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

9 Months Ended

Sep. 30, 2016

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

HEXION INC.

SEPTEMBER 30, 2016

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 $19, respectively)	$	49		$	—		$	96		$	—		$	145
Accounts receivable, net	140			1			357			—			498
Intercompany accounts receivable	115			—			38			(153		)	—
Intercompany loans receivable - current portion	27			—			144			(171		)	—
Inventories:
Finished and in-process goods	90			—			131			—			221
Raw materials and supplies	35			—			63			—			98
Other current assets	42			—			38			—			80
Total current assets	498			1			867			(324		)	1,042
Investment in unconsolidated entities	79			6			18			(86		)	17
Deferred income taxes	—			—			10			—			10
Other assets, net	15			6			22			—			43
Intercompany loans receivable	1,080			—			214			(1,294		)	—
Property and equipment, net	444			—			448			—			892
Goodwill	66			—			58			—			124
Other intangible assets, net	43			—			13			—			56
Total assets	$	2,225		$	13		$	1,650		$	(1,704	)	$	2,184
Liabilities and Deficit
Current liabilities:
Accounts payable	$	106		$	—		$	205		$	—		$	311
Intercompany accounts payable	38			—			115			(153		)	—
Debt payable within one year	8			—			61			—			69
Intercompany loans payable within one year	144			—			27			(171		)	—
Interest payable	95			—			1			—			96
Income taxes payable	22			—			2			—			24
Accrued payroll and incentive compensation	23			—			35			—			58
Other current liabilities	104			—			56			—			160
Total current liabilities	540			—			502			(324		)	718
Long-term liabilities:
Long-term debt	3,430			—			45			—			3,475
Intercompany loans payable	210			6			1,078			(1,294		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	313			86			—			(399		)	—
Long-term pension and post employment benefit obligations	41			—			183			—			224
Deferred income taxes	(3		)	—			17			—			14
Other long-term liabilities	104			—			60			—			164
Advance from affiliates	—			—			—			—			—
Total liabilities	4,635			92			1,885			(2,017		)	4,595
Total Hexion Inc. shareholder’s deficit	(2,410		)	(79		)	(234		)	313			(2,410		)
Noncontrolling interest	—			—			(1		)	—			(1		)
Total deficit	(2,410		)	(79		)	(235		)	313			(2,411		)
Total liabilities and deficit	$	2,225		$	13		$	1,650		$	(1,704	)	$	2,184

HEXION INC.

DECEMBER 31, 2015

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 $8, respectively)	$	62		$	—		$	174		$	—		$	236
Accounts receivable, net	115			1			334			—			450
Intercompany accounts receivable	132			—			154			(286		)	—
Intercompany loans receivable	—			—			174			(174		)	—
Inventories:
Finished and in-process goods	97			—			121			—			218
Raw materials and supplies	34			—			56			—			90
Other current assets	29			—			24			—			53
Total current assets	469			1			1,037			(460		)	1,047
Investment in unconsolidated entities	117			28			21			(130		)	36
Deferred income taxes	—			—			13			—			13
Other long-term assets	21			6			21			—			48
Intercompany loans receivable	1,269			6			108			(1,383		)	—
Property and equipment, net	559			—			492			—			1,051
Goodwill	65			—			57			—			122
Other intangible assets, net	49			—			16			—			65
Total assets	$	2,549		$	41		$	1,765		$	(1,973	)	$	2,382
Liabilities and Deficit
Current liabilities:
Accounts payable	$	148		$	—		$	238		$	—		$	386
Intercompany accounts payable	154			—			132			(286		)	—
Debt payable within one year	6			—			74			—			80
Intercompany loans payable within one year	174			—			—			(174		)	—
Interest payable	80			—			2			—			82
Income taxes payable	7			—			8			—			15
Accrued payroll and incentive compensation	43			—			35			—			78
Other current liabilities	73			—			50			—			123
Total current liabilities	685			—			539			(460		)	764
Long term liabilities:
Long-term debt	3,656			—			42			—			3,698
Intercompany loans payable	93			6			1,284			(1,383		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	429			130			—			(559		)	—
Long-term pension and post employment benefit obligations	45			—			179			—			224
Deferred income taxes	6			—			6			—			12
Other long-term liabilities	111			—			50			—			161
Total liabilities	5,025			136			2,100			(2,402		)	4,859
Total Hexion Inc. shareholder’s deficit	(2,476		)	(95		)	(334		)	429			(2,476		)
Noncontrolling interest	—			—			(1		)	—			(1		)
Total deficit	(2,476		)	(95		)	(335		)	429			(2,477		)
Total liabilities and deficit	$	2,549		$	41		$	1,765		$	(1,973	)	$	2,382

Condensed Consolidating Statement of Operations [Table Text Block]

HEXION INC.

