Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | Hexion Inc. | |
Entity Central Index Key | 13,239 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 82,556,847 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents (including restricted cash of $18 and $17, respectively) | $ 118 | $ 196 |
Accounts receivable (net of allowance for doubtful accounts of $18 and $17, respectively) | 500 | 390 |
Inventories: | ||
Finished and in-process goods | 240 | 199 |
Raw materials and supplies | 92 | 88 |
Other current assets | 49 | 45 |
Total current assets | 999 | 918 |
Investment in unconsolidated entities | 20 | 18 |
Deferred income taxes | 12 | 10 |
Other Assets, Noncurrent | 49 | 43 |
Property and equipment | ||
Land | 84 | 79 |
Buildings | 288 | 273 |
Machinery and equipment | 2,312 | 2,353 |
Property, plant and equipment, gross | 2,684 | 2,705 |
Less accumulated depreciation | (1,766) | (1,812) |
Property, plant and equipment, net | 918 | 893 |
Goodwill | 113 | 121 |
Other intangible assets, net | 45 | 52 |
Total assets | 2,156 | 2,055 |
Current liabilities | ||
Accounts and drafts payable | 347 | 368 |
Debt payable within one year | 121 | 107 |
Interest payable | 101 | 70 |
Income taxes payable | 13 | 13 |
Accrued payroll and incentive compensation | 47 | 55 |
Other current liabilities | 126 | 159 |
Total current liabilities | 755 | 772 |
Long-term liabilities | ||
Long-term debt | 3,612 | 3,397 |
Long-term pension and post employment benefit obligations | 263 | 246 |
Deferred income taxes | 13 | 13 |
Other long-term liabilities | 173 | 166 |
Total liabilities | 4,816 | 4,594 |
Commitments and contingencies (see Note 7) | ||
Deficit | ||
Common stock—$0.01 par value; 300,000,000 shares authorized, 170,605,906 issued and 82,556,847 outstanding at September 30, 2017 and December 31, 2016 | 1 | 1 |
Paid-in capital | 526 | 526 |
Treasury stock, at cost—88,049,059 shares | (296) | (296) |
Accumulated other comprehensive income | (14) | (39) |
Accumulated deficit | (2,876) | (2,730) |
Total Hexion Inc. shareholder’s deficit | (2,659) | (2,538) |
Noncontrolling interest | (1) | (1) |
Total deficit | (2,660) | (2,539) |
Total liabilities and deficit | $ 2,156 | $ 2,055 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents | ||
restricted cash | $ 18 | $ 17 |
Accounts Receivable | ||
net allowance for doubtful accounts | $ 18 | $ 17 |
Common Stock | ||
par value | $ 0.01 | $ 0.01 |
shares authorized | 300,000,000 | 300,000,000 |
shares issued | 170,605,906 | 170,605,906 |
shares outstanding | 82,556,847 | 82,556,847 |
Treasury stock, shares | 88,049,059 | 88,049,059 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net sales | $ 914 | $ 819 | $ 2,696 | $ 2,680 |
Cost of sales | 797 | 701 | 2,312 | 2,357 |
Gross profit | 117 | 118 | 384 | 323 |
Selling, general and administrative expense | 75 | 69 | 227 | 235 |
Gain on dispositions | 0 | 0 | 0 | (240) |
Asset impairments (see Note 5) | 13 | 0 | 13 | 0 |
Business realignment costs (income) | 10 | (3) | 27 | 42 |
Other operating expense, net | 1 | 7 | 4 | 6 |
Operating income | 18 | 45 | 113 | 280 |
Interest expense, net | 82 | 76 | 247 | 235 |
(Gain) loss on extinguishment of debt | 0 | 3 | (3) | 47 |
Other non-operating (income) expense, net | (3) | 2 | (4) | 1 |
(Loss) income before income tax and earnings from unconsolidated entities | (61) | (30) | (133) | 91 |
Income tax expense | 9 | 16 | 16 | 40 |
(Loss) income before (losses) earnings from unconsolidated entities | (70) | (46) | (149) | 51 |
(Losses) earnings from unconsolidated entities, net of taxes | 0 | (1) | 3 | 8 |
Net (loss) income | $ (70) | $ (47) | $ (146) | $ 59 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net (loss) income | $ (70) | $ (47) | $ (146) | $ 59 |
Other comprehensive (loss) income, net of tax: | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 10 | 7 | 25 | 8 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 0 | 0 | (1) |
Other comprehensive income | 10 | 7 | 25 | 7 |
Comprehensive (loss) income | $ (60) | $ (40) | $ (121) | $ 66 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows provided by (used in) operating activities | ||
Net (loss) income | $ (146) | $ 59 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 85 | 101 |
Non-cash asset impairments and accelerated depreciation | 27 | 127 |
Deferred tax (benefit) expense | (1) | 3 |
Gain on dispositions | 0 | (240) |
Gain on sale of assets | (1) | 0 |
Amortization of Debt Issuance Costs | 12 | 11 |
(Gain) loss on extinguishment of debt | 3 | (47) |
Unrealized foreign currency losses (gains) | (5) | (40) |
Other non-cash adjustments | (4) | 3 |
Net change in assets and liabilities: | ||
Accounts receivable | (89) | (88) |
Inventories | (29) | (32) |
Accounts payable | 32 | 35 |
Income taxes payable | 8 | 26 |
Other assets, current and non-current | (4) | (27) |
Other liabilities, current and long-term | (29) | 48 |
Net cash used in operating activities | 205 | 131 |
Cash flows provided by (used in) investing activities | ||
Capital expenditures | (86) | (91) |
Capitalized interest | (1) | (1) |
Proceeds from dispositions, net | 0 | 281 |
Cash received on buyer’s note | 0 | 45 |
Proceeds from sale of assets | 5 | 1 |
Change in restricted cash | 1 | (11) |
Investment in affiliate | 0 | (1) |
Net cash (used in) provided by investing activities | (81) | 223 |
Cash flows provided by (used in) financing activities | ||
Net short-term debt (repayments) borrowings | 15 | (13) |
Borrowings of long-term debt | 1,291 | 461 |
Repayments of long-term debt | (1,079) | (643) |
Long-term debt and credit facility financing fees | (25) | 0 |
Net cash provided by (used in) financing activities | (202) | 195 |
Effect of Exchange Rate on Cash and Cash Equivalents | 5 | 1 |
Change in cash and cash equivalents | (79) | (102) |
Cash and cash equivalents (unrestricted) at beginning of period | 179 | 228 |
Cash and cash equivalents (unrestricted) at end of period | 100 | 126 |
Supplemental disclosures of cash flow information | ||
Interest, net | 205 | 210 |
Income taxes, net of cash refunds | 10 | 20 |
Acceptance of buyer’s note (see Note 12) | $ 0 | $ 75 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Equity (Deficit) - 9 months ended Sep. 30, 2017 - USD ($) $ in Millions | Total | Common Stock [Member] | Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Parent [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2016 | $ (2,539) | $ 1 | $ 526 | $ (296) | $ (39) | $ (2,730) | $ (2,538) | $ (1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | (146) | 0 | 0 | 0 | 0 | (146) | (146) | 0 |
Other comprehensive income | 25 | 0 | 0 | 0 | 25 | 0 | 25 | 0 |
Balance at Sep. 30, 2017 | $ (2,660) | $ 1 | $ 526 | $ (296) | $ (14) | $ (2,876) | $ (2,659) | $ (1) |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Background and Basis of Presentation [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Background and Basis of Presentation Based in Columbus, Ohio, Hexion Inc. (“Hexion” or the “Company”) serves global industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. The Company’s business is organized based on the products offered and the markets served. At September 30, 2017 , the Company had two reportable segments: Epoxy, Phenolic and Coating Resins and Forest Products Resins. The Company’s direct parent is Hexion LLC, a holding company and wholly owned subsidiary of Hexion Holdings LLC (“Hexion Holdings”), the ultimate parent entity of Hexion. Hexion Holdings is controlled by investment funds managed by affiliates of Apollo Management Holdings, L.P. (together with Apollo Global Management, LLC and its subsidiaries, “Apollo”). Apollo may also be referred to as the Company’s owner. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, its majority-owned subsidiaries in which minority shareholders hold no substantive participating rights and variable interest entities in which the Company is the primary beneficiary. Intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, all adjustments consisting of normal, recurring adjustments considered necessary for a fair statement have been included. Results for the interim periods are not necessarily indicative of results for the entire year. Year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the accompanying notes included in the Company’s most recent Annual Report on Form 10-K. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and also requires the disclosure of contingent assets and liabilities at the date of the financial statements. In addition, it requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Subsequent Events —The Company has evaluated events and transactions subsequent to September 30, 2017 through the date of issuance of its unaudited Condensed Consolidated Financial Statements. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Board Update No. 2014-09: Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes the existing revenue recognition guidance and most industry-specific guidance applicable to revenue recognition. According to the new guidance, an entity will apply a principles-based five step model to recognize revenue upon the transfer of promised goods or services to customers and in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The effective date for ASU 2014-09 is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted for annual and interim periods beginning on or after December 15, 2016. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in ASU 2014-09. The Company plans to adopt ASU 2014-09 utilizing a modified retrospective approach, which will result in a cumulative adjustment to equity on the adoption date of January 1, 2018. The Company currently anticipates that implementation of this standard will result only in timing differences for certain revenue streams, which are not expected to have a material impact on its financial statements. In February 2016, the FASB issued Accounting Standards Board Update No. 2016-02: Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 supersedes the existing lease guidance in Topic 840. According to the new guidance, all leases, with limited scope exceptions, will be recorded on the balance sheet in the form of a liability to make lease payments (lease liability) and a right-of-use asset representing the right to use the underlying asset for the lease term. The guidance is effective for annual and interim periods beginning on or after December 15, 2018, and early adoption is permitted. Entities will be required to adopt ASU 2016-02 using a modified retrospective approach, whereby leases will be recognized and measured at the beginning of the earliest period presented. The Company is currently assessing the potential impact of ASU 2016-02 on its financial statements. In August 2016, the FASB issued Accounting Standards Board Update No. 2016-15: Statement of Cash Flows (Topic 230) (“ASU 2016-15”) as part of the FASB simplification initiative. ASU 2016-15 provides guidance on treatment in the statement of cash flows for eight specific cash flow topics, with the objective of reducing existing diversity in practice. Of the eight cash flow topics addressed in the new guidance, the topics expected to have an impact on the Company include debt prepayment or debt extinguishment costs, proceeds from the settlement of insurance claims, treatment of restricted cash and distributions received from equity method investees. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements. In November 2016, the FASB issued Accounting Standards Board Update No. 2016-18: Statement of Cash Flows (Topic 230) Restricted Cash (“ASU 2016-18”) as part of the FASB simplification initiative. ASU 2016-18 requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. ASU 2016-18 also requires supplemental disclosure regarding the nature of restrictions on a company’s cash and cash equivalents, such as the purpose and terms of the restriction, expected duration of the restriction and the amount of cash subject to restriction. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption is permitted. Based on restricted cash balances at December 31, 2016 and September 30, 2017, beginning and ending cash balances in the Condensed Consolidated Statements of Cash Flows would include $17 and $18, respectively, of restricted cash upon adoption of this standard. In January 2017, the FASB issued Accounting Standards Board Update No. 2017-01: Clarifying the Definition of a Business (Topic 805) (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption is permitted. The Company is currently assessing the potential impact of ASU 2017-01 on its financial statements. In March 2017, the FASB issued Accounting Standards Board Update No. 2017-07: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). ASU 2017-07 requires that an employer report the service cost component of its net periodic pension and postretirement benefit costs (“net benefit cost”) in the same line item or items as other compensation costs arising from services rendered by employees during the period. Additionally, ASU 2017-07 only allows the service cost component of net benefit cost to be eligible for capitalization into inventory. All other components of net benefit cost, which primarily include interest cost, expected return on assets and the annual mark-to-market liability remeasurement, are required to be presented in the income statement separately from the service cost component and outside of income from operations. