Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 11, 2016
 
HEXION INC.
(Exact Name of Registrant as Specified in Its Charter)
 
New Jersey
(State or Other Jurisdiction of Incorporation)
 
 
 
1-71
13-0511250
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
180 East Broad Street, Columbus, Ohio
43215-3799
(Address of Principal Executive Offices)
(Zip Code)
614-225-4000
(Registrant's Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02        Results of Operations and Financial Condition
On August 11, 2016, Hexion Inc. issued a news release announcing its results for the second quarter ended June 30, 2016. A copy of the News Release is furnished as Exhibit 99.1 to this current report.
Item 9.01        Financial Statements and Exhibits
(d) Exhibits
Exhibit 99.1
News Release, dated August 11, 2016, announcing Hexion Inc's financial results for the second quarter ended June 30, 2016.






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
HEXION INC.
 
 
 
 
Date:
August 11, 2016
 
/s/ George F. Knight
 
 
 
George F. Knight
 
 
 
Executive Vice President and Chief Financial Officer







EXHIBIT INDEX

Exhibit No.
Description
99.1
News Release dated August 11, 2016 titled “Hexion Inc. Announces Second Quarter 2016 Results.”



Exhibit


Exhibit 99.1

FOR IMMEDIATE RELEASE

Hexion Inc. Announces Second Quarter 2016 Results

Second Quarter 2016 Highlights

Net income of $150 million compared to a net loss of $2 million in the prior year period primarily due to gains on the sale of businesses

Total Segment EBITDA decreased 2% versus prior year to $130 million; on a constant currency basis EBITDA grew 1%

Total liquidity as of June 30, 2016 of $501 million
COLUMBUS, Ohio - (August 11, 2016) - Hexion Inc. (“Hexion” or the “Company”) today announced results for the second quarter ended June 30, 2016.

“Our second quarter 2016 results reflected continued volume growth in our specialty epoxy business driven by strong wind energy demand, particularly in Europe and the Asia Pacific region, as well as improved earnings in our Versatic™ Acids and Derivatives and North American forest product businesses,” said Craig O. Morrison, Chairman, President and CEO. “Our diversified portfolio enabled Hexion to largely offset economic volatility in Latin America and softer oilfield proppant results. We continue to aggressively pursue our global cost reduction initiatives including the rationalization of our Norco, Louisiana site in the second quarter as planned, which we anticipate will deliver approximately $20 million in annualized savings. We also successfully took actions in the quarter to strategically streamline our portfolio through the sale of our Performance Adhesives, Powder Coatings, Additives & Acrylic Coatings and Monomers business and our interest in HA-International, LLC, a joint venture serving the North American foundry industry.”

Second Quarter 2016 Results

Net Sales. Net sales for the quarter ended June 30, 2016 were $952 million, a decrease of 12% compared with $1.09 billion in the prior year period. The decline in net sales was primarily driven by the strengthening of the U.S. dollar against most other currencies, slightly lower volumes in both segments and the pass through of savings from lower priced oil-driven feedstocks.

Segment EBITDA. Segment EBITDA for the quarter ended June 30, 2016 was $130 million, a decrease of 2% compared with $133 million in the prior year period. In the second quarter 2016, growth in in our Versatic™ Acids and Derivatives business and higher volumes in specialty epoxy resins was not able to fully offset weaker oilfield proppant results and the impact of a strengthening U.S. dollar against most other currencies. On a constant currency basis, Segment EBITDA would have increased 1% for the quarter.

Global Restructuring Program

The Company remains on track to achieve its previously announced productivity and cost reduction programs. As of June 30, 2016, Hexion had approximately $36 million of in-process cost savings, the majority of which we expect to be achieved over the next 12 to 24 months.

Segment Results

Following are net sales and Segment EBITDA by reportable segment for the second quarter ended June 30, 2016 and 2015. See “Non-U.S. GAAP Measures” for further information regarding Segment EBITDA and a reconciliation of Segment EBITDA to net loss.
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In millions)
 
2016
 
2015
 
2016
 
2015
Net Sales (1):
 
 
 
 
 
 
 
 
Epoxy, Phenolic and Coating Resins
 
$
613

 
$
683

 
$
1,188

 
$
1,357

Forest Products Resins
 
339

 
404

 
673

 
809

Total
 
$
952

 
$
1,087

 
$
1,861

 
$
2,166

 
 
 
 
 
 
 
 
 
Segment EBITDA:
 
 
 
 
 
 
 
 
Epoxy, Phenolic and Coating Resins
 
$
83

 
$
88

 
$
166

 
$
173

Forest Products Resins
 
63

 
62

 
119

 
123

Corporate and Other
 
(16
)
 
(17
)
 
(33
)
 
(36
)
Total
 
$
130

 
$
133

 
$
252

 
$
260

(1)Intersegment sales are not significant and, as such, are eliminated within the selling segment.






