Segment Information | 14. Segment Information Tenneco consists of four operating segments: Motorparts, Performance Solutions, Clean Air, and Powertrain. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the four operating segments as “Corporate.” Management uses EBITDA including noncontrolling interests as the key performance measure of segment profitability and uses the measure in its financial and operational decision-making processes, for internal reporting, and for planning and forecasting purposes to effectively allocate resources. EBITDA including noncontrolling interests is defined as earnings before interest expense, income taxes, noncontrolling interests, and depreciation and amortization. Segment assets are not presented as it is not a measure reviewed by the Chief Operating Decision Maker (“CODM”) in allocating resources and assessing performance. EBITDA including noncontrolling interests should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income, which is the most directly comparable financial measure to EBITDA including noncontrolling interests that is in accordance with U.S. GAAP. EBITDA including noncontrolling interests, as determined and measured by the Company, should not be compared to similarly titled measures reported by other companies. Segment results are as follows: Reportable Segments Motorparts Performance Solutions Clean Air Powertrain Total Reclass & Elims Total Three Months Ended June 30, 2022 Revenues from external customers $ 729 $ 791 $ 2,137 $ 1,008 $ 4,665 $ — $ 4,665 Intersegment revenues $ 9 $ 20 $ 5 $ 45 $ 79 $ (79) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 4 $ — $ — $ 6 $ 10 $ — $ 10 Three Months Ended June 30, 2021 Revenues from external customers $ 794 $ 715 $ 2,024 $ 1,050 $ 4,583 $ — $ 4,583 Intersegment revenues $ 10 $ 23 $ 4 $ 47 $ 84 $ (84) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 4 $ — $ — $ 11 $ 15 $ — $ 15 Six Months Ended June 30, 2022 Revenues from external customers $ 1,451 $ 1,584 $ 4,240 $ 2,039 $ 9,314 $ — $ 9,314 Intersegment revenues $ 20 $ 42 $ 10 $ 91 $ 163 $ (163) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 8 $ (1) $ — $ 15 $ 22 $ — $ 22 Six Months Ended June 30, 2021 Revenues from external customers $ 1,513 $ 1,502 $ 4,148 $ 2,151 $ 9,314 $ — $ 9,314 Intersegment revenues $ 19 $ 49 $ 10 $ 94 $ 172 $ (172) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 7 $ 1 $ — $ 29 $ 37 $ — $ 37 Segment EBITDA including noncontrolling interests and the reconciliation to earnings (loss) before interest expense, income taxes, and noncontrolling interests are as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 EBITDA including noncontrolling interests by segment: Motorparts $ 70 $ 67 $ 156 $ 169 Performance Solutions 11 32 26 75 Clean Air 101 143 207 292 Powertrain 42 94 108 209 Total reportable segments 224 336 497 745 Corporate (66) (64) (116) (114) Depreciation and amortization (143) (145) (289) (300) Earnings (loss) before interest expense, income taxes, and noncontrolling interests 15 127 92 331 Interest expense (76) (69) (142) (139) Income tax (expense) benefit (43) (41) (73) (88) Net income (loss) $ (104) $ 17 $ (123) $ 104 Disaggregated Revenue Original Equipment Value-Added Sales OE revenue is generated from providing OE manufacturers and servicers with products for automotive, commercial truck, off-highway, and industrial applications. Supply relationships typically extend over the life of the related vehicle, subject to interim design and technical specification revisions, and do not require the customer to purchase a minimum quantity. Substrate/Passthrough Sales Generally, in connection with the sale of exhaust systems to certain OE manufacturers, the Company purchases catalytic converters and diesel particulate filters or components thereof including precious metals (“substrates”) on behalf of its customers which are used in the assembled system. These substrates are included in inventory and are “passed through” to the customer at cost, plus a small margin. Since the Company takes title to the substrate inventory and has responsibility for both the delivery and quality of the finished product including the substrates, the revenues and related expenses are recorded at gross amounts. Aftermarket Aftermarket revenue is generated from providing products for the global vehicle aftermarket to a wide range of warehouse distributors, retail parts stores, and mass merchants that distribute these products to customers ranging from professional service providers to “do-it-yourself” consumers. Revenue from contracts with customers is disaggregated by customer type and geography, as it depicts the nature and amount of the Company’s revenue that is aligned with the Company’s key growth strategies. In the following tables, revenue is disaggregated accordingly: Reportable Segments By Customer Type Motorparts Performance Solutions Clean Air Powertrain Total Three Months Ended June 30, 2022 OE - Substrate $ — $ — $ 1,132 $ — $ 1,132 OE - Value add — 770 1,005 1,008 2,783 Aftermarket 729 21 — — 750 Total $ 729 $ 791 $ 2,137 $ 1,008 $ 4,665 Three Months Ended June 30, 2021 OE - Substrate $ — $ — $ 1,081 $ — $ 1,081 OE - Value add — 697 943 1,050 2,690 Aftermarket 794 18 — — 812 Total $ 794 $ 715 $ 2,024 $ 1,050 $ 4,583 Six Months Ended June 30, 2022 OE - Substrate $ — $ — $ 2,222 $ — $ 2,222 OE - Value add — 1,541 2,018 2,039 5,598 Aftermarket 1,451 43 — — 1,494 Total $ 1,451 $ 1,584 $ 4,240 $ 2,039 $ 9,314 Six Months Ended June 30, 2021 OE - Substrate $ — $ — $ 2,169 $ — $ 2,169 OE - Value add — 1,465 1,979 2,151 5,595 Aftermarket 1,513 37 — — 1,550 Total $ 1,513 $ 1,502 $ 4,148 $ 2,151 $ 9,314 Reportable Segments By Geography Motorparts Performance Solutions Clean Air Powertrain Total Three Months Ended June 30, 2022 North America $ 457 $ 259 $ 1,002 $ 344 $ 2,062 Europe, Middle East, Africa and South America 219 338 644 510 1,711 Asia Pacific 53 194 491 154 892 Total $ 729 $ 791 $ 2,137 $ 1,008 $ 4,665 Three Months Ended June 30, 2021 North America $ 501 $ 223 $ 812 $ 316 $ 1,852 Europe, Middle East, Africa and South America 238 324 639 548 1,749 Asia Pacific 55 168 573 186 982 Total $ 794 $ 715 $ 2,024 $ 1,050 $ 4,583 Six Months Ended June 30, 2022 North America $ 901 $ 509 $ 1,869 $ 678 $ 3,957 Europe, Middle East, Africa and South America 442 671 1,306 1,033 3,452 Asia Pacific 108 404 1,065 328 1,905 Total $ 1,451 $ 1,584 $ 4,240 $ 2,039 $ 9,314 Six Months Ended June 30, 2021 North America $ 955 $ 463 $ 1,663 $ 644 $ 3,725 Europe, Middle East, Africa and South America 450 679 1,321 1,111 3,561 Asia Pacific 108 360 1,164 396 2,028 Total $ 1,513 $ 1,502 $ 4,148 $ 2,151 $ 9,314 |