Selected Financial Information

2017 Full Year Financial Information

Highlights

During 2017, we generated profit of $129 million, compared to profit of $649 million during 2016. The year-over-year decrease was primarily due to the unfavorable judgment in the Canadian Patent litigation. Excluding the patent litigation activity, our profit would have been $131 million lower in 2017, compared to 2016.

In December 2017, we announced two significant Strategic Growth Projects for our Ontario operations involving a capital investment expected to exceed $2 billion CAD, which is approximately $1.8 billion USD. We plan to expand our Corunna cracker by approximately 50% to provide ethylene feedstock to a new polyethylene facility, NOVA Chemicals' second Advanced SCLAIRTECH™ technology facility ("AST2"). The AST2 facility is designed to increase our polyethylene production capacity by approximately 950 million pounds per year. Site preparations are currently underway for both projects, with start-up targeted for late 2021.

In February 2018, we signed definitive agreements with affiliates of Borealis AG ("Borealis") and Total S.A. ("Total") to form a joint venture. The joint venture will be owned 50% by Total and 50% by Novealis Holdings LLC, and will commence subject to customary closing conditions, including receipt of regulatory approvals. The joint venture will include (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, following a decision on the outcome of an acceptable engineering, procurement and construction agreement. Novealis Holdings LLC is a joint venture 50% owned by Borealis and 50% owned by NOVA Chemicals.

Capital spending during 2017 included our Corunna All Ethane Conversion project and the purchase of the Ethylene Delivery System and Joffre Feedstock Pipeline, while 2016 capital spending included the expansion of our PE1 asset. Capital spending increased 3%, compared to 2016, due to increased spending on 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. As of December 31, 2017, our total liquidity was $1,545 million, including $416 million of cash and cash equivalents.

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 a $1,200 million senior secured revolving credit facility provided by a syndicate of lenders, which we amended in 2017 to extend the maturity date one year to December 16, 2022 and increase the availability from $800 million to $1,200 million. As of December 31, 2017, we had utilized $71 million.

Our Canadian accounts receivable securitization program allows for maximum funding of $100 million and has a term that expires on March 30, 2018. 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, 2017.

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, 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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