Liquidity and Capital Resources

At June 30, 2016, Hexion had total debt of approximately $3.6 billion compared to $3.8 billion at December 31, 2015. In addition, at June 30, 2016, the Company had $501 million in liquidity comprised of $172 million of unrestricted cash and cash equivalents, $288 million of borrowings available under the Company’s asset-backed loan facility (the “ABL Facility”) and $41 million of time drafts and availability under credit facilities at certain international subsidiaries.

On May 31, 2016, the Company sold its 50% interest in a joint venture for a purchase price of $136 million. In addition, on June 30, 2016, Hexion completed the sale of its Performance Adhesives, Powder Coatings, Additives & Acrylic Coatings and Monomers businesses. During the second quarter of 2016, the Company received cash proceeds from these transactions of $281 million and a $75 million short term note receivable.

Hexion expects to have adequate liquidity to fund its ongoing operations for the next twelve months from cash on its balance sheet, cash flows provided by operating activities and amounts available for borrowings under its credit facilities.

Earnings Call

Hexion will host a teleconference to discuss second quarter 2016 results on Thursday, August 11, 2016, at 10:00 a.m. Eastern Time. Interested parties are asked to dial-in approximately 10 minutes before the call begins at the following numbers:

U.S. Participants: (877) 681-2070
International Participants: +1 (442) 444-3169
Participant Passcode: 49706997

Live Internet access to the call and presentation materials will be available through the Investor Relations section of the Company's website: www.hexion.com. A replay of the call will be available for one week beginning at 2:00 p.m. Eastern Time on August 11, 2016. The playback can be accessed by dialing (855) 859-2056 (U.S.) and +1 (404) 537-3406 (International). The passcode is 49706997. A replay also will be available through the Investor Relations Section of the Company’s website.

Covenant Compliance

The instruments that govern the Company’s indebtedness contain, among other provisions, restrictive covenants regarding indebtedness (including an Adjusted EBITDA to Fixed Charges ratio incurrence test), dividends and distributions, mergers and acquisitions, asset sales, affiliate transactions and capital expenditures.

The indentures that govern the Company’s 6.625% First-Priority Senior Secured Notes, 10.00% First-Priority Senior Secured Notes, 8.875% Senior Secured Notes and 9.00% Second-Priority Senior Secured Notes (collectively, the “Secured Indentures”) contain an Adjusted EBITDA to Fixed Charges ratio incurrence test which may restrict our ability to take certain actions such as incurring additional debt or making acquisitions if the Company is unable to meet this ratio (measured on a last twelve months, or LTM, basis) of at least 2.0:1. The Adjusted EBITDA to Fixed Charges ratio under the Secured Indentures is generally defined as the ratio of (a) Adjusted EBITDA to (b) net interest expense excluding the amortization or write-off of deferred financing costs, each measured on a LTM basis. See “Non-U.S. GAAP Measures” for further information regarding Adjusted EBITDA and Schedule 5 to the release for a calculation of the Adjusted EBITDA to Fixed Charges ratio.

The Company’s ABL Facility does not have any financial maintenance covenant other than a minimum Fixed Charge Coverage Ratio of 1.0 to 1.0 that would only apply if the Company’s availability under the ABL Facility at any time is less than the greater of (a) $40 million and (b) 12.5% of the lesser of the borrowing base and the total ABL Facility commitments at such time. The Fixed Charge Coverage Ratio under the credit agreement governing the ABL Facility is generally defined as the ratio of (a) Adjusted EBITDA minus non-financed capital expenditures and cash taxes to (b) debt service plus cash interest expense plus certain restricted payments, each measured on an LTM basis. At June 30, 2016, the Company’s availability under the ABL Facility exceeded the minimum requirements so it was not subject to a financial maintenance covenant.

Non-U.S. GAAP Measures

Segment EBITDA is defined as EBITDA adjusted to exclude certain non-cash and non-recurring expenses. Segment EBITDA is an important measure used by the Company's senior management and board of directors to evaluate operating results and allocate capital resources among segments. Corporate and Other primarily represents certain corporate, general and administrative expenses that are not allocated to the segments. Segment EBITDA should not be considered a substitute for net income (loss) or other results reported in accordance with U.S. GAAP. Segment EBITDA may not be comparable to similarly titled measures reported by other companies. See Schedule 4 to this release for reconciliation of Segment EBITDA to net loss.






