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Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 20-F

o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934ORý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934For the fiscal year ended December 31, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                                    toORo

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report


Commission file number 1-3064



NOVA Chemicals Corporation(Exact name of Registrant as specified in its charter)

New Brunswick, Canada(Jurisdiction of incorporation or organization)

1000 7th Avenue S.W.
Calgary, Alberta
Canada, T2P 5L5(Address of principal executive offices)

Contact Person: Todd D. Karran
Senior Vice President and Chief Financial Officer
1000 7th Avenue S.W.
Calgary, Alberta
Canada, T2P 5L5
Telephone: 403-750-3600
Fax: 403-269-7410(name, telephone, e-mail and/or facsimile number and address of company contact person)



Securities registered or to be registered pursuant to Section 12(b) of the Act.None

Securities
registered or to be registered pursuant to Section 12(g) of the Act:None

Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act: 8.375% senior notes due
2016 and 8.625% senior notes due 2019

As
of December 31, 2010, there were 141,494,222 shares of the registrant's common stock outstanding.

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
o Yes    ý No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934. o Yes    ý No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. ý Yes    o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). o Yes    o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act (check one):

o Large accelerated filer

o Accelerated filer

ý Non-accelerated filer


Indicate
by check mark which basis for accounting the registrant has used to prepare the financing statements included in this filing:

U.S. GAAP
o        International Financial Reporting Standards as issued by        Other
ýCanadian GAAP
the International Accounting Standards Board o

Indicate by check mark which financial statement item the registrant has elected to follow.

ý
Item 17            o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).

o
Yes    ý No



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Table of Contents



TABLE OF CONTENTS



PageEXPLANATORY NOTES

4DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION

5PART I

7Item 1.  Identity of Directors, Senior
Management and Advisors

7Item 2.  Offer Statistics and Expected
Timetable

7Item 3.  Key Information

73.A.  SELECTED FINANCIAL DATA

73.B.  CAPITALIZATION AND INDEBTEDNESS

103.C.  REASONS FOR THE OFFER AND USE OF
PROCEEDS

103.D.  RISK FACTORS

10Item 4.  Information on the Company

194.A.  HISTORY AND DEVELOPMENT OF THE COMPANY

194.B.  BUSINESS OVERVIEW

224.C.  ORGANIZATIONAL STRUCTURE

344.D.  PROPERTY, PLANTS AND EQUIPMENT

34Item 4A.  Unresolved Staff Comments

34Item 5.  Operating and Financial Review and
Prospects

34Item 6.  Directors, Senior Management and
Employees

836.A.  DIRECTORS AND SENIOR MANAGEMENT

836.B.  COMPENSATION

856.C.  BOARD PRACTICES

1006.D.  EMPLOYEES

1016.E.  SHARE OWNERSHIP

102Item 7.  Major Shareholders and Related Party
Transactions

1027.A.  MAJOR SHAREHOLDERS

1027.B.  RELATED PARTY TRANSACTIONS

1027.C.  INTERESTS OF EXPERTS AND COUNSEL

103Item 8.  Financial Information

1038.A.  CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
INFORMATION

1038.B.  SIGNIFICANT CHANGES

103Item 9.  The Offer and Listing

1039.A.  OFFER AND LISTING DETAILS

1039.B.  PLAN OF DISTRIBUTION

1049.C.  MARKETS

1049.D.  SELLING SHAREHOLDERS

1049.E.  DILUTION

1049.F.  EXPENSES OF THE ISSUE

104Item 10.  Additional Information

10410.A.  SHARE CAPITAL

10410.B.  MEMORANDUM AND ARTICLES OF ASSOCIATION

104


2

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Table of Contents

Page10.C.  MATERIAL CONTRACTS

10710.D.  EXCHANGE CONTROLS

10710.E.  TAXATION

10710.F.  DIVIDENDS AND PAYING AGENTS

10810.G.  STATEMENT BY EXPERTS

10810.H.  DOCUMENTS ON DISPLAY

10810.I.  SUBSIDIARY INFORMATION

108Item 11.  Quantitative and Qualitative Disclosures About Market
Risk

108Item 12.  Description of Securities Other than Equity
Securities

10812.A.  DEBT SECURITIES

10812.B.  WARRANTS AND RIGHTS

10812.C.  OTHER SECURITIES

10812.D.  AMERICAN DEPOSITORY SHARES

108PART II

108Item 13.  Defaults, Dividend Arrearages and
Delinquencies

108Item 14.  Material Modifications to the Rights of Security
Holders and Use of Proceeds

108Item 15.  Controls and Procedures

109Item 16A.  Audit Committee Financial Expert

109Item 16B.  Code of Ethics

109Item 16C.  Principal Accountant Fees and
Services

109Item 16D.  Exemptions from the Listing Standards for Audit
Committees

110Item 16E.  Purchases of Equity Securities by the Issuer and
Affiliated Purchasers

110Item 16F.  Change of Registrant's Certifying Accountant

110Item 16G.  Corporate Governance

110PART III

110Item 17.  Financial Statements

110Item 18.  Financial Statements

110Item 19.  Exhibits

111Index to Financial Statements

F-i


3

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Table of Contents

EXPLANATORY NOTES

The Corporation

We are a global company continued under the laws of the province of New Brunswick, Canada, with our head office located at
1000-7th Avenue S.W., Calgary, Alberta, Canada T2P 5L5, and our United States commercial center located at 1555 Coraopolis Heights Road, Moon
Township, PA 15108. Our telephone number is (403) 750-3600. We maintain a website at www.novachemicals.com. The information on our website is not a part of this annual report on Form 20-F.

Unless
otherwise indicated or required by the context, as used in this Form 20-F, the terms "NOVA Chemicals," the "Corporation," "we," "our" and "us" refer to NOVA
Chemicals Corporation and all of its subsidiaries and joint ventures that are consolidated under Canadian generally accepted accounting principles.

Presentation of Financial Information

The Annual Audited Consolidated Financial Statements contained in this annual report on Form 20-F are reported in
U.S. dollars but have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada. Canadian GAAP differs in certain material respects from U.S. GAAP.
Note 24 to our Annual Audited Consolidated Financial Statements contained in this annual report on Form 20-F summarizes the effect on our Annual Audited Consolidated
Financial Statements of the principal differences between GAAP in Canada and in the United States.

Beginning
January 1, 2011, our Consolidated Financial Statements will be prepared in accordance with International Financial Reporting Standards ("IFRS"), see FUTURE CHANGES IN ACCOUNTING POLICIES, Transition to
IFRSin our "Management Discussion and Analysis of Financial Condition and Results of Operation"
included in this annual report under "Item 5Operating and Financial Review and Prospects."

Market and Industry Data

We obtained the market and competitive position data used throughout this annual report from our own research, surveys or studies
conducted by third parties and industry or general publications, including data from Chemical Market Associates, Inc., Nexant ChemSystems, the American Chemistry Council, IHS Global Insight and
other petrochemical industry consultants. Industry publications and surveys generally state that they have obtained information from sources believed to be reliable. We have not independently verified
such data. Similarly, our internal research has not been verified by any independent sources.

TRADEMARKS

Advanced
SCLAIRTECH and SCLAIRTECH are trademarks of NOVA Chemicals.

ARCEL®,
ELEMIX®, DYLARK®, DYLITE®, and NOVACAT® are registered trademarks of NOVA Chemicals Inc.

SCLAIR®
and SURPASS® are registered trademarks of NOVA Chemicals Corporation in Canada and of NOVA Chemicals (International) S.A. elsewhere; authorized use/utilisation
autorisée.

Responsible
Care® or variations thereof is a registered trademark of the Chemistry Industry Association of Canada in Canada and a registered service mark of the American Chemistry Council
("ACC") in the United States.

4

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Table of Contents

DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION

This annual report on Form 20-F contains forward-looking information with respect to us within the meaning of
U.S. federal securities laws. By its nature, forward-looking information requires us to make assumptions and is subject to inherent risks and uncertainties. There is significant risk that
predictions, forecasts, conclusions and projections that constitute forward-looking information will not prove to be accurate, that our assumptions may not be correct and that actual results may vary
from the forward-looking information.

Forward-looking
information for the time periods beyond 2011 involves longer-term assumptions and estimates than forward-looking information for 2011 and is consequently
subject to greater uncertainty. We caution readers of this annual report on Form 20-F not to place undue reliance on our forward-looking information 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 information.

The
words "believe," "expect," "plan," "intend," "estimate," or "anticipate" and similar expressions, as well as future or conditional verbs such as "should," "would," and "could" often
identify forward-looking information. Specific forward-looking information contained in this annual report on Form 20-F includes, among others, our beliefs about and expectations
for our Olefins/Polyolefins business unit, including our beliefs about our cost advantaged feedstock position, our beliefs regarding export flows of natural gas from Alberta and ethane availability
for our ethylene plants in Western Canada, our plans to source additional feedstock that is not necessarily tied to export natural gas flows from Alberta, our agreements with Hess and affiliates of
Mistral to purchase and transport ethane production from Hess' Tioga Gas Plant in North Dakota via a pipeline to Alberta, Canada, our agreements with AltaGas for long-term,
cost-competitive ethane and other natural gas liquids supply from AltaGas' Harmattan-Elkton Gas Plant and the timing of start-up of this co-stream project; our
expectations for our modernization and expansion project at our Mooretown, Ontario, plant, our beliefs about ethylene and polyethylene supply and demand, and our beliefs about the Marcellus Basin,
including our belief that our Corunna facility could become an ideal outlet for ethane from the Marcellus Basin as well as other nearby shale formations and our hope to be able to secure
long-term competitive petrochemical feedstock supply for our Sarnia operations via an ethane pipeline from the Marcellus Basin; our beliefs about and expectations for our Performance
Styrenics segment, including our belief that the restructured business can be successful; our expectation that we will not record a material gain or loss related to the sale of our 50% interest in the
INEOS NOVA joint venture; our beliefs about our competitive advantages and our ability to compete successfully; our beliefs about expected funding for our pension and retirement plans; our beliefs
about environmental matters, including our expectation that legally binding federal greenhouse gas emission reduction requirements will be imposed on our operations in Canada and our expected costs to
conduct decommissioning and site restoration; our beliefs regarding our transition to IFRS and expected impacts; and general economic conditions.

With
respect to forward-looking information contained in this annual report on Form 20-F, we have made material assumptions regarding, among other things: future 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; the impact of increasing
competition; and our ability to obtain financing on acceptable terms. 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 information include: a deterioration in
our cash balances or liquidity; our ability to access capital markets, which could impact our ability to react to changing economic and business conditions; 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; our ability to implement our business strategy; meeting time and budget targets for significant capital investments; avoiding unplanned facility shutdowns; safety, health and
environmental risks

5

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Table of Contents

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; changes in, or the introduction of new laws and 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 and other risks detailed from time to time in our publicly filed disclosure documents and securities commission reports. The information contained in this annual report on
Form 20-F, including the information provided under the heading "Risk Factors," identifies additional factors that could affect our operating results and performance.

The
forward-looking information in this annual report on Form 20-F is expressly qualified in its entirety by this cautionary statement. In addition, the
forward-looking information is made only as of the date of this annual report on Form 20-F, and except as required by applicable law, we undertake no obligation to update publicly
this forward-looking information to reflect new information, subsequent events or otherwise.

6

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Table of Contents

PART I

Item 1.    Identity of Directors, Senior Management and Advisors



Item 2.    Offer Statistics and Expected Timetable



Item 3.    Key Information

3.A. SELECTED FINANCIAL DATA

The selected historical consolidated financial information set forth below has been derived from our Annual Audited Consolidated
Financial Statements for each of the years in the five-year period ended December 31, 2010, which statements have been audited by Ernst & Young LLP, Chartered
Accountants.

Certain
amounts in the selected historical consolidated financial information presented below have been restated from that which has been included elsewhere in this annual report on
Form 20-F due to adoption of new accounting standards or to conform with the presentation of our financial information for the year ended December 31, 2010. In the opinion of
management, all adjustments considered necessary for a fair presentation of our results and financial position have been included in those results and financial position.

The
selected historical consolidated financial information presented below is condensed and may not contain all of the information that you should consider. This selected financial data
should be read in conjunction with our Annual Audited Consolidated Financial Statements, the notes thereto and the section entitled "Item 5Operating and Financial Review
and Prospects."

For
a description of our election to use push-down accounting and predecessor/successor presentation, see "Item 5Operating and Financial Review and
ProspectsIPIC Transaction."

