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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO __________
COMMISSION FILE NUMBER 1-12387
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
THE TENNECO AUTOMOTIVE EMPLOYEE STOCK
OWNERSHIP PLAN FOR HOURLY EMPLOYEES
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
TENNECO AUTOMOTIVE INC.
500 NORTH FIELD DRIVE
LAKE FOREST, IL 60045
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Tenneco Automotive Inc. Benefits Committee:
We have audited the accompanying statement of net assets available for plan
benefits of The Tenneco Automotive Employee Stock Ownership Plan for Hourly
Employees as of December 31, 2000, and the related statement of changes in net
assets available for plan benefits for the period from inception, February 1,
2000, through December 31, 2000. These financial statements and the supplemental
schedules referred to below are the responsibility of the Tenneco Automotive
Inc. Benefits Committee. Our responsibility is to express an opinion on these
financial statements and supplemental schedules based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of The Tenneco
Automotive Employee Stock Ownership Plan for Hourly Employees as of December 31,
2000, and the changes in net assets available for plan benefits for the period
from inception, February 1, 2000, through December 31, 2000, in conformity with
accounting principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets (held at end
of year) as of December 31, 2000, included as Schedule I, and reportable
transactions for the period from inception, February 1, 2000, through December
31, 2000, included as Schedule II, are presented for purposes of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois
June 1, 2001
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THE TENNECO AUTOMOTIVE EMPLOYEE STOCK
OWNERSHIP PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2000
ASSETS:
Investments, at fair value-
Corporate securities-
Pactiv Corporation common stock $ 2,109,517
Tenneco Automotive Inc. common stock 3,854,631
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5,964,148
Collective trust funds-
Barclays Global Investors Equity Index Fund T 10,953,457
Barclays Global Investors U.S. Debt Market Index Fund K 4,978,706
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15,932,163
Registered investment companies-
Fidelity Growth Company Fund 11,348,571
INVESCO Total Return Fund 1,344,694
Putnam New Opportunities Fund 5,557,031
Templeton Foreign Fund 348,093
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18,598,389
Nations Cash Reserves 6,245,828
Bankers Trust Pyramid Directed Account Cash Fund 744,989
Participant loans receivable 3,371,824
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Total investments 50,857,341
Receivables-
Employee contributions 142,489
Employer contributions 261,643
Accrued interest and dividends 42,277
Due from broker 63,372
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Total receivables 509,781
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Total assets 51,367,122
LIABILITIES:
Due to broker 81,660
Administration expenses payable 260,696
Due to The Tenneco Automotive Employee Stock
Ownership Plan for Salaried Employees 39,867
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Total liabilities 382,223
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 50,984,899
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The accompanying notes to financial statements are an integral part of this
financial statement.
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THE TENNECO AUTOMOTIVE EMPLOYEE STOCK
OWNERSHIP PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE PERIOD FROM INCEPTION, FEBRUARY 1, 2000
THROUGH DECEMBER 31, 2000
ADDITIONS:
Dividends $ 1,951,523
Interest 325,165
Repayment of loan interest 220,524
Net appreciation (depreciation) in fair value of investments-
Corporate securities (4,292,937)
Collective trust funds 19,507
Registered investment companies (5,005,367)
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Total net depreciation in fair value of investments (9,278,797)
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Net investment loss (6,781,585)
Contributions-
Employee 7,887,064
Employer 6,656,587
Rollover 143,383
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Total contributions 14,687,034
Transfer from Pactiv Corporation Thrift Plan for Hourly Employees 49,792,719
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Total additions 57,698,168
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DEDUCTIONS:
Withdrawals 5,522,242
Administrative expenses 545,072
Transfer to The Tenneco Automotive Employee Stock Ownership
Plan for Salaried Employees 645,955
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Total deductions 6,713,269
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NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of period -
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End of period $ 50,984,899
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The accompanying notes to financial statements are an integral part of this
financial statement.
