Document - Cover
Document - Cover - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Mar. 01, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Transition Report | false | |
Entity Registrant Name | HEXION INC. | |
Entity Central Index Key | 0000013239 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | FY | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 13-0511250 | |
Entity Address, Address Line One | 180 East Broad St., | |
Entity Address, City or Town | Columbus, | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 43215 | |
City Area Code | 614 | |
Local Phone Number | 225-4000 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | No | |
Entity File Number | 1-71 | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 100 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | Yes | |
Entity Public Float | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | |
Current assets | |||
Cash and cash equivalents (including restricted cash of $4) | $ 204 | $ 254 | |
Accounts receivable (net of allowance for doubtful accounts of $3) | 331 | 316 | |
Inventories: | |||
Finished and in-process goods | 180 | 211 | |
Raw materials and supplies | 85 | 82 | |
Total current assets held for sale | 114 | 99 | |
Other current assets | 39 | 40 | |
Total current assets | 953 | 1,002 | |
Investments in unconsolidated entities | 10 | 14 | |
Long-term deferred income taxes | 7 | 6 | |
Total long-term assets held for sale | 342 | 400 | |
Noncurrent assets | 85 | 44 | |
Property and equipment | |||
Land | 79 | 82 | |
Buildings | 122 | 114 | |
Machinery and equipment | 1,270 | 1,148 | |
Property, plant and equipment, gross | 1,471 | 1,344 | |
Less accumulated depreciation | (212) | (63) | |
Property, plant and equipment, net | 1,259 | 1,281 | |
Operating Lease, Right-of-Use Asset | [1] | 103 | 110 |
Goodwill | 164 | 164 | |
Other intangible assets, net | 1,079 | 1,125 | |
Assets | [2] | 4,002 | 4,146 |
Current liabilities | |||
Accounts and drafts payable | 339 | 289 | |
Debt payable within one year | 82 | 70 | |
Interest payable | 30 | 35 | |
Income taxes payable | 6 | 17 | |
Accrued payroll and incentive compensation | 42 | 43 | |
Total current liabilities associated with assets held for sale | 70 | 69 | |
Operating Lease, Liability, Current | 19 | 20 | |
Other current liabilities | 111 | 95 | |
Total current liabilities | 699 | 638 | |
Long-term liabilities | |||
Long-term debt | 1,710 | 1,715 | |
Long-term pension and post employment benefit obligations | 250 | 223 | |
Long-term deferred income taxes | 161 | 149 | |
Operating Lease, Liability, Noncurrent | 76 | 82 | |
Total long-term liabilities with assets held for sale | 74 | 56 | |
Other long-term liabilities | 209 | 208 | |
Total liabilities | 3,179 | 3,071 | |
Commitments and Contingencies | |||
Equity [Abstract] | |||
Common stock—$0.01 par value; 100 shares authorized, issued and outstanding at both December 31, 2020 and 2019 | 0 | 0 | |
Paid-in capital | 1,169 | 1,165 | |
Accumulated other comprehensive loss | 27 | 1 | |
Accumulated deficit | (319) | (89) | |
Total deficit | 823 | 1,075 | |
Total liabilities and deficit | $ 4,002 | $ 4,146 | |
[1] | (1) Operating lease assets include $8 and $9 of favorable leasehold interests as of December 31, 2020 and 2019, respectively. | ||
[2] | Includes assets held for sale at December 31, 2020 and 2019 . |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Restricted Cash and Cash Equivalents | $ 4 | $ 4 |
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 3 | $ 3 |
Common Stock | ||
Par Value, Common Stock | $ 0.01 | $ 0.01 |
shares authorized | 100 | 100 |
shares issued | 100 | 100 |
shares outstanding | 100 | 100 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Net sales | [1],[2] | $ 1,323 | $ 1,481 | $ 2,510 | $ 3,137 |
Cost of sales (exclusive of depreciation and amortization shown below) | 1,117 | 1,211 | 2,043 | 2,559 | |
Selling, general and administrative expense | 124 | 128 | 231 | 243 | |
Depreciation and amortization | 93 | 43 | 191 | 98 | |
Gain on dispositions (see Note 18) | 0 | 0 | 0 | 44 | |
Asset impairments (see Note 8) | 0 | 0 | 16 | 28 | |
Business realignment costs | [3] | 22 | 14 | 69 | 27 |
Other operating expense, net | (16) | (17) | (24) | (37) | |
Operating (loss) income | (49) | 68 | (64) | 189 | |
Interest expense, net | 55 | 89 | 100 | 365 | |
Reorganization items, net (see Note 7) | 0 | (2,970) | 0 | 0 | |
Other non-operating income, net | 0 | 11 | 15 | 12 | |
(Loss) income from continuing operations before income tax and earnings from unconsolidated entities | [4] | (104) | 2,960 | (149) | (164) |
Income tax expense (benefit) (see Note 17) | [5] | (10) | 201 | 14 | 31 |
(Loss) income from continuing operations before earnings from unconsolidated entities | (94) | 2,759 | (163) | (195) | |
Earnings from unconsolidated entities, net of taxes | 2 | 1 | 2 | 4 | |
(Loss) income from continuing operations, net of taxes | (92) | 2,760 | (161) | (191) | |
Less: Net (loss) income from discontinued operations | 4 | 135 | (69) | 28 | |
Net (loss) income | (88) | 2,895 | (230) | (163) | |
Net (income) loss attributable to noncontrolling interest | (1) | (1) | 0 | 1 | |
Net loss | $ (89) | $ 2,894 | $ (230) | $ (162) | |
[1] | Intersegment sales are not significant and, as such, are eliminated within the selling segment. | ||||
[2] | Sales are attributed to the country in which the individual business locations reside. | ||||
[3] | Business realignment costs for the Successor and Predecessor periods below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Severance costs $ 16 $ 9 $ 8 $ 9 In-process facility rationalizations 11 5 3 11 Contractual costs from exited business 8 — — — Business services implementation 22 — — — Legacy environmental reserves 9 7 1 5 Other 3 1 2 2 (a) The Company had $8 of severance liabilities accrued within “Other current liabilities” on the Consolidated Balance Sheets at both December 31, 2020 and 2019. The Company expects the amounts associated with these severance liabilities to be paid over the next 12 months . | ||||
[4] | Excludes (loss) income before income taxes of $(70), $5, $155, and $38 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, related to the Held for Sale Business. | ||||
[5] | Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Other comprehensive (loss) income, net of tax: | ||||
Net (loss) income | $ (88) | $ 2,895 | $ (230) | $ (163) |
Foreign currency translation adjustments | (3) | (8) | (8) | (8) |
Unrealized (loss) gain on cash flow hedge | 2 | 0 | (18) | 0 |
Loss recognized from pension and postretirement benefits | 0 | 0 | 0 | (2) |
Other comprehensive loss | 1 | 8 | 26 | 10 |
Comprehensive (loss) income | (89) | 2,887 | (256) | (173) |
Comprehensive (income) loss attributable to noncontrolling interest | 1 | 1 | 0 | (1) |
Comprehensive (loss) income attributable to Hexion Inc. | (90) | 2,886 | (256) | (172) |
Parent [Member] | ||||
Other comprehensive (loss) income, net of tax: | ||||
Net (loss) income | (89) | (230) | ||
Other comprehensive loss | 1 | 26 | ||
Noncontrolling Interest [Member] | ||||
Other comprehensive (loss) income, net of tax: | ||||
Net (loss) income | 1 | 0 | ||
Other comprehensive loss | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Cash flows provided by (used in) operating activities | ||||
Net (loss) income | $ (88) | $ 2,895 | $ (230) | $ (163) |
Less: Net (loss) income from discontinued operations | 4 | 135 | (69) | 28 |
Net (loss) income from continuing operations, net of taxes | (92) | 2,760 | (161) | (191) |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization | 93 | 43 | 191 | 98 |
Non-cash asset impairments | 0 | 0 | 16 | 28 |
Non-cash reorganization items, net | 0 | (3,156) | 0 | 0 |
Non-cash impact of Inventory step-up, Cash Flow | 27 | 0 | 0 | 0 |
Deferred tax expense (benefit) | (9) | 140 | 9 | 12 |
Gain (Loss) on Disposition of Business | 0 | 0 | 0 | (44) |
Gain (Loss) on Disposition of Assets | 4 | 3 | 9 | 6 |
Amortization of deferred financing fees | 0 | 0 | 0 | 49 |
Foreign Currency Transaction Gain (Loss), Unrealized | (1) | (7) | (3) | 2 |
Non-cash stock based compensation expense | 8 | 0 | 17 | 0 |
Unrealized losses (gains) on pension and postretirement benefit plan liabilities | 5 | 0 | 4 | (13) |
Financing fees included in net loss | 0 | 136 | 0 | 0 |
Other non-cash adjustments | (2) | (1) | (1) | (3) |
Net change in assets and liabilities: | ||||
Increase (Decrease) in Accounts Receivable | 108 | (73) | (3) | 9 |
Increase (Decrease) in Inventories | 15 | (20) | 35 | (30) |
Accounts payable | (15) | (15) | 44 | (3) |
Income taxes payable | (3) | 15 | (9) | 8 |
Increase (Decrease) in Other Operating Assets | 25 | 3 | (21) | 3 |
Other liabilities, current and non-current | 11 | 9 | (11) | 6 |
Net cash provided by (used in) operating activities from continuing operations | 174 | (163) | 116 | (63) |
Net cash provided by (used in) operating activities from discontinued operations | 50 | (10) | 15 | 40 |
Net cash provided by (used in) operating activities | 224 | (173) | 131 | (23) |
Cash flows (used in) provided by investing activities | ||||
Capital expenditures | 47 | 41 | 108 | 81 |
Proceeds from dispositions, net | 0 | 0 | 0 | 49 |
Proceeds from sale of assets, net | 0 | 1 | 3 | 1 |
Net cash used in investing activities from continuing operations | (47) | (40) | (105) | (31) |
Net cash used in investing activities from discontinued operations | (11) | (2) | (21) | (9) |
Net cash used in investing activities | (58) | (42) | (126) | (40) |
Cash flows used in financing activities | ||||
Net short-term debt (repayments) borrowings | (24) | (4) | (7) | 10 |
Borrowings of long-term debt | 118 | 2,313 | 256 | 540 |
Repayments of Long-term Debt | 130 | 2,261 | 293 | 468 |
Return of capital to parent (see Note 9) | 0 | 0 | (13) | 0 |
Proceeds from rights offering | 0 | 300 | 0 | 0 |
Payments of Financing Costs | 2 | 136 | 0 | 1 |
Net Cash Provided by (Used in) Financing Activities | (38) | 212 | (57) | 81 |
Effect of exchange rates on cash and cash equivalents, including restricted cash | 1 | 0 | 2 | (5) |
(Decrease) increase in cash and cash equivalents, including restricted cash | 129 | (3) | (50) | 13 |
Cash, cash equivalents and restricted cash at beginning of period | 125 | 128 | 254 | 115 |
Cash, cash equivalents and restricted cash at end of period | 254 | 125 | 204 | 128 |
Supplemental disclosures of cash flow information | ||||
Interest, net | 22 | 71 | 103 | 318 |
Income taxes, net of cash refunds | 10 | 10 | 16 | 17 |
Reorganization items, net | $ 0 | $ 188 | $ 0 | $ 0 |
Consolidated Statement of Equit
Consolidated Statement of Equity (Deficit) - USD ($) $ in Millions | Total | Common Stock [Member] | Paid-in Capital [Member] | Treasury Stock [Member] | Notes Receivable From Parent [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total Hexion Inc. Deficit [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2017 | $ (2,742) | $ 1 | $ (526) | $ 296 | $ 0 | $ (8) | $ (2,964) | $ (2,741) | $ (1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (162) | 0 | 0 | 0 | 0 | 0 | (162) | (162) | |
Net (loss) income | (163) | ||||||||
Add: Net income (loss) attributable to noncontrolling interest | (1) | (1) | |||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 0 | 0 | 0 | 0 | 0 | (10) | |||
Other comprehensive loss | (10) | (10) | 0 | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 1 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 0 |
Return of capital to parent (see Note 9) | 0 | ||||||||
Balance at Dec. 31, 2018 | (2,914) | 1 | (526) | 296 | 0 | (18) | (3,125) | (2,912) | (2) |
Balance at Jul. 01, 2019 | (1) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (89) | ||||||||
Net (loss) income | (88) | 0 | 0 | 0 | 0 | 0 | (89) | (89) | 1 |
Add: Net income (loss) attributable to noncontrolling interest | 1 | ||||||||
Other comprehensive loss | (1) | 0 | 0 | 0 | 0 | (1) | 0 | (1) | 0 |
Stock-based compensation | 8 | 0 | 0 | 0 | 0 | 0 | 8 | 0 | |
Return of capital to parent (see Note 9) | 0 | ||||||||
Balance at Dec. 31, 2019 | 1,075 | 0 | 1,165 | 0 | 0 | (1) | (89) | 1,075 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (230) | ||||||||
Net (loss) income | (230) | 0 | 0 | 0 | 0 | 0 | (230) | (230) | 0 |
Add: Net income (loss) attributable to noncontrolling interest | 0 | ||||||||
Other comprehensive loss | (26) | 0 | 0 | 0 | 0 | (26) | 0 | (26) | 0 |
Stock-based compensation | 17 | 0 | 0 | 0 | 0 | 0 | 17 | 0 | |
Return of capital to parent (see Note 9) | (13) | 0 | (13) | 0 | 0 | 0 | 0 | (13) | 0 |
Disbursement of Affiliated Loan | (10) | 0 | 0 | 0 | (10) | 0 | 0 | (10) | 0 |
Settlement of affiliate loan | 10 | 0 | 0 | 0 | 10 | 0 | 0 | 10 | 0 |
Balance at Dec. 31, 2020 | $ 823 | $ 0 | $ 1,169 | $ 0 | $ 0 | $ (27) | $ (319) | $ 823 | $ 0 |
Background and Basis of Present
Background and Basis of Presentation (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
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. At December 31, 2020, the Company had 44 production and manufacturing facilities, with 21 located in the United States. The Company’s business is organized based on the products offered and the markets served. At December 31, 2020, the Company had three reportable segments: Adhesives; Coatings and Composites; and Corporate and Other. Sale of Phenolic Specialty Resins Business On September 27, 2020, the Company entered into a definitive agreement (the “Purchase Agreement”) for the sale of its Phenolic Specialty Resins ("PSR"), Hexamine and European-based Forest Products Resins businesses (together with PSR, the “Held for Sale Business”) to Black Diamond Capital Management, LLC and Investindustrial (the “Buyers”) for a purchase price of approximately $425. The consideration consists of $335 in cash and certain assumed liabilities with the remainder in future contingent proceeds based on the performance of the Held for Sale Business. For more information, see Note 4 “Discontinued Operations”. As of December 31, 2020, the Company reclassified the assets and liabilities of the Held for Sale Business as held for sale on the Consolidated Balance Sheets and reported the results of the operations for the year ended December 31, 2020 as “(Loss) income from continuing operations, net of taxes” on the Consolidated Statements of Operations. Amounts for prior periods have similarly been retrospectively reclassified for all periods presented. Additionally, the Company has included $15, $9, $10 and $24 in both “Net sales” and “Cost of sales” within the Company’s continuing operations for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and year ended December 31, 2018, respectively, which represents sales from the Company’s continuing operations to the Held for Sale Business that were previously eliminated in consolidation. These reclassifications had no impact on “Net (loss) income” in the Consolidated Statements of Operations for any of the periods presented. Emergence from Chapter 11 and Fresh Start Accounting As a result of the Company’s reorganization and emergence from Chapter 11 (as defined in Note 5) on the morning of July 1, 2019 (the “Effective Date”), the Company’s direct parent is Hexion Intermediate Holding 2, Inc. (“Hexion Intermediate”), a holding company and wholly owned subsidiary of Hexion Intermediate Holding 1, Inc., a holding company and wholly owned subsidiary of Hexion Holdings Corporation, the ultimate parent of Hexion (“Hexion Holdings” or “Parent”). Prior to its reorganization, the Company’s parent was Hexion LLC, a holding company and wholly owned subsidiary of Hexion Holdings LLC (now known as Hexion TopCo, LLC or “TopCo”), the previous ultimate parent entity of Hexion, which was controlled by investment funds managed by affiliates of Apollo Management Holdings, L.P. (together with Apollo Global Management, Inc. and its subsidiaries, “Apollo”). On the Effective Date, the Company’s existing common stock were cancelled and 100 new shares of common stock were issued at a par value of $0.01 to the Company’s new direct parent Hexion Intermediate in accordance with the Plan (as defined in Note 5). See Note 5 for more information. The Company filed for Chapter 11 bankruptcy protection on April 1, 2019 (the “Petition Date”) and as the Company previously disclosed, based on its financial condition and its projected operating results, the defaults under its debt agreements, and the risks and uncertainties surrounding its Chapter 11 proceedings (see Note 5), that there was substantial doubt as to the Company’s ability to continue as a going concern as of the issuance of the Company’s 2018 Annual Report on Form 10-K. Since the Company’s emergence from Chapter 11 on July 1, 2019, based on its new capital structure, liquidity position and projected operating results, the Company expects to continue as a going concern for the next twelve months. See Note 5 for more information. On the Effective Date, in accordance with ASC 852, the Company applied fresh start accounting to its financial statements as (i) the holders of existing voting shares of the Company prior to its emergence received less than 50% of the voting shares of the Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the plan of reorganization was less than the post-petition liabilities and allowed claims. Fresh start accounting was applied to the Company’s consolidated financial statements as of July 1, 2019, the date it emerged from bankruptcy, which resulted in a new basis of accounting and the Company became a new entity for financial reporting purposes. As a result, the Company allocated the reorganization value of the Company to its individual assets based on their estimated fair values. Reorganization value represents the fair value of the Company’s assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets was reported as goodwill. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Consolidated Financial Statements after the Effective Date are not comparable with the Consolidated Financial Statements prior to that date. References to “Successor” or “Successor Company” relate to the financial position and results of operations of the Company after the Effective Date. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company on or before the Effective Date. Refer to Note 6 for more information. Financial Reporting in Reorganization Effective on the Petition Date, the Company applied Accounting Standard Codification, No. 852, “Reorganizations,” (“ASC 852”) which is applicable to companies under Chapter 11 bankruptcy protection. It requires the financial statements for periods subsequent to the Chapter 11 filing to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses, realized gains and losses, and provisions for losses that are directly associated with reorganization proceedings must be reported separately as “Reorganization items, net” in the Consolidated Statements of Operations. In addition, the balance sheet must distinguish debtor pre-petition liabilities subject to compromise (“LSTC”) from liabilities of non-filing entities, pre-petition liabilities that are not subject to compromise and post-petition liabilities in the accompanying Consolidated Balance Sheet. LSTC are pre-petition obligations that are not fully secured and have at least a possibility of not being repaid at the full claim amount. LSTC related to debt, its related interest payable and certain affiliate payables were settled in accordance with the Plan, as applicable, on or shortly after the Company emerged from Chapter 11 bankruptcy on July 1, 2019. As of July 1, 2019, all remaining liabilities subject to compromise were not impaired and remain on the Company’s Consolidated Balance Sheets. The Company’s Consolidated Balance Sheets as of December 31, 2020 and |
Significant Accounting Policies
Significant Accounting Policies (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Principles of Consolidation— The Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries in which minority shareholders hold no substantive participating rights. Intercompany accounts and transactions are eliminated in consolidation. The Company’s share of the net earnings of 20% to 50% owned companies, which are accounted for under the equity method of accounting as the Company has the ability to exercise significance influence over operating and financial policies (but not control), are included in “Earnings from unconsolidated entities, net of taxes” in the Consolidated Statements of Operations. Investments in the other companies are carried at cost. The Company has recorded a noncontrolling interest for the equity interests in consolidated subsidiaries that are not 100% owned. The Company’s unconsolidated investments accounted for under the equity method of accounting include the following as of December 31, 2020: • 49.99% interest in Momentive UV Coatings (Shanghai) Co., Ltd, a joint venture that manufactures UV-curable coatings and adhesives in China; • 50% ownership interest in Hexion Shchekinoazot Holding B.V., a joint venture that manufactures forest products resins in Russia (see Note 4 for discussion of Russia JV within discontinued operations); • 50% ownership interest in Hexion Australia Pty Ltd, a joint venture which provides urea formaldehyde resins and other products to industrial customers in western Australia. Foreign Currency Translations and Transactions —Assets and liabilities of foreign affiliates are translated at the exchange rates in effect at the balance sheet date. Income, expenses and cash flows are translated at average exchange rates during the year. The Company did not recognize a transaction gain or loss for the year ended December 31, 2020. The Company recognized transaction gains (losses) of $5, $(8) and $30 for the Successor period July 2, 2019 through December 31, 2019, the Predecessor periods January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, which are included as a component of “Net (loss) income.” In addition, gains or losses related to the Company’s intercompany loans payable and receivable denominated in a foreign currency other than the subsidiary’s functional currency that are deemed to be permanently invested are remeasured to cumulative translation and recorded in “Accumulated other comprehensive loss” in the Consolidated Balance Sheets. The effect of translation is included in “Accumulated other comprehensive loss.” Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and also 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. The most significant estimates that are included in the financial statements are environmental remediation liabilities, legal liabilities, deferred tax assets and liabilities and related valuation allowances, income tax accruals, pension and postretirement assets and liabilities, reserves for uncollectible accounts receivable, general insurance liabilities, asset impairments, fair values of assets acquired and liabilities assumed in business acquisitions, and valuations associated with fresh start accounting. Actual results could differ from these estimates. Cash and Cash Equivalents —The Company considers all highly liquid investments that are purchased with an original maturity of three months or less to be cash equivalents. At December 31, 2020 and 2019, the Company had interest-bearing time deposits and other cash equivalent investments of $20 and $74, respectively. The Company’s restricted cash balances of $4 as of both December 31, 2020 and 2019, respectively represent deposits to secure certain bank guarantees issued to third parties to guarantee potential obligations of the Company primarily related to the completion of tax audits. These balances will remain restricted as long as the underlying exposures exist and are included in the Consolidated Balance Sheets as a component of “Cash and cash equivalents.” Allowance for Doubtful Accounts — Under adoption of ASU 2016-13, the Company has updated its credit loss methodology to consider a broader range of reasonable and supportable information to determine its credit loss estimates. The Company utilizes a historical aging method disaggregated by portfolio segment of geographic region, and then the Company makes any necessary adjustments for current conditions and forecasts about future economic conditions for calculating its allowance for doubtful accounts. The Company evaluates each pooled receivables’ geographic region by differing regional industrial and economic conditions, overall end market conditions and groups of customers with similar risk profiles related to timing and uncertainty of future collections. If particular accounts receivable balances no longer display risk characteristics that are similar to other pooled receivables, the Company performs individual assessments of expected credit losses for those specific receivables. Receivables are charged against the allowance for doubtful accounts when it is probable that the receivable will not be collected. As of December 31, 2020, the Company’s allowance for doubtful accounts provision for expected credit losses reflected the current business conditions, forecasts of future economic conditions and the impacts related to the global business and market disruptions of the coronavirus disease 2019 (“COVID-19”) pandemic, in accordance with ASU 2016-13 (see Note 3 for more information) which did not result in an increase for the year. The Company’s current expectations and assumptions regarding its business, the economy and other future events and conditions are based on currently available financial, economic and competitive data and current business plans as of December 31, 2020. Actual results could vary materially depending on risks and uncertainties that may affect the Company’s operations, markets, services, prices and other factors. The Company recorded an allowance for doubtful accounts of $3 at both December 31, 2020 and 2019, to reduce accounts receivable to their estimated net realizable value. Accounts receivable balances are written-off against the allowance if a final determination of uncollectibility is made. There were no write-offs or recoveries for the year ended December 31, 2020. Prior to adoption of ASU 2016-13, the Company’s policy for the allowance for doubtful accounts was estimated using factors such as customer credit ratings and past collection history. Inventories —Inventories are stated at lower of cost or net realizable value using the first-in, first-out method. Costs include direct material, direct labor and applicable manufacturing overheads, which are based on normal production capacity. Abnormal manufacturing costs are recognized as period costs and fixed manufacturing overheads are allocated based on normal production capacity. Deferred Expenses —Deferred debt financing costs are included in “Long-term debt” in the Consolidated Balance Sheets, with the exception of deferred financing costs related to revolving line of credit arrangements, which are included in “Other long-term assets” in the Consolidated Balance Sheets. These costs are amortized over the life of the related debt or credit facility using the effective interest method. Upon extinguishment of any debt, the related debt issuance costs are written off. Deferred debt financing costs included in “Long-term debt” in the Consolidated Balance Sheets were less than $1 at December 31, 2020. During the year ended December 31, 2019, in connection with the application of fresh start accounting, any existing debt issuance costs were included in “Reorganization items, net” in the Consolidated Statements of Operations and there were no deferred debt financing costs included in “Long-term debt” in the Consolidated Balance Sheets as of December 31, 2019. Property and Equipment —Land, buildings and machinery and equipment are stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful lives of properties (the range of estimated useful lives for buildings and machinery and equipment were 9 to 39 years and 1 to 20 years, respectively at December 31, 2020 and 2019). Assets under finance leases are amortized over the lesser of their useful life or the lease term. Major renewals and betterments are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. When property and equipment is retired or disposed of, the asset and related depreciation are removed from the accounts and any gain or loss is reflected in operating income. The Company capitalizes interest costs that are incurred during the construction of property and equipment. Property and equipment was recorded at its estimated fair value in connection with the application of fresh start accounting, resulting in the remeasurement of accumulated depreciation to zero as of July 1, 2019 (see Note 6. Depreciation expense was $131, $90, $40 and $86 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. Additionally, for the year ended December 31, 2020 and 2018, $2 and $4, respectively, of accelerated depreciation was recorded as a result of shortening the estimated useful lives of certain long-lived assets related to planned facility rationalizations. There was no accelerated depreciation in the Successor period July 2, 2019 through December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. Lastly, for the year ended December 31, 2020 and the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, “Capitalized expenditures” in the Consolidated Statements of Cash Flows were increased by $2, decreased by $8, increased by $7 and increased by $5, respectively, to reflect the change in invoiced but unpaid capital expenditures at each respective year-end as a non-cash investing activity. Leases —The Company adopted ASU 2016-02 using a modified retrospective adoption method at January 1, 2019. Under this method of adoption, there is no impact to the comparative Consolidated Statement of Operations and the Consolidated Balance Sheets. The Company also determined that there was no cumulative-effect adjustment to beginning retained earnings on the Consolidated Balance Sheet. The Company will continue to report periods prior to January 1, 2019 in its financial statements under prior guidance as outlined in Accounting Standards Codification Topic 840, “Leases”. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward its historical lease classification. The Company also elected the hindsight practical expedient to determine the lease term for existing leases. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right of use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Nearly all of the Company’s lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company estimates the incremental borrowing rate to discount the lease payments based on information available at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company combines lease and non-lease components. See Note 13 for more information. Capitalized Software —The Company capitalizes certain costs, such as software coding, installation and testing, that are incurred to purchase or create and implement computer software for internal use. Amortization is recorded on the straight-line basis over the estimated useful lives, which range from 1 to 5 years. Goodwill and Intangibles —The excess of purchase price over net tangible and identifiable intangible assets of businesses acquired is carried as “Goodwill” in the Consolidated Balance Sheets. Separately identifiable intangible assets that are used in the operations of the business (e.g., patents and technology, tradenames, customer lists and contracts) are recorded at cost (fair value at the time of acquisition) and reported as “Other intangible assets, net” in the Consolidated Balance Sheets. Costs to renew or extend the term of identifiable intangible assets are expensed as incurred. The Company does not amortize goodwill. Intangible assets with determinable lives are amortized on a straight-line basis over the legal or economic life of the assets, which range from 15 to 25 years (see Note 6 and Note 10). As a result of the application of fresh start accounting the Company established $178 of Successor goodwill and $1,219 of Successor intangibles upon Emergence. Refer to Note 6 for additional information related to Emergence. The amount of goodwill and intangibles related to continuing operations is $164 and $1,079, respectively. Refer to Note 10 for additional information. Impairment —The Company reviews property and equipment, leases and all amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based on estimated undiscounted cash flows or other relevant observable measures. The Company tests goodwill for impairment annually, or when events or changes in circumstances indicate impairment may exist, by comparing the estimated fair value of each reporting unit with goodwill to its carrying value to determine if there is an indication that a potential impairment may exist. Long-Lived Assets and Amortizable Intangible Assets There were $16 long-lived asset impairments recorded during the year ended December 31, 2020 and there were no long-lived asset impairments for the Successor period July 2, 2019 through December 31, 2019 or the Predecessor period January 1, 2019 through July 1, 2019. During the year ended December 31, 2018, the Company recorded long-lived asset impairments of $28, which are included in “Asset impairments” in the Consolidated Statements of Operations (see Note 8 for more information). Goodwill The Company’s reporting units in continuing operations include epoxy, versatics and forest products. The Company’s reporting units are generally one level below the operating segments for which discrete financial information is available and reviewed by segment management. However, components of an operating segment can be aggregated as one reporting unit if the components have similar economic characteristics. The Company’s consolidated goodwill balance from continuing operations was $164 as of December 31, 2020, including $127 related to the forest products reporting unit, $36 related to the versatics reporting unit and $1 related to the epoxy reporting unit. The Company tests goodwill annually for impairment of value or more frequently when potential impairment triggering events are present. The Company’s annual impairment testing date is October 1. Goodwill is tested for impairment by comparing the estimated fair value of a reporting unit to its carrying value. The Company uses a weighted market and income approach to estimate the fair value of its reporting units. The market approach is a comparable analysis technique commonly used in the investment banking and private equity industries based on the EBITDA (earnings before interest, income taxes, depreciation and amortization) multiple technique, and the income approach is based on a discounted cash flow model. The key assumptions and estimates utilized in the market and income approaches primarily include market multiples, discount rates and future levels of revenue growth and operating margins, and to a lesser extent, estimates and assumptions related to working capital investment, taxes, depreciation and amortization and capital spending projections. If the carrying value of the reporting unit exceeds the estimated fair value, an impairment charge is recorded for the difference. As of October 1, 2020 and 2019, the estimated fair value of each of the Company’s remaining reporting units was deemed to be in excess of the carrying amount of assets (including goodwill) and liabilities assigned to each reporting unit. The step-up of fixed and intangible asset values during fresh start accounting resulted in an increase of the carrying amounts of net assets for the Company’s reporting units that have goodwill, thereby reducing the amount of headroom between the fair value and carrying value of these reporting units. As a result, future unfavorable changes to business results and/or discounted cash flows for these reporting units are more likely to result in asset impairments. General Insurance —The Company is generally insured for losses and liabilities for workers’ compensation, physical damage to property, business interruption and comprehensive general, product and vehicle liability under high-deductible insurance policies. The Company records losses when they are probable and reasonably estimable and amortizes insurance premiums over the life of the respective insurance policies. Legal Claims and Costs —The Company accrues for legal claims and costs in the period in which a claim is made or an event becomes known, if the amounts are probable and reasonably estimable. Each claim is assigned a range of potential liability and the most likely amount is accrued. If there is no amount in the range of potential liability that is most likely, the low end of the range is accrued. The amount accrued includes all costs associated with the claim, including settlements, assessments, judgments and fines. Legal fees are expensed as incurred (see Note 14). Environmental Matters —Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Environmental accruals are reviewed on a quarterly basis and as events and developments warrant (see Note 14). Asset Retirement Obligations —Asset retirement obligations are initially recorded at their estimated net present values in the period in which the obligation occurs, with a corresponding increase to the related long-lived asset. Over time, the liability is accreted to its settlement value and the capitalized cost is depreciated over the useful life of the related asset. When the liability is settled, a gain or loss is recognized for any difference between the settlement amount and the liability that was recorded. Revenue Recognition —The Company follows the 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. Revenue, net of estimated allowances and returns, is recognized when the Company has completed its performance obligations under a contract and control of the product is transferred to the customer. Substantially all revenue is recognized at the time shipment is made or upon delivery as risk and title to the product transfer to the customer. Sales, value add, and other taxes that are collected concurrently with revenue-producing activities are excluded from revenue. Contract terms for certain transactions, including sales made on a consignment basis, result in the transfer of control of the finished product to the customer prior to the point at which the Company has the right to invoice for the product. In these cases, timing of revenue recognition will differ from the timing of invoicing to customers and will result in the Company recording a contract asset. The Company adopted ASU 2014-09 as of January 1, 2018 utilizing a modified retrospective approach. A contract asset balance of $5 and $6 is recorded within “Other current assets” at December 31, 2020 and 2019, respectively, in the Consolidated Balance Sheet. Refer to Note 20 for additional discussion of the Company’s net sales by reportable segment disaggregated by geographic region. Shipping and Handling —Freight costs that are billed to customers are included in “Net sales” in the Consolidated Statements of Operations. Shipping costs are incurred to move the Company’s products from production and storage facilities to the customer. Handling costs are incurred from the point the product is removed from inventory until it is provided to the shipper and generally include costs to store, move and prepare the products for shipment. Revenue from shipping and handling services is recognized when control of the product is transferred to the customer. Shipping and handling costs are recorded in “Cost of sales” in the Consolidated Statements of Operations. Turnaround Costs —The Company periodically performs procedures at its major production facilities to extend the useful life, increase output and efficiency and ensure the long-term reliability and safety of plant machinery (“turnaround” or “turnaround costs”). As a result of the application of fresh start accounting upon the Company’s emergence from Chapter 11, the Successor Company adopted an accounting policy to capitalize certain turnaround costs and amortize on a straight-line basis over the estimated period until the next turnaround. Costs for routine repairs and maintenance are expensed as incurred. Capitalized turnaround costs were $7 and $2 at December 31, 2020 and 2019 and are included in “Machinery and equipment” in the Consolidated Balance Sheets. Research and Development Costs —Funds are committed to research and development activities for technical improvement of products and processes that are expected to contribute to future earnings. We also provide customer service through our technical staff as part of our research and development program to discover new applications and processes. All costs associated with research and development and technical services are charged to expense as incurred. Research and development and technical service expense was $38, $20, $21 and $43 for the year ended December 31, 2020, the Successor period ended July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, and is included in “Selling, general and administrative expense” in the Consolidated Statements of Operations. Business Realignment Costs —The Company incurred “Business realignment costs” totaling $69, $22, $14 and $27 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. These costs primarily included costs related to in-process cost reduction programs and certain in-process and recently completed facility rationalizations. Pension and Other Non-Pension Postretirement Benefit Liabilities —Pension and other non-pension postretirement benefit (“OPEB”) assumptions are significant inputs to the actuarial models that measure pension and OPEB benefit obligations and related effects on operations. Two assumptions, discount rate and expected return on assets, are important elements of plan expense and asset/liability measurement. The Company evaluates these critical assumptions at least annually on a plan and country-specific basis. The Company periodically evaluates other assumptions involving demographic factors, such as retirement age, mortality and turnover, and updates them to reflect the Company's experience and expectations for the future. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. Accumulated and projected benefit obligations are measured as the present value of future cash payments. The Company discounts these cash payments using a split-rate interest approach. This approach uses multiple interest rates from market-observed forward yield curves which correspond to the estimated timing of the related benefit payments. Lower discount rates increase present values and higher discount rates decrease present values. To determine the expected long-term rate of return on pension plan assets, the Company considers current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. In developing future return expectations for the principal benefit plans’ assets, the Company evaluates general market trends as well as key elements of asset class returns such as expected earnings growth, yields and spreads across a number of potential scenarios. Upon the Company’s annual remeasurement of its pension and OPEB liabilities in the fourth quarter, or on an interim basis as triggering events warrant remeasurement, the Company immediately recognizes gains and losses as a mark-to-market (“MTM”) gain or loss through earnings. As such, the Company’s net periodic pension and OPEB expense consists of i) service cost, interest cost, expected return on plan assets, amortization of prior service cost/credits recognized on a quarterly basis and ii) MTM adjustments recognized annually in the fourth quarter upon remeasurement of pension and OPEB liabilities or when triggering events warrant remeasurement. The MTM adjustments were a loss of $4, loss of $5 and a gain of $13 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, and the year ended December 31, 2018, respectively, and are recognized in “Other non-operating (income) expense, net” in the Consolidated Statements of Operations. A MTM loss of $44 was recorded upon the Company’s emergence from bankruptcy (see Note 5 for more information) which was included within “Reorganization items, net” on the Consolidated Statement of Operations for the Predecessor period January 1, 2019 through July 1, 2019. Income Taxes —The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of the assets and liabilities. Deferred tax balances are adjusted to reflect tax rates, based on current tax laws, which will be in effect in the years in which temporary differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized (see Note 17). Unrecognized tax benefits are generated when there are differences between tax positions taken in a tax return and amounts recognized in the consolidated financial statements. Tax benefits are recognized in the consolidated financial statements when it is more likely than not that a tax position will be sustained upon examination. Tax benefits are measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. The Company classifies interest and penalties as a component of tax expense. The Company monitors changes in tax laws and reflects the impact of tax law changes in the period of enactment. See Note 17 for additional information on how the Company recorded the impacts of the U.S. tax reform. Derivative Financial Instruments and Hedging Activities —Periodically, the Company is a party to forward exchange contracts, foreign exchange rate swaps, interest rate swaps, natural gas futures and electricity forward contracts to reduce its cash flow exposure to changes in interest rates and natural gas and electricity prices. The Company does not hold or issue derivative financial instruments for trading purposes. All derivatives, whether designated as hedging relationships or not, are recorded on our balance sheet at fair value. For fair value and cash flow hedges qualifying for hedge accounting, the Company formally documents at inception the relationship between hedging instruments and hedged items, the risk management objective, strategy and the evaluation of effectiveness for the hedge transaction. If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded in accumulated other comprehensive income, to the extent effective, and will be recognized in the Consolidated Statement of Operations when settled. The effectiveness of a cash flow hedging relationship is established at the inception of the hedge, and after inception the Company performs effectiveness assessments at least every three months. For a derivative that does not qualify or has not been designated as a hedge, changes in fair value are recognized in earnings. Stock-Based Compensation —All stock-based compensation activity relates to shares issued by Hexion Holdings, the ultimate parent of the Company. Stock-based compensation cost is measured at the grant date based on the fair value of the award which is amortized as expense over the requisite service period or derived service period on a graded-vesting basis. The expense is recorded net of forfeitures upon occurrence (see Note 16). Transfers of Financial Assets —The Company executes factoring and sales agreements with respect to its trade accounts receivable to support its working capital requirements. The Company accounts for these transactions as either sales-type or financing-type transfers of financial assets based on the terms and conditions of each agreement. For the portion of the sales price that is deferred in a reserve account and subsequently collected, the Company’s policy is to classify the cash in-flows as cash flows from operating activities as the predominant source of the cash flows pertains to the Company’s trade accounts receivable. The remaining portion of the sales price not deferred is recognized as cash flows from operating activities. When the Company retains the servicing rights on the transfers of accounts receivable, it measures these rights at fair value, if material. Concentrations of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk are primarily temporary investments and accounts receivable. The Company places its temporary investments with high quality institutions and, by policy, limits the amount of credit exposure to any one institution. Concentrations of credit risk for accounts receivable are limited due to the large number of customers in the Company’s customer base and their dispersion across many different industries and geographies. The Company generally does not require collateral or other security to support customer receivables. Concentrations of Supplier Risk —The Company relies on long-term agreements with key suppliers for most of its raw materials. The loss of a key source of supply or a delay in shipments could have an adverse effect on its business. Should any of the suppliers fail to deliver or should any of the key long-term supply contracts be canceled, the Company would be forced to purchase raw materials at current market prices. The Company’s largest supplier provides approximately 9% of raw material purchases. In addition, several of the feedstocks at various facilities are transported through a pipeline from one supplier. Subsequent Events —The Company has evaluated events and transactions subsequent to December 31, 2020 through the date of issuance of its Consolidated Financial Statements. Reclassifications —Certain amounts in the Consolidated Financial Statements for prior periods have been reclassified to conform with the current presentation. These reclassifications were to record the assets and liabilities of the Held for Sale Business and the results of operations as disconti |
Covid-19 Impacts (Notes)
Covid-19 Impacts (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
COVID-19 Impact [Abstract] | |
