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Disclosure Regarding Forward-Looking Statements
This Annual Report contains forward-looking statements with respect to NOVA Chemicals. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions and projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. Forward-looking statements for the time periods beyond 2007 involve longer-term assumptions and estimates than forward-looking statements for 2007 and are consequently subject to greater uncertainty. We advise readers of this Annual Report not to place undue reliance on our forward-looking statements as a number of factors could cause actual results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.
The words “believe,” “expect,” “plan,” “intend,” “estimate”, or “anticipate” and similar expressions, as well as future or conditional verbs such as “will,” “should,” “would,” and “could” often identify forward-looking statements. Specific forward-looking statements contained in this Annual Report include, among others, statements regarding: our expected financial performance in future periods; our cost savings and potential benefits related to the 2006 restructuring and other cost-reduction initiatives and NOVA Innovene’s restructuring; savings related to the expiration of styrene monomer contracts; our expectations regarding the strategic options available to us relating to our non-core STYRENIX business unit; our expectations regarding future improvements in underlying EBITDA from our Olefins/Polyolefins and Performance Styrenics businesses due to our Performance Products; forecast growth in North American and global Gross Domestic Product rates; NOVA Chemicals’ expectations of favorable market conditions in the future and our ability to benefit from those conditions; our expectations of the supply/demand balance and global and North American operating capacity and rates in future periods; changes in the demand for our products; expected sales volume and revenue growth of our standard and Performance Products; how changes in various factors could affect NOVA Chemicals’ profitability; our expectations for new end-use applications for our products; changes in our historical average cost advantage for ethylene produced at our Joffre, Alberta site and our ability to maintain our Alberta Advantage at the historical average over the long-term; changes in pricing policies by us or our competitors; our competitive advantages, including our belief that our Performance Products will generate higher, more sustainable margins and enhanced earnings stability throughout the chemical cycle; our ability to compete successfully; our plans to increase our production capacity, including our capacity to manufacture Performance Products; our beliefs concerning capturing value from our downstream business ventures and licensing opportunities; the impact of Canadian tax rate and public policy actions on our business; our belief that our reserves are adequate to cover any outstanding claims; our estimates for capital expenditures and funding for pension benefits for 2007; changes in the costs of energy and raw materials; our methods of raising capital; our level of debt; our intended quarterly dividend; and general economic conditions.
With respect to forward-looking statements contained in this Annual Report, we have made assumptions regarding, among other things: future crude oil, natural gas, natural gas liquids and benzene prices; our ability to obtain raw materials; our ability to market products successfully to our anticipated customers; our ability to obtain financing on acceptable terms; and the impact of increasing competition. Some of our assumptions are based upon internal estimates and analyses of current market conditions and trends, management plans and strategies, economic conditions and other factors and are necessarily subject to risks and uncertainties inherent in projecting future conditions and results.
Some of the risks that could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include: commodity chemicals price levels (which depend, among other things, on supply and demand for these products, capacity utilization and substitution rates between these products and competing products); feedstock availability and prices; operating costs; terms and availability of financing; technology developments; currency exchange rate fluctuations; starting up and operating facilities using new technology; realizing synergy and cost-savings targets; meeting time and budget targets for significant capital investments; avoiding unplanned facility shutdowns; safety, health, and environmental risks associated with the operation of chemical plants and marketing of chemical products, including transportation of these products; public perception of chemicals and chemical end-use products; the impact of competition; changes in customer demand, including customer acceptance of our Performance Products; changes in, or the introduction of new laws or regulations relating to our business, including environmental, competition and employment laws; loss of the services of any of our executive officers; uncertainties associated with the North American, South American, European, and Asian economies; terrorist attacks; severe weather events; and other risks detailed from time to time in the publicly filed disclosure documents and securities commission reports of NOVA Chemicals.
NOVA Chemicals’ forward-looking statements are expressly qualified in their entirety by this cautionary statement. In addition, the forward-looking statements are made only as of the date of this Annual Report. We undertake no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by applicable law.
The following discussion and analysis should be read in conjunction with information contained in the Consolidated Financial Statements and the notes thereto starting on page 73. This Management’s Discussion and Analysis is based upon financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP). These accounting principles are different in some respects from those generally accepted in the United States, and the significant differences are described in Note 23 to the Consolidated Financial Statements. References may be made to several non-GAAP measures throughout this Management’s Discussion and Analysis. These measures are discussed in Supplemental Measures on page 62. This Management’s Discussion and Analysis is the responsibility of management. The Board of Directors carries out its responsibility for review of this disclosure principally through its Audit, Finance and Risk Committee comprised exclusively of independent directors. The Audit, Finance and Risk Committee reviews this disclosure and recommends its approval by the Board of Directors. This Management’s Discussion and Analysis was prepared as of Feb. 8, 2007.
All references in this Annual Report, including the Management’s Discussion and Analysis, to “NOVA Chemicals,” the “Company,” “we,” “us” and similar terms refer to NOVA Chemicals Corporation alone or together with its consolidated subsidiaries and affiliates, depending on the context in which such terms are used. All amounts are presented in U.S. dollars unless otherwise noted.