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THE TENNECO AUTOMOTIVE EMPLOYEE STOCK
OWNERSHIP PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
1. DESCRIPTION OF THE TENNECO AUTOMOTIVE EMPLOYEE
STOCK OWNERSHIP PLAN FOR HOURLY EMPLOYEES:
The following description of The Tenneco Automotive Employee Stock Ownership
Plan for Hourly Employees (the Plan) provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
General
The Plan is a defined contribution plan established by Tenneco Automotive Inc.
(the Company) on February 1, 2000. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended (ERISA).
Effective February 1, 2000, Tenneco Automotive Inc. employees who were
participants in the Pactiv Corporation Thrift Plan for Hourly Employees (the
Pactiv Plan) had their participant account balances transferred to the Plan. On
February 1, 2000, Tenneco Automotive Inc. employees transferred $49,792,719 to
the Plan.
Eligibility and Contributions
Hourly employees are eligible to participate in the Plan the first day of the
month following the Company's receipt of an application for enrollment or two
complete calendar months of employment provided the employee has not waived
automatic enrollment.
Any employee who was enrolled in the Pactiv Plan as of January 1, 2000, and who
continued to be an active employee of the Company was automatically enrolled in
the Plan effective February 1, 2000.
An employee is automatically enrolled in the Plan upon completion of the
eligibility requirements at a pretax contribution rate of 2 percent of
compensation, unless the employee elects to waive automatic enrollment prior to
the effective date. Participants can elect to increase the pretax deferral rate
from 2 percent up to 16 percent, in any whole percentage, at any time. Total
pretax contributions were limited to $10,500 for 2000. The Company contributes
on behalf of the participant an amount equal to 100 percent of the participant's
deferral contributions not to exceed 8 percent of the participant's
compensation. The Company may also make discretionary contributions to
participants' accounts.
Certain union hourly employees have adopted the Plan and are subject to
different eligibility and contribution provisions, as described in the Special
Appendix I of the Plan document.
Company contributions are made in the Company's common stock. The Company's
contributions and the related earnings must remain in the form of the Company's
common stock until the participant reaches age 55 or terminates employment and
requests a total distribution.
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Investment Options
Each participant has the right upon enrollment to select the funds in which the
balance in the participant's account, excluding Company contributions, will be
invested. During 2000, participants can invest in Company common stock, two
collective trust funds, four registered investment companies and a money market
fund.
Shares of Pactiv Corporation common stock, transferred from the Pactiv Plan, are
held in a separate fund; however, participants cannot direct contributions or
fund transfers to this fund.
Vesting
All participants are 100 percent vested in their entire account balance in the
Plan.
Withdrawals and Participant Loans
Upon retirement or other termination of employment, the participant may receive
the value of his account as a lump-sum distribution. A participant who has
attained age 55 may elect to make an in-service withdrawal of the Company's
matching account. In-service withdrawals of deferral contributions may be made
by participants who have attained age 59-1/2. Plan equity as of December 31,
2000, includes amounts pending distribution to participants of $86,440 (see Note
5).
Active participants and certain other individuals who have not had a loan during
the previous three months may obtain a loan with a term not to exceed 54 months
from his account. The borrower may have only one loan outstanding at any time,
and the amount of the loan may not be less than $1,000 and shall not exceed the
lesser of (a) $50,000 or (b) one-half the borrower's account balance. The loan
interest rate is equal to The Wall Street Journal prime rate. Loan principal and
interest repayments are made through payroll deductions.
Administration
The Plan is administered by the Tenneco Automotive Inc. Benefits Committee (the
Committee). Bankers Trust Company serves as trustee.
2. SUMMARY OF ACCOUNTING POLICIES:
Basis of Accounting
The financial statements of the Plan are presented on the accrual basis of
accounting. The investments of the Plan are generally reported at quoted market
value. Collective trust funds are valued by reference to published market data,
as available, of the underlying assets. Participant loans receivable are
reported at cost which approximates fair value.
