Guarantor Non-Guarantor Subsidiary Financial Information

12 Months Ended

Dec. 31, 2012

Guarantor Non Guarantor Subsidary Financial Information [Abstract]

Guarantees [Text Block]

Guarantor/Non-Guarantor Subsidiary Financial Information

The Company and certain of its U.S. subsidiaries guarantee debt issued by its wholly owned subsidiaries Hexion Nova Scotia, ULC and Hexion U.S. Finance Corporation (together, the “Subsidiary Issuers”), which includes the 6.625% first priority notes due 2020, 8.875% senior secured notes due 2018, the floating rate second-priority senior secured notes due 2014 and the 9% second-priority notes due 2020.

The following information contains the condensed consolidating financial information for MSC (the parent), the Subsidiary Issuers, the combined subsidiary guarantors (Momentive Specialty Chemical Investments Inc.; Borden Chemical Foundry; LLC, Lawter International, Inc.; HSC Capital Corporation; Momentive International, Inc.; Momentive CI Holding Company; NL COOP Holdings LLC and Oilfield Technology Group, Inc.) and the combined non-guarantor subsidiaries, which includes all of the Company’s foreign subsidiaries.

All of the subsidiary issuers and subsidiary guarantors are 100% owned by MSC. All guarantees are full and unconditional, and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its domestic subsidiaries by dividend or loan. While the Company’s Australian, New Zealand and Brazilian subsidiaries are restricted in the payment of dividends and intercompany loans due to the terms of their credit facilities, there are no material restrictions on the Company’s ability to obtain cash from the remaining non-guarantor subsidiaries.

This information includes allocations of corporate overhead to the combined non-guarantor subsidiaries based on net sales. Income tax expense has been provided on the combined non-guarantor subsidiaries based on actual effective tax rates.

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2012

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers		Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents (including restricted cash of $0 and $18, respectively)	$	276		$	—	$	—		$	143		$	—		$	419
Short-term investments	—			—		—			5			—			5
Accounts receivable, net	177			—		—			350			—			527
Intercompany accounts receivable	126			52		—			318			(496		)	—
Intercompany loans receivable - current portion	162			—		—			624			(786		)	—
Inventories:
Finished and in-process goods	109			—		—			153			—			262
Raw materials and supplies	35			—		—			70			—			105
Other current assets	38			—		—			43			—			81
Total current assets	923			52		—			1,706			(1,282		)	1,399
Investment in unconsolidated entities	252			—		42			18			(270		)	42
Deferred income taxes	337			—		—			11			—			348
Other assets, net	—			42		28			39			—			109
Intercompany loans receivable	773			2,273		27			3,835			(6,908		)	—
Property and equipment, net	493			—		—			674			—			1,167
Goodwill	93			—		—			76			—			169
Other intangible assets, net	53			—		—			38			—			91
Total assets	$	2,924		$	2,367	$	97		$	6,397		$	(8,460	)	$	3,325
Liabilities and (Deficit) Equity
Current liabilities
Accounts payable	$	136		$	—	$	—		$	282		$	—		$	418
Intercompany accounts payable	96			4		1			395			(496		)	—
Debt payable within one year	13			—		—			63			—			76
Intercompany loans payable within one year	197			—		—			589			(786		)	—
Interest payable	12			51		—			—			—			63
Income taxes payable	3			—		—			1			—			4
Accrued payroll and incentive compensation	14			—		—			26			—			40
Other current liabilities	64			—		—			65			—			129
Total current liabilities	535			55		1			1,421			(1,282		)	730
Long-term debt	860			2,138		—			421			—			3,419
Intercompany loans payable	2,303			4		7			4,594			(6,908		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	325			—		107			—			(432		)	—
Long-term pension and post employment benefit obligations	98			—		—			211			—			309
Deferred income taxes	—			1		—			17			—			18
Other long-term liabilities	120			6		—			40			—			166
Total liabilities	4,241			2,204		115			6,704			(8,622		)	4,642
Total Momentive Specialty Chemicals Inc. shareholders (deficit) equity	(1,317		)	163		(18		)	(307		)	162			(1,317		)
Noncontrolling interest	—			—		—			—			—			—
Total (deficit) equity	(1,317		)	163		(18		)	(307		)	162			(1,317		)
Total liabilities and (deficit) equity	$	2,924		$	2,367	$	97		$	6,397		$	(8,460	)	$	3,325

