NOVA Chemicals: Record Breaking Quarter Caps Record Breaking Year - Strength Continues

Business Wire, Jan 31, 2008

PITTSBURGH -- All financial information is in U.S. dollars unless otherwise indicated.

NOVA Chemicals Corporation (NOVA Chemicals) (NYSE:NCX)(TSX:NCX) reported net income of $126 million ($1.51 per share diluted) for the fourth quarter of 2007.

Fourth quarter net income compares to $97 million ($1.16 per share diluted) for the third quarter of 2007 and a net loss of $781 million ($9.46 loss per share) for the fourth quarter of 2006, which included a $772 million after-tax ($9.35 per share) non-cash restructuring charge related to the write-down of assets now in the INEOS NOVA Joint Venture.

NOVA Chemicals reported net income of $347 million ($4.16 per share diluted) for 2007 compared to a net loss of $703 million ($8.52 per share loss) for 2006.

Cash from operations for the quarter totaled $205 million which enabled the company to reduce net debt by $105 million.

"NOVA Chemicals just finished the best quarter and the best year in our history," said Jeff Lipton, NOVA Chemicals' CEO. "Based on our record breaking feedstock advantages, modernized and energy efficient plants, and unique new product portfolio, we expect an ongoing step-up of performance in the high oil price environment we foresee for many years to come."

The Olefins/Polyolefins business unit reported record adjusted EBITDA of $308 million in the fourth quarter, up from $280 million in the third quarter primarily due to higher polyethylene sales volumes and a record Alberta Advantage of 27C/ per pound in the fourth quarter, up from 21C/ per pound in the third quarter.

Fourth quarter's results included a number of non-operating charges and benefits. See page 4 for more details.

The expanded INEOS NOVA styrenics joint venture, which commenced operations on Oct. 1, 2007, took significant action to improve its business. See page 4 for more details.

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NOVA Chemicals will host a conference call today, Thursday, January 31, 2008 for investors and analysts at 11:30 a.m. EST (9:30 a.m. MST; 8:30 a.m. PST). 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. 3230757). The live call is also available on the Internet at www.investorcalendar.com (ticker symbol NCX)

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INEOS NOVA Joint Venture

The expanded INEOS NOVA styrenics joint venture commenced operations on Oct. 1, 2007. Within the first two months of operation, INEOS NOVA announced the closure of the Montreal, Quebec, and Belpre, Ohio, polystyrene facilities with total annual production capacity of 340 million pounds. Also during the fourth quarter, INEOS NOVA obtained the exclusive rights to styrene production from Sterling Chemicals' Texas City facility and nominated zero production in December 2007, which prompted Sterling to exercise its right to permanently shut down and decommission the styrene plant. The facility represents 11% of North American capacity. The polystyrene plant closures and the impact from the Sterling deal will contribute significantly to the joint venture's $80 million annual synergy target.

Items Impacting Fourth Quarter Results

During the fourth quarter, various items affected NOVA Chemicals' results which are not typical of normal operations. They include the following:

* $76 million before-tax ($46 million after-tax) restructuring charges almost entirely related to actions taken by the INEOS NOVA joint venture to permanently shut down the Montreal, Quebec, and Belpre, Ohio, polystyrene facilities and the write-off of the Sterling production rights agreement due to the nomination of zero production.

* $19 million before-tax ($13 million after-tax) gain related to the sale of the Chesapeake, Virginia facility, and sale of other land.

* $53 million income tax benefit related to a reduction in future federal income tax rates in Canada. The Canadian government enacted a 7% reduction in federal tax rates effective by the year 2012 to make Canada the lowest tax jurisdiction among the G7 countries.

* $13 million non-cash tax benefit associated with a Belgium tax issue from a prior year that was settled in NOVA Chemicals' favor.

OLEFINS/POLYOLEFINS BUSINESS UNIT

Financial Highlights

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Operating Highlights

Average Benchmark Prices (1)

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Review of Operations

Olefins/Polyolefins

The Olefins/Polyolefins business unit reported a record adjusted EBITDA of $308 million in the fourth quarter of 2007, up from $280 million in the third quarter. In the fourth quarter, sharply increasing feedstock costs for United States Gulf Coast (USGC) producers led to industry price increases for ethylene and polyethylene. These price increases expanded margins for NOVA Chemicals since the Company's Alberta-based feedstock costs increased at a lower rate. Record polyethylene sales volumes also contributed to quarter-over-quarter adjusted EBITDA improvement.

Fourth quarter results were negatively impacted by approximately $22 million higher costs ($15 million after-tax) due to the appreciation of the Canadian dollar by $0.07 to 1.02 $Cdn./US. Most of NOVA Chemicals' Canadian dollar-denominated costs are related to the Olefins/Polyolefins business unit's results.