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

6 Months Ended

Jun. 30, 2015

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

HEXION INC.

JUNE 30, 2015

CONDENSED CONSOLIDATING BALANCE SHEET (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents (including restricted cash of $0 and $16, respectively)	$	181		$	—		$	143		$	—		$	324
Short-term investments	—			—			2			—			2
Accounts receivable, net	150			—			475			—			625
Intercompany accounts receivable	112			—			121			(233		)	—
Intercompany loans receivable - current portion	21			—			40			(61		)	—
Inventories:				—									—
Finished and in-process goods	106			—			161			—			267
Raw materials and supplies	44			—			63			—			107
Other current assets	28			—			34			—			62
Total current assets	642			—			1,039			(294		)	1,387
Investment in unconsolidated entities	164			31			24			(177		)	42
Deferred income taxes	—			—			15			—			15
Other assets, net	74			6			28			—			108
Intercompany loans receivable	1,268			29			107			(1,404		)	—
Property and equipment, net	539			—			486			—			1,025
Goodwill	66			—			49			—			115
Other intangible assets, net	52			—			20			—			72
Total assets	$	2,805		$	66		$	1,768		$	(1,875	)	$	2,764
Liabilities and Deficit
Current liabilities:
Accounts payable	$	145		$	—		$	280		$	—		$	425
Intercompany accounts payable	121			—			112			(233		)	—
Debt payable within one year	—			—			75			—			75
Intercompany loans payable within one year	40			—			21			(61		)	—
Interest payable	87			—			1			—			88
Income taxes payable	6			—			18			—			24
Accrued payroll and incentive compensation	27			—			31			—			58
Other current liabilities	69			—			53			—			122
Total current liabilities	495			—			591			(294		)	792
Long-term liabilities:
Long-term debt	3,909			—			53			—			3,962
Intercompany loans payable	117			6			1,281			(1,404		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	536			177			—			(713		)	—
Long-term pension and post employment benefit obligations	55			—			204			—			259
Deferred income taxes	10			—			8			—			18
Other long-term liabilities	116			—			52			—			168
Total liabilities	5,238			183			2,189			(2,411		)	5,199
Total Hexion Inc. shareholder’s deficit	(2,433		)	(117		)	(419		)	536			(2,433		)
Noncontrolling interest	—			—			(2		)	—			(2		)
Total deficit	(2,433		)	(117		)	(421		)	536			(2,435		)
Total liabilities and deficit	$	2,805		$	66		$	1,768		$	(1,875	)	$	2,764

HEXION INC.

DECEMBER 31, 2014

CONDENSED CONSOLIDATING BALANCE SHEET

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents (including restricted cash of $0 and $16, respectively)	$	23		$	—		$	149		$	—		$	172
Short-term investments	—			—			7			—			7
Accounts receivable, net	174			—			417			—			591
Intercompany accounts receivable	118			—			138			(256		)	—
Intercompany loans receivable - current portion	265			—			43			(308		)	—
Inventories:													—
Finished and in-process goods	117			—			173			—			290
Raw materials and supplies	46			—			64			—			110
Other current assets	36			—			37			—			73
Total current assets	779			—			1,028			(564		)	1,243
Investment in unconsolidated entities	234			34			29			(249		)	48
Deferred income taxes	—			—			18			—			18
Other assets, net	76			6			28			—			110
Intercompany loans receivable	1,046			28			17			(1,091		)	—
Property and equipment, net	534			—			521			—			1,055
Goodwill	65			—			54			—			119
Other intangible assets, net	56			—			25			—			81
Total assets	$	2,790		$	68		$	1,720		$	(1,904	)	$	2,674
Liabilities and Deficit
Current liabilities:
Accounts payable	$	142		$	—		$	284		$	—		$	426
Intercompany accounts payable	138			—			118			(256		)	—
Debt payable within one year	26			—			73			—			99
Intercompany loans payable within one year	43			—			265			(308		)	—
Interest payable	81			—			1			—			82
Income taxes payable	6			—			6			—			12
Accrued payroll and incentive compensation	34			—			33			—			67
Other current liabilities	69			—			66			—			135
Total current liabilities	539			—			846			(564		)	821
Long term liabilities:
Long-term debt	3,674			—			61			—			3,735
Intercompany loans payable	36			6			1,049			(1,091		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	705			249			—			(954		)	—
Long-term pension and post employment benefit obligations	59			—			219			—			278
Deferred income taxes	8			—			11			—			19
Other long-term liabilities	117			—			54			—			171
Total liabilities	5,138			255			2,240			(2,609		)	5,024
Total Hexion Inc. shareholder’s deficit	(2,348		)	(187		)	(518		)	705			(2,348		)
Noncontrolling interest	—			—			(2		)	—			(2		)
Total deficit	(2,348		)	(187		)	(520		)	705			(2,350		)
Total liabilities and deficit	$	2,790		$	68		$	1,720		$	(1,904	)	$	2,674