THREE MONTHS ENDED SEPTEMBER 30, 2016

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	356		$	—		$	507		$	(44	)	$	819
Cost of sales	325			—			420			(44		)	701
Gross profit	31			—			87			—			118
Selling, general and administrative expense	30			—			39			—			69
Business realignment (income) costs	(7		)	—			4			—			(3		)
Other operating expense (income), net	10			6			(9		)	—			7
Operating (loss) income	(2		)	(6		)	53			—			45
Interest expense, net	74			—			2			—			76
Intercompany interest (income) expense, net	(18		)	—			18			—			—
Gain on extinguishment of debt	(3		)	—			—			—			(3		)
Other non-operating (income) expense, net	(5		)	—			7			—			2
(Loss) income before income tax and earnings (losses) from unconsolidated entities	(50		)	(6		)	26			—			(30		)
Income tax expense	9			—			7			—			16
(Loss) income before earnings (losses) from unconsolidated entities	(59		)	(6		)	19			—			(46		)
Earnings (losses) from unconsolidated entities, net of taxes	12			(1		)	—			(12		)	(1		)
Net (loss) income	$	(47	)	$	(7	)	$	19		$	(12	)	$	(47	)
Comprehensive (loss) income	$	(40	)	$	(7	)	$	26		$	(19	)	$	(40	)

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.

NINE MONTHS ENDED SEPTEMBER 30, 2016

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	1,119		$	—		$	1,701		$	(140	)	$	2,680
Cost of sales	1,080			—			1,417			(140		)	2,357
Gross profit	39			—			284			—			323
Selling, general and administrative expense	109			—			126			—			235
Gain on dispositions	(188		)	—			(52		)	—			(240		)
Business realignment costs	31			—			11			—			42
Other operating expense (income), net	14			6			(14		)	—			6
Operating income (loss)	73			(6		)	213			—			280
Interest expense, net	227			—			8			—			235
Intercompany interest (income) expense, net	(55		)	—			55			—			—
Gain on extinguishment of debt	(47		)	—			—			—			(47		)
Other non-operating (income) expense, net	(16		)	—			17			—			1
(Loss) income before income tax and earnings from unconsolidated entities	(36		)	(6		)	133			—			91
Income tax expense	5			—			35			—			40
(Loss) income before earnings from unconsolidated entities	(41		)	(6		)	98			—			51
Earnings from unconsolidated entities, net of taxes	100			45			2			(139		)	8
Net income	$	59		$	39		$	100		$	(139	)	$	59
Comprehensive income	$	66		$	39		$	100		$	(139	)	$	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 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	)

Condensed Consolidating Statement of Cash Flows [Table Text Block]

HEXION INC.

NINE MONTHS ENDED SEPTEMBER 30, 2016

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	$	(198	)		$	4		$	67			$	(4	)	$	(131	)
Cash flows provided by (used in) investing activities
Capital expenditures	(47		)		—			(44		)		—			(91		)
Capitalized interest	(1		)		—			—				—			(1		)
Proceeds from dispositions, net	146				—			135				—			281
Cash received on buyer’s note	45				—			—				—			45
Proceeds from sale of assets, net	—				—			1				—			1
Change in restricted cash	—				—			(11		)		—			(11		)
Capital contribution to subsidiary	(13		)		(9		)	—				22			—
Investment in unconsolidated affiliates, net	(1		)		—			—				—			(1		)
Return of capital from subsidiary from sales of accounts receivable	70			(a)	—			—				(70		)	—
	199				(9		)	81				(48		)	223
Cash flows (used in) provided by financing activities
Net short-term debt borrowings (repayments)	2				—			(15		)		—			(13		)
Borrowings of long-term debt	280				—			181				—			461
Repayments of long-term debt	(467		)		—			(176		)		—			(643		)
Net intercompany loan borrowings (repayments)	171				—			(171		)		—			—
Capital contributions	—				9			13				(22		)	—
Common stock dividends paid	—				(4		)	—				4			—
Return of capital to parent from sales of accounts receivable	—				—			(70		)	(a)	70			—
	(14		)		5			(238		)		52			(195		)
Effect of exchange rates on cash and cash equivalents	—				—			1				—			1
Decrease in cash and cash equivalents	(13		)		—			(89		)		—			(102		)
Cash and cash equivalents (unrestricted) at beginning of period	62				—			166				—			228
Cash and cash equivalents (unrestricted) at end of period	$	49			$	—		$	77			$	—		$	126

(a) During the nine months ended September 30, 2016, Hexion Inc. contributed receivables of $70 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the nine months ended September 30, 2016, 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, 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 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.