Selected Financial Information
For the first quarter of 2018 and 2017, we incurred a loss of $555 million and $198 million, respectively. The quarter-over-quarter
decrease was due to the legal provision, related to litigation concerning the jointly owned third ethylene plant at our Joffre site, that
we recorded in the first quarter of 2018, somewhat offset by higher selling prices for polyethylene in the first quarter of 2018 and
the legal provision that we recorded in the first quarter of 2017. Excluding the $727 million (net of tax) and $353 million (net of tax)
legal provisions that we recorded in the first quarter of 2018 and 2017, respectively, our profit would have been $17 million higher
in the first quarter of 2018 compared to the first quarter of 2017.
In March 2018, we entered into a non-binding memorandum of understanding with a subsidiary of Energy Transfer Partners regarding
a potential joint venture to develop an ethylene export terminal to be located on the United States’ Gulf Coast. The parties will seek
market commitment for an anticipated start-up of the terminal by mid-2020. The terminal is expected to have the capability to export
800,000 tons (1.8 billion pounds) per year of ethylene to the global market.
On May 23, 2018, we entered into a joint venture with affiliates of Borealis AG and Total S.A., at which time we contributed $180
million. The joint venture, named Bayport Polymers LLC is owned 50% by Total and 50% by Novealis Holdings LLC. The joint
venture includes (i) the under-construction 2.2 billion pound per year ethane steam cracker in Port Arthur, Texas, (ii) Total’s existing
880 million pound per year polyethylene facility in Bayport, Texas, and (iii) a new 1.35 billion pound per year Borstar® polyethylene
unit at Total’s Bayport, Texas, site, subject to final investment decision. Novealis Holdings LLC is a joint venture 50% owned by
Borealis and 50% owned by NOVA Chemicals.
Capital spending in the first quarter of 2018 decreased by 39% compared to the first quarter of 2017, primarily due to the timing of
spending on our Strategic Growth Projects.
Liquidity and Credit Facilities
We define liquidity as total available capacity under revolving credit facilities, less utilization (including letters of credit), plus cash
and cash equivalents. Our total liquidity at March 31, 2018, was $1,730 million, compared to $1,545 million at December 31, 2017.
We have a $1,200 million senior secured revolving credit facility provided by a syndicate of lenders, which we amended in 2017 to,
among other things, extend the maturity date one year to December 16, 2022, increase the availability from $800 million to $1,200
million and increase our maximum debt to capitalization covenant ratio from 60% to 62.5%. As of March 31, 2018 and December 31,
2017, we had utilized $71 million, respectively.
We have two accounts receivable securitization programs (one in the U.S. and one in Canada). At March 31, 2018 and December 31,
2017, there were no outstanding balances under the programs. At March 31, 2018 and December 31, 2017, the combined maximum
funding availability of the programs was $175 million and $225 million, respectively. 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.As of March 31, 2018, the programs were undrawn. The receivables
base, at this date, would have allowed us to draw approximately 94% of the maximum funding availability.
Our $1,200 million secured revolving credit facility and our accounts receivable securitization programs are governed by financial
covenants which require quarterly compliance. The covenants require a maximum senior debt-to-cash flow ratio of 3:1 computed
on a rolling 12 month basis and a debt to capitalization ratio not to exceed 62.5%. We were in compliance with these covenants at
March 31, 2018.
As of March 31, 2018 and December 31, 2017, we had $24 million outstanding on our standby letter of credit facility and our cash
secured letter of credit facility was undrawn.
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.
Senior Corporate Paralegal