Selected Financial Information

Q3 Financial Information

Highlights

During the third quarter of 2016, we sold over 1 billion pounds of polyethylene, which resulted in our second highest quarterly polyethylene sales volumes, after a record first quarter 2016. This contributed to record polyethylene sales volumes of 3 billion pounds during the first nine months of 2016, which exceeded the same period in 2015 by 5%.

On September 7, 2016, we reached mechanical completion of the PE1 Expansion project – a third gas phase reactor at our Joffre, Alberta site. The reactor is designed to produce approximately 1 billion pounds of linear low density polyethylene ("LLDPE") annually. The Joffre site nameplate polyethylene capacity will increase to approximately 3.5 billion pounds, a 40% production increase. We are currently conducting equipment testing which will be followed by start-up and production of LLDPE. Commercial sales are expected to begin in late 2016 or early 2017. This will be the first new LLDPE reactor to start-up in the Americas in a decade.

For the third quarter of 2016, we generated profit of $194 million compared to profit of $169 million for the third quarter of 2015. The quarter-over-quarter increase was primarily due to an increase in our Olefins/Polyolefins business unit operating profit. For the nine months ended September 30, 2016, we generated profit of $486 million compared to profit of $441 million for the nine months ended September 30, 2015. The year-over-year increase was primarily due to the reversal of a legal provision of approximately $31 million, lower finance costs and lower income tax expense, somewhat offset by a decrease in our Olefins/Polyolefins business unit operating profit.

Capital spending during the first nine months of 2016, increased by 17%, compared to the first nine months of 2015, primarily due to increased spending on NOVA 2020 growth projects. We expect our 2016 capital expenditures to be around $580 million. 

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 September 30, 2016, our total liquidity was $1,287 million, including $780 million of cash and cash equivalents.

We have a $550 million senior secured revolving credit facility provided by a syndicate of lenders, which matures on December 16, 2020. As of September 30, 2016, we had utilized $43 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 2017 and the Canadian program expires in February 2018. The programs were undrawn at September 30, 2016.

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 September 30, 2016.

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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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