COVID-19 Impact | COVID-19 Impacts In March 2020, the World Health Organization categorized COVID-19 as a global pandemic. Around the world, local governments’ responses to COVID-19 continue to evolve, which has led to stay-at-home orders, social distancing guidelines and other preventative measures that have disrupted various industries in the global economy and the markets in which our products are manufactured, distributed and sold. During this pandemic, the Company has implemented additional guidelines to further protect the health and safety of its employees as the Company continues to operate with its suppliers and customers. The Company has maintained a focus on the safety of its employees while minimizing potential disruptions caused by COVID-19. For example, the Company is following all legislatively-mandated travel directives in the various countries where it operates, and the Company has also put additional travel restrictions in place for its associates designed to reduce the risk from COVID-19. Additionally, the Company is utilizing extended work from home options to protect its office associates, while adjusting its meeting protocols and processes at its manufacturing sites. The Company’s businesses have been designated by many governments as essential businesses and the Company’s operations have continued through December 31, 2020. While the Company has continued to operate during the pandemic, it did incur adverse financial impacts to its sales and profitability results during the year ended December 31, 2020 from COVID-19, primarily related to reduced volumes associated with the pandemic. The pandemic has impacted global economic conditions and lowered demand in many of the end use markets in which the Company operates such as automotive, aerospace, industrial products, oil and gas, construction and housing. The ultimate impact that COVID-19 will have on the Company’s future financial position, operating results and cash flows involves numerous risks and uncertainties, including new information which may emerge concerning the severity and duration of COVID-19 and actions to contain the virus or treat its impact. The Coronavirus Aid, Relief, and Economic Security (the “CARES”) Act was enacted on March 27, 2020 in the U.S. The CARES Act includes several significant provisions, such as delaying certain payroll tax payments, mandatory transition tax payments under the Tax Cuts and Jobs Act, and estimated income tax payments. The Company does not currently expect the CARES Act to have a material impact on its financial results, including on its annual estimated effective tax rate but the Company delayed approximately $15 of certain income tax and non-income tax payments during 2020 and deferred an additional $5 of certain tax payments to future years. The Company continues to monitor and assess the CARES Act and similar legislation in the US and other jurisdictions where the Company operates which may impact the Company’s business and financial results. |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued OperationsOn September 27, 2020, the Company entered into a Purchase Agreement for the sale of PSR, Hexamine and European-based Forest Products Resins businesses (together with PSR, the “Held for Sale Business” or the “Business”) to Black Diamond Capital Management, LLC and Investindustrial (the “Buyers”) for a purchase price of approximately $425. The consideration consists of $335 in cash and certain assumed liabilities with the remainder in future contingent proceeds based on the performance of the Held for Sale Business. The final purchase price is subject to customary post-closing adjustments. The Held for Sale Business was formerly included in the Company’s Adhesives reportable segment. Assets included in the transaction are the Company’s manufacturing sites in Barry, United Kingdom; Cowie, United Kingdom; Lantaron, Spain; Botlek, Netherlands; Iserlohn, Germany; Frielendorf, Germany; Solbiate, Italy; Kitee, Finland; Louisville, Kentucky; Acme, North Carolina; and the Company's 50% ownership interest in Hexion Schekinoazot Holding B.V. (the “Russia JV”), a joint venture that manufactures forest products resins in Russia. The Held for Sale Business produces phenolic specialty resins and engineered thermoset molding compounds used in applications that require extreme heat resistance and strength, such as after-market automotive and original equipment manufacturing (“OEM”) truck brake pads, filtration, aircraft components and foundry resins. The Business is also a significant producer of formaldehyde-based resins in Europe and merchant formaldehyde and formaldehyde derivatives in the Louisville and Acme plants, respectively. Formaldehyde-based resins, also known as forest products resins, are a key adhesive and binding ingredient used in the production of a wide variety of engineered lumber products, including medium density fiberboard (“MDF”), particleboard and oriented strand board (“OSB”). These products are used in a wide range of applications in the construction, remodeling and furniture industries. Merchant formaldehyde and formaldehyde derivatives are intermediate ingredients that are used in a variety of durable and industrial products. The Business generated annual sales of approximately $500 in 2020 and was historically reported within the Adhesives reportable segment. The sale is subject to customary closing conditions, including European Works Council consultation, and is expected to close in the first quarter of 2021. Until the closing date, the Company has agreed to operate the Held for Sale Business in the ordinary course. The Company has agreed to provide certain transitional services to the Buyers for a limited period of time following the closing. As of December 31, 2020, the Company reclassified the assets and liabilities of the Held for Sale Business as held for sale on the Consolidated Balance Sheets and reported the results of the operations for the year ended December 31, 2020 as “(Loss) income from discontinued operations, net of tax” on the Consolidated Statements of Operations. Amounts for prior periods have similarly been retrospectively reclassified for all periods presented. The Held for Sale Business had $14 of goodwill at both December 31, 2020 and 2019, and $61 and $63 of other intangible assets at December 31, 2020 and 2019, respectively. Goodwill was allocated based on the relative fair value of the European-based Forest Products Resins businesses, included in the Held for Sale Business, which is part of the Company’s Forest Product Resins reporting unit. Other intangible assets were specifically identified based on customer relationships within the Company’s Forest Products Resins reporting unit that are associated with the Held for Sale Business. As a result of entering into the Purchase Agreement, the Company recognized a pre-tax charge of $75 within discontinued operations, representing the difference between the fair value of the Held for Sale Business, less costs to sell, and the carrying value of net assets held for sale as of December 31, 2020. Fair value represents the expected net cash proceeds, excluding any future contingent proceeds, from the sale of the Held for Sale Business. The Company has made an accounting policy election to account for the initial and subsequent measurement of the future contingent proceeds, of up to $90, as a gain contingency. Under this model, any future contingent consideration is not recognized until all future conditions are met and the Company has earned the proceeds. The contingent proceeds are based on performance targets of the Held for Sale Business over each of the next three years, as specified in the Purchase Agreement. Thus, for purposes of this impairment analysis the fair value of the future contingent proceeds was not considered in determination of the disposal group impairment. Further, the Company concluded that the impairment of the Held for Sale Business assets did not represent an impairment triggering event for the Company’s continuing operations. The following table reconciles the carrying amounts of major classes of assets and liabilities of discontinued operations to total assets and liabilities of discontinued operations that are classified as held for sale in the Company’s Consolidated Balance Sheets: December 31, 2020 December 31, 2019 Carrying amounts of major classes of assets held for sale: Accounts receivable $ 66 $ 49 Finished and in-process goods 18 21 Raw materials and supplies 17 18 Other current assets 12 11 Total current assets 113 99 Investment in unconsolidated entities 5 3 Deferred tax assets 2 — Other long-term assets 7 11 Property, plant and equipment, net 310 297 Operating lease assets 13 12 Goodwill 14 14 Other intangible assets, net 61 63 Discontinued operations impairment (75) — Total long-term assets 337 400 Total assets held for sale $ 450 $ 499 Carrying amounts of major classes of liabilities held for sale: Accounts payable $ 52 $ 52 Income taxes payable 1 — Accrued payroll 3 5 Current portion of operating lease liabilities 2 2 Other current liabilities 9 10 Total current liabilities 67 69 Long-term pension and post employment benefit obligations 36 29 Deferred income taxes 22 15 Operating lease liabilities 5 4 Other long-term liabilities 8 8 Total long-term liabilities 71 56 Total liabilities held for sale $ 138 $ 125 In addition to the Held for Sale Business assets and liabilities classified as “held for sale” in the table above, the Company’s Consolidated Balance Sheets as of December 31, 2020 also includes $1 of current assets held for sale, noncurrent assets held for sale of $5, current liabilities associated with assets held for sale of $3 and noncurrent liabilities associated with assets held for sale of $3. These additional assets and liabilities classified as “held for sale” at December 31, 2020 are related to the Company’s other restructuring activities. The following table shows the financial results of discontinued operations for the periods presented: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through Year Ended December 31, 2018 Major line items constituting pretax income of discontinued operations: Net sales (1) $ 493 $ 286 $ 309 $ 692 Cost of sales (exclusive of depreciation and amortization) (1) 412 245 263 600 Selling, general and administrative expense 42 15 17 34 Depreciation and amortization 26 17 9 19 Asset impairments 75 — — — Business realignment costs 3 2 1 2 Other operating expense (income), net — 1 (1) (1) Operating (loss) income (65) 6 20 38 Reorganization items, net — — (135) — Other non-operating expense, net 5 1 — — (Loss) income from discontinued operations before income tax, earnings from unconsolidated entities (70) 5 155 38 Income tax expense (benefit) 1 1 21 9 (Loss) income from discontinued operations, net of tax $ (71) $ 4 $ 134 $ 29 Earnings from unconsolidated entities, net of tax 2 — 1 (1) Net (loss) income attributable to discontinued operations $ (69) $ 4 $ 135 $ 28 (1) The Held for Sale Business has included $4, $5, $2 and $9 in both “Net sales” and “Cost of sales” within the discontinued operations for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor periods January 1, 2019 through July 1, 2019 and year ended December 31, 2018, respectively, which represents sales from the Held for Sale Business to the Company’s continuing operations that were previously eliminated in consolidation. These reclassifications had no impact on “Net (loss) income” in the Consolidated Statements of Operations for any of the periods presented. Equity Method Investments The Company's 50% ownership interest in the Russia JV, accounted for using the equity method of accounting, is included in the Held for Sale Business. Summarized financial data for the Russia JV are shown in the following tables: December 31, 2020 December 31, 2019 Current assets $ 7 $ 9 Non-current assets 1 1 Current liabilities 2 11 Non-current liabilities 6 12 Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Net sales $ 32 $ 14 $ 18 $ 43 Gross profit 12 3 4 7 Pre-tax income 5 1 2 2 Net income 4 — 2 2 |
Emergence from Chapter 11 Bankr
Emergence from Chapter 11 Bankruptcy (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Chapter 11 Bankruptcy | Emergence from Chapter 11 Bankruptcy Bankruptcy Petitions and Emergence from Chapter 11 On the Petition Date, the Company, Hexion Holdings LLC, Hexion LLC and certain of the Company’s subsidiaries (collectively, the “Debtors”) filed voluntary petitions (the “Bankruptcy Petitions”) for reorganization under Chapter 11 (“Chapter 11”) of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware, (the “Bankruptcy Court”). The Chapter 11 proceedings were jointly administered under the caption In re Hexion TopCo, LLC, No. 19-10684 (the “Chapter 11 Cases”). The Debtors continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. On June 25, 2019, the Court entered an order (the “Confirmation Order”) confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Hexion Holdings LLC and its Debtor Affiliates under Chapter 11 (the “Plan”). On the morning of July 1, 2019, in accordance with the terms of the Plan and the Confirmation Order, the Plan became effective and the Debtors emerged from bankruptcy (the “Emergence”). Debtor-in-Possession Financing DIP Term Loan Facility In connection with the filing of the Bankruptcy Petitions, on April 3, 2019, the Company entered into a New York law-governed senior secured term loan agreement (the “DIP Term Loan Facility”), among Hexion LLC (“Holdings”), the Company, Hexion International Holdings B.V. (the “Dutch Borrower”), which was amended on April 17, 2019, the lenders party thereto and JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent and collateral agent (the “Term Loan Agent”). The proceeds of the DIP Term Loan Facility were loaned by the Dutch Borrower to the Company pursuant to an intercompany loan agreement (the “Intercompany Loan Agreement”) and were used in part to repay in full the outstanding obligations under the Company’s existing asset-based revolving credit agreement ABL Facility (the “Predecessor ABL Facility”). As of June 30, 2019, the Company had $350 borrowings outstanding under DIP Term Loan Facility. The Company’s remaining obligations under the DIP Term Loan Facility were repaid in full and the DIP Term Loan Facility was terminated upon consummation of the Plan by the Company on July 1, 2019. DIP ABL Facility In connection with the filing of the Bankruptcy Petitions, on April 3, 2019, Holdings, the Company and certain of its subsidiaries (collectively, the “Borrowers”), the lenders party thereto, JPMorgan, as administrative agent, and JPMorgan, as collateral agent (the “DIP ABL Collateral Agent” and together with the DIP Term Loan Facility, the “ DIP Credit Facilities”), entered into an amended and restated senior secured debtor-in-possession asset-based revolving credit agreement, which was further amended on May 10, 2019 (the “DIP ABL Facility”), which amended and restated the Company’s Predecessor ABL Facility among Holdings, the Company, the Borrowers, the lenders party thereto, JPMorgan, as administrative agent, and JPMorgan, as collateral agent. As of June 30, 2019, the Company had no outstanding borrowings under the DIP ABL Facility and the DIP ABL Facility was terminated upon consummation of the Plan by the Company on July 1, 2019. Restructuring Support Agreement On April 1, 2019, the Debtors entered into a Restructuring Support Agreement (the “Support Agreement”) with equityholders that beneficially owned more than a majority of the Company’s outstanding equity (the “Consenting Sponsors”) and creditors that held more than a majority of the aggregate outstanding principal amount of each of the Company’s 6.625% Notes and 10.00% Notes, (the “1L Notes”), 13.750% 1.5 lien notes due 2022 (the “1.5L Notes”), 9.00% second lien notes due 2020 (the “2L Notes”), 9.20% Debentures due 2021 and/or 7.875% Debentures due 2023 issued by Borden, Inc. (the “Unsecured Notes”) (the “Consenting Creditors” and, together with the Consenting Sponsors, the “Consenting Parties”). The Support Agreement incorporated the economic terms regarding a restructuring of the Debtors agreed to by the parties reflected in the Support Agreement. The restructuring transactions were effectuated through the Plan. Equity Backstop Agreement and Rights Offering On April 25, 2019, the Debtors entered into the Equity Backstop Commitment Agreement, as subsequently amended (the “Equity Backstop”), among the Debtors and the equity backstop parties party thereto (the “Equity Backstop Parties”). The Equity Backstop provides that upon the satisfaction of certain terms and conditions, including the confirmation of the Plan, the Company will have the option to require the Equity Backstop Parties to backstop the common stock of the reorganized Company (the “New Common Stock”) that is not otherwise purchased in connection with the $300 rights offerings for New Common Stock of Hexion Holdings (the “Rights Offering”) to be made in connection with the Plan (the “Unsubscribed Shares”) on a several, and not joint and several, basis. In consideration for their commitment to purchase the Unsubscribed Shares, the Equity Backstop Parties will be paid a Premium of 8% of the Rights Offering Amount (the “Equity Backstop Premium”), which premium was earned in full upon entry of the Equity Backstop Approval Order and which is payable either in Cash or in New Common Equity at the option of each Equity Backstop Party. Pursuant to the terms of the Equity Backstop, the Equity Backstop Premium was deemed earned, nonrefundable and non-avoidable upon entry of the approval order by the Court. The Company incurred $24 for the Equity Backstop Premium, which is included in “Reorganization items, net” in the Consolidated Statements of Operations. The Company paid the Equity Backstop Premium on the Effective Date in accordance with the Plan. Debt Backstop Agreement On April 25, 2019, the Debtors entered into the Debt Backstop Commitment Agreement, as subsequently amended (the “Debt Backstop”), among the Debtors and the debt backstop parties party thereto (the “Debt Backstop Parties”). The Debt Backstop provides that upon satisfaction of certain terms and conditions, including the confirmation of the Plan, the Debt Backstop Parties will backstop the New Long-Term Debt on a several, and not joint and several, basis of an amount equal to such Debt Backstop Party’s commitment percentage, in exchange for (a) the Debt Backstop Premium of 3.375% of the backstop commitments thereunder payable either in Cash or in New Common Equity at the option of each Debt Backstop Party and (b) for certain Debt Backstop Parties, the Additional Debt Backstop Premium of 1.5% of the backstop commitments thereunder payable in Cash, both of which premiums (described in (a) and (b)) were earned in full upon entry of the Debt Backstop Approval Order. Pursuant to the terms of the Debt Backstop, the Backstop Commitment Premium was deemed earned, nonrefundable and non-avoidable upon entry of the approval order by the Court. The Company incurred $80 for the Backstop Commitment Premium, which is included in “Reorganization items, net” in the Consolidated Statements of Operations. The Company paid the Debt Backstop Premium on the Effective Date in accordance with the Plan. Pre-Petition Claims On June 7, 2019, the Debtors filed schedules of assets and liabilities and statements of financial affairs with the Court, which were amended on June 14, 2019. Prior to the Company’s emergence from Chapter 11 bankruptcy on the Effective Date, all pre-petition amounts were classified as “Liabilities subject to compromise” in the Consolidated Balance Sheets as of June 30, 2019 and have either been settled or reinstated pursuant to the terms of the Plan. See Note 4 for more information. The Debt Instruments provide that as a result of the Bankruptcy Petitions the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the Bankruptcy Petitions and the creditors’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. Upon Emergence on July 1, 2019, these automatic stay provisions are no longer in effect. Emergence from Chapter 11 Bankruptcy On July 1, 2019, the Plan became effective and the Debtors emerged from the Chapter 11 proceedings. On or following the Effective Date, and pursuant to the terms of the Plan, the following occurred: • The restructuring of the Debtors’ pre-petition funded debt obligations with the proceeds of $1,658 in new long-term debt (“New Long-term Debt”) (see Note 12 ); • A $300 Rights Offering for new common equity of Hexion Holdings; • A percentage of the Rights Offering was issued in the form of warrants (“New Warrants”), these warrants represented 15% of the Rights Offering which are exercisable for shares of Common Stock, issued by Hexion Holdings under the Plan, and referred to as New Warrants under the Plan (together with New Common Stock, “Registrable Securities”); • Certain of the Debtors entered into the $350 ABL Facility (the “ABL Facility) (see Note 12) ; • General unsecured claims being paid in full or otherwise continuing unimpaired; • Holders of claims with respect to the 1L Notes received their pro rata share of (a) cash in the amount of $1.450 billion (less the sum of adequate protection payments paid on account of the 1L Notes during the Chapter 11 cases), (b) 72.5% of new common equity of Hexion Holdings (“New Common Equity”) (subject to the Agreed Dilution), and (c) 72.5% of the rights to purchase additional New Common Equity pursuant to the Rights Offering. The dilution of the New Common Equity (“the Agreed Dilution”) resulted from the Rights Offering and the Management Incentive Plan, as defined in the Plan. 10% of the fully-diluted equity of Hexion Holdings is to be reserved for grant to key members of management and independent, non-employee members of the Board of Directors, (see Note 14 for further details on the Management Incentive Plan); • Holders of claims with respect to the 1.5L Notes, 2L Notes, and Unsecured Notes received their pro rata share of (a) 27.5% of the New Common Equity (subject to the Agreed Dilution) and (b) 27.5% of the rights to purchase additional New Common Equity pursuant to the Rights Offering; • Holders of equity interests (i.e., any class of equity securities) in TopCo received no distributions and all such Equity Interests being cancelled; • Reorganized Hexion issuing a $2.5 settlement note to the Consenting Sponsors; and • Appointment of a new board of directors. Cancellation of Prior Common Stock In accordance with the Plan, each share of the Predecessor Company’s common stock outstanding prior to the Effective Date, including treasury stock, was canceled. Furthermore, all of the Company’s equity award agreements under prior incentive plans, and the awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or effect after the Effective Date. On the Effective Date, 100 new shares of common stock were issued at a par value of $0.01 to the Company’s new direct parent Hexion Intermediate in accordance with the Plan. Issuance of New Common Stock On the Effective Date, all previously issued and outstanding equity interests in TopCo were cancelled. Upon effectiveness of the Plan, Hexion Holdings issued 58,410,731 shares of a new class of common stock, par value $0.01 per share (“New Common Stock”), pursuant to the Rights Offering. The shares of New Common Stock were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 1145 of the Bankruptcy Code, which generally exempts from such registration requirements the issuance of securities under a plan of reorganization. New Warrant Agreement In addition, Hexion Holdings entered into a warrant agreement (the “Warrant Agreement”) and upon effectiveness of the Plan, Hexion Holdings issued 10,307,778 New Warrants as a part of the Rights Offering on the Effective Date. The New Warrants represented 15% of the Rights Offering which are exercisable to purchase shares of New Common Stock. These New Warrants may be exercised, at any time on or after the initial exercise date for exercise price per share of the New Common Stock of $0.01. The Warrant Agreement contains customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions. The holder or group of holders (the “Attribution Parties”) of New Warrants shall be permitted to exercise these New Warrants, at any time, in part or in whole, in amounts sufficient for the holder and Attribution Parties to maintain in the aggregate no less than the beneficial ownership limitation of 9.9% of the fully diluted shares outstanding. Fully diluted shares outstanding is calculated as (x) the aggregate number of shares of New Common Stock issued and outstanding plus (y) the aggregate number of shares of common stock issuable upon the conversion of any other issued and outstanding securities or rights convertible into, or exchangeable for (in each case, directly or indirectly), common stock (excluding, for the avoidance of doubt, any unexercised warrants or options to purchase common stock). The New Warrants do not entitle the holder or group of holders of the New Warrants to any voting rights, dividends or other rights as a shareholder of the Company prior to exercise of the held New Warrants. If any shares of common stock are listed on a trading market, Hexion Holdings shall use its reasonable best efforts to cause the New Warrants shares issued upon exercise of these New Warrants to also be listed on such trading market, in accordance with the Warrant Agreement. Registration Rights Agreement On the Effective Date, Hexion Holdings entered into a registration rights agreement with certain of its shareholders (the “Registration Rights Agreement”). Under the Registration Rights Agreement, upon delivery of a written notice by one or more shareholders holding, individually or in the aggregate, at least a majority of the outstanding Registrable Securities and New Warrants, voting together (as if such New Warrants had been exercised), Hexion Holdings is required to file a registration statement and effect an initial public offering and listing of its common stock, so long as the total offering size is at least $100 (a “Qualified IPO”). Hexion Holdings is also required to file a registration statement at any time following 180 days after the closing of a Qualified IPO upon the delivery of a written notice by one or more shareholders proposing to sell, individually or in the aggregate, at least $50 of Registrable Securities. In addition, under the Registration Rights Agreement, Hexion Holdings is required to file a shelf registration statement as soon as practicable following the closing of a Qualified IPO to register the resale, on a delayed or continuous basis, of all Registrable Securities that have been timely designated for inclusion by the holders (specified in the Registration Rights Agreement). Any individual holder or holders of our outstanding common stock party thereto can demand up to four “shelf takedowns” in any 12-month period which may be conducted in underwritten offerings so long as the total offering size is at least $50. Furthermore, each shareholder party to the Registration Rights Agreement has unlimited piggyback registration rights with respect to underwritten offerings, subject to certain exceptions and limitations. The foregoing registration rights are subject to certain cutback provisions and customary suspension/blackout provisions. Hexion Holdings has agreed to pay all registration expenses under the Registration Rights Agreement. Generally, “Registrable Securities” under the Registration Rights Agreement includes New Common Equity issued under the Plan, except that “Registrable Securities” does not include securities that have been sold under an effective registration statement or Rule 144 under the Securities Act. |
Fresh Start Accounting (Notes)
Fresh Start Accounting (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Fresh-Start Accounting | Fresh Start Accounting Upon Emergence, the Company applied fresh start accounting, in accordance with ASC 852, to its financial statements because (i) the holders of existing voting shares of the Predecessor Company prior to its emergence received less than 50% of the voting shares of the Successor Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the plan of reorganization was less than the post-petition liabilities and allowed claims. Fresh start accounting was applied to the Company’s consolidated financial statements upon Emergence. Under the principles of fresh start accounting, a new reporting entity was created, and, as a result, the Company allocated the reorganization value of the Company to its individual assets based on their estimated fair values in conformity with ASC 805, “Business Combinations”. Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets was reported as goodwill. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after the Effective Date are not comparable with the consolidated financial statements as of or prior to that date. Reorganization Value As set forth in the Plan of Reorganization and the Disclosure Statement filed with the Bankruptcy Court, the enterprise value of the Successor Company was estimated to be between $2,900 and $3,300 as of the Effective Date. Based on the estimates and assumptions discussed below, the Company estimated the enterprise value to be $3,100 for financial reporting purposes, which is the mid-point of the range of enterprise value per the Plan of Reorganization. The Company estimated the enterprise value of the Successor Company utilizing three valuation methods: a comparable public company analysis, a selected precedent transactions analysis, and a discounted cash flow (“DCF”) method. The comparable public company analysis is based on the enterprise values of selected publicly traded diversified chemical companies with operating and financial characteristics comparable to the Company. Under this methodology, certain financial multiples that measure financial performance and value are calculated for each selected company and then applied to imply an estimated enterprise value of the Company. The selected precedent transaction analysis is based on the implied enterprise values of companies and assets involved in publicly disclosed merger and acquisition transactions which the targets had operating and financial characteristics comparable to certain respects of the Company. Under this methodology, a multiple is derived using the enterprise value of each such target, calculated as the consideration paid and the net debt assumed in the merger or acquisition transaction relative to a financial metric, in this case, EBITDA (earnings before interest, income taxes, depreciation and amortization) for the Company, for the last twelve month period which financial results have been publicly announced. Utilizing these multiples a reference range was created to imply an estimated enterprise value range. The DCF analysis is a forward-looking enterprise valuation methodology that estimates fair value by calculating the present value of expected future cash flows to be generated plus a present value of the estimated terminal value. The Company established a five year estimate of future cash flows based on the financial projections and assumptions utilized in the Company’s disclosure statement, which were derived from earnings forecasts and assumptions regarding growth and margin projections. A terminal value was included, and was calculated using the constant growth method based on the projected cash flows of the final year of the forecast period. While the Company considers such estimates and assumptions reasonable, they are inherently subject to significant business, economic and competitive uncertainties, many of which are beyond the Company’s control and, therefore, may not be realized. Changes in these estimates and assumptions may have a significant effect on the determination of the Company’s enterprise value. The assumptions used in the calculations for the DCF analysis included projected revenue, cost and cash flows representing the Company’s best estimates at the time the analysis was prepared. The DCF analysis has various complex considerations and judgments, including the discount rate and all of the other projections, etc. Due to the unobservable inputs to the valuation, the fair value would be considered Level 3 in the fair value hierarchy. The estimated enterprise value is not necessarily indicative of the actual value and the financial results; changes in the economy or the financial markets could result in a different enterprise value. The calculated enterprise value relies on all three of the methodologies listed above collectively. The actual value of the business is subject to certain uncertainties and contingencies that are difficult to predict and will fluctuate with changes in various factors affecting the financial conditions and prospects of such a business. The discount rate for each reporting unit was estimated based on an after-tax weighted average cost of capital (“WACC”) reflecting the rate of return that would be expected by a market participant and ranged between approximately 11% and 19%. The WACC also takes into consideration a company-specific risk premium, reflecting the risk associated with the overall uncertainty of the financial projections used to estimate future cash flows. The fair value of debt obligations represents $97 of debt payable within one year and $1,733 of long-term debt. The fair value of long-term debt was determined based on a market approach utilizing current market yields and was estimated to be approximately 100% of par value. The fair value of pension liabilities of $239 was determined based upon assumptions related to discount rates and expected return on assets, as well as certain other assumptions related to various demographic factors. The following table reconciles the enterprise value (including both continuing and discontinued operations) to the estimated reorganization value as of the Effective Date: Enterprise value $ 3,100 Plus: Total cash 125 Plus: Fair value of non-debt and non-pension liabilities Current liabilities 540 Long-term liabilities 527 Total non-debt and non-pension liabilities 1,067 Reorganization value of Successor assets $ 4,292 The fair value of non-debt and non-pension liabilities represents the total liabilities, less debt payable within one year, long-term debt and pension obligations, of the Successor Company as of the Effective Date. Condensed Consolidated Statement of Financial Position The following balance sheet illustrates the impacts of the implementation of the Plan and the application of fresh start accounting, which results in the opening balance sheet of the Successor Company. The Company has reclassified assets and liabilities of the Held for Sale Business and the results of discontinued operations in the table below. As of July 1, 2019 (in millions, except share data) Predecessor Company Reorganization Adjustments (a) Fresh Start Adjustments (q) Successor Company Assets Current assets: Cash and cash equivalents (including restricted cash of $15) 96 $ 29 (b) $ — $ 125 Accounts receivable (net of allowance for doubtful accounts of $16 and $0, respectively) 421 — 6 (r) 427 Inventories: Finished and in-process goods 221 — 27 (s) 248 Raw materials and supplies 89 — — 89 Current assets held for sale 132 — 2 (aa) 134 Other current assets 56 2 (c) — 58 Total current assets 1,015 31 35 1,081 Investment in unconsolidated entities 20 — (6) (t) 14 Deferred tax assets — 12 (d) (3) (u) 9 Other long-term assets 34 4 (e) (1) (v) 37 Property and equipment: Land 69 — 11 (w) 80 Buildings 228 — (118) (w) 110 Machinery and equipment 1,948 — (837) (w) 1,111 2,245 — (944) 1,301 Less accumulated depreciation (1,559) — 1,566 (w) 7 686 — 622 1,308 Operating lease assets 89 — 33 (x) 122 Goodwill 83 — 81 (y) 164 Other intangible assets, net 17 — 1,138 (z) 1,155 Noncurrent assets held for sale 187 — $ 215 (aa) $ 402 Total assets $ 2,131 $ 47 $ 2,114 $ 4,292 Liabilities and Deficit Current liabilities: Accounts payable $ 247 $ 49 (a) $ — $ 296 Debt payable within one year 438 (343) (f) 2 (ab) 97 Interest payable 7 (5) (g) — 2 Income taxes payable 5 11 (h) — 16 Accrued payroll and incentive compensation 32 — — 32 Current liabilities associated with assets held for sale 69 — 1 (aa) 70 Current portion of operating lease liabilities 19 — 6 (x) 25 Financing fees payable 104 (104) (i) — — Other current liabilities 101 5 (j) — 106 Total current liabilities 1,022 (387) 9 644 Long-term liabilities: Liabilities subject to compromise 3,664 (3,664) (k) — — Long-term debt 90 1,622 (l) 21 (ab) 1,733 Long-term pension and post employment benefit obligations 160 33 (a) 39 (ac) 232 Deferred income taxes 11 1 (m) 148 (ad) 160 Operating lease liabilities 70 — 17 (x) 87 Other long-term liabilities 149 72 (n) (6) (r) 215 Noncurrent liabilities associated with assets held for sale 46 — 20 (aa) 66 Total liabilities 5,212 (2,323) 248 3,137 As of July 1, 2019 (in millions, except share data) Predecessor Company Reorganization Adjustments (a) Fresh Start Adjustments (q) Successor Company Equity (Deficit) Common stock (Successor) — — (o) — — Paid-in capital (Successor) — 1,156 (o) — 1,156 Common stock (Predecessor) 1 (1) (p) — — Paid-in capital (Predecessor) 526 (526) (p) — — Treasury stock (Predecessor), at cost—88,049,059 shares at December 31, 2018 (296) 296 (p) — — Accumulated other comprehensive loss (26) — 26 (ae) — Accumulated deficit (3,285) 1,445 (p) 1,840 (ae) — Total Hexion Inc. equity (deficit) (3,080) 2,370 1,866 1,156 Noncontrolling interest (1) — — (1) Total equity (deficit) (3,081) 2,370 (o) 1,866 1,155 Total liabilities and equity (deficit) $ 2,131 $ 47 $ 2,114 $ 4,292 Reorganization Adjustments (a) The reorganization adjustments column reflects adjustments related to the consummation of the Plan, including the settlement of liabilities subject to compromise and related payments, other distributions of cash, issuance of new shares of common stock and the cancellation of the common equity of the Predecessor Company, as discussed in Note 5. The following is a calculation of the total pre-tax gain on the settlement of the liabilities subject to compromise: Liabilities subject to compromise (“LSTC”) (see (k) below) $ 3,664 Repayment of 1st Lien Notes (1,383) Liabilities reinstated at emergence: Accounts payable (49) Pension and other post employment benefit obligations (33) Other current liabilities (18) Other long-term liabilities (32) Total liabilities reinstated at emergence (132) Fair value of equity issued in exchange for debt: Fair value of equity (1,156) Less: Proceeds from Rights Offering 300 Total fair value of equity issued in exchange for debt (856) Gain on settlement of LSTC $ 1,293 (b) Reflects the net cash received as of the Effective Date from implementation of the Plan: Sources: Proceeds from the Rights Offerings $ 300 Proceeds from the Senior Notes 450 Proceeds from the Senior Secured Term Loan 1,196 Release of utility deposit 1 Total sources 1,947 Uses: Repayment of 1st Lien Notes (1,383) Repayment of DIP Term Loan Facility (350) Repayment of DIP Term Loan interest (5) Debt and Equity Backstop premiums (104) Financing fees (19) Success fees at emergence (31) Other professional fees (26) Total uses (1,918) Net cash received $ 29 (c) Represents $3 of excess professional fees due to the Company offset by $1 for the settlement of certain amounts owed during reorganization. (d) Reflects the adjustment to release the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of reorganization. (e) Reflects the adjustments to capitalize the ABL Facility financing fees incurred upon Emergence. (f) Reflects the adjustments made on the Effective Date to repay $350 in outstanding DIP Term Loans and to incur $7 for the current portion of the new Senior Secured Term Loan (see Note 12). (g) On the Effective Date, the Company repaid $5 of accrued unpaid interest on the DIP Term Loan Facility. (h) Reflects the adjustment to record income taxes payable as a result of reorganization. (i) On the Effective Date, the Company paid $24 of Equity Backstop premiums to the parties participating in the Rights Offering and $80 of Debt Backstop premiums. See Note 5 for more information. (j) Represents $18 of other current liabilities that were reclassified from “Liabilities subject to compromise” and $13 of other current liabilities incurred as a result of emergence offset by $26 of professional fees paid at emergence. (k) Liabilities subject to compromise represent unsecured liabilities incurred prior to the Petition Date. As a result of the Bankruptcy Petitions, actions to enforce or otherwise effect payment of pre-petition liabilities were generally stayed. These liabilities represent the amounts which have been allowed on known claims which were resolved through the Chapter 11 process, and have been approved by the Court as a result of the Confirmation Order. The following table summarizes pre-petition liabilities that are classified as “Liabilities subject to compromise” in the Consolidated Balance Sheets: June 30, 2019 Debt $ 3,420 Interest payable 99 Accounts payable 49 Environmental reserve 43 Pension and other post employment benefit obligations 33 Dividends payable to parent 13 Other 7 Total $ 3,664 (l) Represents the issuance of the new Senior Term Loan due 2026 of $1,208 and the new Senior Secured Notes due 2027 of $450 offset by $12 of debt discounts and $17 of debt issuance costs of which $7 is classified as “Debt due within one year” on the Consolidated Balance Sheets. The term loan and notes were recorded at estimated fair value, which was determined based on a market approach utilizing current yield. (m) Represents deferred tax activity associated with Emergence. (n) Reflects the adjustments made to reclassify $32 of other long-term liabilities from “Liabilities subject to compromise” and to record $40 of tax liability as a result of Emergence. (o) The following table reconciles the enterprise value to the estimated fair value of the Successor equity as of the Emergence Date: Enterprise value $ 3,100 Plus: Total cash 125 Less: Fair value of new debt (1,646) Less: Fair value of remaining debt obligations (184) Less: Pension obligations (239) Fair value of equity 1,156 Plus: Fair value of noncontrolling interest 1 Fair value of Successor paid-in capital $ 1,157 At the Effective Date, 100 shares of Common Stock of Hexion Inc. held by new direct parent Hexion Intermediate were issued and outstanding at a par value of $0.01 per share. (p) Reflects the cumulative impact of the reorganization adjustments discussed above: Continuing Operations Gain on settlement of LSTC $ 1,293 Success and other fees recognized at emergence (39) Net gain on reorganization adjustments (1) 1,254 Tax impact on reorganization adjustments (40) Cancellation of Predecessor common stock 1 Cancellation of Predecessor additional paid-in capital 526 Cancellation of Predecessor treasury stock (296) Net impact to Accumulated Deficit 1,445 (1) The net gain on reorganization adjustments has been included in “Reorganization items, net” in the Consolidated Statements of Operations. Fresh Start Adjustments (q) The Fresh Start Adjustments column reflects adjustments required to record the assets and liabilities of the Company at fair value, including the elimination of the accumulated deficit and accumulated other comprehensive (loss) of the Predecessor Company. (r) Reflects the adjustments made to Predecessor deferred revenue in situations where it has been determined the Successor Company has no remaining legal performance obligation related to the arrangement that give rise to the deferred revenue for the Predecessor Company. (s) Reflects the adjustment made to record finished goods inventory at its estimated fair value, which was determined based on the current acquisition cost, including disposal and holding period costs and a reasonable profit margin less costs to sell. (t) Reflects the adjustments made to record the Predecessor Company’s investments in unconsolidated subsidiaries at fair value utilizing a cost approach method. (u) Reflects the deferred tax asset impact of the fresh start adjustments, resulting primarily from the book adjustment made to foreign property, plant, and equipment and intangibles that increased the future taxable temporary differences recorded. (v) Reflects the adjustments required to record the Predecessor Company’s long-term assets at fair value. (w) Reflects the adjustments made to record property, plant and equipment at its estimated fair value and eliminate Predecessor accumulated depreciation. Depreciable lives were also revised to reflect the remaining estimated useful lives of the related property, plant and equipment, which range from 1 to 39 years. Fair value was determined as follows: • The market, sales comparison or trended cost approach was utilized to estimate fair value for land and buildings. This approach relies upon recent sales, offerings of similar assets or a specific inflationary adjustment to original purchase price to arrive at a probable selling price. • The cost approach was utilized to estimate fair value for machinery and equipment. This approach considers the amount required to construct or purchase a new asset of equal utility at current market prices, with adjustments in value for physical deterioration and functional and economic obsolescence. Physical deterioration is an adjustment made in the cost approach to reflect the real operating age of an asset with regard to wear and tear, decay and deterioration that is not prevented by maintenance. Functional obsolescence is an adjustment made to reflect the loss in value or usefulness of an asset caused by inefficiencies or inadequacies of the asset, as compared to a more efficient or less costly replacement asset with newer technology. Economic obsolescence is an adjustment made to reflect the loss in value or usefulness of an asset due to factors external to the asset, such as the economics of the industry, reduced demand, increased competition or similar factors. Depreciable lives were revised to reflect the remaining estimated useful lives as follows (in years): Buildings 9 to 39 years Machinery and equipment 1 to 20 years (x) Reflects $24 of adjustments made to bring the right-of-use operating leased assets, exclusive of $1 related to the Held of Sale Business, and their associated liabilities to fair value utilizing an average discount rate of approximately 6% and to record favorable leasehold interests of $9, exclusive of $5 related to the Held for Sale Business, which were valued using a rental analysis approach based on (i) fair market rent was determined based on rates for facilities comparable to the Company’s properties, (ii) discount rates ranging from 8.0% to 12.0%, which were based on the after-tax WACC; and (iii) market rental growth rates ranging from 0.0% to 5.0%. (y) Reflects the adjustments made to record the elimination of the Predecessor goodwill balance of $83, exclusive of $25 related to the Held for Sale Business, and to record the Successor goodwill of $164, exclusive of $14 related to the Held for Sale Business, which represents the reorganization value of assets in excess of amounts allocated to identified tangible and intangible assets. (z) Reflects the adjustments made to eliminate the Predecessor Company’s other intangible assets of $17, exclusive of $7 related to the Held for Sale Business, and to record $1,155, exclusive of $64 related to the Held for Sale Business, in estimated fair value of Successor other intangible assets. Fair value was comprised of the following: • Customer related intangible assets of $904, exclusive of $64 related to the Held for Sale Business, were valued using the multi-period excess earnings income approach based on the following significant assumptions; i. Forecasted net sales and profit margins attributable to the current customer base through the applicable economic useful life; ii. Attrition rates ranging from 0.5% to 5.0%; iii. Discount rates ranging from 13.0% to 17.5%, which were based on the after-tax WACC; and iv. Economic lives of 20 to 25 years. • Trademarks of $141 were valued using the relief from royalty income approach based on the following significant assumptions: i. Forecasted net sales attributable to the trademarks through the applicable economic useful life; ii. Royalty rates ranging from 0.2% to 2.0% of expected net sales determined with regard to comparable market transactions and profitability analysis; iii. Discount rates ranging from 11.0% to 16.5%, which were based on the after-tax weighted average cost of capital (“WACC”); and iv. Economic lives ranging from 15 to 20 years. • Technology based intangible assets of $110 were valued used the relief from royalty income approach based on the following significant assumptions: i. Forecasted net sales attributable to the respective technologies through the applicable economic useful life; ii. Royalty rates ranging from 0.5% to 2.25% of expected net sales determined with regard to expected cash flows of respective technologies and the overall importance of respective technologies to product offering iii. Discount rates ranging from 11.0% to 16.5%, which were based on the after-tax WACC; and iv. Economic lives of 15 years. (aa) Reflects the fresh start accounting adjustments related to the Held for Sale business: Discontinued Operations Finished and in-process goods $ 2 Total current assets held for sale 2 Investment in unconsolidated companies 3 Deferred tax assets (1) Other long-term assets 3 Property and equipment, net 158 Operating lease assets (See endnote X) 6 Goodwill (See endnote Y) (11) Other intangible assets (See endnote Z) 57 Total noncurrent assets held for sale 215 Current portion of operating lease liabilities (See endnote X) 1 Current liabilities associated with assets held for sale 1 Long-term pension and post employment benefit obligations 5 Deferred income taxes 15 Noncurrent liabilities associated with assets held for sale 20 (ab) Reflects the adjustments made to bring various sale-leaseback financing arrangements to fair value and to revalue debt obligations. (ac) Reflects the remeasurement of the Predecessor Company’s pension liabilities. The increase in pension liabilities was driven by reductions in discount rates and changes in other actuarial assumptions as of the Effective Date, primarily impacting our unfunded German pension plans. (ad) Represents the deferred tax liability impact of the fresh start adjustments, resulting primarily from the book adjustment made to foreign property, plant, and equipment and intangibles that increased the future taxable temporary differences recorded. (ae) Reflects the cumulative impact of the fresh start accounting adjustments discussed above and the elimination of the Predecessor Company’s accumulated other comprehensive income: Continuing Operations Discontinued Operations Total Hexion Establishment of Successor goodwill $ 164 $ 14 $ 178 Elimination of Predecessor goodwill (83) (25) (108) Establishment of Successor other intangible assets 1,155 64 1,219 Elimination of Predecessor other intangible assets (17) (7) (24) Inventory fair value adjustments 27 2 29 Property, plant and equipment fair value adjustment 622 158 780 Pension liability fair value adjustment (39) (5) (44) Other assets and liabilities fair value adjustment (8) 11 3 Elimination of Predecessor Company accumulated other comprehensive income 51 (77) (26) Net gain on fresh start adjustments (1) 1,872 135 2,007 Tax impact on fresh start adjustments (151) (16) (167) Net impact on accumulated deficit 1,721 119 1,840 (1) The net gain on fresh start adjustments has been included in “Reorganization items, net” in the Consolidated Statements of Operations. |
Reorganization Expense (Notes)
Reorganization Expense (Notes) | 6 Months Ended |
Dec. 31, 2019 | |
Reorganizations [Abstract] | |
Reorganization under Chapter 11 of US Bankruptcy Code Disclosure [Text Block] | Reorganization Items, Net Incremental costs incurred directly as a result of the Bankruptcy Petitions, gains on the settlement of liabilities under the Plan and the net impact of fresh start accounting adjustments are classified as “Reorganization items, net” in the Consolidated Statements of Operations. The following table summarizes reorganization items: January 1, 2019 through July 1, 2019 Continuing Operations Discontinued Operations Net gain on reorganization adjustments (see Note 6) $ (1,254) $ — Net gain on fresh start adjustments (see Note 6) (1,872) (135) Financing fees 104 — Professional fees 39 — DIP ABL Facility fees 13 — Total $ (2,970) $ (135) |
Asset Impairments (Notes)
Asset Impairments (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Asset Impairment Charges | Asset Impairments During the first quarter of 2020, the Company indefinitely idled certain assets within its Adhesives segment. These represented triggering events resulting in impairment evaluations of the fixed assets within both the oilfield and phenolic specialty resins asset groups. As a result, asset impairments totaling $16 were recorded in “Asset impairments” in the Consolidated Statements of Operations during the year ended December 31, 2020. See Note 4 for discussion of the discontinued operations impairment charge recorded in 2020. During the first quarter of 2018, the Company indefinitely idled an oilfield manufacturing facility within its Adhesives segment, and production was shifted to another facility within the oilfield manufacturing group. This represented a triggering event resulting in an impairment evaluation of the fixed and intangible assets within the U.S. oilfield asset group. As a result, an asset impairment of $20 was recorded in the first quarter of 2018 related to the fixed assets at the idled manufacturing facility. In addition, the remaining U.S. oilfield asset group was evaluated for impairment utilizing a discounted cash flow approach, resulting in an additional impairment of $5 that was recorded during the first quarter of 2018 related to an existing customer relationship intangible asset. Overall, the Company incurred $25 of total impairment related to these assets, which is included in “Asset impairments” in the Consolidated Statements of Operations for the year ended December 31, 2018. |
Related Party Transactions (Not