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption was only permitted in the first quarter of 2017. The Company is currently assessing the potential impact of ASU 2017-07 on its financial statements. Recently Adopted Accounting Standards In July 2015, the FASB issued Accounting Standards Board Update No. 2015-11: Simplifying the Measurement of Inventory (Topic 330) (“ASU 2015-11”) as part of the FASB simplification initiative. ASU 2015-11 replaces the existing concept of market value of inventory (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin) with the single measurement of net realizable value. The guidance is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. The Company adopted ASU 2015-11 as of January 1, 2017 and adoption of this standard had no impact on the Company’s financial statements. In March 2016, the FASB issued Accounting Standards Board Update No. 2016-07: Simplifying the Transition to the Equity Method of Accounting (Topic 323) (“ASU 2016-07”) as part of the FASB simplification initiative. ASU 2016-07 eliminates the requirement that when an existing investment qualifies for use of the equity method, an investor adjust the investment, results of operations and retained earnings retroactively as if the equity method has been in effect in all previous periods that the investment had been held. Under the new guidance, the equity method investor is only required to adopt the equity method as of the date the investment qualifies for the equity method, with no retrospective adjustment required. The guidance is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. The Company adopted ASU 2016-07 as of January 1, 2017 and adoption of this standard had no impact on the Company’s financial statements. In March 2016, the FASB issued Accounting Standards Board Update No. 2016-09: Improvements to Employee Share-Based Payment Accounting (Topic 718) (“ASU 2016-09”) as part of the FASB simplification initiative. ASU 2016-09 simplifies various aspects of share-based payment accounting, including the income tax consequences, classification of equity awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. The Company adopted ASU 2016-09 as of January 1, 2017 and adoption of this standard had no impact on the Company’s financial statements. In January 2017, the FASB issued Accounting Standards Board Update No. 2017-04: Simplifying the Test for Goodwill Impairment (Topic 350) (“ASU 2017-04”) as part of the FASB simplification initiative. To simplify the subsequent measurement of goodwill, ASU 2017-04 eliminated Step 2 from the goodwill impairment test. Instead, under the amendments in ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, which is Step 1 of the goodwill impairment test. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for goodwill impairment tests performed after December 15, 2019 and early adoption is permitted. The Company early adopted ASU 2017-04 during the third quarter 2017. See Note 5 for more information. |
Restructuring (Notes)
Restructuring (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | Business Realignment 2017 Restructuring Activities In November 2017, the Company initiated new restructuring actions with the intent to optimize its cost structure. The Company expects these restructuring actions to generate approximately $40 of incremental cost savings over the next 12 to 18 months. As of the filing date of this Quarterly Report on Form 10-Q, the total one-time cash costs expected to be incurred for these restructuring activities are estimated between $30 and $40, consisting primarily of workforce reduction costs. Oilfield During the third quarter of 2017, the Company indefinitely idled an oilfield manufacturing facility within its Epoxy, Phenolic and Coating Resins segment, and production was ceased at this facility. As a result, the estimated useful lives of certain long-lived assets related to this facility were shortened, and consequently, during the three months ended September 30, 2017, the Company incurred $14 of accelerated depreciation related to these assets, which is included in “Cost of sales” in the unaudited Condensed Consolidated Statements of Operations. Norco In the first quarter of 2016, the Company announced a planned rationalization at its Norco, LA manufacturing facility within its Epoxy, Phenolic and Coating Resins segment, and production was ceased at this facility during the second quarter of 2016. As a result of this facility rationalization, the Company recorded one-time costs in 2016 related to the early termination of certain contracts for utilities, site services, raw materials and other items. The Company also recorded a conditional asset retirement obligation (“ARO”) in 2016 related to certain contractually obligated future demolition, decontamination and repair costs associated with this facility rationalization. The Company does not expect to incur any additional contract termination or ARO charges related to this facility rationalization. The table below summarizes the changes in the liabilities recorded related to contract termination costs and ARO from December 31, 2016 to September 30, 2017, all of which are included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets. Contract Termination Costs Asset Retirement Obligation Total Accrued liability at December 31, 2016 $ 18 $ 13 $ 31 Activity (1) (15 ) (13 ) (28 ) Accrued liability at September 30, 2017 $ 3 $ — $ 3 (1) These amounts include $23 of cash payments during the nine months ended September 30, 2017 and $5 of these amounts are included in “Accounts payable” in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2017. As a result of the announcement of the Norco facility rationalization, the estimated useful lives of certain long-lived assets related to this facility were shortened, and consequently, during the nine months ended September 30, 2016, the Company incurred $76 of accelerated depreciation related to these assets, which is included in “Cost of sales” in the unaudited Condensed Consolidated Statements of Operations. These assets were fully depreciated in the second quarter of 2016. In addition, at June 30, 2016 the Company recorded a conditional ARO of $30 related to certain contractually obligated future demolition, decontamination and repair costs associated with this facility rationalization. During the nine months ended September 30, 2016, the Company recorded an additional $30 of accelerated depreciation related to this ARO, which is also included in “Cost of sales” in the unaudited Condensed Consolidated Statements of Operations, rendering this item fully depreciated as of June 30, 2016. During the three months ended September 30, 2016, this ARO liability was reduced by $11 as a result of revised cost estimates, primarily due to a reduction in the scope of expected future demolition. This $11 reduction in costs is included in “Business realignment costs (income)” in the unaudited Condensed Consolidated Statements of Operations for both the three and nine months ended September 30, 2016. Lastly, during the three months and nine months ended September 30, 2017, the Company incurred additional costs of less than $1 and $3 , respectively, related to other ongoing site closure expenses related to this facility rationalization, which are included in “Business realignment costs (income)” in the unaudited Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2016, the Company incurred costs of $23 related to the early termination of certain contracts for utilities, site services, raw materials and other items related to this facility rationalization and $13 related to abnormal production overhead, severance and other expenses to the facility closure. All of these costs are included in “Business realignment costs (income)” in the unaudited Condensed Consolidated Statements of Operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions Administrative Service, Management and Consulting Arrangement The Company is subject to a Management Consulting Agreement with Apollo (the “Management Consulting Agreement”) that renews on an annual basis, unless notice to the contrary is given by either party. Under the Management Consulting Agreement, the Company receives certain structuring and advisory services from Apollo and its affiliates. The Management Consulting Agreement provides indemnification to Apollo, its affiliates and their directors, officers and representatives for potential losses arising from these services. Apollo is entitled to an annual fee equal to the greater of $3 or 2% of the Company’s Adjusted EBITDA. Apollo elected to waive charges of any portion of the annual management fee due in excess of $3 for the calendar year 2017 . During the three months ended September 30, 2017 and 2016 and during the nine months ended September 30, 2017 and 2016, the Company recognized expense under the Management Consulting Agreement of $1 and $2 , respectively. This amount is included in “Other operating expense, net” in the unaudited Condensed Consolidated Statements of Operations. Transactions with MPM Shared Services Agreement On October 1, 2010, the Company entered into a shared services agreement with Momentive Performance Materials Inc. (‘MPM”) (which, from October 1, 2010 through October 24, 2014, was a subsidiary of Hexion Holdings), as amended in October 2014 (the “Shared Services Agreement”). Under this agreement, the Company provides to MPM, and MPM provides to the Company, certain services, including, but not limited to, executive and senior management, administrative support, human resources, information technology support, accounting, finance, legal and procurement services. The Shared Services Agreement establishes certain criteria upon which the costs of such services are allocated between the Company and MPM. The Shared Services Agreement was renewed for one year starting October 2017 and is subject to termination by either the Company or MPM, without cause, on not less than 30 days’ written notice, and expires in October 2018 (subject to one-year renewals every year thereafter; absent contrary notice from either party). The Company periodically reviews the scope of services provided under this agreement and has recently begun efforts to reduce the scope of services provided by the Company, in particular with respect to human resources, information technology and accounting and finance. Pursuant to the Shared Services Agreement, during the nine months ended September 30, 2017 and 2016 , the Company incurred approximately $41 and $50 , respectively, of net costs for shared services and MPM incurred approximately $31 and $38 , respectively, of net costs for shared services. Included in the net costs incurred during the nine months ended September 30, 2017 and 2016 , were net billings from the Company to MPM of $21 and $23 , respectively, to bring the percentage of total net incurred costs for shared services under the Shared Services Agreement to the applicable agreed upon allocation percentage. The Company had accounts receivable from MPM of $2 and $5 as of September 30, 2017 and December 31, 2016 , respectively, and no accounts payable to MPM. Sales and Purchases of Products with MPM The Company also sells products to, and purchases products from, MPM. During the three months ended September 30, 2017 and 2016, the Company sold less than $1 of products to MPM and purchased $6 and $7 , respectively. During the nine months ended September 30, 2017 and 2016 , the Company sold less than $1 of products to MPM and purchased $18 and $22 , respectively. During the three and nine months ended September 30, 2017 and 2016 , the Company earned less than $1 from MPM as compensation for acting as distributor of products. The Company had no accounts receivable from MPM at September 30, 2017 and accounts receivable of less than $1 at December 31, 2016. A s of both September 30, 2017 and December 31, 2016 , the Company had $2 of accounts payable to MPM. Purchases and Sales of Products and Services with Apollo Affiliates Other than MPM The Company sells products to various Apollo affiliates other than MPM. These sales were $1 and less than $1 for the three months ended September 30, 2017 and 2016 , respectively, and $3 and $6 for the nine months ended September 30, 2017 and 2016 , respectively. Accounts receivable from these affiliates were less than $1 at both September 30, 2017 and December 31, 2016 . The Company also purchases raw materials and services from various Apollo affiliates other than MPM. There were no purchases for the three and nine months ended September 30, 2017 and purchases of less than $1 for the three and nine months ended September 30, 2016, respectively. The Company had no accounts payable to these affiliates at September 30, 2017 and accounts payable of less than $1 at December 31, 2016 . Other Transactions and Arrangements The Company sells products and provides services to, and purchases products from, its joint ventures which are recorded under the equity method of accounting. These sales were $1 and $4 for the three months ended September 30, 2017 and 2016 , respectively, and $9 and $38 for the nine months ended September 30, 2017 and 2016, respectively. Accounts receivable from these joint ventures were $5 and $7 at September 30, 2017 and December 31, 2016 , respectively. These purchases were $3 and $4 for the three months ended September 30, 2017 and 2016 , respectively, and $10 and $14 for the nine months ended September 30, 2017 and 2016, respectively. The Company had accounts payable to these joint ventures of less than $1 and $1 at September 30, 2017 and December 31, 2016 , respectively. The Company had a loan receivable of $6 and royalties receivable of $2 as of both September 30, 2017 and December 31, 2016 from its unconsolidated forest products joint venture in Russia. Note that these royalties receivable are also included in the accounts receivable from joint ventures disclosed above. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value and Financial Instruments [Abstract] | |