Condensed Consolidating Statement of Operations [Table Text Block]

HEXION INC.

THREE MONTHS ENDED JUNE 30, 2015

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	443		$	—	$	692		$	(48	)	$	1,087
Cost of sales	398			—		575			(48		)	925
Gross profit	45			—		117			—			162
Selling, general and administrative expense	25			—		51			—			76
Business realignment costs	1			—		4			—			5
Other operating expense, net	—			—		2			—			2
Operating income	19			—		60			—			79
Interest expense, net	83			—		1			—			84
Intercompany interest (income) expense, net	(20		)	—		20			—			—
Other non-operating (income) expense, net	(32		)	—		34			—			2
(Loss) income before income tax and earnings (losses) from unconsolidated entities	(12		)	—		5			—			(7		)
Income tax expense (benefit)	3			—		(2		)	—			1
(Loss) income before earnings from unconsolidated entities	(15		)	—		7			—			(8		)
Earnings from unconsolidated entities, net of taxes	13			4		2			(13		)	6
Net (loss) income	$	(2	)	$	4	$	9		$	(13	)	$	(2	)
Comprehensive income	$	11		$	5	$	14		$	(19	)	$	11

HEXION INC.

THREE MONTHS ENDED JUNE 30, 2014

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	595		$	—	$	804		$	(62	)	$	1,337
Cost of sales	524			—		711			(62		)	1,173
Gross profit	71			—		93			—			164
Selling, general and administrative expense	24			—		69			—			93
Business realignment costs	10			—		2			—			12
Other operating expense (income), net	2			—		(3		)	—			(1		)
Operating income	35			—		25			—			60
Interest expense, net	74			—		2			—			76
Intercompany interest (income) expense, net	(24		)	—		24			—			—
Other non-operating expense (income), net	5			—		(2		)	—			3
(Loss) income before income tax and earnings from unconsolidated entities	(20		)	—		1			—			(19		)
Income tax expense	2			—		7			—			9
Loss before earnings from unconsolidated entities	(22		)	—		(6		)	—			(28		)
Earnings from unconsolidated entities, net of taxes	—			5		1			—			6
Net (loss) income	$	(22	)	$	5	$	(5	)	$	—		$	(22	)
Comprehensive (loss) income	$	(26	)	$	5	$	(11	)	$	6		$	(26	)

HEXION INC.

SIX MONTHS ENDED JUNE 30, 2015

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	908		$	—	$	1,355		$	(97	)	$	2,166
Cost of sales	803			—		1,142			(97		)	1,848
Gross profit	105			—		213			—			318
Selling, general and administrative expense	60			—		98			—			158
Business realignment costs	3			—		5			—			8
Other operating expense, net	4			—		6			—			10
Operating income	38			—		104			—			142
Interest expense, net	158			—		3			—			161
Intercompany interest (income) expense, net	(40		)	—		40			—			—
Other non-operating expense (income), net	69			—		(70		)	—			(1		)
Loss before income tax and earnings (losses) from unconsolidated entities	(149		)	—		131			—			(18		)
Income tax (benefit) expense	(2		)	—		29			—			27
Loss before earnings (losses) from unconsolidated entities	(147		)	—		102			—			(45		)
Earnings from unconsolidated entities, net of taxes	111			78		—			(180		)	9
Net (loss) income	$	(36	)	$	78	$	102		$	(180	)	$	(36	)
Comprehensive (loss) income	$	(85	)	$	79	$	82		$	(161	)	$	(85	)

HEXION INC.

