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

3 Months Ended

Mar. 31, 2017

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

HEXION INC.

MARCH 31, 2017

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)	$	12		$	—		$	111		$	—		$	123
Accounts receivable, net	126			2			353			—			481
Intercompany accounts receivable	110			—			26			(136		)	—
Intercompany loans receivable - current portion	15			—			—			(15		)	—
Inventories:
Finished and in-process goods	90			—			131			—			221
Raw materials and supplies	42			—			63			—			105
Other current assets	14			—			33			—			47
Total current assets	409			2			717			(151		)	977
Investment in unconsolidated entities	97			13			19			(110		)	19
Deferred income taxes	—			—			11			—			11
Other assets, net	17			6			24			—			47
Intercompany loans receivable	1,068			—			283			(1,351		)	—
Property and equipment, net	443			—			455			—			898
Goodwill	66			—			56			—			122
Other intangible assets, net	39			—			10			—			49
Total assets	$	2,139		$	21		$	1,575		$	(1,612	)	$	2,123
Liabilities and Deficit
Current liabilities:
Accounts payable	$	134		$	—		$	240		$	—		$	374
Intercompany accounts payable	26			—			110			(136		)	—
Debt payable within one year	2			—			116			—			118
Intercompany loans payable within one year	—			—			15			(15		)	—
Interest payable	96			—			2			—			98
Income taxes payable	6			—			9			—			15
Accrued payroll and incentive compensation	28			—			32			—			60
Other current liabilities	89			—			48			—			137
Total current liabilities	381			—			572			(151		)	802
Long-term liabilities:
Long-term debt	3,396			—			74			—			3,470
Intercompany loans payable	283			—			1,068			(1,351		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	503			110			—			(613		)	—
Long-term pension and post employment benefit obligations	42			—			205			—			247
Deferred income taxes	4			—			9			—			13
Other long-term liabilities	104			—			62			—			166
Total liabilities	4,713			110			1,990			(2,115		)	4,698
Total Hexion Inc. shareholder’s deficit	(2,574		)	(89		)	(414		)	503			(2,574		)
Noncontrolling interest	—			—			(1		)	—			(1		)
Total deficit	(2,574		)	(89		)	(415		)	503			(2,575		)
Total liabilities and deficit	$	2,139		$	21		$	1,575		$	(1,612	)	$	2,123

HEXION INC.

DECEMBER 31, 2016

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 $17, respectively)	$	28		$	—		$	168		$	—		$	196
Accounts receivable, net	119			1			270			—			390
Intercompany accounts receivable	106			—			60			(166		)	—
Intercompany loans receivable - current portion	—			—			175			(175		)	—
Inventories:
Finished and in-process goods	82			—			117			—			199
Raw materials and supplies	31			—			57			—			88
Other current assets	26			—			19			—			45
Total current assets	392			1			866			(341		)	918
Investment in unconsolidated entities	93			13			18			(106		)	18
Deferred income taxes	—			—			10			—			10
Other long-term assets	17			6			20			—			43
Intercompany loans receivable	1,050			—			180			(1,230		)	—
Property and equipment, net	448			—			445			—			893
Goodwill	65			—			56			—			121
Other intangible assets, net	41			—			11			—			52
Total assets	$	2,106		$	20		$	1,606		$	(1,677	)	$	2,055
Liabilities and Deficit
Current liabilities:
Accounts payable	$	142		$	—		$	226		$	—		$	368
Intercompany accounts payable	60			—			106			(166		)	—
Debt payable within one year	6			—			101			—			107
Intercompany loans payable within one year	175			—			—			(175		)	—
Interest payable	69			—			1			—			70
Income taxes payable	6			—			7			—			13
Accrued payroll and incentive compensation	28			—			27			—			55
Other current liabilities	110			—			49			—			159
Total current liabilities	596			—			517			(341		)	772
Long term liabilities:
Long-term debt	3,378			—			19			—			3,397
Intercompany loans payable	180			—			1,050			(1,230		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	339			106			—			(445		)	—
Long-term pension and post employment benefit obligations	42			—			204			—			246
Deferred income taxes	4			—			9			—			13
Other long-term liabilities	105			—			61			—			166
Total liabilities	4,644			106			1,860			(2,016		)	4,594
Total Hexion Inc. shareholder’s deficit	(2,538		)	(86		)	(253		)	339			(2,538		)
Noncontrolling interest	—			—			(1		)	—			(1		)
Total deficit	(2,538		)	(86		)	(254		)	339			(2,539		)
Total liabilities and deficit	$	2,106		$	20		$	1,606		$	(1,677	)	$	2,055

Condensed Consolidating Statement of Operations [Table Text Block]

HEXION INC.

