Guarantor Non-Guarantor Subsidiary Financial Information Level 3 (Tables)

6 Months Ended

Jun. 30, 2014

Guarantor - Condensed Consolidating Statements of Operations [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

MOMENTIVE SPECIALTY CHEMICALS INC.

JUNE 30, 2014

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, $0 and $16, respectively)	$	30		$	2	$	—		$	103		$	—		$	135
Short-term investments	—			—		—			4			—			4
Accounts receivable, net	213			3		2			510			—			728
Intercompany accounts receivable	115			89		—			370			(574		)	—
Intercompany loans receivable - current portion	211			—		—			245			(456		)	—
Inventories:
Finished and in-process goods	124			—		—			207			—			331
Raw materials and supplies	65			—		—			89			—			154
Other current assets	23			—		—			45			—			68
Total current assets	781			94		2			1,573			(1,030		)	1,420
Investment in unconsolidated entities	359			—		32			30			(372		)	49
Deferred income taxes	—			—		—			19			—			19
Other assets, net	23			58		1			56			—			138
Intercompany loans receivable	1,165			3,364		30			2,517			(7,076		)	—
Property and equipment, net	517			—		—			565			—			1,082
Goodwill	66			—		—			60			—			126
Other intangible assets, net	59			—		—			32			—			91
Total assets	$	2,970		$	3,516	$	65		$	4,852		$	(8,478	)	$	2,925
Liabilities and (Deficit) Equity
Current liabilities:
Accounts payable	$	160		$	—	$	—		$	350		$	—		$	510
Intercompany accounts payable	136			4		—			434			(574		)	—
Debt payable within one year	20			—		—			117			—			137
Intercompany loans payable within one year	56			—		—			400			(456		)	—
Interest payable	9			73		—			1			—			83
Income taxes payable	4			—		—			13			—			17
Accrued payroll and incentive compensation	26			—		—			36			—			62
Other current liabilities	64			—		—			55			—			119
Total current liabilities	475			77		—			1,406			(1,030		)	928
Long-term liabilities:
Long-term debt	354			3,326		—			29			—			3,709
Intercompany loans payable	3,402			—		8			3,666			(7,076		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	699			—		266			—			(965		)	—
Long-term pension and post employment benefit obligations	43			—		—			183			—			226
Deferred income taxes	8			2		—			12			—			22
Other long-term liabilities	105			6		—			46			—			157
Total liabilities	5,086			3,411		274			5,342			(9,071		)	5,042
Total Momentive Specialty Chemicals Inc. shareholders (deficit) equity	(2,116		)	105		(209		)	(489		)	593			(2,116		)
Noncontrolling interest	—			—		—			(1		)	—			(1		)
Total (deficit) equity	(2,116		)	105		(209		)	(490		)	593			(2,117		)
Total liabilities and (deficit) equity	$	2,970		$	3,516	$	65		$	4,852		$	(8,478	)	$	2,925

MOMENTIVE SPECIALTY CHEMICALS INC.

