NOVA Chemicals: Alberta Advantage, Record Polyethylene Sales Drive Excellent Operating Results

Business Wire, April 24, 2008

PITTSBURGH -- All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise indicated.

First Quarter 2008 Results

* Net income of $50 million ($0.60 per share) which includes $36 million after-tax ($0.43 per share) of non-operating corporate charges identified on page 2.

* Net income compares to $44 million ($0.53 per share) for the first quarter of 2007, and $126 million ($1.51 per share) for the fourth quarter of 2007.

* Adjusted EBITDA from the businesses of $256 million, compared to $172 million in the first quarter of 2007 and $302 million in the fourth quarter of 2007.

First Quarter 2008 Highlights

* Olefins/Polyolefins EBITDA of $246 million, highest first quarter in history.

* Record total polyethylene sales volume of 916 million pounds, and export sales of 224 million pounds (24.5%).

* Alberta Advantage averaged 21C/ per pound, the highest first quarter in history.

"NOVA Chemicals' businesses have delivered almost $1.1 billion of EBITDA for the last four quarters, principally as a result of our continuing record Alberta Advantage and increasing polyethylene sales," said Jeff Lipton, NOVA Chemicals' CEO. "We see very positive supply/demand balances going forward, and good prospects for strong ongoing financial performance in our core ethylene and polyethylene business."

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NOVA Chemicals (NYSE:NCX) (TSX:NCX) will host a conference call today, Thursday, April 24, 2008 for investors and analysts at 11:30 a.m. EDT (9:30 a.m. MDT; 8:30 a.m. PDT). Media are welcome to join this call in "listen-only" mode. The dial-in number for this call is (416) 406-6419. The replay number is (416) 695-5800 (Reservation No. 3230758). The live call is also available on the Internet at www.investorcalendar.com (ticker symbol NCX)

NOVA Chemicals Financial Highlights

These Highlights should be read in conjunction with NOVA Chemicals' other interim and annual financial statement disclosures, and its 2007 Annual Report.

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Items Impacting First Quarter Results

NOVA Chemicals' first quarter results were affected by the following charges totaling $50 million before-tax ($36 million after- tax). See page 7 for more details.

* $30 million ($21 million after-tax) non-cash expense related to a decrease in mark-to-market feedstock derivative values, compared to a $26 million ($17 million after-tax) gain in the first quarter of 2007 and a $13 million ($9 million after-tax) expense in the fourth quarter of 2007.

* $10 million ($8 million after-tax) expense related to the mandated recognition of stock-based compensation costs for retirement eligible employees. This charge is included in the "Stock-based compensation and profit sharing" line of the Corporate results.

* $10 million ($7 million after-tax) variable compensation charge due to NOVA Chemicals' record earnings in 2007. Of this charge, approximately $7 million is included in the "Corporate operating costs" line item of the Corporate results while the remaining $3 million is included in the business unit results.

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Review of Operations

The Olefins/Polyolefins business unit reported adjusted EBITDA of $246 million in the first quarter of 2008, the highest first quarter in history and significantly higher than the $159 million in the first quarter last year. The year-over-year improvement was due to higher margins, driven by a record first quarter Alberta Advantage, and record polyethylene sales. Results improved significantly despite higher fixed costs due to a stronger Canadian dollar, which averaged parity with the U.S. dollar in the first quarter of 2008 as compared to $0.86 in the first quarter of 2007.

Adjusted EBITDA of $246 million was down from a record $308 million in the fourth quarter of 2007. Margins from the Alberta based ethylene and polyethylene assets remained strong but were lower than the fourth quarter due to higher natural gas costs. Margins from the Ontario based ethylene and polyethylene assets were lower than the fourth quarter of 2007 due to higher crude oil flow-through costs that outpaced price increases in energy and chemical co-products, and ethylene.

Joffre Olefins

First Quarter 2008 Versus Fourth Quarter 2007

The Joffre Olefins segment reported adjusted EBITDA of $168 million in the first quarter of 2008, down from $188 million in the fourth quarter of 2007. The decline was primarily due to higher feedstock and utility costs.

Alberta ethane costs increased 21%, as natural gas prices rose in seasonal response to colder weather in North America. In comparison, United States Gulf Coast (USGC) ethane prices were 3% lower than the fourth quarter as several ethylene cracker outages led to lower demand. USGC ethane prices remained near historically high levels due to the high costs of competing feedstock such as naphtha. As a result, the Alberta Advantage averaged 21C/ per pound in the first quarter, a record for a first quarter, but down from the 27C/ per pound record set in the fourth quarter of 2007.