Adjusted EBITDA is defined as EBITDA adjusted for certain non-cash and certain non-recurring items and other adjustments calculated on a pro forma basis, including the expected future cost savings from business optimization programs or other programs and the expected future impact of acquisitions, in each case as determined under the governing debt instrument. As the Company is highly leveraged, it believes that including the supplemental adjustments that are made to calculate Adjusted EBITDA provides additional information to investors about the Company’s ability to comply with its financial covenants and to obtain additional debt in the future. Adjusted EBITDA and Fixed Charges are not defined terms under U.S. GAAP. Adjusted EBITDA is not a measure of financial condition, liquidity or profitability, and should not be considered as an alternative to net income (loss) determined in accordance with U.S. GAAP or operating cash flows determined in accordance with U.S. GAAP. Additionally, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not take into account certain items such as interest and principal payments on our indebtedness, depreciation and amortization expense (because the Company uses capital assets, depreciation and amortization expense is a necessary element of our costs and ability to generate revenue), working capital needs, tax payments (because the payment of taxes is part of our operations, it is a necessary element of our costs and ability to operate), non-recurring expenses and capital expenditures. Fixed Charges under the Secured Indentures should not be considered an alternative to interest expense. See Schedule 5 to this release for reconciliation of net loss to Adjusted EBITDA and the Fixed Charges Ratio.

Forward Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of and made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, our management may from time to time make oral forward-looking statements. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “project,” “plan,” “estimate,” “may,” “will,” “could,” “should,” “seek” or “intend” and similar expressions. Forward-looking statements reflect our current expectations and assumptions regarding our business, the economy and other future events and conditions and are based on currently available financial, economic and competitive data and our current business plans. Actual results could vary materially depending on risks and uncertainties that may affect our operations, markets, services, prices and other factors as discussed in the Risk Factors section of our filings with the Securities and Exchange Commission (the “SEC”). While we believe our assumptions are reasonable, we caution you against relying on any forward-looking statements as it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, a weakening of global economic and financial conditions, interruptions in the supply of or increased cost of raw materials, the loss of, or difficulties with the further realization of, cost savings in connection with our strategic initiatives, including transactions with our affiliate, Momentive Performance Materials Inc., the impact of our substantial indebtedness, our failure to comply with financial covenants under our credit facilities or other debt, pricing actions by our competitors that could affect our operating margins, changes in governmental regulations and related compliance and litigation costs and the other factors listed in our SEC filings. For a more detailed discussion of these and other risk factors, see the Risk Factors section in our most recent Annual Report on Form 10-K and our other filings made with the SEC. All forward-looking statements are expressly qualified in their entirety by this cautionary notice. The forward-looking statements made by us speak only as of the date on which they are made. Factors or events that could cause our actual results to differ may emerge from time to time. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

About the Company

Based in Columbus, Ohio, Hexion Inc. (formerly known as Momentive Specialty Chemicals Inc.) is a global leader in thermoset resins. Hexion Inc. serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Inc. is controlled by investment funds affiliated with Apollo Global Management, LLC. Additional information about Hexion Inc. and its products is available at www.hexion.com.

Contacts

Investors and Media:
John Kompa
614-225-2223
john.kompa@hexion.com


See Attached Financial Statements







HEXION INC.
SCHEDULE 1: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In millions)
 
2016
 
2015
 
2016
 
2015
Net sales
 
$
952

 
$
1,087

 
$
1,861

 
$
2,166

Cost of sales (1)
 
854

 
925

 
1,656

 
1,848

Gross profit
 
98

 
162

 
205

 
318

Selling, general and administrative expense
 
82

 
76

 
166

 
158

Gain on dispositions
 
(240
)
 

 
(240
)
 

Business realignment costs
 
42

 
5

 
45

 
8

Other operating (income) expense, net
 
(4
)
 
2

 
(1
)
 
10

Operating income
 
218

 
79

 
235

 
142

Interest expense, net
 
80

 
84

 
159

 
161

Gain on extinguishment of debt
 
(21
)
 

 
(44
)
 

Other non-operating (income) expense, net
 
(3
)
 
2

 
(1
)
 
(1
)
Income (loss) before income tax and earnings from unconsolidated entities
 
162

 
(7
)
 
121

 
(18
)
Income tax expense
 
17

 
1

 
24

 
27

Income (loss) before earnings from unconsolidated entities
 
145

 
(8
)
 
97

 
(45
)
Earnings from unconsolidated entities, net of taxes
 
5

 
6

 
9

 
9

Net income (loss)
 
$
150

 
$
(2
)
 
$
106

 
$
(36
)
    
(1)
Cost of sales for the three and six months ended June 30, 2016 includes accelerated depreciation of $60 and $106, respectively, related to a planned facility rationalization within our Epoxy, Phenolic and Coatings Resins segment.






