Supplemental Guarantor Condensed Consolidating Financial Statements | Supplemental Guarantor Condensed Consolidating Financial Statements Basis of Presentation Substantially all of the Company's existing and future material domestic 100% owned subsidiaries (which are referred to as the Guarantor Subsidiaries) fully and unconditionally guarantee its senior notes on a joint and several basis. However, a subsidiary’s guarantee may be released in certain customary circumstances such as a sale of the subsidiary or all or substantially all of its assets in accordance with the indenture applicable to the notes. The Guarantor Subsidiaries are combined in the presentation below. These condensed consolidating financial statements are presented on the equity method. Under this method, the Company's investments are recorded at cost and adjusted for its 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 the Company's consolidated financial statements and related notes of which this note is an integral part. The accompanying supplemental guarantor condensed consolidating financial statements have been updated to reflect the reclassifications as described in Note 2, Summary of Significant Accounting Policies . As discussed in Note 3, Acquisitions and Divestitures , the Company finalized the valuation of the assets and liabilities of the Federal-Mogul Acquisition and Öhlins Acquisition during the third and fourth quarters of 2019, respectively. Distributions There are no significant restrictions on the ability of the Guarantor Subsidiaries to make distributions to the Company. STATEMENT OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2019 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated Revenues Net sales and operating revenues: External $ 6,390 $ 11,060 $ — $ — $ 17,450 Affiliated companies 909 1,075 — (1,984 ) — 7,299 12,135 — (1,984 ) 17,450 Costs and expenses Cost of sales (exclusive of depreciation and amortization) 6,290 10,606 — (1,984 ) 14,912 Selling, general, and administrative 669 463 6 — 1,138 Depreciation and amortization 325 346 2 — 673 Engineering, research, and development 136 188 — — 324 Restructuring charges and asset impairments 62 64 — — 126 Goodwill and intangible impairment charge 172 69 — — 241 7,654 11,736 8 (1,984 ) 17,414 Other income (expense) Non-service pension and postretirement benefit (costs) credits 2 (13 ) — — (11 ) Equity in earnings (losses) of nonconsolidated affiliates, net of tax 3 40 — — 43 Other income (expense), net 34 19 — — 53 39 46 — — 85 Earnings (loss) before interest expense, income taxes and noncontrolling interests (316 ) 445 (8 ) — 121 Interest expense: External, net of interest capitalized (37 ) (29 ) (256 ) — (322 ) Affiliated companies, net of interest income 25 (7 ) (18 ) — — Earnings (loss) before income taxes and noncontrolling interests (328 ) 409 (282 ) — (201 ) Income tax (expense) benefit 117 (131 ) (5 ) — (19 ) Equity in net income (loss) from affiliated companies 196 — (27 ) (169 ) — Net income (loss) (15 ) 278 (314 ) (169 ) (220 ) Less: Net income attributable to noncontrolling interests — 114 — — 114 Net income (loss) attributable to Tenneco Inc. $ (15 ) $ 164 $ (314 ) $ (169 ) $ (334 ) Comprehensive income (loss) attributable to Tenneco Inc. $ 27 $ 77 $ (353 ) $ (104 ) $ (353 ) STATEMENT OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2018 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated Revenues Net sales and operating revenues: External $ 4,678 $ 7,085 $ — $ — $ 11,763 Affiliated companies 606 725 — (1,331 ) — 5,284 7,810 — (1,331 ) 11,763 Costs and expenses Cost of sales (exclusive of depreciation and amortization) 4,551 6,795 (13 ) (1,331 ) 10,002 Selling, general, and administrative 430 289 33 — 752 Depreciation and amortization 