Related Party Transactions (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions Transactions with Apollo As of the Company’s emergence from bankruptcy on July 1, 2019, Apollo is no longer a related party to the Company. The disclosures below are through July 1, 2019 and only reflect the time period when Apollo was a related party. Sales to various Apollo affiliates were $1 and $2 for the Predecessor period January 1, 2019 through July 1, 2019 and for the year ended December 31, 2018. There were no purchases during the Predecessor period January 1, 2019 through July 1, 2019 and for the year ended December 31, 2018. Management Consulting Agreement The Company was party to a Management Consulting Agreement with Apollo (the “Management Consulting Agreement”) pursuant to which the Company received certain structuring and advisory services from Apollo and its affiliates. Apollo was entitled to an annual fee equal to the greater of $3 or 2% of the Company’s Adjusted EBITDA. In conjunction with the Company’s Chapter 11 proceedings and the Support Agreement filed on April 1, 2019, Apollo agreed to waive its annual management fee for 2019. In connection with the Company’s emergence from Chapter 11, the Management Consulting Agreement was terminated pursuant to the Confirmation Order, as of the Effective Date. Transactions with MPM As of May 15, 2019, MPM was no longer under the common control of Apollo and, accordingly, is no longer a related party to the Company. During the year ended December 31, 2018, the Company sold less than $1 of products to MPM. There were no products sold to MPM during the Predecessor period January 1, 2019 through July 1, 2019. During the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, the Company earned less than $1 from MPM as compensation for acting as distributor of products and had purchases of $10 and $32, respectively. Shared Services Agreement The Company previously held a shared services agreement with MPM (the “Shared Services Agreement”). Under this agreement, the Company provided to MPM, and MPM provided 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. On March 14, 2019, MPM terminated the Shared Services Agreement, which triggered a transition period for the parties to work together to facilitate an orderly transition of services. The transition of services was completed on September 1, 2020. During the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, the Company incurred approximately $15 and $28, respectively, of net costs for shared services and MPM incurred approximately $14 and $21 of net costs for shared services. Included in the net costs incurred during the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018 were net billings from Hexion to MPM of $11 and $14, respectively. Other Transactions and Arrangements In March 2020, the Company entered into a $10 short term affiliate loan with its Parent at a 0% interest rate to fund Parent share repurchases. In June 2020, the Company made a $10 non-cash distribution to its Parent treated as a return of capital to settle this affiliate loan. The Company made an additional $3 return of capital distribution to its Parent to fund additional Parent share repurchases in December 2020. This return of capital reduced “Paid-in capital” in the Consolidated Balance Sheet at December 31, 2020. The Company sells products and provides services to, and purchases products from, its other joint ventures which are accounted for under the equity method of accounting. Refer to the below table for a summary of the sales and purchases with the Company and its joint ventures which are recorded under the equity method of accounting: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Sales to joint ventures (1)(2) $ 2 $ 2 $ 2 $ 9 Purchases from joint ventures (2) 1 2 2 6 (1) Sales to joint ventures includes sales to the Russia JV of $1, $1, $1, and $7 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, which are included in the Held for Sale Business. (2) There were no sales to joint ventures or purchases from joint ventures for the Predecessor period July 1, 2019. December 31, 2020 December 31, 2019 Accounts receivable from joint ventures (1) $ <1 $ 1 Accounts payable to joint ventures — <1 (1) Accounts receivable from joint ventures is mostly comprised of receivables from the Russia JV included in the Held for Sale Business. Accounts receivable from the Company’s other joint ventures was less than $1 for both December 31, 2020 and 2019. In addition to the accounts receivable from joint ventures disclosed above, the Company had a loan receivable of $4 and $7 as of December 31, 2020 and 2019, respectively, from the Russia JV. This loan receivable has been included in “Long-term assets held for sale” within the Consolidated Balance Sheets. |
Goodwill and Intangibles (Notes
Goodwill and Intangibles (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Intangible Assets In connection with the Company’s emergence from Chapter 11 and application of fresh start accounting, the excess of reorganization value over the fair value of identified tangible and intangible assets of $178 was recorded as goodwill as of July 1, 2019. The Company’s gross carrying amount and accumulated impairments of goodwill consist of the following as of December 31, 2020 and 2019: 2020 2019 Gross Accumulated Accumulated Net Gross Accumulated Accumulated Net Adhesives (1) $ 127 $ — $ — $ 127 $ 127 $ — $ — $ 127 Coatings and Composites 37 — — 37 37 — — 37 Total $ 164 $ — $ — $ 164 $ 164 $ — $ — $ 164 (1) Excludes $14 of goodwill in the Adhesives segment associated with the Held for Sale Business at both December 31, 2020 and 2019 (See Note 4). The changes in the net carrying amount of goodwill by segment for the years ended December 31, 2020 and 2019 are as follows: Adhesives (3) Coatings and Composites Total Predecessor Goodwill balance at December 31, 2018 $ 43 $ 41 $ 84 Divestitures — — — Foreign currency translation (1) — (1) Goodwill balance at June 30, 2019 42 41 83 Elimination of Predecessor Goodwill (42) (41) (83) Goodwill balance at July 1, 2019 — — — Recording of Successor Goodwill (1) 127 37 164 Successor Goodwill balance at July 2, 2019 $ 127 $ 37 $ 164 Adjustments (2) — — — Goodwill balance at December 31, 2019 $ 127 $ 37 $ 164 Adjustments (2) — — — Goodwill balance at December 31, 2020 $ 127 $ 37 $ 164 (1) Recording of the Successor Company goodwill in accordance with the application of fresh start accounting. Refer to Note 6 for more details. (2) There were no foreign currency adjustments nor impairments related to Successor Company goodwill for the year ended December 31, 2020 and the Successor period July 2, 2019 through December 31, 2019. (3) Excludes $14 at both December 31, 2020 and 2019 and $25 at both June 30, 2019 and December 31, 2018 related in the Held for Sale Business (See Note 4). The Company’s intangible assets with identifiable useful lives consist of the following as of December 31, 2020 and 2019: Gross Accumulated Foreign Exchange Accumulated Net Gross Accumulated Foreign Exchange Accumulated Net 2020 2019 Customer relationships (1) $ 903 $ 5 $ (61) $ 847 $ 903 $ (3) $ (19) $ 881 Trademarks 141 2 (12) 131 141 — (3) 138 Technology 110 2 (11) 101 110 — (4) 106 Total $ 1,154 $ 9 $ (84) $ 1,079 $ 1,154 $ (3) $ (26) $ 1,125 (1) Excludes net book value of $61 and $63 at December 31, 2020 and 2019, respectively, related to the Held of Sale Business (See Note 4). On July 1, 2019, as part of the application of fresh start accounting, the Company’s existing intangible assets were eliminated and new intangible assets were established at their estimated fair value as of July 1, 2019. New intangible assets were established for customer relationships, trademarks, and technology. See Note 6 for more information. Total intangible amortization expense related to continuing operations for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018 was $58, $26, $3 and $9, respectively. Estimated annual intangible amortization expense for 2021 through 2025 is as follows: 2021 $ 58 2022 58 2023 58 2024 58 2025 58 |
Fair Value (Notes)
Fair Value (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [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 December 31, 2020, the Company had derivative liabilities related to foreign exchange, electricity and natural gas contracts of $1, which were measured using Level 2 inputs, and consist 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 year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018. 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 December 31, 2020 and 2019, no adjustment was made by the Company to reduce its derivative liabilities 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. Interest Rate Swap The Company will from time to time use interest rate swaps to alter interest rate exposures between floating and fixed rates on certain long-term debt. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated using an agreed-upon notional principal amount. The counter-parties to the interest rate swap agreements are financial institutions with investment grade ratings. On October 10, 2019, the Company executed an interest rate swap syndication agreement with Credit Suisse International where Hexion receives a variable 3-month LIBOR, and pays fixed interest rate swaps, beginning January 1, 2020 through January 1, 2025 (the “Hedge”) for a total notional amount of $300. The purpose of this arrangement is to hedge the variability caused by quarterly changes in cash flow due to associated changes in LIBOR for $300 of the Company’s variable rate Senior Secured Term Loan denominated in USD ($701 at December 31, 2020.) The Company has evaluated this transaction and designated this derivative instrument as a cash flow hedge for hedge accounting under Accounting Standard Codification, No. 815, “Derivatives and hedging,” (“ASC 815”). For the Hedge, the Company recorded changes in the fair value of the derivative in other comprehensive income (“OCI”) and will subsequently reclassify gains and losses from these changes in fair value from OCI to the Consolidated Statement of Operations in the same period that the hedged transaction affects net (loss) income and in the same Consolidated Statement of Operations category as the hedged item, “Interest expense, net”. The following tables summarize the Company’s derivative financial instrument designated as a hedging instrument: December 31, 2020 December 31, 2019 Balance Sheet Location Notional Amount Fair Value Liability Notional Amount Fair Value Asset Derivatives designated as hedging instruments Interest Rate Swap Other current (liabilities)/assets $ 300 $ (15) $ 300 $ 3 Total derivatives designated as hedging instruments $ (15) $ 3 Amount of (Loss) Gain Recognized in OCI on Derivatives, net of tax Successor Predecessor Derivatives designated as hedging instruments Year ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Interest Rate Swaps Interest Rate Swap $ (18) $ 2 $ — Total $ (18) $ 2 $ — During the year ended December 31, 2020, the Company reclassified a loss of $2 from OCI to “Interest expense, net” on the Consolidated Statement of Operations related to the settlement of a portion of the Hedge. 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 December 31, 2020 Debt $ 1,792 $ — $ 1,767 $ 55 $ 1,822 December 31, 2019 Debt $ 1,785 $ — $ 1,751 $ 64 $ 1,815 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 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 (Notes)
Debt Obligations (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Debt and Lease Obligation [Abstract] | |
Debt Disclosure [Text Block] | Debt Obligations Debt outstanding at December 31, 2020 and 2019 is as follows: December 31, 2020 December 31, 2019 Long-Term Due Within One Year Long-Term Due Within One Year Senior Secured Credit Facility: ABL Facility $ — $ — $ — $ — Senior Secured Term Loan - USD due 2026 (includes $6 and $7 of unamortized debt discount at December 31, 2020 and 2019, respectively) 701 7 708 7 Senior Secured Term Loan - EUR due 2026 (includes $4 of unamortized debt discount at December 31, 2020 and 2019) 515 — 473 — Senior Notes: 7.875% Senior Notes due 2027 450 — 450 — Other Borrowings: Australia Facility due 2021 at 4.0% and 3.9% at December 31, 2020 and 2019, respectively — 30 27 4 Brazilian bank loans at 10.2% and 9.2% at December 31, 2020 and 2019, respectively 2 22 7 34 Lease obligations (1) 42 14 50 14 Other at 3.9% and 5.0% at December 31, 2020 and 2019, respectively — 9 — 11 Total (2) $ 1,710 $ 82 $ 1,715 $ 70 (1) Lease obligations include finance leases and sale leaseback financing arrangements. (2) The foreign exchange translation impact of the Company’s foreign currency denominated debt instruments was an increase of $46 and a decrease of $10 as of December 31, 2020 and 2019, respectively. In consummation of the Plan, on July 1, 2019, the 1L Note holders received their pro rata share of (a) cash in the amount of $1.450 billion (less the sum of adequate protection payments paid on account of the 1L Notes during the Chapter 11 cases), (b) 72.5% of new common equity of Hexion Holdings (“New Common Equity”) (subject to the Agreed Dilution), and (c) 72.5% of the rights to purchase additional New Common Equity pursuant to the Rights Offering. Additionally, the owners of the 1.5L Notes, 2L Notes, and Unsecured Notes received their pro rata share of (a) 27.5% of the New Common Equity (subject to the Agreed Dilution) and (b) 27.5% of the rights to purchase additional New Common Equity pursuant to the Rights Offering. See Note 5 for more information. In connection with the filing of the Bankruptcy Petitions, on April 3, 2019, as described in Note 5 the proceeds of the DIP Term Loan Facility were used in part to repay in full the outstanding obligations under the Company’s existing asset-based revolving credit agreement ABL Facility. Credit Facilities and Senior Notes ABL Facility On July 1, 2019, in connection with the Emergence, the Company, Hexion Canada Inc., a Canadian corporation (the “Canadian ABL Borrower”), Hexion B.V., a company organized under the laws of The Netherlands (the “Dutch ABL Borrower”), Hexion GmbH, a company organized under the laws of Germany (the “German ABL Borrower”), Hexion UK Limited, a corporation organized under the laws of England and Wales ( the “U.K. ABL Borrower” and, together with the Company, the Canadian ABL Borrower, the Dutch ABL Borrower and the German ABL Borrower, the “ABL Borrowers”) entered into a senior secured ABL Facility with the lenders and other parties thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, in an aggregate principal amount of $350, under which the ABL Borrowers may borrow funds from time to time and up to $150 amount of which is available through a subfacility in the form of letters of credit, in each case subject to a borrowing base, as further described below. In addition, the Company may request one or more incremental facilities in an aggregate amount equal to the greater of (i) $100 and (ii) the excess of the borrowing base over $350. The ABL Facility will mature and the commitments thereunder will terminate on July 1, 2024 and bears interest based on an adjusted LIBOR rate, EURIBOR or an alternate base rate (depending on the currency of the borrowing), in each case plus an applicable initial margin of 1.50% or, in the case of the alternate base rate, 0.50%, which margin may increase or decrease depending on the average availability under the ABL Facility. The borrowing base is, at any time of determination, an amount (net of reserves) equal to the sum of: • in the case of the borrowing base for the Company’s U.S., U.K., Dutch and Canadian subsidiaries, 85% of the amount of eligible receivables (or 90% of the amount of “investment grade” eligible receivables) (including trade receivables), plus • in the case of the borrowing base for the Company’s U.S., U.K., Dutch and Canadian subsidiaries, the lesser of (i) 70% of the amount of eligible inventory and (ii) 85% of the net orderly liquidation value of eligible inventory, plus • in the case of the borrowing base for the Company’s U.K., Dutch, Canadian and German subsidiaries, the lesser of (i) the sum of (a) 80% of the amount of eligible machinery and equipment appraised on a net orderly liquidation basis and (b) 75% of the appraised fair market value of eligible real property of the loan parties in Canada, England and Wales, the Netherlands and Germany and (ii) the lesser of (x) 20% of the total commitments and (y) 20% of the borrowing base of the borrowers without giving effect to the additional borrowing base from the eligible machinery and equipment and eligible real property, plus • in the case of the borrowing base for the Company’s U.S. and Canadian subsidiaries, 100% of unrestricted cash, in each case held in an account subject to the springing control of the agent; provided, that the cash component of the borrowing base shall not constitute more than the lesser of (x) 15.0% of the total commitments and (y) 15.0% of the borrowing base of the borrowers (calculated prior to giving effect to such limitation). The borrowing base of the U.K., Dutch and German subsidiaries may not exceed the greater of 50% of the total commitments and 50% of the borrowing base of the ABL Borrowers. On the closing date of the ABL Facility, as adjusted for the consummation of the Plan and related transactions, the borrowing base reflecting various required reserves was determined to be approximately $350. In addition to paying interest on outstanding principal under the ABL Facility, the Company is required to pay a commitment fee to the lenders in respect of the unutilized commitments thereunder at a rate equal to 0.50% or 0.375% per annum depending on the average utilization of the commitments. The Company also pays a customary letter of credit fee, including a fronting fee of 0.125% per annum of the daily average stated amount of each outstanding letter of credit, and customary agency fees. Outstanding loans under the ABL Facility may be voluntarily repaid at any time without premium or penalty, other than customary “breakage” costs with respect to eurocurrency loans. The obligations of the Company under the ABL Facility are unconditionally guaranteed by the Company’s direct parent, Hexion Intermediate, and each of the Company’s existing and future wholly-owned material U.S. subsidiaries, which the Company refers to as the “U.S. ABL Guarantors.” In addition, all obligations of the foreign subsidiary borrowers under the ABL Facility are guaranteed by the U.S. ABL Guarantors and certain other direct and indirect wholly-owned foreign subsidiaries, which the Company refers to collectively as the “Foreign ABL Guarantors” and, together with the U.S. ABL Guarantors, the “ABL Guarantors.” In addition, the ABL Facility requires the Company to maintain a minimum fixed charge coverage ratio at any time when the excess availability is less than the greater of (x) $30 and (y) 10.0% of the lesser of (i) the borrowing base at such time and (ii) the aggregate amount of ABL Facility commitments at such time. In that event, the Company must satisfy a minimum fixed charge coverage ratio of 1.0 to 1.0. The Company was in compliance with all ABL Facility provisions as of December 31, 2020 and 2019 . New Senior Secured Term Loan Facility Additionally, in connection with the completion of the Plan, on July 1, 2019, the Company and Hexion International Cooperatief U.A., a company organized under the laws of the Netherlands (the “Dutch Term Loan Borrower” and, together with the Company, the “Term Loan Borrowers”), entered into a senior secured term loan facility with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (the “Term Loan Facility”), which consists of (i) a USD denominated tranche in an aggregate principal amount of $725 (“Senior Secured Term Loan - USD”) borrowed by the Company and (ii) a EUR denominated tranche in an aggregate principal amount of €425 (“Senior Secured Term Loan - EUR”) borrowed by the Dutch Term Loan Borrower (the Senior Secured Term Loans together with the ABL Facility represent the “Credit Facilities”). In addition, the Company may request one or more incremental facilities in an aggregate amount up to the sum of $425 and amounts that may be incurred pursuant to certain leverage and coverage ratios. The Term Loan Facility will mature on July 1, 2026 and bears interest based on (i) in the case of the USD tranche, at the Company’s option, an adjusted LIBOR rate or an alternate base rate, in each case plus an applicable margin equal to 3.50% or, in the case of the alternate base rate, 2.50% and (ii) in the case of the EUR tranche, EURIBOR plus an applicable margin equal to 4.00%. As of December 31, 2020, the effective interest for the Company’s Term Loan Facility on the USD tranche and EUR tranche was 3.73% and 4.00%, respectively, and the effective interest rate as of December 31, 2019 for the Company’s Term Loan Facility on USD tranche and EUR tranche was 5.82% and 4.00%, respectively. The obligations of the Company under the Term Loan Facility are unconditionally guaranteed by Hexion Intermediate and each of the Company’s existing and future wholly owned material U.S. subsidiaries, which subsidiaries the Company refers to collectively as “U.S. Term Guarantors”. In addition, all obligations of the Dutch Term Loan Borrower under the Term Loan Facility are guaranteed by Hexion Intermediate, the Company, the U.S. Term Guarantors and certain other direct and indirect wholly-owned foreign subsidiaries, which foreign subsidiaries the Company collectively refers to as the “Foreign Term Guarantors” (together with the U.S. Term Guarantors, the “Subsidiary Term Guarantors” and, together with Hexion Intermediate, the “Term Guarantors”). The Credit Facilities contain among other provisions, restrictive covenants regarding indebtedness, payments and distributions, mergers and acquisitions, asset sales, affiliate transactions, capital expenditures and the maintenance of certain financial ratios. Events of default include the failure to pay principal and interest when due, a material breach of representation or warranty, covenant defaults, events of bankruptcy and a change of control. The Credit Facilities also contain certain other customary affirmative covenants and events of default. If the Company fails to perform its obligations under these and other covenants, the Credit Facilities could be terminated and any outstanding borrowings, together with accrued interest, under the Credit Facilities could be declared immediately due and payable. There were no covenant violations or events of default as of December 31, 2020 or 2019. Indenture and 7.875% Senior Notes due 2027 The Company entered into an indenture, dated as of July 1, 2019 (the “Indenture”), among the Company, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee, and issued $450 aggregate principal amount of 7.875% Senior Notes due 2027 (the “Senior Notes”) thereunder. The Senior Notes are guaranteed on a senior basis by the Company’s existing domestic subsidiaries that guarantee its obligations under its Credit Facilities (as defined below) (the “Guarantors”) on a full and unconditional basis. The following is a brief description of the material provisions of the Indenture and the Senior Notes. The Senior Notes will mature on July 15, 2027. Interest on the Senior Notes will accrue at the rate of 7.875% per annum and will be payable semiannually in arrears on January 15 and July 15, commencing on January 15, 2020. Optional Redemption. At any time prior to July 15, 2022, the Company may redeem the Senior Notes, in whole or in part, at a price equal to 100% of the principal amount of the Senior Notes redeemed, plus an applicable “make-whole” premium and accrued and unpaid interest, if any, to the redemption date. In addition, at any time prior to July 15, 2022, the Company may redeem up to 40% of the aggregate principal amount of the Senior Notes at a redemption price of 107.875% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of certain equity offerings; provided that at least 50% of the aggregate principal amount of the Senior Notes originally issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its subsidiaries); and provided, further, that such redemption occurs within 90 days of the date of the closing of such equity offering. On and after July 15, 2022, the Company may redeem all or a part of the Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15 of the years indicated below: Year Percentage 2022 103.94 % 2023 101.97 % 2024 and thereafter 100.00 % Change of Control. If a change of control (as defined in the Indenture) occurs, holders of the Senior Notes will have the right to require the Company to repurchase all or any part of their Senior Notes at a purchase price equal to 101% of the aggregate principal amount of the Senior Notes repurchased, plus accrued and unpaid interest, if any, to the repurchase date. Certain Covenants. The Indenture governing the Senior Notes contains, among other provisions, restrictive covenants regarding indebtedness, payments and distributions, mergers and acquisitions, asset sales, affiliate transactions, capital expenditures and the maintenance of certain financial ratios. At such time as (1) the Senior Notes have an investment grade rating from both of Moody’s Investors Service, Inc. and Standard and Poor’s Ratings Services and (2) no default has occurred and is continuing under the Indenture, certain of these and other covenants will be suspended and cease to be in effect. Events of Default. The Indenture also provides for certain customary events of default, including, among others, nonpayment of principal or interest, failure to pay final judgments in excess of a specified threshold, failure of a guarantee to remain in effect, bankruptcy and insolvency events, and cross acceleration, which would permit the principal, premium, if any, interest and other monetary obligations on all the then outstanding Senior Notes to be declared due and payable immediately. Intercreditor Agreement On July 1, 2019, in connection with the Emergence, JPMorgan Chase Bank, N.A., as collateral agent under each of the Credit Facilities, and the Company and certain of its subsidiaries entered into an ABL Intercreditor Agreement that, among other things, sets forth the relative lien priorities of the secured parties under the Credit Facilities on the collateral shared by the ABL Facility and the Term Loan Facility. Other Borrowings The Company’s Australian Term Loan Facility has a variable interest rate equal to the 90 day Australian or New Zealand Bank Bill Rates plus an applicable margin. The agreement also provides access to a $7 revolving credit facility of which there were no outstanding borrowings at December 31, 2020 and $1 at December 31, 2019. In February 2021, the Company extended its Australian Term Loan Facility through February 2026. The Brazilian bank loans represent various bank loans, primarily for working capital purposes and to finance the construction of manufacturing facilities. The Company’s other debt obligations represent various international credit facilities in China and Korea to fund working capital needs and capital expenditures. While these facilities are primarily unsecured, portions of the lines are collateralized by equipment and cash and short term investments at December 31, 2020. The Company’s lease obligations classified as debt on the Consolidated Balance Sheets include finance leases and sale leaseback financing arrangements, which range from one to fifteen year terms for equipment, pipeline, land and buildings. Scheduled Maturities Aggregate maturities of debt, excluding amortization of debt discounts, at December 31, 2020 for the Company are as follows: Year Debt 2021 $ 84 2022 35 2023 17 2024 9 2025 9 2026 and thereafter 1,651 Total minimum payments 1,805 Less: Amount representing interest (3) Present value of minimum payments $ 1,802 |
Leases (Notes)
Leases (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | Leases The Company leases certain buildings, warehouses, rail cars, land and operating equipment under both operating and finance leases expiring on various dates through 2044. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company combines lease and non-lease components. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right of use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Nearly all of the Company’s lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company estimates the incremental borrowing rate to discount the lease payments based on information available at lease commencement. The tables and discussion below represent the Company’s continuing operations and exclude the Held for Sale Business. Lease Costs The table below summarizes the lease costs for the year ended December 31, 2020 and the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019 : Classification Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Operating lease expense Operating (loss) income $ 29 $ 18 $ 16 Short-term lease expense Operating (loss) income 5 2 5 Amortization expense Operating (loss) income 2 1 1 Interest expense from financing leases Interest expense, net <1 <1 <1 Variable lease expense Operating (loss) income 3 3 2 Balance Sheet Classification The table below presents the lease-related assets and liabilities recorded on the Consolidated Balance Sheets: Successor Classification December 31, 2020 December 31, 2019 Assets: Operating (1) Operating lease assets $ 103 $ 110 Finance (2) Machinery and Equipment 13 10 Total leased assets $ 116 $ 120 Liabilities: Current Operating Current portion of operating lease liabilities $ 19 $ 20 Finance Debt payable within one year 2 4 Noncurrent Operating Operating lease liabilities 76 82 Finance Long-term debt 6 3 Total leased liabilities $ 103 $ 109 (1) Operating lease assets include $8 and $9 of favorable leasehold interests as of December 31, 2020 and 2019, respectively. (2) Finance lease assets are recorded net of accumulated amortization of $3 and $1 as of December 31, 2020 and 2019, respectively. Other Lease Information Cash paid for operating leases approximated operating lease expense and non-cash right-of-use asset amortization for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019. The table below presents other cash and noncash consideration detail for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019 : Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Cash paid for finance leases $ 4 $ 2 $ 2 Right-of-use assets obtained in exchange for operating lease 13 2 1 Right-of-use assets obtained in exchange for finance lease obligations 5 — 3 The tables below present supplemental information related to leases as of December 31, 2020 and 2019: Successor December 31, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 10.0 10.7 Finance leases 4.8 1.7 Weighted-average discount rate Operating leases 5.24 % 5.74 % Finance leases 7.73 % 10.00 % The table below reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the Company’s Consolidated Balance Sheet as of December 31, 2020: Year Minimum Rentals Under Operating Leases Minimum Payments Under Finance Leases (1) 2021 $ 23 $ 2 2022 16 1 2023 11 1 2024 9 1 2025 9 1 2026 and thereafter 58 3 Total lease payments $ 126 $ 9 Less: Amount representing interest (31) (1) Present value of lease liabilities $ 95 $ 8 |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies [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. The following table summarizes all probable environmental remediation, indemnification and restoration liabilities, including related legal expenses, at December 31, 2020 and 2019: Liability Range of Reasonably Possible Costs as of December 31, 2020 Successor Site Description December 31, 2020 (1) December 31, 2019 (1) Low High Geismar, LA $ 12 $ 12 $ 9 $ 22 Superfund and offsite landfills – allocated share: Less than 1% 3 3 2 6 Equal to or greater than 1% 6 6 5 14 Currently-owned 8 8 4 14 Formerly-owned: Remediation 18 21 14 36 Monitoring only — 1 — 1 Total $ 47 $ 51 $ 34 $ 93 (1) The table includes approximately $2 of environmental remediation liabilities related to the Held for Sale Business at both December 31, 2020 and 2019. These associated liabilities have been included in “Long-term liabilities associated with assets held for sale” within the Consolidated Balance Sheets. 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 December 31, 2020 and 2019, $14 and $18, respectively, has been included in “Other current liabilities” in the 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 December 31, 2020 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 of 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 20 years. The range of possible outcomes is discounted in a similar manner. The undiscounted liability, which is expected to be paid over the next 20 years, is approximately $16. Over the next five years, the Company expects to make ratable payments totaling $5. 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 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 signed a settlement agreement in 2016 with the current site owner and a past site owner, pursuant to which the Company paid $10 for past remediation costs and 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 $8. The final costs to the Company will depend on natural variations in remediation costs, including unforeseen circumstances, agency requests, new contaminants of concern and the ongoing financial viability of the other PRPs. 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 $1 at both December 31, 2020 and 2019, respectively, for all non-environmental legal defense costs incurred and settlement costs that it believes are probable and estimable. At December 31, 2020 and 2019, $2 and $1 has been included in “Other current liabilities” in the Consolidated Balance Sheets with the remaining amount included in “Other long-term liabilities.” Other Legal Matters —The Company is involved in various other product liability, commercial and employment litigation, personal injury, property damage and other legal proceedings in addition to those described above, 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. Other Commitments and Contingencies The Company has entered into contractual agreements with third parties for the supply of site services, utilities, materials and facilities and for operation and maintenance services necessary to operate certain of the Company’s facilities on a stand-alone basis. The duration of the contracts range from less than one year to 20 years, depending on the nature of services. These contracts may be terminated by either party under certain conditions as provided for in the respective agreements; generally, 90 days notice is required for short-term contracts and three years notice is required for longer-term contracts (generally those contracts in excess of five years). Contractual pricing generally includes a fixed and variable component. In addition, the Company has entered into contractual agreements with third parties to purchase feedstocks or other services. The terms of these agreements vary from one to fifteen years and may be extended at the Company’s request and are cancelable by either party as provided for in each agreement. Feedstock prices are based on market prices less negotiated volume discounts or cost input formulas. The Company is required to make minimum annual payments under these contracts as follows: Year Minimum Annual Purchase Commitments 2021 $ 190 2022 134 2023 94 2024 50 2025 49 2026 and beyond 253 Total minimum payments 770 Less: Amount representing interest (31) Present value of minimum payments $ 739 |
Pension and Postretirement Expe
Pension and Postretirement Expense (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Pension and Postretirement Expense [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Pension and Non-Pension Postretirement Benefit Plans The Company sponsors defined benefit pension plans covering certain U.S. associates and certain non-U.S. associates primarily in Netherlands, Germany, Canada and Belgium. Benefits under these plans are generally based on eligible compensation and / or years of credited service. Retirement benefits in other foreign locations are primarily structured as defined contribution plans. During 2009, the Company implemented a change in its U.S. retirement benefits to shift to a defined contribution platform. Benefits under the defined benefit U.S. pension plan were frozen and the Company added an annual Company contribution to the U.S. defined contribution plan for eligible participants. Effective March 1, 2018, the Canadian pension plan was frozen to new entrants. Certain active participants in the Company’s German defined benefit pension plan relate to the Held for Sale Business. These employees will transfer with the Held for Sale business at closing and therefore, the pension liability and expense associated with these employees is included within discontinued operations. As the Company’s German defined benefit pension plan is unfunded, there is no impact on the Company’s Pension Plan assets. See below table for a summary of the pension liability and expense amounts included in discontinued operations. Pension Benefits Successor December 31, 2020 December 31, 2019 Discontinued Operations U.S. Non-U.S. U.S. Non-U.S. Benefit obligation $ — $ 36 $ — $ 29 Pension Benefits Successor Predecessor Year ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year ended December 31, 2018 Discontinued Operations U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Net expense $ — $ 5 $ — $ < 1 $ — $ 6 $ — $ 1 The Company also provides non-pension postretirement benefit plans to certain U.S. associates, to Canadian associates, to Brazilian associates and to certain associates in the Netherlands. The U.S. benefit primarily consists of a life insurance benefit for a grandfathered group of retirees, for which premiums are paid by the Company. Effective December 31, 2018, this life insurance benefit was transferred to a third party financial institution, which moved the liability from the Company to the third party. The Canadian plans provide retirees and their dependents with medical and life insurance benefits, which are supplemental benefits to the respective provincial healthcare plan in Canada. The Brazilian plan became effective in 2012 as a result of a change in certain regulations, and provides retirees that contributed towards coverage while actively employed with access to medical benefits, with the retiree being responsible for 100% of the premiums. In 2014, the plan was amended such that 100% of the premiums of active employees are paid by the Company. The Netherlands’ plan provides a lump sum payment at retirement for grandfathered associates. The following table presents the change in benefit obligation, change in plan assets and components of funded status for the Company’s defined benefit pension and non-pension postretirement benefit plans for the year ended December 31, 2020, the Successor period from July 2, 2019 through December 31, 2019, and the Predecessor period January 1, 2019 through July 1, 2019: Pension Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Change in Benefit Obligation Benefit obligation at beginning of period $ 225 $ 688 $ 228 $ 678 $ 216 $ 583 Service cost 2 18 2 8 2 7 Interest cost 6 6 3 4 4 4 Actuarial losses 17 43 3 12 14 93 Foreign currency exchange rate changes — 61 — (8) — (3) Benefits paid (15) (13) (8) (6) (8) (6) Expenses paid from assets (3) — (3) — — — Employee contributions — 1 — — — — Benefit obligation at end of period $ 232 $ 804 $ 225 $ 688 $ 228 $ 678 Benefit obligation at end of period - discontinued operations — 36 — 29 — 29 Benefit obligation at end of period - continuing operations $ 232 $ 768 $ 225 $ 659 $ 228 $ 649 Change in Plan Assets Fair value of plan assets at beginning of period $ 197 $ 483 $ 196 $ 470 $ 185 $ 404 Actual return on plan assets 18 58 10 9 19 60 Foreign currency exchange rate changes — 45 — (5) — (2) Employer contributions — 40 2 15 — 14 Benefits paid (15) (13) (8) (6) (8) (6) Expenses paid from assets (3) — (3) — — — Employee contributions — 1 — — — — Fair value of plan assets at end of period 197 614 197 483 196 470 Funded status of the plan at end of period $ (35) $ (190) $ (28) $ (205) $ (32) $ (208) Funded status of the plan at end of period - discontinued operations — (36) — (29) — (29) Funded status of the plan at the end of period - continuing operations $ (35) $ (154) $ (28) $ (176) $ (32) $ (179) Non-Pension Postretirement Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Change in Benefit Obligation Benefit obligation at beginning of period $ — $ 13 $ — $ 17 $ — $ 13 Interest cost — 1 — — — — Actuarial (gains) losses — (1) — (4) — 4 Foreign currency exchange rate changes — (1) — — — — Plan settlements — — — — — — Benefit obligation at end of period $ — $ 12 $ — $ 13 $ — $ 17 Change in Plan Assets Fair value of plan assets at beginning of period $ — $ — $ — $ — $ — $ — Employer contributions — — — — — — Plan settlements — — — — — — Fair value of plan assets at end of period — — — — — — Funded status of the plan at end of period $ — $ (12) $ — $ (13) $ — $ (17) Pension Benefits Non-Pension Postretirement Benefits December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Amounts recognized in the Consolidated Balance Sheets consists of: Noncurrent assets $ — $ 52 $ — $ 8 $ — $ — $ — $ — Other current liabilities — (6) — (5) — (1) — (1) Long-term pension and post employment benefit obligations (35) (236) (28) (208) — (11) — (12) Accumulated other comprehensive loss — — — — — — — — Net amounts recognized $ (35) $ (190) $ (28) $ (205) $ — $ (12) $ — $ (13) Net amounts recognized - discontinued operations — (36) — (29) — — — — Net amounts recognized - continued operations $ (35) $ (154) $ (28) $ (176) $ — $ (12) $ — $ (13) Accumulated benefit obligation $ 232 $ 757 $ 225 $ 648 Accumulated benefit obligation for funded plans 232 525 225 446 Pension plans with underfunded or non-funded accumulated benefit obligations: Aggregate projected benefit obligation (1) $ 232 $ 258 $ 225 $ 224 Aggregate accumulated benefit obligation 232 250 225 216 Aggregate fair value of plan assets 197 16 197 13 Pension plans with projected benefit obligations in excess of plan assets: Aggregate projected benefit obligation $ 232 $ 285 $ 225 $ 287 Aggregate fair value of plan assets 197 42 197 74 (1) Aggregate projected benefit obligation related to the Company’s Held for Sale Business was $36 at December 31, 2020 and is included in the table above with the Company’s continuing operations. The foreign currency impact reflected in these rollforward tables are primarily for changes in the euro versus the U.S. dollar. The Pension Protection Act of 2006 (the “2006 PPA”) provides for minimum funding levels on U.S. plans, and plans not meeting the minimum funding requirement may be subject to certain restrictions. Following are the components of net pension and postretirement expense (benefit) recognized for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Pension Benefits U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Service cost $ 2 $ 2 $ 2 $ 3 Interest cost on projected benefit obligation 6 3 4 7 Expected return on assets (12) (7) (6) (14) Unrealized actuarial loss (1) 11 — 1 11 Net expense (benefit) $ 7 $ (2) $ 1 $ 7 Non-U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Service cost $ 18 $ 8 $ 7 $ 17 Interest cost on projected benefit obligation 6 4 4 10 Expected return on assets (13) (6) (6) (13) Unrealized actuarial (gain) loss (1) (2) 9 39 (26) Net expense (benefit) (2) $ 9 $ 15 $ 44 $ (12) Non-Pension Postretirement Benefits U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Interest cost on projected benefit obligation $ — $ — $ — $ — Unrealized actuarial loss (1) — — — — Net (benefit) expense $ — $ — $ — $ — Non-U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Interest cost on projected benefit obligation $ 1 $ — $ — $ 1 Unrealized actuarial(gain) loss (1) (1) (4) 4 2 Net (benefit) expense $ — $ (4) $ 4 $ 3 (1) Upon the application of fresh start accounting, the Company’s pension and other non-pension postretirement liabilities were remeasured as of the Predecessor period July 1, 2019. As a result, for the Predecessor period January 1, 2019 through July 1, 2019, total unrealized actuarial losses of $44 were recorded to “Reorganization, net” in the Consolidated Statements of Operations, $5 of which relate to the Company’s Held for Sale business. (2) Net expense (benefit) related to the Company’s Held for Sale Business was $5, $<1, $6 and $1 for the year ended December 31, 2020, the Successor period from July 2, 2019 to December 31, 2019, the Predecessor period from January 1, 2019 through July 1, 2020 and the year ended December 31, 2018, respectively, and is included in the table above. Determination of actuarial assumptions The Company’s actuarial assumptions are determined based on the demographics of the population, target asset allocations for funded plans, regional economic trends, statutory requirements and other factors that could impact the benefit obligation and plan assets. For our European plans, most assumptions are set by country, as the plans within these countries have similar demographics, and are impacted by the same regional economic trends and statutory requirements. The discount rates selected reflect the rate at which pension obligations could be effectively settled. The Company selects the discount rates based on cash flow models using the yields of high-grade corporate bonds or the local equivalent with maturities consistent with the Company’s anticipated cash flow projections. The Company’s pension and OPEB liabilities and related service and interest cost are calculated using a split-rate interest discounting methodology, whereby expected future cash flows related to these liabilities are discounted using multiple interest rates on a forward curve that correspond to the timing of the expected cash flows. The expected rates of future compensation level increases are based on salary and wage trends in the chemical and other similar industries, as well as the Company’s specific long-term compensation targets by country. Input is obtained from the Company’s internal Human Resources group and from outside actuaries. These rates include components for wage rate inflation and merit increases. The expected long-term rates of return on plan assets are determined based on the plans’ current and projected asset mix. To determine the expected overall long-term rate of return on assets, the Company takes into account the rates on long-term debt investments held within the portfolio, as well as expected trends in the equity markets, for plans including equity securities. Peer data and historical returns are reviewed and the Company consults with its actuaries, as well as the Plan’s investment advisors, to confirm that the Company’s assumptions are reasonable. The weighted average rates used to determine the benefit obligations were as follows for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, and the Predecessor period January 1, 2019 through July 1, 2019: Pension Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Discount rate 2.2 % 0.8 % 3.1 % 1.2 % 3.3 % 1.3 % Rate of increase in future compensation levels — 3.6 % — 3.4 % — 3.4 % Non-Pension Postretirement Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. Plans U.S. Non-U.S. Plans U.S. Plans Non-U.S. Plans Discount rate — % 4.6 % — % 5.2 % — % 6.9 % Rate of increase in future compensation levels — — — — — — The weighted average assumed health care cost trend rates are as follows: Health care cost trend rate assumed for next year — % 6.8 % — % 5.7 % — % 6.2 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) — % 4.5 % — % 4.0 % — % 4.0 % Year that the rate reaches the ultimate trend rate — 2040 — 2040 — 2040 The weighted average rates used to determine net periodic pension expense (benefit) were as follows for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Pension Benefits U.S. Plans Non-U.S. Plans Successor Predecessor Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Discount rate 3.1 % 3.3 % 4.1 % 3.5 % 1.2 % 1.3 % 1.9 % 1.9 % Rate of increase in future compensation levels — — — — 3.4 % 3.4 % 2.3 % 2.4 % Expected long-term rate of return on plan assets 6.6 % 6.6 % 6.6 % 6.7 % 3.1 % 2.6 % 3.1 % 3.1 % Non-Pension Postretirement Benefits U.S. Plans Non-U.S. Plans Successor Predecessor Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Discount rate — % — % 4.1 % 3.2 % 5.2 % 6.9 % 6.3 % 5.3 % Rate of increase in future compensation levels — — — — — — — — Expected long-term rate of return on plan assets — — — — — — — — A one-percentage-point change in the assumed health care cost trend rates would change the projected benefit obligation for international non-pension postretirement benefits by approximately $2 and service cost and interest cost by $1. The impact on U.S. plans is negligible. Pension Investment Policies and Strategies The Company’s investment strategy for the assets of its North American defined benefit pension plans is to maximize the long-term return on plan assets using a mix of equities, fixed income and alternative investments with a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and expected timing of future cash flow requirements. The investment portfolio contains a diversified blend of equity, fixed-income and alternative investments. For U.S. plans, equity investments are also diversified across U.S. and international stocks, as well as growth, value and small and large capitalization investments, while the Company’s Canadian plan includes a blend of Canadian securities with U.S. and other foreign investments. The alternative investments are allocated in a diversified fund structure with exposure to a variety of hedge fund strategies. Investment risk and performance is measured and monitored on an ongoing basis through periodic investment portfolio reviews, annual liability measurements and periodic asset and liability studies. As plan funded status changes, adjustments to the diversified portfolio may be considered to reduce funded status volatility and better match the duration of plan liabilities. The Company periodically reviews its target allocation of North American plan assets among the various asset classes. The targeted allocations are based on anticipated asset performance, discussions with investment professionals and on the projected timing of future benefit payments. The Company observes local regulations and customs governing its European pension plans in determining asset allocations, which generally require a blended weight leaning toward more fixed income securities, including government bonds. Actual Target 2020 2020 2019 Weighted average allocations of U.S. pension plan assets at December 31: Equity securities 32 % 35 % 35 % Debt securities 55 % 53 % 55 % Cash, short-term investments and other 13 % 12 % 10 % Total 100 % 100 % 100 % Weighted average allocations of non-U.S. pension plan assets at December 31: Equity securities 22 % 22 % 23 % Debt securities 76 % 75 % 77 % Cash, short-term investments and other 2 % 3 % — % Total 100 % 100 % 100 % Fair Value of Plan Assets 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. Certain investments measured at net asset value (“NAV”), as a practical expedient for fair value, have been excluded from the fair value hierarchy. The following table presents U.S. pension plan investments measured at fair value on a recurring basis as of December 31, 2020 and 2019: Fair Value Measurements Using 2020 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Large cap equity funds (1) $ — $ 35 $ — $ 35 $ — $ 37 $ — $ 37 Small/mid cap equity funds (1) — 5 — 5 — 6 — 6 International equity funds (1) — 25 — 25 — 27 — 27 Fixed income securities (1) — 107 — 107 — 103 — 103 Cash equivalents (2) — 2 — 2 — 2 — 2 $ — $ 174 $ — $ 174 $ — $ 175 $ — $ 175 Investments measured at fair value using net asset value as a practical expedient: Other funds (3) $ 23 $ 22 Total $ 197 $ 197 The following table presents non-U.S. pension plan investments measured at fair value on a recurring basis as of December 31, 2020 and 2019: Fair Value Measurements Using 2020 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Pooled insurance products with fixed income guarantee (1) $ — $ 15 $ — $ 15 $ — $ 13 $ — $ 13 Cash equivalents (2) — — — — — 1 — 1 $ — $ 15 $ — $ 15 $ — $ 14 $ — $ 14 Investments measured at fair value using net asset value as a practical expedient: Other international equity funds (3) $ 135 $ 108 Other fixed income securities (3) 464 361 Total $ 614 $ 483 (1) Level 2 equity and fixed income securities are primarily in pooled asset and mutual funds and are valued based on underlying net asset value multiplied by the number of shares held. The underlying asset values are based on observable inputs and quoted market prices. (2) Cash equivalents represent investment in a collective short term investment fund, which is a cash sweep for uninvested cash that earns interest monthly. For these investments, book value is assumed to equal fair value due to the short duration of the investment term. (3) Represents investments in commingled funds with exposure to a variety of hedge fund strategies, which are not publicly traded and have ongoing redemption restrictions. The Company’s interest in these investments is measured at net asset value per share as a practical expedient for fair value, which is derived from the underlying asset values in these funds, only some of which represent observable inputs and quoted market prices. Projections of Plan Contributions and Benefit Payments The Company expects to make contributions totaling $36 to its defined benefit pension plans in 2021. Estimated future plan benefit payments as of December 31, 2020 are as follows: Pension Benefits Non-Pension Postretirement Benefits Year U.S. Plans Non-U.S. U.S. Plans Non-U.S. 2021 $ 17 $ 16 $ — $ 1 2022 16 16 — — 2023 15 17 — — 2024 15 19 — — 2025 15 17 — — 2026-2030 64 118 — 2 Defined Contribution Plans The Company sponsors a number of defined contribution plans for its associates, primarily in the U.S., Canada, Europe and in the Asia-Pacific region. Full-time associates are generally eligible to participate immediately and may make pre-tax and after-tax contributions subject to plan and statutory limitations. For certain plans, the Company has the option to make contributions above the match provided in the plan based on financial performance. As previously discussed, U.S retirement income benefits are provided under the Company's defined contribution plan (the “401(k) Plan”). This plan allows eligible associates to make pre-tax contributions from 1% to 15% of eligible earnings for associates who meet the IRS definition of a highly compensated employee and up to 25% for all other associates up to the federal limits for qualified plans. Associates contributing to the 401(k) are eligible to receive matching contributions from the Company at 100% on contributions of up to 5% of eligible earnings. An additional matching contribution may be made if the Company achieves specified annual financial targets established at the beginning of each plan year. In addition, the Company makes an annual retirement contribution ranging from 3% to 7% of eligible compensation depending on years of benefit service. All associates who are actively employed on the last day of the year are eligible for the true-up match and annual retirement contribution, unless otherwise determined by collective bargaining agreements. Effective January 2, 2018, the 401(k) Plan added the option for eligible participants to make after-tax contributions to a Roth 401(k). The Company incurred expense for contributions under its defined contribution plans of $14, $6, $7 and $17 during the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. Non-Qualified and Other Retirement Benefit Plans The Company provides key executives in some locations with non-qualified benefit plans that provide participants with an opportunity to elect to defer compensation or to otherwise provide supplemental retirement benefits in cases where executives cannot fully participate in the defined benefit or defined contribution plans because of plan or local statutory limitations. Most of the Company's supplemental benefit plans are unfunded and benefits are paid from the general assets of the Company. The liabilities related to defined benefit supplemental benefits are included in the previously discussed defined benefit pension disclosures. The Company maintains a non-qualified defined contribution plan (the “SERP”) that provides annual employer credits to eligible U.S. associates of 5% of eligible compensation above the IRS limit for qualified plans. The Company can also make discretionary credits under the SERP; however, no participant contributions are permitted. The account credits are made annually to an unfunded phantom account, in the following calendar year. Certain executives also previously earned benefits under U.S. non-qualified executive supplemental plans that were frozen prior to 2010. The Company’s liability for these non-qualified benefit plans was $4 and $5 at December 31, 2020 and 2019, and is included in “Other long-term liabilities” in the Consolidated Balance Sheets. The Company’s German subsidiaries offer a government subsidized early retirement program to eligible associates called Altersteilzeit or ATZ Plans. The German government provides a subsidy in certain cases where the participant is replaced with a qualifying candidate. The Company had liabilities for these arrangements of $3 and $2 at December 31, 2020 and 2019, respectively. The Company incurred expense for these plans of $1, less than $1, less than $1 and $1 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. |
