Guarantor Non-Guarantor Subsidary Financial Information

3 Months Ended

Mar. 31, 2012

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Guarantees [Text Block]

Guarantor/Non-Guarantor Subsidiary Financial Information

The Company and certain of its U.S. subsidiaries guarantee debt issued by its wholly owned subsidiaries Hexion Nova Scotia, ULC and Hexion U.S. Finance Corporation (together, the “Subsidiary Issuers”), which includes the 6.625% first priority notes due 2020, 8.875% senior secured notes due 2018, the floating rate second-priority senior secured notes due 2014 and the 9% second-priority notes due 2020.

The following information contains the condensed consolidating financial information for MSC (the parent), the Subsidiary Issuers, the combined subsidiary guarantors (Momentive Specialty Chemical Investments Inc.; Borden Chemical Foundry; LLC, Lawter International, Inc.; HSC Capital Corporation; Momentive International, Inc.; Momentive CI Holding Company; NL COOP Holdings LLC and Oilfield Technology Group, Inc.) and the combined non-guarantor subsidiaries, which includes all of the Company’s foreign subsidiaries.

All of the subsidiary issuers and subsidiary guarantors are 100% owned by MSC. All guarantees are full and unconditional, and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its domestic subsidiaries by dividend or loan. While the Company’s Australian, New Zealand and Brazilian subsidiaries are restricted in the payment of dividends and intercompany loans due to the terms of their credit facilities, there are no material restrictions on the Company’s ability to obtain cash from the remaining non-guarantor subsidiaries.

This information includes allocations of corporate overhead to the combined non-guarantor subsidiaries based on net sales. Income tax expense has been provided on the combined non-guarantor subsidiaries based on actual effective tax rates.

MOMENTIVE SPECIALTY CHEMICALS INC.

THREE MONTHS ENDED MARCH 31, 2012

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	538		$	—		$	—		$	769		$	(71	)	$	1,236
Cost of sales	454			—			—			675			(71		)	1,058
Gross profit	84			—			—			94			—			178
Selling, general and administrative expense	30			—			—			55			—			85
Asset impairments	—			—			—			23			—			23
Business realignment costs	2			—			—			13			—			15
Other operating expense, net	5			—			—			6			—			11
Operating income (loss)	47			—			—			(3		)	—			44
Interest expense, net	16			39			—			10			—			65
Intercompany interest expense (income)	30			(42		)	—			12			—			—
Other non-operating (income) expense , net	(11		)	—			(1		)	14			—			2
Income (loss) from continuing operations before income tax, earnings from unconsolidated entities	12			3			1			(39		)	—			(23		)
Income tax benefit	(1		)	—			—			(1		)	—			(2		)
Income (loss) from continuing operations before earnings from unconsolidated entities	13			3			1			(38		)	—			(21		)
(Losses) earnings from unconsolidated entities, net of taxes	(29		)	—			(2		)	—			36			5
Net (loss) income	$	(16	)	$	3		$	(1	)	$	(38	)	$	36		$	(16	)
Comprehensive income (loss)	$	13		$	4		$	(1	)	$	(21	)	$	18		$	13

MOMENTIVE SPECIALTY CHEMICALS INC.

THREE MONTHS ENDED MARCH 31, 2011

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	562		$	—		$	—	$	814		$	(82	)	$	1,294
Cost of sales	467			—			—		700			(82		)	1,085
Gross profit	95			—			—		114			—			209
Selling, general and administrative expense	28			—			—		56			—			84
Business realignment costs	1			—			—		2			—			3
Other operating (income) expense, net	(16		)	—			—		19			—			3
Operating income	82			—			—		37			—			119
Interest expense, net	17			38			—		9			—			64
Intercompany interest expense (income)	30			(43		)	—		13			—			—
Other non-operating (income) expense, net	(28		)	—			—		25			—			(3		)
Income (loss) from continuing operations before income tax, earnings from unconsolidated entities	63			5			—		(10		)	—			58
Income tax (benefit) expense	(8		)	—			—		11			—			3
Income (loss) from continuing operations before earnings from unconsolidated entities	71			5			—		(21		)	—			55
Earnings from unconsolidated entities, net of taxes	10			—			19		—			(26		)	3
Net income (loss) from continuing operations	81			5			19		(21		)	(26		)	58
Net (loss) income from discontinued operations, net of tax	(18		)	—			—		23			—			5
Net income	$	63		$	5		$	19	$	2		$	(26	)	$	63
Comprehensive income	$	93		$	8		$	19	$	1		$	(28	)	$	93

MOMENTIVE SPECIALTY CHEMICALS INC.

