Selected Financial Information

2016 Year End Financial Information

Highlights

For the first half of 2017, we generated a loss of $84 million, compared to profit of $292 million for the first half of 2016. The decrease was primarily due to legal provisions recorded in the first half of 2017.

We recorded a legal provision of $501 million in the first half of 2017 that related to the Dow Chemical Canadian Patent litigation. The provision included damages of $389 million and interest of $112 million. In the first half of 2016, we reversed a legal provision of $31 million related to the Dow Chemical U.S. Patent litigation. Excluding this litigation provision activity, our profit was $12 million higher in the first half of 2017 compared to the first half of 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 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”). Under the terms of the membership interest purchase agreement, we paid $2.1 billion for the Geismar Business, subject to 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.

Capital spending in the first half of 2017 increased by 4% compared to the first half of 2016, primarily due to the purchase of two pipelines, the Ethylene Delivery System and Joffre Feedstock Pipeline, from AltaGas Extraction and Transmission L.P. on March 15, 2017, partially offset by a decrease in growth project spending.


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. As of June 30, 2017, our total liquidity was $3,875 million, including $3,120 million of cash and cash equivalents. Excluding cash required to fund the Geismar Business acquisition and the Canadian Patent litigation damages and interest claim, of $2,100 million and $501 million, respectively, on July 6, 2017, our liquidity would have been approximately $1,274 million at June 30, 2017.

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 of the Geismar Business and the senior notes offering.

We have an $800 million senior secured revolving credit facility provided by a syndicate of lenders, which matures on December 16, 2021. As of June 30, 2017, we had utilized $45 million.

We also have two accounts receivable securitization programs (one in the U.S. and one in Canada) with combined maximum funding of $225 million. The U.S. program expires in January 2020 and the Canadian program expires in February 2018. The programs were undrawn at June 30, 2017. The receivables base, at this date, would have allowed us to draw approximately 67% of the maximum funding availability.

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 which require quarterly compliance. We were in compliance with these covenants at June 30, 2017.

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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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