The
associated results of operations, financial position and cash flows for the INEOS NOVA joint venture and our building and construction businesses, collectively known as SYNTHEON, are
reported as discontinued operations and assets and liabilities held for sale for all periods presented in this annual report on Form 20-F. For related summarized financial
information, see Note 3 in the Annual Audited Consolidated Financial Statements.

7

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Table of Contents

Year Ended Dec. 31,July 6-
Dec. 31,
2009
Restated(a)

Jan. 1-
July 5,
2009
Restated(a)(millions of U.S. dollars)

Year Ended
Dec. 31,
2010

2008
Restated(a)

2007
Restated(a)

2006
Restated(a)Successor

PredecessorConsolidated Statement of Income (Loss) Data:Revenue

$
4,576

$
1,612

$
1,345

$
5,645

$
4,893

$
4,629Feedstock and operating costs


3,466


1,157


1,167


5,055


3,766


3,764Depreciation and amortization


243


131


117


235


215


186Selling, general and administrative


209


82


175


212


218


182Research and development


35


17


17


44


45


43Foreign exchange losses (gains)


13


104


39


(117
)




Restructuring charges(b)


20


22


41


32


13


68Total operating expenses


3,986


1,513


1,556


5,461


4,257


4,243Operating income (loss) from continuing operations


590


99


(211
)

184


636


386Interest expense, net


(183
)

(83
)

(92
)

(149
)

(171
)

(170
)Other (losses) gains(c)


(54
)




6


(1
)

18


(237
)

(83
)

(86
)

(150
)

(153
)

(170
)Income tax (expense) recovery from continuing operations


(120
)

(7
)

62


71


(48
)

(4
)Income (loss) from continuing operations


233


9


(235
)

105


435


212Income (loss) from discontinued operations, net of income taxes


26


(11
)

(4
)

(145
)

(87
)

(920
)Net income (loss)

$
259

$
(2
)
$
(239
)
$
(40
)
$
348

$
(708
)Selected Financial Data:Revenue from continuing operations(d)Olefins/Polyolefins

$
4,308

$
1,482

$
1,258

$
5,301

$
4,533

$
4,281Performance Styrenics


304


143


93


388


371


348Intersegment eliminations


(36
)

(13
)

(6
)

(44
)

(11
)

Total revenue from continuing operations

$
4,576

$
1,612

$
1,345

$
5,645

$
4,893

$
4,629Operating income (loss) from continuing operationsOlefins/Polyolefins

$
788

$
223

$
43

$
371

$
792

$
637Performance Styrenics


2


5


(19
)

(49
)

(28
)

(25
)Corporate


(200
)

(129
)

(235
)

(138
)

(128
)

(226
)Total operating income (loss) from continuing operations

$
590

$
99

$
(211
)
$
184

$
636

$
386Other Consolidated Financial Data:Capital expenditures for continuing operations

$
126

$
55

$
35

$
144

$
126

$
173Cash provided by (used in) operating activities


575


(20
)

(258
)

272


329


350Ratio of earnings to fixed charges(e)


2.8


1.2


N/A


1.3


3.5


2.1U.S. GAAP Financial Data:Revenue

$
4,576

$
1,612

$
1,345

$
5,645

$
4,893

$
4,629Net income (loss)


259


(2
)

(240
)

(24
)

363


(703
)


8

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Table of Contents



Dec. 31,(millions of U.S. dollars)

2010

2009
Restated(a)

2008
Restated(a)

2007
Restated(a)

2006
Restated(a)Successor

PredecessorConsolidated Balance Sheets Data (at end of period):Cash and cash equivalents

$
300

$
232

$
40

$
67

$
49Working capital(f)


266


256


(28
)

238


45Plant, property and equipment (net)


3,456


3,553


2,486


2,734


2,452Total assets


5,670


5,596


4,082


5,143


4,141Total debt(g)


1,541


1,824


1,650


1,795


1,780Shareholder's equity


2,049


1,793


895


1,072


521U.S. GAAP Financial Data:Total assets


5,670


5,596


4,081


5,177


4,164Total debt(h)


1,541


1,824


1,650


1,794


1,782Shareholder's equity


2,009


1,800


746


987


466


Notes: (a)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.(b)Restructuring
charges include:


Year Ended Dec. 31,Year
Ended
Dec. 31,
2010

July 6-
Dec. 31,
2009
Restated(a)

Jan. 1-
July 5,
2009
Restated(a)(millions of U.S. dollars)

2008
Restated(a)

2007
Restated(a)

2006
Restated(a)Successor

PredecessorAsset impairments

$
20

$


$
17

$
17

$


$
Severance costs





21


13


6


7


68Other





1


11


9


6


$
20

$
22

$
41

$
32

$
13

$
68




Year Ended Dec. 31,July 6-
Dec. 31,
2009
Restated(a)

Jan. 1-
July 5,
2009
Restated(a)(millions of U.S. dollars)

Year
Ended Dec.
31, 2010

2008
Restated(a)

2007
Restated(a)

2006
Restated(a)Successor

PredecessorDow Chemical patent litigation

$
(95
)
$


$


$


$


$
Insurance claim


45














Gain on sale of Chesapeake














17


Gain on sale of Cambridge














1


Other


(4
)




6


(1
)




$
(54
)
$


$
6

$
(1
)
$
18

$



9

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Table of Contents

(d)Intersegment
eliminations relate to feedstock requirements for our long-term styrene monomer processing agreement. Prior to the expansion of our
INEOS NOVA joint venture on October 1, 2007, this agreement was part of our STYRENIX segment. Subsequently, this agreement is part of our Performance Styrenics segment.(e)For
purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings from continuing operations before income taxes plus fixed
charges (excluding capitalized interest during the period). Fixed charges consist of interest expense, capitalized interest and amortization of bond discount and issue costs. For the period
January 1, 2009 through July 5, 2009, earnings were insufficient to cover fixed charges, and the ratio is not meaningful. Periods prior to 2010 have been restated to reflect only
continuing operations.(f)Working
capital equals accounts receivable plus prepaid expenses plus inventories less accounts payable and accrued liabilities.(g)Total
debt equals long-term debt plus installments on long-term debt due within one year and bank loans.(h)Total
debt includes long-term debt under U.S. GAAP, installments on long-term debt due within one year and bank loans.


3.B. CAPITALIZATION AND INDEBTEDNESS



3.C. REASONS FOR THE OFFER AND USE OF PROCEEDS



3.D. RISK FACTORS

Risks Related to Our Business

The cyclicality of plastics and chemical businesses may cause significant fluctuation in our income and cash flow.

Our
historical operating results reflect the cyclical and volatile nature of plastics and chemical businesses. Our businesses historically experience alternating periods of inadequate
capacity and tight supply, causing prices and profit margins to increase, followed by periods of oversupply, resulting from capacity additions. Prolonged oversupply leads to declining capacity
utilization rates, prices and profit margins. The markets for ethylene, co-products and polyethylene, are also highly cyclical, resulting in volatile profits and cash flow over the
business cycle. Because we derive nearly all of our revenue from sales of these products, our operating results are more sensitive to this cyclical nature than many of our competitors who have more
diversified businesses. This cyclicality is exacerbated by volatility in feedstock prices. We cannot provide assurance that pricing or profitability in the future will be comparable to any particular
historical period, including the most recent period shown in our operating results.

Excess
industry capacity, especially at times when demand is weak, has in the past and may in the future cause us and other industry participants to lower production rates, which can
reduce our margins, income and cash flow.

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Rising costs of energy and raw materials may result in increased operating expenses and reduced results of operations.

We purchase large amounts of energy and raw materials, including natural gas and crude oil, for our businesses, representing a
substantial portion of our operating expenses. The prices of energy and raw materials have historically been highly volatile and cyclical, and our energy and raw material costs have fluctuated
significantly in recent years. Although certain of our customer contracts are tied to changes in feedstock costs or provide for surcharges if feedstock costs change, many contracts are tied to market
prices. Currently, the price of crude oil is disproportionately higher than the price of natural gas resulting in a higher than historical average ratio between the two potentially giving natural
gas-based producers an advantage over oil-based producers. We cannot predict whether and to what extent energy and/or raw materials prices will rise in the future or whether
and to what extent we will be able to pass on such cost increases to our customers. Any significant energy and/or raw materials cost increase could have a material adverse effect on our business,
results of operations, financial condition or cash flow.

Interruptions in our supply of raw materials could adversely affect our business.

We purchase large amounts of raw materials, including natural gas and crude oil, for our businesses. If temporary shortages due to
disruptions in supply caused by weather, transportation, production delays, regulatory changes or other factors require us to procure our raw materials from sources other than our current suppliers,
we cannot provide any assurance that we will be able to do so on terms as favorable as our current terms, or at all. Currently, the amount of ethane available as feedstock in Alberta is largely
dependent on volumes of natural gas available to be processed at the ethane extraction plants ("Straddle Plants") on the mainline of the TransCanada Alberta pipeline system as well as the ethane
content in that natural gas. Weather conditions and economic conditions drive demand for and the price of natural gas and could lead to short-term supply dislocations. In 2011, we expect
the export flows of natural gas from Alberta to be similar to the lower than historical flows experienced in 2010, due primarily to low selling prices for natural gas in North America. This will
likely lead to less than historical natural gas flowing through the Straddle Plants and therefore less ethane available as feedstock for our ethylene plants in Western Canada. If we are unable to
secure additional feedstock sources, our operating results could be negatively impacted.

Unanticipated problems or delays with projects to source additional feedstock may harm our business.

We have recently executed agreements to secure additional feedstock, and we continue to work with suppliers, the Alberta government and
pipeline companies to source additional supply for our feedstock needs. Some of the agreements contemplate other parties investing in, designing and constructing pipelines, fractionation facilities,
and/or installing or modifying complex equipment. These projects may suffer significant delays as a result of a variety of factors, such as shortages of workers, key equipment, parts and materials,
transportation constraints, adverse weather, equipment failures, fires, damage to or destruction of property and equipment, environmental damage, regulatory requirements, unforeseen difficulties or
labor issues, any of which could prevent the projects from commencing operations as expected, which could harm our business.

We sell our products in highly competitive markets and face significant price pressure.

We sell our products in highly competitive markets. Due to the commodity nature of a majority of our products, competition in these
markets is based primarily on price and to a lesser extent on product performance, product quality, product deliverability and customer service. As a result, we may not be able to protect our market
position by product differentiation or pass on cost increases to our customers. Accordingly, increases in raw material costs and other costs may not necessarily correlate with changes in product
prices, either in the direction of the price change or in magnitude. Although we strive to maintain or increase our profitability by reducing costs through improving production efficiency, emphasizing
higher margin products and controlling selling and administration expenses, we cannot provide any assurance that these efforts will be sufficient to offset fully the effect of any pricing changes on
our operating results.

Among
our competitors are some of the world's largest chemical companies and major integrated petroleum companies that have their own raw material resources. Some of these companies may
be able to

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produce
products more economically than we can. In addition, most of our competitors are larger and have greater financial resources, which may enable them to invest significant capital into their
businesses, including expenditures for research and development. If any of our current or future competitors develop proprietary technology that enables them to produce products that compete with our
products at a significantly lower cost, segments of our technology could be rendered over time uneconomical or obsolete. The entrance of new competitors into the industry may reduce our ability to
capture profit margins in circumstances where capacity utilization in the industry is decreasing. Further, production from low-cost producers in petroleum-rich countries is
increasing in the chemical industry and may expand significantly in the future. Any of these developments could affect our ability to enjoy higher profit margins during periods of increased demand.

External factors beyond our control can cause fluctuations in demand for our products and in our prices and margins, which may negatively affect our income and
cash flow.

External factors can cause significant fluctuations in demand for our products and volatility in the price of raw materials and other
operating costs. Examples of external factors include general economic conditions, competitor actions, technological developments, unplanned facility shutdowns, international events and circumstances,
and governmental regulation.

Demand
for our products is influenced by general economic conditions. A number of our products are highly dependent on durable goods markets, which are themselves particularly cyclical.
If the global economy does not continue to improve, demand for our products and our income and cash flow could be adversely affected.

We
may reduce production, idle a facility for an extended period of time, or discontinue certain products because of high raw material prices, an oversupply of a particular product,
feedstock unavailability and/or lack of demand for that particular product. When we decide to reduce or idle production, reduced operating rates are often necessary for several quarters or, in certain
cases, longer and cause us to incur costs, including the expenses of the outages and the restart of these facilities.

Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
The recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. Our business, financial condition and result of operations were negatively affected in
prior periods as a result of the recent downturn. While many areas of the global economy are improving and the credit markets have improved, a slowdown in the economic recovery or worsening global
economic conditions could result in a variety of risks to our business, including, deferrals or reductions of customer orders, potential deterioration of customers' ability to pay us or our suppliers'
ability to meet their obligations, losses or impairment charges, reduced revenue, reduced demand for our products, deterioration in our cash balances and liquidity, and increased volatility in energy
and raw material prices. Any of the foregoing could harm our business.

Operating problems in our business may adversely affect our income and cash flow.

The occurrence of significant operating problems at our facilities may have a material adverse effect on the productivity and
profitability of a particular manufacturing facility or on our operations as a whole. Our income and cash flow are dependent on the continued operation of our various production facilities. Our
operations are subject to the usual hazards associated with chemical manufacturing and the related storage and transportation of raw materials, products and wastes, including pipeline, storage tank
and other leaks and ruptures; integrity issues associated with storage caverns; fires; mechanical failure; labor difficulties; remediation complications; discharges or releases of pollutants,
contaminants or toxic or hazardous substances or gases and other environmental risks; explosions; chemical spills; unscheduled downtime; transportation interruptions; and inclement weather and natural
disasters.

Some
of these hazards may cause personal injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of
operations and the

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imposition
of civil, regulatory or criminal penalties. Furthermore, we are also subject to present and future claims with respect to workplace exposure, workers' compensation and other matters. We
carry insurance against potential operating hazards which is consistent with industry norms. If we were to incur a significant liability that was not covered by insurance, it could significantly
affect our productivity, profitability and financial position.

We are subject to intellectual property and other litigation from time to time in the ordinary course of business.

We are currently involved in patent litigation.

In
2005, the Dow Chemical Company ("Dow Chemical") filed a complaint against NOVA Chemicals in the Federal District Court in Delaware alleging that certain grades of our
SURPASS® polyethylene film resins infringe two Dow Chemical patents. In June 2010, a jury trial took place resulting in a verdict against us which awarded damages in the amount of
$61.8 million based on sales of SURPASS resin in the United States through the end of 2009. On July 30, 2010, the court awarded Dow Chemical pre-judgment interest in
the amount of $14.3 million.

Following
the jury verdict, both parties filed certain motions with the District Court in Delaware, including a motion by Dow Chemical seeking a permanent injunction to require us to
stop importing and selling certain sLLDPE grades of SURPASS resin in the United States. Given the substantial issues for appeal, including the question of Dow Chemical's standing in the case,
the short unexpired term of the patents and the possibility that we will prevail on appeal, the court was not persuaded that entry of a permanent injunction would serve the parties or the public
interest and the judge denied Dow Chemical's motion for a permanent injunction. Accordingly, the court's order permits us to sell the alleged infringing grades of our SURPASS resin to existing
customers in the United States.

We
have appealed the verdict to the Court of Appeals for the Federal Circuit in Washington, D.C. on several grounds. To stay execution (i.e., collection) of the money
judgment pending the outcome of the appeal, we posted a bond in the amount of the jury verdict plus pre-judgment interest as awarded by the court, post-judgment interest at a
prescribed statutory rate and costs as determined by the court. The bond is secured with cash collateral in the amount of $85 million.

In
December 2010, Dow Chemical filed a Statement of Claim against NOVA Chemicals in the Federal Court in Canada alleging that certain grades of our SURPASS polyethylene film
resins infringe a Dow Chemical Canadian patent that is related to the U.S. patents subject to the suit in the United States.

Although
we believe that we do not infringe Dow Chemical's patents and have meritorious defenses and intend to vigorously defend these patent suits, we can give no assurance that we will
be able to achieve a satisfactory outcome.

We
are involved in other litigation from time to time in the ordinary course of business. Among these items is a claim by Dow Chemical Canada ULC and its European affiliate
concerning our jointly owned third ethylene plant at our Joffre facility ("E3"). The amount of the claim was initially $120 million, but, on August 12, 2010, the court granted an
application to amend the amended statement of claim to update the damage claims and add new claims. Accordingly, the amount of the claim is now approximately $300 million. We initially
counterclaimed in the same action for approximately $300 million. We have filed our amended
statement of defense and counterclaim. The amount of our counterclaim is now approximately $700 million. This litigation is in its early stages and no amount has been accrued as of
December 31, 2010 with respect to this claim.

Because
of the inherent uncertainties of litigation, there can be no assurance on the outcome of any litigation. Any litigation or claims brought by or against us, whether with or
without merit, or whether successful or not, could be time consuming, result in substantial costs, require significant amounts of management time, and result in the diversion of significant
operational resources, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

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We are exposed to costs arising from environmental compliance, cleanup and adverse litigation, which may have a substantial adverse effect on our business, financial
condition, operating results and cash flow.

We are subject to extensive foreign, federal, provincial, state and local environmental laws and regulations concerning the
manufacturing, processing and importation of certain chemical substances, air emissions, water discharges and the generation, handling, storage, transportation, treatment, disposal and cleanup of
regulated substances. Our operations involve the risk of accidental discharges or releases of hazardous materials, personal injury, property and environmental damage. Furthermore, applicable
environmental laws and regulations are complex, change frequently and provide for substantial fines, regulatory penalties and criminal sanctions in the event of non-compliance. We cannot
provide assurance that we will not incur substantial costs or liabilities as a result of such occurrences or the enforcement of environmental laws.

From
time to time, we have entered into consent agreements or been subject to administrative orders for pollution abatement or remedial action. Under some environmental laws, we may be
subject to strict and under certain circumstances, joint and several liability for the costs of environmental contamination on or from our properties, and at off-site locations where we
disposed of or arranged for disposal or treatment of hazardous substances, and may also incur liability for related damages to natural resources. We have been named as a potentially responsible party
under the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or its state equivalents, at several third-party sites. We have a provision in our financial
statements to cover the estimated costs of remediation of discontinued sites and future environmental liabilities. Nevertheless, we cannot provide assurance that we will not incur substantial costs
and liabilities resulting from future events or unknown circumstances, which exceed our reserves or will be material.

We could incur significant costs to comply with greenhouse gas emission reduction requirements, which in turn could reduce our operating results and cash flow.

In 2002, Canada ratified the Kyoto Protocol, and agreed to regulate reductions in air emissions that contribute to climate change. In
2007, the Canadian federal government released its plan for reducing industrial air emissions, including an ultimate goal of reducing greenhouse gas ("GHG") emissions by 20% from the 2006 levels by
2020 and by 60 to 70% by 2050. In December 2010, Canada signed the Copenhagen Accord committing to reduce national GHG emissions by 17% from 2005 levels by 2020.

The
Canadian federal government, recognizing the recent global economic recession and Canada's approximate 2% contribution of global GHGs, has indicated an intent to balance national
environmental and energy policies between economic renewal and sustainable development. In addition, the Canadian federal government has stated that GHG reduction objectives require a systemic
approach of regulating emissions sector by sector and, where appropriate, alignment with the United States. To date, the Canadian federal government emphasis remains on GHG emissions associated
with transportation and coal fired electricity generation. We anticipate legally binding federal GHG emission reduction requirements to be imposed on our operations in Canada, although the scope and
timing for such requirements and the related impacts are uncertain.

Many
Canadian provinces are also considering or implementing GHG emissions reduction legislation. In Alberta, theSpecified Gas Emitters
Regulationunder theClimate Change and Emissions Management Actcame into effect in 2007, imposing annual reductions
requirements on facilities that emit over 100,000 tons of GHGs per year. In compliance with the regulations, we submitted the GHG emissions baseline data and the 2007 and 2008 emissions data
and have satisfied the requirements associated with reducing GHG emissions intensity by 12% from the 2003-2005 baseline. Recently, the Ontario legislature passed Bill 185, the Environmental Protection Amendment Act (Greenhouse
Gas Emissions Trading), providing the foundation for the province's cap and trade program to reduce
GHG emissions, which is expected to come into force in 2012. Ontario has also indicated its intent to align such a program with the other provinces and states participating in the Western Climate
Initiative. On December 1, 2009, Ontario filed its Greenhouse Gas Emissions Reporting Regulation under the Environmental Protection Act. This regulation came into force on January 1,
2010 and provides for the annual reporting of GHGs by prescribed facilities that emit 25,000 tons of carbon dioxide equivalent or more per year.

Although
the United States has not ratified the Kyoto Protocol, it is a signatory to the Copenhagen Accord. Additionally, a number of federal laws and regulations related to GHG
emissions are being considered by the

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U.S. Environmental
Protection Agency ("EPA") and in Congress. Various state and regional laws, regulations and initiatives have been enacted or are being considered, including the Regional
Greenhouse Gas Initiative, the Midwestern Regional Greenhouse Gas Reduction Accord, and the Western Climate Initiative.

In
September 2009, the EPA issued the Final Mandatory Reporting of Greenhouse Gases Rule requiring facilities that emit more than 25,000 tons of GHGs per year to collect
data beginning January 1, 2010 with the first annual reports due March 31, 2011. In May 2010, the EPA released thePrevention of Significant Deterioration
and Title V Greenhouse Gas Tailoring Ruleimposing requirements upon new and modified major stationary sources emitting more than 75,000 tons of GHGs per year. This rule
requires new or modified sources beginning January 2, 2011 to obtain permits on the basis of acceptable GHG controls or mitigation, the standards for which are established within the current
Clean Air Act framework of pre-construction permitting and limitation of emissions using best available control technology or the equivalent. The rule allows for a phased in approach to
the development of such standards. The emissions from NOVA Chemicals' U.S.-based facilities are significantly below the threshold and are not subject to this rule.

We
continue to develop and implement a variety of initiatives to improve energy efficiency and reduce GHG emissions across our manufacturing operations. Due to the uncertainty of long
term regulatory requirements, we cannot provide assurance that we will not incur substantial costs to meet GHG emission reduction requirements or whether they will be material.

We are dependent upon certain key members of management.

Our success depends to a significant degree on the abilities and efforts of our senior management. Moreover, our success depends on our
ability to attract, retain and motivate qualified management, technical and sales personnel. These people are in high demand and often have competing employment opportunities. The labor market for
skilled employees in the plastics and chemicals industry is competitive, and we may lose key employees or be forced to increase compensation to retain these people. Employee turnover could
significantly increase our employee costs. The loss of key personnel, or the failure to attract qualified personnel, could have a material adverse effect on our business, financial condition or
results of operations.

We may be subject to losses that are not covered by insurance.

We carry comprehensive liability and property (including fire and extended perils) insurance on all of our facilities, with deductibles
and other policy specifications and insured limits customarily carried in the petrochemical industry for similar properties. In addition, some types of losses, such as losses resulting from war are
not insured. We determine coverage limits based on what we believe to be a reasonable maximum foreseeable loss scenario for our operations. In the event that an uninsured loss or a loss in excess of
insured limits occurs, we may not be reimbursed for the cost to replace capital invested in that property, nor insured for the anticipated future revenues derived from the manufacturing activities
conducted at that property, while we could remain obligated for any indebtedness or other financial obligations related to the property. Any such loss could adversely affect our business, results of
operations or financial condition.

We have made and may continue to make investments in entities that we do not control.

We have established joint ventures and made minority interest investments designed to increase our vertical integration, enhance
customer service and increase efficiencies in our marketing and distribution. Our principal joint venture is the E3 facility. There is a significant risk that, as a result of differing views
and priorities, there will be occasions when the joint venture parties do not agree on various matters and any such disagreements may result in delayed decisions, disputes or litigation (such as the
litigation concerning the E3 facility discussed earlier in these risk factors), which could harm our business.

Labor disputes could have an adverse effect on our business.

As of December 31, 2010, we had approximately 2,445 employees globally. Approximately 320, or 13%, of our North American
employees are represented by unions under two separate collective bargaining agreements that expire on March 15, 2012 and March 31, 2013. If we are unable to negotiate acceptable
contracts with these unions upon expiration of an existing contract or other employees were to become unionized, we could

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experience
work stoppages, a disruption in operations or higher labor costs, which could have an adverse effect on our business, financial condition, results of operations or cash flow.

Our business is dependent on its intellectual property. If our patents are declared invalid or our trade secrets become known to our competitors, our ability to compete may
be adversely affected.

