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

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Condensed Consolidating Balance Sheet [Table Text Block]

HEXION INC.

MARCH 31, 2018

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)	$	19		$	—		$	94		$	—		$	113
Accounts receivable, net	128			1			375			—			504
Intercompany accounts receivable	136			—			28			(164		)	—
Intercompany loans receivable - current portion	8			—			—			(8		)	—
Inventories:
Finished and in-process goods	92			—			163			—			255
Raw materials and supplies	35			—			60			—			95
Other current assets	15			—			41			—			56
Total current assets	433			1			761			(172		)	1,023
Investment in unconsolidated entities	160			14			21			(174		)	21
Deferred income taxes	—			—			8			—			8
Other assets, net	14			7			25			—			46
Intercompany loans receivable	1,138			—			87			(1,225		)	—
Property and equipment, net	382			—			518			—			900
Goodwill	52			—			61			—			113
Other intangible assets, net	25			—			9			—			34
Total assets	$	2,204		$	22		$	1,490		$	(1,571	)	$	2,145
Liabilities and Deficit
Current liabilities:
Accounts payable	$	122		$	—		$	250		$	—		$	372
Intercompany accounts payable	28			—			136			(164		)	—
Debt payable within one year	7			—			59			—			66
Intercompany loans payable within one year	—			—			8			(8		)	—
Interest payable	99			—			2			—			101
Income taxes payable	5			—			7			—			12
Accrued payroll and incentive compensation	32			—			31			—			63
Other current liabilities	65			—			56			—			121
Total current liabilities	358			—			549			(172		)	735
Long-term liabilities:
Long-term debt	3,501			—			202			—			3,703
Intercompany loans payable	87			—			1,138			(1,225		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	854			174			—			(1,028		)	—
Long-term pension and post employment benefit obligations	30			—			226			—			256
Deferred income taxes	2			—			9			—			11
Other long-term liabilities	111			—			69			—			180
Total liabilities	4,943			174			2,193			(2,425		)	4,885
Total Hexion Inc. shareholder’s deficit	(2,739		)	(152		)	(702		)	854			(2,739		)
Noncontrolling interest	—			—			(1		)	—			(1		)
Total deficit	(2,739		)	(152		)	(703		)	854			(2,740		)
Total liabilities and deficit	$	2,204		$	22		$	1,490		$	(1,571	)	$	2,145

HEXION INC.

DECEMBER 31, 2017

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 $18, respectively)	$	13		$	—		$	102		$	—		$	115
Accounts receivable, net	126			1			335			—			462
Intercompany accounts receivable	121			—			80			(201		)	—
Intercompany loans receivable - current portion	1			—			22			(23		)	—
Inventories:
Finished and in-process goods	85			—			136			—			221
Raw materials and supplies	36			—			56			—			92
Current assets held-for-sale	1			—			5			—			6
Other current assets	19			—			25			—			44
Total current assets	402			1			761			(224		)	940
Investment in unconsolidated entities	158			13			20			(171		)	20
Deferred income taxes	—			—			8			—			8
Long-term assets held for sale	—			—			2			—			2
Other long-term assets	17			8			24			—			49
Intercompany loans receivable	1,114			—			190			(1,304		)	—
Property and equipment, net	410			—			514			—			924
Goodwill	52			—			60			—			112
Other intangible assets, net	32			—			10			—			42
Total assets	$	2,185		$	22		$	1,589		$	(1,699	)	$	2,097
Liabilities and Deficit
Current liabilities:
Accounts payable	$	129		$	—		$	273		$	—		$	402
Intercompany accounts payable	80			—			121			(201		)	—
Debt payable within one year	10			—			115			—			125
Intercompany loans payable within one year	22			—			1			(23		)	—
Interest payable	80			—			2			—			82
Income taxes payable	6			—			6			—			12
Accrued payroll and incentive compensation	22			—			25			—			47
Current liabilities associated with assets held for sale	—			—			2			—			2
Other current liabilities	70			—			65			—			135
Total current liabilities	419			—			610			(224		)	805
Long term liabilities:
Long-term debt	3,507			—			77			—			3,584
Intercompany loans payable	190			—			1,114			(1,304		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	668			171			—			(839		)	—
Long-term pension and post employment benefit obligations	31			—			231			—			262
Deferred income taxes	2			—			9			—			11
Other long-term liabilities	109			—			68			—			177
Total liabilities	4,926			171			2,109			(2,367		)	4,839
Total Hexion Inc. shareholder’s deficit	(2,741		)	(149		)	(519		)	668			(2,741		)
Noncontrolling interest	—			—			(1		)	—			(1		)
Total deficit	(2,741		)	(149		)	(520		)	668			(2,742		)
Total liabilities and deficit	$	2,185		$	22		$	1,589		$	(1,699	)	$	2,097