Stock Option Plans and Stock Ba
Stock Option Plans and Stock Based Compensation (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Stock Option Plans and Stock Based Compensation [Abstract] | |
Share-based Payment Arrangement [Text Block] | Stock Based Compensation Cancellation and Expiration of Outstanding Predecessor Equity Awards As of the Effective Date, in conjunction with the Company’s emergence from Chapter 11, all outstanding unvested unit options and restricted deferred units of the Predecessor Company’s parent company, TopCo, were canceled, effective immediately (See Note 6 for more information). There was no financial statement impact as a result of these cancellations. Successor Company Stock Based Awards The following is a summary of the new stock based compensation plans issued after Emergence and their related outstanding shares as of December 31, 2020: Plan Name Grant Date Shares Outstanding (1) Plan Expiration Vesting Terms/Status Number of Shares Authorized Hexion Holdings Corporation 2019 Omnibus Incentive Plan August 2029 7,635,389 Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”): 2019 Grants RSUs September 2019 1,034,100 Time-vest ratably over 3 years, but must be employed on July 1, 2022 in order to receive shares; Accelerated vesting upon change in control. PSUs September 2019 2,412,894 Performance based with market conditions: Step vest over 4 years based on a 20 consecutive trading-day volume weighted average price per share from $20 to $30 per share. PSUs that vest by June 30, 2022 will be settled in July 2022 and remaining PSUs that vest by June 30, 2023 will be settled in July 2023. 2020 Grants RSUs March 2020 692,441 Time-vest ratably over 3 years; Accelerated vesting upon change in control. PSUs March 2020 811,425 Performance based: 50% vest upon achievement of adjusted return on invested capital targets as of December 31, 2022. 50% vest upon achievement of Hexion Segment EBITDA Margin targets as of December 31, 2022. PSUs that vest will be settled in July 2023. 2020 Non-employee Grants RSUs January 2020 73,332 Time-vest ratably over 3 years; Accelerated vesting upon change in control. Settled upon vesting. RSUs August 2020 60,664 100% vest on June 1, 2021; Accelerated vesting upon change in control. RSUs that vest will be settled upon the date the non-employee director leaves board service. (1) Shares outstanding includes shares awarded to associates related to the Held for Sale Business. Summary of Plans On August 8, 2019, the Board of Directors of Hexion Holdings approved the Hexion Holdings Corporation 2019 Omnibus Incentive Plan (the “2019 Incentive Plan”), whereby Hexion Holdings is reserving shares of Class B Common Stock, par value $0.01 per share, representing 10% of Hexion Holding’s fully diluted equity as of the date of approval of the 2019 Incentive Plan, for issuance to employees, directors, and other key service providers in connection with stock options, restricted stock units, performance-based stock units and other equity-based awards (such as performance stock units) to be awarded from time to time as the Board determines. The restricted and performance stock units are deemed to be equivalent to one share of common stock of Hexion Holdings. The awards contain restrictions on transferability and other typical terms and conditions. Restricted Stock Units - Employee Grants In September 2019, Hexion Holdings granted RSUs that time vest over three years with an aggregate grant date fair value of approximately $16. The fair value was determined using the estimated aggregate fair value of equity per share on the grant date. Compensation cost is recognized equally over the 3 year service period. For certain retirement eligible associates, the stock-based compensation cost is accelerated according to the plan documents. Upon vesting, RSUs are settled in shares at the end of the three year vesting period. As of December 31, 2020, a total of 344,700 RSUs had vested. In March 2020, Hexion Holdings granted additional RSUs to certain employees that time vest over three years with an aggregate grant date fair value of approximately $11. The fair value was determined using the estimated aggregate fair value of equity per share on the grant date. Compensation cost is recognized equally over the 3 year service period. For certain retirement eligible associates, the stock-based compensation cost is accelerated according to the plan documents. Upon vesting, RSUs are settled in shares at the end of the three year vesting period. As of December 31, 2020, no RSUs had vested. Restricted Stock Units - Director Grants In January 2020, Hexion Holdings granted RSUs to certain non-employee directors that time vest over three years with an aggregate grant date fair value of approximately $2. The fair value was determined using the estimated aggregate fair value of equity per share on the grant date. Compensation cost is recognized equally over the 3 year service period. Upon vesting, RSUs are settled in shares. As of December 31, 2020, a total of 36,666 shares had vested and settled. In August 2020, Hexion Holdings granted RSUs to certain non-employee directors that time vest over one year with an aggregate grant date fair value of approximately $1. The fair value was determined using the estimated aggregate fair value of equity per share on the grant date. Compensation cost is recognized equally over the 1 year service period. RSUs that vest are settled in shares upon the date the non-employee director leaves board service. As of December 31, 2020, no shares had vested. Performance Stock Units In September 2019, Hexion Holdings granted PSUs with market conditions with an aggregate grant date fair value of approximately $29. The fair value was estimated at the grant date using a Monte Carlo valuation method. The Monte Carlo valuation method requires the use of a range of assumptions that includes the risk-free interest rates of 1.49% to 1.87% and expected volatility rates ranged from 39% to 60%. The expected life assumption is not used in the Monte Carlo valuation method, but the output of the model indicated a weighted-average expected life of 3.8 years. The PSUs step vest over four years upon the achievement of the pre-established goals by the end of the fourth year of the term. PSUs that vest by June 30, 2022 will be settled in shares in July 2022 and remaining PSUs that vest by June 30, 2023 will be settled in shares by July 2023. As of December 31, 2020, the market conditions have not been met and no PSUs have vested. Compensation cost will be recognized over 3.8 years and adjusted accordingly as vesting conditions are met. For certain retirement eligible associates, the recognition of stock-based compensation cost is accelerated according to the plan documents. In March 2020, Hexion Holdings granted PSUs with performance conditions with an aggregate grant date fair value of approximately $13. The fair value was determined using the estimated aggregate fair value of equity per share on the grant date. The PSUs vest upon achievement of the performance metrics. 50% of the PSUs vest upon achievement of an adjusted return on invested capital target as of December 31, 2022. 50% vest upon achievement of Hexion Segment EBITDA Margin target as of December 31, 2022, and will be settled in shares in July 2023. Compensation cost will be recognized when a performance condition is deemed probable and adjusted accordingly as vesting conditions are met. As of December 31, 2020, the performance conditions have not been deemed probable, thus no PSUs have vested and no compensation cost has been recorded. The following is a summary of Company’s RSU and PSU plan activity for the year ended December 31, 2020: Hexion Holdings Common RSUs Weighted Average Grant Date Fair Value Hexion Holdings Common PSUs Weighted Average Grant Date Fair Value Nonvested at December 31, 2019 1,034,100 $ 15.37 2,412,894 $ 11.97 Units granted 882,422 $ 15.80 823,619 $ 15.80 Units forfeited (16,348) $ 15.80 (12,194) $ 15.80 Units vested (381,366) $ 15.41 — $ — Nonvested at December 31, 2020 (1) 1,518,808 $ 15.60 3,224,319 $ 12.93 (1) Nonvested shares include shares awarded to associates related to discontinued operations. Financial Statement Impact Although the 2019 Incentive Plan was issued by Hexion Holdings, the underlying share-based compensation cost represents compensation costs paid for by Hexion Holdings on Hexion’s behalf, as a result of the employees’ service to Hexion. The compensation costs for RSUs and PSUs are recorded over the requisite service period on a graded-vesting basis and over the derived service period, respectively. Share-based compensation costs are recognized, net of actual forfeitures, over the requisite service period on a graded-vesting basis for RSUs. Stock-based compensation cost is recognized, net of forfeitures, over the requisite service period on a graded-vesting basis over the derived service period for PSUs. The Company adjusts compensation expense periodically for forfeitures. Stock based compensation costs are included in “Non-cash stock based compensation expense” on the Consolidated Statements of Cash Flows. The Company recognized $17 and $8 share-based compensation costs for the year ended December 31, 2020 and the Successor period from July 2, 2019 through December 31, 2019, respectively. The amount of expense for associates related to discontinued operations was less than $1 for both the year ended December 31, 2020 and the Successor period from July 2, 2019 through December 31, 2019. There were no share-based compensation costs for the Predecessor period from January 1, 2019 through July 1, 2019, and year ended December 31, 2018, respectively. The amounts are included in “Selling, general and administrative expense” in the Consolidated Statements of Operations. |
Income Taxes (Notes)
Income Taxes (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Incom e Taxes During 2018, the Company recognized income tax expense of $31, primarily as a result of income from certain foreign operations. In the United States, disallowed interest expense resulted in current year taxable income which utilized a net operating loss carryforward. The disallowed interest expense carryforward of $283 generated a deferred tax asset. The decrease in the valuation allowance due to the net operating loss utilization was offset by an increase in the valuation allowance recorded on the interest expense carryforward deferred tax asset. The Company had a Global Intangible Low Tax Income (“GILTI”) inclusion of $21, which was fully offset by our net operating loss. This further reduced our valuation allowance. During the Predecessor period January 1, 2019 through July 1, 2019, the Predecessor Company recorded income tax expense of $40 for reorganization adjustments, primarily consisting of tax expense of $50 for the gain recognized between fair value and tax basis (the gain in Predecessor Company will be substantially offset by the Predecessor Company’s tax attributes, including net operating losses and previously disallowed interest expense). A tax benefit of $10 was recorded for the removal of a valuation allowance for certain foreign jurisdictions. Pursuant to the Plan, the Successor Company is obligated to indemnify the Predecessor Company for any tax related liabilities. The Predecessor Company recorded income tax expense of $201 in the Predecessor period, primarily related to the increase in deferred tax liabilities resulting from fresh start accounting. The Predecessor Company’s U.S. net operating loss carryforward of $1,053 and certain state net operating loss carryforwards, along with other tax attributes, have been utilized or forfeited as a result of the taxable gain realized upon Emergence. Certain foreign net operating losses and other carryforwards of the Predecessor Company were forfeited upon Emergence. Upon the Emergence, the Successor Company applied fresh start accounting (see Note 6 for more information regarding fresh start accounting) and therefore the deferred tax assets and liabilities were adjusted based on the revised U.S. GAAP financial statements. As a result of the step-up in U.S. GAAP basis in the Successor Company’s foreign assets without a corresponding step-up in the tax basis of the foreign assets, the Successor Company’s deferred tax liability increased. An Internal Revenue Code §338(h)(10) election was made to treat the Emergence as an asset sale for U.S. income tax purposes. As a result, the Emergence was treated as a deemed sale of assets of the Predecessor Company while the Successor Company received a step-up in U.S. tax basis to fair value. The Successor Company elected bonus depreciation on the stepped-up U.S. eligible fixed assets. The Successor Company elected to amortize the stepped-up basis of intangibles over a 15-year period and the Successor Company’s depreciation and amortization expense generated a U.S. net operating loss for both the tax years ended December 31, 2020 and 2019. The U.S. net operating loss will be carried forward indefinitely, but will be subject to an 80% limitation on U.S. taxable income starting in 2021. During the Successor period July 2, 2019 through December 31, 2019, the Company recognized income tax benefit of $10, primarily as a result of losses from certain foreign operations of which the deferred tax asset created is not offset by a valuation allowance. Losses in the United States created a deferred tax asset which was completely offset by an increase to the valuation allowance. The Company recognized a GILTI inclusion of $5, which was fully offset by our net operating loss and further reduced our valuation allowance. As previously discussed above, the Company elected bonus depreciation in 2019. Income tax expense detail for the Company for year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018 is as follows: Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Current: Federal $ (14) $ (1) $ 36 $ (4) State and local — 4 13 1 Foreign 22 1 11 25 Total current 8 4 60 22 Deferred: Federal 3 9 (2) 1 State and local (1) 1 — — Foreign 4 (24) 143 8 Total deferred 6 (14) 141 9 Income tax expense (benefit) (1) $ 14 $ (10) $ 201 $ 31 (1) Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. A reconciliation of the Company’s combined differences between income taxes computed at the federal statutory tax rate of 21% and the provisions for income taxes for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Income tax (benefit) expense computed at federal statutory tax rate $ (31) $ (21) $ 622 $ (35) State tax (benefit) expense, net of federal benefit (5) (2) 9 1 Foreign tax rate expense differential 1 2 33 13 Foreign source income subject to U.S. taxation — 3 1 2 Non-deductible losses and other expenses — — 5 9 Increase (decrease) in the taxes due to changes in valuation allowance 46 17 (433) 25 Additional (benefit) expense on foreign unrepatriated earnings (3) — — 1 Additional (benefit) expense for uncertain tax positions (4) — 44 15 Tax recognized in other comprehensive income — (1) (4) — Changes in enacted tax laws and tax rates 6 — — — Tax benefit for fresh start accounting and reorganization adjustments — — (68) — Other decrease (increase) of deferred tax assets 4 (8) (8) — Income tax expense (benefit) (1) $ 14 $ (10) $ 201 $ 31 (1) Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. The domestic and foreign components of the Company’s loss before income taxes for year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Domestic $ (138) $ (46) $ 2,754 $ (216) Foreign (11) (58) 206 52 Total (1) $ (149) $ (104) $ 2,960 $ (164) (1) Excludes (loss) income before income taxes of $(70), $5, $155, and $38 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, related to the Held for Sale Business. The tax effects of significant temporary differences, net operating losses, interest expense limitation, and credit carryforwards, which comprise the Company’s deferred tax assets and liabilities at December 31, 2020 and 2019 are as follows: December 31, 2020 December 31, 2019 Assets: Non-pension post-employment $ 4 $ 4 Accrued and other expenses 61 97 Property, plant and equipment — 4 Loss, expense, and credit carryforwards 240 163 Intangible assets 11 — Pension and postretirement benefit liabilities 47 14 Gross deferred tax assets 363 282 Valuation allowance (217) (122) Net deferred tax asset 146 160 Liabilities: Property, plant and equipment (227) (228) Unrepatriated earnings of foreign subsidiaries (7) (10) Intangible assets (66) (65) Gross deferred tax liabilities (300) (303) Net deferred tax liability (1) $ (154) $ (143) (1) Excludes net deferred tax liability of $20 and $15 for the years ended December 31, 2020 and 2019, respectively, related to the Held for Sale Business. The following table summarizes the presentation of the Company’s net deferred tax liability in the Consolidated Balance Sheets at December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Assets: Long-term deferred income taxes $ 7 $ 6 Liabilities: Long-term deferred income taxes (161) (149) Net deferred tax liability (1) $ (154) $ (143) (1) Excludes net deferred tax liability of $20 and $15 for the years ended December 31, 2020 and 2019 respectively, related to the Held for Sale Business. Hexion Holdings, and its direct subsidiary Hexion Intermediate Holding 1, Inc. and its direct subsidiary Hexion Intermediate Holding 2, Inc. (the “Eligible Subsidiaries”) are not members of the registrant. Hexion Holdings and its Eligible Subsidiaries file a consolidated U.S. Federal income tax return. Therefore, the Company can utilize Hexion Holdings and its Eligible Subsidiaries’ tax attributes or vice versa. As of December 31, 2020, the Company had a $217 valuation allowance against its net deferred tax assets that management believes, more likely than not, will not be realized. The Company’s deferred tax assets include federal, state and foreign net operating loss carryforwards as well as an interest expense carryforward. The federal net operating loss carryforwards available are $636 , which excludes the cumulative income from Hexion Holdings and its Eligible Subsidiaries, as described above. The federal net operating loss will be carried forward indefinitely, but beginning in 2021, will be subject to an 80% limitation on U.S. taxable income. A valuation allowance has been recorded against these loss carryforwards. The Company has provided a valuation allowance against its state deferred tax assets, primarily related to state net operating loss carryforwards of $19. A valuation allowance of $97 has been recorded against a portion of foreign net operating loss carryforwards, primarily in the Netherlands. The Company continues to not assert indefinite reinvestment of undistributed earnings of its foreign subsidiaries outside of the United States. Accordingly, a related deferred tax liability of $7 is recorded. The following table summarizes the changes in the valuation allowance for the year ended December 31, 2020, and the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Balance at Changes in Charge / (Release) Balance at Valuation allowance on Deferred tax assets: Predecessor Year ended December 31, 2018 498 — 27 525 January 1, 2019 through July 1, 2019 525 — (427) 98 Successor July 2, 2019 through December 31, 2019 98 — 24 122 Year ended December 31, 2020 (1) 122 41 54 217 (1) The changes in related gross deferred tax assets/liabilities is related to the application of discontinued operations accounting to asset sale entities for tax purposes. For 2020, previous and current losses in the U.S. and in certain foreign operations for recent periods continue to provide sufficient negative evidence requiring a valuation allowance against the net federal, state, and certain foreign deferred tax assets. Examination of Tax Returns The Company conducts business globally and, as a result, certain of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities throughout the world, including major jurisdictions such as the United States, Brazil, Canada, China, Germany, Italy, Netherlands and the United Kingdom. With minor exceptions, the Company’s closed tax years for major jurisdictions are years prior to: 2016 for United States, 2013 for Brazil, 2010 for Canada, 2015 for China, 2016 for Germany, 2016 for Italy, 2010 for Netherlands and 2017 for the United Kingdom. The Company continuously reviews issues that are raised from ongoing examinations and open tax years to evaluate the adequacy of its liabilities. As the various taxing authorities continue with their audit/examination process, the Company will adjust its reserves accordingly to reflect the current status and settlements. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Balance at beginning of period $ 130 $ 133 $ 94 Additions based on tax positions related to the current year 4 2 41 Additions for tax positions of prior years 14 — 5 Reductions for tax positions of prior years (20) (3) (6) Settlements (1) (4) — Foreign currency translation 2 2 (1) Balance at end of period (1) $ 129 $ 130 $ 133 (1) Includes unrecognized tax benefits of $6, $5, and $11 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019 associated with the Held for Sale business. During the year ended December 31, 2020 and the Successor period July 2, 2019 through December 31, 2019, the Company decreased the amount of its unrecognized tax benefits, including its accrual for interest and penalties, by $10 and $1, respectively, primarily as a result of decreases in the unrecognized tax benefit from negotiations with foreign jurisdictions, lapses of statute of limitations and settlements, offset by increases of unrecognized tax benefits for various intercompany transactions. During the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, the Company recognized approximately $9, $2, $3 and $3, respectively, in interest and penalties. The Company had approximately $56, $56, and $54 accrued for the payment of interest and penalties at December 31, 2020 and 2019, and July 1, 2019, respectively. $129 of unrecognized tax benefits, if recognized, would affect the effective tax rate; however, a portion of the unrecognized tax benefit would be in the form of a net operating loss carryforward, which would be subject to a full valuation allowance. The Company anticipates recognizing less than $15 of the total amount of unrecognized tax benefits within the next 12 months as a result of lapses of statute of limitations, negotiations with foreign jurisdictions, settlements, and completion of audit examinations. |
Dispositions (Notes)
Dispositions (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, ATG, Disclosure | Dispositions ATG On January 8, 2018, the Company completed the sale of its Additives Technology Group business (“ATG”) to MÜNZING CHEMIE GmbH. ATG was previously included within the Company’s Forest Products Resins segment and includes manufacturing sites located in Somersby, Australia and Sungai Petani, Malaysia. The ATG business produced a range of specialty chemical materials for the engineered wood, paper impregnation and laminating industries, including catalysts, release agents and wetting agents. The Company received gross cash consideration for the ATG business in the amount of $49, which was used for general corporate purposes. The Company recorded a gain on this disposition of $44 which is included in “Gain on dispositions” in the Predecessor Company’s Consolidated Statements of Operations for the year ended December 31, 2018. |
Summarized Financial Informatio
Summarized Financial Information of Unconsolidated Affiliate (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Summarized Financial Information of Unconsolidated Affiliate [Abstract] | |
Significant Subsidiary Financial Information [Text Block] | Summarized Financial Information of Unconsolidated Affiliates Summarized financial information of the Company’s unconsolidated affiliates, which are listed below, as of December 31, 2020 and 2019 and for the years ended December 31, 2020, and 2019 is as follows: • Momentive UV Coatings (Shanghai) Co., Ltd • Hexion Australia Pty Ltd • MicroBlend Columbia S.A.S. Excluded from the table below is the summarized financial information for the Russia JV since it is part of the Held for Sale Business (See Note 4). December 31, 2020 December 31, 2019 Current assets $ 38 $ 32 Non-current assets 7 6 Current liabilities 20 10 Non-current liabilities — — Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Net sales $ 59 $ 33 $ 39 $ 88 Gross profit 16 8 9 22 Pre-tax income 8 3 4 13 Net income 6 2 3 9 |
Segment Information (Notes)
Segment Information (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Information [Abstract] | |
Segment Reporting Disclosure [Text Block] | Segment and Geographic Information Realignment of Reportable Segments in 2020 As part of the Company’s continuing efforts to drive growth and greater operating efficiencies, in January 2020, the Company changed its reporting segments to align around its two growth platforms: (i) Adhesives and (ii) Coatings and Composites. At December 31, 2020, the Company’s continuing operations has three reportable segments which consist of the following businesses: • Adhesives : these businesses focus on the global adhesives market. They include the Company’s global wood adhesives business, which now also includes the oilfield technologies group, including: forest products resin assets in North America, Latin America, Australia and New Zealand; and global formaldehyde. • Coatings and Composites : these businesses focus on the global coatings and composites market. They include the Company’s base and specialty epoxy resins and Versatic™ Acids and Derivatives businesses. • Corporate and Other: primarily corporate general and administrative expenses that are not allocated to the other segments, such as shared service and administrative functions and foreign exchange gains and losses. The Company has recast its Net Sales and Segment EBITDA (as defined below) for the Successor period July 2, 2019 through December 31, 2019 and for the Predecessor periods July 1, 2019 and January 1, 2019 through July 1, 2019 to reflect the new reportable segments. Reportable Segments Following are net sales, Segment EBITDA and other financial information from continuing operations by reportable segment. Segment EBITDA is defined as EBITDA (earnings before interest, income taxes, depreciation and amortization) 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 other segments, such as shared service and administrative functions and foreign exchange gains and losses not allocated to continuing segments. Net Sales (1) : Following is continuing operations revenue by reportable segment. Product sales within each reportable segment share economically similar risks. These risks include general economic and industrial conditions, competitive pricing pressures and the Company’s ability to pass on fluctuations in raw material prices to its customers. A substantial number of the Company’s raw material inputs are petroleum-based and their prices fluctuate with the price of oil. Due to differing regional industrial and economic conditions, the geographic distribution of revenue may impact the amount, timing and uncertainty of revenue and cash flows from contracts with customers. Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives $ 1,188 $ 693 $ 761 $ 1,641 Coatings and Composites 1,322 630 720 1,496 Total $ 2,510 $ 1,323 $ 1,481 $ 3,137 (1) Intersegment sales are not significant and, as such, are eliminated within the selling segment. Segment EBITDA: Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives (1) $ 214 $ 116 $ 135 $ 252 Coatings and Composites (2) 151 60 96 200 Corporate and Other (71) (37) (30) (71) Total $ 294 $ 139 $ 201 $ 381 (1) Included in Adhesives Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of less than $1 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor Period January 1, 2019 through July 1, 2019 and $1 for the Predecessor year ended December 31, 2018. (2) Included in Coatings and Composites Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of $2, $2, $1 and $3 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. Depreciation and Amortization Expense: Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives (1) $ 97 $ 47 $ 21 $ 50 Coatings and Composites 90 44 20 44 Corporate and Other 4 2 2 4 Total $ 191 $ 93 $ 43 $ 98 (1) Includes accelerated depreciation of $2 and $4 for the years ended December 31, 2020 and 2018. There was no accelerated depreciation in either the Successor period July 2, 2019 through December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. Total Assets (1) : December 31, 2020 December 31, 2019 Adhesives $ 2,202 $ 2,374 Coatings and Composites 1,404 1,371 Corporate and Other 396 401 Total $ 4,002 $ 4,146 (1) Includes assets held for sale at December 31, 2020 and 2019 . Capital Expenditures (1) : Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives $ 62 $ 21 $ 18 $ 35 Coatings and Composites 43 22 22 43 Corporate and Other 3 4 1 3 Total $ 108 $ 47 $ 41 $ 81 (1) Includes capitalized interest costs that are incurred during the construction of property and equipment. Geographic Information Net Sales (1) : Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 United States $ 1,142 $ 617 $ 693 $ 1,449 Netherlands 523 240 308 652 Canada 278 153 154 362 China 259 121 121 229 Brazil 123 83 91 194 Other international 185 109 114 251 Total $ 2,510 $ 1,323 $ 1,481 $ 3,137 (1) Sales are attributed to the country in which the individual business locations reside. Following is net sales by reportable segment disaggregated by geographic region (1) : Successor December 31, 2020 July 2, 2019 through December 31, 2019 Adhesives Coatings and Composites Total Adhesives Coatings and Composites Total North America $ 910 $ 510 $ 1,420 $ 517 $ 255 $ 772 Europe 20 521 541 12 236 248 Asia Pacific 124 291 415 69 139 208 Latin America 134 — 134 95 — 95 Total $ 1,188 $ 1,322 $ 2,510 $ 693 $ 630 $ 1,323 Predecessor January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Adhesives Coatings and Composites Total Adhesives Coatings and Composites Total North America $ 562 $ 286 $ 848 $ 1,215 $ 596 $ 1,811 Europe 15 305 320 $ 37 $ 644 681 Asia Pacific 81 129 210 $ 170 $ 254 424 Latin America 103 — 103 $ 219 $ 2 221 Total $ 761 $ 720 $ 1,481 $ 1,641 $ 1,496 $ 3,137 (1) Intersegment sales are not significant and, as such, are eliminated within the selling segment. Long-Lived Assets (1) : December 31, 2020 December 31, 2019 United States $ 1,520 $ 1,605 Netherlands 556 526 Brazil 79 105 Canada 113 116 Other international 234 218 Total $ 2,502 $ 2,570 (1) Long-lived assets consist of property, plant and equipment, net; goodwill; and other intangible assets, net. Reconciliation of Net Loss to Segment EBITDA: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Reconciliation: Net (loss) income attributable to Hexion Inc. $ (230) $ (89) $ 2,894 $ (162) Add: Net income (loss) attributable to noncontrolling interest — 1 1 (1) Less: Net (loss) income from discontinued operations (69) 4 135 28 Net (loss) income from continued operations (161) (92) 2,760 (191) Income tax expense (benefit) 14 (10) 201 31 Interest expense, net 100 55 89 365 Depreciation and amortization (1) 191 93 43 98 EBITDA 144 46 3,093 303 Adjustments to arrive at Segment EBITDA: Asset impairments and write-downs $ 16 $ — $ — $ 32 Business realignment costs (2) 69 22 14 27 Realized and unrealized foreign currency losses (gains) — 4 (7) 28 Gain on dispositions — — — (44) Unrealized losses (gains) on pension and OPEB plan liabilities 4 5 — (13) Transaction costs (3) 6 11 26 13 Reorganization items, net (4) — — (2,943) — Non-cash impact of inventory step-up (5) — 27 (27) — Accelerated deferred revenue (6) — — 18 — Other non-cash items (7) 43 10 9 14 Other (8) 12 14 18 21 Total adjustments 150 93 (2,892) 78 Segment EBITDA $ 294 $ 139 $ 201 $ 381 Segment EBITDA: Adhesives 214 116 135 252 Coatings and Composites 151 60 96 200 Corporate and Other (71) (37) (30) (71) Total $ 294 $ 139 $ 201 $ 381 (1) For the year ended December 31, 2020 and 2018 accelerated depreciation of $2 and $4 has been included in “Depreciation and amortization.” There was no accelerated deprecation in either the Successor year ended December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. (2) Business realignment costs for the Successor and Predecessor periods below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Severance costs $ 16 $ 9 $ 8 $ 9 In-process facility rationalizations 11 5 3 11 Contractual costs from exited business 8 — — — Business services implementation 22 — — — Legacy environmental reserves 9 7 1 5 Other 3 1 2 2 (a) The Company had $8 of severance liabilities accrued within “Other current liabilities” on the Consolidated Balance Sheets at both December 31, 2020 and 2019. The Company expects the amounts associated with these severance liabilities to be paid over the next 12 months . (3) For the year ended December 31, 2020, transaction costs included certain professional fees related to strategic projects. For the Successor period from July 2, 2019 through December 31, 2019 and the Predecessor period from January 1, 2019 through July 1, 2019, transaction costs primarily included $6 and $23, respectively, of certain professional fees and other expenses related to the Company’s Chapter 11 proceedings. (4) Represents incremental costs incurred directly as a result of the Company’s Chapter 11 proceedings after the date of filing, gains on settlement of liabilities under the Plan and the net impact of fresh start accounting adjustments. The amounts excludes the “Non-cash impact of inventory step-up” discussed below. (5) Represents $27 of non-cash expense related to the step up of finished goods inventory on July 1 as part of fresh start accounting that was expensed in the successor period upon the sale of the inventory. (6) For the Predecessor period from January 1, 2019 through July 1, 2019, $18 of deferred revenue was accelerated on July 1 as part of Fresh Start accounting. (7) Other non-cash items for the Successor and Predecessor periods presented below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Fixed asset write-offs $ 13 $ 6 $ 3 $ 6 Stock-based compensation costs 17 8 — — Long-term retention programs 9 (2) 5 8 One-time capitalized variance impact of inventory fresh start step-up — (4) — — Other 4 2 1 — (8) Other for Successor and Predecessor periods presented below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Legacy and other non-recurring items $ 8 $ 7 $ 3 $ 7 IT outage (recoveries) costs, net (4) — 9 — Financing fees and other 8 7 6 14 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period of January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Cash Flow Hedge Total Predecessor Balance at December 31, 2018 $ (1) $ (17) $ — $ (18) Change in value — (8) — (8) Elimination of Predecessor Company accumulated other comprehensive loss 1 25 — 26 Balance at July 1, 2019 $ — $ — $ — $ — Successor Balance at July 2, 2019 $ — $ — $ — $ — Change in value — (3) 2 (1) Balance at December 31, 2019 $ — $ (3) $ 2 $ (1) Change in value — (8) (18) (26) Balance at December 31, 2020 $ — $ (11) $ (16) $ (27) |
Interim Reporting (Notes)
Interim Reporting (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Selected Unaudited Quarterly Financial Data Condensed Consolidated Statements of Operations Successor Three Months Ended December 31, 2020 Three Months Ended September 30, 2020 (as revised) (1) Three Months Ended June 30, 2020 Three Months Ended March 31, 2020 Net sales $ 655 $ 634 $ 534 $ 687 Operating (loss) income (10) 8 (28) (34) Net (loss) income from continuing operations, net of taxes (37) (26) (36) (62) Net income (loss) from discontinued operations, net of taxes 2 (68) (6) 3 Net loss $ (35) $ (94) $ (42) $ (59) (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. Successor Predecessor Three Months Ended December 31, 2019 July 2, 2019 through September 30, 2019 July 1, 2019 (1) Three Months Ended June 30, 2019 (2) Three Months Ended March 31, 2019 Net sales $ 630 $ 693 $ — $ 750 $ 731 Operating (loss) income (30) (18) — 40 27 Net (loss) income from continuing operations, net of taxes (48) (44) 2,935 (118) (57) Net income from discontinued operations, net of taxes 3 1 119 10 6 Net (loss) income (45) (43) 3,054 (108) (51) Net income attributable to noncontrolling interest (1) — — — (1) Net (loss) income attributable to Hexion Inc. $ (46) $ (43) $ 3,054 $ (108) $ (52) (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). In the fourth quarter 2020, we identified certain errors within our condensed consolidated financial statements for the three and nine months ended September 30, 2020: – Approximately $13 associated with an insurance premium financing arrangement was incorrectly disclosed as a non-cash financing activity but should have been classified as an operating cash outflow from continuing operations and financing cash inflow; – “Net cash used in operating activities from continuing operations” was overstated by approximately $13 and “Net cash (used in) provided by operating activities from discontinued operations” was understated by approximately $13 due to activity within “Other assets, current and non-current” being incorrectly classified; and – The impairment charge recognized with respect to our Held for Sale Business was overstated by approximately $8 which also resulted in an understatement of the Assets Held for Sale as of September 30, 2020. Based upon quantitative and qualitative assessments, we have determined that these adjustments were not material to the previously issued interim financial statements. The impacts to the previously issued interim financial statements will be revised in our Form 10-Q filing for the quarterly period ended September 30, 2021 and are shown in the tables below. Condensed Consolidated Statement of Cash Flows (Nine Months Ended September 30, 2020) (unaudited) Line Item As Previously Reported Adjustments As Revised Net (loss) income $ (203) $ 8 $ (195) (Loss) income from discontinued operations, net of taxes (79) 8 (71) Other assets, current and non-current (1) (26) (27) Net cash (used in) provided by operating activities from continuing operations (11) (26) (37) Net cash (used in) provided by operating activities from discontinued operations (1) 13 12 Net cash (used in) provided by operating activities $ (12) $ (13) $ (25) Net short-term debt repayments $ (25) $ 13 $ (12) Net cash provided by (used in) financing activities $ 7 $ 13 $ 20 Condensed Consolidated Statement of Operations (Three Months Ended September 30, 2020) (unaudited) Line Item As Previously Reported Adjustment (1) As Revised (Loss) income from discontinued operations, net of taxes $ (76) $ 8 $ (68) Net (loss) income (102) 8 (94) Net (loss) income attributable to Hexion Inc. (102) 8 (94) Condensed Consolidated Statement of Operations (Nine Months Ended September 30, 2020) (unaudited) Line Item As Previously Reported Adjustment (1) As Revised (Loss) income from discontinued operations, net of taxes $ (79) $ 8 $ (71) Net (loss) income (203) 8 (195) Net (loss) income attributable to Hexion Inc. (203) 8 (195) (1) The $8 adjustment summarized above impacts the “Asset impairments” caption within the financial results table in the Discontinued Operations footnote. The adjustment also impacts “Comprehensive loss” and “Accumulated deficit.” |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation [Policy Text Block] | Principles of Consolidation— The Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries in which minority shareholders hold no substantive participating rights. Intercompany accounts and transactions are eliminated in consolidation. The Company’s share of the net earnings of 20% to 50% owned companies, which are accounted for under the equity method of accounting as the Company has the ability to exercise significance influence over operating and financial policies (but not control), are included in “Earnings from unconsolidated entities, net of taxes” in the Consolidated Statements of Operations. Investments in the other companies are carried at cost. The Company has recorded a noncontrolling interest for the equity interests in consolidated subsidiaries that are not 100% owned. The Company’s unconsolidated investments accounted for under the equity method of accounting include the following as of December 31, 2020: • 49.99% interest in Momentive UV Coatings (Shanghai) Co., Ltd, a joint venture that manufactures UV-curable coatings and adhesives in China; • 50% ownership interest in Hexion Shchekinoazot Holding B.V., a joint venture that manufactures forest products resins in Russia (see Note 4 for discussion of Russia JV within discontinued operations); • 50% ownership interest in Hexion Australia Pty Ltd, a joint venture which provides urea formaldehyde resins and other products to industrial customers in western Australia. |
Foreign Currency Translations [Policy Text Block] | Foreign Currency Translations and Transactions—Assets and liabilities of foreign affiliates are translated at the exchange rates in effect at the balance sheet date. Income, expenses and cash flows are translated at average exchange rates during the year. The Company did not recognize a transaction gain or loss for the year ended December 31, 2020. The Company recognized transaction gains (losses) of $5, $(8) and $30 for the Successor period July 2, 2019 through December 31, 2019, the Predecessor periods January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, which are included as a component of “Net (loss) income.” In addition, gains or losses related to the Company’s intercompany loans payable and receivable denominated in a foreign currency other than the subsidiary’s functional currency that are deemed to be permanently invested are remeasured to cumulative translation and recorded in “Accumulated other comprehensive loss” in the Consolidated Balance Sheets. The effect of translation is included in “Accumulated other comprehensive loss.” |
Use of Estimates [Policy Text Block] | Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and also 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. The most significant estimates that are included in the financial statements are environmental remediation liabilities, legal liabilities, deferred tax assets and liabilities and related valuation allowances, income tax accruals, pension and postretirement assets and liabilities, reserves for uncollectible accounts receivable, general insurance liabilities, asset impairments, fair values of assets acquired and liabilities assumed in business acquisitions, and valuations associated with fresh start accounting. Actual results could differ from these estimates. |
Cash and Cash Equivalents [Policy Text Block] | Cash and Cash Equivalents —The Company considers all highly liquid investments that are purchased with an original maturity of three months or less to be cash equivalents. At December 31, 2020 and 2019, the Company had interest-bearing time deposits and other cash equivalent investments of $20 and $74, respectively. The Company’s restricted cash balances of $4 as of both December 31, 2020 and 2019, respectively represent deposits to secure certain bank guarantees issued to third parties to guarantee potential obligations of the Company primarily related to the completion of tax audits. These balances will remain restricted as long as the underlying exposures exist and are included in the Consolidated Balance Sheets as a component of “Cash and cash equivalents.” |
Allowance for Doubtful Accounts [Policy Text Block] | Allowance for Doubtful Accounts — Under adoption of ASU 2016-13, the Company has updated its credit loss methodology to consider a broader range of reasonable and supportable information to determine its credit loss estimates. The Company utilizes a historical aging method disaggregated by portfolio segment of geographic region, and then the Company makes any necessary adjustments for current conditions and forecasts about future economic conditions for calculating its allowance for doubtful accounts. The Company evaluates each pooled receivables’ geographic region by differing regional industrial and economic conditions, overall end market conditions and groups of customers with similar risk profiles related to timing and uncertainty of future collections. If particular accounts receivable balances no longer display risk characteristics that are similar to other pooled receivables, the Company performs individual assessments of expected credit losses for those specific receivables. Receivables are charged against the allowance for doubtful accounts when it is probable that the receivable will not be collected. As of December 31, 2020, the Company’s allowance for doubtful accounts provision for expected credit losses reflected the current business conditions, forecasts of future economic conditions and the impacts related to the global business and market disruptions of the coronavirus disease 2019 (“COVID-19”) pandemic, in accordance with ASU 2016-13 (see Note 3 for more information) which did not result in an increase for the year. The Company’s current expectations and assumptions regarding its business, the economy and other future events and conditions are based on currently available financial, economic and competitive data and current business plans as of December 31, 2020. Actual results could vary materially depending on risks and uncertainties that may affect the Company’s operations, markets, services, prices and other factors. The Company recorded an allowance for doubtful accounts of $3 at both December 31, 2020 and 2019, to reduce accounts receivable to their estimated net realizable value. Accounts receivable balances are written-off against the allowance if a final determination of uncollectibility is made. There were no write-offs or recoveries for the year ended December 31, 2020. Prior to adoption of ASU 2016-13, the Company’s policy for the allowance for doubtful accounts was estimated using factors such as customer credit ratings and past collection history. |
Inventories [Policy Text Block] | Inventories—Inventories are stated at lower of cost or net realizable value using the first-in, first-out method. Costs include direct material, direct labor and applicable manufacturing overheads, which are based on normal production capacity. Abnormal manufacturing costs are recognized as period costs and fixed manufacturing overheads are allocated based on normal production capacity. |
Deferred Expenses [Policy Text Block] | Deferred Expenses —Deferred debt financing costs are included in “Long-term debt” in the Consolidated Balance Sheets, with the exception of deferred financing costs related to revolving line of credit arrangements, which are included in “Other long-term assets” in the Consolidated Balance Sheets. These costs are amortized over the life of the related debt or credit facility using the effective interest method. Upon extinguishment of any debt, the related debt issuance costs are written off. Deferred debt financing costs included in “Long-term debt” in the Consolidated Balance Sheets were less than $1 at December 31, 2020. During the year ended December 31, 2019, in connection with the application of fresh start accounting, any existing debt issuance costs were included in “Reorganization items, net” in the Consolidated Statements of Operations and there were no deferred debt financing costs included in “Long-term debt” in the Consolidated Balance Sheets as of December 31, 2019. |
Property and Equipment [Policy Text Block] | Property and Equipment —Land, buildings and machinery and equipment are stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful lives of properties (the range of estimated useful lives for buildings and machinery and equipment were 9 to 39 years and 1 to 20 years, respectively at December 31, 2020 and 2019). Assets under finance leases are amortized over the lesser of their useful life or the lease term. Major renewals and betterments are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. When property and equipment is retired or disposed of, the asset and related depreciation are removed from the accounts and any gain or loss is reflected in operating income. The Company capitalizes interest costs that are incurred during the construction of property and equipment. Property and equipment was recorded at its estimated fair value in connection with the application of fresh start accounting, resulting in the remeasurement of accumulated depreciation to zero as of July 1, 2019 (see Note 6. Depreciation expense was $131, $90, $40 and $86 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. Additionally, for the year ended December 31, 2020 and 2018, $2 and $4, respectively, |
Capitalized Software [Policy Text Block] | Capitalized Software —The Company capitalizes certain costs, such as software coding, installation and testing, that are incurred to purchase or create and implement computer software for internal use. Amortization is recorded on the straight-line basis over the estimated useful lives, which range from 1 to 5 years. |
