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

9 Months Ended

Sep. 30, 2017

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

HEXION INC.

SEPTEMBER 30, 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 $18, respectively)	$	6		$	—		$	112		$	—		$	118
Accounts receivable, net	131			2			367			—			500
Intercompany accounts receivable	104			—			22			(126		)	—
Intercompany loans receivable - current portion	9			—			—			(9		)	—
Inventories:
Finished and in-process goods	87			—			153			—			240
Raw materials and supplies	35			—			57			—			92
Other current assets	16			—			33			—			49
Total current assets	388			2			744			(135		)	999
Investment in unconsolidated entities	146			13			20			(159		)	20
Deferred income taxes	1			—			11			—			12
Other assets, net	16			6			27			—			49
Intercompany loans receivable	1,110			—			208			(1,318		)	—
Property and equipment, net	416			—			502			—			918
Goodwill	52			—			61			—			113
Other intangible assets, net	35			—			10			—			45
Total assets	$	2,164		$	21		$	1,583		$	(1,612	)	$	2,156
Liabilities and Deficit
Current liabilities:
Accounts payable	$	109		$	—		$	238		$	—		$	347
Intercompany accounts payable	22			—			104			(126		)	—
Debt payable within one year	10			—			111			—			121
Intercompany loans payable within one year	—			—			9			(9		)	—
Interest payable	99			—			2			—			101
Income taxes payable	8			—			5			—			13
Accrued payroll and incentive compensation	10			—			37			—			47
Other current liabilities	69			—			57			—			126
Total current liabilities	327			—			563			(135		)	755
Long-term liabilities:
Long-term debt	3,528			—			84			—			3,612
Intercompany loans payable	208			—			1,110			(1,318		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	614			159			—			(773		)	—
Long-term pension and post employment benefit obligations	39			—			224			—			263
Deferred income taxes	2			—			11			—			13
Other long-term liabilities	105			—			68			—			173
Total liabilities	4,823			159			2,060			(2,226		)	4,816
Total Hexion Inc. shareholder’s deficit	(2,659		)	(138		)	(476		)	614			(2,659		)
Noncontrolling interest	—			—			(1		)	—			(1		)
Total deficit	(2,659		)	(138		)	(477		)	614			(2,660		)
Total liabilities and deficit	$	2,164		$	21		$	1,583		$	(1,612	)	$	2,156

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 SEPTEMBER 30, 2017

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	400		$	—		$	558		$	(44	)	$	914
Cost of sales	360			—			481			(44		)	797
Gross profit	40			—			77			—			117
Selling, general and administrative expense	28			—			47			—			75
Asset impairments	13			—			—			—			13
Business realignment costs	6			—			4			—			10
Other operating expense (income), net	3			—			(2		)	—			1
Operating (loss) income	(10		)	—			28			—			18
Interest expense, net	78			—			4			—			82
Intercompany interest (income) expense, net	(20		)	—			20			—			—
Other non-operating (income) expense, net	(24		)	—			21			—			(3		)
Loss before tax and (losses) earnings from unconsolidated entities	(44		)	—			(17		)	—			(61		)
Income tax expense	3			—			6			—			9
Loss before (losses) earnings from unconsolidated entities	(47		)	—			(23		)	—			(70		)
(Losses) earnings from unconsolidated entities, net of taxes	(23		)	(18		)	1			40			—
Net loss	$	(70	)	$	(18	)	$	(22	)	$	40		$	(70	)
Comprehensive loss	$	(60	)	$	(18	)	$	(22	)	$	40		$	(60	)

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.

NINE MONTHS ENDED SEPTEMBER 30, 2017

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	1,195		$	—		$	1,651		$	(150	)	$	2,696
Cost of sales	1,037			—			1,425			(150		)	2,312
Gross profit	158			—			226			—			384
Selling, general and administrative expense	91			—			136			—			227
Asset impairments	13			—			—			—			13
Business realignment costs	16			—			11			—			27
Other operating expense, net	—			—			4			—			4
Operating income	38			—			75			—			113
Interest expense, net	236			—			11			—			247
Intercompany interest (income) expense, net	(55		)	—			55			—			—
Loss on extinguishment of debt	3			—			—			—			3
Other non-operating (income) expense, net	(78		)	—			74			—			(4		)
Loss before tax and (losses) earnings from unconsolidated entities	(68		)	—			(65		)	—			(133		)
Income tax (benefit) expense	(1		)	—			17			—			16
Loss before (losses) earnings from unconsolidated entities	(67		)	—			(82		)	—			(149		)
(Losses) earnings from unconsolidated entities, net of taxes	(79		)	(52		)	3			131			3
Net loss	$	(146	)	$	(52	)	$	(79	)	$	131		$	(146	)
Comprehensive loss	$	(121	)	$	(52	)	$	(71	)	$	123		$	(121	)

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

Condensed Consolidating Statement of Cash Flows [Table Text Block]

HEXION INC.

NINE MONTHS ENDED SEPTEMBER 30, 2017

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	$	(245	)		$	—	$	41			$	(1	)	$	(205	)
Cash flows provided by (used in) investing activities
Capital expenditures	(33		)		—		(53		)		—			(86		)
Capitalized interest	—				—		(1		)		—			(1		)
Proceeds from sale of assets, net	5				—		—				—			5
Change in restricted cash	—				—		1				—			1
Return of capital from subsidiary from sales of accounts receivable	117			(a)	—		—				(117		)	—
	89				—		(53		)		(117		)	(81		)
Cash flows provided by (used in) financing activities
Net short-term debt borrowings	4				—		11				—			15
Borrowings of long-term debt	1,007				—		284				—			1,291
Repayments of long-term debt	(850		)		—		(229		)		—			(1,079		)
Net intercompany loan borrowings (repayments)	(7		)		—		7				—			—
Long-term debt and credit facility financing fees paid	(20		)		—		(5		)		—			(25		)
Common stock dividends paid	—				—		(1		)		1			—
Return of capital to parent from sales of accounts receivable	—				—		(117		)	(a)	117			—
	134				—		(50		)		118			202
Effect of exchange rates on cash and cash equivalents	—				—		5				—			5
Change in cash and cash equivalents	(22		)		—		(57		)		—			(79		)
Cash and cash equivalents (unrestricted) at beginning of period	28				—		151				—			179
Cash and cash equivalents (unrestricted) at end of period	$	6			$	—	$	94			$	—		$	100

(a) During the nine months ended September 30, 2017, Hexion Inc. contributed receivables of $117 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the nine months ended September 30, 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.

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.