Fair Value Disclosures [Text Block] | Fair Value Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurement provisions establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This guidance describes three levels of inputs that may be used to measure fair value: • Level 1: Inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. • Level 3: Unobservable inputs that are supported by little or no market activity and are developed based on the best information available in the circumstances. For example, inputs derived through extrapolation or interpolation that cannot be corroborated by observable market data. Recurring Fair Value Measurements As of September 30, 2017 , the Company had derivative liabilities related to electricity, natural gas and foreign exchange contracts of less than $1, which were measured using level 2 inputs, and consisted of derivative instruments transacted primarily in over-the-counter markets. There were no transfers between Level 1, Level 2 or Level 3 measurements during the nine months ended September 30, 2017 or 2016 . The Company calculates the fair value of its Level 2 derivative liabilities using standard pricing models with market-based inputs, adjusted for nonperformance risk. When its financial instruments are in a liability position, the Company evaluates its credit risk as a component of fair value. At both September 30, 2017 and December 31, 2016 , no adjustment was made by the Company to reduce its derivative position for nonperformance risk. When its financial instruments are in an asset position, the Company is exposed to credit loss in the event of nonperformance by other parties to these contracts and evaluates their credit risk as a component of fair value. Non-recurring Fair Value Measurements Goodwill In 2017, the Company lowered its forecast of estimated earnings and cash flows for its oilfield business from those previously projected, and indefinitely idled a manufacturing facility within its oilfield business. This was due to the slower than previously assumed recovery in the oil and gas market. As of September 30, 2017, the estimated fair value of the Company’s oilfield reporting unit was less than the carrying value of the net assets of the reporting unit. In estimating the fair value of the oilfield reporting unit, the Company relied solely on a discounted cash flow model income approach. This was due to the Company’s belief that the reporting unit’s EBITDA, a key input under the market approach, was not representative and consistent with the reporting unit’s historical performance and long-term outlook and, therefore, was not consistent with assumptions that a market participant would use in determining the fair value of the reporting unit. To measure the amount of the goodwill impairment, the Company allocated the estimated fair value of the reporting unit to the reporting unit’s assets and liabilities. As a result of this allocation, the Company estimated that the implied fair value of the oilfield reporting unit’s goodwill was $0. As such, the entire oilfield reporting unit’s goodwill balance of $13 was impaired during the third quarter of 2017, and the Company recognized a goodwill impairment charge of $13 in its Epoxy, Phenolic and Coating Resins segment, which is included in “Asset impairments” in the unaudited Condensed Consolidated Statements of Operations. Significant unobservable inputs in the discounted cash flow analysis included projected long-term future cash flows, projected growth rates and discount rates associated with this reporting unit. Future projected long-term cash flows and growth rates were derived from models based upon forecasts prepared by the Company’s management. These projected cash flows were discounted using a rate of 13.5%. Non-derivative Financial Instruments The following table summarizes the carrying amount and fair value of the Company’s non-derivative financial instruments: Carrying Amount Fair Value Level 1 Level 2 Level 3 Total September 30, 2017 Debt $ 3,777 $ — $ 3,205 $ 31 $ 3,236 December 31, 2016 Debt $ 3,542 $ — $ 3,134 $ 9 $ 3,143 Fair values of debt classified as Level 2 are determined based on other similar financial instruments, or based upon interest rates that are currently available to the Company for the issuance of debt with similar terms and maturities. Level 3 amounts represent capital leases whose fair value is determined through the use of present value and specific contract terms. The carrying amount and fair value of the Company’s debt is exclusive of unamortized deferred financing fees. The carrying amounts of cash and cash equivalents, short term investments, accounts receivable, accounts payable and other accrued liabilities are considered reasonable estimates of their fair values due to the short-term maturity of these financial instruments. |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt Obligations Debt outstanding at September 30, 2017 and December 31, 2016 is as follows: September 30, 2017 December 31, 2016 Long-Term Due Within One Year Long-Term Due Within One Year ABL Facility $ 124 $ — $ — $ — Senior Secured Notes: 6.625% First-Priority Senior Secured Notes due 2020 (includes $2 and $3 of unamortized debt premium at September 30, 2017 and December 31, 2016, respectively) 1,552 — 1,553 — 10.00% First-Priority Senior Secured Notes due 2020 315 — 315 — 10.375% First-Priority Senior Secured Notes due 2022 560 — — — 8.875% Senior Secured Notes due 2018 (includes $1 of unamortized debt discount at December 31, 2016) — — 706 — 13.75% Senior Secured Notes due 2022 225 — — — 9.00% Second-Priority Senior Secured Notes due 2020 574 — 574 — Debentures: 9.2% debentures due 2021 74 — 74 — 7.875% debentures due 2023 189 — 189 — Other Borrowings: Australia Facility due 2017 — 55 — 51 Brazilian bank loans 11 29 14 26 Lease obligations 27 4 7 2 Other 5 33 3 28 Unamortized debt issuance costs (44 ) — (38 ) — Total $ 3,612 $ 121 $ 3,397 $ 107 2017 Refinancing Transactions • In February 2017, the Company issued $485 aggregate principal amount of 10.375% First-Priority Senior Secured Notes due 2022 (the “New First Lien Notes”) and $225 aggregate principal amount of 13.75% Senior Secured Notes due 2022 (the “New Senior Secured Notes”). Upon the closing of these offerings, the Company used the net proceeds from these offerings, together with cash on its balance sheet, to redeem all of the Company’s outstanding 8.875% Senior Secured Notes due 2018 (the “Old Senior Secured Notes”), which occurred in March 2017. In connection with the extinguishment of the Old Senior Secured Notes, the Company wrote off $3 of unamortized deferred debt issuance costs and discounts, which are included in “(Gain) loss on extinguishment of debt” in the unaudited Condensed Consolidated Statements of Operations. • In May 2017, the Company issued an additional $75 aggregate principal amount of New First Lien Notes at an issue price of 100.5%. These notes mature on February 1, 2022 and have the same terms as the New First Lien Notes issued in February 2017. The Company used the net proceeds from these notes for general corporate purposes. • The Company also amended and restated its ABL Facility in December 2016 with modifications to, among other things, permit the refinancing of the Old Senior Secured Notes. In connection with the issuance of the new notes in February 2017, certain lenders under the ABL Facility provided extended revolving credit facility commitments in an aggregate principal amount of $350 with a maturity date of December 5, 2021 (subject to certain early maturity triggers), the existing commitments were terminated and the size of the ABL Facility was reduced from $400 to $350 . These transactions are collectively referred to as the “2017 Refinancing Transactions.” |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Environmental Matters The Company’s operations involve the use, handling, processing, storage, transportation and disposal of hazardous materials. The Company is subject to extensive environmental regulation at the federal, state and local levels as well as foreign laws and regulations, and is therefore exposed to the risk of claims for environmental remediation or restoration. In addition, violations of environmental laws or permits may result in restrictions being imposed on operating activities, substantial fines, penalties, damages or other costs, any of which could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Environmental Institution of Paraná IAP— On August 10, 2005, the Environmental Institute of Paraná (IAP), an environmental agency in the State of Paraná, provided Hexion Quimica Industria, the Company’s Brazilian subsidiary, with notice of an environmental assessment in the amount of 12 Brazilian reals. The assessment related to alleged environmental damages to the Paranagua Bay caused in November 2004 from an explosion on a shipping vessel carrying methanol purchased by the Company. The investigations performed by the public authorities have not identified any actions of the Company that contributed to or caused the accident. The Company responded to the assessment by filing a request to have it cancelled and by obtaining an injunction precluding execution of the assessment pending adjudication of the issue. In November 2010, the Court denied the Company’s request to cancel the assessment and lifted the injunction that had been issued. The Company responded to the ruling by filing an appeal in the State of Paraná Court of Appeals. In March 2012, the Company was informed that the Court of Appeals had denied the Company’s appeal, and on June 4, 2012 the Company filed appeals to the Superior Court of Justice and the Supreme Court of Brazil. In September 2016, the Superior Court of Justice decided that strict liability does not apply to administrative fines issued by environmental agencies and reversed the decision of the State of Paraná Court of Appeals. The Superior Court of Justice remanded the case back to the Court of Appeals to determine if the IAP met its burden of proving negligence by the Company. In September 2017, the State of Paraná Court of Appeals decided that IAP did not prove that the Company was negligent and granted the Company’s request to annul the environmental assessment. IAP filed a motion for clarification regarding the Court of Appeals’ analysis of the case and the Company filed a motion for clarification regarding attorney fees. After the pending motions are resolved, IAP will have 15 business days to file an appeal with the Superior Court of Justice. The Company does not believe that a loss is probable. At September 30, 2017 , the amount of the assessment, including tax, penalties, monetary correction and interest, is 55 Brazilian reals, or approximately $17 . The following table summarizes all probable environmental remediation, indemnification and restoration liabilities, including related legal expenses, at September 30, 2017 and December 31, 2016 : Liability Range of Reasonably Possible Costs at September 30, 2017 Site Description September 30, 2017 December 31, 2016 Low High Geismar, LA $ 14 $ 14 $ 9 $ 22 Superfund and offsite landfills – allocated share: Less than 1% 2 2 1 4 Equal to or greater than 1% 7 6 5 14 Currently-owned 4 4 3 9 Formerly-owned: Remediation 27 30 25 42 Monitoring only — 1 — 1 Total $ 54 $ 57 $ 43 $ 92 These amounts include estimates for unasserted claims that the Company believes are probable of loss and reasonably estimable. The estimate of the range of reasonably possible costs is less certain than the estimates upon which the liabilities are based. To establish the upper end of a range, assumptions less favorable to the Company among the range of reasonably possible outcomes were used. As with any estimate, if facts or circumstances change, the final outcome could differ materially from these estimates. At September 30, 2017 and December 31, 2016 , $14 and $13 , respectively, have been included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets, with the remaining amount included in “Other long-term liabilities.” Following is a discussion of the Company’s environmental liabilities and the related assumptions at September 30, 2017 : Geismar, LA Site —The Company formerly owned a basic chemicals and polyvinyl chloride business that was taken public as Borden Chemicals and Plastics Operating Limited Partnership (“BCPOLP”) in 1987. The Company retained a 1% interest, the general partner interest and the liability for certain environmental matters after BCPOLP’s formation. Under a Settlement Agreement approved by the United States Bankruptcy Court for the District of Delaware among the Company, BCPOLP, the United States Environmental Protection Agency and the Louisiana Department of Environmental Quality, the Company agreed to perform certain tasks related to BCPOLP’s obligations for soil and groundwater contamination at BCPOLP’s Geismar, Louisiana site. The Company bears the sole responsibility for these obligations because there are no other potentially responsible parties (“PRP”) or third parties from whom the Company could seek reimbursement. A groundwater pump and treat system to remove contaminants is operational, and natural attenuation studies are proceeding. If closure procedures and remediation systems prove to be inadequate, or if additional contamination is discovered, costs that would approach the higher end of the range of possible