Condensed Consolidating Statement of Operations [Table Text Block]

HEXION INC.

THREE MONTHS ENDED MARCH 31, 2018

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited)

	Hexion Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	431		$	—		$	570		$	(55	)	$	946
Cost of sales	357			—			487			(55		)	789
Gross profit	74			—			83			—			157
Selling, general and administrative expense	36			—			46			—			82
Gain on disposition	(24		)	—			(20		)	—			(44		)
Asset impairments	25			—			—			—			25
Business realignment costs	6			—			3			—			9
Other operating expense, net	—			—			9			—			9
Operating income	31			—			45			—			76
Interest expense, net	79			—			4			—			83
Intercompany interest (income) expense, net	(20		)	—			20			—			—
Other non-operating (income) expense, net	(19		)	—			18			—			(1		)
(Loss) income before tax and (losses) earnings from unconsolidated entities	(9		)	—			3			—			(6		)
Income tax (benefit) expense	(7		)	—			15			—			8
Loss before (losses) earnings from unconsolidated entities	(2		)	—			(12		)	—			(14		)
(Losses) earnings from unconsolidated entities, net of taxes	(11		)	(3		)	1			14			1
Net loss	$	(13	)	$	(3	)	$	(11	)	$	14		$	(13	)
Comprehensive income (loss)	$	1		$	(2	)	$	2		$	—		$	1

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	33			—			46			—			79
Business realignment costs	4			—			3			—			7
Other operating income, net	(6		)	—			—			—			(6		)
Operating income	25			—			28			—			53
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	(8		)	—			10			—			2
Loss before income 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	)

Condensed Consolidating Statement of Cash Flows [Table Text Block]

HEXION INC.

THREE MONTHS ENDED MARCH 31, 2018

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

	Hexion Inc.				Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries				Eliminations			Consolidated
Cash flows used in operating activities	$	(49	)		$	—	$	(34	)		$	—		$	(83	)
Cash flows provided by investing activities
Capital expenditures	(8		)		—		(17		)		—			(25		)
Proceeds from disposition, net	24				—		25				—			49
Proceeds from sale of assets, net	—				—		1				—			1
Return of capital from subsidiary from sales of accounts receivable	73			(a)	—		—				(73		)	—
	89				—		9				(73		)	25
Cash flows (used in) provided by financing activities
Net short-term debt borrowings	(3		)		—		(12		)		—			(15		)
Borrowings of long-term debt	50				—		116				—			166
Repayments of long-term debt	(58		)		—		(38		)		—			(96		)
Net intercompany loan (repayments) borrowings	(23		)		—		23				—			—
Long-term debt and credit facility financing fees paid	—				—		(1		)		—			(1		)
Return of capital to parent from sales of accounts receivable	—				—		(73		)	(a)	73			—
	(34		)		—		15				73			54
Effect of exchange rates on cash and cash equivalents	—				—		2				—			2
Change in cash and cash equivalents	6				—		(8		)		—			(2		)
Cash and cash equivalents at beginning of period	13				—		102				—			115
Cash and cash equivalents at end of period	$	19			$	—	$	94			$	—		$	113

(a) During the three months ended March 31, 2018, Hexion Inc. contributed receivables of $73 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the three months ended March 31, 2018, 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, 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
Return of capital from subsidiary from sales of accounts receivable	33			(a)	—		—				(33		)	—
	24				—		(17		)		(33		)	(26		)
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	(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		)		—		(57		)		—			(73		)
Cash and cash equivalents at beginning of period	28				—		168				—			196
Cash and cash equivalents at end of period	$	12			$	—	$	111			$	—		$	123

(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.