153 192 — — 345 Engineering, research, and development 94 106 — — 200 Restructuring charges and asset impairments 20 97 — — 117 Goodwill and intangible impairment charge 3 — — — 3 5,251 7,479 20 (1,331 ) 11,419 Other income (expense) Non-service pension and postretirement benefit (costs) credit (13 ) (9 ) 2 — (20 ) Loss on extinguishment of debt — — (10 ) — (10 ) Equity in earnings (losses) of nonconsolidated affiliates, net of tax — 18 — — 18 Other income (expense), net (29 ) 38 (1 ) (18 ) (10 ) (42 ) 47 (9 ) (18 ) (22 ) Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies (9 ) 378 (29 ) (18 ) 322 Interest expense: External, net of interest capitalized (33 ) (21 ) (94 ) — (148 ) Affiliated companies, net of interest income 14 (7 ) (7 ) — — Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies (28 ) 350 (130 ) (18 ) 174 Income tax (expense) benefit 30 (93 ) — — (63 ) Equity in net income (loss) from affiliated companies 135 — 184 (319 ) — Net income (loss) 137 257 54 (337 ) 111 Less: Net income attributable to noncontrolling interests — 56 — — 56 Net income (loss) attributable to Tenneco Inc. $ 137 $ 201 $ 54 $ (337 ) $ 55 Comprehensive income (loss) attributable to Tenneco Inc. $ 159 $ 24 $ (31 ) $ (251 ) $ (99 ) STATEMENT OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2017 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated Revenues Net sales and operating revenues: External $ 3,889 $ 5,385 $ — $ — $ 9,274 Affiliated companies 540 640 — (1,180 ) — 4,429 6,025 — (1,180 ) 9,274 Costs and expenses Cost of sales (exclusive of depreciation and amortization) 3,773 5,178 — (1,180 ) 7,771 Selling, general, and administrative 391 241 — — 632 Depreciation and amortization 91 135 — — 226 Engineering, research, and development 77 81 — — 158 Restructuring charges and asset impairments 4 43 — — 47 Goodwill and intangible impairment charge — 11 — — 11 4,336 5,689 — (1,180 ) 8,845 Other income (expense) Non-service pension and postretirement benefit (costs) credits (18 ) 2 — — (16 ) Loss on extinguishment of debt (1 ) — — — (1 ) Equity in earnings (losses) of nonconsolidated affiliates, net of tax — (1 ) — — (1 ) Other income (expense), net 7 48 — (53 ) 2 (12 ) 49 — (53 ) (16 ) Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies 81 385 — (53 ) 413 Interest expense: External, net of interest capitalized (20 ) (8 ) (49 ) — (77 ) Affiliated companies, net of interest income 15 (6 ) (9 ) — — Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies 76 371 (58 ) (53 ) 336 Income tax (expense) benefit 10 (81 ) — — (71 ) Equity in net income (loss) from affiliated companies 149 — 265 (414 ) — Net income (loss) 235 290 207 (467 ) 265 Less: Net income attributable to noncontrolling interests — 67 — — 67 Net income (loss) attributable to Tenneco Inc. $ 235 $ 223 $ 207 $ (467 ) $ 198 Comprehensive income (loss) attributable to Tenneco Inc. $ 282 $ 173 $ 331 $ (467 ) $ 319 BALANCE SHEETS December 31, 2019 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated ASSETS Current assets: Cash and cash equivalents $ 126 $ 438 $ — $ — $ 564 Restricted cash — 2 — — 2 Receivables, net 731 1,807 — — 2,538 Inventories, net 868 1,131 — — 1,999 Prepayments and other current assets 163 410 59 — 632 Total current assets 1,888 3,788 59 — 5,735 Property, plant and equipment, net 1,140 2,478 9 — 3,627 Investment in affiliated companies 1,617 — 4,903 (6,520 ) — Long-term receivables, net 9 1 — — 10 Goodwill 479 296 — — 775 Intangibles, net 892 530 — — 1,422 Investments in nonconsolidated affiliates 43 475 — — 518 Deferred income taxes 353 244 10 — 607 Other assets 141 378 13 — 532 Total assets $ 6,562 $ 8,190 $ 4,994 $ (6,520 ) $ 13,226 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt, including current maturities of