Proprietary protection of our processes, apparatuses and other technology is important to our business. Consequently, we rely on
judicial enforcement for protection of our patents. While a presumption of validity exists with respect to patents issued to us in the United States and Canada, there can be no assurance that
any of our patents will not be challenged, invalidated or circumvented. Furthermore, if any pending patent application filed by us does not result in an issued patent, then the use of any such
intellectual property by our competitors could have an adverse effect on our businesses, financial condition, results of operations or cash flow. Additionally, our competitors or other third parties
may obtain patents that restrict or preclude our ability to produce or sell our products lawfully in a competitive manner, which could have an adverse effect on our business, financial condition,
results of operations or cash flow.

We
also rely upon unpatented proprietary know-how and continuing technological innovation and other trade secrets to develop and maintain our competitive position. While it
is our policy to enter into confidentiality agreements with our employees and third parties to protect our intellectual property, these confidentiality agreements may be breached and, consequently,
may not provide meaningful protection for our trade secrets or proprietary know-how, or adequate remedies may not be available in the event of an unauthorized use or disclosure of such
trade secrets and know-how. In addition, others could obtain knowledge of such trade secrets through independent development or other access by legal means. Although we do not regard any
single patent or trademark as being material to our operations as a whole, the failure of our patents or confidentiality agreements to protect our processes, apparatuses, technology, trade secrets or
proprietary know-how could have an adverse effect on our business, financial condition, results of operations or cash flow.

Litigation
may be necessary to enforce our intellectual property rights and protect our proprietary information, or to defend against claims by third parties alleging that we infringe
third party intellectual property rights. Any intellectual property litigation or claims against us could result in the loss or compromise of our intellectual property and proprietary rights, could
subject us to significant liabilities, require us to seek licenses on unfavorable terms, if available at all, prevent us from manufacturing or selling products and require us to redesign, relabel or,
in the case of trademark claims, rename our products, any of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Our future pension costs and required level of contributions could be unfavorably impacted by market volatility.

We currently maintain four defined benefit plans in North America covering various categories of employees and retirees, which
represent our major defined benefit retirement plans. Funding obligations are determined using actuarial valuations that are based on certain assumptions about the long-term operation of
the plans, including employee turnover, retirement rates, the performance of the financial markets and interest rates. If future trends differ from the assumptions, the amount we are obligated to
contribute to the plans may increase. If financial markets perform lower than what is assumed, we may have to make larger contributions to the plans than we would otherwise have to make and expenses
related to defined benefit obligations could increase. Also, if interest rates are lower than we assume, we may be required to make larger contributions than we would otherwise have to make.

In
2008 and early 2009, we experienced significant declines in the value of our pension plan assets due to the adverse conditions in the equity markets globally. In response to the
financial pressures and adverse market conditions placed on plan sponsors, U.S. federal and the Canadian provincial legislators enacted temporary funding relief measures. In 2010, our Canadian
plans were funded based on these temporary measures. For 2011, some of these measures will expire with the result that our funding obligations will increase significantly over 2010. In addition, if
economic conditions are difficult, we will be required to make even larger future contributions to our defined benefit plans. Reported results could be materially and adversely affected, and our cash
flow available for other uses may be significantly reduced.

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Our business may be adversely affected by fluctuations in currency exchange rates and other risks associated with international operations.

Although we report our results in U.S. dollars, we conduct a significant portion of our business outside the
United States, and we are subject to risks normally associated with international operations.

Our
financial results are impacted by transaction currency effects resulting from changes in currency exchange rates. Transaction currency effects occur when one of our subsidiaries
incurs costs or earns revenue in a currency different from its functional currency. This can impact our financial results in two ways:



Fluctuations
in exchange rates may also affect the relative competitive position of a particular manufacturing facility, as well as our ability to market our products successfully in
other markets.

Other
risks of international operations include trade barriers, tariffs, exchange controls, national and regional labor strikes, social and political risks, general economic risks,
required compliance with a variety of foreign laws, including tax laws, and the difficulty of enforcing agreements and collecting receivables through foreign legal systems.

Risks Relating to Our Indebtedness

We have a significant amount of debt, which could adversely affect our financial condition.

We have a significant amount of indebtedness. As of December 31, 2010, we had (a) total indebtedness of approximately
$1,541 million and (b) additional amounts of $695 million available for borrowing under our credit facilities (less $19 million utilized as of December 31, 2010),
subject to customary conditions. In addition, subject to the restrictions in our credit facilities and the indentures, we may incur significant additional indebtedness from time to time.

The
level of our indebtedness could have important consequences, including:



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If
new debt is added to current debt levels, the related risks described above would intensify. If financing is not available when required or is not available on acceptable terms, we
may be unable to grow our business, take advantage of business opportunities, respond to competitive pressures or refinance maturing debt, any of which could have a material adverse effect on our
operating results and financial condition.

We will require a significant amount of cash to service our indebtedness and our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness will depend on our ability to generate cash. Our ability to fund
working capital and planned capital expenditures will also depend on our ability to generate cash in the future. We have a significant amount of indebtedness, of which $10 million is maturing
in 2011 and an additional $400 million is maturing in January 2012. We cannot provide any assurance that:



Factors
beyond our control will affect our ability to make these payments and refinancings. These factors could include those discussed elsewhere in this annual report on
Form 20-F, including under this "Risk Factors" section and under "Disclosure Regarding Forward-Looking Information."

If
we cannot generate sufficient cash from our operations to meet our debt service obligations, we may need to reduce or delay capital expenditures or curtail research and development
efforts. In addition, we may need to refinance our debt, obtain additional financing or sell assets, which we may not be able to do on commercially reasonable terms, if at all. We cannot provide any
assurance that our business will generate sufficient cash flow, or that we will be able to obtain funding, sufficient to satisfy our debt service obligations.

Our debt agreements restrict our ability to take certain actions.

The agreements governing our indebtedness impose significant operating and financial restrictions on us and our subsidiaries. These
restrictions may restrict our ability to pursue our business strategies, such as acquisitions or joint ventures, or engage in other favorable business activities.



Our indentures governing our public debt contain various covenants that limit our ability to engage in certain transactions, including
the ability to create liens or engage in sale and leaseback transactions and could reduce the available capacity under our revolving credit facilities.



We currently have four revolving credit facilities aggregating $695 million of borrowing capacity (one of the facilities
in the amount of $100 million will expire on March 20, 2011 and a $30 million tranche under another of the facilities will expire on September 20, 2011). As of
December 31, 2010, $19 million of the available $695 million borrowing capacity was utilized. While each of the credit facilities contains typical affirmative and negative
covenants, which are substantially the same, our senior secured revolving credit facility, as well as other financing agreements, contain financial covenants, which
require quarterly compliance. Our ability to meet the financial covenants may be impacted by events beyond our control, and we may not be able to satisfy these covenants in the future.

Our
credit facilities also contain restrictive covenants that limit our ability, and the ability of our restricted subsidiaries to, among other things: incur additional liens; sell
certain assets; make distributions on or repurchase equity; incur additional debt; enter into hedging agreements; enter into operating leases; engage in reorganizations or mergers; and change the
character of our business.

A
breach of any of these provisions could permit the lenders to declare all amounts outstanding under the credit facilities to be immediately due and payable and to terminate all
commitments to extend further credit. If we were unable to repay those amounts, the lenders under our senior secured revolving credit facility could proceed against the collateral granted to them to
secure that debt.

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A downgrade in the ratings of our debt securities could result in increased interest and other financial expenses related to future borrowings and could restrict our access
to additional capital or trade credit.

Standard & Poor's Corporation, Moody's Investor Service, Inc., Dominion Bond Rating Service Limited ("DBRS") and Fitch
Ratings Ltd. maintain credit ratings for our debt securities. Except for the DBRS rating, each of these ratings is currently below investment grade. Any decision by these or other ratings
agencies to downgrade such ratings in the future could result in increased interest and other financial expenses relating to our future borrowings and could restrict our ability to obtain additional
financing on satisfactory terms, if at all. In addition, any downgrade could restrict our access to, and negatively impact the terms of, trade credit extended by our suppliers of raw materials.

We are controlled by International Petroleum Investment Company ("IPIC"), whose interests may not be aligned with the interests of our debt holders.

A holding company controlled by IPIC currently owns all of our equity and, therefore, IPIC has the power to control our affairs and
policies. It also controls the election of directors, the appointment of management, the entering into mergers, sales of substantially all of our assets and other extraordinary transactions. The
directors have authority, subject to the terms of our debt, to issue additional stock, declare dividends and make other decisions.

The
interests of IPIC and its affiliates could conflict with the interests of the holders of our debt. For example, if we encounter financial difficulties or are unable to pay our debts
as they mature, the interests of IPIC, as equity holders, might conflict with the interests of our debt holders. IPIC and its affiliates may also have an interest in pursuing acquisitions,
divestitures, financings or other transactions (including integrating us with another IPIC-controlled petrochemical company) that, in their judgment, could enhance their equity
investments, even though such transactions might involve risks. Additionally, IPIC and its affiliates are in the business of making investments in companies, and may from time to time in the future
acquire interests in businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours.

Item 4.    Information on the Company

4.A. HISTORY AND DEVELOPMENT OF THE COMPANY

NOVA Chemicals Corporation

NOVA Chemicals' predecessor, NOVA Corporation of Alberta, was incorporated in 1954 by Special Act of the Legislative Assembly of the
Province of Alberta. On May 10, 1994, NOVA Corporation of Alberta filed articles of arrangement under the Business Corporations Act of Alberta (the "Act") to complete a reorganization
pursuant to which it became a wholly owned subsidiary of NOVA
Corporation ("NOVA"), changed its name to NOVA Gas Transmission Ltd. and its common shareholders became the common shareholders of NOVA. At the same time, NOVA also became the parent
corporation of Novacor Chemicals Ltd. and NOVA Gas International Ltd. Novacor Chemicals Ltd.'s name was changed to NOVA Chemicals Ltd. in March 1996.

On
July 2, 1998, NOVA and TransCanada PipeLines Limited ("TransCanada") completed a merger of equals by way of a plan of arrangement (the "TransCanada Arrangement") under
the Act. Under the terms of the TransCanada Arrangement, shareholders of NOVA exchanged each NOVA common share for 0.52 of a TransCanada common share. As part of the TransCanada Arrangement,
TransCanada distributed to its common shareholders, including all of the former common shareholders of NOVA, all of the common shares of NOVA on the basis of 0.2 of a NOVA common share for each
TransCanada common share. At the time of the distribution of NOVA common shares, the only material asset of NOVA was all of the common shares of NOVA Chemicals Ltd.

As
a result of the TransCanada Arrangement, NOVA continued to conduct the commodity plastics and chemical businesses through NOVA Chemicals Ltd., and TransCanada began to conduct
the energy services businesses formerly carried on by NOVA, through NOVA's former subsidiaries, NOVA Gas Transmission Ltd. and NOVA Gas International Ltd.

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On
December 31, 1998, NOVA Chemicals Ltd. changed its name to NOVA Chemicals Corporation. Effective January 1, 1999, NOVA Chemicals Corporation amalgamated with NOVA
under the Act and the resulting corporation adopted the name NOVA Chemicals Corporation.

On
April 14, 2004, NOVA Chemicals Corporation was continued under the Canada Business Corporations Act.

On
July 6, 2009, International Petroleum Investment Company, which is wholly owned by the government of the Emirate of Abu Dhabi, completed the acquisition of NOVA Chemicals
Corporation by way of a plan of arrangement (the "Arrangement") under the Canada Business Corporations Act. Pursuant to the Arrangement, a wholly owned subsidiary of IPIC, acquired all of our
issued and outstanding common shares. On that same day, NOVA Chemicals was continued under theBusiness Corporations Act(New Brunswick), and our
common shares were delisted from the New York Stock Exchange and the Toronto Stock Exchange.

Development of NOVA Chemicals Corporation



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Developments since January 1, 2010



Events Subsequent to December 31, 2010



For
a description, including the amount invested, of our principal capital expenditures since the beginning of our last three fiscal years, see the "Liquidity and Capital Resources"
section in our "Management Discussion and Analysis of Financial Condition and Results of Operation" included in this annual report under "Item 5Operating and Financial
Review and Prospects."

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4.B. BUSINESS OVERVIEW

General

Our principal business is the production and marketing of plastics and chemicals. We operate an Olefins/Polyolefins business unit that
produces and markets ethylene, polyethylene, higher-value polyethylene manufactured using our Advanced SCLAIRTECH technology, and a variety of
chemical and energy products (commonly known as co-products). We also operate a Performance Styrenics business that produces and markets EPS as well as higher value styrenic polymers.