DECEMBER 31, 2013

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, $0 and $14, respectively)	$	165		$	5	$	—		$	223		$	—		$	393
Short-term investments	—			—		—			7			—			7
Accounts receivable, net	179			—		—			422			—			601
Intercompany accounts receivable	190			89		—			374			(653		)	—
Intercompany loans receivable - current portion	216			—		—			278			(494		)	—
Inventories:
Finished and in-process goods	105			—		—			152			—			257
Raw materials and supplies	38			—		—			65			—			103
Other current assets	27			—		—			45			—			72
Total current assets	920			94		—			1,566			(1,147		)	1,433
Investment in unconsolidated entities	351			—		29			28			(363		)	45
Deferred income taxes	—			—		—			21			—			21
Other assets, net	31			59		2			42			—			134
Intercompany loans receivable	1,251			3,355		29			4,221			(8,856		)	—
Property and equipment, net	491			—		—			556			—			1,047
Goodwill	52			—		—			60			—			112
Other intangible assets, net	47			—		—			35			—			82
Total assets	$	3,143		$	3,508	$	60		$	6,529		$	(10,366	)	$	2,874
Liabilities and (Deficit) Equity
Current liabilities:
Accounts payable	$	165		$	—	$	—		$	318		$	—		$	483
Intercompany accounts payable	130			—		—			523			(653		)	—
Debt payable within one year	20			—		—			89			—			109
Intercompany loans payable within one year	173			—		—			321			(494		)	—
Interest payable	10			72		—			1			—			83
Income taxes payable	4			—		—			8			—			12
Accrued payroll and incentive compensation	19			—		—			28			—			47
Other current liabilities	65			—		—			62			—			127
Total current liabilities	586			72		—			1,350			(1,147		)	861
Long term liabilities:
Long-term debt	309			3,326		—			30			—			3,665
Intercompany loans payable	3,388			—		7			5,461			(8,856		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	762			—		261			—			(1,023		)	—
Long-term pension and post employment benefit obligations	50			—		—			184			—			234
Deferred income taxes	7			2		—			12			—			21
Other long-term liabilities	110			6		—			47			—			163
Total liabilities	5,212			3,406		268			7,084			(11,026		)	4,944
Total Momentive Specialty Chemicals Inc. shareholders (deficit) equity	(2,069		)	102		(208		)	(554		)	660			(2,069		)
Noncontrolling interest	—			—		—			(1		)	—			(1		)
Total (deficit) equity	(2,069		)	102		(208		)	(555		)	660			(2,070		)
Total liabilities and (deficit) equity	$	3,143		$	3,508	$	60		$	6,529		$	(10,366	)	$	2,874

Condensed Consolidating Statement of Operations [Table Text Block]

MOMENTIVE SPECIALTY CHEMICALS INC.

THREE MONTHS ENDED JUNE 30, 2014

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	595		$	—		$	—	$	804		$	(62	)	$	1,337
Cost of sales	524			—			—		712			(62		)	1,174
Gross profit	71			—			—		92			—			163
Selling, general and administrative expense	27			—			—		68			—			95
Business realignment costs	10			—			—		2			—			12
Other operating expense (income), net	2			—			—		(3		)	—			(1		)
Operating income	32			—			—		25			—			57
Interest expense, net	7			67			—		2			—			76
Intercompany interest expense (income), net	44			(68		)	—		24			—			—
Other non-operating expense (income), net	5			—			—		(2		)	—			3
(Loss) income before income tax and (losses) earnings from unconsolidated entities	(24		)	1			—		1			—			(22		)
Income tax expense	—			—			—		11			—			11
(Loss) income before (losses) earnings from unconsolidated entities	(24		)	1			—		(10		)	—			(33		)
(Losses) earnings from unconsolidated entities, net of taxes	(3		)	—			5		1			3			6
Net (loss) income	$	(27	)	$	1		$	5	$	(9	)	$	3		$	(27	)
Comprehensive (loss) income	$	(29	)	$	—		$	6	$	(16	)	$	10		$	(29	)

MOMENTIVE SPECIALTY CHEMICALS INC.

THREE MONTHS ENDED JUNE 30, 2013

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	572		$	—		$	—		$	729		$	(51	)	$	1,250
Cost of sales	485			—			—			664			(51		)	1,098
Gross profit	87			—			—			65			—			152
Selling, general and administrative expense	29			—			—			60			—			89
Asset impairments	—			—			—			7			—			7
Business realignment costs	2			—			—			—			—			2
Other operating (income) expense, net	(1		)	—			—			6			—			5
Operating income (loss)	57			—			—			(8		)	—			49
Interest expense, net	8			67			—			1			—			76
Intercompany interest expense (income), net	47			(67		)	—			20			—			—
Other non-operating (income) expense, net	(8		)	—			—			6			—			(2		)
Income (loss) before income tax and (losses) earnings from unconsolidated entities	10			—			—			(35		)	—			(25		)
Income tax (benefit) expense	(4		)	—			—			10			—			6
Income (loss) before (losses) earnings from unconsolidated entities	14			—			—			(45		)	—			(31		)
(Losses) earnings from unconsolidated entities, net of taxes	(42		)	—			(17		)	1			61			3
Net loss	$	(28	)	$	—		$	(17	)	$	(44	)	$	61		$	(28	)
Comprehensive (loss) income	$	(43	)	$	1		$	(16	)	$	(62	)	$	77		$	(43	)

MOMENTIVE SPECIALTY CHEMICALS INC.

