Separate Financial Information of Subsidiary Guarantors of Indebtedness

6 Months Ended

May 31, 2012

Separate Financial Information of Subsidiary Guarantors of Indebtedness

Note O – Separate Financial Information of Subsidiary Guarantors of Indebtedness

The $250 million Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by all of OMNOVA Solutions Inc.’s existing and future 100% owned domestic subsidiaries that from time to time guarantee obligations under the Company’s Senior Notes, with certain exceptions (the “Guarantors”). Current guarantor subsidiaries include Decorative Products Thailand Inc. (“Ohio”) and OMNOVA Wallcovering (U.S.A.) Inc. Presented below are the condensed financial statements of OMNOVA Solutions (“Parent”) as borrower, its combined Guarantor subsidiaries and its combined Non-Guarantor subsidiaries. The income (loss) of the Company’s subsidiary guarantors and non-guarantors in these Condensed Consolidating Statements of Operations are presented under the equity method for purposes of this disclosure only.

Condensed Consolidating Statements of Operations for the Three Months Ended May 31, 2012

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
Net Sales	$	204.7		$	—		$	110.8		$	(8.0	)	$	307.5
Cost of products sold		165.5			—			89.9			(7.9	)		247.5
Gross profit		39.2			—			20.9			(.1	)		60.0
Selling, general and administrative		22.2			.2			9.8			—			32.2
Depreciation and amortization		4.1			—			4.0			—			8.1
Restructuring and severance		—			—			—			—			—
Interest expense		7.9			(.5	)		2.4			(.3	)		9.5
Asset impairment		.2			—			.3			—			.5
(Income) loss from subsidiaries		(3.5	)		(2.7	)		—			6.2			—
Other (income) expense, net		(1.0	)		(.1	)		1.3			(.3	)		(.1	)
		29.9			(3.1	)		17.8			5.6			50.2
Income (loss) from continuing operations before income taxes		9.3			3.1			3.1			(5.7	)		9.8
Income tax expense		3.3			—			(.4	)		—			2.9
Income (loss) from continuing operations		6.0			3.1			3.5			(5.7	)		6.9
Income (loss) from discontinued operations		1.0			(.1	)		(.8	)		—			.1
Net Income	$	7.0		$	3.0		$	2.7		$	(5.7	)	$	7.0

Condensed Consolidating Statements of Operations for the Six Months Ended May 31, 2012

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
Net Sales	$	383.4		$	—		$	214.7		$	(14.7	)	$	583.4
Cost of products sold		305.6			—			171.3			(14.4	)		462.5
Gross profit		77.8			—			43.4			(.3	)		120.9
Selling, general and administrative		41.6			.5			19.6			—			61.7
Depreciation and amortization		8.2			—			7.9			—			16.1
Restructuring and severance		.4			—			—			—			.4
Interest expense		15.8			(.9	)		4.3			(.2	)		19.0
Asset impairment		.3			—			.2			—			.5
(Income) loss from subsidiaries		(7.4	)		(7.6	)		—			15.0			—
Other (income) expense, net		(2.1	)		(.3	)		1.6			—			(.8	)
		56.8			(8.3	)		33.6			14.8			96.9
Income (loss) from continuing operations before income taxes		21.0			8.3			9.8			(15.1)			24.0
Income tax expense		6.4			—			—			—			6.4
Income (loss) from continuing operations		14.6			8.3			9.8			(15.1)			17.6
Income (loss) from discontinued operations		5.9			(.8	)		(2.2	)		—			2.9
Net Income	$	20.5		$	7.5		$	7.6		$	(15.1	)	$	20.5

Condensed Consolidating Statements of Operations for the Three Months Ended May 31, 2011