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2011

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents (including restricted cash of $0 and $3, respectively)	$	212		$	—	$	—	$	207		$	—		$	419
Short-term investments	—			—		—		7			—			7
Accounts receivable, net	206			—		—		386			—			592
Intercompany accounts receivable	102			46		—		257			(405		)	—
Intercompany loans receivable - current portion	203			—		—		713			(916		)	—
Inventories:
Finished and in-process goods	116			—		—		138			—			254
Raw materials and supplies	33			—		—		70			—			103
Other current assets	27			—		—		45			—			72
Total current assets	899			46		—		1,823			(1,321		)	1,447
Investment in unconsolidated entities	288			—		20		13			(295		)	26
Deferred income taxes	—			—		—		4			—			4
Other assets, net	11			36		20		72			—			139
Intercompany loans receivable	649			1,907		22		4,592			(7,170		)	—
Property and equipment, net	504			—		—		705			—			1,209
Goodwill	93			—		—		74			—			167
Other intangible assets, net	59			—		—		45			—			104
Total assets	$	2,503		$	1,989	$	62	$	7,328		$	(8,786	)	$	3,096
Liabilities and (Deficit) Equity
Current liabilities
Accounts payable	$	125		$	—	$	—	$	256		$	—		$	381
Intercompany accounts payable	78			4		1		322			(405		)	—
Debt payable within one year	17			—		—		100			—			117
Intercompany loans payable within one year	238			—		—		678			(916		)	—
Affiliated debt payable within one year	2			—		—		—			—			2
Interest payable	14			44		—		3			—			61
Income taxes payable	1			—		—		14			—			15
Accrued payroll and incentive compensation	26			—		—		31			—			57
Other current liabilities	69			—		—		63			—			132
Total current liabilities	570			48		1		1,467			(1,321		)	765
Long-term debt	1,134			1,688		—		598			—			3,420
Intercompany loans payable	1,903			4		6		5,257			(7,170		)	—
Accumulated losses of unconsolidated subsidiaries in excess of investment	192			—		—		—			(192		)	—
Long-term pension and post employment benefit obligations	99			—		—		124			—			223
Deferred income taxes	30			2		—		40			—			72
Other long-term liabilities	116			6		—		34			—			156
Advance from affiliates	225			—		—		—			—			225
Total liabilities	4,269			1,748		7		7,520			(8,683		)	4,861
Total Momentive Specialty Chemicals Inc. shareholders (deficit) equity	(1,766		)	241		55		(193		)	(103		)	(1,766		)
Noncontrolling interest	—			—		—		1			—			1
Total (deficit) equity	(1,766		)	241		55		(192		)	(103		)	(1,765		)
Total liabilities and (deficit) equity	$	2,503		$	1,989	$	62	$	7,328		$	(8,786	)	$	3,096

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2012

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	2,120		$	—		$	—		$	2,902		$	(266	)	$	4,756
Cost of sales	1,800			—			—			2,626			(266		)	4,160
Gross profit	320			—			—			276			—			596
Selling, general and administrative expense	61			—			—			261			—			322
Asset impairments	—			—			—			23			—			23
Business realignment costs	9			—			—			26			—			35
Other operating expense (income), net	6			2			(1		)	7			—			14
Operating income (loss)	244			(2		)	1			(41		)	—			202
Interest expense, net	59			176			—			28			—			263
Intercompany interest expense (income)	132			(186		)	(1		)	55			—			—
Other non-operating (income) expense, net	(8		)	(2		)	—			9			—			(1		)
Income (loss) from continuing operations before income tax, earnings from unconsolidated entities	61			10			2			(133		)	—			(60		)
Income tax (benefit) expense	(371		)	—			—			6			—			(365		)
Income (loss) from continuing operations before earnings from unconsolidated entities	432			10			2			(139		)	—			305
(Losses) earnings from unconsolidated entities, net of taxes	(108		)	—			(71		)	3			195			19
Net income (loss)	$	324		$	10		$	(69	)	$	(136	)	$	195		$	324
Comprehensive income (loss) attributable to Momentive Specialty Chemicals Inc.	$	230		$	13		$	(69	)	$	(229	)	$	285		$	230