Earnings
Individual participants' accounts are credited daily with investment earnings
and losses. Investment earnings and losses are credited based upon the number of
units held in an individual participant's account and the fair value per unit
based upon the net asset value or share price of the underlying securities at
the close of business each day.
Expenses
Substantially all administrative expenses are paid by the Plan. These expenses
include record-keeping, audit and trustee fees.
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Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to use
estimates and assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from those estimates.
3. NONPARTICIPANT-DIRECTED INVESTMENTS:
Information about the net assets relating to the nonparticipant-directed
investments is as follows as of December 31, 2000:
Tenneco Automotive Inc. common stock $3,607,711
Bankers Trust Pyramid Directed Account Cash Fund 86,245
Employer contribution receivable 261,643
Due to broker (4,214)
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Net assets $3,951,385
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The significant components of the change in net assets relating to the
nonparticipant-directed investments for the period from inception, February 1,
2000, through December 31, 2000, are as follows:
Investment income-
Interest and dividends $ 130,814
Net depreciation in fair value of
corporate securities (4,444,872)
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(4,314,058)
Employer contributions 6,656,587
Transfer from Pactiv Corporation Thrift Plan for
Hourly Employees 2,232,155
Interfund transfers (194,573)
Withdrawals (415,053)
Transfer to The Tenneco Automotive Employee Stock
Ownership Plan for Salaried Employees (13,673)
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Increase in net assets $ 3,951,385
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4. RISKS AND UNCERTAINTIES:
The Plan provides for investment in corporate securities, collective trust
funds, registered investment companies and money market funds. Investment
securities, in general, are exposed to various risks, such as interest rate,
credit and overall market volatility risk. Due to the level of risk associated
with certain investment securities, it is reasonably possible that changes in
the value of investment securities will occur in the near term.
5. RECONCILIATION OF FINANCIAL
STATEMENTS TO FORM 5500:
The following is a reconciliation of net assets available for Plan benefits per
the financial statements to the Form 5500 as of December 31, 2000:
Net assets available for Plan benefits per the financial statements $50,984,899
Less- Amounts allocated to withdrawing participants 86,440
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Net assets available for Plan benefits per the Form 5500 $50,898,459
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The following is a reconciliation of withdrawals per the financial statements to
the Form 5500 for the period from inception, February 1, 2000, through December
31, 2000:
Withdrawals per the financial statements $5,522,242
Add- Amounts allocated to withdrawing participants at December 31, 2000 86,440
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Withdrawals per the Form 5500 $5,608,682
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Amounts allocated to withdrawing participants are recorded on the Form 5500 for
withdrawals that have been processed and approved for payment prior to December
31 but not paid as of that date.
6. FEDERAL INCOME TAXES:
The Plan has requested, but has not received a determination from the Internal
Revenue Service stating that the Plan is designed in accordance with the
applicable requirements of the Internal Revenue Code of 1986, as amended (the
IRC). However, the Committee believes that the Plan is currently designed and
being operated in compliance with the applicable requirements of the IRC.
Therefore, the Committee believes that the Plan was qualified and the related
trust was tax-exempt as of the financial statement date.
7. TERMINATION OF THE PLAN:
Although the Company intends to continue the Plan indefinitely, they reserve the
right to terminate the Plan. Any assets which are not allocated to the accounts
of participants upon the complete termination of the Plan, or complete
discontinuance of contributions, will be allocated among all of the
participants' accounts pro rata on the basis of their respective balances.
8. PARTY IN INTEREST:
The Plan invests in shares of the Bankers Trust Pyramid Directed Account Cash
Fund which is managed by Bankers Trust Company. Bankers Trust Company is the
trustee and, therefore, these transactions qualify as party-in-interest
transactions.
