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

9 Months Ended

Sep. 30, 2014

Guarantor - Condensed Consolidating Statements of Operations [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

MOMENTIVE SPECIALTY CHEMICALS INC.

SEPTEMBER 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)	$	9		$	2	$	—		$	106		$	—		$	117
Short-term investments	—			—		—			10			—			10
Accounts receivable, net	220			—		2			503			—			725
Intercompany accounts receivable	87			103		1			82			(273		)	—
Intercompany loans receivable - current portion	248			—		—			29			(277		)	—
Inventories:
Finished and in-process goods	115			—		—			186			—			301
Raw materials and supplies	58			—		—			77			—			135
Other current assets	29			—		—			49			—			78
Total current assets	766			105		3			1,042			(550		)	1,366
Investment in unconsolidated entities	339			—		33			30			(353		)	49
Deferred income taxes	—			—		—			18			—			18
Other assets, net	21			56		1			50			—			128
Intercompany loans receivable	1,083			3,364		28			13			(4,488		)	—
Property and equipment, net	532			—		—			527			—			1,059
Goodwill	66			—		—			56			—			122
Other intangible assets, net	58			—		—			27			—			85
Total assets	$	2,865		$	3,525	$	65		$	1,763		$	(5,391	)	$	2,827
Liabilities and (Deficit) Equity
Current liabilities:
Accounts payable	$	166		$	—	$	—		$	338		$	—		$	504
Intercompany accounts payable	185			4		—			84			(273		)	—
Debt payable within one year	27			—		—			101			—			128
Intercompany loans payable within one year	29			—		—			248			(277		)	—
Interest payable	4			85		—			1			—			90
Income taxes payable	5			—		—			13			—			18
Accrued payroll and incentive compensation	22			—		—			41			—			63
Other current liabilities	66			—		—			52			—			118
Total current liabilities	504			89		—			878			(550		)	921
Long-term liabilities:
Long-term debt	353			3,326		—			27			—			3,706
Intercompany loans payable	3,398			—		6			1,084			(4,488		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	641			—		244			—			(885		)	—
Long-term pension and post employment benefit obligations	39			—		—			170			—			209
Deferred income taxes	7			2		—			12			—			21
Other long-term liabilities	106			—		—			48			—			154
Total liabilities	5,048			3,417		250			2,219			(5,923		)	5,011
Total Momentive Specialty Chemicals Inc. shareholders (deficit) equity	(2,183		)	108		(185		)	(455		)	532			(2,183		)
Noncontrolling interest	—			—		—			(1		)	—			(1		)
Total (deficit) equity	(2,183		)	108		(185		)	(456		)	532			(2,184		)
Total liabilities and (deficit) equity	$	2,865		$	3,525	$	65		$	1,763		$	(5,391	)	$	2,827

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 SEPTEMBER 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	$	597		$	—		$	—		$	816		$	(66	)	$	1,347
Cost of sales	531			—			—			723			(66		)	1,188
Gross profit	66			—			—			93			—			159
Selling, general and administrative expense	24			—			—			60			—			84
Business realignment costs	4			—			—			2			—			6
Other operating expense (income), net	1			—			(1		)	4			—			4
Operating income	37			—			1			27			—			65
Interest expense, net	8			68			—			1			—			77
Intercompany interest expense (income), net	45			(68		)	—			23			—			—
Other non-operating expense (income), net	62			—			—			(44		)	—			18
(Loss) income before income tax and earnings from unconsolidated entities	(78		)	—			1			47			—			(30		)
Income tax (benefit) expense	(1		)	(6		)	—			9			—			2
(Loss) income before earnings from unconsolidated entities	(77		)	6			1			38			—			(32		)
Earnings from unconsolidated entities, net of taxes	49			—			26			2			(73		)	4
Net (loss) income	$	(28	)	$	6		$	27		$	40		$	(73	)	$	(28	)
Comprehensive (loss) income	$	(67	)	$	7		$	26		$	35		$	(68	)	$	(67	)

MOMENTIVE SPECIALTY CHEMICALS INC.