outcomes could result. Due to the long-term nature of the project, the reliability of timing and the ability to estimate remediation payments, a portion of this liability was recorded at its net present value, assuming a 3% discount rate and a time period of 22 years. The range of possible outcomes is discounted in a similar manner. The undiscounted liability, which is expected to be paid over the next 22 years , is approximately $20 . Over the next five years, the Company expects to make ratable payments totaling $6 . Superfund Sites and Offsite Landfills —The Company is currently involved in environmental remediation activities at a number of sites for which it has been notified that it is, or may be, a PRP under the United States Comprehensive Environmental Response, Compensation and Liability Act or similar state “superfund” laws. The Company anticipates approximately 50% of the estimated liability for these sites will be paid within the next five years, with the remainder over the next twenty-five years. The Company generally does not bear a significant level of responsibility for these sites, and as a result, has little control over the costs and timing of cash flows. The Company’s ultimate liability will depend on many factors including its share of waste volume, the financial viability of other PRPs, the remediation methods and technology used, the amount of time necessary to accomplish remediation and the availability of insurance coverage. The range of possible outcomes takes into account the maturity of each project, resulting in a more narrow range as the project progresses. To estimate both its current reserves for environmental remediation at these sites and the possible range of additional costs, the Company has not assumed that it will bear the entire cost of remediation of every site to the exclusion of other known PRPs who may be jointly and severally liable. The Company has limited information to assess the viability of other PRPs and their probable contribution on a per site basis. The Company’s insurance provides very limited, if any, coverage for these environmental matters. Sites Under Current Ownership —The Company is conducting environmental remediation at a number of locations that it currently owns, of which ten sites are no longer in operation. As the Company is performing a portion of the remediation on a voluntary basis, it has some control over the costs to be incurred and the timing of cash flows. The Company expects to pay approximately $4 of these liabilities within the next five years, with the remainder over the next ten years. The factors influencing the ultimate outcome include the methods of remediation elected, the conclusions and assessment of site studies remaining to be completed, and the time period required to complete the work. No other parties are responsible for remediation at these sites. Formerly-Owned Sites —The Company is conducting, or has been identified as a PRP in connection with, environmental remediation at a number of locations that it formerly owned and/or operated. Remediation costs at these former sites, such as those associated with our former phosphate mining and processing operations, could be material. The Company has accrued those costs for formerly-owned sites which are currently probable and reasonably estimable. One such site is the Coronet Industries, Inc. Superfund Alternative Site in Plant City, Florida. The Company entered into a settlement agreement effective February 1, 2016 with Coronet Industries and another former site owner. Pursuant to the agreement, the Company agreed to pay $10 in fulfillment of the contribution claim against the Company for past remediation costs, payable in three annual installments, of which one installment remains to be paid in 2018. Additionally, the Company accepted a 40% allocable share of specified future remediation costs at this site. The Company estimates its allocable share of future remediation costs to be approximately $15 . The final costs to the Company will depend on the method of remediation chosen, the amount of time necessary to accomplish remediation and the ongoing financial viability of the other PRPs. Currently, the Company has insufficient information to estimate the range of reasonably possible costs related to this site. Monitoring Only Sites —The Company is responsible for a number of sites that require monitoring where no additional remediation is expected. The Company has established reserves for costs related to these sites. Payment of these liabilities is anticipated to occur over the next ten or more years. The ultimate cost to the Company will be influenced by fluctuations in projected monitoring periods or by findings that are different than anticipated. Indemnifications —In connection with the acquisition of certain of the Company’s operating businesses, the Company has been indemnified by the sellers against certain liabilities of the acquired businesses, including liabilities relating to both known and unknown environmental contamination arising prior to the date of the purchase. The indemnifications may be subject to certain exceptions and limitations, deductibles and indemnity caps. While it is reasonably possible that some costs could be incurred, except for those sites identified above, the Company has inadequate information to allow it to estimate a potential range of liability, if any. Non-Environmental Legal Matters The Company is involved in various legal proceedings in the ordinary course of business and had reserves of $4 and $2 at September 30, 2017 and December 31, 2016 , respectively, for all non-environmental legal defense costs incurred and settlement costs that it believes are probable and estimable. At September 30, 2017 and December 31, 2016 , $3 and $1 , respectively, has been included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets, with the remaining amount included in “Other long-term liabilities.” The Company is also involved in various product liability, commercial and employment litigation, personal injury, property damage and other legal proceedings, including actions that allege harm caused by products the Company has allegedly made or used, containing silica, vinyl chloride monomer and asbestos. The Company believes it has adequate reserves and that it is not reasonably possible that a loss exceeding amounts already reserved would be material. Furthermore, the Company has insurance to cover claims of these types. |
Pension and Postretirement Expe
Pension and Postretirement Expense | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Pension and Postretirement Benefit Plans Following are the components of net pension and postretirement (benefit) expense recognized by the Company for the three and nine months ended September 30, 2017 and 2016 : Pension Benefits Non-Pension Postretirement Benefits Three Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost $ 1 $ 4 $ 1 $ 4 $ — $ — $ — $ — Interest cost on projected benefit obligation 2 3 2 3 — — — — Expected return on assets (3 ) (3 ) (4 ) (3 ) — — — — Net expense (benefit) $ — $ 4 $ (1 ) $ 4 $ — $ — $ — $ — Pension Benefits Non-Pension Postretirement Benefits Nine Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost $ 2 $ 12 $ 3 $ 11 $ — $ — $ — $ — Interest cost on projected benefit obligation 6 7 6 8 — 1 — 1 Expected return on assets (10 ) (8 ) (11 ) (8 ) — — — — Amortization of prior service benefit — — — — — — (1 ) — Net (benefit) expense $ (2 ) $ 11 $ (2 ) $ 11 $ — $ 1 $ (1 ) $ 1 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Segment Information The Company’s business segments are based on the products that the Company offers and the markets that it serves. At September 30, 2017 , the Company had two reportable segments: Epoxy, Phenolic and Coating Resins and Forest Products Resins. A summary of the major products of the Company’s reportable segments follows: • Epoxy, Phenolic and Coating Resins: epoxy specialty resins, phenolic encapsulated substrates, versatic acids and derivatives, basic epoxy resins and intermediates and phenolic specialty resins and molding compounds • Forest Products Resins: forest products resins and formaldehyde applications Reportable Segments Following are net sales and Segment EBITDA (earnings before interest, income taxes, depreciation and amortization) by reportable segment. Segment EBITDA is defined as EBITDA adjusted for certain non-cash items and other income and expenses. Segment EBITDA is the primary performance measure used by the Company’s senior management, the chief operating decision-maker and the board of directors to evaluate operating results and allocate capital resources among segments. Segment EBITDA is also the profitability measure used to set management and executive incentive compensation goals. Corporate and Other is primarily corporate general and administrative expenses that are not allocated to the segments, such as shared service and administrative functions, foreign exchange gains and losses and legacy company costs not allocated to continuing segments. Net Sales (1) : Three Months Ended September 30, Nine Months Ended September 30. 2017 2016 2017 2016 Epoxy, Phenolic and Coating Resins $ 528 $ 476 $ 1,537 $ 1,664 Forest Products Resins 386 343 1,159 1,016 Total $ 914 $ 819 $ 2,696 $ 2,680 (1) Intersegment sales are not significant and, as such, are eliminated within the selling segment. Reconciliation of Net (Loss) Income to Segment EBITDA: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Reconciliation: Net (loss) income $ (70 ) $ (47 ) $ (146 ) $ 59 Income tax expense 9 16 16 40 Interest expense, net 82 76 247 235 Depreciation and amortization 29 30 85 101 Accelerated depreciation 14 21 14 127 EBITDA $ 64 $ 96 $ 216 $ 562 Items not included in Segment EBITDA: Asset impairments $ 13 $ — $ 13 $ — Business realignment costs (income) 10 (3 ) 27 42 Gain on dispositions — — — (240 ) Realized and unrealized foreign currency (gains) losses (5 ) 6 (7 ) (3 ) (Gain) loss on extinguishment of debt — (3 ) 3 (47 ) Other 14 16 39 50 Total adjustments 32 16 75 (198 ) Segment EBITDA $ 96 $ 112 $ 291 $ 364 Segment EBITDA: Epoxy, Phenolic and Coating Resins $ 45 $ 64 $ 143 $ 230 Forest Products Resins 66 65 195 184 Corporate and Other (15 ) (17 ) (47 ) (50 ) Total $ 96 $ 112 $ 291 $ 364 Items Not Included in Segment EBITDA Not included in Segment EBITDA are certain non-cash items and other income and expenses. For the three and nine months ended September 30, 2017 and 2016, these items primarily include expenses from retention programs and certain professional fees related to strategic projects. Business realignment costs for the three and nine months ended September 30, 2017 primarily include costs related to certain in-process facility rationalizations and cost reduction programs. Business realignment costs for the three and nine months ended September 30, 2016 primarily include costs related to the planned facility rationalizations within the Epoxy, Phenolic and Coating Resins segment and costs related to certain in-process cost reduction programs. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income Level 1 (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Changes of Accumulated Other Comprehensive Income [Abstract] | |
Changes in Accumulated Other Comprehensive Income [Text Block] | Changes in Accumulated Other Comprehensive Loss Following is a summary of changes in “Accumulated other comprehensive loss” for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Beginning balance $ 3 $ (27 ) $ (24 ) $ 3 $ (18 ) $ (15 ) Other comprehensive income before reclassifications, net of tax — 10 10 — 7 7 Ending balance $ 3 $ (17 ) $ (14 ) $ 3 $ (11 ) $ (8 ) Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Beginning balance $ 3 $ (42 ) $ (39 ) $ 4 $ (19 ) $ (15 ) Other comprehensive income (loss) before reclassifications, net of tax — 25 25 (1 ) 8 7 Ending balance $ 3 $ (17 ) $ (14 ) $ 3 $ (11 ) $ (8 ) |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes The effective tax rate was (15)% and (53)% for the three months ended September 30, 2017 and 2016 , respectively. The effective tax rate was (12)% and 44% for the nine months ended September 30, 2017 and 2016, respectively. The change in the effective tax rate was primarily attributable to the amount and distribution of income and losses among the various jurisdictions in which we operate. The effective tax rates were also impacted by operating gains and losses generated in jurisdictions where no tax expense or benefit was recognized due to the maintenance of a full valuation allowance. For the three and nine months ended September 30, 2017 and 2016 , income tax expense relates primarily to income from certain foreign operations. In 2017, losses in the United States and certain foreign jurisdictions had no impact on income tax expense as no tax benefit was recognized due to the maintenance of a full valuation allowance. In 2016, the income tax expense related to the gain on dispositions was substantially reduced by net operating loss utilization which was offset by a decrease to the respective valuation allowances. |
Guarantor Non-Guarantor Subsidi
Guarantor Non-Guarantor Subsidiary Financial Information | 9 Months Ended |
Sep. 30, 2017 | |
Guarantor Non Guarantor Subsidary Financial Information [Abstract] | |