Goodwill and Intangibles; Impairment [Policy Text Block] | Goodwill and Intangibles —The excess of purchase price over net tangible and identifiable intangible assets of businesses acquired is carried as “Goodwill” in the Consolidated Balance Sheets. Separately identifiable intangible assets that are used in the operations of the business (e.g., patents and technology, tradenames, customer lists and contracts) are recorded at cost (fair value at the time of acquisition) and reported as “Other intangible assets, net” in the Consolidated Balance Sheets. Costs to renew or extend the term of identifiable intangible assets are expensed as incurred. The Company does not amortize goodwill. Intangible assets with determinable lives are amortized on a straight-line basis over the legal or economic life of the assets, which range from 15 to 25 years (see Note 6 and Note 10). As a result of the application of fresh start accounting the Company established $178 of Successor goodwill and $1,219 of Successor intangibles upon Emergence. Refer to Note 6 for additional information related to Emergence. The amount of goodwill and intangibles related to continuing operations is $164 and $1,079, respectively. Refer to Note 10 for additional information. Impairment —The Company reviews property and equipment, leases and all amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based on estimated undiscounted cash flows or other relevant observable measures. The Company tests goodwill for impairment annually, or when events or changes in circumstances indicate impairment may exist, by comparing the estimated fair value of each reporting unit with goodwill to its carrying value to determine if there is an indication that a potential impairment may exist. Long-Lived Assets and Amortizable Intangible Assets There were $16 long-lived asset impairments recorded during the year ended December 31, 2020 and there were no long-lived asset impairments for the Successor period July 2, 2019 through December 31, 2019 or the Predecessor period January 1, 2019 through July 1, 2019. During the year ended December 31, 2018, the Company recorded long-lived asset impairments of $28, which are included in “Asset impairments” in the Consolidated Statements of Operations (see Note 8 for more information). Goodwill The Company’s reporting units in continuing operations include epoxy, versatics and forest products. The Company’s reporting units are generally one level below the operating segments for which discrete financial information is available and reviewed by segment management. However, components of an operating segment can be aggregated as one reporting unit if the components have similar economic characteristics. The Company’s consolidated goodwill balance from continuing operations was $164 as of December 31, 2020, including $127 related to the forest products reporting unit, $36 related to the versatics reporting unit and $1 related to the epoxy reporting unit. The Company tests goodwill annually for impairment of value or more frequently when potential impairment triggering events are present. The Company’s annual impairment testing date is October 1. Goodwill is tested for impairment by comparing the estimated fair value of a reporting unit to its carrying value. The Company uses a weighted market and income approach to estimate the fair value of its reporting units. The market approach is a comparable analysis technique commonly used in the investment banking and private equity industries based on the EBITDA (earnings before interest, income taxes, depreciation and amortization) multiple technique, and the income approach is based on a discounted cash flow model. The key assumptions and estimates utilized in the market and income approaches primarily include market multiples, discount rates and future levels of revenue growth and operating margins, and to a lesser extent, estimates and assumptions related to working capital investment, taxes, depreciation and amortization and capital spending projections. If the carrying value of the reporting unit exceeds the estimated fair value, an impairment charge is recorded for the difference. As of October 1, 2020 and 2019, the estimated fair value of each of the Company’s remaining reporting units was deemed to be in excess of the carrying amount of assets (including goodwill) and liabilities assigned to each reporting unit. The step-up of fixed and intangible asset values during fresh start accounting resulted in an increase of the carrying amounts of net assets for the Company’s reporting units that have goodwill, thereby reducing the amount of headroom between the fair value and carrying value of these reporting units. As a result, future unfavorable changes to business results and/or discounted cash flows for these reporting units are more likely to result in asset impairments. |
General Insurance [Policy Text Block] | General Insurance—The Company is generally insured for losses and liabilities for workers’ compensation, physical damage to property, business interruption and comprehensive general, product and vehicle liability under high-deductible insurance policies. The Company records losses when they are probable and reasonably estimable and amortizes insurance premiums over the life of the respective insurance policies. |
Legal Claims and Costs [Policy Text Block] | Legal Claims and Costs —The Company accrues for legal claims and costs in the period in which a claim is made or an event becomes known, if the amounts are probable and reasonably estimable. Each claim is assigned a range of potential liability and the most likely amount is accrued. If there is no amount in the range of potential liability that is most likely, the low end of the range is accrued. The amount accrued includes all costs associated with the claim, including settlements, assessments, judgments and fines. Legal fees are expensed as incurred (see Note 14). |
Environmental Matters [Policy Text Block] | Environmental Matters —Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Environmental accruals are reviewed on a quarterly basis and as events and developments warrant (see Note 14). |
Asset Retirement Obligations [Policy Text Block] | Asset Retirement Obligations —Asset retirement obligations are initially recorded at their estimated net present values in the period in which the obligation occurs, with a corresponding increase to the related long-lived asset. Over time, the liability is accreted to its settlement value and the capitalized cost is depreciated over the useful life of the related asset. When the liability is settled, a gain or loss is recognized for any difference between the settlement amount and the liability that was recorded. |
Revenue Recognition [Policy Text Block] | Revenue Recognition —The Company follows the 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. Revenue, net of estimated allowances and returns, is recognized when the Company has completed its performance obligations under a contract and control of the product is transferred to the customer. Substantially all revenue is recognized at the time shipment is made or upon delivery as risk and title to the product transfer to the customer. Sales, value add, and other taxes that are collected concurrently with revenue-producing activities are excluded from revenue. Contract terms for certain transactions, including sales made on a consignment basis, result in the transfer of control of the finished product to the customer prior to the point at which the Company has the right to invoice for the product. In these cases, timing of revenue recognition will differ from the timing of invoicing to customers and will result in the Company recording a contract asset. The Company adopted ASU 2014-09 as of January 1, 2018 utilizing a modified retrospective approach. A contract asset balance of $5 and $6 is recorded within “Other current assets” at December 31, 2020 and 2019, respectively, in the Consolidated Balance Sheet. Refer to Note 20 for additional discussion of the Company’s net sales by reportable segment disaggregated by geographic region. |
Shipping and Handling [Policy Text Block] | Shipping and Handling —Freight costs that are billed to customers are included in “Net sales” in the Consolidated Statements of Operations. Shipping costs are incurred to move the Company’s products from production and storage facilities to the customer. Handling costs are incurred from the point the product is removed from inventory until it is provided to the shipper and generally include costs to store, move and prepare the products for shipment. Revenue from shipping and handling services is recognized when control of the product is transferred to the customer. Shipping and handling costs are recorded in “Cost of sales” in the Consolidated Statements of Operations. |
Research and Development Costs [Policy Text Block] | Research and Development Costs —Funds are committed to research and development activities for technical improvement of products and processes that are expected to contribute to future earnings. We also provide customer service through our technical staff as part of our research and development program to discover new applications and processes. All costs associated with research and development and technical services are charged to expense as incurred. Research and development and technical service expense was $38, $20, $21 and $43 for the year ended December 31, 2020, the Successor period ended July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, and is included in “Selling, general and administrative expense” in the Consolidated Statements of Operations. |
Business Realignment Costs [Policy Text Block] | Business Realignment Costs—The Company incurred “Business realignment costs” totaling $69, $22, $14 and $27 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. These costs primarily included costs related to in-process cost reduction programs and certain in-process and recently completed facility rationalizations. |
Pension and Other Postretirement Plans, Policy [Policy Text Block] | Pension and Other Non-Pension Postretirement Benefit Liabilities —Pension and other non-pension postretirement benefit (“OPEB”) assumptions are significant inputs to the actuarial models that measure pension and OPEB benefit obligations and related effects on operations. Two assumptions, discount rate and expected return on assets, are important elements of plan expense and asset/liability measurement. The Company evaluates these critical assumptions at least annually on a plan and country-specific basis. The Company periodically evaluates other assumptions involving demographic factors, such as retirement age, mortality and turnover, and updates them to reflect the Company's experience and expectations for the future. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. Accumulated and projected benefit obligations are measured as the present value of future cash payments. The Company discounts these cash payments using a split-rate interest approach. This approach uses multiple interest rates from market-observed forward yield curves which correspond to the estimated timing of the related benefit payments. Lower discount rates increase present values and higher discount rates decrease present values. To determine the expected long-term rate of return on pension plan assets, the Company considers current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. In developing future return expectations for the principal benefit plans’ assets, the Company evaluates general market trends as well as key elements of asset class returns such as expected earnings growth, yields and spreads across a number of potential scenarios. Upon the Company’s annual remeasurement of its pension and OPEB liabilities in the fourth quarter, or on an interim basis as triggering events warrant remeasurement, the Company immediately recognizes gains and losses as a mark-to-market (“MTM”) gain or loss through earnings. As such, the Company’s net periodic pension and OPEB expense consists of i) service cost, interest cost, expected return on plan assets, amortization of prior service cost/credits recognized on a quarterly basis and ii) MTM adjustments recognized annually in the fourth quarter upon remeasurement of pension and OPEB liabilities or when triggering events warrant remeasurement. The MTM adjustments were a loss of $4, loss of $5 and a gain of $13 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, and the year ended December 31, 2018, respectively, and are recognized in “Other non-operating (income) expense, net” in the Consolidated Statements of Operations. A MTM loss of $44 was recorded upon the Company’s emergence from bankruptcy (see Note 5 for more information) which was included within “Reorganization items, net” on the Consolidated Statement of Operations for the Predecessor period January 1, 2019 through July 1, 2019. |
Income Taxes [Policy Text Block] | Income Taxes —The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of the assets and liabilities. Deferred tax balances are adjusted to reflect tax rates, based on current tax laws, which will be in effect in the years in which temporary differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized (see Note 17). Unrecognized tax benefits are generated when there are differences between tax positions taken in a tax return and amounts recognized in the consolidated financial statements. Tax benefits are recognized in the consolidated financial statements when it is more likely than not that a tax position will be sustained upon examination. Tax benefits are measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. The Company classifies interest and penalties as a component of tax expense. The Company monitors changes in tax laws and reflects the impact of tax law changes in the period of enactment. See Note 17 for additional information on how the Company recorded the impacts of the U.S. tax reform. |
Derivative Financial Instruments [Policy Text Block] | Derivative Financial Instruments and Hedging Activities—Periodically, the Company is a party to forward exchange contracts, foreign exchange rate swaps, interest rate swaps, natural gas futures and electricity forward contracts to reduce its cash flow exposure to changes in interest rates and natural gas and electricity prices. The Company does not hold or issue derivative financial instruments for trading purposes. All derivatives, whether designated as hedging relationships or not, are recorded on our balance sheet at fair value. For fair value and cash flow hedges qualifying for hedge accounting, the Company formally documents at inception the relationship between hedging instruments and hedged items, the risk management objective, strategy and the evaluation of effectiveness for the hedge transaction. If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded in accumulated other comprehensive income, to the extent effective, and will be recognized in the Consolidated Statement of Operations when settled. The effectiveness of a cash flow hedging relationship is established at the inception of the hedge, and after inception the Company performs effectiveness assessments at least every three months. For a derivative that does not qualify or has not been designated as a hedge, changes in fair value are recognized in earnings. |
Share-based Compensation [Policy Text Block] | Stock-Based Compensation —All stock-based compensation activity relates to shares issued by Hexion Holdings, the ultimate parent of the Company. Stock-based compensation cost is measured at the grant date based on the fair value of the award which is amortized as expense over the requisite service period or derived service period on a graded-vesting basis. The expense is recorded net of forfeitures upon occurrence (see Note 16). |
Transfers of Financial Assets [Policy Text Block] | Transfers of Financial Assets—The Company executes factoring and sales agreements with respect to its trade accounts receivable to support its working capital requirements. The Company accounts for these transactions as either sales-type or financing-type transfers of financial assets based on the terms and conditions of each agreement. For the portion of the sales price that is deferred in a reserve account and subsequently collected, the Company’s policy is to classify the cash in-flows as cash flows from operating activities as the predominant source of the cash flows pertains to the Company’s trade accounts receivable. The remaining portion of the sales price not deferred is recognized as cash flows from operating activities. When the Company retains the servicing rights on the transfers of accounts receivable, it measures these rights at fair value, if material. |
Concentrations of Credit Risk [Policy Text Block] | Concentrations of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk are primarily temporary investments and accounts receivable. The Company places its temporary investments with high quality institutions and, by policy, limits the amount of credit exposure to any one institution. Concentrations of credit risk for accounts receivable are limited due to the large number of customers in the Company’s customer base and their dispersion across many different industries and geographies. The Company generally does not require collateral or other security to support customer receivables. |
Concentrations of Supplier Risk [Policy Text Block] | Concentrations of Supplier Risk —The Company relies on long-term agreements with key suppliers for most of its raw materials. The loss of a key source of supply or a delay in shipments could have an adverse effect on its business. Should any of the suppliers fail to deliver or should any of the key long-term supply contracts be canceled, the Company would be forced to purchase raw materials at current market prices. The Company’s largest supplier provides approximately 9% of raw material purchases. In addition, several of the feedstocks at various facilities are transported through a pipeline from one supplier. |
Subsequent Events [Policy Text Block] | Subsequent Events —The Company has evaluated events and transactions subsequent to December 31, 2020 through the date of issuance of its Consolidated Financial Statements. |
Reclassifications [Policy Text Block] | Reclassifications —Certain amounts in the Consolidated Financial Statements for prior periods have been reclassified to conform with the current presentation. These reclassifications were to record the assets and liabilities of the Held for Sale Business and the results of operations as discontinued operations. See Note 4 for more information. |
Guarantees, Indemnifications and Warranties Policies [Policy Text Block] | Standard Guarantees / Indemnifications —In the ordinary course of business, the Company enters into a number of agreements that contain standard guarantees and indemnities where the Company may indemnify another party for, among other things, breaches of representations and warranties. These guarantees or indemnifications are granted under various agreements, including those governing (i) purchases and sales of assets or businesses, (ii) leases of real property, (iii) licenses of intellectual property, (iv) long-term supply agreements, (v) employee benefits services agreements and (vi) agreements with public authorities on subsidies for designated research and development projects. These guarantees or indemnifications are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords or lessors in lease contracts, (iii) licensors or licensees in license agreements, (iv) vendors or customers in long-term supply agreements, (v) service providers in employee benefits services agreements and (vi) governments or agencies subsidizing research or development. In addition, the Company guarantees some of the payables of its subsidiaries to purchase raw materials in the ordinary course of business. These parties may also be indemnified against any third party claim resulting from the transaction that is contemplated in the underlying agreement. Additionally, in connection with the sale of assets and the divestiture of businesses, the Company may agree to indemnify the buyer for liabilities related to the pre-closing operations of the assets or businesses sold. Indemnities for pre-closing operations generally include tax liabilities, environmental liabilities and employee benefit liabilities that are not assumed by the buyer in the transaction. Indemnities related to the pre-closing operations of sold assets normally do not represent additional liabilities to the Company, but simply serve to protect the buyer from potential liability associated with the Company’s existing obligations at the time of sale. The Company has accrued for those pre-closing obligations that it considers to be probable and reasonably estimable. The amounts recorded at December 31, 2020 and 2019 are not material. While some of these guarantees extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless they are subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under its guarantees, nor is the Company able to estimate the maximum potential amount of future payments to be made under these guarantees because the triggering events are not predictable. Our corporate charter also requires us to indemnify, to the extent allowed by New Jersey state corporate law, our directors and officers as well as directors and officers of our subsidiaries and other agents against certain liabilities and expenses incurred by them in carrying out their obligations. Warranties —The Company does not make express warranties on its products, other than that they comply with the Company’s specifications; therefore, the Company does not record a warranty liability. Adjustments for product quality claims are not material and are charged against net sales. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards Newly Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13: Financial Instruments - Credit Losses (Topic 820): Measurement of Credit Losses on Financial Instruments, (“ASU 2016-13”). The amendments in this update replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. New disclosures are also required with this standard. The standard is effective for annual and interim periods beginning after December 15, 2019. This standard impacts the Company’s accounts receivables and contract assets. The Company adopted ASU 2016-13 at January 1, 2020, using a modified retrospective adoption method. Under this method of adoption, there is no impact to the comparative Consolidated Statement of Operations and the Consolidated Balance Sheets. There was an immaterial impact of adopting ASU 2016-13 on the date of adoption. In August 2018, the FASB issued ASU 2018-15: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) : Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”). ASU 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for annual and interim periods beginning after December 15, 2019. The Company adopted ASU 2016-13 prospectively on January 1, 2020 and the adoption had an immaterial impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 will provide optional expedients and exceptions for a limited period of time to ease the potential burden in accounting for contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company has adopted ASU 2020-04 and the initial adoption of this ASU did not have an impact on our consolidated financial statements. Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in income tax accounting and improve consistent application of and simplify GAAP for other areas of income tax accounting by clarifying and amending existing guidance. The new guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the potential impact ASU 2019-12 will have on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-14: Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”). ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The standard is effective for fiscal years ending after December 15, 2020. The Company is currently assessing the potential impact of ASU 2018-14 on its financial statements. |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | In June 2016, the FASB issued ASU 2016-13: Financial Instruments - Credit Losses (Topic 820): Measurement of Credit Losses on Financial Instruments, (“ASU 2016-13”). The amendments in this update replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. New disclosures are also required with this standard. The standard is effective for annual and interim periods beginning after December 15, 2019. This standard impacts the Company’s accounts receivables and contract assets. The Company adopted ASU 2016-13 at January 1, 2020, using a modified retrospective adoption method. Under this method of adoption, there is no impact to the comparative Consolidated Statement of Operations and the Consolidated Balance Sheets. There was an immaterial impact of adopting ASU 2016-13 on the date of adoption. In August 2018, the FASB issued ASU 2018-15: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) : Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”). ASU 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for annual and interim periods beginning after December 15, 2019. The Company adopted ASU 2016-13 prospectively on January 1, 2020 and the adoption had an immaterial impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 will provide optional expedients and exceptions for a limited period of time to ease the potential burden in accounting for contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company has adopted ASU 2020-04 and the initial adoption of this ASU did not have an impact on our consolidated financial statements. |
Turnaround costs | Turnaround Costs —The Company periodically performs procedures at its major production facilities to extend the useful life, increase output and efficiency and ensure the long-term reliability and safety of plant machinery (“turnaround” or “turnaround costs”). As a result of the application of fresh start accounting upon the Company’s emergence from Chapter 11, the Successor Company adopted an accounting policy to capitalize certain turnaround costs and amortize on a straight-line basis over the estimated period until the next turnaround. Costs for routine repairs and maintenance are expensed as incurred. Capitalized turnaround costs were $7 and $2 at December 31, 2020 and 2019 and are included in “Machinery and equipment” in the Consolidated Balance Sheets. |
Lessee, Leases | Leases —The Company adopted ASU 2016-02 using a modified retrospective adoption method at January 1, 2019. Under this method of adoption, there is no impact to the comparative Consolidated Statement of Operations and the Consolidated Balance Sheets. The Company also determined that there was no cumulative-effect adjustment to beginning retained earnings on the Consolidated Balance Sheet. The Company will continue to report periods prior to January 1, 2019 in its financial statements under prior guidance as outlined in Accounting Standards Codification Topic 840, “Leases”. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward its historical lease classification. The Company also elected the hindsight practical expedient to determine the lease term for existing leases. |
Discontinued Operations and D_2
Discontinued Operations and Disposal Groups (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table reconciles the carrying amounts of major classes of assets and liabilities of discontinued operations to total assets and liabilities of discontinued operations that are classified as held for sale in the Company’s Consolidated Balance Sheets: December 31, 2020 December 31, 2019 Carrying amounts of major classes of assets held for sale: Accounts receivable $ 66 $ 49 Finished and in-process goods 18 21 Raw materials and supplies 17 18 Other current assets 12 11 Total current assets 113 99 Investment in unconsolidated entities 5 3 Deferred tax assets 2 — Other long-term assets 7 11 Property, plant and equipment, net 310 297 Operating lease assets 13 12 Goodwill 14 14 Other intangible assets, net 61 63 Discontinued operations impairment (75) — Total long-term assets 337 400 Total assets held for sale $ 450 $ 499 Carrying amounts of major classes of liabilities held for sale: Accounts payable $ 52 $ 52 Income taxes payable 1 — Accrued payroll 3 5 Current portion of operating lease liabilities 2 2 Other current liabilities 9 10 Total current liabilities 67 69 Long-term pension and post employment benefit obligations 36 29 Deferred income taxes 22 15 Operating lease liabilities 5 4 Other long-term liabilities 8 8 Total long-term liabilities 71 56 Total liabilities held for sale $ 138 $ 125 The following table shows the financial results of discontinued operations for the periods presented: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through Year Ended December 31, 2018 Major line items constituting pretax income of discontinued operations: Net sales (1) $ 493 $ 286 $ 309 $ 692 Cost of sales (exclusive of depreciation and amortization) (1) 412 245 263 600 Selling, general and administrative expense 42 15 17 34 Depreciation and amortization 26 17 9 19 Asset impairments 75 — — — Business realignment costs 3 2 1 2 Other operating expense (income), net — 1 (1) (1) Operating (loss) income (65) 6 20 38 Reorganization items, net — — (135) — Other non-operating expense, net 5 1 — — (Loss) income from discontinued operations before income tax, earnings from unconsolidated entities (70) 5 155 38 Income tax expense (benefit) 1 1 21 9 (Loss) income from discontinued operations, net of tax $ (71) $ 4 $ 134 $ 29 Earnings from unconsolidated entities, net of tax 2 — 1 (1) Net (loss) income attributable to discontinued operations $ (69) $ 4 $ 135 $ 28 (1) The Held for Sale Business has included $4, $5, $2 and $9 in both “Net sales” and “Cost of sales” within the discontinued operations for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor periods January 1, 2019 through July 1, 2019 and year ended December 31, 2018, respectively, which represents sales from the Held for Sale Business to the Company’s continuing operations that were previously eliminated in consolidation. These reclassifications had no impact on “Net (loss) income” in the Consolidated Statements of Operations for any of the periods presented. The Company's 50% ownership interest in the Russia JV, accounted for using the equity method of accounting, is included in the Held for Sale Business. Summarized financial data for the Russia JV are shown in the following tables: December 31, 2020 December 31, 2019 Current assets $ 7 $ 9 Non-current assets 1 1 Current liabilities 2 11 Non-current liabilities 6 12 Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Net sales $ 32 $ 14 $ 18 $ 43 Gross profit 12 3 4 7 Pre-tax income 5 1 2 2 Net income 4 — 2 2 |
Fresh Start Accounting (Tables)
Fresh Start Accounting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Schedule of Fresh-Start Adjustments [Table Text Block] | The following table reconciles the enterprise value (including both continuing and discontinued operations) to the estimated reorganization value as of the Effective Date: Enterprise value $ 3,100 Plus: Total cash 125 Plus: Fair value of non-debt and non-pension liabilities Current liabilities 540 Long-term liabilities 527 Total non-debt and non-pension liabilities 1,067 Reorganization value of Successor assets $ 4,292 Condensed Consolidated Statement of Financial Position The following balance sheet illustrates the impacts of the implementation of the Plan and the application of fresh start accounting, which results in the opening balance sheet of the Successor Company. The Company has reclassified assets and liabilities of the Held for Sale Business and the results of discontinued operations in the table below. As of July 1, 2019 (in millions, except share data) Predecessor Company Reorganization Adjustments (a) Fresh Start Adjustments (q) Successor Company Assets Current assets: Cash and cash equivalents (including restricted cash of $15) 96 $ 29 (b) $ — $ 125 Accounts receivable (net of allowance for doubtful accounts of $16 and $0, respectively) 421 — 6 (r) 427 Inventories: Finished and in-process goods 221 — 27 (s) 248 Raw materials and supplies 89 — — 89 Current assets held for sale 132 — 2 (aa) 134 Other current assets 56 2 (c) — 58 Total current assets 1,015 31 35 1,081 Investment in unconsolidated entities 20 — (6) (t) 14 Deferred tax assets — 12 (d) (3) (u) 9 Other long-term assets 34 4 (e) (1) (v) 37 Property and equipment: Land 69 — 11 (w) 80 Buildings 228 — (118) (w) 110 Machinery and equipment 1,948 — (837) (w) 1,111 2,245 — (944) 1,301 Less accumulated depreciation (1,559) — 1,566 (w) 7 686 — 622 1,308 Operating lease assets 89 — 33 (x) 122 Goodwill 83 — 81 (y) 164 Other intangible assets, net 17 — 1,138 (z) 1,155 Noncurrent assets held for sale 187 — $ 215 (aa) $ 402 Total assets $ 2,131 $ 47 $ 2,114 $ 4,292 Liabilities and Deficit Current liabilities: Accounts payable $ 247 $ 49 (a) $ — $ 296 Debt payable within one year 438 (343) (f) 2 (ab) 97 Interest payable 7 (5) (g) — 2 Income taxes payable 5 11 (h) — 16 Accrued payroll and incentive compensation 32 — — 32 Current liabilities associated with assets held for sale 69 — 1 (aa) 70 Current portion of operating lease liabilities 19 — 6 (x) 25 Financing fees payable 104 (104) (i) — — Other current liabilities 101 5 (j) — 106 Total current liabilities 1,022 (387) 9 644 Long-term liabilities: Liabilities subject to compromise 3,664 (3,664) (k) — — Long-term debt 90 1,622 (l) 21 (ab) 1,733 Long-term pension and post employment benefit obligations 160 33 (a) 39 (ac) 232 Deferred income taxes 11 1 (m) 148 (ad) 160 Operating lease liabilities 70 — 17 (x) 87 Other long-term liabilities 149 72 (n) (6) (r) 215 Noncurrent liabilities associated with assets held for sale 46 — 20 (aa) 66 Total liabilities 5,212 (2,323) 248 3,137 As of July 1, 2019 (in millions, except share data) Predecessor Company Reorganization Adjustments (a) Fresh Start Adjustments (q) Successor Company Equity (Deficit) Common stock (Successor) — — (o) — — Paid-in capital (Successor) — 1,156 (o) — 1,156 Common stock (Predecessor) 1 (1) (p) — — Paid-in capital (Predecessor) 526 (526) (p) — — Treasury stock (Predecessor), at cost—88,049,059 shares at December 31, 2018 (296) 296 (p) — — Accumulated other comprehensive loss (26) — 26 (ae) — Accumulated deficit (3,285) 1,445 (p) 1,840 (ae) — Total Hexion Inc. equity (deficit) (3,080) 2,370 1,866 1,156 Noncontrolling interest (1) — — (1) Total equity (deficit) (3,081) 2,370 (o) 1,866 1,155 Total liabilities and equity (deficit) $ 2,131 $ 47 $ 2,114 $ 4,292 Reorganization Adjustments (a) The reorganization adjustments column reflects adjustments related to the consummation of the Plan, including the settlement of liabilities subject to compromise and related payments, other distributions of cash, issuance of new shares of common stock and the cancellation of the common equity of the Predecessor Company, as discussed in Note 5. The following is a calculation of the total pre-tax gain on the settlement of the liabilities subject to compromise: Liabilities subject to compromise (“LSTC”) (see (k) below) $ 3,664 Repayment of 1st Lien Notes (1,383) Liabilities reinstated at emergence: Accounts payable (49) Pension and other post employment benefit obligations (33) Other current liabilities (18) Other long-term liabilities (32) Total liabilities reinstated at emergence (132) Fair value of equity issued in exchange for debt: Fair value of equity (1,156) Less: Proceeds from Rights Offering 300 Total fair value of equity issued in exchange for debt (856) Gain on settlement of LSTC $ 1,293 (b) Reflects the net cash received as of the Effective Date from implementation of the Plan: Sources: Proceeds from the Rights Offerings $ 300 Proceeds from the Senior Notes 450 Proceeds from the Senior Secured Term Loan 1,196 Release of utility deposit 1 Total sources 1,947 Uses: Repayment of 1st Lien Notes (1,383) Repayment of DIP Term Loan Facility (350) Repayment of DIP Term Loan interest (5) Debt and Equity Backstop premiums (104) Financing fees (19) Success fees at emergence (31) Other professional fees (26) Total uses (1,918) Net cash received $ 29 (c) Represents $3 of excess professional fees due to the Company offset by $1 for the settlement of certain amounts owed during reorganization. (d) Reflects the adjustment to release the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of reorganization. (e) Reflects the adjustments to capitalize the ABL Facility financing fees incurred upon Emergence. (f) Reflects the adjustments made on the Effective Date to repay $350 in outstanding DIP Term Loans and to incur $7 for the current portion of the new Senior Secured Term Loan (see Note 12). (g) On the Effective Date, the Company repaid $5 of accrued unpaid interest on the DIP Term Loan Facility. (h) Reflects the adjustment to record income taxes payable as a result of reorganization. (i) On the Effective Date, the Company paid $24 of Equity Backstop premiums to the parties participating in the Rights Offering and $80 of Debt Backstop premiums. See Note 5 for more information. (j) Represents $18 of other current liabilities that were reclassified from “Liabilities subject to compromise” and $13 of other current liabilities incurred as a result of emergence offset by $26 of professional fees paid at emergence. (k) Liabilities subject to compromise represent unsecured liabilities incurred prior to the Petition Date. As a result of the Bankruptcy Petitions, actions to enforce or otherwise effect payment of pre-petition liabilities were generally stayed. These liabilities represent the amounts which have been allowed on known claims which were resolved through the Chapter 11 process, and have been approved by the Court as a result of the Confirmation Order. The following table summarizes pre-petition liabilities that are classified as “Liabilities subject to compromise” in the Consolidated Balance Sheets: June 30, 2019 Debt $ 3,420 Interest payable 99 Accounts payable 49 Environmental reserve 43 Pension and other post employment benefit obligations 33 Dividends payable to parent 13 Other 7 Total $ 3,664 (l) Represents the issuance of the new Senior Term Loan due 2026 of $1,208 and the new Senior Secured Notes due 2027 of $450 offset by $12 of debt discounts and $17 of debt issuance costs of which $7 is classified as “Debt due within one year” on the Consolidated Balance Sheets. The term loan and notes were recorded at estimated fair value, which was determined based on a market approach utilizing current yield. (m) Represents deferred tax activity associated with Emergence. (n) Reflects the adjustments made to reclassify $32 of other long-term liabilities from “Liabilities subject to compromise” and to record $40 of tax liability as a result of Emergence. (o) The following table reconciles the enterprise value to the estimated fair value of the Successor equity as of the Emergence Date: Enterprise value $ 3,100 Plus: Total cash 125 Less: Fair value of new debt (1,646) Less: Fair value of remaining debt obligations (184) Less: Pension obligations (239) Fair value of equity 1,156 Plus: Fair value of noncontrolling interest 1 Fair value of Successor paid-in capital $ 1,157 At the Effective Date, 100 shares of Common Stock of Hexion Inc. held by new direct parent Hexion Intermediate were issued and outstanding at a par value of $0.01 per share. (p) Reflects the cumulative impact of the reorganization adjustments discussed above: Continuing Operations Gain on settlement of LSTC $ 1,293 Success and other fees recognized at emergence (39) Net gain on reorganization adjustments (1) 1,254 Tax impact on reorganization adjustments (40) Cancellation of Predecessor common stock 1 Cancellation of Predecessor additional paid-in capital 526 Cancellation of Predecessor treasury stock (296) Net impact to Accumulated Deficit 1,445 (1) The net gain on reorganization adjustments has been included in “Reorganization items, net” in the Consolidated Statements of Operations. Fresh Start Adjustments (q) The Fresh Start Adjustments column reflects adjustments required to record the assets and liabilities of the Company at fair value, including the elimination of the accumulated deficit and accumulated other comprehensive (loss) of the Predecessor Company. (r) Reflects the adjustments made to Predecessor deferred revenue in situations where it has been determined the Successor Company has no remaining legal performance obligation related to the arrangement that give rise to the deferred revenue for the Predecessor Company. (s) Reflects the adjustment made to record finished goods inventory at its estimated fair value, which was determined based on the current acquisition cost, including disposal and holding period costs and a reasonable profit margin less costs to sell. (t) Reflects the adjustments made to record the Predecessor Company’s investments in unconsolidated subsidiaries at fair value utilizing a cost approach method. (u) Reflects the deferred tax asset impact of the fresh start adjustments, resulting primarily from the book adjustment made to foreign property, plant, and equipment and intangibles that increased the future taxable temporary differences recorded. (v) Reflects the adjustments required to record the Predecessor Company’s long-term assets at fair value. (w) Reflects the adjustments made to record property, plant and equipment at its estimated fair value and eliminate Predecessor accumulated depreciation. Depreciable lives were also revised to reflect the remaining estimated useful lives of the related property, plant and equipment, which range from 1 to 39 years. Fair value was determined as follows: • The market, sales comparison or trended cost approach was utilized to estimate fair value for land and buildings. This approach relies upon recent sales, offerings of similar assets or a specific inflationary adjustment to original purchase price to arrive at a probable selling price. • The cost approach was utilized to estimate fair value for machinery and equipment. This approach considers the amount required to construct or purchase a new asset of equal utility at current market prices, with adjustments in value for physical deterioration and functional and economic obsolescence. Physical deterioration is an adjustment made in the cost approach to reflect the real operating age of an asset with regard to wear and tear, decay and deterioration that is not prevented by maintenance. Functional obsolescence is an adjustment made to reflect the loss in value or usefulness of an asset caused by inefficiencies or inadequacies of the asset, as compared to a more efficient or less costly replacement asset with newer technology. Economic obsolescence is an adjustment made to reflect the loss in value or usefulness of an asset due to factors external to the asset, such as the economics of the industry, reduced demand, increased competition or similar factors. Depreciable lives were revised to reflect the remaining estimated useful lives as follows (in years): Buildings 9 to 39 years Machinery and equipment 1 to 20 years (x) Reflects $24 of adjustments made to bring the right-of-use operating leased assets, exclusive of $1 related to the Held of Sale Business, and their associated liabilities to fair value utilizing an average discount rate of approximately 6% and to record favorable leasehold interests of $9, exclusive of $5 related to the Held for Sale Business, which were valued using a rental analysis approach based on (i) fair market rent was determined based on rates for facilities comparable to the Company’s properties, (ii) discount rates ranging from 8.0% to 12.0%, which were based on the after-tax WACC; and (iii) market rental growth rates ranging from 0.0% to 5.0%. (y) Reflects the adjustments made to record the elimination of the Predecessor goodwill balance of $83, exclusive of $25 related to the Held for Sale Business, and to record the Successor goodwill of $164, exclusive of $14 related to the Held for Sale Business, which represents the reorganization value of assets in excess of amounts allocated to identified tangible and intangible assets. (z) Reflects the adjustments made to eliminate the Predecessor Company’s other intangible assets of $17, exclusive of $7 related to the Held for Sale Business, and to record $1,155, exclusive of $64 related to the Held for Sale Business, in estimated fair value of Successor other intangible assets. Fair value was comprised of the following: • Customer related intangible assets of $904, exclusive of $64 related to the Held for Sale Business, were valued using the multi-period excess earnings income approach based on the following significant assumptions; i. Forecasted net sales and profit margins attributable to the current customer base through the applicable economic useful life; ii. Attrition rates ranging from 0.5% to 5.0%; iii. Discount rates ranging from 13.0% to 17.5%, which were based on the after-tax WACC; and iv. Economic lives of 20 to 25 years. • Trademarks of $141 were valued using the relief from royalty income approach based on the following significant assumptions: i. Forecasted net sales attributable to the trademarks through the applicable economic useful life; ii. Royalty rates ranging from 0.2% to 2.0% of expected net sales determined with regard to comparable market transactions and profitability analysis; iii. Discount rates ranging from 11.0% to 16.5%, which were based on the after-tax weighted average cost of capital (“WACC”); and iv. Economic lives ranging from 15 to 20 years. • Technology based intangible assets of $110 were valued used the relief from royalty income approach based on the following significant assumptions: i. Forecasted net sales attributable to the respective technologies through the applicable economic useful life; ii. Royalty rates ranging from 0.5% to 2.25% of expected net sales determined with regard to expected cash flows of respective technologies and the overall importance of respective technologies to product offering iii. Discount rates ranging from 11.0% to 16.5%, which were based on the after-tax WACC; and iv. Economic lives of 15 years. (aa) Reflects the fresh start accounting adjustments related to the Held for Sale business: Discontinued Operations Finished and in-process goods $ 2 Total current assets held for sale 2 Investment in unconsolidated companies 3 Deferred tax assets (1) Other long-term assets 3 Property and equipment, net 158 Operating lease assets (See endnote X) 6 Goodwill (See endnote Y) (11) Other intangible assets (See endnote Z) 57 Total noncurrent assets held for sale 215 Current portion of operating lease liabilities (See endnote X) 1 Current liabilities associated with assets held for sale 1 Long-term pension and post employment benefit obligations 5 Deferred income taxes 15 Noncurrent liabilities associated with assets held for sale 20 (ab) Reflects the adjustments made to bring various sale-leaseback financing arrangements to fair value and to revalue debt obligations. (ac) Reflects the remeasurement of the Predecessor Company’s pension liabilities. The increase in pension liabilities was driven by reductions in discount rates and changes in other actuarial assumptions as of the Effective Date, primarily impacting our unfunded German pension plans. (ad) Represents the deferred tax liability impact of the fresh start adjustments, resulting primarily from the book adjustment made to foreign property, plant, and equipment and intangibles that increased the future taxable temporary differences recorded. (ae) Reflects the cumulative impact of the fresh start accounting adjustments discussed above and the elimination of the Predecessor Company’s accumulated other comprehensive income: Continuing Operations Discontinued Operations Total Hexion Establishment of Successor goodwill $ 164 $ 14 $ 178 Elimination of Predecessor goodwill (83) (25) (108) Establishment of Successor other intangible assets 1,155 64 1,219 Elimination of Predecessor other intangible assets (17) (7) (24) Inventory fair value adjustments 27 2 29 Property, plant and equipment fair value adjustment 622 158 780 Pension liability fair value adjustment (39) (5) (44) Other assets and liabilities fair value adjustment (8) 11 3 Elimination of Predecessor Company accumulated other comprehensive income 51 (77) (26) Net gain on fresh start adjustments (1) 1,872 135 2,007 Tax impact on fresh start adjustments (151) (16) (167) Net impact on accumulated deficit 1,721 119 1,840 (1) The net gain on fresh start adjustments has been included in “Reorganization items, net” in the Consolidated Statements of Operations. |
Reorganization Expense (Tables)
Reorganization Expense (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Reorganizations [Abstract] | |
Reorganizations [Table Text Block] | The following table summarizes reorganization items: January 1, 2019 through July 1, 2019 Continuing Operations Discontinued Operations Net gain on reorganization adjustments (see Note 6) $ (1,254) $ — Net gain on fresh start adjustments (see Note 6) (1,872) (135) Financing fees 104 — Professional fees 39 — DIP ABL Facility fees 13 — Total $ (2,970) $ (135) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Refer to the below table for a summary of the sales and purchases with the Company and its joint ventures which are recorded under the equity method of accounting: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Sales to joint ventures (1)(2) $ 2 $ 2 $ 2 $ 9 Purchases from joint ventures (2) 1 2 2 6 (1) Sales to joint ventures includes sales to the Russia JV of $1, $1, $1, and $7 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, which are included in the Held for Sale Business. (2) There were no sales to joint ventures or purchases from joint ventures for the Predecessor period July 1, 2019. December 31, 2020 December 31, 2019 Accounts receivable from joint ventures (1) $ <1 $ 1 Accounts payable to joint ventures — <1 (1) Accounts receivable from joint ventures is mostly comprised of receivables from the Russia JV included in the Held for Sale Business. Accounts receivable from the Company’s other joint ventures was less than $1 for both December 31, 2020 and 2019. |
Goodwill and Intangibles Level
Goodwill and Intangibles Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The Company’s gross carrying amount and accumulated impairments of goodwill consist of the following as of December 31, 2020 and 2019: 2020 2019 Gross Accumulated Accumulated Net Gross Accumulated Accumulated Net Adhesives (1) $ 127 $ — $ — $ 127 $ 127 $ — $ — $ 127 Coatings and Composites 37 — — 37 37 — — 37 Total $ 164 $ — $ — $ 164 $ 164 $ — $ — $ 164 (1) Excludes $14 of goodwill in the Adhesives segment associated with the Held for Sale Business at both December 31, 2020 and 2019 (See Note 4). The changes in the net carrying amount of goodwill by segment for the years ended December 31, 2020 and 2019 are as follows: Adhesives (3) Coatings and Composites Total Predecessor Goodwill balance at December 31, 2018 $ 43 $ 41 $ 84 Divestitures — — — Foreign currency translation (1) — (1) Goodwill balance at June 30, 2019 42 41 83 Elimination of Predecessor Goodwill (42) (41) (83) Goodwill balance at July 1, 2019 — — — Recording of Successor Goodwill (1) 127 37 164 Successor Goodwill balance at July 2, 2019 $ 127 $ 37 $ 164 Adjustments (2) — — — Goodwill balance at December 31, 2019 $ 127 $ 37 $ 164 Adjustments (2) — — — Goodwill balance at December 31, 2020 $ 127 $ 37 $ 164 (1) Recording of the Successor Company goodwill in accordance with the application of fresh start accounting. Refer to Note 6 for more details. (2) There were no foreign currency adjustments nor impairments related to Successor Company goodwill for the year ended December 31, 2020 and the Successor period July 2, 2019 through December 31, 2019. (3) Excludes $14 at both December 31, 2020 and 2019 and $25 at both June 30, 2019 and December 31, 2018 related in the Held for Sale Business (See Note 4). |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The Company’s intangible assets with identifiable useful lives consist of the following as of December 31, 2020 and 2019: Gross Accumulated Foreign Exchange Accumulated Net Gross Accumulated Foreign Exchange Accumulated Net 2020 2019 Customer relationships (1) $ 903 $ 5 $ (61) $ 847 $ 903 $ (3) $ (19) $ 881 Trademarks 141 2 (12) 131 141 — (3) 138 Technology 110 2 (11) 101 110 — (4) 106 Total $ 1,154 $ 9 $ (84) $ 1,079 $ 1,154 $ (3) $ (26) $ 1,125 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Estimated annual intangible amortization expense for 2021 through 2025 is as follows: 2021 $ 58 2022 58 2023 58 2024 58 2025 58 |
Fair Value Level 3 (Tables)
Fair Value Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 Debt $ 1,792 $ — $ 1,767 $ 55 $ 1,822 December 31, 2019 Debt $ 1,785 $ — $ 1,751 $ 64 $ 1,815 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following tables summarize the Company’s derivative financial instrument designated as a hedging instrument: December 31, 2020 December 31, 2019 Balance Sheet Location Notional Amount Fair Value Liability Notional Amount Fair Value Asset Derivatives designated as hedging instruments Interest Rate Swap Other current (liabilities)/assets $ 300 $ (15) $ 300 $ 3 Total derivatives designated as hedging instruments $ (15) $ 3 Amount of (Loss) Gain Recognized in OCI on Derivatives, net of tax Successor Predecessor Derivatives designated as hedging instruments Year ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Interest Rate Swaps Interest Rate Swap $ (18) $ 2 $ — Total $ (18) $ 2 $ — |
Debt Obligations Level 3 (Table
Debt Obligations Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt and Lease Obligation [Abstract] | |
Schedule of Debt [Table Text Block] | Debt outstanding at December 31, 2020 and 2019 is as follows: December 31, 2020 December 31, 2019 Long-Term Due Within One Year Long-Term Due Within One Year Senior Secured Credit Facility: ABL Facility $ — $ — $ — $ — Senior Secured Term Loan - USD due 2026 (includes $6 and $7 of unamortized debt discount at December 31, 2020 and 2019, respectively) 701 7 708 7 Senior Secured Term Loan - EUR due 2026 (includes $4 of unamortized debt discount at December 31, 2020 and 2019) 515 — 473 — Senior Notes: 7.875% Senior Notes due 2027 450 — 450 — Other Borrowings: Australia Facility due 2021 at 4.0% and 3.9% at December 31, 2020 and 2019, respectively — 30 27 4 Brazilian bank loans at 10.2% and 9.2% at December 31, 2020 and 2019, respectively 2 22 7 34 Lease obligations (1) 42 14 50 14 Other at 3.9% and 5.0% at December 31, 2020 and 2019, respectively — 9 — 11 Total (2) $ 1,710 $ 82 $ 1,715 $ 70 (1) Lease obligations include finance leases and sale leaseback financing arrangements. (2) The foreign exchange translation impact of the Company’s foreign currency denominated debt instruments was an increase of $46 and a decrease of $10 as of December 31, 2020 and 2019, respectively. |