THREE MONTHS ENDED SEPTEMBER 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	$	553		$	—		$	—		$	748		$	(52	)	$	1,249
Cost of sales	475			—			—			669			(52		)	1,092
Gross profit	78			—			—			79			—			157
Selling, general and administrative expense	28			—			—			65			—			93
Business realignment costs	2			—			—			2			—			4
Other operating (income) expense, net	—			—			(1		)	3			—			2
Operating income	48			—			1			9			—			58
Interest expense, net	7			68			—			2			—			77
Intercompany interest expense (income), net	31			(69		)	—			38			—			—
Other non-operating (income) expense, net	(25		)	—			—			23			—			(2		)
Income (loss) before income tax and losses from unconsolidated entities	35			1			1			(54		)	—			(17		)
Income tax expense (benefit)	61			—			—			(4		)	—			57
(Loss) income before losses from unconsolidated entities	(26		)	1			1			(50		)	—			(74		)
Losses from unconsolidated entities, net of taxes	(50		)	—			(32		)	—			80			(2		)
Net (loss) income	$	(76	)	$	1		$	(31	)	$	(50	)	$	80		$	(76	)
Comprehensive (loss) income	$	(48	)	$	1		$	(31	)	$	(40	)	$	70		$	(48	)

MOMENTIVE SPECIALTY CHEMICALS INC.

NINE MONTHS ENDED SEPTEMBER 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	$	1,770		$	—		$	—		$	2,392		$	(185	)	$	3,977
Cost of sales	1,560			—			—			2,116			(185		)	3,491
Gross profit	210			—			—			276			—			486
Selling, general and administrative expense	79			—			—			196			—			275
Business realignment costs	19			—			—			5			—			24
Other operating expense (income), net	4			—			(1		)	4			—			7
Operating income	108			—			1			71			—			180
Interest expense, net	23			202			—			5			—			230
Intercompany interest expense (income), net	132			(204		)	—			72			—			—
Other non-operating expense (income), net	67			—			—			(44		)	—			23
(Loss) income before income tax and earnings from unconsolidated entities	(114		)	2			1			38			—			(73		)
Income tax (benefit) expense	(2		)	(6		)	—			31			—			23
(Loss) income before earnings from unconsolidated entities	(112		)	8			1			7			—			(96		)
Earnings from unconsolidated entities, net of taxes	30			—			30			4			(50		)	14
Net (loss) income	$	(82	)	$	8		$	31		$	11		$	(50	)	$	(82	)
Comprehensive (loss) income	$	(117	)	$	8		$	31		$	10		$	(49	)	$	(117	)

MOMENTIVE SPECIALTY CHEMICALS INC.

NINE MONTHS ENDED SEPTEMBER 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	$	1,662		$	—		$	—		$	2,185		$	(156	)	$	3,691
Cost of sales	1,424			—			—			1,971			(156		)	3,239
Gross profit	238			—			—			214			—			452
Selling, general and administrative expense	85			—			—			189			—			274
Asset impairments	—			—			—			7			—			7
Business realignment costs	8			—			—			7			—			15
Other operating expense (income), net	3			(4		)	(1		)	6			—			4
Operating income	142			4			1			5			—			152
Interest expense, net	25			196			—			6			—			227
Intercompany interest expense (income), net	122			(199		)	—			77			—			—
Loss on extinguishment of debt	2			—			—			4			—			6
Other non-operating (income) expense, net	(18		)	—			—			19			—			1
Income (loss) before income tax and (losses) earnings from unconsolidated entities	11			7			1			(101		)	—			(82		)
Income tax expense	19			1			—			11			—			31
(Loss) income before (losses) earnings from unconsolidated entities	(8		)	6			1			(112		)	—			(113		)
(Losses) earnings from unconsolidated entities, net of taxes	(100		)	—			(55		)	2			158			5
Net (loss) income	$	(108	)	$	6		$	(54	)	$	(110	)	$	158		$	(108	)
Comprehensive (loss) income	$	(108	)	$	6		$	(54	)	$	(118	)	$	166		$	(108	)

Condensed Consolidating Statement of Cash Flows [Table Text Block]

MOMENTIVE SPECIALTY CHEMICALS INC.

