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

9 Months Ended

Sep. 30, 2015

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

HEXION INC.

SEPTEMBER 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 $8, respectively)	$	45		$	—		$	150		$	—		$	195
Accounts receivable, net	139			—			440			—			579
Intercompany accounts receivable	126			—			106			(232		)	—
Intercompany loans receivable - current portion	—			—			56			(56		)	—
Inventories:
Finished and in-process goods	104			—			154			—			258
Raw materials and supplies	41			—			63			—			104
Other current assets	32			—			36			—			68
Total current assets	487			—			1,005			(288		)	1,204
Investment in unconsolidated entities	151			30			19			(164		)	36
Deferred income taxes	—			—			16			—			16
Other assets, net	77			6			23			—			106
Intercompany loans receivable	1,256			29			109			(1,394		)	—
Property and equipment, net	548			—			495			—			1,043
Goodwill	66			—			58			—			124
Other intangible assets, net	50			—			19			—			69
Total assets	$	2,635		$	65		$	1,744		$	(1,846	)	$	2,598
Liabilities and Deficit
Current liabilities:
Accounts payable	$	127		$	—		$	259		$	—		$	386
Intercompany accounts payable	106			—			126			(232		)	—
Debt payable within one year	9			—			66			—			75
Intercompany loans payable within one year	56			—			—			(56		)	—
Interest payable	100			—			2			—			102
Income taxes payable	6			—			15			—			21
Accrued payroll and incentive compensation	34			—			37			—			71
Other current liabilities	68			—			50			—			118
Total current liabilities	506			—			555			(288		)	773
Long-term liabilities:
Long-term debt	3,795			—			48			—			3,843
Intercompany loans payable	108			6			1,280			(1,394		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	501			164			—			(665		)	—
Long-term pension and post employment benefit obligations	50			—			202			—			252
Deferred income taxes	10			—			8			—			18
Other long-term liabilities	115			—			49			—			164
Total liabilities	5,085			170			2,142			(2,347		)	5,050
Total Hexion Inc. shareholder’s deficit	(2,450		)	(105		)	(396		)	501			(2,450		)
Noncontrolling interest	—			—			(2		)	—			(2		)
Total deficit	(2,450		)	(105		)	(398		)	501			(2,452		)
Total liabilities and deficit	$	2,635		$	65		$	1,744		$	(1,846	)	$	2,598

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 SEPTEMBER 30, 2015

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	433		$	—		$	675	$	(43	)	$	1,065
Cost of sales	384			—			564		(43		)	905
Gross profit	49			—			111		—			160
Selling, general and administrative expense	29			—			42		—			71
Business realignment costs	1			—			2		—			3
Other operating expense, net	5			—			7		—			12
Operating income	14			—			60		—			74
Interest expense, net	81			—			3		—			84
Intercompany interest (income) expense, net	(20		)	(1		)	21		—			—
Gain on extinguishment of debt	(14		)	—			—		—			(14		)
Other non-operating (income) expense, net	(1		)	—			1		—			—
(Loss) income before income tax and earnings from unconsolidated entities	(32		)	1			35		—			4
Income tax expense	1			—			—		—			1
(Loss) income before earnings from unconsolidated entities	(33		)	1			35		—			3
Earnings from unconsolidated entities, net of taxes	40			17			—		(53		)	4
Net income	$	7		$	18		$	35	$	(53	)	$	7
Comprehensive (loss) income	$	(17	)	$	17		$	20	$	(37	)	$	(17	)

HEXION INC.

THREE MONTHS ENDED SEPTEMBER 30, 2014

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			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			—			58			—			82
Business realignment costs	4			—			2			—			6
Other operating expense (income), net	1			(1		)	4			—			4
Operating income	37			1			29			—			67
Interest expense, net	76			—			1			—			77
Intercompany interest (income) expense, net	(23		)	—			23			—			—
Other non-operating expense (income), net	62			—			(44		)	—			18
(Loss) income before income tax and earnings from unconsolidated entities	(78		)	1			49			—			(28		)
Income tax (benefit) expense	(8		)	—			10			—			2
(Loss) income before earnings from unconsolidated entities	(70		)	1			39			—			(30		)
Earnings from unconsolidated entities, net of taxes	44			25			2			(67		)	4
Net (loss) income	$	(26	)	$	26		$	41		$	(67	)	$	(26	)
Comprehensive (loss) income	$	(66	)	$	27		$	34		$	(61	)	$	(66	)

HEXION INC.