HEXION INC.
SCHEDULE 2: CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except share data)
June 30,
2016
 
December 31,
2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents (including restricted cash of $18 and $8, respectively)
$
190

 
$
236

Accounts receivable (net of allowance for doubtful accounts of $16 and $15, respectively)
520

 
450

Inventories:
 
 
 
Finished and in-process goods
209

 
218

Raw materials and supplies
97

 
90

Other current assets
125

 
53

Total current assets
1,141

 
1,047

Investment in unconsolidated entities
22

 
36

Deferred income taxes
10

 
13

Other long-term assets
45

 
48

Property and equipment:
 
 
 
Land
78

 
84

Buildings
275

 
296

Machinery and equipment
2,352

 
2,406

 
2,705

 
2,786

Less accumulated depreciation
(1,796
)
 
(1,735
)
 
909

 
1,051

Goodwill
123

 
122

Other intangible assets, net
59

 
65

Total assets
$
2,309

 
$
2,382

Liabilities and Deficit
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
346

 
$
386

Debt payable within one year
67

 
80

Interest payable
74

 
82

Income taxes payable
17

 
15

Accrued payroll and incentive compensation
54

 
78

Other current liabilities
158

 
123

Total current liabilities
716

 
764

Long-term liabilities:
 
 
 
Long-term debt
3,555

 
3,698

Long-term pension and post employment benefit obligations
222

 
224

Deferred income taxes
14

 
12

Other long-term liabilities
173

 
161

Total liabilities
4,680

 
4,859

Deficit
 
 
 
Common stock—$0.01 par value; 300,000,000 shares authorized, 170,605,906 issued and 82,556,847 outstanding at June 30, 2016 and December 31, 2015
1

 
1

Paid-in capital
526

 
526

Treasury stock, at cost—88,049,059 shares
(296
)
 
(296
)
Accumulated other comprehensive loss
(15
)
 
(15
)
Accumulated deficit
(2,586
)
 
(2,692
)
Total Hexion Inc. shareholder’s deficit
(2,370
)
 
(2,476
)
Noncontrolling interest
(1
)
 
(1
)
Total deficit
(2,371
)
 
(2,477
)
Total liabilities and deficit
$
2,309

 
$
2,382






HEXION INC.
SCHEDULE 3: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
Six Months Ended June 30,
(In millions)
2016
 
2015
Cash flows (used in) provided by operating activities
 
 
 
Net income (loss)
$
106

 
$
(36
)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
 
 
 
Depreciation and amortization
71

 
68

Accelerated depreciation
106

 

Deferred tax expense
3

 
3

Gain on dispositions
(240
)
 

Gain on extinguishment of debt
(44
)
 

Unrealized foreign currency (gains) losses
(45
)
 
1

Other non-cash adjustments
(4
)
 
1

Net change in assets and liabilities:
 
 
 
Accounts receivable
(119
)
 
(56
)
Inventories
(21
)
 
8

Accounts payable
2

 
16

Income taxes payable
8

 
13

Other assets, current and non-current
(25
)
 
13

Other liabilities, current and long-term
52

 
(3
)
Net cash (used in) provided by operating activities
(150
)
 
28

Cash flows provided by (used in) investing activities
 
 
 
Capital expenditures
(61
)
 
(79
)
Capitalized interest
(1
)
 

Proceeds from dispositions, net
281

 

Proceeds from sale of assets, net
1

 

Proceeds from sale of investments, net

 
4

Change in restricted cash
(10
)
 

Net cash provided by (used in) investing activities
210

 
(75
)
Cash flows (used in) provided by financing activities
 
 
 
Net short-term debt repayments
(12
)
 
(5
)
Borrowings of long-term debt
335

 
490

Repayments of long-term debt
(439
)
 
(274
)
Long-term debt and credit facility financing fees

 
(8
)
Net cash (used in) provided by financing activities
(116
)
 
203

Effect of exchange rates on cash and cash equivalents

 
(4
)
(Decrease) increase in cash and cash equivalents
(56
)
 
152

Cash and cash equivalents (unrestricted) at beginning of period
228

 
156

Cash and cash equivalents (unrestricted) at end of period
$
172

 
$
308

Supplemental disclosures of cash flow information
 
 
 