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2011

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	2,246		$	—		$	—		$	3,254		$	(293	)	$	5,207
Cost of sales	1,856			—			—			2,910			(293		)	4,473
Gross profit	390			—			—			344			—			734
Selling, general and administrative expense	110			—			—			225			—			335
Asset impairments	4			—			—			28			—			32
Business realignment costs	2			—			—			13			—			15
Other operating (income) expense, net	(20		)	—			(1		)	5			—			(16		)
Operating income	294			—			1			73			—			368
Interest expense, net	69			150			—			43			—			262
Intercompany interest expense (income)	121			(170		)	(1		)	50			—			—
Other non-operating expense (income), net	8			—			—			(5		)	—			3
Income (loss) from continuing operations before income tax, earnings from unconsolidated entities	96			20			2			(15		)	—			103
Income tax (benefit) expense	(8		)	1			—			10			—			3
Income (loss) from continuing operations before earnings from unconsolidated entities	104			19			2			(25		)	—			100
Earnings from unconsolidated entities, net of taxes	32			—			22			1			(39		)	16
Net income (loss) from continuing operations	136			19			24			(24		)	(39		)	116
Net (loss) income from discontinued operations	(18		)	—			—			20			—			2
Net income (loss)	$	118		$	19		$	24		$	(4	)	$	(39	)	$	118
Comprehensive income (loss) attributable to Momentive Specialty Chemicals Inc.	$	47		$	20		$	23		$	(19	)	$	(24	)	$	47

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2010

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	2,002		$	—		$	—		$	2,934		$	(339	)	$	4,597
Cost of sales	1,618			—			—			2,587			(339		)	3,866
Gross profit	384			—			—			347			—			731
Selling, general and administrative expense	117			—			—			215			—			332
Terminated merger and settlement income, net	(171		)	—			—			—			—			(171		)
Business realignment costs	5			—			—			15			—			20
Other operating expense (income), net	6			—			—			(2		)	—			4
Operating income	427			—			—			119			—			546
Interest expense, net	92			144			—			40			—			276
Loss on extinguishment of debt	7			5			—			18			—			30
Intercompany interest expense (income)	123			(169		)	(1		)	47			—			—
Other non-operating (income) expense, net	(18		)	8			—			6			—			(4		)
Income from continuing operations before income tax, earnings from unconsolidated entities	223			12			1			8			—			244
Income tax (benefit) expense	(11		)	10			—			36			—			35
Income (loss) from continuing operations before earnings from unconsolidated entities	234			2			1			(28		)	—			209
(Losses) earnings from unconsolidated entities, net of taxes	(13		)	—			(5		)	—			26			8
Net income (loss) from continuing operations	221			2			(4		)	(28		)	26			217
Net (loss) income from discontinued operations, net of tax	(7		)	—			—			4			—			(3		)
Net income (loss)	$	214		$	2		$	(4	)	$	(24	)	$	26		$	214
Comprehensive income (loss) attributable to Momentive Specialty Chemicals Inc.	$	203		$	24		$	(4	)	$	(71	)	$	51		$	203

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2012

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	88		$	(59	)	$	16		$	160		$	(28	)	$	177
Cash flows provided by (used in) investing activities
Capital expenditures	(57		)	—			—			(76		)	—			(133		)
Proceeds from sale of debt securities, net	—			—			—			2			—			2
Change in restricted cash	—			—			—			(15		)	—			(15		)
Funds remitted to unconsolidated affiliates, net	—			—			—			(3		)	—			(3		)
Proceeds from sale of assets	9			—			—			2			—			11
Capital contribution to subsidiary	(30		)	—			(19		)	—			49			—
Return of capital from subsidiary from sales of accounts receivable	87			—			—			—			(87		)	—
	9			—			(19		)	(90		)	(38		)	(138		)
Cash flows (used in) provided by financing activities
Net short-term debt repayments	—			—			—			(7		)	—			(7		)
Borrowings of long-term debt	—			450			—			3			—			453
Repayments of long-term debt	(278		)	—			—			(209		)	—			(487		)
Repayment of affiliated debt	(2		)	—			—			—			—			(2		)
Repayment of advance from affiliates	(7		)	—			—			—			—			(7		)
Net intercompany loan borrowings (repayments)	251			(364		)	(3		)	116			—			—
Capital contribution from parent	16			—			19			30			(49		)	16
Long-term debt and credit facility financing fees	(2		)	(12		)	—			—			—			(14		)
Common stock dividends paid	(11		)	(15		)	(13		)	—			28			(11		)
Return of capital to parent from sales of accounts receivable	—			—			—			(87		)	87			—
	(33		)	59			3			(154		)	66			(59		)
Effect of exchange rates on cash and cash equivalents	—			—			—			5			—			5
Increase (decrease) in cash and cash equivalents	64			—			—			(79		)	—			(15		)
Cash and cash equivalents (unrestricted) at beginning of year	212			—			—			204			—			416
Cash and cash equivalents (unrestricted) at end of year	$	276		$	—		$	—		$	125		$	—		$	401