NINE MONTHS ENDED SEPTEMBER 30, 2015

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	1,341		$	—		$	2,030		$	(140	)	$	3,231
Cost of sales	1,187			—			1,706			(140		)	2,753
Gross profit	154			—			324			—			478
Selling, general and administrative expense	89			—			140			—			229
Business realignment costs	4			—			7			—			11
Other operating expense, net	9			—			13			—			22
Operating income	52			—			164			—			216
Interest expense, net	239			—			6			—			245
Intercompany interest (income) expense, net	(60		)	(1		)	61			—			—
Gain on extinguishment of debt	(14		)	—			—			—			(14		)
Other non-operating expense (income), net	68			—			(69		)	—			(1		)
(Loss) income before income tax and earnings (losses) from unconsolidated entities	(181		)	1			166			—			(14		)
Income tax (benefit) expense	(1		)	—			29			—			28
(Loss) income before earnings from unconsolidated entities	(180		)	1			137			—			(42		)
Earnings from unconsolidated entities, net of taxes	151			95			—			(233		)	13
Net (loss) income	$	(29	)	$	96		$	137		$	(233	)	$	(29	)
Comprehensive (loss) income	$	(102	)	$	96		$	102		$	(198	)	$	(102	)

HEXION INC.

NINE MONTHS ENDED SEPTEMBER 30, 2014

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	1,770		$	—		$	2,392		$	(185	)	$	3,977
Cost of sales	1,560			—			2,112			(185		)	3,487
Gross profit	210			—			280			—			490
Selling, general and administrative expense	75			—			194			—			269
Business realignment costs	19			—			5			—			24
Other operating expense (income), net	4			(1		)	4			—			7
Operating income	112			1			77			—			190
Interest expense, net	225			—			5			—			230
Intercompany interest (income) expense, net	(72		)				72			—			—
Other non-operating expense (income), net	67			—			(44		)	—			23
(Loss) income before income tax and earnings from unconsolidated entities	(108		)	1			44			—			(63		)
Income tax (benefit) expense	(11		)	—			28			—			17
(Loss) income before earnings from unconsolidated entities	(97		)	1			16			—			(80		)
Earnings from unconsolidated entities, net of taxes	31			29			4			(50		)	14
Net (loss) income	$	(66	)	$	30		$	20		$	(50	)	$	(66	)
Comprehensive (loss) income	$	(107	)	$	31		$	16		$	(47	)	$	(107	)

Condensed Consolidating Statement of Cash Flows [Table Text Block]

HEXION INC.

NINE MONTHS ENDED SEPTEMBER 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	$	(255	)		$	14		$	321			$	(14	)	$	66
Cash flows provided by (used in) investing activities
Capital expenditures	(63		)		—			(59		)		—			(122		)
Purchase of business, net of cash acquired	—				—			(7		)		—			(7		)
Proceeds from the sale of investments, net	—				—			6				—			6
Proceeds from sale of assets	—				—			1				—			1
Change in restricted cash	—				—			8				—			8
Capital contribution to subsidiary	(13		)		(8		)	—				21			—
Return of capital from subsidiary from sales of accounts receivable	227			(a)	—			—				(227		)	—
	151				(8		)	(51		)		(206		)	(114		)
Cash flows provided by (used in) financing activities
Net short-term debt borrowings (repayments)	3				—			(4		)		—			(1		)
Borrowings of long-term debt	470				—			22				—			492
Repayments of long-term debt	(354		)		—			(39		)		—			(393		)
Net intercompany loan borrowings (repayments)	17				—			(17		)		—			—
Capital Contributions	—				8			13				(21		)	—
Long-term debt and credit facility financing fees	(10		)		—			—				—			(10		)
Common stock dividends paid	—				(14		)	—				14			—
Return of capital to parent from sales of accounts receivable	—				—			(227		)	(a)	227			—
	126				(6		)	(252		)		220			88
Effect of exchange rates on cash and cash equivalents	—				—			(9		)		—			(9		)
Increase in cash and cash equivalents	22				—			9				—			31
Cash and cash equivalents (unrestricted) at beginning of period	23				—			133				—			156
Cash and cash equivalents (unrestricted) at end of period	$	45			$	—		$	142			$	—		$	187

(a) During the nine months ended September 30, 2015, Hexion Inc. contributed receivables of $227 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the nine months ended September 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.

NINE MONTHS ENDED SEPTEMBER 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	$	(349	)		$	6		$	220			$	(9	)	$	(132	)
Cash flows provided by (used in) investing activities
Capital expenditures	(74		)		—			(59		)		—			(133		)
Proceeds from sale of investments, net	—				—			(4		)		—			(4		)
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	272			(a)	—			—				(272		)	—
Investment in unconsolidated affiliates, net	—				—			(2		)		—			(2		)
	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, Hexion 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 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.