NINE MONTHS ENDED SEPTEMBER 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 (used in) provided by operating activities	$	(33	)		$	1		$	17		$	90			$	(98	)	$	(23	)
Cash flows provided by (used in) investing activities
Capital expenditures	(49		)		—			—			(47		)		—			(96		)
Capitalized interest	—				—			—			(1		)		—			(1		)
Purchases of securities, net	—				—			—			(1		)		—			(1		)
Capital contribution to subsidiary	(15		)		—			(10		)	—				25			—
Change in restricted cash	—				—			—			4				—			4
Proceeds from sale of assets	—				—			—			1				—			1
Return of capital from subsidiary from sales of accounts receivable	126			(a)	—			—			—				(126		)	—
Investment in unconsolidated affiliates, net	—				—			—			(13		)		—			(13		)
	62				—			(10		)	(57		)		(101		)	(106		)
Cash flows (used in) provided by financing activities
Net short-term debt borrowings	—				—			—			16				—			16
Borrowings of long-term debt	—				1,108			—			20				—			1,128
Repayments of long-term debt	(545		)		(120		)	—			(380		)		—			(1,045		)
Net intercompany loan borrowings (repayments)	437				(882		)	(2		)	447				—			—
Long-term debt and credit facility financing fees	(13		)		(24		)	—			—				—			(37		)
Capital contribution from parent	—				—			10			15				(25		)	—
Common stock dividends paid	—				(83		)	(15		)	—				98			—
Return of capital to parent from sales of accounts receivable	—				—			—			(126		)	(a)	126			—
	(121		)		(1		)	(7		)	(8		)		199			62
Effect of exchange rates on cash and cash equivalents	—				—			—			(2		)		—			(2		)
(Decrease) increase in cash and cash equivalents	(92		)		—			—			23				—			(69		)
Cash and cash equivalents (unrestricted) at beginning of period	276				—			—			125				—			401
Cash and cash equivalents (unrestricted) at end of period	$	184			$	—		$	—		$	148			$	—		$	332

MOMENTIVE SPECIALTY CHEMICALS INC.

NINE MONTHS ENDED SEPTEMBER 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	$	(349	)		$	(3	)	$	9		$	220			$	(9	)	$	(132	)
Cash flows provided by (used in) investing activities
Capital expenditures	(74		)		—			—			(59		)		—			(133		)
Acquisition of businesses	(52		)		—			—			(12		)		—			(64		)
Purchases of securities, net	—				—			—			(4		)		—			(4		)
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	272			(a)	—			—			—				(272		)	—
	130				—			(10		)	(79		)		(246		)	(205		)
Cash flows provided by (used in) financing activities
Net short-term debt borrowings	8				—			—			17				—			25
Borrowings of long-term debt	155				—			—			58				—			213
Repayments of long-term debt	(110		)		—			—			(64		)		—			(174		)
Net intercompany loan borrowings (repayments)	10				—			—			(10		)		—			—
Capital contribution from parent	—				—			10			16				(26		)	—
Common stock dividends paid	—				—			(9		)	—				9			—
Return of capital to parent from sales of accounts receivable	—				—			—			(272		)	(a)	272			—
	63				—			1			(255		)		255			64
Effect of exchange rates on cash and cash equivalents	—				—			—			(5		)		—			(5		)
Decrease in cash and cash equivalents	(156		)		(3		)	—			(119		)		—			(278		)
Cash and cash equivalents (unrestricted) at beginning of period	165				5			—			209				—			379
Cash and cash equivalents (unrestricted) at end of period	$	9			$	2		$	—		$	90			$	—		$	101

(a) During the nine months ended September 30, 2014, Momentive Specialty Chemicals Inc. contributed receivables of $272 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the nine months ended September 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.