Cash paid for:
 
 
 
Interest, net
$
159

 
$
146

Income taxes, net
16

 
10

Non-cash investing activity:
 
 
 
Acceptance of buyer's note
$
75

 
$






HEXION INC.
SCHEDULE 4: RECONCILIATION OF SEGMENT EBITDA TO NET INCOME (LOSS) (Unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In millions)
 
2016
 
2015
 
2016
 
2015
Segment EBITDA:
 
 
 
 
 
 
 
 
Epoxy, Phenolic and Coating Resins
 
$
83

 
$
88

 
$
166

 
$
173

Forest Products Resins
 
63

 
62

 
119

 
123

Corporate and Other
 
(16
)
 
(17
)
 
(33
)
 
(36
)
Total
 
$
130

 
$
133

 
$
252

 
$
260

 
 
 
 
 
 
 
 
 
Reconciliation:
 
 
 
 
 
 
 
 
Items not included in Segment EBITDA:
 
 
 
 
 
 
 
 
Business realignment costs
 
$
(42
)
 
$
(5
)
 
$
(45
)
 
$
(8
)
Gain on sale of business
 
240

 

 
240

 

Gain on extinguishment of debt
 
21

 

 
44

 

Realized and unrealized foreign currency gains (losses)
 
11

 

 
9

 
(3
)
Other
 
(17
)
 
(11
)
 
(34
)
 
(29
)
Total adjustments
 
213

 
(16
)
 
214

 
(40
)
Interest expense, net
 
(80
)
 
(84
)
 
(159
)
 
(161
)
Income tax expense
 
(17
)
 
(1
)
 
(24
)
 
(27
)
Depreciation and amortization
 
(36
)
 
(34
)
 
(71
)
 
(68
)
Accelerated depreciation
 
(60
)
 

 
(106
)
 

Net income (loss)
 
$
150

 
$
(2
)
 
$
106

 
$
(36
)





HEXION INC.
SCHEDULE 5: RECONCILIATION OF LAST TWELVE MONTHS NET INCOME TO ADJUSTED EBITDA
 
June 30, 2016
(In millions)
LTM Period
Net income
$
103

Income tax expense
30

Interest expense, net
324

Depreciation and amortization
139

Accelerated depreciation
107

EBITDA
703

Adjustments to EBITDA:
 
Asset impairments
6

Business realignment costs (1)
53

Realized and unrealized foreign currency gains
(1
)
Gain on dispositions
(240
)
Gain on extinguishment of debt
(84
)
Unrealized gain on pension and postretirement benefits (2)
(13
)
Other (3)
40

Cost reduction programs savings (4)
36

Adjustment for PAC and HAI dispositions (5)
(53
)
Adjusted EBITDA
$
447

Pro forma fixed charges (6)
$
288

Ratio of Adjusted EBITDA to Fixed Charges (7)
1.55

(1)
Primarily represents costs related to the planned facility rationalization within the Epoxy, Phenolic and Coating Resins segment, as well as headcount reduction expenses and plant rationalization costs related to cost reduction programs, terminated costs, and other costs associated with business realignments.
(2)
Represents non-cash gains resulting from pension and postretirement benefit plan liability remeasurements.
(3)
Primarily includes retention program costs, business optimization expenses, certain professional fees related to strategic projects and management fees, partially offset by gains on the disposal of assets and a gain on a step acquisition.
(4)
Represents pro forma impact of in-process cost reduction programs savings. Cost reduction program savings represent the unrealized headcount reduction savings and plant rationalization savings related to cost reduction programs and other unrealized savings associated with the Company’s business realignments activities, and represent our estimate of the unrealized savings from such initiatives that would have been realized had the related actions been completed at the beginning of the LTM period. The savings are calculated based on actual costs of exiting headcount and elimination or reduction of site costs.
(5)
Represents pro forma LTM Adjusted EBITDA impact of the PAC and HAI dispositions, which both occurred during the second quarter of 2016.
(6)
Reflects pro forma interest expense based on interest rates at June 30, 2016, as if the 2016 Debt Transactions had taken place at the beginning of the period.
(7)
The Company’s ability to incur additional indebtedness, among other actions, is restricted under the indentures governing certain notes, unless the Company has an Adjusted EBITDA to Fixed Charges ratio of 2.0 to 1.0. As of June 30, 2016, we did not satisfy this test. As a result, we are subject to restrictions on our ability to incur additional indebtedness and to make investments; however, there are exceptions to these restrictions, including exceptions that permit indebtedness under our ABL Facility (available borrowings of which were $288 at June 30, 2016).