Guarantees [Text Block] | Guarantor/Non-Guarantor Subsidiary Financial Information The Company’s 6.625% First-Priority Senior Secured Notes due 2020, 10.00% First-Priority Senior Secured Notes due 2020, 10.375% First-Priority Senior Secured Notes due 2022, 13.75% Senior Secured Notes due 2022 and 9.00% Second-Priority Senior Secured Notes due 2020 are guaranteed by certain of its U.S. subsidiaries. The following information contains the condensed consolidating financial information for Hexion Inc. (the parent), the combined subsidiary guarantors (Hexion Investments Inc.; Lawter International, Inc.; HSC Capital Corporation (dissolved in April 2017); Hexion International Inc.; Hexion CI Holding Company (China) LLC; NL COOP Holdings LLC and Oilfield Technology Group, Inc. (dissolved in September 2017)) and the combined non-guarantor subsidiaries, which includes all of the Company’s foreign subsidiaries. All of the subsidiary guarantors are 100% owned by Hexion Inc. All guarantees are full and unconditional, and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its domestic subsidiaries by dividend or loan. While the Company’s Australian, New Zealand, Brazilian and China subsidiaries contain certain restrictions related to the payment of dividends and intercompany loans due to the terms of their credit facilities, there are no material restrictions on the Company’s ability to obtain cash from the remaining non-guarantor subsidiaries. These financial statements are prepared on the same basis as the consolidated financial statements of the Company except that investments in subsidiaries are accounted for using the equity method for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. This information includes allocations of corporate overhead to the combined non-guarantor subsidiaries based on net sales. Income tax expense has been provided on the combined non-guarantor subsidiaries based on actual effective tax rates. 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 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 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. |
Significant Accounting Polici20
Significant Accounting Policies Level 2 (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and also requires the disclosure of contingent assets and liabilities at the date of the financial statements. In addition, it requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events —The Company has evaluated events and transactions subsequent to September 30, 2017 through the date of issuance of its unaudited Condensed Consolidated Financial Statements. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Board Update No. 2014-09: Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes the existing revenue recognition guidance and most industry-specific guidance applicable to revenue recognition. According to the new guidance, an entity will apply a principles-based five step model to recognize revenue upon the transfer of promised goods or services to customers and in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The effective date for ASU 2014-09 is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted for annual and interim periods beginning on or after December 15, 2016. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in ASU 2014-09. The Company plans to adopt ASU 2014-09 utilizing a modified retrospective approach, which will result in a cumulative adjustment to equity on the adoption date of January 1, 2018. The Company currently anticipates that implementation of this standard will result only in timing differences for certain revenue streams, which are not expected to have a material impact on its financial statements. In February 2016, the FASB issued Accounting Standards Board Update No. 2016-02: Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 supersedes the existing lease guidance in Topic 840. According to the new guidance, all leases, with limited scope exceptions, will be recorded on the balance sheet in the form of a liability to make lease payments (lease liability) and a right-of-use asset representing the right to use the underlying asset for the lease term. The guidance is effective for annual and interim periods beginning on or after December 15, 2018, and early adoption is permitted. Entities will be required to adopt ASU 2016-02 using a modified retrospective approach, whereby leases will be recognized and measured at the beginning of the earliest period presented. The Company is currently assessing the potential impact of ASU 2016-02 on its financial statements. In August 2016, the FASB issued Accounting Standards Board Update No. 2016-15: Statement of Cash Flows (Topic 230) (“ASU 2016-15”) as part of the FASB simplification initiative. ASU 2016-15 provides guidance on treatment in the statement of cash flows for eight specific cash flow topics, with the objective of reducing existing diversity in practice. Of the eight cash flow topics addressed in the new guidance, the topics expected to have an impact on the Company include debt prepayment or debt extinguishment costs, proceeds from the settlement of insurance claims, treatment of restricted cash and distributions received from equity method investees. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements. In November 2016, the FASB issued Accounting Standards Board Update No. 2016-18: Statement of Cash Flows (Topic 230) Restricted Cash (“ASU 2016-18”) as part of the FASB simplification initiative. ASU 2016-18 requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. ASU 2016-18 also requires supplemental disclosure regarding the nature of restrictions on a company’s cash and cash equivalents, such as the purpose and terms of the restriction, expected duration of the restriction and the amount of cash subject to restriction. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption is permitted. Based on restricted cash balances at December 31, 2016 and September 30, 2017, beginning and ending cash balances in the Condensed Consolidated Statements of Cash Flows would include $17 and $18, respectively, of restricted cash upon adoption of this standard. In January 2017, the FASB issued Accounting Standards Board Update No. 2017-01: Clarifying the Definition of a Business (Topic 805) (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption is permitted. The Company is currently assessing the potential impact of ASU 2017-01 on its financial statements. In March 2017, the FASB issued Accounting Standards Board Update No. 2017-07: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). ASU 2017-07 requires that an employer report the service cost component of its net periodic pension and postretirement benefit costs (“net benefit cost”) in the same line item or items as other compensation costs arising from services rendered by employees during the period. Additionally, ASU 2017-07 only allows the service cost component of net benefit cost to be eligible for capitalization into inventory. All other components of net benefit cost, which primarily include interest cost, expected return on assets and the annual mark-to-market liability remeasurement, are required to be presented in the income statement separately from the service cost component and outside of income from operations. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, and early adoption was only permitted in the first quarter of 2017. The Company is currently assessing the potential impact of ASU 2017-07 on its financial statements. Recently Adopted Accounting Standards In July 2015, the FASB issued Accounting Standards Board Update No. 2015-11: Simplifying the Measurement of Inventory (Topic 330) (“ASU 2015-11”) as part of the FASB simplification initiative. ASU 2015-11 replaces the existing concept of market value of inventory (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin) with the single measurement of net realizable value. The guidance is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. The Company adopted ASU 2015-11 as of January 1, 2017 and adoption of this standard had no impact on the Company’s financial statements. In March 2016, the FASB issued Accounting Standards Board Update No. 2016-07: Simplifying the Transition to the Equity Method of Accounting (Topic 323) (“ASU 2016-07”) as part of the FASB simplification initiative. ASU 2016-07 eliminates the requirement that when an existing investment qualifies for use of the equity method, an investor adjust the investment, results of operations and retained earnings retroactively as if the equity method has been in effect in all previous periods that the investment had been held. Under the new guidance, the equity method investor is only required to adopt the equity method as of the date the investment qualifies for the equity method, with no retrospective adjustment required. The guidance is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. The Company adopted ASU 2016-07 as of January 1, 2017 and adoption of this standard had no impact on the Company’s financial statements. In March 2016, the FASB issued Accounting Standards Board Update No. 2016-09: Improvements to Employee Share-Based Payment Accounting (Topic 718) (“ASU 2016-09”) as part of the FASB simplification initiative. ASU 2016-09 simplifies various aspects of share-based payment accounting, including the income tax consequences, classification of equity awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. The Company adopted ASU 2016-09 as of January 1, 2017 and adoption of this standard had no impact on the Company’s financial statements. In January 2017, the FASB issued Accounting Standards Board Update No. 2017-04: Simplifying the Test for Goodwill Impairment (Topic 350) (“ASU 2017-04”) as part of the FASB simplification initiative. To simplify the subsequent measurement of goodwill, ASU 2017-04 eliminated Step 2 from the goodwill impairment test. Instead, under the amendments in ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, which is Step 1 of the goodwill impairment test. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for goodwill impairment tests performed after December 15, 2019 and early adoption is permitted. The Company early adopted ASU 2017-04 during the third quarter 2017. See Note 5 for more information. |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | The table below summarizes the changes in the liabilities recorded related to contract termination costs and ARO from December 31, 2016 to September 30, 2017, all of which are included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets. Contract Termination Costs Asset Retirement Obligation Total Accrued liability at December 31, 2016 $ 18 $ 13 $ 31 Activity (1) (15 ) (13 ) (28 ) Accrued liability at September 30, 2017 $ 3 $ — $ 3 (1) These amounts include $23 of cash payments during the nine months ended September 30, 2017 and $5 of these amounts are included in “Accounts payable” in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2017. |
Fair Value Level 3 (Tables)
Fair Value Level 3 (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The following table summarizes the carrying amount and fair value of the Company’s non-derivative financial instruments: Carrying Amount Fair Value Level 1 Level 2 Level 3 Total September 30, 2017 Debt $ 3,777 $ — $ 3,205 $ 31 $ 3,236 December 31, 2016 Debt $ 3,542 $ — $ 3,134 $ 9 $ 3,143 |
Debt Obligations Level 3 (Table
Debt Obligations Level 3 (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Debt outstanding at September 30, 2017 and December 31, 2016 is as follows: September 30, 2017 December 31, 2016 Long-Term Due Within One Year Long-Term Due Within One Year ABL Facility $ 124 $ — $ — $ — Senior Secured Notes: 6.625% First-Priority Senior Secured Notes due 2020 (includes $2 and $3 of unamortized debt premium at September 30, 2017 and December 31, 2016, respectively) 1,552 — 1,553 — 10.00% First-Priority Senior Secured Notes due 2020 315 — 315 — 10.375% First-Priority Senior Secured Notes due 2022 560 — — — 8.875% Senior Secured Notes due 2018 (includes $1 of unamortized debt discount at December 31, 2016) — — 706 — 13.75% Senior Secured Notes due 2022 225 — — — 9.00% Second-Priority Senior Secured Notes due 2020 574 — 574 — Debentures: 9.2% debentures due 2021 74 — 74 — 7.875% debentures due 2023 189 — 189 — Other Borrowings: Australia Facility due 2017 — 55 — 51 Brazilian bank loans 11 29 14 26 Lease obligations 27 4 7 2 Other 5 33 3 28 Unamortized debt issuance costs (44 ) — (38 ) — Total $ 3,612 $ 121 $ 3,397 $ 107 |
Commitments and Contingencies L
Commitments and Contingencies Level 3 (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Environmental Loss Contingencies by Site [Table Text Block] | The following table summarizes all probable environmental remediation, indemnification and restoration liabilities, including related legal expenses, at September 30, 2017 and December 31, 2016 : Liability Range of Reasonably Possible Costs at September 30, 2017 Site Description September 30, 2017 December 31, 2016 Low High Geismar, LA $ 14 $ 14 $ 9 $ 22 Superfund and offsite landfills – allocated share: Less than 1% 2 2 1 4 Equal to or greater than 1% 7 6 5 14 Currently-owned 4 4 3 9 Formerly-owned: Remediation 27 30 25 42 Monitoring only — 1 — 1 Total $ 54 $ 57 $ 43 $ 92 |
Pension and Postretirement Ex25
Pension and Postretirement Expense Level 3 (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
Schedule of Changes in Projected Benefit Obligations [Table Text Block] | Following are the components of net pension and postretirement (benefit) expense recognized by the Company for the three and nine months ended September 30, 2017 and 2016 : Pension Benefits Non-Pension Postretirement Benefits Three Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost $ 1 $ 4 $ 1 $ 4 $ — $ — $ — $ — Interest cost on projected benefit obligation 2 3 2 3 — — — — Expected return on assets (3 ) (3 ) (4 ) (3 ) — — — — Net expense (benefit) $ — $ 4 $ (1 ) $ 4 $ — $ — $ — $ — Pension Benefits Non-Pension Postretirement Benefits Nine Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost $ 2 $ 12 $ 3 $ 11 $ — $ — $ — $ — Interest cost on projected benefit obligation 6 7 6 8 — 1 — 1 Expected return on assets (10 ) (8 ) (11 ) (8 ) — — — — Amortization of prior service benefit — — — — — — (1 ) — Net (benefit) expense $ (2 ) $ 11 $ (2 ) $ 11 $ — $ 1 $ (1 ) $ 1 |
