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

Business Wire, Jan 31, 2008

Sales of polyethylene manufactured using Advanced SCLAIRTECH technology totaled 244 million pounds in the fourth quarter, the highest in Company history. For a third consecutive quarter, rated production and sales exceeded the plant's original annual 850 million pound nameplate capacity. In the fourth quarter, sales rates exceeded even the newly increased nameplate capacity of 900 million pounds per year. Margins expanded further this quarter in part due to continued market penetration of higher value products.

During the fourth quarter, NOVA Chemicals successfully implemented two polyethylene price increases: 4C/ per pound in October and 5C/ per pound in November. In January, NOVA Chemicals implemented a 3C/ per pound price increase and plans to implement an additional 3C/ per pound starting Feb. 1, 2008.

Fourth Quarter 2007 Versus Fourth Quarter 2006

The Polyethylene segment reported adjusted EBITDA of $64 million in the fourth quarter of 2007 compared to a loss of $8 million in the fourth quarter of 2006. The significant improvement was primarily due to higher polyethylene selling prices and sales volumes. The industry average butene liner polyethylene price was 75C/ per pound in the fourth quarter of 2007 compared to 58C/ per pound in same period one year ago. Low producer inventories, strong demand and high feedstock costs drove producers to implement a series of price increases in the fourth quarter of 2007.

2007 Versus 2006

The Polyethylene segment reported adjusted EBITDA of $196 million in 2007 compared to $141 million in 2006. The improvement was primarily due to lower feedstock costs and higher sales volumes. NOVA Chemicals sold 3,375 million pounds of polyethylene in 2007, up from 3,239 million pounds in 2006, as demand was stronger for both domestic and international sales.

NOVA Chemicals' ability to implement announced price increases depends on many factors that may be beyond its control. See Forward-Looking Information on page 16.

PERFORMANCE STYRENICS BUSINESS UNIT

Financial Highlights

(millions of U.S. Dollars, except as noted)

[TABLE OMITTED]

Operating Highlights

Average Benchmark Raw Material Prices (1)

(U.S. dollars per pound)

[TABLE OMITTED]

Review of Operations

Fourth Quarter 2007 Versus Third Quarter 2007

The Performance Styrenics segment reported break even adjusted EBITDA in the fourth quarter of 2007 compared to $4 million in the third quarter. The quarter-over-quarter decline was primarily due to seasonally slower sales of expandable polystyrene (EPS) and DYLARK([R]) resins. Selling prices for EPS resin remained steady in the fourth quarter, despite lower demand.

ZYLAR and NAS resin assets that were formerly included in NOVA Chemicals' Performance Styrenics segment were contributed to the expanded joint venture on Oct. 1, 2007. Accordingly, the results for ZYLAR and NAS resins are now included in the INEOS NOVA joint venture's results. Prior period comparative amounts have been revised to reflect this change.

Fourth Quarter 2007 Versus Fourth Quarter 2006