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
Net Sales	$	200.3		$	—		$	117.2		$	(4.7	)	$	312.8
Cost of products sold		163.6			—			93.4			(4.6	)		252.4
Gross profit		36.7			—			23.8			(.1	)		60.4
Selling, general and administrative		19.3			.3			8.8			—			28.4
Depreciation and amortization		4.0			—			4.3			—			8.3
Restructuring and severance		.4			—			.1			—			.5
Interest expense		7.9			(.5	)		1.9			.3			9.6
Acquisition and integration costs		.8			—			—			—			.8
(Income) loss from subsidiaries		(3.1	)		(2.7	)		—			5.8			—
Other (income) expense, net		(1.0	)		(.2	)		2.4			—			1.2
		28.3			(3.1	)		17.5			6.1			48.8
Income (loss) from continuing operations before income taxes		8.4			3.1			6.3			(6.2	)		11.6
Income tax expense		1.2			—			2.9			—			4.1
Income (loss) from continuing operations		7.2			3.1			3.4			(6.2	)		7.5
Income (loss) from discontinued operations		(1.0	)		.4			(.7	)		—			(1.3	)
Net Income	$	6.2		$	3.5		$	2.7		$	(6.2	)	$	6.2

Condensed Consolidating Statements of Operations for the Six Months Ended May 31, 2011

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
Net Sales	$	377.2		$	—		$	215.7		$	(8.2	)	$	584.7
Cost of products sold		308.0			—			172.5			(8.2	)		472.3
Gross profit		69.2			—			43.2			—			112.4
Selling, general and administrative		36.9			.5			18.3			—			55.7
Depreciation and amortization		8.2			—			8.2			—			16.4
Restructuring and severance		.6			—			.7			—			1.3
Interest expense		15.2			(.5	)		3.6			.6			18.9
Acquisition and integration cost		2.7			—			—			—			2.7
Deferred financing fees write-off		1.0			—			—			—			1.0
(Income) loss from subsidiaries		(4.9	)		(4.5	)		—			9.4			—
Other (income) expense, net		(1.4	)		(.3	)		2.4			—			.7
		58.3			(4.8	)		33.2			10.0			96.7
Income (loss) from continuing operations before income taxes		10.9			4.8			10.0			(10.0	)		15.7
Income tax expense		2.1			—			4.6			—			6.7
Income (loss) from continuing operations		8.8			4.8			5.4			(10.0	)		9.0
Income (loss) from discontinued operations		(1.6	)		.7			(.9	)		—			(1.8	)
Net Income	$	7.2		$	5.5		$	4.5		$	(10.0	)	$	7.2

Condensed Consolidating Statements of Financial Position May 31, 2012

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
ASSETS:
Current Assets
Cash and cash equivalents	$	94.8		$	—		$	33.1		$	—		$	127.9
Restricted cash		5.5			—			—			—			5.5
Accounts receivable, net		86.5			—			80.4			—			166.9
Inventories		51.4			—			53.7			(.8	)		104.3
Prepaid expenses and other		2.2			—			1.8			—			4.0
Deferred income taxes		4.4			—			2.8			(1.0	)		6.2
Total Current Assets		244.8			—			171.8			(1.8	)		414.8
Property, plant and equipment, net		105.4			—			107.7			—			213.1
Trademarks and other intangible assets, net		91.8			—			87.2			.1			179.1
Deferred income taxes		66.5			—			4.7			(2.5	)		68.7
Investments in subsidiaries and intercompany		83.4			141.7			2.8			(227.9	)		—
Other assets		188.8			—			5.8			(182.9	)		11.7
Total Assets	$	780.7		$	141.7		$	380.0		$	(415.0	)	$	887.4
LIABILITIES AND SHARE HOLDERS’ EQUITY:
Current Liabilities
Amounts due to banks	$	2.0		$	—		$	8.8		$	—		$	10.8
Accounts payable		68.7			.1			54.7			(.2	)		123.3
Accrued payroll and personal property taxes		11.2			—			3.3			—			14.5
Employee benefit obligations		2.2			—			—			—			2.2
Deferred income taxes - current		—			—			1.1			(1.0	)		.1
Other current liabilities		16.0			(.2	)		2.2			(.6	)		17.4
Liabilities held for sale - current		—			.3			.3			—			.6
Total Current Liabilities		100.1			.2			70.4			(1.8	)		168.9
Long-term debt		443.5			—			—			—			443.5
Postretirement benefits other than pensions		7.7			—			—			—			7.7
Pension liabilities		80.0			—			8.6			—			88.6
Deferred income taxes		—			—			28.5			(2.6	)		25.9
Other liabilities		12.4			79.7			227.5			(303.8	)		15.8
Total Liabilities		643.7			79.9			335.0			(308.2	)		750.4
Shareholders’ Equity
Common stock		4.7			—			16.2			(16.2	)		4.7
Additional contributed capital		328.7			144.6			4.9			(149.5	)		328.7
Retained earnings (deficit)		(94.3	)		(85.0	)		35.0			50.0			(94.3	)
Treasury stock		(2.9	)		—			—			—			(2.9	)
Accumulated other comprehensive income (loss)		(99.2	)		2.2			(11.1	)		8.9			(99.2	)
Total Shareholders’ Equity		137.0			61.8			45.0			(106.8	)		137.0
Total Liabilities and Shareholders’ Equity	$	780.7		$	141.7		$	380.0		$	(415.0	)	$	887.4