Segment Information Level 3 (Ta
Segment Information Level 3 (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Net Sales (1) : Three Months Ended September 30, Nine Months Ended September 30. 2017 2016 2017 2016 Epoxy, Phenolic and Coating Resins $ 528 $ 476 $ 1,537 $ 1,664 Forest Products Resins 386 343 1,159 1,016 Total $ 914 $ 819 $ 2,696 $ 2,680 (1) Intersegment sales are not significant and, as such, are eliminated within the selling segment |
Reconciliation of Segment EBITDA to Net Income [Table Text Block] | Reconciliation of Net (Loss) Income to Segment EBITDA: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Reconciliation: Net (loss) income $ (70 ) $ (47 ) $ (146 ) $ 59 Income tax expense 9 16 16 40 Interest expense, net 82 76 247 235 Depreciation and amortization 29 30 85 101 Accelerated depreciation 14 21 14 127 EBITDA $ 64 $ 96 $ 216 $ 562 Items not included in Segment EBITDA: Asset impairments $ 13 $ — $ 13 $ — Business realignment costs (income) 10 (3 ) 27 42 Gain on dispositions — — — (240 ) Realized and unrealized foreign currency (gains) losses (5 ) 6 (7 ) (3 ) (Gain) loss on extinguishment of debt — (3 ) 3 (47 ) Other 14 16 39 50 Total adjustments 32 16 75 (198 ) Segment EBITDA $ 96 $ 112 $ 291 $ 364 Segment EBITDA: Epoxy, Phenolic and Coating Resins $ 45 $ 64 $ 143 $ 230 Forest Products Resins 66 65 195 184 Corporate and Other (15 ) (17 ) (47 ) (50 ) Total $ 96 $ 112 $ 291 $ 364 |
Changes in Accumulated Other 27
Changes in Accumulated Other Comprehensive Income Level 3 (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Changes of Accumulated Other Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Following is a summary of changes in “Accumulated other comprehensive loss” for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Beginning balance $ 3 $ (27 ) $ (24 ) $ 3 $ (18 ) $ (15 ) Other comprehensive income before reclassifications, net of tax — 10 10 — 7 7 Ending balance $ 3 $ (17 ) $ (14 ) $ 3 $ (11 ) $ (8 ) Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Total Beginning balance $ 3 $ (42 ) $ (39 ) $ 4 $ (19 ) $ (15 ) Other comprehensive income (loss) before reclassifications, net of tax — 25 25 (1 ) 8 7 Ending balance $ 3 $ (17 ) $ (14 ) $ 3 $ (11 ) $ (8 ) |
Guarantor Non-Guarantor Subsi28
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 $70 to a non-guarantor subsidiary as capital contributions, resulting in a non-cash transaction. During the nine months ended September 30, 2016 , the non-guarantor subsidiary sold the contributed receivables to certain banks under various supplier financing agreements. The cash proceeds were returned to Hexion Inc. by the non-guarantor subsidiary as a return of capital. The sale of receivables has been included within cash flows from operating activities on the Combined non-guarantor subsidiaries. The return of the cash proceeds from the sale of receivables has been included as a financing outflow and an investing inflow on the Combined Non-Guarantor Subsidiaries and Hexion Inc., respectively. |
Background and Basis of Prese29
Background and Basis of Presentation Level 4 (Details) - Number of Reportable Segments | 9 Months Ended |
Sep. 30, 2017Segments | |
Segment Reporting Information [Line Items] | |
Number of Reportable Segments | 2 |
Restructuring Restructuring and
Restructuring Restructuring and Cost Reduction Programs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Accelerated depreciation | $ 14 | $ 21 | $ 14 | $ 127 | ||
Restructuring Reserve | 3 | 3 | $ 31 | |||
Restructuring Reserve, Period Increase (Decrease) | (28) | |||||
Payments for Restructuring | 23 | |||||
RestructuringReserveIncludedInAccountsPayable | 5 | 5 | ||||
Asset Retirement Obligation | $ 30 | |||||
Norco [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Norco Restructuring and Related Cost, Accelerated Depreciation | 76 | |||||
Loss on Contract Termination | 0 | 30 | ||||
Restructuring and Related Cost, Incurred Cost | $ 1 | $ 23 | $ 3 |
Restructuring Changes in liabil
Restructuring Changes in liabilities recorded related to contract termination costs and ARO (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | $ 3 | $ 3 | $ 31 | |
Restructuring Reserve, Period Increase (Decrease) | (28) | |||
Norco [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Norco Restructuring and Related Cost, Accelerated Depreciation | $ 76 | |||
Loss on Contract Termination | 0 | $ 30 | ||
Contract Termination [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 3 | 3 | 18 | |
Restructuring Reserve, Period Increase (Decrease) | (15) | |||
Other Restructuring [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | $ 0 | 0 | $ 13 | |
Restructuring Reserve, Period Increase (Decrease) | (13) | |||
Loss on Contract Termination | $ 13 |
Related Party Transactions Leve
Related Party Transactions Level 4 (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Accounts Receivable shared services costs | $ 2 | $ 2 | |||
Apollo [Member] | |||||
Related Party Transaction [Line Items] | |||||
Annual management consulting fee | $ 3 | ||||
Annual management consulting fee percentage | 2.00% | ||||
Related Party Costs | 1 | $ 1 | $ 2 | $ 2 | |
Subsidiary of Common Parent [Member] | |||||
Related Party Transaction [Line Items] | |||||
Shared Services Costs Incurred by MPM | 31 | 38 | |||
Momentive Performance Materials Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts Receivable shared services costs | $ 5 | ||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 1 | 1 | 1 | 1 | |
Related Party Transaction, Purchases from Related Party | 6 | 7 | 18 | 22 | |
Revenues from distribution agreement | 1 | 1 | 1 | 1 | |
Accounts Receivable, Related Parties | 0 | 0 | 1 | ||
Accounts Payable, Related Parties | 2 | 2 | 2 | ||
Apollo Affiliates and Other Related Parties [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts Receivable, Related Parties | 1 | 1 | 1 | ||
Due to Related Parties | 0 | 0 | 1 | ||
Revenue from Related Parties | 1 | 1 | 3 | 6 | |
Purchases From Related Parties | 0 | 1 | 0 | 1 | |
Other joint ventures unconsolidated [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts Receivable, Related Parties | 5 | 5 | 7 | ||
Due to Related Parties | 1 | 1 | 1 | ||
Revenue from Related Parties | 1 | 4 | 9 | 38 | |
Purchases from JV | 3 | $ 4 | 10 | 14 | |
Russian Joint Venture [Member] | |||||
Related Party Transaction [Line Items] | |||||
Loans and Leases Receivable, Related Parties | 6 | 6 | 6 | ||
Accounts Receivable, Related Parties, Current | $ 2 | 2 | $ 2 | ||
Hexion Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Shared Services Costs Incurred by Hexion | 41 | 50 | |||
Shared Services Billings - Hexion to MPM | $ 21 | $ 23 |
Fair Value Level 4 (Details) -
Fair Value Level 4 (Details) - Fair Value of Debt - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 3,777 | $ 3,542 |
Long-term Debt, fair value | 3,236 | 3,143 |
Fair Value Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, fair value | 0 | 0 |
Fair Value Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, fair value | 3,205 | 3,134 |
Fair Value Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, fair value | $ 31 | $ 9 |
Debt Obligations Level 4 (Detai
Debt Obligations Level 4 (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 121 | $ 107 |
Long-term debt | 3,612 | 3,397 |
ABL Facility [Domain] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | 0 | 0 |
Long-term debt | 124 | 0 |
6.625% First Priority Senior Notes Due 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Unamortized Premium | 3 | 3 |
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | 0 | 0 |
Long-term debt | $ 1,552 | $ 1,553 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.625% | 6.625% |
Debt Instrument, Maturity Date | Apr. 15, 2020 | |
10.00% First Priority Senior Notes Due 2020 [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 0 | $ 0 |
Long-term debt | $ 315 | $ 315 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% |
10.375% First-Priority Senion Secured Notes due 2022 [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 0 | $ 0 |
Long-term debt | $ 560 | 0 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.375% | |
Debt Instrument, Maturity Date | Feb. 1, 2022 | |
8.875% Senior Secured Notes Due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Unamortized Discount | $ 0 | 1 |
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | 0 | 0 |
Long-term debt | $ 0 | $ 706 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.875% | 8.875% |
Debt Instrument, Maturity Date | Feb. 15, 2018 | |
13.75% Senior Secured Notes due 2022 [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 0 | $ 0 |
Long-term debt | $ 225 | 0 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 13.75% | |
9.00% Second-Priority Senior Secured Notes Due 2020 [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 0 | 0 |
Long-term debt | $ 574 | $ 574 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% |
Debt Instrument, Maturity Date | Nov. 15, 2020 | |
9.2% Debentures Due 2021 [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 0 | $ 0 |
Long-term debt | $ 74 | $ 74 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 9.20% | 9.20% |
Debt Instrument, Maturity Date | Mar. 15, 2021 | |
7.875% Debentures Due 2023 [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 0 | $ 0 |
Long-term debt | $ 189 | $ 189 |
Affiliated Debt [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% | 7.875% |
Debt Instrument, Maturity Date | Feb. 15, 2023 | |
Australia Facility Due 2017 [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 55 | $ 51 |
Long-term debt | 0 | 0 |
Brazilian Bank Loans [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | 29 | 26 |
Long-term debt | 11 | 14 |
Capital Leases [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | 4 | 2 |
Long-term debt | 27 | 7 |
Other [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | 33 | 28 |
Long-term debt | $ 5 | 3 |
Australia Facility Due 2017 [Member] | ||
Affiliated Debt [Abstract] | ||
Debt Instrument, Maturity Date | Dec. 5, 2017 | |
Unamortized debt issuance costs [Member] | ||
Non-Affiliated Debt [Abstract] | ||
Due Within One Year | $ 0 | 0 |
Debt Issuance Costs, Gross | $ (44) | $ (38) |
Debt Obligations 2017 Refinanci
Debt Obligations 2017 Refinancing Transactions (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 3,612 | $ 3,397 | |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ 3 | ||
13.75% Senior Secured Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 225 | 0 | |
8.875% Senior Secured Notes Due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 706 | |
10.375% First-Priority Senion Secured Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 560 | 0 | |
ABL Facility [Domain] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 124 | 0 | |
Line of Credit Facility, Maximum Borrowing Capacity | 350 | $ 400 | |
Debt Refinancing Transactions [Member] | 13.75% Senior Secured Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 225 | ||
Debt Refinancing Transactions [Member] | 10.375% First-Priority Senion Secured Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 75 | $ 485 |
Commitments and Contingencies36
Commitments and Contingencies Level 4 (Details) - Environmental Liabilities - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accrued Environmental Loss Contingencies, Current | $ 14 | $ 13 |
Estimated Litigation Liability, Current | 3 | 1 |
Environmental Institution of Parana IAP [Member] | ||
Liability | 17 | |
Geismar, LA [Member] | ||
Accrual for Environmental Loss Contingencies | $ 14 | 14 |
Discount rate assumed to record at present value | 3.00% | |
Undiscounted Liability Expected to be Paid | next 22 years | |
Accrual for Environmental Loss Contingencies, Gross | $ 20 | |
Accrual for Environmental Loss Contingencies, Undiscounted, Due Ratably over the Next Five Years | 6 | |
Superfund and Offsite Landfills - allocated share: Less than 1% [Member] | ||
Accrual for Environmental Loss Contingencies | 2 | 2 |
Superfund and Offsite Landfills - allocated share: Equal to or Greater than 1% [Member] | ||
Accrual for Environmental Loss Contingencies | 7 | 6 |
Currently-Owned [Member] | ||
Accrual for Environmental Loss Contingencies | 4 | 4 |
Accrual for Environmental Loss Contingencies, Undiscounted, Due Ratably over the Next Five Years | 4 | |
Formerly-Owned - Remediation [Member] | ||
Accrual for Environmental Loss Contingencies | 27 | 30 |
Accrued Environmental Loss Contingencies, Current | 10 | |
Estimated Litigation Liability, Noncurrent | 15 | |
Formerly-Owned - Monitoring Only [Member] | ||
Accrual for Environmental Loss Contingencies | 0 | $ 1 |
Maximum [Member] | Geismar, LA [Member] | ||
Liability | 22 | |
Maximum [Member] | Superfund and Offsite Landfills - allocated share: Less than 1% [Member] | ||
Liability | 4 | |
Maximum [Member] | Superfund and Offsite Landfills - allocated share: Equal to or Greater than 1% [Member] | ||
Liability | 14 | |
Maximum [Member] | Currently-Owned [Member] | ||
Liability | 9 | |
Maximum [Member] | Formerly-Owned - Remediation [Member] | ||
Liability | 42 | |
Maximum [Member] | Formerly-Owned - Monitoring Only [Member] | ||
Liability | 1 | |
Minimum [Member] | Geismar, LA [Member] | ||
Liability | 9 | |