SIX MONTHS ENDED JUNE 30, 2014

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	1,173		$	—		$	—	$	1,576		$	(119	)	$	2,630
Cost of sales	1,029			—			—		1,393			(119		)	2,303
Gross profit	144			—			—		183			—			327
Selling, general and administrative expense	55			—			—		136			—			191
Business realignment costs	15			—			—		3			—			18
Other operating expense, net	3			—			—		—			—			3
Operating income	71			—			—		44			—			115
Interest expense, net	15			134			—		4			—			153
Intercompany interest expense (income), net	87			(136		)	—		49			—			—
Other non-operating expense, net	5			—			—		—			—			5
(Loss) income before income tax and (losses) earnings from unconsolidated entities	(36		)	2			—		(9		)	—			(43		)
Income tax (benefit) expense	(1		)	—			—		22			—			21
(Loss) income before (losses) earnings from unconsolidated entities	(35		)	2			—		(31		)	—			(64		)
(Losses) earnings from unconsolidated entities, net of taxes	(19		)	—			4		2			23			10
Net (loss) income	$	(54	)	$	2		$	4	$	(29	)	$	23		$	(54	)
Comprehensive (loss) income	$	(50	)	$	1		$	5	$	(25	)	$	19		$	(50	)

MOMENTIVE SPECIALTY CHEMICALS INC.

SIX MONTHS ENDED JUNE 30, 2013

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	1,109		$	—		$	—		$	1,437		$	(104	)	$	2,442
Cost of sales	949			—			—			1,302			(104		)	2,147
Gross profit	160			—			—			135			—			295
Selling, general and administrative expense	57			—			—			124			—			181
Asset impairments	—			—			—			7			—			7
Business realignment costs	6			—			—			5			—			11
Other operating expense (income), net	3			(4		)	—			3			—			2
Operating income (loss)	94			4			—			(4		)	—			94
Interest expense, net	18			128			—			4			—			150
Intercompany interest expense (income), net	91			(130		)	—			39			—			—
Loss on extinguishment of debt	2			—			—			4			—			6
Other non-operating expense (income), net	7			—			—			(4		)	—			3
(Loss) income before income tax and (losses) earnings from unconsolidated entities	(24		)	6			—			(47		)	—			(65		)
Income tax (benefit) expense	(42		)	1			—			15			—			(26		)
Income (loss) before (losses) earnings from unconsolidated entities	18			5			—			(62		)	—			(39		)
(Losses) earnings from unconsolidated entities, net of taxes	(50		)	—			(23		)	2			78			7
Net (loss) income	$	(32	)	$	5		$	(23	)	$	(60	)	$	78		$	(32	)
Comprehensive (loss) income	$	(60	)	$	5		$	(23	)	$	(78	)	$	96		$	(60	)

Condensed Consolidating Statement of Cash Flows [Table Text Block]

MOMENTIVE SPECIALTY CHEMICALS INC.