Our
polyethylene and styrenic polymer resins are used in a wide range of applications including rigid and flexible packaging, containers, plastic bags, plastic pipe, consumer
electronics, building and construction materials, housewares and other industrial and consumer goods.

Ethylene
is a basic chemical used to manufacture a wide variety of polymers and other chemical products. Ethylene production in excess of our internal consumption requirements is sold to
third parties. In addition, we engage in swap transactions with other producers of ethylene where we have limited or no ethylene production capability.

We
produce polyethylene primarily from our internal ethylene production. We produce the following varieties of polyethylene: high-density polyethylene ("HDPE"),
low-density polyethylene ("LDPE") and linear low-density polyethylene ("LLDPE"). In addition, we develop and market higher value LLDPE and HDPE manufactured using our Advanced
SCLAIRTECH technology, including SURPASS® and some SCLAIR® polyethylene resins.

Styrene
monomer is a basic chemical used to manufacture a wide variety of polymers and other chemical products. We have a minority interest in LyondellBasell Industries'
("LyondellBasell") propylene oxide/styrene monomer ("PO/SM") facility in Channelview, Texas and an associated long-term styrene monomer processing agreement to acquire styrene monomer that
provides sufficient styrene monomer supply for the operation of our Performance Styrenics business.

Our
Performance Styrenics segment produces EPS and ARCEL® resin. In addition, this segment has interests in EPS-based downstream business and ventures for the
building and construction industry, which are collectively known as SYNTHEON. During 2010, our Board of Directors approved the sale of SYNTHEON, subject to certain conditions.

In
addition to our principal business of producing and marketing plastics and chemicals, we have a licensing business. For example, we offer for license our proprietary polyethylene
SCLAIRTECH process technology and catalyst technology. We also license our Performance Styrenics business's technology such as its in-mold labeled cup and container technology and cup and
container bead technology.

On
October 31, 2010, we entered into an agreement with an affiliate of INEOS providing for the sale of our 50% interest in the INEOS NOVA joint venture. The negotiated sale price
was subject to several deductions. Some of these deductions were fixed as of October 31, 2010, such as our 50% share of the joint venture's net indebtedness and some were estimated on the
closing date, such as indemnified and unindemnified pension liabilities. The anticipated windup of certain indemnified pension liabilities resulted in us increasing the estimated amount of our pension
liabilities by $11 million in December 2010.

The
sale closed on February 28, 2011. At closing, we received approximately €47 million. This amount does not represent our final net proceeds from the
sale, because pension liabilities were estimated as of closing and the final determination of these liabilities is not expected to be completed until the second quarter of 2011, at which time the
proceeds will be adjusted. While we cannot determine the final net proceeds of the sale as of the date of this annual report, we do not expect to record a material gain or loss related to this
transaction. Associated results of operations, financial position and cash flows are separately reported as discontinued operations and assets and liabilities held for sale for all periods presented.
See Note 3 in the Annual Audited Consolidated Financial Statements for further disclosure of the discontinued operations.

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Table of Contents

Depending
on the context, "INEOS NOVA" in this annual report means our former joint venture with INEOS or the current standalone business that is 100% owned by INEOS.

(millions of U.S. dollars)

2010 Revenue from
continuing operations

2010 Operating income from
continuing operationsOlefins/Polyolefins

$
4,308

$
788Performance Styrenics


304


2


Properties and Production Facilities

Our products are manufactured at seven sites in North America. All production facilities are owned by us (except LyondellBasell's PO/SM
facility in Channelview, Texas, in which we have a minority interest, and the E3 manufacturing plant at Joffre, Alberta, in respect of which we and Dow each own 50%). With the exception of the
Channelview facility, we own the land on which our production facilities are located.

In
addition to our production facilities, we lease or own office space in numerous locations, mostly in North America. Our head office is located in Calgary, Alberta. Our
United States commercial center is located in Moon Township, Pennsylvania.

The
following chart and tables show our plastics and chemical product flow and production facilities.

NOVA Chemicals Product Flow Chart

GRAPHIC

---

Notes:

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Table of Contents

Facility Profile (Olefins/Polyolefins)

Rated CapacitySite

Feedstocks

Main Products

(mmlbs/year)

(kilotonnes/year)1.Joffre, Alberta

Ethane/Propane


Ethylene (E1)


1,600


730Ethane/Propane


Ethylene (E2)


1,800


820Ethane


Ethylene (E3)(1)


1,400


640Co-products(2)


830


380Ethylene


LLDPE (PE1)


1,480


670LLDPE & HDPE (PE2)


950


4302.Corunna, Ontario

Crude Oil, Condensates,


Ethylene(3)


1,800


820Ethane, Butane, Propane,


Co-products(3)


4,700


2,130Naphtha, Gas Oils3.St. Clair River,Corunna, Ontario

Ethylene


HDPE


450


2054.Mooretown, Ontario

Ethylene


HDPE


465


210LDPE(4)


375


170TOTAL ETHYLENE PRODUCTION CAPACITY (Design Production)


6,600


2,990
*TOTAL POLYETHYLENE PRODUCTION CAPACITY


3,720


1,685
*


Notes: (1)The
annual design production capacity of E3 totals 2,800 million pounds and is divided between Dow and us. Our share of the production
capacity is 50%.(2)Production
capacity is variable and depends on the feedstock used.(3)Ethylene
design capacity is 1,800 million pounds per year and propylene design capacity is 900 million pounds per year, resulting in
4,700 million pounds per year of co-product capacity. In both cases, capacity is dependent on feedstock mix.(4)The
Mooretown, Ontario, LDPE line underwent a modernization and expansion during 2010. The rated capacity reflects the majority of the new capacity, and we
expect to increase rates toward the design capacity of 395 million pounds per year through 2011.*Difference
between total and individual plant values attributable to rounding.


Facility Profile (Performance Styrenics)

Rated CapacitySite

Feedstocks

Main Products

(mmlbs/year)

(kilotonnes/year)Styrene Monomer1.Channelview, Texas(1)

Benzene, Ethylene

Styrene Monomer


400


180TOTAL STYRENE MONOMER PRODUCTION CAPACITY


400


180Styrenic Polymers1.Monaca, Pennsylvania

Styrene Monomer

ARCEL and EPS


250


1152.Painesville, Ohio

Styrene Monomer

EPS


100


45TOTAL STYRENIC POLYMERS PRODUCTION CAPACITY


350


160


Note: (1)This
represents a minority interest in the LyondellBasell Channelview, Texas PO/SM facility and the long-term styrene monomer processing
agreement associated with that interest.


Our Business Segments

OLEFINS/POLYOLEFINS

Our Olefins/Polyolefins business unit produces ethylene and polyethylene. As part of the ethylene production process, and in the
preparation of feedstocks for this process, we also produce a number of co-products.

Our
Joffre, Alberta, site is integrated with the AEGS pipeline system, which connects large-scale ethane extraction plants and ethane storage facilities to our ethylene plants. The
Joffre Feedstock Pipeline ("JFP") is

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also
integrated with the Joffre site and connects natural gas liquids production and storage facilities in Fort Saskatchewan, Alberta to the Joffre site. AltaGas completed construction of the JFP in
early 2005, and we operate and are the sole shipper on the JFP. Ethylene produced at Joffre is fed directly to onsite polyethylene production at Joffre, as well as to customers at Joffre, Prentiss,
Edmonton and Scotford, Alberta, and to storage and customers at Fort Saskatchewan, Alberta through the ethylene delivery system that is integrated with our Joffre site.

Our
Corunna, Ontario, ethylene facility is connected to multiple pipeline and rail systems that, in conjunction with the facility's flexible feedstock capabilities, enable us to optimize
our feedstock slate. The Corunna facility provides ethylene by pipeline to our polyethylene production facilities in Mooretown, Ontario, and our St. Clair River site in Corunna, Ontario. The
Corunna facility also provides ethylene to customers in the Sarnia, Ontario area.

For
financial reporting purposes, we have three reportable segments as part of our Olefins/Polyolefins business unit: Joffre Olefins, Corunna Olefins and Polyethylene.



We have annual production capacity of approximately 6,600 million pounds of ethylene (excluding Dow's share of E3). Ethylene is
a commodity chemical that we produce through thermal cracking, or pyrolysis, of various feedstocks, a process that uses high temperatures to break down the carbon chains. The feedstocks used to
produce ethylene are natural gas liquids ("NGLs"), including ethane, propane and butane, and crude oil derived feedstocks, including naphtha and gas oils. The most common feedstocks used by us are
ethane and, to a lesser extent other NGLs, crude oil and naphtha. Ethylene is used in the manufacture of polyethylene, styrene monomer, styrenic polymers and polyvinyl chloride, as well as chemical
intermediates such as ethylene oxide, ethylene glycol, ethylene dichloride and vinyl acetate.



Co-products are produced in the ethylene manufacturing process and can be grouped into two categories: chemical
co-products and energy co-products. Chemical co-products include propylene, benzene, and butadienebuilding blocks that are used to make items such as
tires, carpet and clothing fibers, or various household goods. Energy co-products include gasoline additives and fuel oil. The profitability of co-products depends on energy
prices and the supply and demand balance for each co-product. Co-product production depends on the feedstock mix. Total co-product production capacity is
approximately 5,500 million pounds per year. The majority of the co-products produced at our Joffre, Alberta, and Corunna, Ontario, facilities are sold to third parties in markets
in Alberta, Ontario and the U.S. Gulf Coast. However, some co-products are consumed internally by us either as fuel or for the production of other products.

We
produce ethylene and co-products at two locations, Joffre, Alberta, and Corunna, Ontario. At Joffre, Alberta, we have three production units, E1, E2, and E3. In Corunna,
Ontario, we have one production unit.



We have annual production capacity of approximately 3.7 billion pounds of polyethylene. Polyethylene is produced through the
polymerization of ethylene. We produce polyethylene from ethylene supplied from our Joffre, Alberta, and Corunna, Ontario, facilities at three locations in Canada: Joffre, Alberta; St. Clair
River, Corunna, Ontario; and Mooretown, Ontario.

We
have two polyethylene plants located at Joffre, Alberta, PE1 and PE2. PE1 has annual production capacity of approximately 1.48 billion pounds and produces LLDPE from
ethylene supplied from E1, E2 and E3. PE1 currently utilizes the NOVACAT® family of catalysts that was developed by us and our catalyst development partner, INEOS, as well as our
proprietary gas-phase process technology originally licensed from Union Carbide Corporation ("UCC"). The licenses from UCC are fully paid and the obligations of confidence and
non-use pursuant to these licenses have expired. Accordingly, we pay no royalties for the use of this technology and independently sustain and develop this technology as used in our
facilities. PE2 has annual production capacity

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of
approximately 950 million pounds. PE2 uses Advanced SCLAIRTECH technology to produce our SURPASS and some SCLAIR polyethylene resins from ethylene supplied from E1, E2 and E3.

We
have a polyethylene plant located at the St. Clair River site in Corunna, Ontario, which has annual production capacity of approximately 450 million pounds. The
St. Clair plant utilizes our proprietary SCLAIRTECH technology and typically manufactures HDPE at this plant, but can also manufacture LLDPE. Ethylene feedstock is supplied from the Corunna,
Ontario, olefins facility.

We
have a polyethylene site located near Mooretown, Ontario, that has an annual production capacity of approximately 840 million pounds. Ethylene feedstock is supplied from our
Corunna, Ontario, olefins facility. One of the lines at the site currently uses our proprietary gas-phase process technology originally licensed from UCC to produce HDPE and the other line
at the site currently uses our proprietary high pressure process technology, also originally licensed from UCC, to produce LDPE. These licenses from UCC are fully paid and the obligations to UCC of
confidence and non-use pursuant to these licenses have expired. In 2010, we completed a modernization and expansion project on our LDPE line. During 2011, we expect to utilize the
projected additional 100 million pounds of annual production capacity, as well as produce an upgraded product slate, with improved reliability and lower production costs. Through 2011, we
expect to increase rates toward the design capacity of 395 million pounds.



After acquiring SCLAIRTECH technology in 1994, we further developed the technology and, in December 1996, announced that we had
developed Advanced SCLAIRTECH technology. Advanced SCLAIRTECH solution-phase technology yields higher value polyethylene resins that we believe provide several advantages over standard polyethylene
resins, such as clarity and toughness in end-use products manufactured by our customers.