THREE MONTHS ENDED MARCH 31, 2017

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	378		$	—		$	543		$	(51	)	$	870
Cost of sales	322			—			466			(51		)	737
Gross profit	56			—			77			—			133
Selling, general and administrative expense	31			—			46			—			77
Business realignment costs	4			—			3			—			7
Other operating income, net	(6		)	—			—			—			(6		)
Operating income	27			—			28			—			55
Interest expense, net	80			—			3			—			83
Intercompany interest (income) expense, net	(17		)	—			17			—			—
Loss on extinguishment of debt	3			—			—			—			3
Other non-operating (income) expense, net	(6		)	—			10			—			4
Loss before tax and earnings from unconsolidated entities	(33		)	—			(2		)	—			(35		)
Income tax (benefit) expense	(6		)	—			14			—			8
Loss before earnings from unconsolidated entities	(27		)	—			(16		)	—			(43		)
(Losses) earnings from unconsolidated entities, net of taxes	(15		)	(2		)	1			17			1
Net loss	$	(42	)	$	(2	)	$	(15	)	$	17		$	(42	)
Comprehensive loss	$	(36	)	$	(3	)	$	(3	)	$	6		$	(36	)

HEXION INC.

THREE MONTHS ENDED MARCH 31, 2016

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	381		$	—		$	578		$	(50	)	$	909
Cost of sales	374			—			478			(50		)	802
Gross profit	7			—			100			—			107
Selling, general and administrative expense	39			—			45			—			84
Business realignment costs	1			—			2			—			3
Other operating expense, net	2			—			1			—			3
Operating (loss) income	(35		)	—			52			—			17
Interest expense, net	77			—			2			—			79
Intercompany interest (income) expense, net	(19		)	—			19			—			—
Gain on extinguishment of debt	(23		)	—			—			—			(23		)
Other non-operating (income) expense, net	(35		)	—			37			—			2
Loss before income tax and earnings from unconsolidated entities	(35		)	—			(6		)	—			(41		)
Income tax (benefit) expense	(4		)	—			11			—			7
Loss before earnings from unconsolidated entities	(31		)	—			(17		)	—			(48		)
(Losses) earnings from unconsolidated entities, net of taxes	(13		)	(5		)	—			22			4
Net loss	$	(44	)	$	(5	)	$	(17	)	$	22		$	(44	)
Comprehensive loss	$	(18	)	$	(6	)	$	(2	)	$	8		$	(18	)

Condensed Consolidating Statement of Cash Flows [Table Text Block]

HEXION INC.

THREE MONTHS ENDED MARCH 31, 2017

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

	Hexion Inc.				Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries				Eliminations			Consolidated
Cash flows used in operating activities	$	(93	)		$	—	$	(25	)		$	—		$	(118	)
Cash flows provided by (used in) investing activities
Capital expenditures	(13		)		—		(17		)		—			(30		)
Proceeds from sale of assets, net	4				—		—				—			4
Change in restricted cash	—				—		1				—			1
Return of capital from subsidiary from sales of accounts receivable	33			(a)	—		—				(33		)	—
	24				—		(16		)		(33		)	(25		)
Cash flows provided by (used in) financing activities
Net short-term debt (repayments) borrowings	(3		)		—		14				—			11
Borrowings of long-term debt	770				—		101				—			871
Repayments of long-term debt	(742		)		—		(49		)		—			(791		)
Net intercompany loan borrowings (repayments)	46				—		(46		)		—			—
Long-term debt and credit facility financing fees paid	(18		)		—		(4		)		—			(22		)
Return of capital to parent from sales of accounts receivable	—				—		(33		)	(a)	33			—
	53				—		(17		)		33			69
Effect of exchange rates on cash and cash equivalents	—				—		2				—			2
Change in cash and cash equivalents	(16		)		—		(56		)		—			(72		)
Cash and cash equivalents (unrestricted) at beginning of period	28				—		151				—			179
Cash and cash equivalents (unrestricted) at end of period	$	12			$	—	$	95			$	—		$	107

(a) During the three months ended March 31, 2017, Hexion Inc. contributed receivables of $33 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the three months ended March 31, 2017, 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.

THREE MONTHS ENDED MARCH 31, 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	$	(99	)		$	4		$	(2	)		$	(4	)	$	(101	)
Cash flows provided by (used in) investing activities
Capital expenditures	(18		)		—			(9		)		—			(27		)
Change in restricted cash	—				—			(3		)		—			(3		)
Return of capital from subsidiary from sales of accounts receivable	27			(a)	—			—				(27		)	—
	9				—			(12		)		(27		)	(30		)
Cash flows provided by (used in) financing activities
Net short-term debt repayments	(4		)		—			(9		)		—			(13		)
Borrowings of long-term debt	110				—			16				—			126
Repayments of long-term debt	(84		)		—			(19		)		—			(103		)
Net intercompany loan borrowings (repayments)	26				—			(26		)		—			—
Common stock dividends paid	—				(4		)	—				4			—
Return of capital to parent from sales of accounts receivable	—				—			(27		)	(a)	27			—
	48				(4		)	(65		)		31			10
Effect of exchange rates on cash and cash equivalents	—				—			2				—			2
Change in cash and cash equivalents	(42		)		—			(77		)		—			(119		)
Cash and cash equivalents (unrestricted) at beginning of period	62				—			166				—			228
Cash and cash equivalents (unrestricted) at end of period	$	20			$	—		$	89			$	—		$	109

(a) During the three months ended March 31, 2016, Hexion Inc. contributed receivables of $27 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the three months ended March 31, 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.