SIX MONTHS ENDED JUNE 30, 2013

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	$	7			$	1		$	13		$	9			$	(95	)	$	(65	)
Cash flows provided by (used in) investing activities
Capital expenditures	(29		)		—			—			(31		)		—			(60		)
Capitalized interest	—				—			—			(1		)		—			(1		)
Purchases of debt securities, net	—				—			—			(1		)		—			(1		)
Capital contribution to subsidiary	(15		)		—			(10		)	—				25			—
Change in restricted cash	—				—			—			15				—			15
Proceeds from sale of assets	—				—			—			1				—			1
Return of capital from subsidiary from sales of accounts receivable	75			(a)	—			—			—				(75		)	—
Investment in unconsolidated affiliates, net	—				—			—			(13		)		—			(13		)
	31				—			(10		)	(30		)		(50		)	(59		)
Cash flows (used in) provided by financing activities
Net short-term debt borrowings	—				—			—			9				—			9
Borrowings of long-term debt	—				1,108			—			19				—			1,127
Repayments of long-term debt	(544		)		(120		)	—			(376		)		—			(1,040		)
Net intercompany loan borrowings (repayments)	467				(882		)	(1		)	416				—			—
Long-term debt and credit facility financing fees	(12		)		(24		)	—			—				—			(36		)
Capital contribution from parent	—				—			10			15				(25		)	—
Common stock dividends paid	—				(83		)	(12		)	—				95			—
Return of capital to parent from sales of accounts receivable	—				—			—			(75		)	(a)	75			—
	(89		)		(1		)	(3		)	8				145			60
Effect of exchange rates on cash and cash equivalents	—				—			—			(5		)		—			(5		)
Decrease in cash and cash equivalents	(51		)		—			—			(18		)		—			(69		)
Cash and cash equivalents (unrestricted) at beginning of period	276				—			—			125				—			401
Cash and cash equivalents (unrestricted) at end of period	$	225			$	—		$	—		$	107			$	—		$	332

MOMENTIVE SPECIALTY CHEMICALS INC.

SIX MONTHS ENDED JUNE 30, 2014

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	$	(267	)		$	(3	)	$	6		$	84			$	(6	)	$	(186	)
Cash flows provided by (used in) investing activities
Capital expenditures	(41		)		—			—			(37		)		—			(78		)
Acquisition of businesses	(52		)		—			—			(12		)		—			(64		)
Proceeds from sale of debt securities, net	—				—			—			3				—			3
Change in restricted cash	—				—			—			(2		)		—			(2		)
Disbursement of affiliated loan	—				—			—			(50		)		—			(50		)
Repayment of affiliated loan	—				—			—			50				—			50
Capital contribution to subsidiary	(16		)		—			(10		)	—				26			—
Investment in unconsolidated affiliates, net	—				—			—			(2		)		—			(2		)
Return of capital from subsidiary from sales of accounts receivable	186			(a)	—			—			—				(186		)	—
	77				—			(10		)	(50		)		(160		)	(143		)
Cash flows provided by (used in) financing activities
Net short-term debt borrowings	—				—			—			27				—			27
Borrowings of long-term debt	115				—			—			45				—			160
Repayments of long-term debt	(69		)		—			—			(48		)		—			(117		)
Net intercompany loan borrowings (repayments)	9				—			—			(9		)		—			—
Capital contribution from parent	—				—			10			16				(26		)	—
Common stock dividends paid	—				—			(6		)	—				6			—
Return of capital to parent from sales of accounts receivable	—				—			—			(186		)	(a)	186			—
	55				—			4			(155		)		166			70
Effect of exchange rates on cash and cash equivalents	—				—			—			(1		)		—			(1		)
Decrease in cash and cash equivalents	(135		)		(3		)	—			(122		)		—			(260		)
Cash and cash equivalents (unrestricted) at beginning of period	165				5			—			209				—			379
Cash and cash equivalents (unrestricted) at end of period	$	30			$	2		$	—		$	87			$	—		$	119

(a) During the six months ended June 30, 2014, Momentive Specialty Chemicals Inc. contributed receivables of $186 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the six months ended June 30, 2014, the non-guarantor subsidiary sold the contributed receivables to certain banks under various supplier financing agreements. The cash proceeds were returned to Momentive Specialty Chemicals Inc. by the non-guarantor subsidiary as a return of capital. The sale of receivables has been included within cash flows from operating activities on the Combined non-guarantor subsidiaries. The return of the cash proceeds from the sale of receivables has been included as a financing outflow and an investing inflow on the Combined Non-Guarantor Subsidiaries and Momentive Specialty Chemicals Inc., respectively.