Advanced
SCLAIRTECH technology used at PE2 includes two proprietary catalyst systems. The Ziegler-Natta ("Z-N") catalyst introduced in 2001 is used to make our line of
SCLAIR polyethylene products. These are octene-based polyethylene grades used primarily for film applications. In 2003, we commercialized a single-site catalyst using Advanced SCLAIRTECH
technology and introduced a series of new polyethylene products under the trademark SURPASS. SURPASS resins have been commercialized for film, rotational molding and thin wall injection molding
applications.



We have three ethylene production facilities at Joffre, Alberta: E1, E2 and E3 (E3 is 50% owned by Dow). These three plants have
an annual production capacity of approximately 1.6, 1.8 and 2.8 billion pounds of ethylene (including Dow's share of E3 production capacity), respectively, for a total annual combined
capacity of 6.2 billion pounds. The combined co-product production capacity of E1, E2 and E3 is approximately 830 million pounds per year, depending on the
feedstock used.

Approximately
half of the ethylene production capacity at these facilities (excluding Dow's share of E3 production capacity) is used internally to support our Joffre polyethylene
production and the rest is sold to third parties. Third party sales are facilitated through a variety of medium to long-term contracts. These contracts typically contain pricing mechanisms
that include a cost recovery component and a market-based component.

All
of the ethylene plants at the Joffre site use ethane as their primary feedstock. Ethane is typically supplied under contracts with the owners of natural gas liquids extraction and
fractionation plants located in Alberta. Most of these supply agreements have 5 to 10 years remaining on their terms with the possibility of renewal by the parties. The price we pay under these
agreements typically consists of two components: (1) the cost to replace the energy content of the ethane extracted from the gas stream (this component varies with the price of natural gas; we
may pay the owner for replacement natural gas or purchase or swap natural gas to physically replace the energy content of the ethane) and (2) a fee to cover an agreed upon portion of the costs
of plant operation and return on invested capital (this component may be fixed or vary with production). We

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supplement
our ethane supplies through spot purchases. Virtually all of the ethane requirements for the Joffre site are transported via AEGS. Under a transportation agreement, we have the right to
ship ethane on AEGS. We have also entered into an operating agreement with Veresen, the owner of AEGS, under which we are responsible for the physical operation of AEGS, while Veresen has
responsibility for all commercial aspects of AEGS operations.

We
have the flexibility to use propane in addition to ethane for a portion of the Joffre feedstock requirements. Propane can be transported to Joffre by the JFP owned by AltaGas.

We
continuously look for opportunities to expand our feedstock flexibility and supply to enhance our operational flexibility and support longer-term growth opportunities. In
July 2007, the Alberta government released details of its "incremental ethane extraction policy" that provides incentives for value-added production and use of ethane in the province. We plan
to take advantage of this policy to increase the utilization of our existing ethylene crackers at our Joffre manufacturing facility.

In
2011, we expect the export flows of natural gas across the Alberta border to be similar to the lower than historical flows experienced in 2010 due primarily to low selling prices for
natural gas in North America. This will likely lead to less than historical volumes of natural gas flowing through the Straddle Plants and therefore less ethane will be available as feedstock for our
ethylene plants at Joffre. We continue work with suppliers, the Alberta government and pipeline companies to source additional supply for our feedstock needs. These sources could include, among
others: additional supplies of ethane recovered from natural gas production that is associated with rapidly increasing crude oil production in North Dakota; the streaming of natural gas with low
ethane content for industrial consumption in Alberta, with the expected result that high ethane content natural gas will flow through the Straddle Plants; natural gas liquids from large new gas finds
in Alberta, British Columbia and northern sources; ethane from off-gas produced at Alberta's oilsands; and ethane from the Alliance pipeline which is not currently extracted in Alberta.
There can be no assurances on the timing, volume or ethane content from any of these sources.

An
example of a new source of ethane supply that will be extracted from natural gas associated with oil production that will begin to reduce our reliance on natural gas that flows across
the Alberta border is our agreements for ethane supply from the Williston basin in North Dakota, United States. On January 31, 2011, we executed definitive agreements with Hess
Corporation ("Hess") and affiliates of Mistral Energy Inc. ("Mistral") to purchase ethane production from Hess' Tioga Gas Plant in North Dakota and transport this ethane via a pipeline to be
constructed, owned and operated by Mistral to Alberta, Canada. We have the right to purchase 100% of the ethane produced at the Tioga Gas Plant under a long-term
arrangement. The pipeline, called the Vantage Pipeline, is expected to start up by the end of 2012, subject to receipt of customary regulatory and other approvals.

In
addition to our ethane supply arrangements from the Williston basin, on March 1, 2011, we and a subsidiary of AltaGas entered into definitive agreements for
long-term, cost-competitive ethane and other natural gas liquids supply from AltaGas' Harmattan-Elkton Gas Plant in Alberta. The ethane extracted from the natural gas will be
delivered through the existing connection to the AEGS system. AltaGas' Harmattan Co-Stream Project (the "Harmattan Project") involves constructing and operating two new
large-diameter high pressure sweet natural gas pipelines and one small-diameter high vapor pressure product pipeline, as well as modifying existing equipment for processing gas at AltaGas' Harmattan
facility. AltaGas is responsible for all capital expenditures and operating costs of the Harmattan Project, which it will recover from us through fees under normal operating conditions. The Harmattan
Project will allow Harmattan to make use of a minimum of 250 million cubic feet per day of existing processing and extraction capacity at its Harmattan facility by processing natural gas
sourced from the TCPL Alberta system subject to the priority of raw gas processing. The Harmattan Project has received regulatory approval from the Alberta Energy and Resources Conservation Board, but
the decision has been appealed. The appeal is expected to be resolved in 2011 and, assuming the regulatory approval is affirmed, we expect to receive ethane and other natural gas liquids starting in
the first quarter of 2012.

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As
part of the ethylene production process at Joffre, we produce approximately 830 million pounds of co-products per year, depending on the feedstock used.
Co-products, other than hydrogen and carbon dioxide, are shipped by railcar to markets in Alberta, Ontario and the U.S. Gulf Coast.



Our Corunna, Ontario, olefins facility, located near Sarnia, Ontario, has an annual production capacity of approximately
1.8 billion pounds of ethylene and 900 million pounds of propylene. In both cases, capacity is dependent on feedstock mix. The Corunna olefins facility has the flexibility to process a
wide range of hydrocarbon feedstocks including crude oil, condensates, ethane, propane, butane, naphtha and gas oils to produce ethylene and co-products for use by our downstream
operations and for sale to third parties. The feedstock chosen depends on market conditions and is determined by using a linear program that calculates the optimal feedstock mix to produce the most
profitable mix of products. The majority of ethylene production from the Corunna olefins facility is used internally by us to produce polyethylene.

The
blend of feedstocks processed in the Corunna, Ontario, olefins facility determines the range of co-products obtained, with heavier feedstocks such as naphtha producing
more co-products. The facility has a production capacity of approximately 4.7 billion pounds of co-products per year.

Feedstocks
for the Corunna, Ontario, olefins facility are obtained from a wide variety of sources. Crude oil, condensate and naphtha are the main heavy feedstocks processed at the
facility. Propane and butane are the main natural gas liquid feedstocks processed at the Corunna facility. Our feedstocks are sourced from western Canadian and local producers, as well as
United States sources, principally by pipeline and rail.

In
February 2010, we and Buckeye announced the signing of a memorandum of understanding regarding the evaluation and possible development of a mixed natural gas liquids pipeline
from the Marcellus Basin in Pennsylvania to the refining and petrochemical complex in the Sarnia-Lambton area in Ontario, Canada. During the evaluation of this project, we determined that an ethane
only pipeline was a better alternative than a mixed natural gas liquids pipeline because we believe it would be a better fit for producers in the Marcellus Basin. We also determined that the
conversion of existing pipelines may offer a more cost effective solution and could accelerate the time line for consumption of Marcellus Basin ethane in Sarnia. During the first quarter of 2011, we
terminated the exclusive agreement with Buckeye to enable us to fully explore Buckeye's project as well as other alternatives.

We
hope to be able to secure long-term competitive petrochemical feedstock supply for our Sarnia operations via an ethane pipeline from the Marcellus Basin. As a first step,
on February 15, 2011, we signed a memorandum of understanding with Caiman for the supply of up to 20,000 barrels per day of ethane under a long-term arrangement from Caiman's
Fort Beeler Plant near Cameron, West Virginia, in the Marcellus Basin. In addition to finalizing a definitive purchase and sale agreement and customary reviews and approvals, the arrangement is
subject to NOVA Chemicals finalizing a pipeline transportation agreement to transport ethane from Fort Beeler into Ontario.



In June 2000, we, ATCO Power Canada Ltd. ("ATCO"), and an affiliate of EPCOR Utilities Inc. ("EPCOR") opened a
natural gas-fired cogeneration power plant with a nominal installed peak capacity of 480 megawatts at our production site at Joffre, Alberta. The power plant supplies the electrical
needs for the entire Joffre site, with excess power sold to Alberta's provincial power grid. The facility also provides steam to certain production facilities within the site. We jointly own the
cogeneration facility with ATCO and EPCOR, with ATCO serving as the facility operator. Our respective interest is 20% while ATCO and EPCOR each have a 40% interest.

PERFORMANCE STYRENICS

Our Performance Styrenics segment includes our EPS and ARCEL resin assets and our minority interest in LyondellBasell's PO/SM facility
in Channelview, Texas.

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The
long-term styrene monomer processing agreement associated with our interest in LyondellBasell's PO/SM facility provides sufficient styrene monomer supply for the
operation of our Performance Styrenics business.



We produce EPS at our Beaver Valley site at Monaca, Pennsylvania, and at our Painesville, Ohio, facility. EPS resins are used in
applications such as foam cups, noodle bowls, takeout and ice cream containers, insulation board and foam packaging. Our EPS cup and container resin is sold under the trademark DYLITE®.

Our
Beaver Valley site in Monaca, Pennsylvania, also produces ARCEL resins, which contain polystyrene and polyethylene. This expandable bead is sold into the protective packaging market.
In addition to producing ARCEL resins at our Beaver Valley site, ARCEL resin is also produced near Shanghai, China under an agreement with Ningbo Chang-Qiao Engineering
Plastics Co., Ltd., an affiliate of Loyal Chemical Industrial Corporation.



Our Performance Styrenics segment also includes our interests in EPS-based downstream business and ventures for the
building and construction industry, which are collectively known as SYNTHEON. During 2010, our Board of Directors approved the sale of SYNTHEON, subject to certain conditions. We anticipated that the
sale would be completed during 2010; however, as of the date of this annual report, negotiations are still in progress. Associated results of operations, financial position and cash flows of SYNTHEON
are separately reported in our Annual Audited
Consolidated Financial Statements contained in this annual report on Form 20-F as discontinued operations and assets and liabilities are reported as held for sale.

Distribution of Products

Our products are marketed primarily through our sales force, with support from established distributors, agents and traders. Canadian
products are sold into the United States primarily through our subsidiary, NOVA Chemicals Inc., for resale through distribution arrangements. Our subsidiary, NOVA Chemicals
(International) S.A., sells in Europe, Asia, Africa, Australia, and Latin America either directly or through distribution arrangements. Distribution agreements among our affiliates provide for
arm's length pricing.

The
following table summarizes, for the years ended December 31, 2010, 2009 and 2008, the geographic segments in which we sell our products and the percentage of sales from
continuing operations in each segment.

Percentage of Sales,
Year Ended Dec. 31,Geographic Segment

2010

2009

2008Canada


43%


40%


47%United States


52%


50%


44%Europe and Others


5%


10%


9%


No
significant portion of our business is dependent upon a single customer. Sales to Canadian and United States federal, state, provincial and local governmental bodies account
for less than 1% of annual sales.

As
of December 31, 2010, we lease or own approximately 5,725 rail hopper and tank cars for use in transportation and delivery of our polyethylene, co-products
and styrenic polymer products to customers in North America. Trucks are used for distributing products sold in bags and boxes and smaller loads of bulk products. Marine vessels are used to transport
bulk product and products sold in bags and boxes, mostly to Asia. We do not own or lease trucks or ships, but do pay transportation fees under short-term arrangements.

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Competition

We compete with other chemical producers on the basis of price, service, product quality, performance and deliverability. Among our
competitors are some of the world's largest
plastics and chemical companies and major integrated oil companies that are larger and have greater financial resources. Some also have their own raw material resources. The keys to competing
successfully in this industry are scale of facilities, low-cost feedstocks and differentiated product and process technologies.