SIX MONTHS ENDED JUNE 30, 2014

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	1,173		$	—	$	1,576		$	(119	)	$	2,630
Cost of sales	1,029			—		1,389			(119		)	2,299
Gross profit	144			—		187			—			331
Selling, general and administrative expense	51			—		136			—			187
Business realignment costs	15			—		3			—			18
Other operating expense, net	3			—		—			—			3
Operating income	75			—		48			—			123
Interest expense, net	149			—		4			—			153
Intercompany interest (income) expense, net	(49		)	—		49			—			—
Other non-operating expense, net	5			—		—			—			5
Loss before income tax and (losses) earnings from unconsolidated entities	(30		)	—		(5		)	—			(35		)
Income tax (benefit) expense	(3		)	—		18			—			15
Loss before (losses) earnings from unconsolidated entities	(27		)	—		(23		)	—			(50		)
(Losses) earnings from unconsolidated entities, net of taxes	(13		)	4		2			17			10
Net (loss) income	$	(40	)	$	4	$	(21	)	$	17		$	(40	)
Comprehensive (loss) income	$	(41	)	$	4	$	(18	)	$	14		$	(41	)

Condensed Consolidating Statement of Cash Flows [Table Text Block]

HEXION INC.

SIX MONTHS ENDED JUNE 30, 2015

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

	Hexion Inc.				Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries				Eliminations			Consolidated
Cash flows (used in) provided by operating activities	$	(148	)		$	9		$	176			$	(9	)	$	28
Cash flows provided by (used in) investing activities
Capital expenditures	(42		)		—			(37		)		—			(79		)
Proceeds from the sale of investments, net	—				—			4				—			4
Return of capital from subsidiary from sales of accounts receivable	151			(a)	—			—				(151		)	—
	109				—			(33		)		(151		)	(75		)
Cash flows (used in) provided by financing activities
Net short-term debt repayments	(5		)		—			—				—			(5		)
Borrowings of long-term debt	470				—			20				—			490
Repayments of long-term debt	(255		)		—			(19		)		—			(274		)
Net intercompany loan (repayments) borrowings	(5		)		—			5				—			—
Long-term debt and credit facility financing fees	(8		)		—			—				—			(8		)
Common stock dividends paid	—				(9		)	—				9			—
Return of capital to parent from sales of accounts receivable	—				—			(151		)	(a)	151			—
	197				(9		)	(145		)		160			203
Effect of exchange rates on cash and cash equivalents	—				—			(4		)		—			(4		)
Increase (decrease) in cash and cash equivalents	158				—			(6		)		—			152
Cash and cash equivalents (unrestricted) at beginning of period	23				—			133				—			156
Cash and cash equivalents (unrestricted) at end of period	$	181			$	—		$	127			$	—		$	308

(a) During the six months ended June 30, 2015, Hexion Inc. contributed receivables of $151 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the six months ended June 30, 2015, the non-guarantor subsidiary sold the contributed receivables to certain banks under various supplier financing agreements. The cash proceeds were returned to Hexion 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 Hexion Inc., respectively.

HEXION INC.

SIX MONTHS ENDED JUNE 30, 2014

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

	Hexion Inc.				Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries				Eliminations			Consolidated
Cash flows (used in) provided by operating activities	$	(270	)		$	6		$	84			$	(6	)	$	(186	)
Cash flows provided by (used in) investing activities
Capital expenditures	(41		)		—			(37		)		—			(78		)
Proceeds from sale of investments, net	—				—			3				—			3
Change in restricted cash					—			(2		)		—			(2		)
Capital contribution to subsidiary	(16		)		(10		)	—				26			—
Disbursement of affiliated loan	—				—			(50		)		—			(50		)
Repayment of affiliated loan	—				—			50				—			50
Acquisition of businesses	(52		)					(12		)					(64		)
Return of capital from subsidiary from sales of accounts receivable	186			(a)	—			—				(186		)	—
Investment in unconsolidated affiliates, net	—				—			(2		)		—			(2		)
	77				(10		)	(50		)		(160		)	(143		)
Cash flows (used in) provided by 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	(138		)		—			(122		)		—			(260		)
Cash and cash equivalents (unrestricted) at beginning of period	170				—			209				—			379
Cash and cash equivalents (unrestricted) at end of period	$	32			$	—		$	87			$	—		$	119

(a) During the six months ended June 30, 2014, Hexion 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 Hexion 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 Hexion Inc., respectively.