Condensed Consolidating Statements of Financial Position November 30, 2011

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
ASSETS:
Current Assets
Cash and cash equivalents	$	55.1		$	—		$	43.8		$	—		$	98.9
Restricted cash		4.2			—			—			—			4.2
Accounts receivable, net		87.7			—			75.5			—			163.2
Inventories		35.9			—			49.0			(.4	)		84.5
Deferred income taxes		4.5			—			3.0			(1.0	)		6.5
Prepaid expenses and other		2.6			—			1.3			—			3.9
Assets held for sale - current		—			—			16.6			—			16.6
Total Current Assets		190.0			—			189.2			(1.4	)		377.8
Property, plant and equipment, net		105.5			—			115.3			—			220.8
Trademarks and other intangible assets, net		80.5			—			95.1			(.1	)		175.5
Deferred income taxes		67.1			—			5.1			(3.1	)		69.1
Investments in subsidiaries and intercompany		84.4			138.1			2.7			(225.2	)		—
Other assets		214.1			(.1	)		6.1			(198.2	)		21.9
Assets held for sale - non-current		.1			40.9			(.1	)		(40.9	)		—
Total Assets	$	741.7		$	178.9		$	413.4		$	(468.9	)	$	865.1
LIABILITIES AND SHARE HOLDERS’ EQUITY:
Current Liabilities
Amounts due to banks	$	2.0		$	—		$	9.3		$	—		$	11.3
Accounts payable		51.9			—			56.6			—			108.5
Accrued payroll and personal property taxes		13.2			.1			3.5			—			16.8
Employee benefit obligations		2.2			—			—			—			2.2
Deferred income taxes		—			—			1.1			(1.0	)		.1
Other current liabilities		4.6			.6			4.6			(.7	)		9.1
Liabilities held for sale - current		—			—			8.5			—			8.5
Total Current Liabilities		73.9			.7			83.6			(1.7	)		156.5
Long-term debt		444.3			—			—			—			444.3
Postretirement benefits other than pensions		7.8			—			—			—			7.8
Pension liabilities		82.6			—			8.9			—			91.5
Deferred income taxes		—			—			31.4			(3.1	)		28.3
Other liabilities		11.4			68.4			249.0			(313.8	)		15.0
Total Liabilities		620.0			69.1			372.9			(318.6	)		743.4
Shareholders’ Equity
Common stock		4.6			—			57.1			(57.1	)		4.6
Additional contributed capital		324.9			140.6			8.9			(149.5	)		324.9
Retained earnings (deficit)		(114.8	)		(32.3	)		(27.1	)		59.4			(114.8	)
Treasury stock		(2.7	)		—			—			—			(2.7	)
Accumulated other comprehensive income (loss)		(90.3	)		1.5			1.6			(3.1	)		(90.3	)
Total Shareholders’ Equity		121.7			109.8			40.5			(150.3	)		121.7
Total Liabilities and Shareholders’ Equity	$	741.7		$	178.9		$	413.4		$	(468.9	)	$	865.1

