Selected Financial Information

2016 Year End Financial Information

Highlights

In the first quarter of 2017, we incurred a loss of $198 million compared to profit of $100 million during the first quarter of 2016. The quarter-over-quarter decrease was primarily due to a legal provision recorded in the first quarter of 2017, somewhat offset by higher operating profit in our Joffre Olefins and Expandable Styrenics segments.    

We generated $252 million of operating profit from the businesses in the first quarter of 2017, compared to $192 million in the first quarter of 2016. The quarter-over-quarter increase was primarily due to higher selling prices for most products, somewhat offset by higher feedstock costs and lower sales volumes for most products.

Capital spending during the first three months of 2017, increased by 30%, compared to the first three months 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, somewhat offset by a decrease in growth project spending.

On April 13, 2017, we signed an agreement to acquire Williams Partners L.P.'s (“Williams”) 88.46% ownership 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”). Under the terms of the membership interest purchase agreement, we will pay $2.1 billion for the Geismar Business, subject to working capital adjustments. Upon closing, we will enter into a long-term arrangement with Williams for transportation and supply of ethane feedstock to support the plant. Closing of the acquisition is subject to customary regulatory approvals and other conditions, but is not subject to any financing condition. The parties expect the transaction to close in summer 2017.

In March 2017, NOVA Chemicals and Borealis AG ("Borealis") signed a preliminary agreement to form a joint venture with Total Petrochemicals and Refining USA, Inc. ("Total"), that will develop and own a new light feed cracker in Port Arthur, Texas and a new Borstar® polyethylene facility in Bayport, Texas, along with Total’s existing Bayport polyethylene facility. We expect to make a final investment decision in late 2017.

We also continue to explore building a new polyethylene facility using our proprietary Advanced SCLAIRTECHTM technology. The base case location remains in the Sarnia-Lambton, Ontario region, with a final investment decision expected later in 2017.

These three endeavors will help to meet the expected growing consumer demand for polyethylene, while better serving customers throughout the Americas. The Williams facility and the proposed joint venture with Borealis and Total address one of the key components of our growth strategy— expansion to the U.S. Gulf Coast.

We recently completed our PE1 Expansion project—a third gas phase reactor at our Joffre, Alberta site. The new polyethylene reactor was fully operational in January 2017, and we expect the reactor to be capable of running at its full capacity by mid-2017.    
   

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 March 31, 2017, our total liquidity was $1,643 million, including $885 million of cash and cash equivalents.

We have a $800 million senior secured revolving credit facility provided by a syndicate of lenders, which matures on December 16, 2021. As of March 31, 2017, we had utilized $42 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 March 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 which require quarterly compliance. We were in compliance with these covenants at March 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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