Selected Financial Information
For the nine months ended September 30, 2017, we generated a loss of $7 million, compared to profit of $486 million for the nine months ended September 30, 2016. The year-over-year decrease was primarily due to the unfavorable judgment in the Canadian Patent litigation. In 2016, we reversed a legal provision of $31 million related to the U.S. Patent litigation. Excluding the Patent litigation activity, our profit would have been $97 million lower in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.
On July 6, 2017, we completed the previously announced acquisition of Williams Partners L.P.'s (“Williams”) indirect 88.46% interest in the Geismar, Louisiana olefins plant, approximately 525 acres of undeveloped land adjacent to the plant, and Williams' interest in the Ethylene Trading Hub in Mt. Belvieu, Texas (collectively, the “Geismar Business”). We paid $2,084 million for the Geismar Business, plus $12 million in working capital adjustments. The acquisition of the Geismar Business, with its well-established infrastructure and workforce, provides us with an entry into the U.S. Gulf Coast.
Although we are experiencing volatility in the market during this transitional period, we are pleased with the long term outlook for our Geismar Business, as we are positioned to benefit from improving commodity prices. We enjoyed safe and reliable operations throughout the third quarter and are focused on the integration of the business.
Capital spending increased 1% during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Capital spending for the nine months ended September 30, 2017 includes our ongoing Corunna All Ethane Conversion project and the purchase of two pipelines, the Ethane Delivery System and Joffre Feedstock Pipeline in the first quarter of 2017. Capital spending for the nine months ended September 30, 2016 included the PE1 expansion project.
Effective on the closing of our acquisition of the Geismar Business, we realigned our reporting segments to reflect the new model under which our business is managed. Our reporting segments now consist of Olefins, Polyethylene, Expandable Styrenics and Corporate. In conjunction with the segment realignment, we changed our primary measure of segment operating performance from Operating Profit to EBITDA to reflect the manner in which management assesses segment performance and allocates resources.
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 September 30, 2017, was $1,333 million, compared to $1,646 million at December 31, 2016.
On June 9, 2017, we issued $1,050 million of 4.875% senior notes due 2024 and $1,050 million of 5.250% senior notes due 2027. The net proceeds, together with cash on hand, were used to fund the acquisition of the Geismar Business on July 6, 2017, and to pay fees and expenses relating to the acquisition and the senior notes offering.
We have an $800 million senior secured revolving credit facility provided by a syndicate of lenders, which we amended in 2016 to extend the maturity date one year to December 16, 2021 and increase the availability from $550 million to $800 million. As of September 30, 2017 and December 31, 2016, we had utilized $72 million and $45 million, respectively.
We have two accounts receivable securitization programs (one in the U.S. and one in Canada). At September 30, 2017 and December 31, 2016, there were no outstanding balances under the programs. At September 30, 2017 and December 31, 2016, the combined maximum funding availability of the programs was $225 million. In January 2017, we amended our U.S. accounts receivable securitization program to extend the term three years to January 30, 2020. The U.S. program allows for maximum funding of $125 million. As of September 30, 2017, the programs were undrawn. The receivables base, at this date, would have allowed us to draw approximately 68% of the maximum funding availability.
Our $800 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 60%. We were in compliance with these covenants at September 30, 2017.
As of September 30, 2017 and December 31, 2016, 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