Selected Financial Information

2018 Full Year Financial Information

Highlights

During 2018, we delivered solid operating results as our Olefins/Polyolefins business benefited from expanded operational capabilities. We sold a record 4,702 million pounds of polyethylene, supported by record polyethylene production. We also made excellent progress against our growth objectives in Canada and the U.S. Gulf Coast.

During 2018, we generated a loss of $171 million, compared to profit of $129 million during 2017. The year-over-year decrease was due to the legal provisions recorded in 2018, somewhat offset by higher polyethylene and ethylene sales volumes and the legal provision that we recorded in 2017. Excluding the $727 million, net of tax, and $371 million, net of tax, legal provisions that we recorded in 2018 and 2017, respectively, our profit would have been $56 million higher in 2018 compared to 2017.

On May 23, 2018, we entered into a joint venture with affiliates of Borealis AG ("Borealis") and Total S.A. ("Total"). The joint venture, Bayport Polymers LLC ("BAYSTAR® Polymers"), is owned 50% by Total and 50% by Novealis Holdings LLC ("Novealis"), a joint venture that is 50% owned by Borealis and 50% owned by NOVA Chemicals. BAYSTAR Polymers includes (i) the under-construction 2.2 billion pound per year ethane steam cracker in Port Arthur, Texas, (ii) Total’s former 880 million pound per year polyethylene facility in Bayport, Texas, and (iii) a new 1.35 billion pound per year Borstar® polyethylene unit in Bayport, Texas which began construction in February 2019.

Effective January 1, 2019, we assumed most sales and marketing functions in the Americas for BAYSTAR Polymers, and we will earn commission revenue from the sales of polyethylene for the joint venture and will incur associated expenses.

Capital spending during 2018 decreased 15%, compared to 2017, due to timing of spending on our growth projects and the purchase of two pipelines, the Ethylene Delivery System and Joffre Feedstock Pipeline, from AltaGas Extraction and Transmission L.P. on March 15, 2017.


Liquidity and Credit Facilities

We define liquidity as total available capacity under our senior secured credit agreement, less utilization (including letters of credit), plus cash and cash equivalents. As of December 31, 2018, our total liquidity was $2,885 million, including $930 million of cash and cash equivalents.

In December 2018, we amended and restated our senior secured credit agreement provided by a syndicate of lenders to, among other things, (i) increase the availability of the revolving credit facility from $1,200 million to $1,500 million, (ii) establish a new 5- year $500 million term loan facility that may be drawn in a single draw down within 181 days of December 3, 2018, and (iii) extend the maturity date of the revolving credit facility one year to December 3, 2023. As of December 31, 2018, we had utilized $45 million.

In March 2018, we amended our Canadian accounts receivable securitization program to extend the term two years until February 11, 2020 and decrease the program's maximum funding from $100 million to $50 million. Our U.S. accounts receivable securitization program allows for maximum funding of $125 million and has a term that expires on January 30, 2020. The programs were undrawn at December 31, 2018.

Our senior secured revolving credit facility and our accounts receivable securitization programs are governed by a maximum senior debt-to-cash flow financial covenant and a debt-to-capitalization financial covenant. We were in compliance with these financial covenants at December 31, 2018.

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NOVA Chemicals Corporation (the “Company”) no longer makes its financial statements available to the general public. However, (1) holders of notes of the Company, (2) bona fide prospective investors who are either qualified institutional buyers or are non-US persons, (3) securities analysts, or (4) market makers in Company notes, can access Company information through the Company’s password-protected online data system. If you are included in any one of the above categories and wish to view Company information, please contact Carolyn Rose per the contact information provided below. Prior to providing log-in details, Ms. Rose may require proof that you fall within one of the above categories and are entitled to access to the data site.
 

Carolyn Rose
Senior Corporate Paralegal
E-mail: bondholder@novachem.com

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