Prices
for our standard chemical and polymer products are determined in part by market factors, such as supply/demand balances and feedstock costs that are beyond our control. We
generally sell these products at prevailing market prices but, on occasion, products are sold based on negotiated prices.

Cyclicality

Our historical operating results reflect the cyclical and volatile nature of the plastics and chemical businesses. The markets for
ethylene, polyethylene, co-products and styrenic polymers historically experience alternating periods of inadequate capacity and tight supply, causing prices and profit margins to
increase, followed by periods of oversupply resulting from capacity additions. Prolonged oversupply leads to declining capacity utilization rates, prices and profit margins. Because we derive nearly
all of our revenue from sales of these products, our operating results are more sensitive to this cyclicality than many of our competitors that have more diversified businesses. The primary driver of
cyclical upswings in the ethylene and styrenics sectors is the combination of limited supply growth and improved demand growth, which is driven by sustained gross domestic product and industrial
production growth.

Currently,
known ethylene and styrene monomer chain capacity additions in North America over the next several years are limited. On a global basis, we expect announced ethylene and
polyethylene capacity additions in the Middle East and Asia to continue to start up during 2011 and beyond. The bulk of expected new global ethylene and polyethylene supply should be on line by the
end of 2011. Starting in 2012, demand growth may again outpace supply growth, beginning a period of increasing capacity utilization.

Cyclicality
is exacerbated by volatility in feedstock prices. In response to higher feedstock prices and other market factors, plastics and chemical producers will generally announce
price increases. However, the implementation of announced price increases depends on many factors, including market conditions, the supply/demand balance for a particular product and feedstock costs
that may be beyond our control.

Seasonality

We sell primarily into non-durable markets such as flexible packaging, containers, plastic bags, and housewares. As a
result, the effect of seasonality is minimal.

Intellectual Property



We own directly, or license from affiliates, a large number of patents in Canada, the United States and other countries. We also
own or license a number of trademarks, which are used to identify various chemical and plastic products. While these patents and trademarks constitute valuable assets, we do not regard any single
patent or trademark as being material to our operations as a whole.

We
actively support all of our technologies to maintain our competitive position, including technologies developed by us and those licensed from third parties. Some of the technologies
licensed from third parties are subject to certain restrictions on use.

We
were initially a licensee of the technology used in our manufacturing operations. However, over time, we have acquired a variety of business units with associated technology assets in
areas including process and catalyst technology, as well as polymer technologies. In addition, since 1994 we have expanded our research and development activities. The result is a technology portfolio
with approximately 600 patents, margin-enhancing

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polyethylene
process technologies such as Advanced SCLAIRTECH technology and proprietary single-site catalyst positions.

We
own two key technologies for the production of polyethylene-SCLAIRTECH technology and Advanced SCLAIRTECH technology. In addition to these technologies, we conduct research and
development on other polyethylene technologies including gas-phase and high-pressure technology.

We
acquired our proprietary SCLAIRTECH technology and a global SCLAIRTECH technology licensing business from DuPont Canada Inc. in 1994. Our St. Clair River site utilizes
SCLAIRTECH technology to produce SCLAIR HDPE resins. In addition, our SCLAIRTECH technology is currently licensed for use at 12 plants worldwide.

In
2001, we began commercial operation of our new, proprietary Advanced SCLAIRTECH technology for the production of polyethylene. The first step in the introduction of this technology
was to utilize a proprietary Z-N catalyst to manufacture new polyethylene products. In 2002, a line of new, Z-N catalyzed, octene-based SCLAIR resins was launched intended for
higher-value polyethylene film applications.

In
April 2003, we announced the commercial introduction of our first polyethylene resins produced with Advanced SCLAIRTECH technology and utilizing our new proprietary
single-site catalyst. We manufacture and sell these polyethylene resins under the trademark SURPASS. SURPASS resins have been commercialized for film, rotational molding and thin wall
injection molding applications.

We
continue to focus on developing and commercializing higher value polyethylene manufactured using Advanced SCLAIRTECH technology, including those used in film, injection molding and
rotational molding.



We have developed three key proprietary families of catalyst technologies for polyethylene production. The first is a family of
proprietary single-site catalysts for Advanced SCLAIRTECH technology and other polymer technologies including gas-phase polyethylene. These single-site catalysts
impart unique properties and create products that compete with many metallocene-based polyethylene products. The second family of catalysts includes proprietary Z-N catalysts used for
SCLAIRTECH technology and Advanced SCLAIRTECH technology. Finally, the NOVACAT family of catalysts was developed by us and our catalyst development partner, INEOS, for use in gas-phase
polyethylene. NOVACAT catalysts provide enhanced throughput, product range and properties when compared to traditional Z-N catalysts in commercial gas-phase polyethylene
production facilities. Variants of the catalyst are available for the manufacture of conventional and higher value LLDPE and narrow molecular weight HDPE. The NOVACAT family of catalysts is currently
being run on several different gas-phase technologies by us and licensees.



We own or have the rights to a significant portfolio of styrenics technology, in the fields of both polymer production and styrenic
polymer applications.

Examples
of styrenic polymer technologies are ARCEL resins that are sold into the protective packaging market and DYLITE premium cup and container grade resins used for EPS cups.

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Research and Development

The following table summarizes, for the years ended December 31, 2010, 2009 and 2008, the amount we spent on research and
development activities and technical support from continuing operations, including activities to improve our existing products.

Year Ended Dec. 31,(millions of U.S. dollars)

2010

2009

2008Research and Development

$
30

$
30

$
39Technical Support

$
5

$
4

$
5


In
2009 and 2010, the amount that we spent on research and development was lower due to reductions that were primarily in styrenics.



Our Olefins/Polyolefins business unit conducts research at the NOVA Chemicals Research & Technology Center and the NOVA
Chemicals Technical Center, both located in Calgary, Alberta. Both centers are equipped with state of the art facilities for the development of new catalysts, olefin and polyolefin processes as well
as full scale testing of new products. The demonstration plant for Advanced SCLAIRTECH technology is located at the St. Clair River site in Corunna, Ontario, and is capable of testing new
catalysts, new polyethylene products and reactor processes.



NOVA Chemicals operates a technical center located at the Beaver Valley site in Monaca, Pennsylvania. The Performance Styrenics
business also operates a pilot plant at the Beaver Valley site.

Responsible Care® and Environmental Regulations

In 1985, we adopted the Responsible Care initiative as the basis for our overall safety, health, environment, security and risk
program. Responsible Care is a global chemical industry performance initiative created by the Chemistry Industry Association of Canada in 1985 and adopted by the American Chemistry Council in the
United States in 1988. Responsible Care is currently practiced by chemical industry associations in over 50 countries worldwide. Responsible Care requires participants to commit to the
responsible management of the total life cycle of their products.

Since
1990, we have utilized an internal environment, health and safety audit program to manage regulatory compliance at our operating facilities. Our Responsible Care Audit Program was
evaluated by a leading international environment, health and safety consulting firm in 1997, 2001, 2003 and 2007. Based on the 2007 assessment, the consulting firm concluded that the Responsible Care
Audit Program is a top quartile program that has all of the hallmarks of an industry leading program. Consistent with our standard procedures, another assessment will be conducted by an independent
third party consultant in 2011.

Like
other companies in our industry, we are subject to extensive environmental laws and regulations at all levels of government. These laws and regulations concern the manufacture,
processing and importation of certain chemical substances, discharges or releases to air, land or water and the generation, handling, storage, transportation, treatment, disposal and
clean-up of regulated materials.

Although
we believe that our businesses, operations and facilities are being operated in material compliance with applicable environmental laws and regulations, the operation of any
petrochemical facility and the distribution of chemical products involve the risks of accidental discharges of hazardous materials, personal injury and property and environmental damage.

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United States
and Canadian generally accepted accounting principles require companies to record liabilities associated with future plant decommissioning and site restoration costs
on both active and inactive plants at their fair value based on a discounted value of the expected costs to be paid when the assets are retired. On December 31, 2010, NOVA Chemicals had
$47 million of accumulated reserve for activities anticipated to be required for the decommissioning and site restoration of currently active plant sites.

We
review our accumulated reserves for decommissioning and site restoration quarterly to determine if adjustments are required. Because these plants may be in operation in excess of
40 years, significant uncertainty exists concerning the nature of the decommissioning and site restoration activities that may be required. Furthermore, significant judgment is involved in the
estimation process because the degree of
natural attenuation, evolution of new technologies and potential future land uses may mitigate future environmental liabilities and potential costs.

Our
environmental capital expenditures, including pollution abatement and remedial programs, were approximately $3 million in 2010 (2009: $2 million; 2008:
$4 million). Operating expenses relating to environmental protection were approximately $8 million in 2010 (2009: $7 million; 2008: $6 million). Total remedial expenditures
to dismantle and remediate discontinued facilities and sites totaled approximately $1 million in 2010 (2009: $1 million; 2008: $1 million).

Foreign Operations

Foreign operations are subject to various risks differing from those in Canada and the United States including political events,
tax changes, labor difficulties, price controls and other governmental actions. We actively address these risks as part of our risk management system.

We
sell our products worldwide. We have established our international commercial headquarters in Switzerland to coordinate commercial activities outside of North America and maintain
sales support operations globally.

Legal Proceedings

We are currently involved in patent litigation.

In
2005, the Dow Chemical Company ("Dow Chemical") filed a complaint against us in the Federal District Court in Delaware alleging that certain grades of our SURPASS polyethylene
film resins infringe two Dow Chemical patents. In June 2010, a jury trial took place resulting in a verdict against us which awarded damages in the amount of $61.8 million based on sales
of SURPASS resin in the United States through the end of 2009. On July 30, 2010, the court awarded Dow Chemical pre-judgment interest in the amount of $14.3 million.

Following
the jury verdict, both parties filed certain motions with the District Court in Delaware, including a motion by Dow Chemical seeking a permanent injunction to require us to
stop importing and selling certain sLLDPE grades of SURPASS resin in the United States. Given the substantial issues for appeal, including the question of Dow Chemical's standing in the case,
the short unexpired term of the patents and the possibility that we will prevail on appeal, the court was not persuaded that entry of a permanent injunction would serve the parties or the public
interest and the judge denied Dow Chemical's motion for a permanent injunction.
Accordingly, the court's order permits us to sell the alleged infringing grades of our SURPASS resin to existing customers in the United States.

We
have appealed the verdict to the Court of Appeals for the Federal Circuit in Washington, D.C. on several grounds. To stay execution (i.e., collection) of the money
judgment pending the outcome of the appeal, we posted a bond in the amount of the jury verdict plus pre-judgment interest as awarded by the court, post-judgment interest at a
prescribed statutory rate and costs as determined by the court. The bond is secured with cash collateral in the amount of $85 million.

Until
the earlier of the resolution of the appeal or the expiration of the patents (October 2011), we will accrue an amount to reflect the sales of the alleged infringing grades
of SURPASS resin in the United States. Therefore, $92 million has been accrued as of December 31, 2010 with respect to this claim, which represents the $76 million award
and pre-judgment interest plus $16 million based on sales and interest.

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In December 2010, Dow Chemical filed a Statement of Claim against us in the Federal Court in Canada alleging that that certain grades of our SURPASS
polyethylene film resins infringe a Dow Chemical Canadian patent that is related to the U.S. patents subject to the suit in the United States. This litigation is in its early stages and
no amount has been accrued as of December 31, 2010 with respect to this claim.

Although
we believe that we do not infringe Dow Chemical's patents and have meritorious defenses and intend to vigorously defend these patent suits, we can give no assurance that we will
be able to achieve a satisfactory outcome.

We
are involved in other litigation from time to time in the ordinary course of business. Among these items is a claim by Dow and its European affiliate concerning E3. The amount of the
claim was initially $120 million, but, on August 12, 2010, the court granted an application to amend the amended statement of claim to update the damage claims and add new claims.
Accordingly, the amount of the claim is now approximately $300 million. We initially counterclaimed in the same action for approximately $300 million. We have filed our amended statement
of defense and counterclaim. The amount of our counterclaim is now
approximately $700 million. This litigation is in its early stages and no amount has been accrued as of December 31, 2010 with respect to this claim.

4.C. ORGANIZATIONAL STRUCTURE

IPIC is the ultimate parent of the NOVA Chemicals group of companies. The following list includes all significant subsidiaries of NOVA
Chemicals and indicates their respective jurisdictions of incorporation, continuance or organization. All of the voting securities of each significant subsidiary are held directly or indirectly by
NOVA Chemicals:

Name

JurisdictionNOVA Chemicals (Canada) Ltd./NOVA Chimie (Canada) Ltée.