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2011

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows (used in) provided by operating activities	$	(41	)	$	8		$	31		$	198		$	(25	)	$	171
Cash flows provided by (used in) investing activities
Capital expenditures	(74		)	—			—			(65		)	—			(139		)
Capitalized interest	(1		)	—			—			—			—			(1		)
Purchases of debt securities, net	—			—			—			(2		)	—			(2		)
Change in restricted cash	—			—			—			3			—			3
Funds remitted to unconsolidated affiliates, net	—			—			—			(4		)	—			(4		)
Proceeds from sale of business, net of cash transferred	49			—			—			124			—			173
Proceeds from sale of assets	2			—			—			1			—			3
Capital contribution to subsidiary	(11		)	—			(19		)	—			30			—
Return of capital from subsidiary	47			—			—			—			(47		)	—
Return of capital from subsidiary from sales of accounts receivable	69			—			—			—			(69		)	—
	81			—			(19		)	57			(86		)	33
Cash flows provided by (used in) financing activities
Net short-term debt (repayments) borrowings	(7		)	—			—			21			—			14
Borrowings of long-term debt	164			—			—			332			—			496
Repayments of long-term debt	(182		)	—			—			(356		)	—			(538		)
Repayment of advance from affiliate	(80		)	—			—			(20		)	—			(100		)
Net intercompany loan borrowings (repayments)	51			4			—			(55		)	—			—
Capital contribution from parent	189			—			—			30			(30		)	189
Long-term debt and credit facility financing fees	(2		)	—			—			—			—			(2		)
Common stock dividends paid	(2		)	(12		)	(12		)	(1		)	25			(2		)
Return of capital to parent	—			—			—			(47		)	47			—
Return of capital to parent from sales of accounts receivable	—			—			—			(69		)	69			—
	131			(8		)	(12		)	(165		)	111			57
Effect of exchange rates on cash and cash equivalents	—			—			—			(5		)	—			(5		)
Increase in cash and cash equivalents	171			—			—			85			—			256
Cash and cash equivalents (unrestricted) at beginning of year	41			—			—			119			—			160
Cash and cash equivalents (unrestricted) at end of year	$	212		$	—		$	—		$	204		$	—		$	416

MOMENTIVE SPECIALTY CHEMICALS INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2010

	Momentive Specialty Chemicals Inc.			Subsidiary Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows (used in) provided by operating activities	$	(444	)	$	19		$	5		$	490		$	(19	)	$	51
Cash flows provided by (used in) investing activities
Capital expenditures	(52		)	—			—			(67		)	—			(119		)
Capitalized interest	—			—			—			(1		)	—			(1		)
Proceeds from sale of debt securities, net	—			—			—			4			—			4
Change in restricted cash	—			—			—			2			—			2
Deconsolidation of variable interest entities	—			—			—			(4		)	—			(4		)
Funds remitted to unconsolidated affiliates, net	—			—			—			(1		)	—			(1		)
Proceeds from sale of assets	6			—			—			8			—			14
Return of capital from subsidiary from sales of accounts receivable	367			—			—			—			(367		)	—
	321			—			—			(59		)	(367		)	(105		)
Cash flows provided by (used in) financing activities
Net short-term debt borrowings (repayments)	3			—			—			(10		)	—			(7		)
Borrowings of long-term debt	290			1,433			—			633			—			2,356
Repayments of long-term debt	(1,108		)	(406		)	—			(663		)	—			(2,177		)
Repayments of affiliated debt	(3		)	—			—			—			—			(3		)
Net intercompany loan borrowings (repayments)	987			(973		)	—			(14		)	—			—
Long-term debt and credit facility financing fees	(9		)	(63		)	—			—			—			(72		)
Common stock dividends paid	—			(10		)	(5		)	(4		)	19			—
Return of capital to parent from sales of accounts receivable	—			—			—			(367		)	367			—
	160			(19		)	(5		)	(425		)	386			97
Effect of exchange rates on cash and cash equivalents	—			—			—			2			—			2
Increase in cash and cash equivalents	37			—			—			8			—			45
Cash and cash equivalents (unrestricted) at beginning of year	4			—			—			111			—			115
Cash and cash equivalents (unrestricted) at end of year	$	41		$	—		$	—		$	119		$	—		$	160