Minimum [Member] | Superfund and Offsite Landfills - allocated share: Less than 1% [Member] | ||
Liability | 1 | |
Minimum [Member] | Superfund and Offsite Landfills - allocated share: Equal to or Greater than 1% [Member] | ||
Liability | 5 | |
Minimum [Member] | Currently-Owned [Member] | ||
Liability | 3 | |
Minimum [Member] | Formerly-Owned - Remediation [Member] | ||
Liability | 25 | |
Minimum [Member] | Formerly-Owned - Monitoring Only [Member] | ||
Liability | $ 0 |
Commitments and Contingencies37
Commitments and Contingencies Level 4 (Details) - Non-Environmental Liabilities - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | $ 4 | $ 2 |
Estimated Litigation Liability, Current | $ 3 | $ 1 |
Pension and Postretirement Ex38
Pension and Postretirement Expense Level 4 (Details) - Components of net pension and postretirement expense benefit - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Plan [Member] | UNITED STATES | ||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | ||||
Service cost | $ 1 | $ 1 | $ 2 | $ 3 |
Interest cost on projected benefit obligation | 2 | 2 | 6 | 6 |
Expected return on assets | (3) | (4) | (10) | (11) |
Net expense (benefit) | 0 | (1) | (2) | (2) |
Pension Plan [Member] | Foreign Plan [Member] | ||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | ||||
Service cost | 4 | 4 | 12 | 11 |
Interest cost on projected benefit obligation | 3 | 3 | 7 | 8 |
Expected return on assets | (3) | (3) | (8) | (8) |
Net expense (benefit) | 4 | 4 | 11 | 11 |
Other Postretirement Benefits Plan [Member] | UNITED STATES | ||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost on projected benefit obligation | 0 | 0 | 0 | 0 |
Expected return on assets | 0 | 0 | 0 | 0 |
Amortization of Prior Service benefit | (1) | |||
Net expense (benefit) | 0 | 0 | 0 | (1) |
Other Postretirement Benefits Plan [Member] | Foreign Plan [Member] | ||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost on projected benefit obligation | 0 | 0 | 1 | 1 |
Expected return on assets | 0 | 0 | 0 | 0 |
Net expense (benefit) | $ 0 | $ 0 | $ 1 | $ 1 |
Segment Information Level 4 (De
Segment Information Level 4 (Details) - Revenues by Segment - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net Sales to Unaffiliated Customers | $ 914 | $ 819 | $ 2,696 | $ 2,680 |
Epoxy, Phenolic and Coating Resins [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales to Unaffiliated Customers | 528 | 476 | 1,537 | 1,664 |
Forest Products Resins [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales to Unaffiliated Customers | $ 386 | $ 343 | $ 1,159 | $ 1,016 |
Segment Information Level 4 (40
Segment Information Level 4 (Details) - EBITDA by Segment - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Segment EBITDA [Line Items] | $ 96 | $ 112 | $ 291 | $ 364 |
Epoxy, Phenolic and Coating Resins [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBITDA [Line Items] | 45 | 64 | 143 | 230 |
Forest Products Resins [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBITDA [Line Items] | 66 | 65 | 195 | 184 |
Corporate and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBITDA [Line Items] | $ (15) | $ (17) | $ (47) | $ (50) |
Segment Information Level 4 (41
Segment Information Level 4 (Details) - Reconciliation of Segment EBITDA to Net Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net (loss) income | $ (70) | $ (47) | $ (146) | $ 59 |
Income tax expense | 9 | 16 | 16 | 40 |
Interest expense, net | 82 | 76 | 247 | 235 |
Depreciation and amortization | 29 | 30 | 85 | 101 |
Accelerated depreciation | 14 | 21 | 14 | 127 |
Earnings before Interest, Taxes, Depreciation, and Amortization | 64 | 96 | 216 | 562 |
Asset impairments (see Note 5) | 13 | 0 | 13 | 0 |
Business realignment costs (income) | 10 | (3) | 27 | 42 |
Gain on dispositions | 0 | 0 | 0 | (240) |
Realized and unrealized foreign currency (gains) losses | (5) | 6 | (7) | (3) |
(Gain) loss on extinguishment of debt | 0 | (3) | 3 | (47) |
Other | 14 | 16 | 39 | 50 |
Total adjustments | 32 | 16 | 75 | (198) |
Segment EBITDA [Line Items] | 96 | 112 | 291 | 364 |
Epoxy, Phenolic and Coating Resins [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBITDA [Line Items] | 45 | 64 | 143 | 230 |
Forest Products Resins [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBITDA [Line Items] | 66 | 65 | 195 | 184 |
Corporate and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBITDA [Line Items] | $ (15) | $ (17) | $ (47) | $ (50) |
Changes in Accumulated Other 42
Changes in Accumulated Other Comprehensive Income Level 4 (Details) - Summary of Changes in Accumulated Other Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning Balance | $ (24) | $ (15) | $ (39) | $ (15) |
Beginning Balance Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, After Tax | 3 | 3 | 3 | 4 |
Beginning Balance Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (27) | (18) | (42) | (19) |
Other comprehensive income before reclassifications, net of tax | 10 | 7 | 25 | 7 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 0 | 0 | (1) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 10 | 7 | 25 | 8 |
Ending Balance Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, After Tax | 3 | 3 | 3 | 3 |
Ending Balance Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (17) | (11) | (17) | (11) |
Ending Balance | $ (14) | $ (8) | $ (14) | $ (8) |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | (15.00%) | (53.00%) | (12.00%) | 44.00% |
Guarantor Non-Guarantor Subsi44
Guarantor Non-Guarantor Subsidiary Financial Information Level 4 (Details) - Additional Information | Sep. 30, 2017 | Dec. 31, 2016 |
6.625% First Priority Senior Notes Due 2020 [Member] | ||
Guarantor Obligations [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.625% | 6.625% |
10.00% First Priority Senior Notes Due 2020 [Member] | ||
Guarantor Obligations [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% |
10.375% First-Priority Senion Secured Notes due 2022 [Member] | ||
Guarantor Obligations [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.375% | |
13.75% Senior Secured Notes due 2022 [Member] | ||
Guarantor Obligations [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 13.75% | |
9.00% Second-Priority Senior Secured Notes Due 2020 [Member] | ||
Guarantor Obligations [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% |
Guarantor Non-Guarantor Subsi45
Guarantor Non-Guarantor Subsidiary Financial Information Level 4 (Details) - Consolidating Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents (including restricted cash of $0 and $18, respectively) | $ 118 | $ 196 |
Accounts receivable, net | 500 | 390 |
Intercompany accounts receivable | 0 | 0 |
Intercompany loans receivable - current portion | 0 | 0 |
Finished and in-process goods | 240 | 199 |
Raw materials and supplies | 92 | 88 |
Other current assets | 49 | 45 |
Total current assets | 999 | 918 |
Investment in unconsolidated entities | 20 | 18 |
Deferred income taxes | 12 | 10 |
Other Assets, Noncurrent | 49 | 43 |
Intercompany loans receivable | 0 | 0 |
Property, Plant and Equipment, Net | 918 | 893 |
Goodwill | 113 | 121 |
Other intangible assets, net | 45 | 52 |
Total assets | 2,156 | 2,055 |
Current liabilities | ||
Accounts and drafts payable | 347 | 368 |
Intercompany accounts payable | 0 | 0 |
Debt payable within one year | 121 | 107 |
Intercompany loans payable within one year | 0 | 0 |
Interest payable | 101 | 70 |
Income taxes payable | 13 | 13 |
Accrued payroll and incentive compensation | 47 | 55 |
Other current liabilities | 126 | 159 |
Total current liabilities | 755 | 772 |
Long-term liabilities | ||
Long-term debt | 3,612 | 3,397 |
Intercompany loans payable | 0 | 0 |
Accumulated losses of unconsolidated subsidiaries in excess of investment | 0 | 0 |
Long-term pension and post employment benefit obligations | 263 | 246 |
Deferred income taxes | 13 | 13 |
Other long-term liabilities | 173 | 166 |
Total liabilities | 4,816 | 4,594 |
Total Hexion Inc. shareholder’s deficit | (2,659) | (2,538) |
Noncontrolling interest | (1) | (1) |
Total deficit | (2,660) | (2,539) |
Total liabilities and deficit | 2,156 | 2,055 |
Hexion Inc. [Member] | ||
Current assets | ||
Cash and cash equivalents (including restricted cash of $0 and $18, respectively) | 6 | 28 |
Accounts receivable, net | 131 | 119 |
Intercompany accounts receivable | 104 | 106 |
Intercompany loans receivable - current portion | 9 | 0 |
Finished and in-process goods | 87 | 82 |
Raw materials and supplies | 35 | 31 |
Other current assets | 16 | 26 |
Total current assets | 388 | 392 |
Investment in unconsolidated entities | 146 | 93 |
Deferred income taxes | 1 | 0 |
Other Assets, Noncurrent | 16 | 17 |
Intercompany loans receivable | 1,110 | 1,050 |
Property, Plant and Equipment, Net | 416 | 448 |
Goodwill | 52 | 65 |
Other intangible assets, net | 35 | 41 |
Total assets | 2,164 | 2,106 |
Current liabilities | ||
Accounts and drafts payable | 109 | 142 |
Intercompany accounts payable | 22 | 60 |
Debt payable within one year | 10 | 6 |
Intercompany loans payable within one year | 0 | 175 |
Interest payable | 99 | 69 |
Income taxes payable | 8 | 6 |
Accrued payroll and incentive compensation | 10 | 28 |
Other current liabilities | 69 | 110 |
Total current liabilities | 327 | 596 |
Long-term liabilities | ||
Long-term debt | 3,528 | 3,378 |
Intercompany loans payable | 208 | 180 |
Accumulated losses of unconsolidated subsidiaries in excess of investment | 614 | 339 |
Long-term pension and post employment benefit obligations | 39 | 42 |
Deferred income taxes | 2 | 4 |
Other long-term liabilities | 105 | 105 |
Total liabilities | 4,823 | 4,644 |
Total Hexion Inc. shareholder’s deficit | (2,659) | (2,538) |
Noncontrolling interest | 0 | 0 |
Total deficit | (2,659) | (2,538) |
Total liabilities and deficit | 2,164 | 2,106 |
Combined Subsidiary Guarantors [Member] | ||
Current assets | ||
Cash and cash equivalents (including restricted cash of $0 and $18, respectively) | 0 | 0 |
Accounts receivable, net | 2 | 1 |
Intercompany accounts receivable | 0 | 0 |
Intercompany loans receivable - current portion | 0 | 0 |
Finished and in-process goods | 0 | 0 |
Raw materials and supplies | 0 | 0 |
Other current assets | 0 | 0 |
Total current assets | 2 | 1 |
Investment in unconsolidated entities | 13 | 13 |
Deferred income taxes | 0 | 0 |
Other Assets, Noncurrent | 6 | 6 |
Intercompany loans receivable | 0 | 0 |
Property, Plant and Equipment, Net | 0 | 0 |
Goodwill | 0 | 0 |
Other intangible assets, net | 0 | 0 |
Total assets | 21 | 20 |
Current liabilities | ||
Accounts and drafts payable | 0 | 0 |
Intercompany accounts payable | 0 | 0 |
Debt payable within one year | 0 | 0 |
Intercompany loans payable within one year | 0 | 0 |
Interest payable | 0 | 0 |
Income taxes payable | 0 | 0 |
Accrued payroll and incentive compensation | 0 | 0 |
Other current liabilities | 0 | 0 |
Total current liabilities | 0 | 0 |
Long-term liabilities | ||
Long-term debt | 0 | 0 |
Intercompany loans payable | 0 | 0 |
Accumulated losses of unconsolidated subsidiaries in excess of investment | 159 | 106 |
Long-term pension and post employment benefit obligations | 0 | 0 |
Deferred income taxes | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Total liabilities | 159 | 106 |
Total Hexion Inc. shareholder’s deficit | (138) | (86) |
Noncontrolling interest | 0 | 0 |
Total deficit | (138) | (86) |
Total liabilities and deficit | 21 | 20 |
Combined Non-Guarantor Subsidiaries [Member] | ||
Current assets | ||
Cash and cash equivalents (including restricted cash of $0 and $18, respectively) | 112 | 168 |
Accounts receivable, net | 367 | 270 |
Intercompany accounts receivable | 22 | 60 |
Intercompany loans receivable - current portion | 0 | 175 |
Finished and in-process goods | 153 | 117 |
Raw materials and supplies | 57 | 57 |
Other current assets | 33 | 19 |
Total current assets | 744 | 866 |
Investment in unconsolidated entities | 20 | 18 |
Deferred income taxes | 11 | 10 |
Other Assets, Noncurrent | 27 | 20 |
Intercompany loans receivable | 208 | 180 |
Property, Plant and Equipment, Net | 502 | 445 |
Goodwill | 61 | 56 |
Other intangible assets, net | 10 | 11 |
Total assets | 1,583 | 1,606 |
Current liabilities | ||
Accounts and drafts payable | 238 | 226 |
Intercompany accounts payable | 104 | 106 |
Debt payable within one year | 111 | 101 |
Intercompany loans payable within one year | 9 | 0 |
Interest payable | 2 | 1 |
Income taxes payable | 5 | 7 |
Accrued payroll and incentive compensation | 37 | 27 |
Other current liabilities | 57 | 49 |
Total current liabilities | 563 | 517 |
Long-term liabilities | ||
Long-term debt | 84 | 19 |
Intercompany loans payable | 1,110 | 1,050 |
Accumulated losses of unconsolidated subsidiaries in excess of investment | 0 | 0 |
Long-term pension and post employment benefit obligations | 224 | 204 |
Deferred income taxes | 11 | 9 |
Other long-term liabilities | 68 | 61 |
Total liabilities | 2,060 | 1,860 |
Total Hexion Inc. shareholder’s deficit | (476) | (253) |
Noncontrolling interest | (1) | (1) |
Total deficit | (477) | (254) |
Total liabilities and deficit | 1,583 | 1,606 |
Consolidation, Eliminations [Member] | ||
Current assets | ||
Cash and cash equivalents (including restricted cash of $0 and $18, respectively) | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Intercompany accounts receivable | (126) | (166) |
Intercompany loans receivable - current portion | (9) | (175) |
Finished and in-process goods | 0 | 0 |
Raw materials and supplies | 0 | 0 |
Other current assets | 0 | 0 |
Total current assets | (135) | (341) |
Investment in unconsolidated entities | (159) | (106) |
Deferred income taxes | 0 | 0 |