long-term debt $ 1 $ 169 $ 15 $ — $ 185 Accounts payable 750 1,897 — — 2,647 Accrued compensation and employee benefits 77 243 5 — 325 Accrued income taxes 1 71 — — 72 Accrued expenses and other current liabilities 445 572 53 — 1,070 Total current liabilities 1,274 2,952 73 — 4,299 Long-term debt 182 9 5,180 — 5,371 Intercompany due to (due from) 1,843 (106 ) (1,737 ) — — Deferred income taxes — 106 — — 106 Pension, postretirement benefits and other liabilities 707 895 33 — 1,635 Commitments and contingencies Total liabilities 4,006 3,856 3,549 — 11,411 Redeemable noncontrolling interests — 196 — — 196 Tenneco Inc. shareholders’ equity 2,556 3,944 1,445 (6,520 ) 1,425 Noncontrolling interests — 194 — — 194 Total equity 2,556 4,138 1,445 (6,520 ) 1,619 Total liabilities, redeemable noncontrolling interests, and equity $ 6,562 $ 8,190 $ 4,994 $ (6,520 ) $ 13,226 BALANCE SHEETS December 31, 2018 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated ASSETS Current assets: Cash and cash equivalents $ 329 $ 364 $ 4 $ — $ 697 Restricted cash — 5 — — 5 Receivables, net 943 1,629 — — 2,572 Inventories, net 958 1,287 — — 2,245 Prepayments and other current assets 254 311 25 — 590 Total current assets 2,484 3,596 29 — 6,109 Property, plant and equipment, net 1,131 2,361 9 — 3,501 Investment in affiliated companies 1,421 — 4,856 (6,277 ) — Long-term receivables, net 9 1 — — 10 Goodwill 263 383 223 — 869 Intangibles, net 1,007 510 2 — 1,519 Investments in nonconsolidated affiliates 43 501 — — 544 Deferred income taxes 255 200 12 — 467 Other assets 48 180 — (15 ) 213 Total assets $ 6,661 $ 7,732 $ 5,131 $ (6,292 ) $ 13,232 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt, including current maturities of long-term debt $ 1 $ 152 $ — $ — $ 153 Accounts payable 858 1,894 7 — 2,759 Accrued compensation and employee benefits 88 255 — — 343 Accrued income taxes — 52 27 (15 ) 64 Accrued expenses and other current liabilities 436 488 77 — 1,001 Total current liabilities 1,383 2,841 111 (15 ) 4,320 Long-term debt 3 32 5,305 — 5,340 Intercompany due to (due from) 2,726 (215 ) (2,511 ) — — Deferred income taxes — 88 — — 88 Pension, postretirement benefits and other liabilities 225 705 500 — 1,430 Commitments and contingencies Total liabilities 4,337 3,451 3,405 (15 ) 11,178 Redeemable noncontrolling interests — 138 — — 138 Tenneco Inc. shareholders’ equity 2,324 3,953 1,726 (6,277 ) 1,726 Noncontrolling interests — 190 — — 190 Total equity 2,324 4,143 1,726 (6,277 ) 1,916 Total liabilities, redeemable noncontrolling interests, and equity $ 6,661 $ 7,732 $ 5,131 $ (6,292 ) $ 13,232 STATEMENT OF CASH FLOWS Year Ended December 31, 2019 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated Operating Activities Net cash provided by (used in) operating activities $ 118 $ 427 $ (89 ) $ (12 ) $ 444 Investing Activities Acquisitions, net of cash acquired — (158 ) — — — (158 ) Proceeds from sale of assets 3 17 — — 20 Proceeds from sale of investment in nonconsolidated affiliates — 2 — — 2 Net proceeds from sale of business 7 15 — — 22 Cash payments for plant, property, and equipment (216 ) (528 ) — — (744 ) Proceeds from deferred purchase price of factored receivables — 250 — — 250 Other 4 (3 ) 1 — 2 Net cash (used in) provided by investing activities (202 ) (405 ) 1 — (606 ) Financing Activities Proceeds from term loans and notes — 200 — — 200 Repayments of term loans and notes (1 ) (238 ) (102 ) — (341 ) Borrowings on revolving lines of credit 8,221 248 651 — 9,120 Payments on revolving lines of credit (8,038 ) (211 ) (635 ) — (8,884 ) Repurchase of common shares — — (2 ) — (2 ) Cash dividends — — (20 ) — (20 ) Net decrease in bank overdrafts — (13 ) — — (13 ) Acquisition of additional ownership interest in consolidated affiliates — (10 ) — — (10 ) Distributions to noncontrolling interest partners — (43 ) — — (43 ) Other — (4 ) — — (4 ) Intercompany dividends and net (decrease) increase in intercompany obligations (302 ) 98 192 12 — Net cash (used in) provided by financing activities (120 ) 27 84 12 3 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — 23 — — 23 Increase in cash, cash equivalents and restricted cash (204 ) 72 (4 ) — (136 ) Cash, cash equivalents and restricted cash, January 1 329 369 4 — 702 Cash, cash equivalents and restricted cash, December 31 $ 125 $ 441 $ — $ — $ 566 STATEMENT OF CASH FLOWS Year Ended December 31, 2018 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated Operating Activities Net cash provided by (used in) operating activities $ 248 $ 246 $ (36 ) $ (19 ) $ 439 Investing Activities Acquisitions, net of cash acquired 151 124 (2,469 ) — (2,194 ) Proceeds from sale of assets 2 7 — — 9 Cash payments for plant, property, and equipment (196 ) (311 ) — — (507 ) Proceeds from deferred purchase price of factored receivables — 174 — — 174 Other 1 3 4 Net cash used in investing activities (42 ) (3 ) (2,469 ) — (2,514 ) Financing Activities Proceeds from term loans and notes — 26 3,400 — 3,426 Repayments of term loans and notes (391 ) (62 ) — — (453 ) Borrowings on revolving lines of credit 4,411 114 624 — 5,149 Payments on revolving lines of credit (4,654 ) (127 ) (624 ) — (5,405 ) Repurchase of common shares — — (1 ) — (1 ) Cash dividends — — (59 ) — (59 ) Debt issuance cost of long-term debt (15 ) — (80 ) — (95 ) Net decrease in bank overdrafts — (5 ) — — (5 ) Distributions to noncontrolling interest partners — (51 ) — — (51 ) Other — (30 ) — — (30 ) Intercompany dividends and net (decrease) increase in intercompany obligations 765 (33 ) (751 ) 19 — Net cash (used in) provided by financing activities 116 (168 ) 2,509 19 2,476 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — (17 ) — — (17 ) Decrease in cash, cash equivalents and restricted cash 322 58 4 — 384 Cash, cash equivalents and restricted cash, January 1 7 311 — — 318 Cash, cash equivalents and restricted cash, December 31 $ 329 $ 369 $ 4 $ — $ 702 STATEMENT OF CASH FLOWS Year Ended December 31, 2017 Guarantor Nonguarantor Tenneco Inc. Reclass Consolidated Operating Activities Net cash provided by (used in) operating activities $ 284 $ 290 $ (4 ) $ (53 ) $ 517 Investing Activities Acquisitions, net of cash acquired 3 5 — — 8 Proceeds from sale of assets — 9 — — 9 Proceeds from sale of investment in nonconsolidated affiliates (164 ) (255 ) — — (419 ) Proceeds from deferred purchase price of factored receivables — 112 — — 112 Other (4 ) (6 ) — — (10 ) Net cash used in investing activities (165 ) (135 ) — — (300 ) Financing Activities Proceeds from term loans and notes 136 24 — — 160 Repayments of term loans and notes (10 ) (20 ) (6 ) — (36 ) Borrowings on revolving lines of credit 3,956 48 2,660 — 6,664 Payments on revolving lines of credit (3,710 ) (49 ) (2,978 ) — (6,737 ) Repurchase of common shares — — (1 ) — (1 ) Cash dividends — — (53 ) — (53 ) Debt issuance cost of long-term debt (8 ) — — — (8 ) Purchase of common stock under the share repurchase program — — (169 ) — (169 ) Net decrease in bank overdrafts — (7 ) — — (7 ) Distributions to noncontrolling interest partners — (64 ) — — (64 ) Intercompany dividends and net (decrease) increase in intercompany obligations (485 ) (119 ) 551 53 — Net cash used in financing activities (121 ) (187 ) 4 53 (251 ) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — 3 — — 3 Increase in cash, cash equivalents and restricted cash (2 ) (29 ) — — (31 ) Cash, cash equivalents and restricted cash, January 1 9 340 — — 349 Cash, cash equivalents and restricted cash, December 31 $ 7 $ 311 $ — $ — $ 318 |