Debt Instrument Redemption | On and after July 15, 2022, the Company may redeem all or a part of the Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15 of the years indicated below: Year Percentage 2022 103.94 % 2023 101.97 % 2024 and thereafter 100.00 % |
Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled Maturities Aggregate maturities of debt, excluding amortization of debt discounts, at December 31, 2020 for the Company are as follows: Year Debt 2021 $ 84 2022 35 2023 17 2024 9 2025 9 2026 and thereafter 1,651 Total minimum payments 1,805 Less: Amount representing interest (3) Present value of minimum payments $ 1,802 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Finance Lease, Liability, Fiscal Year Maturity | The table below reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the Company’s Consolidated Balance Sheet as of December 31, 2020: Year Minimum Rentals Under Operating Leases Minimum Payments Under Finance Leases (1) 2021 $ 23 $ 2 2022 16 1 2023 11 1 2024 9 1 2025 9 1 2026 and thereafter 58 3 Total lease payments $ 126 $ 9 Less: Amount representing interest (31) (1) Present value of lease liabilities $ 95 $ 8 |
Lessee, Operating Lease, Liability, Maturity | The table below reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the Company’s Consolidated Balance Sheet as of December 31, 2020: Year Minimum Rentals Under Operating Leases Minimum Payments Under Finance Leases (1) 2021 $ 23 $ 2 2022 16 1 2023 11 1 2024 9 1 2025 9 1 2026 and thereafter 58 3 Total lease payments $ 126 $ 9 Less: Amount representing interest (31) (1) Present value of lease liabilities $ 95 $ 8 |
Supplemental Lease Information | The tables below present supplemental information related to leases as of December 31, 2020 and 2019: Successor December 31, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 10.0 10.7 Finance leases 4.8 1.7 Weighted-average discount rate Operating leases 5.24 % 5.74 % Finance leases 7.73 % 10.00 % |
Other lease information | Cash paid for operating leases approximated operating lease expense and non-cash right-of-use asset amortization for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019. The table below presents other cash and noncash consideration detail for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019: Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Cash paid for finance leases $ 4 $ 2 $ 2 Right-of-use assets obtained in exchange for operating lease 13 2 1 Right-of-use assets obtained in exchange for finance lease obligations 5 — 3 |
Schedule of Lease Assets and Liabilities | The table below presents the lease-related assets and liabilities recorded on the Consolidated Balance Sheets: Successor Classification December 31, 2020 December 31, 2019 Assets: Operating (1) Operating lease assets $ 103 $ 110 Finance (2) Machinery and Equipment 13 10 Total leased assets $ 116 $ 120 Liabilities: Current Operating Current portion of operating lease liabilities $ 19 $ 20 Finance Debt payable within one year 2 4 Noncurrent Operating Operating lease liabilities 76 82 Finance Long-term debt 6 3 Total leased liabilities $ 103 $ 109 (1) Operating lease assets include $8 and $9 of favorable leasehold interests as of December 31, 2020 and 2019, respectively. |
Lease, Cost | The table below summarizes the lease costs for the year ended December 31, 2020 and the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019 : Classification Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Operating lease expense Operating (loss) income $ 29 $ 18 $ 16 Short-term lease expense Operating (loss) income 5 2 5 Amortization expense Operating (loss) income 2 1 1 Interest expense from financing leases Interest expense, net <1 <1 <1 Variable lease expense Operating (loss) income 3 3 2 |
Commitments and Contingencies L
Commitments and Contingencies Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies [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 December 31, 2020 and 2019: Liability Range of Reasonably Possible Costs as of December 31, 2020 Successor Site Description December 31, 2020 (1) December 31, 2019 (1) Low High Geismar, LA $ 12 $ 12 $ 9 $ 22 Superfund and offsite landfills – allocated share: Less than 1% 3 3 2 6 Equal to or greater than 1% 6 6 5 14 Currently-owned 8 8 4 14 Formerly-owned: Remediation 18 21 14 36 Monitoring only — 1 — 1 Total $ 47 $ 51 $ 34 $ 93 (1) The table includes approximately $2 of environmental remediation liabilities related to the Held for Sale Business at both December 31, 2020 and 2019. These associated liabilities have been included in “Long-term liabilities associated with assets held for sale” within the Consolidated Balance Sheets. |
Long-term Purchase Commitment [Table Text Block] | The Company is required to make minimum annual payments under these contracts as follows: Year Minimum Annual Purchase Commitments 2021 $ 190 2022 134 2023 94 2024 50 2025 49 2026 and beyond 253 Total minimum payments 770 Less: Amount representing interest (31) Present value of minimum payments $ 739 |
Pension and Postretirement Ex_2
Pension and Postretirement Expense Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Pension and Postretirement Expense [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | See below table for a summary of the pension liability and expense amounts included in discontinued operations. Pension Benefits Successor December 31, 2020 December 31, 2019 Discontinued Operations U.S. Non-U.S. U.S. Non-U.S. Benefit obligation $ — $ 36 $ — $ 29 Pension Benefits Successor Predecessor Year ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year ended December 31, 2018 Discontinued Operations U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Net expense $ — $ 5 $ — $ < 1 $ — $ 6 $ — $ 1 |
Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets [Table Text Block] | The following table presents the change in benefit obligation, change in plan assets and components of funded status for the Company’s defined benefit pension and non-pension postretirement benefit plans for the year ended December 31, 2020, the Successor period from July 2, 2019 through December 31, 2019, and the Predecessor period January 1, 2019 through July 1, 2019: Pension Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Change in Benefit Obligation Benefit obligation at beginning of period $ 225 $ 688 $ 228 $ 678 $ 216 $ 583 Service cost 2 18 2 8 2 7 Interest cost 6 6 3 4 4 4 Actuarial losses 17 43 3 12 14 93 Foreign currency exchange rate changes — 61 — (8) — (3) Benefits paid (15) (13) (8) (6) (8) (6) Expenses paid from assets (3) — (3) — — — Employee contributions — 1 — — — — Benefit obligation at end of period $ 232 $ 804 $ 225 $ 688 $ 228 $ 678 Benefit obligation at end of period - discontinued operations — 36 — 29 — 29 Benefit obligation at end of period - continuing operations $ 232 $ 768 $ 225 $ 659 $ 228 $ 649 Change in Plan Assets Fair value of plan assets at beginning of period $ 197 $ 483 $ 196 $ 470 $ 185 $ 404 Actual return on plan assets 18 58 10 9 19 60 Foreign currency exchange rate changes — 45 — (5) — (2) Employer contributions — 40 2 15 — 14 Benefits paid (15) (13) (8) (6) (8) (6) Expenses paid from assets (3) — (3) — — — Employee contributions — 1 — — — — Fair value of plan assets at end of period 197 614 197 483 196 470 Funded status of the plan at end of period $ (35) $ (190) $ (28) $ (205) $ (32) $ (208) Funded status of the plan at end of period - discontinued operations — (36) — (29) — (29) Funded status of the plan at the end of period - continuing operations $ (35) $ (154) $ (28) $ (176) $ (32) $ (179) Non-Pension Postretirement Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Change in Benefit Obligation Benefit obligation at beginning of period $ — $ 13 $ — $ 17 $ — $ 13 Interest cost — 1 — — — — Actuarial (gains) losses — (1) — (4) — 4 Foreign currency exchange rate changes — (1) — — — — Plan settlements — — — — — — Benefit obligation at end of period $ — $ 12 $ — $ 13 $ — $ 17 Change in Plan Assets Fair value of plan assets at beginning of period $ — $ — $ — $ — $ — $ — Employer contributions — — — — — — Plan settlements — — — — — — Fair value of plan assets at end of period — — — — — — Funded status of the plan at end of period $ — $ (12) $ — $ (13) $ — $ (17) |
Amounts Recognized in the Consolidated Balance Sheet, Accumulated Other Comprehensive Income and Other [Table Text Block] | Pension Benefits Non-Pension Postretirement Benefits December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Amounts recognized in the Consolidated Balance Sheets consists of: Noncurrent assets $ — $ 52 $ — $ 8 $ — $ — $ — $ — Other current liabilities — (6) — (5) — (1) — (1) Long-term pension and post employment benefit obligations (35) (236) (28) (208) — (11) — (12) Accumulated other comprehensive loss — — — — — — — — Net amounts recognized $ (35) $ (190) $ (28) $ (205) $ — $ (12) $ — $ (13) Net amounts recognized - discontinued operations — (36) — (29) — — — — Net amounts recognized - continued operations $ (35) $ (154) $ (28) $ (176) $ — $ (12) $ — $ (13) Accumulated benefit obligation $ 232 $ 757 $ 225 $ 648 Accumulated benefit obligation for funded plans 232 525 225 446 Pension plans with underfunded or non-funded accumulated benefit obligations: Aggregate projected benefit obligation (1) $ 232 $ 258 $ 225 $ 224 Aggregate accumulated benefit obligation 232 250 225 216 Aggregate fair value of plan assets 197 16 197 13 Pension plans with projected benefit obligations in excess of plan assets: Aggregate projected benefit obligation $ 232 $ 285 $ 225 $ 287 Aggregate fair value of plan assets 197 42 197 74 |
Schedule of Changes in Projected Benefit Obligations [Table Text Block] | Following are the components of net pension and postretirement expense (benefit) recognized for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Pension Benefits U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Service cost $ 2 $ 2 $ 2 $ 3 Interest cost on projected benefit obligation 6 3 4 7 Expected return on assets (12) (7) (6) (14) Unrealized actuarial loss (1) 11 — 1 11 Net expense (benefit) $ 7 $ (2) $ 1 $ 7 Non-U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Service cost $ 18 $ 8 $ 7 $ 17 Interest cost on projected benefit obligation 6 4 4 10 Expected return on assets (13) (6) (6) (13) Unrealized actuarial (gain) loss (1) (2) 9 39 (26) Net expense (benefit) (2) $ 9 $ 15 $ 44 $ (12) Non-Pension Postretirement Benefits U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Interest cost on projected benefit obligation $ — $ — $ — $ — Unrealized actuarial loss (1) — — — — Net (benefit) expense $ — $ — $ — $ — Non-U.S. Plans Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Interest cost on projected benefit obligation $ 1 $ — $ — $ 1 Unrealized actuarial(gain) loss (1) (1) (4) 4 2 Net (benefit) expense $ — $ (4) $ 4 $ 3 (1) Upon the application of fresh start accounting, the Company’s pension and other non-pension postretirement liabilities were remeasured as of the Predecessor period July 1, 2019. As a result, for the Predecessor period January 1, 2019 through July 1, 2019, total unrealized actuarial losses of $44 were recorded to “Reorganization, net” in the Consolidated Statements of Operations, $5 of which relate to the Company’s Held for Sale business. (2) Net expense (benefit) related to the Company’s Held for Sale Business was $5, $<1, $6 and $1 for the year ended December 31, 2020, the Successor period from July 2, 2019 to December 31, 2019, the Predecessor period from January 1, 2019 through July 1, 2020 and the year ended December 31, 2018, respectively, and is included in the table above. |
Weighted Average Rates Used to Determine the Benefit Obligations [Table Text Block] | The weighted average rates used to determine the benefit obligations were as follows for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, and the Predecessor period January 1, 2019 through July 1, 2019: Pension Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Discount rate 2.2 % 0.8 % 3.1 % 1.2 % 3.3 % 1.3 % Rate of increase in future compensation levels — 3.6 % — 3.4 % — 3.4 % Non-Pension Postretirement Benefits Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 U.S. Non-U.S. Plans U.S. Non-U.S. Plans U.S. Plans Non-U.S. Plans Discount rate — % 4.6 % — % 5.2 % — % 6.9 % Rate of increase in future compensation levels — — — — — — The weighted average assumed health care cost trend rates are as follows: Health care cost trend rate assumed for next year — % 6.8 % — % 5.7 % — % 6.2 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) — % 4.5 % — % 4.0 % — % 4.0 % Year that the rate reaches the ultimate trend rate — 2040 — 2040 — 2040 |
Weighted Average Rates Used to Determine Net Periodic Pension Expense Benefit [Table Text Block] | The weighted average rates used to determine net periodic pension expense (benefit) were as follows for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Pension Benefits U.S. Plans Non-U.S. Plans Successor Predecessor Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Discount rate 3.1 % 3.3 % 4.1 % 3.5 % 1.2 % 1.3 % 1.9 % 1.9 % Rate of increase in future compensation levels — — — — 3.4 % 3.4 % 2.3 % 2.4 % Expected long-term rate of return on plan assets 6.6 % 6.6 % 6.6 % 6.7 % 3.1 % 2.6 % 3.1 % 3.1 % Non-Pension Postretirement Benefits U.S. Plans Non-U.S. Plans Successor Predecessor Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Discount rate — % — % 4.1 % 3.2 % 5.2 % 6.9 % 6.3 % 5.3 % Rate of increase in future compensation levels — — — — — — — — Expected long-term rate of return on plan assets — — — — — — — — |
Schedule of Allocation of Plan Assets [Table Text Block] | Actual Target 2020 2020 2019 Weighted average allocations of U.S. pension plan assets at December 31: Equity securities 32 % 35 % 35 % Debt securities 55 % 53 % 55 % Cash, short-term investments and other 13 % 12 % 10 % Total 100 % 100 % 100 % Weighted average allocations of non-U.S. pension plan assets at December 31: Equity securities 22 % 22 % 23 % Debt securities 76 % 75 % 77 % Cash, short-term investments and other 2 % 3 % — % Total 100 % 100 % 100 % |
Schedule of Fair Value of U.S. Pension Plan Investments [Table Text Block] | The following table presents U.S. pension plan investments measured at fair value on a recurring basis as of December 31, 2020 and 2019: Fair Value Measurements Using 2020 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Large cap equity funds (1) $ — $ 35 $ — $ 35 $ — $ 37 $ — $ 37 Small/mid cap equity funds (1) — 5 — 5 — 6 — 6 International equity funds (1) — 25 — 25 — 27 — 27 Fixed income securities (1) — 107 — 107 — 103 — 103 Cash equivalents (2) — 2 — 2 — 2 — 2 $ — $ 174 $ — $ 174 $ — $ 175 $ — $ 175 Investments measured at fair value using net asset value as a practical expedient: Other funds (3) $ 23 $ 22 Total $ 197 $ 197 The following table presents non-U.S. pension plan investments measured at fair value on a recurring basis as of December 31, 2020 and 2019: Fair Value Measurements Using 2020 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Unobserv-able Total Pooled insurance products with fixed income guarantee (1) $ — $ 15 $ — $ 15 $ — $ 13 $ — $ 13 Cash equivalents (2) — — — — — 1 — 1 $ — $ 15 $ — $ 15 $ — $ 14 $ — $ 14 Investments measured at fair value using net asset value as a practical expedient: Other international equity funds (3) $ 135 $ 108 Other fixed income securities (3) 464 361 Total $ 614 $ 483 (1) Level 2 equity and fixed income securities are primarily in pooled asset and mutual funds and are valued based on underlying net asset value multiplied by the number of shares held. The underlying asset values are based on observable inputs and quoted market prices. (2) Cash equivalents represent investment in a collective short term investment fund, which is a cash sweep for uninvested cash that earns interest monthly. For these investments, book value is assumed to equal fair value due to the short duration of the investment term. (3) Represents investments in commingled funds with exposure to a variety of hedge fund strategies, which are not publicly traded and have ongoing redemption restrictions. The Company’s interest in these investments is measured at net asset value per share as a practical expedient for fair value, which is derived from the underlying asset values in these funds, only some of which represent observable inputs and quoted market prices. |
Schedule of Expected Benefit Payments [Table Text Block] | Estimated future plan benefit payments as of December 31, 2020 are as follows: Pension Benefits Non-Pension Postretirement Benefits Year U.S. Plans Non-U.S. U.S. Plans Non-U.S. 2021 $ 17 $ 16 $ — $ 1 2022 16 16 — — 2023 15 17 — — 2024 15 19 — — 2025 15 17 — — 2026-2030 64 118 — 2 |
Stock Option Plans and Stock _2
Stock Option Plans and Stock Based Compensation Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock Option Plans and Stock Based Compensation [Abstract] | |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | The following is a summary of Company’s RSU and PSU plan activity for the year ended December 31, 2020: Hexion Holdings Common RSUs Weighted Average Grant Date Fair Value Hexion Holdings Common PSUs Weighted Average Grant Date Fair Value Nonvested at December 31, 2019 1,034,100 $ 15.37 2,412,894 $ 11.97 Units granted 882,422 $ 15.80 823,619 $ 15.80 Units forfeited (16,348) $ 15.80 (12,194) $ 15.80 Units vested (381,366) $ 15.41 — $ — Nonvested at December 31, 2020 (1) 1,518,808 $ 15.60 3,224,319 $ 12.93 (1) Nonvested shares include shares awarded to associates related to discontinued operations. |
Share-based Payment Arrangement, Performance Shares, Activity | The following is a summary of Company’s RSU and PSU plan activity for the year ended December 31, 2020: Hexion Holdings Common RSUs Weighted Average Grant Date Fair Value Hexion Holdings Common PSUs Weighted Average Grant Date Fair Value Nonvested at December 31, 2019 1,034,100 $ 15.37 2,412,894 $ 11.97 Units granted 882,422 $ 15.80 823,619 $ 15.80 Units forfeited (16,348) $ 15.80 (12,194) $ 15.80 Units vested (381,366) $ 15.41 — $ — Nonvested at December 31, 2020 (1) 1,518,808 $ 15.60 3,224,319 $ 12.93 (1) Nonvested shares include shares awarded to associates related to discontinued operations. |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following is a summary of the new stock based compensation plans issued after Emergence and their related outstanding shares as of December 31, 2020: Plan Name Grant Date Shares Outstanding (1) Plan Expiration Vesting Terms/Status Number of Shares Authorized Hexion Holdings Corporation 2019 Omnibus Incentive Plan August 2029 7,635,389 Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”): 2019 Grants RSUs September 2019 1,034,100 Time-vest ratably over 3 years, but must be employed on July 1, 2022 in order to receive shares; Accelerated vesting upon change in control. PSUs September 2019 2,412,894 Performance based with market conditions: Step vest over 4 years based on a 20 consecutive trading-day volume weighted average price per share from $20 to $30 per share. PSUs that vest by June 30, 2022 will be settled in July 2022 and remaining PSUs that vest by June 30, 2023 will be settled in July 2023. 2020 Grants RSUs March 2020 692,441 Time-vest ratably over 3 years; Accelerated vesting upon change in control. PSUs March 2020 811,425 Performance based: 50% vest upon achievement of adjusted return on invested capital targets as of December 31, 2022. 50% vest upon achievement of Hexion Segment EBITDA Margin targets as of December 31, 2022. PSUs that vest will be settled in July 2023. 2020 Non-employee Grants RSUs January 2020 73,332 Time-vest ratably over 3 years; Accelerated vesting upon change in control. Settled upon vesting. RSUs August 2020 60,664 100% vest on June 1, 2021; Accelerated vesting upon change in control. RSUs that vest will be settled upon the date the non-employee director leaves board service. |
Income Taxes Level 3 (Tables)
Income Taxes Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax expense detail for the Company for year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018 is as follows: Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Current: Federal $ (14) $ (1) $ 36 $ (4) State and local — 4 13 1 Foreign 22 1 11 25 Total current 8 4 60 22 Deferred: Federal 3 9 (2) 1 State and local (1) 1 — — Foreign 4 (24) 143 8 Total deferred 6 (14) 141 9 Income tax expense (benefit) (1) $ 14 $ (10) $ 201 $ 31 (1) Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the Company’s combined differences between income taxes computed at the federal statutory tax rate of 21% and the provisions for income taxes for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Income tax (benefit) expense computed at federal statutory tax rate $ (31) $ (21) $ 622 $ (35) State tax (benefit) expense, net of federal benefit (5) (2) 9 1 Foreign tax rate expense differential 1 2 33 13 Foreign source income subject to U.S. taxation — 3 1 2 Non-deductible losses and other expenses — — 5 9 Increase (decrease) in the taxes due to changes in valuation allowance 46 17 (433) 25 Additional (benefit) expense on foreign unrepatriated earnings (3) — — 1 Additional (benefit) expense for uncertain tax positions (4) — 44 15 Tax recognized in other comprehensive income — (1) (4) — Changes in enacted tax laws and tax rates 6 — — — Tax benefit for fresh start accounting and reorganization adjustments — — (68) — Other decrease (increase) of deferred tax assets 4 (8) (8) — Income tax expense (benefit) (1) $ 14 $ (10) $ 201 $ 31 (1) Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | The domestic and foreign components of the Company’s loss before income taxes for year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Domestic $ (138) $ (46) $ 2,754 $ (216) Foreign (11) (58) 206 52 Total (1) $ (149) $ (104) $ 2,960 $ (164) (1) Excludes (loss) income before income taxes of $(70), $5, $155, and $38 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The tax effects of significant temporary differences, net operating losses, interest expense limitation, and credit carryforwards, which comprise the Company’s deferred tax assets and liabilities at December 31, 2020 and 2019 are as follows: December 31, 2020 December 31, 2019 Assets: Non-pension post-employment $ 4 $ 4 Accrued and other expenses 61 97 Property, plant and equipment — 4 Loss, expense, and credit carryforwards 240 163 Intangible assets 11 — Pension and postretirement benefit liabilities 47 14 Gross deferred tax assets 363 282 Valuation allowance (217) (122) Net deferred tax asset 146 160 Liabilities: Property, plant and equipment (227) (228) Unrepatriated earnings of foreign subsidiaries (7) (10) Intangible assets (66) (65) Gross deferred tax liabilities (300) (303) Net deferred tax liability (1) $ (154) $ (143) (1) Excludes net deferred tax liability of $20 and $15 for the years ended December 31, 2020 and 2019, respectively, related to the Held for Sale Business. The following table summarizes the presentation of the Company’s net deferred tax liability in the Consolidated Balance Sheets at December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Assets: Long-term deferred income taxes $ 7 $ 6 Liabilities: Long-term deferred income taxes (161) (149) Net deferred tax liability (1) $ (154) $ (143) (1) Excludes net deferred tax liability of $20 and $15 for the years ended December 31, 2020 and 2019 respectively, related to the Held for Sale Business. |
Summary of Valuation Allowance [Table Text Block] | The following table summarizes the changes in the valuation allowance for the year ended December 31, 2020, and the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Balance at Changes in Charge / (Release) Balance at Valuation allowance on Deferred tax assets: Predecessor Year ended December 31, 2018 498 — 27 525 January 1, 2019 through July 1, 2019 525 — (427) 98 Successor July 2, 2019 through December 31, 2019 98 — 24 122 Year ended December 31, 2020 (1) 122 41 54 217 |
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Balance at beginning of period $ 130 $ 133 $ 94 Additions based on tax positions related to the current year 4 2 41 Additions for tax positions of prior years 14 — 5 Reductions for tax positions of prior years (20) (3) (6) Settlements (1) (4) — Foreign currency translation 2 2 (1) Balance at end of period (1) $ 129 $ 130 $ 133 (1) Includes unrecognized tax benefits of $6, $5, and $11 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019 associated with the Held for Sale business. |
Summarized Financial Informat_2
Summarized Financial Information of Unconsolidated Affiliate Level 3 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summarized Financial Information of Unconsolidated Affiliate [Abstract] | |
Schedule of Variable Interest Entities [Table Text Block] | Summarized financial information of the Company’s unconsolidated affiliates, which are listed below, as of December 31, 2020 and 2019 and for the years ended December 31, 2020, and 2019 is as follows: • Momentive UV Coatings (Shanghai) Co., Ltd • Hexion Australia Pty Ltd • MicroBlend Columbia S.A.S. Excluded from the table below is the summarized financial information for the Russia JV since it is part of the Held for Sale Business (See Note 4). December 31, 2020 December 31, 2019 Current assets $ 38 $ 32 Non-current assets 7 6 Current liabilities 20 10 Non-current liabilities — — Successor Predecessor December 31, 2020 July 2, 2019 through December 31, 2019 January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Net sales $ 59 $ 33 $ 39 $ 88 Gross profit 16 8 9 22 Pre-tax income 8 3 4 13 Net income 6 2 3 9 |
Segment Information Level 3 (Ta
Segment Information Level 3 (Tables) | 12 Months Ended | |
Dec. 31, 2020 | ||
Segment Information [Abstract] | ||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Net Sales (1) : Following is continuing operations revenue by reportable segment. Product sales within each reportable segment share economically similar risks. These risks include general economic and industrial conditions, competitive pricing pressures and the Company’s ability to pass on fluctuations in raw material prices to its customers. A substantial number of the Company’s raw material inputs are petroleum-based and their prices fluctuate with the price of oil. Due to differing regional industrial and economic conditions, the geographic distribution of revenue may impact the amount, timing and uncertainty of revenue and cash flows from contracts with customers. Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives $ 1,188 $ 693 $ 761 $ 1,641 Coatings and Composites 1,322 630 720 1,496 Total $ 2,510 $ 1,323 $ 1,481 $ 3,137 (1) Intersegment sales are not significant and, as such, are eliminated within the selling segment. Segment EBITDA: Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives (1) $ 214 $ 116 $ 135 $ 252 Coatings and Composites (2) 151 60 96 200 Corporate and Other (71) (37) (30) (71) Total $ 294 $ 139 $ 201 $ 381 (1) Included in Adhesives Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of less than $1 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor Period January 1, 2019 through July 1, 2019 and $1 for the Predecessor year ended December 31, 2018. (2) Included in Coatings and Composites Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of $2, $2, $1 and $3 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. Total Assets (1) : December 31, 2020 December 31, 2019 Adhesives $ 2,202 $ 2,374 Coatings and Composites 1,404 1,371 Corporate and Other 396 401 Total $ 4,002 $ 4,146 (1) Includes assets held for sale at December 31, 2020 and 2019 . | [1] |
Depreciation and Amortization Expense by Segment [Table Text Block] | Depreciation and Amortization Expense: Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives (1) $ 97 $ 47 $ 21 $ 50 Coatings and Composites 90 44 20 44 Corporate and Other 4 2 2 4 Total $ 191 $ 93 $ 43 $ 98 | |
Capital Expenditures by Segment [Table Text Block] | Capital Expenditures (1) : Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Adhesives $ 62 $ 21 $ 18 $ 35 Coatings and Composites 43 22 22 43 Corporate and Other 3 4 1 3 Total $ 108 $ 47 $ 41 $ 81 (1) Includes capitalized interest costs that are incurred during the construction of property and equipment. | |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | Geographic Information Net Sales (1) : Successor Predecessor December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 United States $ 1,142 $ 617 $ 693 $ 1,449 Netherlands 523 240 308 652 Canada 278 153 154 362 China 259 121 121 229 Brazil 123 83 91 194 Other international 185 109 114 251 Total $ 2,510 $ 1,323 $ 1,481 $ 3,137 (1) Sales are attributed to the country in which the individual business locations reside. | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Following is net sales by reportable segment disaggregated by geographic region (1) : Successor December 31, 2020 July 2, 2019 through December 31, 2019 Adhesives Coatings and Composites Total Adhesives Coatings and Composites Total North America $ 910 $ 510 $ 1,420 $ 517 $ 255 $ 772 Europe 20 521 541 12 236 248 Asia Pacific 124 291 415 69 139 208 Latin America 134 — 134 95 — 95 Total $ 1,188 $ 1,322 $ 2,510 $ 693 $ 630 $ 1,323 Predecessor January 1, 2019 through July 1, 2019 Year Ended December 31, 2018 Adhesives Coatings and Composites Total Adhesives Coatings and Composites Total North America $ 562 $ 286 $ 848 $ 1,215 $ 596 $ 1,811 Europe 15 305 320 $ 37 $ 644 681 Asia Pacific 81 129 210 $ 170 $ 254 424 Latin America 103 — 103 $ 219 $ 2 221 Total $ 761 $ 720 $ 1,481 $ 1,641 $ 1,496 $ 3,137 (1) Intersegment sales are not significant and, as such, are eliminated within the selling segment. | |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | Long-Lived Assets (1) : December 31, 2020 December 31, 2019 United States $ 1,520 $ 1,605 Netherlands 556 526 Brazil 79 105 Canada 113 116 Other international 234 218 Total $ 2,502 $ 2,570 (1) Long-lived assets consist of property, plant and equipment, net; goodwill; and other intangible assets, net. | |
Reconciliation of Segment EBITDA to Net Income [Table Text Block] | Reconciliation of Net Loss to Segment EBITDA: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Reconciliation: Net (loss) income attributable to Hexion Inc. $ (230) $ (89) $ 2,894 $ (162) Add: Net income (loss) attributable to noncontrolling interest — 1 1 (1) Less: Net (loss) income from discontinued operations (69) 4 135 28 Net (loss) income from continued operations (161) (92) 2,760 (191) Income tax expense (benefit) 14 (10) 201 31 Interest expense, net 100 55 89 365 Depreciation and amortization (1) 191 93 43 98 EBITDA 144 46 3,093 303 Adjustments to arrive at Segment EBITDA: Asset impairments and write-downs $ 16 $ — $ — $ 32 Business realignment costs (2) 69 22 14 27 Realized and unrealized foreign currency losses (gains) — 4 (7) 28 Gain on dispositions — — — (44) Unrealized losses (gains) on pension and OPEB plan liabilities 4 5 — (13) Transaction costs (3) 6 11 26 13 Reorganization items, net (4) — — (2,943) — Non-cash impact of inventory step-up (5) — 27 (27) — Accelerated deferred revenue (6) — — 18 — Other non-cash items (7) 43 10 9 14 Other (8) 12 14 18 21 Total adjustments 150 93 (2,892) 78 Segment EBITDA $ 294 $ 139 $ 201 $ 381 Segment EBITDA: Adhesives 214 116 135 252 Coatings and Composites 151 60 96 200 Corporate and Other (71) (37) (30) (71) Total $ 294 $ 139 $ 201 $ 381 (1) For the year ended December 31, 2020 and 2018 accelerated depreciation of $2 and $4 has been included in “Depreciation and amortization.” There was no accelerated deprecation in either the Successor year ended December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. (2) Business realignment costs for the Successor and Predecessor periods below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Severance costs $ 16 $ 9 $ 8 $ 9 In-process facility rationalizations 11 5 3 11 Contractual costs from exited business 8 — — — Business services implementation 22 — — — Legacy environmental reserves 9 7 1 5 Other 3 1 2 2 (a) The Company had $8 of severance liabilities accrued within “Other current liabilities” on the Consolidated Balance Sheets at both December 31, 2020 and 2019. The Company expects the amounts associated with these severance liabilities to be paid over the next 12 months . (3) For the year ended December 31, 2020, transaction costs included certain professional fees related to strategic projects. For the Successor period from July 2, 2019 through December 31, 2019 and the Predecessor period from January 1, 2019 through July 1, 2019, transaction costs primarily included $6 and $23, respectively, of certain professional fees and other expenses related to the Company’s Chapter 11 proceedings. (4) Represents incremental costs incurred directly as a result of the Company’s Chapter 11 proceedings after the date of filing, gains on settlement of liabilities under the Plan and the net impact of fresh start accounting adjustments. The amounts excludes the “Non-cash impact of inventory step-up” discussed below. (5) Represents $27 of non-cash expense related to the step up of finished goods inventory on July 1 as part of fresh start accounting that was expensed in the successor period upon the sale of the inventory. (6) For the Predecessor period from January 1, 2019 through July 1, 2019, $18 of deferred revenue was accelerated on July 1 as part of Fresh Start accounting. (7) Other non-cash items for the Successor and Predecessor periods presented below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Fixed asset write-offs $ 13 $ 6 $ 3 $ 6 Stock-based compensation costs 17 8 — — Long-term retention programs 9 (2) 5 8 One-time capitalized variance impact of inventory fresh start step-up — (4) — — Other 4 2 1 — (8) Other for Successor and Predecessor periods presented below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Legacy and other non-recurring items $ 8 $ 7 $ 3 $ 7 IT outage (recoveries) costs, net (4) — 9 — Financing fees and other 8 7 6 14 | |
[1] | (1) Intersegment sales are not significant and, as such, are eliminated within the selling segment |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Changes in 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 December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period of January 1, 2019 through July 1, 2019 and the year ended December 31, 2018: Defined Benefit Pension and Postretirement Plans Foreign Currency Translation Adjustments Cash Flow Hedge Total Predecessor Balance at December 31, 2018 $ (1) $ (17) $ — $ (18) Change in value — (8) — (8) Elimination of Predecessor Company accumulated other comprehensive loss 1 25 — 26 Balance at July 1, 2019 $ — $ — $ — $ — Successor Balance at July 2, 2019 $ — $ — $ — $ — Change in value — (3) 2 (1) Balance at December 31, 2019 $ — $ (3) $ 2 $ (1) Change in value — (8) (18) (26) Balance at December 31, 2020 $ — $ (11) $ (16) $ (27) |
Interim Reporting (Tables)
Interim Reporting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Effect of Fourth Quarter Events | Condensed Consolidated Statements of Operations Successor Three Months Ended December 31, 2020 Three Months Ended September 30, 2020 (as revised) (1) Three Months Ended June 30, 2020 Three Months Ended March 31, 2020 Net sales $ 655 $ 634 $ 534 $ 687 Operating (loss) income (10) 8 (28) (34) Net (loss) income from continuing operations, net of taxes (37) (26) (36) (62) Net income (loss) from discontinued operations, net of taxes 2 (68) (6) 3 Net loss $ (35) $ (94) $ (42) $ (59) (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. Successor Predecessor Three Months Ended December 31, 2019 July 2, 2019 through September 30, 2019 July 1, 2019 (1) Three Months Ended June 30, 2019 (2) Three Months Ended March 31, 2019 Net sales $ 630 $ 693 $ — $ 750 $ 731 Operating (loss) income (30) (18) — 40 27 Net (loss) income from continuing operations, net of taxes (48) (44) 2,935 (118) (57) Net income from discontinued operations, net of taxes 3 1 119 10 6 Net (loss) income (45) (43) 3,054 (108) (51) Net income attributable to noncontrolling interest (1) — — — (1) Net (loss) income attributable to Hexion Inc. $ (46) $ (43) $ 3,054 $ (108) $ (52) (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). Line Item As Previously Reported Adjustments As Revised Net (loss) income $ (203) $ 8 $ (195) (Loss) income from discontinued operations, net of taxes (79) 8 (71) Other assets, current and non-current (1) (26) (27) Net cash (used in) provided by operating activities from continuing operations (11) (26) (37) Net cash (used in) provided by operating activities from discontinued operations (1) 13 12 Net cash (used in) provided by operating activities $ (12) $ (13) $ (25) Net short-term debt repayments $ (25) $ 13 $ (12) Net cash provided by (used in) financing activities $ 7 $ 13 $ 20 Condensed Consolidated Statement of Operations (Three Months Ended September 30, 2020) (unaudited) Line Item As Previously Reported Adjustment (1) As Revised (Loss) income from discontinued operations, net of taxes $ (76) $ 8 $ (68) Net (loss) income (102) 8 (94) Net (loss) income attributable to Hexion Inc. (102) 8 (94) Condensed Consolidated Statement of Operations (Nine Months Ended September 30, 2020) (unaudited) Line Item As Previously Reported Adjustment (1) As Revised (Loss) income from discontinued operations, net of taxes $ (79) $ 8 $ (71) Net (loss) income (203) 8 (195) Net (loss) income attributable to Hexion Inc. (203) 8 (195) (1) The $8 adjustment summarized above impacts the “Asset impairments” caption within the financial results table in the Discontinued Operations footnote. The adjustment also impacts “Comprehensive loss” and “Accumulated deficit.” |
Background and Basis of Prese_2
Background and Basis of Presentation (Details) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / shares | Jun. 30, 2019USD ($) | Dec. 31, 2020USD ($)sitesSegments$ / shares | Dec. 31, 2018USD ($) | Jul. 01, 2019$ / shares | |
Entity Location [Line Items] | |||||
Par Value, Common Stock | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Number of Sites | 44 | ||||
Continuing Operations Sales Grossups Related to Discontinued Operations | $ | $ 9 | $ 10 | $ 15 | $ 24 | |
Number of Reportable Segments | Segments | 3 | ||||
UNITED STATES | |||||
Entity Location [Line Items] | |||||
Number of Sites | 21 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | Jul. 02, 2019 | Jul. 01, 2019 | ||
Capital Expenditures Incurred but Not yet Paid | $ (8) | $ (7) | $ (2) | $ (5) | ||||
Depreciation | $ 90 | 40 | 131 | 86 | ||||
Accelerated Depreciation | 2 | 4 | ||||||
Pension liability fair value adjustment | $ (44) | |||||||
Goodwill | 164 | 164 | 164 | $ 178 | ||||
Unrealized gains (losses) on pension and OPEB plan liabilities | 5 | 0 | 4 | (13) | ||||
Foreign Currency Transaction Gain (Loss), before Tax | 5 | (8) | 30 | |||||
Interest-bearing time deposits and other cash equivalents | 74 | 74 | 20 | |||||
Unamortized Debt Issuance Expense | 1 | |||||||
Asset impairments (see Note 8) | 0 | 0 | 0 | 16 | 28 | |||
Research and Development Expense | 20 | 21 | 38 | 43 | ||||
Business realignment costs | [1] | 22 | 14 | $ 69 | 27 | |||
Concentration Risk, Percentage | 9.00% | |||||||
Other intangible assets, net | 1,125 | 1,125 | $ 1,079 | |||||
Establishment of Successor other intangible assets | 1,219 | 1,219 | ||||||
Contract with Customer, Asset, Sale | 6 | 5 | ||||||
Capitalized Turnaround Costs Noncurrent | 2 | 2 | 7 | |||||
Restricted Cash and Cash Equivalents | 4 | 4 | 4 | |||||
Allowance for Doubtful Accounts, Premiums and Other Receivables | 3 | 3 | 3 | |||||
Fresh Start Adjustments [Member] | ||||||||
Pension liability fair value adjustment | 44 | |||||||
Continuing Operations | ||||||||
Pension liability fair value adjustment | (39) | |||||||
Goodwill | $ 164 | $ 164 | $ 83 | 164 | $ 84 | $ 164 | 0 | |
Establishment of Successor other intangible assets | 1,155 | |||||||
Continuing Operations | Fresh Start Adjustments [Member] | ||||||||
Pension liability fair value adjustment | $ (39) | |||||||
Continuing Operations | Epoxy | ||||||||
Goodwill | 1 | |||||||
Continuing Operations | Forest Products | ||||||||
Goodwill | 127 | |||||||
Continuing Operations | Versatics | ||||||||
Goodwill | $ 36 | |||||||
Minimum [Member] | ||||||||
Property, Plant and Equipment, Useful Life | 1 year | |||||||
Finite-Lived Intangible Asset, Useful Life | 15 years | |||||||
Minimum [Member] | Building [Member] | ||||||||
Property, Plant and Equipment, Useful Life | 9 years | |||||||
Minimum [Member] | Machinery and Equipment [Member] | ||||||||
Property, Plant and Equipment, Useful Life | 1 year | |||||||
Maximum [Member] | ||||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||||
Finite-Lived Intangible Asset, Useful Life | 25 years | |||||||
Maximum [Member] | Building [Member] | ||||||||
Property, Plant and Equipment, Useful Life | 39 years | |||||||
Maximum [Member] | Machinery and Equipment [Member] | ||||||||
Property, Plant and Equipment, Useful Life | 20 years | |||||||
[1] | Business realignment costs for the Successor and Predecessor periods below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Severance costs $ 16 $ 9 $ 8 $ 9 In-process facility rationalizations 11 5 3 11 Contractual costs from exited business 8 — — — Business services implementation 22 — — — Legacy environmental reserves 9 7 1 5 Other 3 1 2 2 (a) The Company had $8 of severance liabilities accrued within “Other current liabilities” on the Consolidated Balance Sheets at both December 31, 2020 and 2019. The Company expects the amounts associated with these severance liabilities to be paid over the next 12 months . |
Discontinued Operations and D_3
Discontinued Operations and Disposal Groups (Details) - USD ($) $ in Millions | Jul. 01, 2019 | [2] | Dec. 31, 2020 | Sep. 30, 2020 | [3] | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | [4] | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||
Goodwill, Discontinued Operations | $ 14 | $ 14 | $ 14 | $ 14 | ||||||||||||||
Other Intangible Assets, Discontinued Operations | 61 | 63 | 63 | 61 | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||
Accounts receivable | 66 | 49 | 49 | 66 | ||||||||||||||
Finished and in-process goods | 18 | 21 | 21 | 18 | ||||||||||||||
Raw materials and supplies | 17 | 18 | 18 | 17 | ||||||||||||||
Other current assets | 12 | 11 | 11 | 12 | ||||||||||||||
Total current assets | 113 | 99 | 99 | 113 | ||||||||||||||
Investment in unconsolidated entities | 5 | 3 | 3 | 5 | ||||||||||||||
Deferred tax assets | 2 | 0 | 0 | 2 | ||||||||||||||
Other long-term assets | 7 | 11 | 11 | 7 | ||||||||||||||
Property, plant and equipment, net | 310 | 297 | 297 | 310 | ||||||||||||||
Operating lease assets | 13 | 12 | 12 | 13 | ||||||||||||||
Goodwill, Discontinued Operations | 14 | 14 | 14 | 14 | ||||||||||||||
Other Intangible Assets, Discontinued Operations | 61 | 63 | 63 | 61 | ||||||||||||||
Discontinued operations impairment | (75) | 0 | 0 | (75) | ||||||||||||||
Total long-term assets | 337 | 400 | 400 | 337 | ||||||||||||||
Total assets held for sale | 450 | 499 | 499 | 450 | ||||||||||||||
Accounts payable | 52 | 52 | 52 | 52 | ||||||||||||||
Income taxes payable | 1 | 0 | 0 | 1 | ||||||||||||||
Accrued payroll | 3 | 5 | 5 | 3 | ||||||||||||||
Current portion of operating lease liabilities | 2 | 2 | 2 | 2 | ||||||||||||||
Other current liabilities | 9 | 10 | 10 | 9 | ||||||||||||||
Total current liabilities | 67 | 69 | 69 | 67 | ||||||||||||||
Long-term pension and post employment benefit obligations | 36 | 29 | 29 | 36 | ||||||||||||||
Deferred income taxes | 22 | 15 | 15 | 22 | ||||||||||||||
Operating lease liabilities | 5 | 4 | 4 | 5 | ||||||||||||||
Other long-term liabilities | 8 | 8 | 8 | 8 | ||||||||||||||
Total long-term liabilities | 71 | 56 | 56 | 71 | ||||||||||||||
Total liabilities held for sale | 138 | 125 | 125 | 138 | ||||||||||||||
Net sales (1) | [1] | 286 | $ 309 | 493 | $ 692 | |||||||||||||
Cost of sales (exclusive of depreciation and amortization)(1) | 245 | 263 | 412 | 600 | ||||||||||||||
Selling, general and administrative expense | 15 | 17 | 42 | 34 | ||||||||||||||
Depreciation and amortization | 17 | 9 | 26 | 19 | ||||||||||||||
Asset impairments | 0 | 0 | 75 | 0 | ||||||||||||||
Business realignment costs | 2 | 1 | 3 | 2 | ||||||||||||||
Other operating expense (income), net | 1 | (1) | 0 | (1) | ||||||||||||||
Operating (loss) income | 6 | 20 | (65) | 38 | ||||||||||||||
Reorganization items, net | 0 | (135) | 0 | 0 | ||||||||||||||
Other non-operating expense, net | 1 | 0 | 5 | 0 | ||||||||||||||
(Loss) income from discontinued operations before income tax, earnings from unconsolidated entities | 5 | 155 | (70) | 38 | ||||||||||||||
Income tax expense (benefit) | 1 | 21 | 1 | 9 | ||||||||||||||
(Loss) income from discontinued operations, net of tax | 4 | 134 | (71) | 29 | ||||||||||||||
Earnings from unconsolidated entities, net of tax | 0 | 1 | 2 | (1) | ||||||||||||||
Less: Net (loss) income from discontinued operations | $ 119 | 2 | $ (68) | $ (6) | $ 3 | 3 | $ 1 | $ 10 | $ 6 | 4 | 135 | $ (71) | (69) | 28 | ||||
Current assets | 7 | 9 | 9 | 7 | ||||||||||||||
Non-current assets | 1 | 1 | 1 | 1 | ||||||||||||||
Current liabilities | 2 | 11 | 11 | 2 | ||||||||||||||
Non-current liabilities | 6 | $ 12 | 12 | 6 | ||||||||||||||
Discontinued Operations Sales Grossups Related to Discontinued Operations | 5 | 2 | 4 | 9 | ||||||||||||||
Net sales | 14 | 18 | 32 | 43 | ||||||||||||||
Gross profit | 3 | 4 | 12 | 7 | ||||||||||||||
Pre-tax income | 1 | 2 | 5 | 2 | ||||||||||||||
Net income | $ 0 | $ 2 | 4 | $ 2 | ||||||||||||||
Disposal Group, Including Discontinued Operation, Consideration | 425 | 425 | ||||||||||||||||
gross cash consideration | 335 | 335 | ||||||||||||||||
Other Assets Held for Sale, Current | 1 | 1 | ||||||||||||||||
Other Assets Held for sale, Noncurrent | 5 | 5 | ||||||||||||||||
Other Liabilities Held for Sale, Current | 3 | 3 | ||||||||||||||||
Other Liabilities Held for Sale, Noncurrent | $ 3 | $ 3 | ||||||||||||||||
[1] | (1) The Held for Sale Business has included $4, $5, $2 and $9 in both “Net sales” and “Cost of sales” within the discontinued operations for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor periods January 1, 2019 through July 1, 2019 and year ended December 31, 2018, respectively, which represents sales from the Held for Sale Business to the Company’s continuing operations that were previously eliminated in consolidation. These reclassifications had no impact on “Net (loss) income” in the Consolidated Statements of Operations for any of the periods presented. | |||||||||||||||||
[2] | (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | |||||||||||||||||
[3] | (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. | |||||||||||||||||
[4] | (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). |
Emergence from Chapter 11 Ban_2
Emergence from Chapter 11 Bankruptcy (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jul. 01, 2019 | Jun. 30, 2019 |
Subsequent Event [Line Items] | ||||||
Rights Offering | $ 100 | |||||
Debtor reorganization item, equity backstop | $ 24 | 24 | ||||
Debtor reorganization items, debt backstop | $ 80 | 80 | ||||
Long-term Debt | $ 1,658 | |||||
Settlement note | $ 2.5 | |||||
shares issued | 100 | 100 | 58,410,731 | |||
ABL Facility [Domain] | ||||||
Subsequent Event [Line Items] | ||||||
Due Within One Year | $ 0 | $ 0 | ||||
13.75% Senior Secured Notes due 2022 [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 13.75% | |||||
Debt Instrument, Interest Rate, Stated Percentage | 13.75% | |||||
7.875% Senior Secured Notes due 2027 [Domain] | ||||||
Subsequent Event [Line Items] | ||||||
Due Within One Year | $ 0 | $ 0 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% | 7.875% | 7.875% | |||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% | 7.875% | 7.875% | |||
DIP Term Loan Facility [Domain] | ||||||
Subsequent Event [Line Items] | ||||||
Due Within One Year | $ 350 |
Reorganization Value (Details)
Reorganization Value (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jul. 01, 2019 |
Fresh-Start Adjustment [Line Items] | ||
Less: Pension obligations | $ 239 | |
Enterprise Value | $ 3,100 | 3,100 |
Plus: Total cash | 125 | |
Current liabilities | 540 | |
Long-term liabilities | 527 | |
Total non-debt and non-pension liabilities | 1,067 | |
Total liabilities and equity (deficit) | $ 4,292 | |
Minimum [Member] | ||
Fresh-Start Adjustment [Line Items] | ||
Reorganization Value | 2,900 | |
Maximum [Member] | ||
Fresh-Start Adjustment [Line Items] | ||
Reorganization Value | $ 3,300 |
Schedule of Fresh Start Adjustm
Schedule of Fresh Start Adjustments to the Balance Sheet (Details) - USD ($) $ in Millions | Jul. 02, 2019 | Jul. 01, 2019 |
Fresh-Start Adjustment [Line Items] | ||
Elimination of Predecessor other intangible assets | $ (24) | |
Elimination of Predecessor Company accumulated other comprehensive income | (26) | |
Inventory fair value adjustments | 29 | |
Property, plant and equipment fair value adjustment | 780 | |
Pension liability fair value adjustment | (44) | |
Net impact on accumulated deficit | 1,840 | |
Plus: Total cash | 125 | |
Establishment of Successor goodwill | 178 | |
Establishment of Successor other intangible assets | $ 1,219 | 1,219 |
Repayment of DIP Term Loan interest | (5) | |
Total equity (deficit) | 1,156 | |
Total liabilities and equity (deficit) | 4,292 | |
Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Elimination of Predecessor other intangible assets | (17) | |
Elimination of Predecessor Company accumulated other comprehensive income | 51 | |
Inventory fair value adjustments | 27 | |
Property, plant and equipment fair value adjustment | 622 | |
Pension liability fair value adjustment | (39) | |
Net impact on accumulated deficit | 1,721 | |
Plus: Total cash | 125 | |
Establishment of Successor goodwill | 164 | |
Establishment of Successor other intangible assets | 1,155 | |
Paid-in capital (Successor) | 1,157 | |
Noncontrolling interest | (1) | |
Total equity (deficit) | 1,156 | |
Discontinued Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Elimination of Predecessor other intangible assets | (7) | |
Elimination of Predecessor Company accumulated other comprehensive income | (77) | |
Inventory fair value adjustments | 2 | |
Property, plant and equipment fair value adjustment | 158 | |
Pension liability fair value adjustment | (5) | |
Net impact on accumulated deficit | 119 | |
Establishment of Successor goodwill | 14 | |
Establishment of Successor other intangible assets | 64 | |
Successor Company [Member] | ||
Fresh-Start Adjustment [Line Items] | ||
Establishment of Successor goodwill | 178 | |
Successor Company [Member] | Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Plus: Total cash | 125 | |
Accounts receivable (net of allowance for doubtful accounts of $16 and $0, respectively) | 427 | |
Finished and in-process goods | 248 | |
Raw materials and supplies | 89 | |
Current assets held for sale | 134 | |
Other current assets | 58 | |
Total current assets | 1,081 | |
Investment in unconsolidated entities | 14 | |
Deferred tax assets | 9 | |
Other long-term assets | 37 | |
Land | 80 | |
Buildings | 110 | |
Machinery and equipment | 1,111 | |
Property, Plant, and Equipment, Gross | 1,301 | |
Less accumulated depreciation | 7 | |
Property, Plant, and Equipment, Net | 1,308 | |
Operating lease assets | 122 | |
Establishment of Successor goodwill | 164 | |
Establishment of Successor other intangible assets | 1,155 | |
Noncurrent assets held for sale | 402 | |
Total assets | 4,292 | |
Accounts payable | 296 | |
Debt payable within one year | 97 | |
Interest payable | 2 | |
Income taxes payable | 16 | |
Accrued payroll and incentive compensation | 32 | |
Current liabilities associated with assets held for sale | 70 | |
Current portion of operating lease liabilities | 25 | |
Financing fees payable | 0 | |
Other current liabilities | 106 | |
Total current liabilities | 644 | |
Liabilities subject to compromise | 0 | |
Long-term debt | 1,733 | |
Long-term pension and post employment benefit obligations | 232 | |
Deferred income taxes | 160 | |
Operating lease liabilities | 87 | |
Other long-term liabilities | 215 | |
Noncurrent liabilities associated with assets held for sale | 66 | |
Total liabilities | 3,137 | |
Common stock (Successor) | 0 | |
Paid-in capital (Successor) | 1,156 | |
Total Hexion Inc. equity (deficit) | 1,156 | |
Noncontrolling interest | (1) | |
Total equity (deficit) | 1,155 | |
Total liabilities and equity (deficit) | 4,292 | |
Reorganization Adjustments [Member] | ||
Fresh-Start Adjustment [Line Items] | ||
Net cash received | 29 | |
Reorganization Adjustments [Member] | Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Net cash received | 29 | |
Accounts receivable (net of allowance for doubtful accounts of $16 and $0, respectively) | 0 | |
Finished and in-process goods | 0 | |
Raw materials and supplies | 0 | |
Current assets held for sale | 0 | |
Other current assets | 2 | |
Total current assets | 31 | |
Investment in unconsolidated entities | 0 | |