The Plan also invests in shares of Tenneco Automotive Inc. common stock. Tenneco
Automotive Inc. is the Plan's sponsor and, therefore, these transactions qualify
as party-in-interest transactions.
9. SUBSEQUENT EVENT (UNAUDITED):
Effective January 1, 2001, the Company's matching contribution was reduced to 75
percent of the participant's deferral contributions not to exceed 8 percent of
the participant's compensation.
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SCHEDULE I
THE TENNECO AUTOMOTIVE EMPLOYEE STOCK
OWNERSHIP PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF ASSETS (Held at End of Year)
AS OF DECEMBER 31, 2000
Shares or Current
Identity of Issue Description of Asset Face Value Cost Value
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Pactiv Corporation Pactiv Corporation common stock 170,466 $ (a) $ 2,109,517
Tenneco Automotive Inc.* Tenneco Automotive Inc. common stock 1,284,877 13,412,346 3,854,631
Barclays Global Investors Barclays Global Investors Equity Index Fund T 296,440 (a) 10,953,457
Barclays Global Investors Barclays Global Investors U.S. Debt Market
Index Fund K 319,763 (a) 4,978,706
Fidelity Investment Institutional
Services Co. Fidelity Growth Company Fund 158,877 (a) 11,348,571
INVESCO Funds Group, Inc. INVESCO Total Return Fund 50,878 (a) 1,344,694
Putnam Management Company Putnam New Opportunities Fund 94,798 (a) 5,557,031
Franklin Templeton Templeton Foreign Fund 33,665 (a) 348,093
Bank of America, N.A. Nations Cash Reserves 6,245,828 (a) 6,245,828
Bankers Trust Company* Bankers Trust Pyramid Directed Account Cash Fund 744,989 744,989 744,989
The Tenneco Automotive Employee Stock
Ownership Plan for Hourly Employees* Participant loans receivable (interest rates
ranging from 7.0% to 9.5%) $3,371,824 (a) 3,371,824
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Total assets (held at end of year) $50,857,341
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*Indicated party in interest.
(a)Cost omitted for participant-directed investments.
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SCHEDULE II
THE TENNECO AUTOMOTIVE EMPLOYEE STOCK
OWNERSHIP PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE PERIOD FROM INCEPTION, FEBRUARY 1, 2000, THROUGH
DECEMBER 31, 2000
Costs of
In-Kind Cost of In-Kind Assets
Identity of Purchase Exchanges Selling of Assets Exchanges Exchanged Net
Party Involved Description Price(a)(c) In(c) Price(b)(c) Sold Out(c) Out Gain (Loss)
- ------------------------ ------------------- ----------- ---------- ----------- ---------- --------- --------- ------------
SERIES:
Tenneco Automotive Inc. Tenneco Automotive
Inc. common stock $927,310 $9,029,620 $947,008 $2,762,115 $306,502 $233,648 $(1,742,253)
(a) Purchase price equals cost of asset and includes expenses incurred in
connection with transactions (i.e., commissions, transfer fees, etc.).
(b) Selling price is net of expenses incurred in connection with transactions.
(c) Current value of asset on transaction date is equal to the purchase/selling
price and in-kind exchanges in/out.
NOTE: This schedule is a listing of series of transactions (for
nonparticipant-directed investments) in the same security which exceed
5 percent of the market value of the Plan transferred on February 1, 2000.
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities and Exchange Act of
1934, the Tenneco Automotive Inc. Benefits Committee has duly caused this annual
report to be signed on its behalf by the undersigned hereunder duly authorized.
THE TENNECO AUTOMOTIVE EMPLOYEE STOCK OWNERSHIP
PLAN FOR HOURLY EMPLOYEES
Date: June 28, 2001 /s/ Richard P. Schneider
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RICHARD P. SCHNEIDER
CHAIRMAN OF TENNECO AUTOMOTIVE INC.
BENEFITS COMMITTEE
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INDEX TO EXHIBIT
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of Independent Public Accountants