MARCH 31, 2012

CONDENSED CONSOLIDATING BALANCE SHEET (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents (including restricted cash of $0 and $3, respectively)	$	266		$	—		$	—		$	134		$	—		$	400
Short-term investments	—			—			—			4			—			4
Accounts receivable, net	231			—			—			469			—			700
Inventories:
Finished and in-process goods	135			—			—			167			—			302
Raw materials and supplies	38			—			—			88			—			126
Other current assets	18			—			—			61			—			79
Total current assets	688			—			—			923			—			1,611
Other assets, net	97			46			29			90			(87		)	175
Property and equipment, net	498			—			—			698			—			1,196
Goodwill	93			—			—			76			—			169
Other intangible assets, net	57			—			—			44			—			101
Total assets	$	1,433		$	46		$	29		$	1,831		$	(87	)	$	3,252
Liabilities and (Deficit) Equity
Current liabilities
Accounts and drafts payable	$	184		$	—		$	—		$	351		$	—		$	535
Intercompany accounts (receivable) payable	(11		)	(37		)	1			47			—			—
Debt payable within one year	12			—			—			62			—			74
Intercompany loans (receivable) payable	(83		)	—			—			83			—			—
Loans payable to affiliates	2			—			—			—			—			2
Interest payable	8			36			—			3			—			47
Income taxes payable	2			—			—			10			—			12
Accrued payroll and incentive compensation	27			—			—			36			—			63
Other current liabilities	97			—			—			45			—			142
Total current liabilities	238			(1		)	1			637			—			875
Long-term debt	870			2,138			—			436			—			3,444
Intercompany loans payable (receivable)	1,615			(2,343		)	(16		)	744			—			—
Long-term pension and post employment benefit obligations	95			—			—			129			—			224
Deferred income taxes	27			2			—			49			—			78
Other long-term liabilities	116			6			—			36			—			158
Advance from affiliates	225			—			—			—			—			225
Total liabilities	3,186			(198		)	(15		)	2,031			—			5,004
Total Momentive Specialty Chemicals Inc. shareholders (deficit) equity	(1,753		)	244			44			(201		)	(87		)	(1,753		)
Noncontrolling interest	—			—			—			1			—			1
Total (deficit) equity	(1,753		)	244			44			(200		)	(87		)	(1,752		)
Total liabilities and (deficit) equity	$	1,433		$	46		$	29		$	1,831		$	(87	)	$	3,252

MOMENTIVE SPECIALTY CHEMICALS INC.

DECEMBER 31, 2011

CONDENSED CONSOLIDATING BALANCE SHEET

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents (including restricted cash of $0 and $3, respectively)	$	221		$	—		$	—		$	210		$	—		$	431
Short-term investments	—			—			—			7			—			7
Accounts receivable, net	206			—			—			386			—			592
Inventories:
Finished and in-process goods	116			—			—			138			—			254
Raw materials and supplies	33			—			—			70			—			103
Other current assets	27			—			—			45			—			72
Total current assets	603			—			—			856			—			1,459
Other assets, net	107			36			40			89			(103		)	169
Property and equipment, net	504			—			—			705			—			1,209
Goodwill	93			—			—			74			—			167
Other intangible assets, net	59			—			—			45			—			104
Total assets	$	1,366		$	36		$	40		$	1,769		$	(103	)	$	3,108
Liabilities and (Deficit) Equity
Current liabilities
Accounts and drafts payable	$	134		$	—		$	—		$	259		$	—		$	393
Intercompany accounts (receivable) payable	(24		)	(42		)	1			65			—			—
Debt payable within one year	17			—			—			100			—			117
Intercompany loans payable (receivable)	35			—			—			(35		)	—			—
Loans payable to affiliates	2			—			—			—			—			2
Interest payable	14			44			—			3			—			61
Income taxes payable	1			—			—			14			—			15
Accrued payroll and incentive compensation	26			—			—			31			—			57
Other current liabilities	69			—			—			63			—			132
Total current liabilities	274			2			1			500			—			777
Long-term debt	1,134			1,688			—			598			—			3,420
Intercompany loans payable (receivable)	1,254			(1,903		)	(16		)	665			—			—
Long-term pension and post employment benefit obligations	99			—			—			124			—			223
Deferred income taxes	30			2			—			40			—			72
Other long-term liabilities	116			6			—			34			—			156
Advance from affiliates	225			—			—			—			—			225
Total liabilities	3,132			(205		)	(15		)	1,961			—			4,873
Total Momentive Specialty Chemicals Inc. shareholders (deficit) equity	(1,766		)	241			55			(193		)	(103		)	(1,766		)
Noncontrolling interest	—			—			—			1			—			1
Total (deficit) equity	(1,766		)	241			55			(192		)	(103		)	(1,765		)
Total liabilities and (deficit) equity	$	1,366		$	36		$	40		$	1,769		$	(103	)	$	3,108