Deferred tax assets | 12 | |
Other long-term assets | 4 | |
Land | 0 | |
Buildings | 0 | |
Machinery and equipment | 0 | |
Property, Plant, and Equipment, Gross | 0 | |
Less accumulated depreciation | 0 | |
Property, Plant, and Equipment, Net | 0 | |
Operating lease assets | 0 | |
Elimination of Predecessor other intangible assets | 0 | |
Noncurrent assets held for sale | 0 | |
Total assets | 47 | |
Accounts payable | 49 | |
Debt payable within one year | (343) | |
Income taxes payable | 11 | |
Accrued payroll and incentive compensation | 0 | |
Current liabilities associated with assets held for sale | 0 | |
Current portion of operating lease liabilities | 0 | |
Financing fees payable | (104) | |
Other current liabilities | 5 | |
Total current liabilities | (387) | |
Liabilities subject to compromise | (3,664) | |
Long-term debt | 1,622 | |
Long-term pension and post employment benefit obligations | 33 | |
Deferred income taxes | 1 | |
Operating lease liabilities | 0 | |
Other long-term liabilities | 72 | |
Noncurrent liabilities associated with assets held for sale | 0 | |
Total liabilities | (2,323) | |
Common stock (Predecessor) | (1) | |
Paid-in capital (Predecessor) | 1,156 | |
Treasury stock (Predecessor), at cost—88,049,059 shares at December 31, 2018 | 296 | |
Elimination of Predecessor Company accumulated other comprehensive income | 0 | |
Accumulated deficit | 1,445 | |
Total Hexion Inc. equity (deficit) | 2,370 | |
Noncontrolling interest | 0 | |
Total equity (deficit) | 2,370 | |
Total liabilities and equity (deficit) | 47 | |
Predecessor Paid-in-capital | (526) | |
Repayment of DIP Term Loan interest | (5) | |
Fresh Start Adjustments [Member] | ||
Fresh-Start Adjustment [Line Items] | ||
Pension liability fair value adjustment | 44 | |
Fresh Start Adjustments [Member] | Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Cash and Cash Equivalents, Fresh Start Adjustment | 0 | |
Accounts receivable, Fresh-start adjustments | 6 | |
Inventory fair value adjustments | 27 | |
Raw Materials, Fresh-start Adjustments | 0 | |
Total current assets held for sale | 2 | |
Other Current assets, Fresh-start Adjustments | 0 | |
Total Current Assets, Fresh-start Adjustments | 35 | |
Investment in unconsolidated companies | (6) | |
Deferred tax assets | (3) | |
Other long-term assets | (1) | |
Land, Fresh-start Adjustment | 11 | |
Buildings, Fresh-start Adjustments | (118) | |
Machinery and Equipment, Fresh-Start Adjustments | (837) | |
Property, Plant, and Equipment, Gross, Fresh-Start Adjustments | (944) | |
Accumulated Depreciation, Fresh-Start Adjustments | 1,566 | |
Property, plant and equipment fair value adjustment | 622 | |
Operating lease assets (See endnote X) | 33 | |
Goodwill (See endnote Y) | 81 | |
Other intangible assets (See endnote Z) | 1,138 | |
Total noncurrent assets held for sale | 215 | |
Total Assets, Fresh-start Adjustments | 2,114 | |
Accounts Payable, Fresh-start Adjustments | 0 | |
Debt payable within one year, Fresh-Start Adjustments | 2 | |
Interest Payable, Fresh-start Adjustments | 0 | |
Income taxes payable, Fresh-start Adjustments | 0 | |
Accrued payroll and incentive compensation, Fresh-start Adjustments | 0 | |
Current liabilities associated with assets held for sale | 1 | |
Current portion of operating lease liabilities (See endnote X) | 6 | |
Financing fees payable, Fresh-start Adjustments | 0 | |
Other Current Liabilities, Fresh-start Adjustments | 0 | |
Total current liabilities, Fresh-start Adjustments | 9 | |
Liabilities Subject to Compromise, Fresh-start Adjustments | 0 | |
Long-term Debt, Fresh-start Adjustments | 21 | |
Pension liability fair value adjustment | (39) | |
Deferred income taxes | 148 | |
Operating lease liabilities, Fresh-Start Adjustments | 17 | |
Other Long-term liabilities, Fresh-start Adjustments | (6) | |
Noncurrent liabilities associated with assets held for sale | 20 | |
Fresh-Start Adjustment, Increase (Decrease), Liabilities, Total | 248 | |
Common Stock, Fresh-start Adjustments | 0 | |
Paid-in-capital, Fresh-Start Adjustments | 0 | |
Treasury Stock, Fresh-start Adjustments | 0 | |
Accumulated other comprehensive loss, Fresh-start Adjustments | 26 | |
Net impact on accumulated deficit | 1,840 | |
Total Hexion Inc. equity (deficit), Fresh-start Adjustments | 1,866 | |
Noncontrolling interest, Fresh-start Adjustments | 0 | |
Total equity (deficit), Fresh-start Adjustments | 1,866 | |
Total liabilities and equity (deficit), Fresh-start Adjustments | 2,114 | |
Fresh Start Adjustments [Member] | Discontinued Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Inventory fair value adjustments | 2 | |
Total current assets held for sale | 2 | |
Investment in unconsolidated companies | 3 | |
Deferred tax assets | (1) | |
Other long-term assets | 3 | |
Property, plant and equipment fair value adjustment | 158 | |
Operating lease assets (See endnote X) | 6 | |
Goodwill (See endnote Y) | (11) | |
Other intangible assets (See endnote Z) | 57 | |
Total noncurrent assets held for sale | 215 | |
Current liabilities associated with assets held for sale | 1 | |
Current portion of operating lease liabilities (See endnote X) | 1 | |
Pension liability fair value adjustment | 5 | |
Deferred income taxes | 15 | |
Noncurrent liabilities associated with assets held for sale | 20 | |
Predecessor Company [Member] | Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Net cash received | 96 | |
Accounts receivable (net of allowance for doubtful accounts of $16 and $0, respectively) | 421 | |
Finished and in-process goods | 221 | |
Raw materials and supplies | 89 | |
Current assets held for sale | 132 | |
Other current assets | 56 | |
Total current assets | 1,015 | |
Investment in unconsolidated entities | 20 | |
Deferred tax assets | 0 | |
Other long-term assets | 34 | |
Land | 69 | |
Buildings | 228 | |
Machinery and equipment | 1,948 | |
Property, Plant, and Equipment, Gross | 2,245 | |
Less accumulated depreciation | (1,559) | |
Property, Plant, and Equipment, Net | 686 | |
Operating lease assets | 89 | |
Goodwill | 83 | |
Elimination of Predecessor other intangible assets | (17) | |
Noncurrent assets held for sale | (187) | |
Total assets | 2,131 | |
Accounts payable | 247 | |
Debt payable within one year | 438 | |
Interest payable | 7 | |
Income taxes payable | 5 | |
Accrued payroll and incentive compensation | 32 | |
Current liabilities associated with assets held for sale | 69 | |
Current portion of operating lease liabilities | 19 | |
Financing fees payable | 104 | |
Other current liabilities | 101 | |
Total current liabilities | 1,022 | |
Liabilities subject to compromise | 3,664 | |
Long-term debt | 90 | |
Long-term pension and post employment benefit obligations | 160 | |
Deferred income taxes | 11 | |
Operating lease liabilities | 70 | |
Other long-term liabilities | 149 | |
Noncurrent liabilities associated with assets held for sale | 46 | |
Total liabilities | 5,212 | |
Common stock (Predecessor) | 1 | |
Paid-in capital (Predecessor) | 526 | |
Treasury stock (Predecessor), at cost—88,049,059 shares at December 31, 2018 | (296) | |
Elimination of Predecessor Company accumulated other comprehensive income | (26) | |
Accumulated deficit | (3,285) | |
Total Hexion Inc. equity (deficit) | (3,080) | |
Noncontrolling interest | (1) | |
Total equity (deficit) | (3,081) | |
Total liabilities and equity (deficit) | $ 2,131 |
Reorganization Adjustments - Li
Reorganization Adjustments - Liabilities Subject to Compromise (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Jul. 01, 2019 |
Fresh-Start Adjustment [Line Items] | ||
Liabilities Subject to Compromise | $ 3,664 | $ 3,664 |
Repayment of 1st Lien Notes | (1,383) | |
Accounts payable | (49) | (49) |
Pension and other post employment benefit obligations | (33) | (33) |
Other | (7) | (18) |
Other long-term liabilities | 32 | |
Total liabilities reinstated at emergence | (132) | |
Fair value of equity | (1,156) | |
Proceeds from the Rights Offerings | 300 | |
Total fair value of equity issued in exchange for debt | (856) | |
Gain on settlement of LSTC | 1,293 | |
Debt | 3,420 | |
Interest payable | 99 | |
Environmental reserve | 43 | |
Dividends payable to parent | $ 13 | |
Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Fair value of equity | $ (1,156) |
Reorganization Adjustments -Cum
Reorganization Adjustments -Cumulative Effect of Emergence (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2019 | |
Fresh-Start Adjustment [Line Items] | ||
Gain on settlement of LSTC | $ 1,293 | |
Fresh-start Adjustment, Increase/Decrease Reorganization Tax Items | 40 | |
Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Professional fees | $ 39 | |
Reorganization Items, Net Gain on Reorganization | 1,254 | |
Fresh-start Adjustment, Increase/Decrease Reorganization Tax Items | (40) | |
Reorganization Items, Impact on Accumulated Deficit | $ 1,445 |
Reorganization Adjustments - So
Reorganization Adjustments - Sources and Uses of Cash (Details) $ in Millions | Jul. 01, 2019USD ($) |
Fresh-Start Adjustment [Line Items] | |
Proceeds from the Rights Offerings | $ 300 |
Proceeds from the Senior Notes | 450 |
Proceeds from the Senior Secured Term Loan | 1,196 |
Release of utility deposit | 1 |
Total sources | 1,947 |
Repayment of 1st Lien Notes | (1,383) |
Repayment of DIP Term Loan Facility | (350) |
Repayment of DIP Term Loan interest | (5) |
Debt and Equity Backstop premiums | (104) |
Financing fees | (19) |
Success fees at emergence | (31) |
Other professional fees | (26) |
Total uses | (1,918) |
Reorganization Adjustments [Member] | |
Fresh-Start Adjustment [Line Items] | |
Net cash received | $ 29 |
Reorganization Adjustments - Eq
Reorganization Adjustments - Equity Value (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jul. 01, 2019 |
Fresh-Start Adjustment [Line Items] | ||
Enterprise Value | $ 3,100 | $ 3,100 |
Plus: Total cash | 125 | |
Less: Pension obligations | 239 | |
Total equity (deficit) | 1,156 | |
Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Enterprise Value | 3,100 | |
Plus: Total cash | 125 | |
Less: Fair value of new debt | (1,646) | |
Less: Fair value of remaining debt obligations | (184) | |
Less: Pension obligations | (239) | |
Total equity (deficit) | 1,156 | |
Plus: Fair value of noncontrolling interest | 1 | |
Paid-in capital (Successor) | $ 1,157 |
Reorganization Adjustments - Na
Reorganization Adjustments - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 01, 2019 |
Reorganizations [Abstract] | |||
Reorganization Adjustments, Escrow Cash Receivable | $ 3 | ||
Reorganization Items, Current Portion of Secured Debt | 7 | ||
Debtor reorganization item, equity backstop | $ 24 | $ 24 | |
Debtor reorganization items, debt backstop | $ 80 | $ 80 | |
Reorganization Items, Other Current Liabilities | 13 | ||
Reorganization Items, Secured Term Loan | 1,208 | ||
Reorganization Items, Secured Notes | 450 | ||
Debt Instrument, Unamortized Discount | 12 | ||
Reorganization Items, Debt Issuance Costs Paid | $ 17 |
Fresh Start Adjustments - Held
Fresh Start Adjustments - Held For Sale (Details) $ in Millions | Jul. 01, 2019USD ($) |
Fresh-Start Adjustment [Line Items] | |
Inventory fair value adjustments | $ 29 |
Property, plant and equipment fair value adjustment | 780 |
Pension liability fair value adjustment | (44) |
Fresh Start Adjustments [Member] | |
Fresh-Start Adjustment [Line Items] | |
Pension liability fair value adjustment | 44 |
Discontinued Operations | |
Fresh-Start Adjustment [Line Items] | |
Inventory fair value adjustments | 2 |
Property, plant and equipment fair value adjustment | 158 |
Pension liability fair value adjustment | (5) |
Discontinued Operations | Fresh Start Adjustments [Member] | |
Fresh-Start Adjustment [Line Items] | |
Inventory fair value adjustments | 2 |
Total current assets held for sale | 2 |
Investment in unconsolidated companies | 3 |
Deferred tax assets | (1) |
Other long-term assets | 3 |
Property, plant and equipment fair value adjustment | 158 |
Operating lease assets (See endnote X) | 6 |
Goodwill (See endnote Y) | (11) |
Other intangible assets (See endnote Z) | 57 |
Total noncurrent assets held for sale | 215 |
Current portion of operating lease liabilities (See endnote X) | 1 |
Current liabilities associated with assets held for sale | 1 |
Pension liability fair value adjustment | 5 |
Deferred income taxes | 15 |
Noncurrent liabilities associated with assets held for sale | $ 20 |
Fresh Start Adjustments - Sched
Fresh Start Adjustments - Schedule of Cumulative Adjustments (Details) - USD ($) $ in Millions | Jul. 02, 2019 | Jul. 01, 2019 |
Fresh-Start Adjustment [Line Items] | ||
Establishment of Successor goodwill | $ 178 | |
Elimination of Predecessor goodwill | (108) | |
Establishment of Successor other intangible assets | $ 1,219 | 1,219 |
Elimination of Predecessor other intangible assets | (24) | |
Inventory fair value adjustments | 29 | |
Property, plant and equipment fair value adjustment | 780 | |
Pension liability fair value adjustment | (44) | |
Other assets and liabilities fair value adjustment | 3 | |
Elimination of Predecessor Company accumulated other comprehensive income | (26) | |
Net gain on fresh start adjustments(1) | 2,007 | |
Tax impact on fresh start adjustments | (167) | |
Net impact on accumulated deficit | 1,840 | |
Continuing Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Establishment of Successor goodwill | 164 | |
Elimination of Predecessor goodwill | (83) | |
Establishment of Successor other intangible assets | 1,155 | |
Elimination of Predecessor other intangible assets | (17) | |
Inventory fair value adjustments | 27 | |
Property, plant and equipment fair value adjustment | 622 | |
Pension liability fair value adjustment | (39) | |
Other assets and liabilities fair value adjustment | (8) | |
Elimination of Predecessor Company accumulated other comprehensive income | 51 | |
Net gain on fresh start adjustments(1) | 1,872 | |
Tax impact on fresh start adjustments | (151) | |
Net impact on accumulated deficit | 1,721 | |
Discontinued Operations | ||
Fresh-Start Adjustment [Line Items] | ||
Establishment of Successor goodwill | 14 | |
Elimination of Predecessor goodwill | (25) | |
Establishment of Successor other intangible assets | 64 | |
Elimination of Predecessor other intangible assets | (7) | |
Inventory fair value adjustments | 2 | |
Property, plant and equipment fair value adjustment | 158 | |
Pension liability fair value adjustment | (5) | |
Other assets and liabilities fair value adjustment | 11 | |
Elimination of Predecessor Company accumulated other comprehensive income | (77) | |
Net gain on fresh start adjustments(1) | 135 | |
Tax impact on fresh start adjustments | (16) | |
Net impact on accumulated deficit | $ 119 |
Fresh Start Adjustments - Narra
Fresh Start Adjustments - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Jul. 01, 2019 |
Fresh-Start Adjustment [Line Items] | ||||
Favorable leasehold interest | $ 8 | $ 9 | ||
Fresh start adjustment, Trademark | $ 141 | |||
Fresh-Start adjustment, Technology based intangible | 110 | |||
Discontinued Operations | ||||
Fresh-Start Adjustment [Line Items] | ||||
Fresh Start Items, Right of Use Assets | 1 | |||
Favorable leasehold interest | $ 5 | |||
Continuing Operations | ||||
Fresh-Start Adjustment [Line Items] | ||||
Fresh Start Items, Right of Use Assets | 24 | |||
Favorable leasehold interest | $ 9 | |||
Continuing Operations | Predecessor Company [Member] | ||||
Fresh-Start Adjustment [Line Items] | ||||
Fresh start adjustment, Customer Related Intangibles | $ 904 |
Reorganization Expense (Details
Reorganization Expense (Details) - USD ($) $ in Millions | Jul. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 |
Fresh-Start Adjustment [Line Items] | ||||||
Reorganization Items, Total | $ 3,126 | $ 156 | $ 0 | $ (2,970) | $ 0 | $ 0 |
Continuing Operations | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Net gain on reorganization adjustments (see Note 6) | (1,254) | |||||
Net gain on fresh start adjustments (see Note 6) | (1,872) | |||||
Financing fees | 104 | |||||
Professional fees | 39 | |||||
DIP ABL Facility fees | 13 | |||||
Reorganization Items, Total | (2,970) | |||||
Discontinued Operations | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Net gain on reorganization adjustments (see Note 6) | 0 | |||||
Net gain on fresh start adjustments (see Note 6) | (135) | |||||
Financing fees | 0 | |||||
Professional fees | 0 | |||||
DIP ABL Facility fees | 0 | |||||
Reorganization Items, Total | $ (135) |
Asset Impairments (Details)
Asset Impairments (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||
Asset impairments (see Note 8) | $ 0 | $ 0 | $ 0 | $ 16 | $ 28 |
OTG [Domain] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Impairment of Long-Lived Assets to be Disposed of | 20 | ||||
Impairment of Intangible Assets (Excluding Goodwill) | 5 | ||||
Restructuring and Related Cost, Accelerated Depreciation | 25 | ||||
Asset impairments (see Note 8) | $ 16 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Related Party Transaction [Line Items] | ||||||
Revenues from distribution agreement | $ 1 | $ 1 | ||||
Shared Services Costs Incurred by Hexion | $ 15 | 28 | ||||
Shared Services Costs Incurred by MPM | 14 | 21 | ||||
Shared Services Net Billings - Hexion to MPM | 11 | 14 | ||||
Note receivable from parent | $ 10 | |||||
Settlement of affiliate loan | 10 | |||||
Return of Capital To Parent | 3 | |||||
Apollo [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Annual management consulting fee | $ 3 | |||||
Annual management consulting fee percentage | 2.00% | |||||
Momentive Performance Materials Inc. [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 1 | |||||
Related Party Transaction, Purchases from Related Party | $ 10 | 32 | ||||
Apollo Affiliates and Other Related Parties [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Net Sales to Related Parties | 1 | 2 | ||||
Other joint ventures unconsolidated [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Net Sales to Related Parties | [1],[2] | $ 2 | 2 | 2 | 9 | |
Related Party Transaction, Purchases from Related Party | [2] | 2 | 2 | 1 | 6 | |
Accounts Receivable, Related Parties | [3] | 1 | 1 | |||
Accounts Payable, Related Parties | 1 | 0 | ||||
Loans and Leases Receivable, Related Parties | 7 | 4 | ||||
Other joint ventures unconsolidated [Member] | Discontinued Operations | ||||||
Related Party Transaction [Line Items] | ||||||
Net Sales to Related Parties | 1 | $ 1 | 1 | $ 7 | ||
Accounts Receivable, Related Parties | $ 1 | $ 1 | ||||
[1] | Sales to joint ventures includes sales to the Russia JV of $1, $1, $1, and $7 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, which are included in the Held for Sale Business. | |||||
[2] | There were no sales to joint ventures or purchases from joint ventures for the Predecessor period July 1, 2019. | |||||
[3] | Accounts receivable from joint ventures is mostly comprised of receivables from the Russia JV included in the Held for Sale Business. Accounts receivable from the Company’s other joint ventures was less than $1 for both December 31, 2020 and 2019. |
Goodwill and Intangibles Leve_2
Goodwill and Intangibles Level 4 (Details) - Schedule of Goodwill - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 02, 2019 | Jul. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | |||||||
Establishment of Successor goodwill | $ 178 | ||||||
Goodwill, Gross | $ 164 | $ 164 | |||||
Goodwill, Impaired, Accumulated Impairment Loss | 0 | 0 | |||||
Accumulated Foreign Currency Translation | 0 | 0 | |||||
Goodwill | (164) | (164) | $ (178) | ||||
Goodwill and Goodwill included in long term assets held for sale | 164 | 164 | |||||
Continuing Operations | |||||||
Goodwill [Line Items] | |||||||
Establishment of Successor goodwill | 164 | ||||||
Goodwill | (164) | (164) | (164) | 0 | $ (83) | $ (84) | |
Discontinued Operations | |||||||
Goodwill [Line Items] | |||||||
Establishment of Successor goodwill | 14 | ||||||
Successor Company [Member] | |||||||
Goodwill [Line Items] | |||||||
Establishment of Successor goodwill | 178 | ||||||
Successor Company [Member] | Continuing Operations | |||||||
Goodwill [Line Items] | |||||||
Establishment of Successor goodwill | 164 | ||||||
Adhesives | |||||||
Goodwill [Line Items] | |||||||
Goodwill, Gross | 127 | 127 | |||||
Goodwill, Impaired, Accumulated Impairment Loss | 0 | 0 | |||||
Accumulated Foreign Currency Translation | 0 | 0 | |||||
Goodwill | [1] | (127) | (127) | ||||
Adhesives | Continuing Operations | |||||||
Goodwill [Line Items] | |||||||
Goodwill | [2] | (127) | (127) | (127) | 0 | (42) | (43) |
Coatings and Composites | |||||||
Goodwill [Line Items] | |||||||
Goodwill, Gross | 37 | 37 | |||||
Goodwill, Impaired, Accumulated Impairment Loss | 0 | 0 | |||||
Accumulated Foreign Currency Translation | 0 | 0 | |||||
Goodwill | (37) | (37) | |||||
Coatings and Composites | Continuing Operations | |||||||
Goodwill [Line Items] | |||||||
Goodwill | $ (37) | $ (37) | $ (37) | $ 0 | $ (41) | $ (41) | |
[1] | Excludes $14 of goodwill in the Adhesives segment associated with the Held for Sale Business at both December 31, 2020 and 2019 (See Note 4). | ||||||
[2] | Excludes $14 at both December 31, 2020 and 2019 and $25 at both June 30, 2019 and December 31, 2018 related in the Held for Sale Business (See Note 4). |
Goodwill and Intangibles Leve_3
Goodwill and Intangibles Level 4 (Details) - Rollforward of Goodwill - USD ($) $ in Millions | Jul. 01, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Goodwill [Roll Forward] | |||||||
Goodwill, Beginning Balance | $ 164 | ||||||
Divestitures | $ 0 | ||||||
Elimination of Predecessor goodwill | $ (108) | ||||||
Goodwill, Ending Balance | $ 164 | 164 | |||||
Goodwill, Discontinued Operations | 14 | 14 | |||||
Coatings and Composites | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, Beginning Balance | 37 | ||||||
Goodwill, Ending Balance | 37 | 37 | |||||
Adhesives | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, Beginning Balance | [1] | 127 | |||||
Goodwill, Ending Balance | [1] | 127 | 127 | ||||
Discontinued Operations | |||||||
Goodwill [Roll Forward] | |||||||
Elimination of Predecessor goodwill | (25) | ||||||
Goodwill, Discontinued Operations | 14 | 14 | $ 25 | ||||
Continuing Operations | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, Beginning Balance | 83 | 0 | 84 | 164 | |||
Foreign currency translation | (1) | ||||||
Elimination of Predecessor goodwill | (83) | ||||||
Recognition of successor goodwill | [2] | 164 | |||||
Goodwill, Adjustments | 0 | [3] | 0 | ||||
Goodwill, Ending Balance | 0 | 164 | 83 | 164 | |||
Continuing Operations | Coatings and Composites | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, Beginning Balance | 41 | 0 | 41 | 37 | |||
Divestitures | 0 | ||||||
Foreign currency translation | 0 | ||||||
Elimination of Predecessor goodwill | (41) | ||||||
Recognition of successor goodwill | [2] | 37 | |||||
Goodwill, Adjustments | 0 | [3] | 0 | ||||
Goodwill, Ending Balance | 0 | 37 | 41 | 37 | |||
Continuing Operations | Adhesives | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, Beginning Balance | [4] | 42 | 0 | 43 | 127 | ||
Divestitures | [4] | 0 | |||||
Foreign currency translation | [4] | (1) | |||||
Elimination of Predecessor goodwill | [4] | (42) | |||||
Recognition of successor goodwill | [2],[4] | 127 | |||||
Goodwill, Adjustments | [4] | 0 | [3] | 0 | |||
Goodwill, Ending Balance | [4] | $ 0 | $ 127 | $ 42 | $ 127 | ||
[1] | Excludes $14 of goodwill in the Adhesives segment associated with the Held for Sale Business at both December 31, 2020 and 2019 (See Note 4). | ||||||
[2] | Recording of the Successor Company goodwill in accordance with the application of fresh start accounting. Refer to Note 6 for more details. | ||||||
[3] | There were no foreign currency adjustments nor impairments related to Successor Company goodwill for the year ended December 31, 2020 and the Successor period July 2, 2019 through December 31, 2019. | ||||||
[4] | Excludes $14 at both December 31, 2020 and 2019 and $25 at both June 30, 2019 and December 31, 2018 related in the Held for Sale Business (See Note 4). |
Goodwill and Intangibles Leve_4
Goodwill and Intangibles Level 4 (Details) - Schedule of Intangible Assets - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | $ 1,154 | $ 1,154 | |
Accumulated Foreign Currency Translation | 0 | 0 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 84 | 26 | |
Other intangible assets, net | 1,079 | 1,125 | |
Other Intangible Assets, Discontinued Operations | 61 | 63 | |
Finite-Lived Intangible Assets, Accumulated Foreign Exchange | 9 | (3) | |
Discontinued Operations | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other Intangible Assets, Discontinued Operations | 61 | 63 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 903 | 903 | |
Accumulated Foreign Currency Translation | (3) | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 61 | 19 | |
Other intangible assets, net | [1] | 847 | 881 |
Finite-Lived Intangible Assets, Accumulated Foreign Exchange | 5 | ||
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 141 | 141 | |
Accumulated Foreign Currency Translation | 0 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 12 | 3 | |
Other intangible assets, net | 131 | 138 | |
Finite-Lived Intangible Assets, Accumulated Foreign Exchange | 2 | ||
Technology-Based Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 110 | 110 | |
Accumulated Foreign Currency Translation | 0 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 11 | 4 | |
Other intangible assets, net | 101 | $ 106 | |
Finite-Lived Intangible Assets, Accumulated Foreign Exchange | $ 2 | ||
[1] | Excludes net book value of $61 and $63 at December 31, 2020 and 2019, respectively, related to the Held of Sale Business (See Note 4) |
Goodwill and Intangibles Leve_5
Goodwill and Intangibles Level 4 (Details) - Estimated Annual Amortization Expense - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 26 | $ 3 | $ 58 | $ 9 |
2021 | 58 | |||
2022 | 58 | |||
2023 | 58 | |||
2024 | 58 | |||
2025 | $ 58 |
Fair Value Level 4 (Details) -
Fair Value Level 4 (Details) - Fair Value Hierarchy - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liabilities | $ 1 | |||
Derivative notional amount, Interest Rate Swap | 300 | |||
Long-term debt | $ 1,715 | 1,710 | ||
Unrealized (loss) gain on cash flow hedge | 2 | $ 0 | (18) | $ 0 |
Interest Rate Derivative Liabilities, at Fair Value | (15) | |||
Interest Rate Derivative Assets, at Fair Value | 3 | |||
Amount of Loss Reclassified from Accumulated OCI into Income | 2 | |||
Senior Secured Term Loan - USD due 2026 [Domain] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 708 | $ 701 |
Fair Value Level 4 (Details) _2
Fair Value Level 4 (Details) - Fair Value of Debt - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying Amount [Member] | ||
Fair Value of Debt [Line Items] | ||
Debt | $ 1,792 | $ 1,785 |
Debt | 1,822 | 1,815 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value of Debt [Line Items] | ||
Debt | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value of Debt [Line Items] | ||
Debt | 1,767 | 1,751 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value of Debt [Line Items] | ||
Debt | $ 55 | $ 64 |
Debt Obligations Level 4 (Detai
Debt Obligations Level 4 (Details) Debt Outstanding - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2019 | ||
Debt Instrument [Line Items] | ||||
Debt Instrument, Unamortized Discount | $ (12) | |||
Long-term Debt | 1,658 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 350 | |||
Long-term debt | $ 1,710 | $ 1,715 | ||
Foreign Currency Translation, Debt | 46 | (10) | ||
ABL Facility [Domain] | ||||
Debt Instrument [Line Items] | ||||
Due Within One Year | 0 | 0 | ||
Long-term debt | 0 | 0 | ||
Australia Facility Due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Due Within One Year | 30 | 4 | ||
Line of Credit Facility, Maximum Borrowing Capacity | 7 | 7 | ||
Long-term debt | $ 0 | $ 27 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 3.90% | ||
Brazilian Bank Loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Due Within One Year | $ 22 | $ 34 | ||
Long-term debt | $ 2 | $ 7 | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.20% | 9.20% | ||
Capital Leases [Member] | ||||
Debt Instrument [Line Items] | ||||
Due Within One Year | [1] | $ 14 | $ 14 | |
Long-term debt | [1] | 42 | 50 | |
Other [Member] | ||||
Debt Instrument [Line Items] | ||||
Due Within One Year | 9 | 11 | ||
Long-term debt | $ 0 | $ 0 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.90% | 5.00% | ||
Total non-affiliated debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | [2] | $ 1,710 | $ 1,715 | |
Due Within One Year | [2] | 82 | 70 | |
Senior Secured Term Loan - USD due 2026 [Domain] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Unamortized Discount | (6) | (7) | ||
Due Within One Year | $ 7 | 7 | ||
Debt Instrument, Maturity Date | Jul. 1, 2026 | |||
Long-term debt | $ 701 | $ 708 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.73% | 5.82% | ||
Senior Notes | 725 | |||
Senior Secured Term Loan - EUR due 2026 [Domain] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Unamortized Discount | $ (4) | $ (4) | ||
Due Within One Year | $ 0 | 0 | ||
Debt Instrument, Maturity Date | Jul. 1, 2026 | |||
Long-term debt | $ 515 | $ 473 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | ||
Senior Notes | $ 425 | |||
7.875% Senior Secured Notes due 2027 [Domain] | ||||
Debt Instrument [Line Items] | ||||
Due Within One Year | $ 0 | $ 0 | ||
Debt Instrument, Maturity Date | Jul. 15, 2027 | |||
Long-term debt | $ 450 | $ 450 | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% | 7.875% | 7.875% | |
[1] | Lease obligations include finance leases and sale leaseback financing arrangements. | |||
[2] | The foreign exchange translation impact of the Company’s foreign currency denominated debt instruments was an increase of $46 and a decrease of $10 as of December 31, 2020 and 2019, respectively. |
Debt Obligations Level 4 (Det_2
Debt Obligations Level 4 (Details) - Scheduled Maturities $ in Millions | Dec. 31, 2020USD ($) |
Debt and Commitments Maturities [Line Items] | |
2021 | $ 84 |
2022 | 35 |
2023 | 17 |
2024 | 9 |
2025 | 9 |
2026 and thereafter | 1,651 |
Less: Amount representing interest | (3) |
Present value of minimum payments | 1,802 |
Non-affiliated Debt [Member] | |
Debt and Commitments Maturities [Line Items] | |
Total minimum payments | $ 1,805 |
Debt Obligations Debt Footnote
Debt Obligations Debt Footnote Disclosures (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2019 |
Long term debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 350 | ||
Australia Facility Due 2021 [Member] | |||
Long term debt [Line Items] | |||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | $ 1 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 7 | $ 7 |
Debt Obligations Debt Transacti
Debt Obligations Debt Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | 36 Months Ended | |||||
Jul. 14, 2026 | Jul. 14, 2024 | Jul. 14, 2023 | Dec. 31, 2020 | Jul. 14, 2022 | Dec. 31, 2019 | Jul. 01, 2019 | |
Extinguishment of Debt [Line Items] | |||||||
Letter of credit subfacility, maximum borrowing capacity | $ 150 | ||||||
Forecast | |||||||
Extinguishment of Debt [Line Items] | |||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | 101.97% | 103.94% | 107.875% | |||
Senior Secured Term Loan - EUR due 2026 [Domain] | |||||||
Extinguishment of Debt [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | |||||
Debt Instrument, Maturity Date | Jul. 1, 2026 | ||||||
Senior Notes | 425 | ||||||
Senior Secured Term Loan - USD due 2026 [Domain] | |||||||
Extinguishment of Debt [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.73% | 5.82% | |||||
Debt Instrument, Maturity Date | Jul. 1, 2026 | ||||||
Senior Notes | $ 725 | ||||||
7.875% Senior Secured Notes due 2027 [Domain] | |||||||
Extinguishment of Debt [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% | 7.875% | 7.875% | ||||
Debt Instrument, Maturity Date | Jul. 15, 2027 |
Leases Lease Cost and Supplemen
Leases Lease Cost and Supplemental Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease expense | $ 18 | $ 16 | $ 29 |
Short-term lease expense | 2 | 5 | 5 |
Amortization expense | 1 | 1 | 2 |
Variable lease expense | 3 | 2 | 3 |
Cash paid for finance leases | 2 | 2 | 4 |
Right-of-use assets obtained in exchange for operating lease | 2 | 1 | 13 |
Right-of-use assets obtained in exchange for finance lease obligations | $ 0 | $ 3 | $ 5 |
Operating Lease, Weighted Average Remaining Lease Term | 10 years 8 months 12 days | 10 years | |
Finance Lease, Weighted Average Remaining Lease Term | 1 year 8 months 12 days | 4 years 9 months 18 days | |
Lessee, Operating Lease, Discount Rate | 5.74% | 5.24% | |
Lessee, Finance Lease, Discount Rate | 10.00% | 7.73% |
Leases Assets and Liabilities,
Leases Assets and Liabilities, Lessee (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating Lease, Right-of-Use Asset | [1] | $ 103 | $ 110 |
Finance Lease, Right-of-Use Asset | [2] | 13 | 10 |
Total leased assets | 116 | 120 | |
Operating Lease, Liability, Current | 19 | 20 | |
Finance Lease, Liability, Current | 2 | 4 | |
Operating Lease, Liability, Noncurrent | 76 | 82 | |
Finance Lease, Liability, Noncurrent | 6 | 3 | |
Total leased liabilities | 103 | 109 | |
Favorable leasehold interest | 8 | 9 | |
Finance lease, Accumulated Amortization | $ 3 | $ 1 | |
[1] | (1) Operating lease assets include $8 and $9 of favorable leasehold interests as of December 31, 2020 and 2019, respectively. | ||
[2] | (2) Finance lease assets are recorded net of accumulated amortization of $3 and $1 as of December 31, 2020 and 2019, respectively. |
Leases Schedule of Maturities o
Leases Schedule of Maturities of Lease Liabilities (Details) $ in Millions | Dec. 31, 2020USD ($) | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 23 | |
2022 | 16 | |
2023 | 11 | |
2024 | 9 | |
2025 | 9 | |
2026 and thereafter | 58 | |
Total lease payments | 126 | |
Less: Amount representing interest | (31) | |
Present value of lease liabilities | 95 | |
Finance Lease, Liability, Payment, Due [Abstract] | ||
2021 | 2 | [1] |
2022 | 1 | [1] |
2023 | 1 | [1] |
2024 | 1 | [1] |
2025 | 1 | [1] |
2026 and thereafter | 3 | [1] |
Total lease payments | 9 | [1] |
Less: Amount representing interest | (1) | [1] |
Present value of lease liabilities | $ 8 | [1] |
[1] | (1) Amounts exclude sale leaseback financing arrangements which are not considered leases under Topic 842. |
Commitments and Contingencies_2
Commitments and Contingencies Level 4 (Details) - Environmental Liabilities - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Accrued Environmental Loss Contingencies, Current | $ 14 | $ 18 | |
Liability | [1] | 47 | 51 |
Discontinued Operations | |||
Liability | $ 2 | 2 | |
Geismar, LA [Member] | |||
Discount rate assumed to record at present value | 3.00% | ||
Undiscounted Liability Expected to be Paid | 20 years | ||
Geismar, LA Site Contingency, Accrual, Undiscounted Amount | $ 16 | ||
Accrual for Environmental Loss Contingencies, Undiscounted, Due Ratably over the Next Five Years | 5 | ||
Formerly-Owned - Remediation [Member] | |||
Accrued Environmental Loss Contingencies, Current | 10 | ||
Liability | 18 | 21 | |
Estimated Litigation Liability, Noncurrent | 8 | ||
Superfund and Offsite Landfills - allocated share: Equal to or Greater than 1% [Member] | |||
Liability | 6 | 6 | |
Superfund and Offsite Landfills - Less than 1% [Member] | |||
Liability | 3 | 3 | |
Geismar, LA [Member] | |||
Liability | 12 | 12 | |
Formerly-Owned - Monitoring Only [Member] | |||
Liability | 0 | 1 | |
Currently-Owned [Member] | |||
Liability | 8 | $ 8 | |
Minimum [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 34 | ||
Minimum [Member] | Formerly-Owned - Remediation [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 14 | ||
Minimum [Member] | Superfund and Offsite Landfills - allocated share: Equal to or Greater than 1% [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 5 | ||
Minimum [Member] | Superfund and Offsite Landfills - Less than 1% [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 2 | ||
Minimum [Member] | Geismar, LA [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 9 | ||
Minimum [Member] | Formerly-Owned - Monitoring Only [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 0 | ||
Minimum [Member] | Currently-Owned [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 4 | ||
Maximum [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 93 | ||
Maximum [Member] | Formerly-Owned - Remediation [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 36 | ||
Maximum [Member] | Superfund and Offsite Landfills - allocated share: Equal to or Greater than 1% [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 14 | ||
Maximum [Member] | Superfund and Offsite Landfills - Less than 1% [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 6 | ||
Maximum [Member] | Geismar, LA [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 22 | ||
Maximum [Member] | Formerly-Owned - Monitoring Only [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | 1 | ||
Maximum [Member] | Currently-Owned [Member] | |||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | $ 14 | ||
[1] | The table includes approximately $2 of environmental remediation liabilities related to the Held for Sale Business at both December 31, 2020 and 2019. These associated liabilities have been included in “Long-term liabilities associated with assets held for sale” within the Consolidated Balance Sheets. |
Commitments and Contingencies_3
Commitments and Contingencies Level 4 (Details) - Non-Environmental Liabilities - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | ||
Accrued Environmental Loss Contingencies, Current | $ 14 | $ 18 |
Estimated Litigation Liability | 1 | 1 |
Estimated Litigation Liability, Current | $ 2 | $ 1 |
Commitments and Contingencies_4
Commitments and Contingencies Level 4 (Details) - Annual Purchase Commitments $ in Millions | Dec. 31, 2020USD ($) |
Long-term Purchase Commitment [Line Items] | |
2021 | $ 190 |
2022 | 134 |
2023 | 94 |
2024 | 50 |
2025 | 49 |
2026 and beyond | 253 |
Total minimum payments | 770 |
Less: Amount representing interest | (31) |
Present Value of Minimum Payments | $ 739 |
Change in Benefit Obligations (
Change in Benefit Obligations (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Foreign Plan [Member] | Pension Plan [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | $ 678 | $ 583 | $ 688 | |
Service cost | 8 | 7 | 18 | $ 17 |
Interest cost | 4 | 4 | 6 | 10 |
Actuarial losses | 12 | 93 | 43 | |
Foreign currency exchange rate changes | (8) | (3) | 61 | |
Defined Benefit Plan, Benefit Obligation, Benefits Paid | (6) | (6) | (13) | |
Expenses paid from assets | 0 | 0 | 0 | |
Defined Benefit Plan, Benefit Obligation, Contributions by Plan Participant | 0 | 0 | 1 | |
Benefit obligation at end of period | 688 | 804 | 583 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets at beginning of period | 470 | 404 | 483 | |
Actual return on plan assets | 9 | 60 | 58 | |
Foreign currency exchange rate changes | (5) | (2) | 45 | |
Employer contributions | 15 | 14 | 40 | |
Benefits paid | (6) | (6) | (13) | |
Expenses paid from assets | 0 | 0 | 0 | |
Employee contributions | 0 | 0 | 1 | |
Fair value of plan assets at end of period | 483 | 614 | 404 | |
Funded status of the plan at end of period | (205) | (190) | ||
Foreign Plan [Member] | Pension Plan [Member] | Discontinued Operations | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | 29 | 29 | ||
Benefit obligation at end of period | 29 | 36 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Funded status of the plan at end of period | (29) | (36) | ||
Foreign Plan [Member] | Pension Plan [Member] | Continuing Operations | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | 649 | 659 | ||
Benefit obligation at end of period | 659 | 768 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Funded status of the plan at end of period | (176) | (154) | ||
Foreign Plan [Member] | Other Postretirement Benefits Plan [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | 17 | 13 | 13 | |
Interest cost | 0 | 0 | 1 | 1 |
Actuarial losses | (4) | 4 | (1) | |
Foreign currency exchange rate changes | 0 | 0 | (1) | |
Plan settlements | 0 | 0 | 0 | |
Benefit obligation at end of period | 13 | 12 | 13 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets at beginning of period | 0 | 0 | 0 | |
Employer contributions | 0 | 0 | 0 | |
Plan settlements | 0 | 0 | 0 | |
Fair value of plan assets at end of period | 0 | 0 | 0 | |
Funded status of the plan at end of period | (13) | (12) | ||
UNITED STATES | Pension Plan [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | 228 | 216 | 225 | |
Service cost | 2 | 2 | 2 | 3 |
Interest cost | 3 | 4 | 6 | 7 |
Actuarial losses | 3 | 14 | 17 | |
Foreign currency exchange rate changes | 0 | 0 | 0 | |
Defined Benefit Plan, Benefit Obligation, Benefits Paid | (8) | (8) | (15) | |
Expenses paid from assets | 3 | 0 | 3 | |
Defined Benefit Plan, Benefit Obligation, Contributions by Plan Participant | 0 | 0 | 0 | |
Benefit obligation at end of period | 225 | 232 | 216 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets at beginning of period | 196 | 185 | 197 | |
Actual return on plan assets | 10 | 19 | 18 | |
Foreign currency exchange rate changes | 0 | 0 | 0 | |
Employer contributions | 2 | 0 | 0 | |
Benefits paid | (8) | (8) | (15) | |
Expenses paid from assets | (3) | 0 | (3) | |
Employee contributions | 0 | 0 | 0 | |
Fair value of plan assets at end of period | 197 | 197 | 185 | |
Funded status of the plan at end of period | (28) | (35) | ||
UNITED STATES | Pension Plan [Member] | Discontinued Operations | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | 0 | 0 | ||
Benefit obligation at end of period | 0 | 0 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Funded status of the plan at end of period | 0 | 0 | ||
UNITED STATES | Pension Plan [Member] | Continuing Operations | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | 228 | 225 | ||
Benefit obligation at end of period | 225 | 232 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Funded status of the plan at end of period | (28) | (35) | ||
UNITED STATES | Other Postretirement Benefits Plan [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation at beginning of period | 0 | 0 | 0 | |
Interest cost | 0 | 0 | 0 | 0 |
Actuarial losses | 0 | 0 | 0 | |
Foreign currency exchange rate changes | 0 | 0 | 0 | |
Plan settlements | 0 | 0 | 0 | |
Benefit obligation at end of period | 0 | 0 | 0 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets at beginning of period | 0 | 0 | 0 | |
Employer contributions | 0 | 0 | 0 | |
Plan settlements | 0 | $ 0 | 0 | |
Fair value of plan assets at end of period | 0 | 0 | $ 0 | |
Funded status of the plan at end of period | $ 0 | $ 0 |
Amounts Recognized (Details)
Amounts Recognized (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 02, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Noncurrent assets | $ 85 | $ 44 | ||||
Other current liabilities | (111) | (95) | ||||
Long-term pension and post employment benefit obligations | (250) | (223) | ||||
Accumulated other comprehensive loss | 27 | 1 | $ 0 | $ 0 | $ 18 | |
Pension Plan [Member] | UNITED STATES | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Noncurrent assets | 0 | 0 | ||||
Other current liabilities | 0 | 0 | ||||
Long-term pension and post employment benefit obligations | (35) | (28) | ||||
Accumulated other comprehensive loss | 0 | 0 | ||||
Net amounts recognized | (35) | (28) | ||||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | ||||||
Accumulated benefit obligation | 232 | 225 | ||||
Accumulated benefit obligation for funded plans | 232 | 225 | ||||
Pension Plans with Underfunded Accumulated Benefit Obligations [Abstract] | ||||||
Aggregate projected benefit obligation(1) | 232 | [1] | 225 | |||
Aggregate accumulated benefit obligation | 232 | 225 | ||||
Aggregate fair value of plan assets | 197 | 197 | ||||
Pension plans with projected benefit obligation [Abstract] | ||||||
Aggregate projected benefit obligation | 232 | 225 | ||||
Aggregate fair value of plan assets | 197 | 197 | ||||
Pension Plan [Member] | UNITED STATES | Discontinued Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | 0 | 0 | ||||
Pension Plan [Member] | UNITED STATES | Continuing Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | (35) | (28) | ||||
Pension Plan [Member] | Foreign Plan [Member] | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Noncurrent assets | 52 | 8 | ||||
Other current liabilities | (6) | (5) | ||||
Long-term pension and post employment benefit obligations | (236) | (208) | ||||
Accumulated other comprehensive loss | 0 | 0 | ||||
Net amounts recognized | (190) | (205) | ||||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | ||||||
Accumulated benefit obligation | 757 | 648 | ||||
Accumulated benefit obligation for funded plans | 525 | 446 | ||||
Pension Plans with Underfunded Accumulated Benefit Obligations [Abstract] | ||||||
Aggregate projected benefit obligation(1) | 258 | 224 | ||||
Aggregate accumulated benefit obligation | 250 | 216 | ||||
Aggregate fair value of plan assets | 16 | 13 | ||||
Pension plans with projected benefit obligation [Abstract] | ||||||
Aggregate projected benefit obligation | 285 | 287 | ||||
Aggregate fair value of plan assets | 42 | 74 | ||||
Pension Plan [Member] | Foreign Plan [Member] | Discontinued Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | (36) | (29) | ||||
Pension Plans with Underfunded Accumulated Benefit Obligations [Abstract] | ||||||
Aggregate projected benefit obligation(1) | 36 | |||||
Pension Plan [Member] | Foreign Plan [Member] | Continuing Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | (154) | (176) | ||||
Other Postretirement Benefits Plan [Member] | UNITED STATES | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Noncurrent assets | 0 | 0 | ||||
Other current liabilities | 0 | 0 | ||||
Long-term pension and post employment benefit obligations | 0 | 0 | ||||
Accumulated other comprehensive loss | 0 | 0 | ||||
Net amounts recognized | 0 | 0 | ||||
Other Postretirement Benefits Plan [Member] | UNITED STATES | Discontinued Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | 0 | 0 | ||||
Other Postretirement Benefits Plan [Member] | UNITED STATES | Continuing Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | 0 | 0 | ||||
Other Postretirement Benefits Plan [Member] | Foreign Plan [Member] | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Noncurrent assets | 0 | 0 | ||||
Other current liabilities | (1) | (1) | ||||
Long-term pension and post employment benefit obligations | (11) | (12) | ||||
Accumulated other comprehensive loss | 0 | 0 | ||||
Net amounts recognized | (12) | (13) | ||||
Other Postretirement Benefits Plan [Member] | Foreign Plan [Member] | Discontinued Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | 0 | 0 | ||||
Other Postretirement Benefits Plan [Member] | Foreign Plan [Member] | Continuing Operations | ||||||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | ||||||
Net amounts recognized | $ (12) | $ (13) | ||||
[1] | Aggregate projected benefit obligation related to the Company’s Held for Sale Business was $36 at December 31, 2020 and is included in the table above with the Company’s continuing operations. |
Components of Pension and OPEB
Components of Pension and OPEB expense (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Other Postretirement Benefits Plan [Member] | UNITED STATES | |||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | |||||
Interest cost | $ 0 | $ 0 | $ 0 | $ 0 | |
Unrealized actuarial loss(1) | [1] | 0 | 0 | 0 | 0 |
Net expense (benefit) | 0 | 0 | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Foreign Plan [Member] | |||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | |||||
Interest cost | 0 | 0 | 1 | 1 | |
Unrealized actuarial loss(1) | [1] | (4) | 4 | (1) | 2 |
Net expense (benefit) | (4) | 4 | 0 | 3 | |
Pension Plan [Member] | UNITED STATES | |||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | |||||
Service cost | 2 | 2 | 2 | 3 | |
Interest cost | 3 | 4 | 6 | 7 | |
Expected return on assets | (7) | (6) | (12) | (14) | |
Unrealized actuarial loss(1) | 0 | 1 | 11 | 11 | |
Net expense (benefit) | (2) | 1 | 7 | 7 | |
Pension Plan [Member] | UNITED STATES | Discontinued Operations | |||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | |||||
Net expense (benefit) | 0 | 0 | 0 | 0 | |
Pension Plan [Member] | Foreign Plan [Member] | |||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | |||||
Service cost | 8 | 7 | 18 | 17 | |
Interest cost | 4 | 4 | 6 | 10 | |
Expected return on assets | (6) | (6) | (13) | (13) | |
Unrealized actuarial loss(1) | [1] | 9 | 39 | (2) | (26) |
Net expense (benefit) | [2] | 15 | 44 | 9 | (12) |
Pension Plan [Member] | Foreign Plan [Member] | Discontinued Operations | |||||
Pension Benefits and Non-Pension Postretirement Benefits Disclosures Table Text Block [Line Items] | |||||
Net expense (benefit) | $ 1 | $ 6 | $ 5 | $ 1 | |
[1] | Upon the application of fresh start accounting, the Company’s pension and other non-pension postretirement liabilities were remeasured as of the Predecessor period July 1, 2019. As a result, for the Predecessor period January 1, 2019 through July 1, 2019, total unrealized actuarial losses of $44 were recorded to “Reorganization, net” in the Consolidated Statements of Operations, $5 of which relate to the Company’s Held for Sale business. | ||||
[2] | Net expense (benefit) related to the Company’s Held for Sale Business was $5, $<1, $6 and $1 for the year ended December 31, 2020, the Successor period from July 2, 2019 to December 31, 2019, the Predecessor period from January 1, 2019 through July 1, 2020 and the year ended December 31, 2018, respectively, and is included in the table above. |
Weighted Average Rates used to
Weighted Average Rates used to Determine the Benefit Obligations (Details) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Jul. 01, 2019 | |
Pension Plan [Member] | UNITED STATES | ||||
Discount rate | 3.10% | 2.20% | 3.30% | |
Rate of increase in future compensation levels | 0.00% | 0.00% | 0.00% | |
Pension Plan [Member] | Foreign Plan [Member] | ||||
Discount rate | 1.20% | 0.80% | 1.30% | |
Rate of increase in future compensation levels | 3.40% | 3.60% | 3.40% | |
Other Postretirement Benefits Plan [Member] | UNITED STATES | ||||
Discount rate | 0.00% | 0.00% | 0.00% | |
Rate of increase in future compensation levels | 0.00% | 0.00% | 0.00% | |
Health care cost trend rate assumed for next year | 0.00% | 0.00% | 0.00% | |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 0.00% | 0.00% | 0.00% | |
Other Postretirement Benefits Plan [Member] | Foreign Plan [Member] | ||||
Discount rate | 5.20% | 4.60% | 6.90% | |
Rate of increase in future compensation levels | 0.00% | 0.00% | 0.00% | |
Health care cost trend rate assumed for next year | 5.70% | 6.80% | 6.20% | |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.00% | 4.50% | 4.00% | |
Year that the rate reaches the ultimate trend rate | 2040 | 2040 | 2040 |
Weighted Average Rates used t_2
Weighted Average Rates used to Determine Net Periodic Pension Expense (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Defined Benefit Plan, Effect of One Percentage Point Increase on Service and Interest Cost Components | $ 1 | |||
Defined Benefit Plan, Effect of One Percentage Point Increase on Accumulated Postretirement Benefit Obligation | $ 2 | |||
Foreign Plan [Member] | Pension Plan [Member] | ||||
Discount rate | 1.30% | 1.90% | 1.20% | 1.90% |
Rate of increase in future compensation levels | 3.40% | 2.30% | 3.40% | 2.40% |
Expected long-term rate of return on plan assets | 2.60% | 3.10% | 3.10% | 3.10% |
Foreign Plan [Member] | Other Postretirement Benefits Plan [Member] | ||||
Discount rate | 6.90% | 6.30% | 5.20% | 5.30% |
Rate of increase in future compensation levels | 0.00% | 0.00% | 0.00% | 0.00% |
Expected long-term rate of return on plan assets | 0.00% | 0.00% | 0.00% | 0.00% |
UNITED STATES | Pension Plan [Member] | ||||
Discount rate | 3.30% | 4.10% | 3.10% | 3.50% |
Rate of increase in future compensation levels | 0.00% | 0.00% | 0.00% | 0.00% |
Expected long-term rate of return on plan assets | 6.60% | 6.60% | 6.60% | 6.70% |
UNITED STATES | Other Postretirement Benefits Plan [Member] | ||||
Discount rate | 0.00% | 4.10% | 0.00% | 3.20% |
Rate of increase in future compensation levels | 0.00% | 0.00% | 0.00% | 0.00% |
Expected long-term rate of return on plan assets | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted Average Allocations of
Weighted Average Allocations of Plan Assets (Details) - Pension Plan [Member] | Dec. 31, 2020 | Dec. 31, 2019 |
UNITED STATES | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 100.00% | 100.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 100.00% | |
UNITED STATES | Equity Securities [Member] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 32.00% | 35.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 35.00% | |
UNITED STATES | Debt Securities [Member] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 55.00% | 53.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 55.00% | |