Other Assets, Noncurrent | 0 | 0 |
Intercompany loans receivable | (1,318) | (1,230) |
Property, Plant and Equipment, Net | 0 | 0 |
Goodwill | 0 | 0 |
Other intangible assets, net | 0 | 0 |
Total assets | (1,612) | (1,677) |
Current liabilities | ||
Accounts and drafts payable | 0 | 0 |
Intercompany accounts payable | (126) | (166) |
Debt payable within one year | 0 | 0 |
Intercompany loans payable within one year | (9) | (175) |
Interest payable | 0 | 0 |
Income taxes payable | 0 | 0 |
Accrued payroll and incentive compensation | 0 | 0 |
Other current liabilities | 0 | 0 |
Total current liabilities | (135) | (341) |
Long-term liabilities | ||
Long-term debt | 0 | 0 |
Intercompany loans payable | (1,318) | (1,230) |
Accumulated losses of unconsolidated subsidiaries in excess of investment | (773) | (445) |
Long-term pension and post employment benefit obligations | 0 | 0 |
Deferred income taxes | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Total liabilities | (2,226) | (2,016) |
Total Hexion Inc. shareholder’s deficit | 614 | 339 |
Noncontrolling interest | 0 | 0 |
Total deficit | 614 | 339 |
Total liabilities and deficit | $ (1,612) | $ (1,677) |
Guarantor Non-Guarantor Subsi46
Guarantor Non-Guarantor Subsidiary Financial Information Level 4 (Details) - Consolidating Statement of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net sales | $ 914 | $ 819 | $ 2,696 | $ 2,680 |
Cost of sales | 797 | 701 | 2,312 | 2,357 |
Gross profit | 117 | 118 | 384 | 323 |
Selling, general and administrative expense | 75 | 69 | 227 | 235 |
Gain on dispositions | 0 | 0 | 0 | (240) |
Business realignment costs (income) | 10 | (3) | 27 | 42 |
Other operating expense, net | 1 | 7 | 4 | 6 |
Operating income | 18 | 45 | 113 | 280 |
Interest expense, net | 82 | 76 | 247 | 235 |
Intercompany interest expense (income) | 0 | 0 | 0 | 0 |
(Gain) loss on extinguishment of debt | 0 | (3) | 3 | (47) |
Other non-operating (income) expense, net | (3) | 2 | (4) | 1 |
(Loss) income before income tax and earnings from unconsolidated entities | (61) | (30) | (133) | 91 |
Income tax expense | 9 | 16 | 16 | 40 |
(Loss) income before (losses) earnings from unconsolidated entities | (70) | (46) | (149) | 51 |
(Losses) earnings from unconsolidated entities, net of taxes | 0 | (1) | 3 | 8 |
Net (loss) income | (70) | (47) | (146) | 59 |
Comprehensive income (loss) | (60) | (40) | (121) | 66 |
Asset impairments (see Note 5) | 13 | 0 | 13 | 0 |
Hexion Inc. [Member] | ||||
Net sales | 400 | 356 | 1,195 | 1,119 |
Cost of sales | 360 | 325 | 1,037 | 1,080 |
Gross profit | 40 | 31 | 158 | 39 |
Selling, general and administrative expense | 28 | 30 | 91 | 109 |
Gain on dispositions | (188) | |||
Business realignment costs (income) | 6 | (7) | 16 | 31 |
Other operating expense, net | 3 | 10 | 0 | 14 |
Operating income | (10) | (2) | 38 | 73 |
Interest expense, net | 78 | 74 | 236 | 227 |
Intercompany interest expense (income) | (20) | (18) | (55) | (55) |
(Gain) loss on extinguishment of debt | (3) | 3 | (47) | |
Other non-operating (income) expense, net | (24) | (5) | (78) | (16) |
(Loss) income before income tax and earnings from unconsolidated entities | (44) | (50) | (68) | (36) |
Income tax expense | 3 | 9 | (1) | 5 |
(Loss) income before (losses) earnings from unconsolidated entities | (47) | (59) | (67) | (41) |
(Losses) earnings from unconsolidated entities, net of taxes | (23) | 12 | (79) | 100 |
Net (loss) income | (70) | (47) | (146) | 59 |
Comprehensive income (loss) | (60) | (40) | (121) | 66 |
Asset impairments (see Note 5) | 13 | |||
Combined Subsidiary Guarantors [Member] | ||||
Net sales | 0 | 0 | 0 | 0 |
Cost of sales | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Selling, general and administrative expense | 0 | 0 | 0 | 0 |
Gain on dispositions | 0 | |||
Business realignment costs (income) | 0 | 0 | 0 | 0 |
Other operating expense, net | 0 | 6 | 0 | 6 |
Operating income | 0 | (6) | 0 | (6) |
Interest expense, net | 0 | 0 | 0 | 0 |
Intercompany interest expense (income) | 0 | 0 | 0 | 0 |
(Gain) loss on extinguishment of debt | 0 | 0 | 0 | |
Other non-operating (income) expense, net | 0 | 0 | 0 | 0 |
(Loss) income before income tax and earnings from unconsolidated entities | 0 | (6) | 0 | (6) |
Income tax expense | 0 | 0 | 0 | 0 |
(Loss) income before (losses) earnings from unconsolidated entities | 0 | (6) | 0 | (6) |
(Losses) earnings from unconsolidated entities, net of taxes | (18) | (1) | (52) | 45 |
Net (loss) income | (18) | (7) | (52) | 39 |
Comprehensive income (loss) | (18) | (7) | (52) | 39 |
Asset impairments (see Note 5) | 0 | |||
Combined Non-Guarantor Subsidiaries [Member] | ||||
Net sales | 558 | 507 | 1,651 | 1,701 |
Cost of sales | 481 | 420 | 1,425 | 1,417 |
Gross profit | 77 | 87 | 226 | 284 |
Selling, general and administrative expense | 47 | 39 | 136 | 126 |
Gain on dispositions | (52) | |||
Business realignment costs (income) | 4 | 4 | 11 | 11 |
Other operating expense, net | (2) | (9) | 4 | (14) |
Operating income | 28 | 53 | 75 | 213 |
Interest expense, net | 4 | 2 | 11 | 8 |
Intercompany interest expense (income) | 20 | 18 | 55 | 55 |
(Gain) loss on extinguishment of debt | 0 | 0 | 0 | |
Other non-operating (income) expense, net | 21 | 7 | 74 | 17 |
(Loss) income before income tax and earnings from unconsolidated entities | (17) | 26 | (65) | 133 |
Income tax expense | 6 | 7 | 17 | 35 |
(Loss) income before (losses) earnings from unconsolidated entities | (23) | 19 | (82) | 98 |
(Losses) earnings from unconsolidated entities, net of taxes | 1 | 0 | 3 | 2 |
Net (loss) income | (22) | 19 | (79) | 100 |
Comprehensive income (loss) | (22) | 26 | (71) | 100 |
Asset impairments (see Note 5) | 0 | |||
Consolidation, Eliminations [Member] | ||||
Net sales | (44) | (44) | (150) | (140) |
Cost of sales | (44) | (44) | (150) | (140) |
Gross profit | 0 | 0 | 0 | 0 |
Selling, general and administrative expense | 0 | 0 | 0 | 0 |
Gain on dispositions | 0 | |||
Business realignment costs (income) | 0 | 0 | 0 | 0 |
Other operating expense, net | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest expense, net | 0 | 0 | 0 | 0 |
Intercompany interest expense (income) | 0 | 0 | 0 | 0 |
(Gain) loss on extinguishment of debt | 0 | 0 | 0 | |
Other non-operating (income) expense, net | 0 | 0 | 0 | 0 |
(Loss) income before income tax and earnings from unconsolidated entities | 0 | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 | 0 |
(Loss) income before (losses) earnings from unconsolidated entities | 0 | 0 | 0 | 0 |
(Losses) earnings from unconsolidated entities, net of taxes | 40 | (12) | 131 | (139) |
Net (loss) income | 40 | (12) | 131 | (139) |
Comprehensive income (loss) | $ 40 | $ (19) | 123 | $ (139) |
Asset impairments (see Note 5) | $ 0 |
Guarantor Non-Guarantor Subsi47
Guarantor Non-Guarantor Subsidiary Financial Information Level 4 (Details) - Consolidating Statement of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net Cash Provided by (Used in) Operating Activities | $ (205) | $ (131) |
Cash flows provided by (used in) investing activities | ||
Capital expenditures | (86) | (91) |
Capitalized interest | (1) | (1) |
Proceeds from dispositions, net | 0 | 281 |
Cash received on buyers note | 0 | (45) |
proceeds from sale of assets, net | 5 | 1 |
Change in restricted cash | 1 | (11) |
Capital contribution to subsidiary | 0 | |
Funds remitted to unconsolidated affiliates, net | (1) | |
Return of capital from subsidiary from sales of accounts receivable | 0 | 0 |
Net cash (used in) provided by investing activities | (81) | 223 |
Cash flows (used in) provided by financing activities | ||
Net short-term debt (repayments) borrowings | 15 | (13) |
Borrowings of long-term debt | 1,291 | 461 |
Repayments of long-term debt | (1,079) | (643) |
Net Intercompany Loan Borrowings (Repayments) | 0 | 0 |
Capital contribution from parent | 0 | |
Long-term debt and credit facility financing fees | (25) | 0 |
Common stock dividends paid | 0 | 0 |
Return of capital to parent from sales of accounts receivable | 0 | 0 |
Net cash used in financing activities | 202 | (195) |
Effect of Exchange Rate on Cash and Cash Equivalents | 5 | 1 |
Increase (decrease) in cash and cash equivalents | (79) | (102) |
Cash and cash equivalents (unrestricted) at beginning of period | 179 | 228 |
Cash and cash equivalents (unrestricted) at end of period | 100 | 126 |
Hexion Inc. [Member] | ||
Net Cash Provided by (Used in) Operating Activities | (245) | (198) |
Cash flows provided by (used in) investing activities | ||
Capital expenditures | 33 | 47 |
Capitalized interest | 0 | 1 |
Proceeds from dispositions, net | 146 | |
Cash received on buyers note | (45) | |
proceeds from sale of assets, net | 5 | 0 |
Change in restricted cash | 0 | 0 |
Capital contribution to subsidiary | (13) | |
Funds remitted to unconsolidated affiliates, net | (1) | |
Return of capital from subsidiary from sales of accounts receivable | 117 | 70 |
Net cash (used in) provided by investing activities | 89 | 199 |
Cash flows (used in) provided by financing activities | ||
Net short-term debt (repayments) borrowings | 4 | 2 |
Borrowings of long-term debt | 1,007 | 280 |
Repayments of long-term debt | (850) | (467) |
Net Intercompany Loan Borrowings (Repayments) | (7) | 171 |
Capital contribution from parent | 0 | |
Long-term debt and credit facility financing fees | (20) | |
Common stock dividends paid | 0 | 0 |
Return of capital to parent from sales of accounts receivable | 0 | 0 |
Net cash used in financing activities | 134 | (14) |
Effect of Exchange Rate on Cash and Cash Equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | (22) | (13) |
Cash and cash equivalents (unrestricted) at beginning of period | 28 | 62 |
Cash and cash equivalents (unrestricted) at end of period | 6 | 49 |
Combined Subsidiary Guarantors [Member] | ||
Net Cash Provided by (Used in) Operating Activities | 0 | 4 |
Cash flows provided by (used in) investing activities | ||
Capital expenditures | 0 | 0 |
Capitalized interest | 0 | 0 |
Proceeds from dispositions, net | 0 | |
proceeds from sale of assets, net | 0 | 0 |
Change in restricted cash | 0 | 0 |
Capital contribution to subsidiary | 9 | |
Return of capital from subsidiary from sales of accounts receivable | 0 | 0 |
Net cash (used in) provided by investing activities | 0 | (9) |
Cash flows (used in) provided by financing activities | ||
Net short-term debt (repayments) borrowings | 0 | 0 |
Borrowings of long-term debt | 0 | 0 |
Repayments of long-term debt | 0 | 0 |
Net Intercompany Loan Borrowings (Repayments) | 0 | 0 |
Capital contribution from parent | 9 | |
Long-term debt and credit facility financing fees | 0 | |
Common stock dividends paid | 0 | (4) |
Return of capital to parent from sales of accounts receivable | 0 | 0 |
Net cash used in financing activities | 0 | 5 |
Effect of Exchange Rate on Cash and Cash Equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents (unrestricted) at beginning of period | 0 | 0 |
Cash and cash equivalents (unrestricted) at end of period | 0 | 0 |
Combined Non-Guarantor Subsidiaries [Member] | ||
Net Cash Provided by (Used in) Operating Activities | 41 | 67 |
Cash flows provided by (used in) investing activities | ||
Capital expenditures | 53 | (44) |
Capitalized interest | 1 | 0 |
Proceeds from dispositions, net | 135 | |
proceeds from sale of assets, net | 0 | 1 |
Change in restricted cash | 1 | (11) |
Capital contribution to subsidiary | 0 | |
Return of capital from subsidiary from sales of accounts receivable | 0 | 0 |
Net cash (used in) provided by investing activities | (53) | 81 |
Cash flows (used in) provided by financing activities | ||
Net short-term debt (repayments) borrowings | 11 | (15) |
Borrowings of long-term debt | 284 | 181 |
Repayments of long-term debt | (229) | (176) |
Net Intercompany Loan Borrowings (Repayments) | 7 | (171) |
Capital contribution from parent | 13 | |
Long-term debt and credit facility financing fees | (5) | |
Common stock dividends paid | (1) | 0 |
Return of capital to parent from sales of accounts receivable | (117) | (70) |
Net cash used in financing activities | (50) | (238) |
Effect of Exchange Rate on Cash and Cash Equivalents | 5 | 1 |
Increase (decrease) in cash and cash equivalents | (57) | (89) |
Cash and cash equivalents (unrestricted) at beginning of period | 151 | 166 |
Cash and cash equivalents (unrestricted) at end of period | 94 | 77 |
Consolidation, Eliminations [Member] | ||
Net Cash Provided by (Used in) Operating Activities | (1) | (4) |
Cash flows provided by (used in) investing activities | ||
Capital expenditures | 0 | 0 |
Capitalized interest | 0 | 0 |
Proceeds from dispositions, net | 0 | |
proceeds from sale of assets, net | 0 | 0 |
Change in restricted cash | 0 | 0 |
Capital contribution to subsidiary | (22) | |
Return of capital from subsidiary from sales of accounts receivable | (117) | (70) |
Net cash (used in) provided by investing activities | (117) | (48) |
Cash flows (used in) provided by financing activities | ||
Net short-term debt (repayments) borrowings | 0 | 0 |
Borrowings of long-term debt | 0 | 0 |
Repayments of long-term debt | 0 | 0 |
Net Intercompany Loan Borrowings (Repayments) | 0 | 0 |
Capital contribution from parent | (22) | |
Long-term debt and credit facility financing fees | 0 | |
Common stock dividends paid | 1 | 4 |
Return of capital to parent from sales of accounts receivable | 117 | 70 |
Net cash used in financing activities | 118 | 52 |
Effect of Exchange Rate on Cash and Cash Equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents (unrestricted) at beginning of period | 0 | 0 |
Cash and cash equivalents (unrestricted) at end of period | $ 0 | $ 0 |