MOMENTIVE SPECIALTY CHEMICALS INC.

THREE MONTHS ENDED MARCH 31, 2012

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	16		$	1		$	5		$	(6	)	$	—		$	16
Cash flows provided by (used in) investing activities
Capital expenditures	(11		)	—			—			(19		)	—			(30		)
Proceeds from matured debt securities, net	—			—			—			4			—			4
Funds remitted to unconsolidated affiliates	—			—			—			(2		)	—			(2		)
Dividend from subsidiary	6			—			—			—			(6		)	—
Proceeds from the return of capital from subsidiary	21			—			—			—			(21		)	—
	16			—			—			(17		)	(27		)	(28		)
Cash flows provided by (used in) financing activities
Net short-term debt borrowings	—			—			—			(12		)	—			(12		)
Borrowings of long-term debt	—			450			—			—			—			450
Repayments of long-term debt	(269		)	—			—			(194		)	—			(463		)
Net intercompany loan borrowings (repayments)	268			(439		)	—			171			—			—
Capital contribution from parent	16			—			—			—			—			16
Long-term debt and credit facility financing fees	(1		)	(11		)	—			—			—			(12		)
Common stock dividends paid	(1		)	(1		)	(5		)	—			6			(1		)
Return of capital to parent	—			—			—			(21		)	21			—
	13			(1		)	(5		)	(56		)	27			(22		)
Effect of exchange rates on cash and cash equivalents	—			—			—			3			—			3
Increase (decrease) in cash and cash equivalents	45			—			—			(76		)	—			(31		)
Cash and cash equivalents (unrestricted) at beginning of period	221			—			—			207			—			428
Cash and cash equivalents (unrestricted) at end of period	$	266		$	—		$	—		$	131		$	—		$	397

MOMENTIVE SPECIALTY CHEMICALS INC.

THREE MONTHS ENDED MARCH 31, 2011

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows (used in) provided by operating activities	$	(103	)	$	1		$	—	$	(33	)	$	—		$	(135	)
Cash flows provided by (used in) investing activities
Capital expenditures	(17		)	—			—		(10		)	—			(27		)
Change in restricted cash	—			—			—		2			—			2
Funds remitted to unconsolidated affiliates	—			—			—		(5		)	—			(5		)
Dividend from subsidiary	1			—			—		—			(1		)	—
Proceeds from sale of business, net of cash transferred	124			—			—		—			—			124
Proceeds from the return of capital from subsidiary	14			—			—		—			(14		)	—
	122			—			—		(13		)	(15		)	94
Cash flows (used in) provided by financing activities
Net short-term debt (repayments) borrowings	(5		)	—			—		1			—			(4		)
Borrowings of long-term debt	50			—			—		176			—			226
Repayments of long-term debt	(54		)	—			—		(206		)	—			(260		)
Return of capital to parent	—			—			—		(14		)	14			—
Net intercompany loan (repayments) borrowings	(55		)	—			—		55			—			—
Payments of dividends on common stock	—			(1		)	—		—			1			—
	(64		)	(1		)	—		12			15			(38		)
Effect of exchange rates on cash and cash equivalents	—			—			—		1			—			1
Decrease in cash and cash equivalents	(45		)	—			—		(33		)	—			(78		)
Cash and cash equivalents (unrestricted) at beginning of period	56			—			—		124			—			180
Cash and cash equivalents (unrestricted) at end of period	$	11		$	—		$	—	$	91		$	—		$	102