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 September 30, 2022 Revenues from external customers $ 723 $ 849 $ 2,335 $ 1,024 $ 4,931 $ — $ 4,931 Intersegment revenues $ 10 $ 18 $ 4 $ 40 $ 72 $ (72) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 3 $ — $ (1) $ 1 $ 3 $ — $ 3 Three Months Ended September 30, 2021 Revenues from external customers $ 769 $ 686 $ 1,936 $ 941 $ 4,332 $ — $ 4,332 Intersegment revenues $ 8 $ 23 $ 4 $ 52 $ 87 $ (87) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 2 $ 1 $ — $ 7 $ 10 $ — $ 10 Nine Months Ended September 30, 2022 Revenues from external customers $ 2,174 $ 2,433 $ 6,575 $ 3,063 $ 14,245 $ — $ 14,245 Intersegment revenues $ 30 $ 60 $ 14 $ 131 $ 235 $ (235) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 11 $ (1) $ (1) $ 16 $ 25 $ — $ 25 Nine Months Ended September 30, 2021 Revenues from external customers $ 2,282 $ 2,188 $ 6,084 $ 3,092 $ 13,646 $ — $ 13,646 Intersegment revenues $ 27 $ 72 $ 14 $ 146 $ 259 $ (259) $ — Equity in earnings (losses) of nonconsolidated affiliates, net of tax $ 9 $ 2 $ — $ 36 $ 47 $ — $ 47 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 EBITDA including noncontrolling interests by segment: Motorparts $ 73 $ 111 $ 229 $ 280 Performance Solutions 41 42 67 117 Clean Air 131 138 338 430 Powertrain 90 71 198 280 Total reportable segments 335 362 832 1,107 Corporate (66) (90) (182) (204) Depreciation and amortization (140) (147) (429) (447) Earnings (loss) before interest expense, income taxes, and noncontrolling interests 129 125 221 456 Interest expense (90) (66) (232) (205) Income tax (expense) benefit (67) (34) (140) (122) Net income (loss) $ (28) $ 25 $ (151) $ 129 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 September 30, 2022 OE - Substrate $ — $ — $ 1,295 $ — $ 1,295 OE - Value add — 830 1,040 1,024 2,894 Aftermarket 723 19 — — 742 Total $ 723 $ 849 $ 2,335 $ 1,024 $ 4,931 Three Months Ended September 30, 2021 OE - Substrate $ — $ — $ 1,039 $ — $ 1,039 OE - Value add — 668 897 941 2,506 Aftermarket 769 18 — — 787 Total $ 769 $ 686 $ 1,936 $ 941 $ 4,332 Nine Months Ended September 30, 2022 OE - Substrate $ — $ — $ 3,517 $ — $ 3,517 OE - Value add — 2,371 3,058 3,063 8,492 Aftermarket 2,174 62 — — 2,236 Total $ 2,174 $ 2,433 $ 6,575 $ 3,063 $ 14,245 Nine Months Ended September 30, 2021 OE - Substrate $ — $ — $ 3,208 $ — $ 3,208 OE - Value add — 2,133 2,876 3,092 8,101 Aftermarket 2,282 55 — — 2,337 Total $ 2,282 $ 2,188 $ 6,084 $ 3,092 $ 13,646 Reportable Segments By Geography Motorparts Performance Solutions Clean Air Powertrain Total Three Months Ended September 30, 2022 North America $ 451 $ 275 $ 1,105 $ 356 $ 2,187 Europe, Middle East, Africa and South America 218 325 583 489 1,615 Asia Pacific 54 249 647 179 1,129 Total $ 723 $ 849 $ 2,335 $ 1,024 $ 4,931 Three Months Ended September 30, 2021 North America $ 475 $ 218 $ 762 $ 300 $ 1,755 Europe, Middle East, Africa and South America 237 286 503 464 1,490 Asia Pacific 57 182 671 177 1,087 Total $ 769 $ 686 $ 1,936 $ 941 $ 4,332 Nine Months Ended September 30, 2022 North America $ 1,352 $ 784 $ 2,974 $ 1,034 $ 6,144 Europe, Middle East, Africa and South America 660 996 1,889 1,522 5,067 Asia Pacific 162 653 1,712 507 3,034 Total $ 2,174 $ 2,433 $ 6,575 $ 3,063 $ 14,245 Nine Months Ended September 30, 2021 North America $ 1,430 $ 681 $ 2,425 $ 944 $ 5,480 Europe, Middle East, Africa and South America 687 965 1,824 1,575 5,051 Asia Pacific 165 542 1,835 573 3,115 Total $ 2,282 $ 2,188 $ 6,084 $ 3,092 $ 13,646 |