UNITED STATES | Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 13.00% | 12.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 10.00% | |
Foreign Plan [Member] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 100.00% | 100.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 100.00% | |
Foreign Plan [Member] | Equity Securities [Member] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 22.00% | 22.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 23.00% | |
Foreign Plan [Member] | Debt Securities [Member] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 76.00% | 75.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 77.00% | |
Foreign Plan [Member] | Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 2.00% | 3.00% |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 0.00% |
U.S. Pension Plan Investments M
U.S. Pension Plan Investments Measured at Fair Value (Details) - Pension Plan [Member] - UNITED STATES - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | |
Large Cap Equity Funds | [1] | $ 35 | $ 37 |
Small mid Cap Equity Funds | [1] | 5 | 6 |
Other International Equity | [1] | 25 | 27 |
Debt Securities Fixed Income | [1] | 107 | 103 |
Cash, Money Market and Other | [2] | 2 | 2 |
Aggregate fair value of plan assets | 197 | 197 | |
Fair value of plan assets at end of year subtotal | 174 | 175 | |
Other funds | [3] | 23 | 22 |
Fair Value, Inputs, Level 1 [Member] | |||
Large Cap Equity Funds | [1] | 0 | 0 |
Small mid Cap Equity Funds | [1] | 0 | 0 |
Other International Equity | [1] | 0 | 0 |
Debt Securities Fixed Income | [1] | 0 | 0 |
Cash, Money Market and Other | [2] | 0 | 0 |
Aggregate fair value of plan assets | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
Large Cap Equity Funds | [1] | 35 | 37 |
Small mid Cap Equity Funds | [1] | 5 | 6 |
Other International Equity | [1] | 25 | 27 |
Debt Securities Fixed Income | [1] | 107 | 103 |
Cash, Money Market and Other | [2] | 2 | 2 |
Aggregate fair value of plan assets | 174 | 175 | |
Fair Value, Inputs, Level 3 [Member] | |||
Large Cap Equity Funds | [1] | 0 | 0 |
Small mid Cap Equity Funds | [1] | 0 | 0 |
Other International Equity | [1] | 0 | 0 |
Debt Securities Fixed Income | [1] | 0 | 0 |
Cash, Money Market and Other | [2] | 0 | 0 |
Aggregate fair value of plan assets | $ 0 | $ 0 | |
[1] | Level 2 equity and fixed income securities are primarily in pooled asset and mutual funds and are valued based on underlying net asset value multiplied by the number of shares held. The underlying asset values are based on observable inputs and quoted market prices. | ||
[2] | Cash equivalents represent investment in a collective short term investment fund, which is a cash sweep for uninvested cash that earns interest monthly. For these investments, book value is assumed to equal fair value due to the short duration of the investment term. | ||
[3] | Represents investments in commingled funds with exposure to a variety of hedge fund strategies, which are not publicly traded and have ongoing redemption restrictions. The Company’s interest in these investments is measured at net asset value per share as a practical expedient for fair value, which is derived from the underlying asset values in these funds, only some of which represent observable inputs and quoted market prices |
Non-U.S. Pension Plan Investmen
Non-U.S. Pension Plan Investments Measured at Fair Value (Details) - Foreign Plan [Member] - Pension Plan [Member] - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | |
Pooled Insurance Products with Fixed Income Guarantee | [1] | $ 15 | $ 13 | ||
Cash, Money Market and Other | [2] | 0 | 1 | ||
Defined Benefit Plan, Plan Assets, Amount | 614 | 483 | $ 470 | $ 404 | |
Fair value of plan assets at end of year subtotal | 15 | 14 | |||
Other international equity funds | [3] | 135 | 108 | ||
Other fixed income securities | [3] | 464 | 361 | ||
Fair Value, Inputs, Level 1 [Member] | |||||
Pooled Insurance Products with Fixed Income Guarantee | [1] | 0 | 0 | ||
Cash, Money Market and Other | [2] | 0 | 0 | ||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 2 [Member] | |||||
Pooled Insurance Products with Fixed Income Guarantee | [1] | 15 | 13 | ||
Cash, Money Market and Other | [2] | 0 | 1 | ||
Defined Benefit Plan, Plan Assets, Amount | 15 | 14 | |||
Fair Value, Inputs, Level 3 [Member] | |||||
Pooled Insurance Products with Fixed Income Guarantee | [1] | 0 | 0 | ||
Cash, Money Market and Other | [2] | 0 | 0 | ||
Defined Benefit Plan, Plan Assets, Amount | $ 0 | $ 0 | |||
[1] | Level 2 equity and fixed income securities are primarily in pooled asset and mutual funds and are valued based on underlying net asset value multiplied by the number of shares held. The underlying asset values are based on observable inputs and quoted market prices. | ||||
[2] | Cash equivalents represent investment in a collective short term investment fund, which is a cash sweep for uninvested cash that earns interest monthly. For these investments, book value is assumed to equal fair value due to the short duration of the investment term. | ||||
[3] | Represents investments in commingled funds with exposure to a variety of hedge fund strategies, which are not publicly traded and have ongoing redemption restrictions. The Company’s interest in these investments is measured at net asset value per share as a practical expedient for fair value, which is derived from the underlying asset values in these funds, only some of which represent observable inputs and quoted market prices |
Estimated Future Plan Benefit P
Estimated Future Plan Benefit Payments (Details) $ in Millions | Dec. 31, 2020USD ($) |
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 36 |
UNITED STATES | Pension Plan [Member] | |
2021 | 17 |
2022 | 16 |
2023 | 15 |
2024 | 15 |
2025 | 15 |
2026-2030 | 64 |
UNITED STATES | Other Postretirement Benefits Plan [Member] | |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026-2030 | 0 |
Foreign Plan [Member] | Pension Plan [Member] | |
2021 | 16 |
2022 | 16 |
2023 | 17 |
2024 | 19 |
2025 | 17 |
2026-2030 | 118 |
Foreign Plan [Member] | Other Postretirement Benefits Plan [Member] | |
2021 | 1 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026-2030 | $ 2 |
Pension Other (Details)
Pension Other (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | Jul. 01, 2019 | ||
non-qualified benefit plans, other long-term liabilities | $ 5 | $ 4 | ||||
German Early Retirement Program [Member] | ||||||
Postemployment Benefits Liability | 2 | 3 | ||||
Defined Contribution Plan, Cost | 1 | $ 1 | 1 | $ 1 | ||
European Jubilee Plan [Member] | ||||||
Postemployment Benefits Liability | 4 | 4 | ||||
Pension Plan [Member] | ||||||
Defined Contribution Plan, Cost | 6 | 7 | 14 | 17 | ||
Pension Plan [Member] | UNITED STATES | ||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | (2) | 1 | 7 | 7 | ||
Defined Benefit Plan, Benefit Obligation | 225 | 232 | 216 | $ 228 | ||
Pension Plan [Member] | Foreign Plan [Member] | ||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | [1] | 15 | 44 | 9 | (12) | |
Defined Benefit Plan, Benefit Obligation | 688 | 804 | 583 | 678 | ||
Pension Plan [Member] | Discontinued Operations | UNITED STATES | ||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | 0 | 0 | 0 | 0 | ||
Defined Benefit Plan, Benefit Obligation | 0 | 0 | 0 | |||
Pension Plan [Member] | Discontinued Operations | Foreign Plan [Member] | ||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | 1 | $ 6 | 5 | $ 1 | ||
Defined Benefit Plan, Benefit Obligation | $ 29 | $ 36 | $ 29 | |||
[1] | Net expense (benefit) related to the Company’s Held for Sale Business was $5, $<1, $6 and $1 for the year ended December 31, 2020, the Successor period from July 2, 2019 to December 31, 2019, the Predecessor period from January 1, 2019 through July 1, 2020 and the year ended December 31, 2018, respectively, and is included in the table above. |
Summary of Existing Stock Based
Summary of Existing Stock Based Compensation Plans (Details) | Dec. 31, 2020shares | |
Stock based compensation plans [Line Items] | ||
Number of Shares Authorized | 7,635,389 | |
HHC 2019 Omnibus Incentive Plan | Restricted Stock Units (RSUs) [Member] | September 2019 | Share-based Payment Arrangement, Employee | ||
Stock based compensation plans [Line Items] | ||
Shares Outstanding(1) | 1,034,100 | [1] |
HHC 2019 Omnibus Incentive Plan | Performance Shares | September 2019 | Share-based Payment Arrangement, Employee | ||
Stock based compensation plans [Line Items] | ||
Shares Outstanding(1) | 2,412,894 | [1] |
HHC 2019 Omnibus Incentive Plan - 2020 Grants | Restricted Stock Units (RSUs) [Member] | March 2020 | Share-based Payment Arrangement, Employee | ||
Stock based compensation plans [Line Items] | ||
Shares Outstanding(1) | 692,441 | [1] |
HHC 2019 Omnibus Incentive Plan - 2020 Grants | Restricted Stock Units (RSUs) [Member] | January 2020 | Share-based Payment Arrangement, Nonemployee | ||
Stock based compensation plans [Line Items] | ||
Shares Outstanding(1) | 73,332 | [1] |
HHC 2019 Omnibus Incentive Plan - 2020 Grants | Restricted Stock Units (RSUs) [Member] | August 2020 | Share-based Payment Arrangement, Nonemployee | ||
Stock based compensation plans [Line Items] | ||
Shares Outstanding(1) | 60,664 | [1] |
HHC 2019 Omnibus Incentive Plan - 2020 Grants | Performance Shares | March 2020 | Share-based Payment Arrangement, Employee | ||
Stock based compensation plans [Line Items] | ||
Shares Outstanding(1) | 811,425 | [1] |
[1] | Shares outstanding includes shares awarded to associates related to the Held for Sale Business |
Stock Option Plans and Stock _3
Stock Option Plans and Stock Based Compensation Level 4 (Details) - Restricted Unit Activity - USD ($) $ / shares in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Schedule of Restricted Stock [Line Items] | ||||
Non-cash stock based compensation expense | $ 8 | $ 0 | $ 17 | $ 0 |
Restricted Stock Units (RSUs) [Member] | ||||
Schedule of Restricted Stock [Line Items] | ||||
Grant Date Fair Value | $ 16 | |||
Restricted Stock Units (RSUs) [Member] | Award Date: March 2020 | ||||
Schedule of Restricted Stock [Line Items] | ||||
Grant Date Fair Value | $ 11 | |||
Restricted Stock Units (RSUs) [Member] | Award Date: August 2020 | ||||
Schedule of Restricted Stock [Line Items] | ||||
Grant Date Fair Value | 1 | |||
Restricted Stock Units (RSUs) [Member] | Award Date: January 2020 | ||||
Schedule of Restricted Stock [Line Items] | ||||
Grant Date Fair Value | $ 2 | |||
Number of Shares Vested | 36,666 | |||
Restricted Stock Units (RSUs) [Member] | September 2019 | Share-based Payment Arrangement, Employee | HHC 2019 Omnibus Incentive Plan | ||||
Schedule of Restricted Stock [Line Items] | ||||
Number of Shares Vested | 344,700 | |||
Performance Shares | ||||
Schedule of Restricted Stock [Line Items] | ||||
Grant Date Fair Value | $ 29 | $ 13 |
Stock Option Plans and Stock _4
Stock Option Plans and Stock Based Compensation Level 4 (Details) - Stock Option Activity - $ / shares | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2019 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
shares issued | 100 | 100 | 58,410,731 | |
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Nonvested at December 31, 2019 | 1,034,100 | |||
Units granted | 882,422 | |||
Units forfeited | (16,348) | |||
Units vested | (381,366) | |||
Nonvested at December 31, 2020(1) | [1] | 1,518,808 | ||
Weighted Average Grant Date Fair Value | $ 15.60 | $ 15.37 | ||
Grants in Period, Weighted Average Grant Date Fair Value | 15.80 | |||
Forfeitures, Weighted Average Grant Date Fair Value | 15.80 | |||
Vested in Period, Weighted Average Grant Date Fair Value | $ 15.41 | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Nonvested at December 31, 2019 | 2,412,894 | |||
Units granted | 823,619 | |||
Units forfeited | (12,194) | |||
Units vested | 0 | |||
Nonvested at December 31, 2020(1) | [1] | 3,224,319 | ||
Weighted Average Grant Date Fair Value | $ 12.93 | $ 11.97 | ||
Grants in Period, Weighted Average Grant Date Fair Value | 15.80 | |||
Forfeitures, Weighted Average Grant Date Fair Value | 15.80 | |||
Vested in Period, Weighted Average Grant Date Fair Value | $ 0 | |||
[1] | Nonvested shares include shares awarded to associates related to discontinued operations. |
Income Taxes Level 4 (Details)
Income Taxes Level 4 (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | Jul. 02, 2019 | Jul. 01, 2019 | Dec. 31, 2017 | ||
Valuation Allowance [Line Items] | ||||||||
Valuation allowance | $ (122) | $ (217) | $ (525) | $ (98) | $ (98) | $ (498) | ||
Income tax benefit | [1] | 10 | $ (201) | (14) | (31) | |||
Operating Loss Carryforwards, Valuation Allowance | 97 | $ 1,053 | ||||||
Disallowed interest expense carryforward | 283 | |||||||
Global Intangible low tax income | 5 | 21 | ||||||
Income tax expense related to reorganization adjustments | 40 | |||||||
Gain (loss) recognized between fair value and tax basis | 50 | |||||||
Tax Benefit for Removal of Valuation Allowance | 10 | |||||||
Changes in enacted tax laws and tax rates | $ 0 | $ 0 | $ 6 | $ 0 | ||||
[1] | Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Income Taxes Level 4 (Details)
Income Taxes Level 4 (Details) - Components of Income Tax Expense - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Current [Abstract] | |||||
Federal | $ (1) | $ 36 | $ (14) | $ (4) | |
State and local | 4 | 13 | 0 | 1 | |
Foreign | 1 | 11 | 22 | 25 | |
Total current | 4 | 60 | 8 | 22 | |
Deferred [Abstract] | |||||
Federal | 9 | (2) | 3 | 1 | |
State and local | 1 | 0 | (1) | 0 | |
Foreign | (24) | 143 | 4 | 8 | |
Total deferred | (14) | 141 | 6 | 9 | |
Income tax expense (benefit) (1) | [1] | $ (10) | $ 201 | $ 14 | $ 31 |
Federal Statutory Income Tax Rate | 21.00% | 21.00% | 21.00% | 21.00% | |
Income tax expense (benefit) | $ 1 | $ 21 | $ 1 | $ 9 | |
[1] | Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Income Taxes Level 4 (Details_2
Income Taxes Level 4 (Details) - Reconciliation of Differences Between Income Taxes For Continuing Operations and Provisions for Income Taxes - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Income Taxes Reconciliation between Continuing Operations and Provisions for Income Taxes [Line Items] | |||||
Income tax (benefit) expense computed at federal statutory tax rate | $ (21) | $ 622 | $ (31) | $ (35) | |
State tax (benefit) expense, net of federal benefit | (2) | 9 | (5) | 1 | |
Foreign tax rate expense differential | 2 | 33 | 1 | 13 | |
Foreign source income subject to U.S. taxation | 3 | 1 | 0 | 2 | |
Non-deductible losses and other expenses | 0 | 5 | 0 | 9 | |
Increase (decrease) in the taxes due to changes in valuation allowance | 17 | (433) | 46 | 25 | |
Additional (benefit) expense on foreign unrepatriated earnings | 0 | 0 | (3) | (1) | |
Additional expense for uncertain tax positions | 0 | 44 | (4) | 15 | |
Effective Income Tax Rate Reconciliation, Equity in Earnings (Losses) of Unconsolidated Subsidiary, Amount | (1) | (4) | 0 | 0 | |
Changes in enacted tax laws and tax rates | 0 | 0 | 6 | 0 | |
Effective income tax rate reconciliation, Fresh start and reorganization adjustment impact | 0 | (68) | 0 | 0 | |
write off net operating loss | (8) | (8) | 4 | 0 | |
Income tax expense (benefit) (1) | [1] | $ (10) | $ 201 | $ 14 | $ 31 |
[1] | Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Income Taxes Level 4 (Details_3
Income Taxes Level 4 (Details) - Domestic and Foreign Components of Income Continuing Operations - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Income Tax Examination [Line Items] | |||||
Domestic | $ (46) | $ 2,754 | $ (138) | $ (216) | |
Foreign | (58) | 206 | (11) | 52 | |
(Loss) income from continuing operations before income tax and earnings from unconsolidated entities | [1] | (104) | 2,960 | (149) | (164) |
(Loss) income from discontinued operations before income tax, earnings from unconsolidated entities | $ 5 | $ 155 | $ (70) | $ 38 | |
[1] | Excludes (loss) income before income taxes of $(70), $5, $155, and $38 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively, related to the Held for Sale Business. |
Income Taxes Level 4 (Details_4
Income Taxes Level 4 (Details) - Deferred Tax Assets and Liabilities - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 02, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets | |||||||
Non-pension post-employment | $ 4 | $ 4 | |||||
Accrued and other expenses | 61 | 97 | |||||
Deferred Tax Assets, Property, Plant and Equipment | 0 | 4 | |||||
Loss, expense, and credit carryforwards | 240 | 163 | |||||
Intangible assets | 11 | 0 | |||||
Pension and postretirement benefit liabilities | 47 | 14 | |||||
Gross deferred tax assets | 363 | 282 | |||||
Valuation allowance | (217) | (122) | $ (98) | $ (98) | $ (525) | $ (498) | |
Net deferred tax asset | 146 | 160 | |||||
Liabilities [Abstract] | |||||||
Property, plant and equipment | (227) | (228) | |||||
Unrepatriated earnings of foreign subsidiaries | (7) | (10) | |||||
Intangible assets | (66) | (65) | |||||
Gross deferred tax liabilities | (300) | (303) | |||||
Net deferred tax liability(1) | [1] | $ (154) | $ (143) | ||||
[1] | Excludes net deferred tax liability of $20 and $15 for the years ended December 31, 2020 and 2019 respectively, related to the Held for Sale Business. |
Income Taxes Level 4 (Details_5
Income Taxes Level 4 (Details) - Presentation of the Net Deferred Tax Liability - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 02, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets | |||||||
Long-term deferred income taxes | $ 7 | $ 6 | |||||
Liabilities [Abstract] | |||||||
Long-term deferred income taxes | 161 | 149 | |||||
Net deferred tax liability(1) | [1] | (154) | (143) | ||||
Valuation allowance | 217 | 122 | $ 98 | $ 98 | $ 525 | $ 498 | |
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 636 | ||||||
Valuation allowance on state net operating loss carryforwards | 19 | ||||||
Operating Loss Carryforwards, Valuation Allowance | 97 | $ 1,053 | |||||
Unrepatriated earnings of foreign subsidiaries | 7 | 10 | |||||
Discontinued Operations | |||||||
Liabilities [Abstract] | |||||||
Net deferred tax liability(1) | $ (20) | $ (15) | |||||
[1] | Excludes net deferred tax liability of $20 and $15 for the years ended December 31, 2020 and 2019 respectively, related to the Held for Sale Business. |
Income Taxes Level 4 (Details_6
Income Taxes Level 4 (Details) - Summary of the Valuation Allowance - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Valuation Allowance [Line Items] | ||||
Disallowed interest expense carryforward | $ 283 | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | $ 98 | $ 525 | $ 122 | 498 |
Changes in Related Gross Deferred Tax Assets/Liabilities | 0 | 0 | 41 | 0 |
Charge / (Release) | 24 | $ (427) | 54 | 27 |
Balance at End of Period | $ 122 | $ 217 | $ 525 |
Income Taxes Level 4 (Details_7
Income Taxes Level 4 (Details) - Unrecognized Tax Benefits - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2019 | ||||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||||||
Balance at beginning of period | $ 133 | [1] | $ 94 | $ 130 | [1] | $ 94 | |||
Additions based on tax positions related to the current year | 2 | 41 | 4 | ||||||
Additions for tax positions of prior years | 0 | 5 | 14 | ||||||
Reductions for tax positions of prior years | (3) | (6) | (20) | ||||||
Settlements | (4) | 0 | (1) | ||||||
Foreign currency translation | 2 | 1 | 2 | ||||||
Balance at end of period(1) | 130 | [1] | 129 | [1] | 130 | [1] | $ 94 | ||
Unrecognized Tax Benefits, Period Increase (Decrease) | 10 | 1 | |||||||
Income Tax Examination, Penalties Expense | 2 | 3 | 9 | $ 3 | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 56 | 56 | 56 | $ 54 | |||||
Discontinued Operations | |||||||||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||||||
Balance at beginning of period | 5 | ||||||||
Balance at end of period(1) | $ 5 | $ 11 | 6 | $ 5 | |||||
Maximum [Member] | |||||||||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||||||
Amount of Unrecognized Tax Benefits Expected to Be Recognized within the Next 12 Months | $ 15 | ||||||||
[1] | Includes unrecognized tax benefits of $6, $5, and $11 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor period January 1, 2019 through July 1, 2019 associated with the Held for Sale business. |
Dispositions (Details)
Dispositions (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from dispositions, net | $ 0 | $ 0 | $ 0 | $ 49 |
Gain on dispositions (see Note 18) | $ 0 | $ 0 | 0 | $ 44 |
gross cash consideration | $ 335 |
Summarized Financial Informat_3
Summarized Financial Information of Unconsolidated Affiliate Summarized Balance Sheet of Unconsolidated Affiliates (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Financial Support for Nonconsolidated Legal Entity [Line Items] | ||
Current assets | $ 7 | $ 9 |
Non-current assets | 1 | 1 |
Current liabilities | 2 | 11 |
Non-current liabilities | 6 | 12 |
Unconsolidated JV [Member] | ||
Financial Support for Nonconsolidated Legal Entity [Line Items] | ||
Current assets | 38 | 32 |
Non-current assets | 7 | 6 |
Current liabilities | 20 | 10 |
Non-current liabilities | $ 0 | $ 0 |
Summarized Financial Informat_4
Summarized Financial Information of Unconsolidated Affiliate Summarized Operations of Unconsolidated Affiliates (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Summarized Financial Information of Unconsolidated Affiliates [Line Items] | |||||
Net Sales of Unconsolidated Affiliates | $ 14 | $ 18 | $ 32 | $ 43 | |
Gross Profit of Unconsolidated Affiliates | 3 | 4 | 12 | 7 | |
Pre-tax Income of Unconsolidated Affiliates | 1 | 2 | 5 | 2 | |
Net Income of Unconsolidated Affiliates | 0 | $ 2 | 4 | 2 | |
Unconsolidated JV [Member] | |||||
Summarized Financial Information of Unconsolidated Affiliates [Line Items] | |||||
Net Sales of Unconsolidated Affiliates | $ 39 | 33 | 59 | 88 | |
Gross Profit of Unconsolidated Affiliates | 9 | 8 | 16 | 22 | |
Pre-tax Income of Unconsolidated Affiliates | 4 | 3 | 8 | 13 | |
Net Income of Unconsolidated Affiliates | $ 3 | $ 2 | $ 6 | $ 9 |
Segment Information Level 4 - R
Segment Information Level 4 - Revenues by Segment (Details) - USD ($) $ in Millions | Jul. 01, 2019 | [1] | Dec. 31, 2020 | Sep. 30, 2020 | [2] | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | [3] | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Net sales | $ 0 | $ 655 | $ 634 | $ 534 | $ 687 | $ 630 | $ 693 | $ 750 | $ 731 | $ 1,323 | [4],[5] | $ 1,481 | [4],[5] | $ 2,510 | [4],[5] | $ 3,137 | [4],[5] | ||||
Accelerated Depreciation | 2 | 4 | |||||||||||||||||||
Adhesives | |||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Net sales | [4] | 693 | 761 | 1,188 | 1,641 | ||||||||||||||||
Coatings and Composites | |||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Net sales | [4] | $ 630 | $ 720 | $ 1,322 | $ 1,496 | ||||||||||||||||
[1] | (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | ||||||||||||||||||||
[2] | (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. | ||||||||||||||||||||
[3] | (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | ||||||||||||||||||||
[4] | Intersegment sales are not significant and, as such, are eliminated within the selling segment. | ||||||||||||||||||||
[5] | Sales are attributed to the country in which the individual business locations reside. |
Segment Information Level 4 - E
Segment Information Level 4 - EBITDA by Segment (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | |||||
Segment EBITDA [Line Items] | $ 139 | $ 201 | $ 294 | $ 381 | |
Earnings from unconsolidated entities, net of taxes | 2 | 1 | 2 | 4 | |
Adhesives | |||||
Segment Reporting Information [Line Items] | |||||
Segment EBITDA [Line Items] | [1] | 116 | 135 | 214 | 252 |
Earnings from unconsolidated entities, net of taxes | 1 | 1 | 1 | 1 | |
Coatings and Composites | |||||
Segment Reporting Information [Line Items] | |||||
Segment EBITDA [Line Items] | [2] | 60 | 96 | 151 | 200 |
Earnings from unconsolidated entities, net of taxes | 2 | 1 | 2 | 3 | |
Corporate and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Segment EBITDA [Line Items] | $ (37) | $ (30) | $ (71) | $ (71) | |
[1] | (1) Included in Adhesives Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of less than $1 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor Period January 1, 2019 through July 1, 2019 and $1 for the Predecessor year ended December 31, 2018. | ||||
[2] | (2) Included in Coatings and Composites Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of $2, $2, $1 and $3 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. |
Segment Information Level 4 - D
Segment Information Level 4 - Depreciation by Segment (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Depreciation by Segment [Line Items] | |||||
Depreciation and amortization (1) | [1] | $ 93 | $ 43 | $ 191 | $ 98 |
Accelerated Depreciation | 2 | 4 | |||
Adhesives | |||||
Depreciation by Segment [Line Items] | |||||
Depreciation and amortization (1) | [2] | 47 | 21 | 97 | 50 |
Coatings and Composites | |||||
Depreciation by Segment [Line Items] | |||||
Depreciation and amortization (1) | 44 | 20 | 90 | 44 | |
Corporate and Other [Member] | |||||
Depreciation by Segment [Line Items] | |||||
Depreciation and amortization (1) | $ 2 | $ 2 | $ 4 | $ 4 | |
[1] | For the year ended December 31, 2020 and 2018 accelerated depreciation of $2 and $4 has been included in “Depreciation and amortization.” There was no accelerated deprecation in either the Successor year ended December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. | ||||
[2] | (1) Includes accelerated depreciation of $2 and $4 for the years ended December 31, 2020 and 2018. There was no accelerated depreciation in either the Successor period July 2, 2019 through December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. |
Segment Information Level 4 - T
Segment Information Level 4 - Total Assets by Segment (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | |
Total Assets by Segment [Line Items] | |||
Assets | [1] | $ 4,002 | $ 4,146 |
Adhesives | |||
Total Assets by Segment [Line Items] | |||
Assets | [1] | 2,202 | 2,374 |
Coatings and Composites | |||
Total Assets by Segment [Line Items] | |||
Assets | [1] | 1,404 | 1,371 |
Corporate and Other [Member] | |||
Total Assets by Segment [Line Items] | |||
Assets | [1] | $ 396 | $ 401 |
[1] | Includes assets held for sale at December 31, 2020 and 2019 . |
Segment Information Level 4 - C
Segment Information Level 4 - Capital Expenditures by Segment (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Capital Expenditures by Segment [Line Items] | |||||
Capital Expenditures | [1] | $ 47 | $ 41 | $ 108 | $ 81 |
Adhesives | |||||
Capital Expenditures by Segment [Line Items] | |||||
Capital Expenditures | [1] | 21 | 18 | 62 | 35 |
Coatings and Composites | |||||
Capital Expenditures by Segment [Line Items] | |||||
Capital Expenditures | [1] | 22 | 22 | 43 | 43 |
Corporate and Other [Member] | |||||
Capital Expenditures by Segment [Line Items] | |||||
Capital Expenditures | [1] | $ 4 | $ 1 | $ 3 | $ 3 |
[1] | (1) Includes capitalized interest costs that are incurred during the construction of property and equipment. |
Segment Information Level 4 - G
Segment Information Level 4 - Geographic Net Sales (Details) - USD ($) $ in Millions | Jul. 01, 2019 | [1] | Dec. 31, 2020 | Sep. 30, 2020 | [2] | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | [3] | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | $ 0 | $ 655 | $ 634 | $ 534 | $ 687 | $ 630 | $ 693 | $ 750 | $ 731 | $ 1,323 | [4],[5] | $ 1,481 | [4],[5] | $ 2,510 | [4],[5] | $ 3,137 | [4],[5] | ||||
UNITED STATES | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [5] | 617 | 693 | 1,142 | 1,449 | ||||||||||||||||
NETHERLANDS | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [5] | 240 | 308 | 523 | 652 | ||||||||||||||||
CANADA | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [5] | 153 | 154 | 278 | 362 | ||||||||||||||||
CHINA | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [5] | 121 | 121 | 259 | 229 | ||||||||||||||||
BRAZIL | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [5] | 83 | 91 | 123 | 194 | ||||||||||||||||
Other international [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [5] | 109 | 114 | 185 | 251 | ||||||||||||||||
North America [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 772 | 848 | 1,420 | 1,811 | ||||||||||||||||
Europe [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 248 | 320 | 541 | 681 | ||||||||||||||||
Asia Pacific [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 208 | 210 | 415 | 424 | ||||||||||||||||
Latin America [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 95 | 103 | 134 | 221 | ||||||||||||||||
Adhesives | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 693 | 761 | 1,188 | 1,641 | ||||||||||||||||
Adhesives | North America [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 517 | 562 | 910 | 1,215 | ||||||||||||||||
Adhesives | Europe [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 12 | 15 | 20 | 37 | ||||||||||||||||
Adhesives | Asia Pacific [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 69 | 81 | 124 | 170 | ||||||||||||||||
Adhesives | Latin America [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 95 | 103 | 134 | 219 | ||||||||||||||||
Coatings and Composites | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 630 | 720 | 1,322 | 1,496 | ||||||||||||||||
Coatings and Composites | North America [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 255 | 286 | 510 | 596 | ||||||||||||||||
Coatings and Composites | Europe [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 236 | 305 | 521 | 644 | ||||||||||||||||
Coatings and Composites | Asia Pacific [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | 139 | 129 | 291 | 254 | ||||||||||||||||
Coatings and Composites | Latin America [Member] | |||||||||||||||||||||
Net Sales to Unaffiliated Customers (Geographic Information) [Line Items] | |||||||||||||||||||||
Net sales | [4] | $ 0 | $ 0 | $ 0 | $ 2 | ||||||||||||||||
[1] | (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | ||||||||||||||||||||
[2] | (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. | ||||||||||||||||||||
[3] | (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | ||||||||||||||||||||
[4] | Intersegment sales are not significant and, as such, are eliminated within the selling segment. | ||||||||||||||||||||
[5] | Sales are attributed to the country in which the individual business locations reside. |
Segment Information Level 4 - L
Segment Information Level 4 - Long Lived Assets (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | |
Long-Lived Assets (Geographic) [Line Items] | |||
Long-Lived Assets | [1] | $ 2,502 | $ 2,570 |
UNITED STATES | |||
Long-Lived Assets (Geographic) [Line Items] | |||
Long-Lived Assets | [1] | 1,520 | 1,605 |
NETHERLANDS | |||
Long-Lived Assets (Geographic) [Line Items] | |||
Long-Lived Assets | [1] | 556 | 526 |
BRAZIL | |||
Long-Lived Assets (Geographic) [Line Items] | |||
Long-Lived Assets | [1] | 79 | 105 |
CANADA | |||
Long-Lived Assets (Geographic) [Line Items] | |||
Long-Lived Assets | [1] | 113 | 116 |
Other international [Member] | |||
Long-Lived Assets (Geographic) [Line Items] | |||
Long-Lived Assets | [1] | $ 234 | $ 218 |
[1] | Long-lived assets consist of property, plant and equipment, net; goodwill; and other intangible assets, net. |
Segment Information Level 4 -_2
Segment Information Level 4 - Reconciliation of Segment EBITDA to Net Income (Details) - USD ($) $ in Millions | Jul. 01, 2019 | [1] | Dec. 31, 2020 | Sep. 30, 2020 | [2] | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | [3] | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||||||||||||||||
Net loss | $ 3,054 | $ (35) | $ (94) | $ (42) | $ (59) | $ (46) | $ (43) | $ (108) | $ (52) | $ (89) | $ 2,894 | $ (195) | $ (230) | $ (162) | ||||
Add: Net income (loss) attributable to noncontrolling interest | 0 | 1 | 0 | 0 | 1 | 1 | 1 | 0 | (1) | |||||||||
Less: Net (loss) income from discontinued operations | 119 | 2 | (68) | (6) | 3 | 3 | 1 | 10 | 6 | 4 | 135 | $ (71) | (69) | 28 | ||||
Net (loss) income from continuing operations, net of taxes | $ 2,935 | $ (37) | $ (26) | $ (36) | $ (62) | $ (48) | $ (44) | $ (118) | $ (57) | (92) | 2,760 | (161) | (191) | |||||
Income tax expense (benefit) | [4] | (10) | 201 | 14 | 31 | |||||||||||||
Interest expense, net | 55 | 89 | 100 | 365 | ||||||||||||||
Depreciation and amortization (1) | [5] | 93 | 43 | 191 | 98 | |||||||||||||
EBITDA | 46 | 3,093 | 144 | 303 | ||||||||||||||
Asset impairments and write-downs | 0 | 0 | 16 | 32 | ||||||||||||||
Business realignment costs | [6] | 22 | 14 | 69 | 27 | |||||||||||||
Realized and unrealized foreign currency losses (gains) | 4 | (7) | 0 | 28 | ||||||||||||||
Gain on dispositions (see Note 18) | 0 | 0 | 0 | 44 | ||||||||||||||
Unrealized gains (losses) on pension and OPEB plan liabilities | 5 | 0 | 4 | (13) | ||||||||||||||
Transaction costs (3) | [7] | 11 | 26 | 6 | 13 | |||||||||||||
Reorganization items, net (4) | [8] | 0 | (2,943) | 0 | 0 | |||||||||||||
Non-cash impact of inventory step-up | [9] | 27 | (27) | 0 | 0 | |||||||||||||
Accelerated deferred revenue (6) | [10] | 0 | 18 | 0 | 0 | |||||||||||||
Other non-cash items (7) | [11] | 10 | 9 | 43 | 14 | |||||||||||||
Other (8) | [12] | 14 | 18 | 12 | 21 | |||||||||||||
Total adjustments | 93 | (2,892) | 150 | 78 | ||||||||||||||
Segment EBITDA [Line Items] | 139 | 201 | 294 | 381 | ||||||||||||||
Accelerated Depreciation | 2 | 4 | ||||||||||||||||
Professional fees and other expenses related to Chapter 11 proceedings | 6 | 23 | ||||||||||||||||
Business Realignment Costs [Abstract] | ||||||||||||||||||
Severance Costs | 9 | 8 | 16 | 9 | ||||||||||||||
In-process facility rationalizations | 5 | 3 | 11 | 11 | ||||||||||||||
Contractual costs | 0 | 0 | 8 | 0 | ||||||||||||||
Business services implementation | 0 | 0 | 22 | 0 | ||||||||||||||
Legacy environmental reserves | 7 | 1 | 9 | 5 | ||||||||||||||
Business realignment costs, other | 1 | 2 | 3 | 2 | ||||||||||||||
Other non-cash items [Abstract] | ||||||||||||||||||
Fixed asset write-offs | 6 | 3 | 13 | 6 | ||||||||||||||
Stock-based compensation costs | 8 | 0 | 17 | 0 | ||||||||||||||
Long-term retention programs | (2) | 5 | 9 | 8 | ||||||||||||||
One-time capitalized variance impact of inventory fresh start step-up | (4) | 0 | 0 | 0 | ||||||||||||||
Other non-cash items, other | 2 | 1 | 4 | 0 | ||||||||||||||
Other items [Abstract] | ||||||||||||||||||
Legacy and other non-recurring items | 7 | 3 | 8 | 7 | ||||||||||||||
IT outage (recoveries) costs, net | 0 | 9 | (4) | 0 | ||||||||||||||
Financing fees and other | 7 | 6 | 8 | 14 | ||||||||||||||
Adhesives | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Depreciation and amortization (1) | [13] | 47 | 21 | 97 | 50 | |||||||||||||
Segment EBITDA [Line Items] | [14] | 116 | 135 | 214 | 252 | |||||||||||||
Coatings and Composites | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Depreciation and amortization (1) | 44 | 20 | 90 | 44 | ||||||||||||||
Segment EBITDA [Line Items] | [15] | 60 | 96 | 151 | 200 | |||||||||||||
Corporate and Other [Member] | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Depreciation and amortization (1) | 2 | 2 | 4 | 4 | ||||||||||||||
Segment EBITDA [Line Items] | $ (37) | $ (30) | $ (71) | $ (71) | ||||||||||||||
[1] | (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | |||||||||||||||||
[2] | (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. | |||||||||||||||||
[3] | (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | |||||||||||||||||
[4] | Excludes income tax expense of $1, $1, $21, and $9 for the year ended December 31, 2020 , the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019, and the year ended December 31, 2018, respectively, related to the Held for Sale Business. | |||||||||||||||||
[5] | For the year ended December 31, 2020 and 2018 accelerated depreciation of $2 and $4 has been included in “Depreciation and amortization.” There was no accelerated deprecation in either the Successor year ended December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. | |||||||||||||||||
[6] | Business realignment costs for the Successor and Predecessor periods below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Severance costs $ 16 $ 9 $ 8 $ 9 In-process facility rationalizations 11 5 3 11 Contractual costs from exited business 8 — — — Business services implementation 22 — — — Legacy environmental reserves 9 7 1 5 Other 3 1 2 2 (a) The Company had $8 of severance liabilities accrued within “Other current liabilities” on the Consolidated Balance Sheets at both December 31, 2020 and 2019. The Company expects the amounts associated with these severance liabilities to be paid over the next 12 months . | |||||||||||||||||
[7] | For the year ended December 31, 2020, transaction costs included certain professional fees related to strategic projects. For the Successor period from July 2, 2019 through December 31, 2019 and the Predecessor period from January 1, 2019 through July 1, 2019, transaction costs primarily included $6 and $23, respectively, of certain professional fees and other expenses related to the Company’s Chapter 11 proceedings. | |||||||||||||||||
[8] | Represents incremental costs incurred directly as a result of the Company’s Chapter 11 proceedings after the date of filing, gains on settlement of liabilities under the Plan and the net impact of fresh start accounting adjustments. The amounts excludes the “Non-cash impact of inventory step-up” discussed below. | |||||||||||||||||
[9] | Represents $27 of non-cash expense related to the step up of finished goods inventory on July 1 as part of fresh start accounting that was expensed in the successor period upon the sale of the inventory. | |||||||||||||||||
[10] | For the Predecessor period from January 1, 2019 through July 1, 2019, $18 of deferred revenue was accelerated on July 1 as part of Fresh Start accounting. | |||||||||||||||||
[11] | Other non-cash items for the Successor and Predecessor periods presented below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Fixed asset write-offs $ 13 $ 6 $ 3 $ 6 Stock-based compensation costs 17 8 — — Long-term retention programs 9 (2) 5 8 One-time capitalized variance impact of inventory fresh start step-up — (4) — — Other 4 2 1 — | |||||||||||||||||
[12] | Other for Successor and Predecessor periods presented below included: Successor Predecessor Year Ended December 31, 2020 July 2, 2019 through January 1, 2019 through Year Ended December 31, 2018 Legacy and other non-recurring items $ 8 $ 7 $ 3 $ 7 IT outage (recoveries) costs, net (4) — 9 — Financing fees and other 8 7 6 14 | |||||||||||||||||
[13] | (1) Includes accelerated depreciation of $2 and $4 for the years ended December 31, 2020 and 2018. There was no accelerated depreciation in either the Successor period July 2, 2019 through December 31, 2019 or in the Predecessor period January 1, 2019 through July 1, 2019. | |||||||||||||||||
[14] | (1) Included in Adhesives Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of less than $1 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019 and the Predecessor Period January 1, 2019 through July 1, 2019 and $1 for the Predecessor year ended December 31, 2018. | |||||||||||||||||
[15] | (2) Included in Coatings and Composites Segment EBITDA are “Earnings from unconsolidated entities, net of taxes” of $2, $2, $1 and $3 for the year ended December 31, 2020, the Successor period July 2, 2019 through December 31, 2019, the Predecessor period January 1, 2019 through July 1, 2019 and the year ended December 31, 2018, respectively. |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning Balance | $ 0 | $ (18) | $ (1) | |
Other comprehensive income before reclassifications, net of tax | (1) | (8) | (26) | |
Ending Balance | (1) | (27) | $ (18) | |
Beginning Balance Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | 0 | (1) | 0 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 0 | 0 | |
Ending Balance Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | 0 | 0 | (1) | |
Beginning Balance Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | 0 | (17) | (3) | |
Foreign currency translation adjustments | (3) | (8) | (8) | (8) |
Ending Balance Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (3) | (11) | (17) | |
Beginning Balance Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax, | 0 | 0 | 2 | |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax, Parent | 2 | 0 | (18) | |
Ending Balance Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | $ 2 | $ (16) | $ 0 | |
Elimination of Predecessor AOCI | 26 | |||
Pension and Other Postretirement Plans Costs | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Elimination of Predecessor AOCI | 1 | |||
Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Elimination of Predecessor AOCI | 25 | |||
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Elimination of Predecessor AOCI | $ 0 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - Condensed Statements of Operations - USD ($) $ in Millions | Jul. 01, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||
Net sales | $ 0 | [1] | $ 655 | $ 634 | [2] | $ 534 | $ 687 | $ 630 | $ 693 | $ 750 | [3] | $ 731 | $ 1,323 | [4],[5] | $ 1,481 | [4],[5] | $ 2,510 | [4],[5] | $ 3,137 | [4],[5] | ||
Operating (loss) income | 0 | [1] | (10) | 8 | [2] | (28) | (34) | (30) | (18) | 40 | [3] | 27 | (49) | 68 | (64) | 189 | ||||||
Net (loss) income from continuing operations, net of taxes | 2,935 | [1] | (37) | (26) | [2] | (36) | (62) | (48) | (44) | (118) | [3] | (57) | (92) | 2,760 | (161) | (191) | ||||||
Less: Net (loss) income from discontinued operations | 119 | [1] | 2 | (68) | [2] | (6) | 3 | 3 | 1 | 10 | [3] | 6 | 4 | 135 | $ (71) | (69) | 28 | |||||
Net loss | 3,054 | [1] | $ (35) | (94) | [2] | $ (42) | $ (59) | (46) | (43) | (108) | [3] | (52) | (89) | 2,894 | (195) | (230) | (162) | |||||
Net (income) loss attributable to noncontrolling interest | 0 | [1] | (1) | 0 | 0 | [3] | (1) | (1) | (1) | 0 | 1 | |||||||||||
Reorganization items, net (see Note 7) | 3,126 | 156 | 0 | (2,970) | 0 | 0 | ||||||||||||||||
(Loss) income from discontinued operations, net of taxes, as previously reported | (76) | (79) | ||||||||||||||||||||
Impairment charge adjustment | [6] | 8 | 8 | |||||||||||||||||||
Net Income (Loss), previously reported | (102) | (203) | ||||||||||||||||||||
Net Income (Loss) Attributable to Parent, previously reported | (102) | (203) | ||||||||||||||||||||
Net (loss) income | $ 3,054 | $ (94) | $ (45) | $ (43) | $ (108) | $ (51) | $ (88) | $ 2,895 | $ (195) | $ (230) | $ (163) | |||||||||||
[1] | (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | |||||||||||||||||||||
[2] | (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. | |||||||||||||||||||||
[3] | (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | |||||||||||||||||||||
[4] | Intersegment sales are not significant and, as such, are eliminated within the selling segment. | |||||||||||||||||||||
[5] | Sales are attributed to the country in which the individual business locations reside. | |||||||||||||||||||||
[6] | The $8 adjustment summarized above impacts the “Asset impairments” caption within the financial results table in the Discontinued Operations footnote. The adjustment also impacts “Comprehensive loss” and “Accumulated deficit.” |
Quarterly Financial Data (Det_2
Quarterly Financial Data (Details) - Condensed Statement of Cash Flows - USD ($) $ in Millions | Jul. 01, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||
Impairment charge adjustment | [1] | $ 8 | $ 8 | |||||||||||||||||||
Net sales | $ 0 | [2] | $ 655 | 634 | [3] | $ 534 | $ 687 | $ 630 | $ 693 | $ 750 | [4] | $ 731 | $ 1,323 | [5],[6] | $ 1,481 | [5],[6] | $ 2,510 | [5],[6] | $ 3,137 | [5],[6] | ||
(Loss) income from discontinued operations, net of taxes, as previously reported | (76) | (79) | ||||||||||||||||||||
Less: Net (loss) income from discontinued operations | 119 | [2] | $ 2 | (68) | [3] | $ (6) | $ 3 | 3 | 1 | 10 | [4] | 6 | 4 | 135 | (71) | (69) | 28 | |||||
Increase (Decrease) in other operating assets, as previously reported | (1) | |||||||||||||||||||||
Adjustment for asset reclassification | (26) | |||||||||||||||||||||
Increase (Decrease) in Other Operating Assets | 25 | 3 | (27) | (21) | 3 | |||||||||||||||||
Net cash provided by (used in) operating activities, continuing operations, previously reported | (11) | |||||||||||||||||||||
Net cash provided by (used in) operating activities from continuing operations | 174 | (163) | (37) | 116 | (63) | |||||||||||||||||
Discontinued operations Cash Flow Adjustment | 13 | |||||||||||||||||||||
Net cash provided by (used in) operating activities, discontinued operations, previously reported | (1) | |||||||||||||||||||||
Insurance premium classification adjustment | (13) | |||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 50 | (10) | 12 | 15 | 40 | |||||||||||||||||
Cumulative Operating Activity Adjustment | 13 | |||||||||||||||||||||
Net cash provided by (used in) operating activities, previously reported | (12) | |||||||||||||||||||||
Net cash provided by (used in) operating activities | 224 | (173) | (25) | 131 | (23) | |||||||||||||||||
Proceeds from (repayments of) short-term debt, previously reported | (25) | |||||||||||||||||||||
Net short-term debt (repayments) borrowings | (24) | (4) | (12) | (7) | 10 | |||||||||||||||||
Cumulative Investing Activity adjustment | 13 | |||||||||||||||||||||
Net cash provided by (used in) financing activities, previously reported | 7 | |||||||||||||||||||||
Net Cash Provided by (Used in) Financing Activities | (38) | 212 | 20 | (57) | 81 | |||||||||||||||||
Net (loss) income | $ 3,054 | (94) | $ (45) | $ (43) | $ (108) | $ (51) | $ (88) | $ 2,895 | (195) | $ (230) | $ (163) | |||||||||||
Net Income (Loss), previously reported | $ (102) | $ (203) | ||||||||||||||||||||
[1] | The $8 adjustment summarized above impacts the “Asset impairments” caption within the financial results table in the Discontinued Operations footnote. The adjustment also impacts “Comprehensive loss” and “Accumulated deficit.” | |||||||||||||||||||||
[2] | (1) During the Emergence on July 1, 2019, the Predecessor recognized $3,126 of reorganization adjustments, which relate to gains on the settlement of liabilities under the Plan, offset by the incremental costs incurred directly as a result of the Bankruptcy Petitions and the net impact of fresh start accounting adjustments, are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | |||||||||||||||||||||
[3] | (1) “Net income (loss) from discontinued operations” and “Net loss” for the three months ended September 30, 2020 includes a revision of approximately $8 of income to correct an overstatement of expense in previously issued interim financial statements. See below for additional information. | |||||||||||||||||||||
[4] | (2) During the three months ended June 30, 2019, the Predecessor recognized $156 of incremental costs directly as a result of Bankruptcy Petitions. These costs are classified as “Reorganization items, net” in the Consolidated Statements of Operations (see Note 6 and Note 7 for more information). | |||||||||||||||||||||
[5] | Intersegment sales are not significant and, as such, are eliminated within the selling segment. | |||||||||||||||||||||
[6] | Sales are attributed to the country in which the individual business locations reside. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | ||
Quarterly Financial Information Disclosure [Abstract] | |||
Impairment charge adjustment | [1] | $ 8 | $ 8 |
Adjustment for asset reclassification | (26) | ||
Net cash provided by (used in) operating activities, continuing operations, previously reported | (11) | ||
Net cash provided by (used in) operating activities, discontinued operations, previously reported | (1) | ||
Insurance premium classification adjustment | (13) | ||
Net cash provided by (used in) financing activities, previously reported | 7 | ||
Net cash provided by (used in) operating activities, previously reported | (12) | ||
Other assets, reclassification | $ 13 | ||
[1] | The $8 adjustment summarized above impacts the “Asset impairments” caption within the financial results table in the Discontinued Operations footnote. The adjustment also impacts “Comprehensive loss” and “Accumulated deficit.” |
Uncategorized Items - hsc-20201
Label | Element | Value |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 1,157,000,000 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | 0 |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | us-gaap_AccumulatedOtherComprehensiveIncomeLossForeignCurrencyTranslationAdjustmentNetOfTax | 0 |
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | us-gaap_AccumulatedOtherComprehensiveIncomeLossDefinedBenefitPensionAndOtherPostretirementPlansNetOfTax | 0 |
Unrecognized Tax Benefits | us-gaap_UnrecognizedTaxBenefits | 133,000,000 |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | us-gaap_AccumulatedOtherComprehensiveIncomeLossCumulativeChangesInNetGainLossFromCashFlowHedgesEffectNetOfTax | 0 |
Foreign Plan [Member] | Pension Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | (208,000,000) |
Foreign Plan [Member] | Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | (17,000,000) |
Defined Benefit Plan, Benefit Obligation | us-gaap_DefinedBenefitPlanBenefitObligation | 17,000,000 |
Defined Benefit Plan, Plan Assets, Amount | us-gaap_DefinedBenefitPlanFairValueOfPlanAssets | 0 |
UNITED STATES | Pension Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | (32,000,000) |
UNITED STATES | Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | 0 |
Defined Benefit Plan, Benefit Obligation | us-gaap_DefinedBenefitPlanBenefitObligation | 0 |
Defined Benefit Plan, Plan Assets, Amount | us-gaap_DefinedBenefitPlanFairValueOfPlanAssets | 0 |
Discontinued Operations [Member] | Foreign Plan [Member] | Pension Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | (29,000,000) |
Discontinued Operations [Member] | UNITED STATES | Pension Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | 0 |
Continuing Operations [Member] | Foreign Plan [Member] | Pension Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | (179,000,000) |
Continuing Operations [Member] | UNITED STATES | Pension Plan [Member] | ||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | us-gaap_DefinedBenefitPlanFundedStatusOfPlan | (32,000,000) |
Notes Receivable From Parent [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | us-gaap_OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent | 0 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 0 |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | 0 |
Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 1,157,000,000 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | (526,000,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 1,157,000,000 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | us-gaap_OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent | 0 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 0 |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | 0 |
AOCI Attributable to Parent [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 0 |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | 26,000,000 |
Other Comprehensive Income (Loss), Net of Tax | us-gaap_OtherComprehensiveIncomeLossNetOfTax | (8,000,000) |
Treasury Stock [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | 296,000,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | us-gaap_OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent | 0 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 0 |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | 0 |
Noncontrolling Interest [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | (1,000,000) |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | 0 |
Net Income (Loss) Attributable to Noncontrolling Interest | us-gaap_NetIncomeLossAttributableToNoncontrollingInterest | 1,000,000 |
Retained Earnings [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | 231,000,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | us-gaap_OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent | 0 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 2,894,000,000 |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | 0 |
Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | (1,000,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | us-gaap_OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent | 0 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 0 |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | 0 |
Parent [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 1,157,000,000 |
Elimination of Predecessor Equity | hsc_EliminationofPredecessorEquity | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 1,157,000,000 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | us-gaap_OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent | (8,000,000) |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 2,894,000,000 |
Elimination of Predecessor AOCI | hsc_EliminationofPredecessorAOCI | $ 26,000,000 |