Condensed Consolidating Statements of Cash Flows Six Months Ended May 31, 2012

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
Operating Activities
Net income (loss)	$	20.5		$	7.5		$	7.6		$	(15.1	)	$	20.5
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		8.2			—			7.9			—			16.1
Gain on sale of business		(6.0	)		—			—			—			(6.0	)
Non-cash stock compensation expense		2.3			—			—			—			2.3
Deferred income taxes		.7			—			(.7	)
Provision for obsolete inventories		.3			—			(.3	)
Provision for doubtful accounts		(.9	)		—			(.3	)		—			(1.2	)
Other		1.6			—			—			—			1.6
Changes in operating assets and liabilities:
Current assets		(11.3	)		—			(2.5	)		.4			(13.4	)
Current liabilities		15.3			(.4	)		(15.1	)		6.0			5.8
Other non-current assets		(1.4	)		(7.5	)		7.3			(10.7	)		(12.3	)
Other non-current liabilities		(1.0	)		(.3	)		(12.6	)		19.7			5.8
Discontinued operations		5.2			—			(2.1	)		—			3.1
Net Cash Provided By (Used In) Operating Activities		33.5			(.7	)		(10.8	)		.3			22.3
Investing Activities
Capital expenditures		(6.3	)		—			(3.9	)		—			(10.2	)
Proceeds from sale of business		12.4			—			—			—			12.4
Net Cash Provided By (Used In) Investing Activities		6.1			—			(3.9	)		—			2.2
Financing Activities
Repayment of debt obligations		(1.0	)		—			—			—			(1.0	)
Short-term debt (payments), net		—			—			(.2	)		—			(.2	)
Payments received from the exercise of stock options		1.4			—			—						1.4
Restricted cash		(1.3	)		—			—			—			(1.3	)
Net Cash Provided by (Used In) Financing Activities		(.9	)		—			(.2	)		—			(1.1	)
Effect of exchange rate changes on cash		1.0			.7			4.2			(.3	)		5.6
Net Increase (Decrease) In Cash And Cash Equivalents		39.7			—			(10.7	)		—			29.0
Cash and cash equivalents at beginning of period		55.1			—			43.8			—			98.9
Cash And Cash Equivalents At End Of Period	$	94.8		$	—		$	33.1		$	—		$	127.9

Condensed Consolidating Statements of Cash Flows Six Months Ended May 31, 2011

(Dollars in millions)	OMNOVA Solutions (Parent)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total
Operating Activities
Net income (loss)	$	7.2		$	5.5		$	4.5		$	(10.0	)	$	7.2
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		8.2			—			8.2			—			16.4
Non-cash stock compensation expense		2.1			—			—			—			2.1
Deferred income taxes		—			—			1.7			(.9	)		.8
Provision for obsolete inventories		.5			—			2.0			—			2.5
Provision for doubtful accounts		—			—			.6			—			.6
Other		1.4			—			—			.1			1.5
Changes in operating assets and liabilities:
Current assets		(29.3	)		(.1	)		(25.4	)		(8.1	)		(62.9	)
Current liabilities		(.9	)		(.1	)		12.2			10.1			21.3
Other non-current assets		(230.3	)		(4.5	)		(50.4	)		283.6			(1.6	)
Other non-current liabilities		(40.2	)		—			156.8			(128.4	)		(11.8	)
Discontinued operations		(.3	)		—			.1			—			(.2	)
Net Cash Provided By (Used In) Operating Activities		(281.6	)		.8			110.3			146.4			(24.1	)
Investing Activities
Capital expenditures		(6.1	)		—			(4.6	)		—			(10.7	)
Proceeds from asset sale		—			—			1.0			—			1.0
Acquisitions of businesses, less cash acquired		(21.5	)		(146.1	)		(103.9	)		(.1	)		(271.6	)
Restricted cash		253.2			—			—			—			253.2
Discontinued operations		(.2	)		—			(.1	)		—			(.3	)
Net Cash Provided By (Used In) Investing Activities		225.4			(146.1	)		(107.6	)		(.1	)		(28.4	)
Financing Activities
Proceeds from borrowings		198.7			—			—			—			198.7
Repayment of debt obligations		(142.6	)		—			—			—			(142.6	)
Short-term debt (payments), net		—			—			1.4			—			1.4
Payments for deferred financing fees		(10.3	)		—			—			—			(10.3	)
Other		2.4			143.6			—			(143.6	)		2.4
Net Cash Provided by (Used In) Financing Activities		48.2			143.6			1.4			(143.6	)		49.6
Effect of exchange rate changes on cash		(1.6	)		1.7			8.8			(2.7	)		6.2
Net Increase (Decrease) In Cash And Cash Equivalents		(9.6	)		—			12.9			—			3.3
Cash and cash equivalents at beginning of period		49.6			—			21.6			—			71.2
Cash And Cash Equivalents At End Of Period	$	40.0		$	—		$	34.5		$	—		$	74.5