CanadaNOVA Chemicals Inc

Delaware, USANOVA Petrochemicals Ltd.

Alberta, CanadaNC Holdings USA Inc

Delaware, USA


4.D. PROPERTY, PLANTS AND EQUIPMENT

We own a number of plants and facilities for the production of chemicals and plastics. For a detailed discussion regarding the use,
capacity and products of these facilities, see "Item 4.B.Business Overview." In addition to our production facilities, we lease or own approximately
500,000 square feet of office space in numerous locations, mostly in North America. Our head office is located in Calgary, Alberta. Our United States commercial center is located
in Moon Township, Pennsylvania. For further information on environmental issues that may affect our utilization of our assets, see "Item 3.D.Risk Factors" and
"Item 4.B.Business OverviewResponsible Care and Environmental Regulations."

Item 4A.    Unresolved Staff Comments



Item 5.    Operating and Financial Review and Prospects

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the information
contained in the Annual Audited Consolidated Financial Statements and the notes thereto included in this annual report on Form 20-F. This MD&A is based upon our Annual Audited
Consolidated 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 24 to the Annual Audited Consolidated Financial Statements. References are made to
certain non-GAAP measures

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throughout
this MD&A. These measures are discussed in Supplemental Measures. Unless otherwise indicated or required by the context, as used in this MD&A, the terms "NOVA Chemicals," the "Corporation,"
"we," "our" and "us" refer to NOVA Chemicals Corporation and all of its subsidiaries and joint ventures that are consolidated under Canadian GAAP. All amounts are presented in U.S. dollars
unless otherwise noted.

NOVA Chemicals Corporation

We are a plastics and chemical company whose products are used in a wide variety of applications, including food and electronics
packaging, industrial materials, appliances and a variety of consumer goods. We operate two business units; Olefins/Polyolefins and Performance Styrenics.

Business Units



IPIC Transaction

On February 23, 2009, we entered into an arrangement agreement (the "Arrangement Agreement") with International Petroleum
Investment Company ("IPIC"), which is wholly owned by the government of the Emirate of Abu Dhabi, providing for the acquisition by IPIC of all of our outstanding common shares for cash consideration
of $6.00 per share. On July 6, 2009, IPIC completed the acquisition of NOVA Chemicals and, through a wholly owned subsidiary, acquired all of our issued and outstanding common shares
(the "Acquisition"). Prior to July 6, 2009, IPIC provided us with $350 million of interim debt financing that was converted into our common equity at the closing of the
Acquisition. We refer to the Acquisition and the conversion of the interim debt financing into equity collectively as the "IPIC Transaction." Our common shares were delisted from the New York
Stock Exchange ("NYSE") and the Toronto Stock Exchange on July 6, 2009.

We
elected to use push-down accounting under the Canadian Institute of Chartered Accountants ("CICA")1625, Comprehensive revaluation of assets and
liabilities, which resulted in our assets and liabilities being comprehensively revalued to be consistent with the values recorded by IPIC in accordance with business
combination accounting standards. In this respect, we applied, for the first time and prospectively, the principles of CICA 1582,Business combinations,
in connection with the push-down accounting. As a result, the carrying values of all identifiable assets and liabilities were adjusted to their respective estimated fair values on
July 6, 2009 as reflected in Note 4 of the Annual Audited Consolidated Financial Statements.

Although
we continued as the same legal entity after the IPIC Transaction, our consolidated financial information for 2009 is presented for two periods: Predecessor and Successor, which
relate to the periods preceding and succeeding the Acquisition on July 6, 2009. These separate periods are presented to reflect the new accounting basis established for our company as of
July 6, 2009, and highlight the fact that the financial information for these periods has been prepared under two different historical-cost bases of accounting. The Successor
portion of the financial information also reflects the equity contributions from IPIC.

Sale of Interest in INEOS NOVA Joint Venture

On October 31, 2010, we entered into an agreement with an affiliate of INEOS Group Ltd. ("INEOS") providing for the sale
of our 50% interest in the INEOS NOVA joint venture. The negotiated sale price was subject to several deductions. Some of these deductions were fixed as of
October 31, 2010, such as our 50% share of the joint venture's net indebtedness and some were estimated on the closing date, such as indemnified and unindemnified pension liabilities. The
anticipated windup of certain indemnified pension liabilities resulted in us increasing the estimated amount of our pension liabilities by $11 million in December 2010.

The
sale closed on February 28, 2011. At closing, we received approximately €47 million. This amount does not represent our final net proceeds from the
sale, because pension liabilities were estimated as of closing and the final determination of these liabilities is not expected to be completed until the second quarter of 2011, at which time the
proceeds will be adjusted. While we cannot determine the final net proceeds of the sale as of the

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date
of this annual report, we do not expect to record a material gain or loss related to this transaction. Associated results of operations, financial position and cash flows are separately reported
as discontinued operations and assets and liabilities held for sale for all periods presented. See Note 3 in the Annual Audited Consolidated Financial Statements for further disclosure of the
discontinued operations.

Depending
on the context, "INEOS NOVA" in this MD&A means our former joint venture with INEOS or the current standalone business that is 100% owned by INEOS. INEOS NOVA is reported as
discontinued operations in our Annual Audited Consolidated Financial Statements.

Key Drivers of Financial Performance

Our earnings and cash flow primarily are influenced by the margins earned on the products we manufacture. Margin is the difference
between the selling price of products and the direct cost to produce and distribute them. Margins for companies in the plastics and chemical industry are driven by the supply/demand balance and tend
to be cyclical.

Supply/Demand BalanceThe Key Driver of Profitability

The supply/demand balance, as measured by industry operating rates, is generally the best indicator of profitability in the plastics
and chemical industry. During peak conditions, when operating rates tend to be high, prices and margins generally increase as customers attempt to secure scarce supply to meet their production needs.
Conversely, during trough conditions, which tend to occur when operating rates are low, margins generally decrease since there is ample supply to meet customer demand.

Plastics and Chemical Industry Earnings are Cyclical

By its nature, profitability in the plastics and chemical industry is cyclical. Demand growth is driven by economic growth, which tends
to be relatively consistent over time. In contrast, new product supply grows in large increments through the construction of large, complex new plants, which generally require significant capital and
lead-time of four to six years to complete.

As
industry operating rates increase, prices and producers' margins tend to increase. Extended periods of profitability encourage new investment in plants to serve growing demand. New
supply added in excess of demand growth causes industry operating rates and profitability to decline. Periods of reduced profitability deter investment in new plants and force high-cost,
unprofitable producers to rationalize capacity. Continued demand growth and lack of new investment lead to tightening capacity utilization and a return to increased profitability. This alternating
pattern of supply surplus and shortage creates the earnings cycles that are typical in commodity industries.

Price, Volume and Cost Influence Profitability



Pricing for our polymer and chemical products is based on the amount our customers are willing to pay for these products compared to
similar available or competing products. Prices can rapidly change as a result of feedstock costs and fluctuations in the supply/demand balance. While feedstock costs heavily influence the price of
our products, margins drive profitability.



Sales volumes for plastics and chemical products are most heavily influenced by economic growth, a key driver of demand. Sales volumes
also may be influenced by short-term changes in customer buying patterns which primarily are driven by expectations of price volatility. Anticipation of higher prices or limited product
availability can motivate customers to purchase beyond short-term needs and build inventories. Conversely, expectations of lower
prices can motivate customers to delay purchases and consume inventories. These short-term buying patterns can create quarterly earnings volatility for plastics and chemical producers and
are not necessarily representative of longer-term profitability.

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Feedstock costs are the single largest component of our costs and account for 70-80% of the total cost of our products. Our
primary feedstocks include ethane, other natural gas liquids, crude oil, and condensates. Feedstock costs heavily influence the price of our products, and in recent years, feedstock cost volatility
has led to rapid changes in product prices. Since feedstock costs represent the most significant portion of total production costs, a feedstock cost advantage can lead to enhanced profitability
relative to industry peers and is the key to our profitability throughout the cycle.

The
remaining 20-30% of the total cost of our products consists of variable conversion costs and fixed costs such as: plant operating and distribution costs; selling, general
and administrative costs ("SG&A"); and research and development costs ("R&D"). SG&A costs represent all direct and most indirect expenses incurred in directing and managing the company. R&D costs
relate to technical activities that support the development and commercialization of new products, technologies and applications.

The
following table illustrates how changes in various feedstock costs could affect our after-tax income assuming all other factors are held constant. The sensitivity is
based on 2010 actual consumption volumes (excluding hedged items and respective hedging instruments) and the periodic effects are determined by relating a reasonably possible change in the
risk variables.

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

Change(1)

Decrease
in After-Tax
IncomeCrude oil


+10%

$
60Natural gas


+10%

$
22Propane


+10%

$
25Butane


+10%

$
35


(1)A
10% decrease in feedstock costs would have the opposite effect.




Our investing, financing and operating activities are exposed to currency risks. Currency risks, as defined by CICA 3862, Financial Instruments: Disclosures,arise when a monetary financial instrument is denominated in a currency other than the functional currency. As of
December 31, 2010 and 2009, we had a net monetary liability position of $252 million and $675 million, respectively, in non-U.S. dollar currencies at their
respective current exchange rates. Each 10% weakening (strengthening) of the Canadian dollar against the U.S. dollar would decrease (increase) the value of the net liability by
$19 million and $47 million after-tax, respectively. Any change in the Euro would not be material.

Beginning
January 1, 2011, our income statement exposure will be reduced to approximately a $3 million after-tax decrease (increase) with each 10% weakening
(strengthening) of the Canadian dollar against the U.S. dollar. This change results from moving to International Financial Reporting Standards ("IFRS")
(seeFUTURE CHANGES IN ACCOUNTING POLICIES, Transition to IFRS) under which foreign currency gains and losses on pension obligations are reported
in Accumulated Other Comprehensive Income ("AOCI").

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(millions of U.S. dollars)

2010

July 6Dec. 31,
2009
Restated(1)

Jan. 1July 5,
2009
Restated(1)

2008
Restated(1)Successor

PredecessorTotal assets

$
5,670

$
5,596


N/A

$
4,082Total long-term liabilities

$
2,785

$
2,788


N/A

$
2,001Revenue

$
4,576

$
1,612

$
1,345

$
5,645Operating income (loss) from continuing operations(2)Olefins/PolyolefinsJoffre Olefins

$
384

$
104

$
87

$
621Corunna Olefins


136


(27
)

(78
)

(243
)Polyethylene


300


152


42


(43
)Eliminations


(32
)

(6
)

(8
)

36Total Olefins/Polyolefins


788


223


43


371Performance Styrenics


2


5


(19
)

(49
)Corporate


(200
)

(129
)

(235
)

(138
)Operating income (loss) from continuing operations(2)

$
590

$
99

$
(211
)
$
184Income (loss) from continuing operations

$
233

$
9

$
(235
)
$
105


Notes: (1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.(2)See
Supplemental Measures.




(millions of U.S. dollars)

2010 vs. July 6 to
Dec. 31, 2009
Restated(1)

2010 vs. Jan. 1 to
July 5, 2009
Restated(1)

July 6 to Dec. 31,
2009 vs. 2008
Restated(1)

Jan. 1 to July 5,
2009 vs. 2008
Restated(1)Successor

PredecessorHigher (lower) operating margin from continuing operations(2)

$
655

$
932

$
(135
)
$
(412
)(Higher) lower selling, general and administrative


(127
)

(34
)

130


37(Higher) lower research and development


(18
)

(18
)

27


27Lower (higher) foreign exchange losses


91


26


(221
)

(156
)Lower (higher) restructuring charges


2


21


10


(9
)(Higher) lower depreciation and amortization


(112
)

(126
)

104


118(Higher) lower interest expense, net


(100
)

(91
)

66


57(Higher) lower other losses, net


(54
)

(60
)

1


7Higher income tax expense


(113
)

(182
)

(78
)

(9
)Higher (lower) income from continuing operations


224


468


(96
)

(340
)Higher income from discontinued operations, net of income taxes


37


30


134


141Increase (decrease) in net income

$
261

$
498

$
38

$
(199
)


Notes: (1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.(2)Operating
margin equals Revenue less Feedstock and operating costs (includes impact of realized and unrealized gains and losses on
mark-to-market feedstock derivatives).


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Discussion of Consolidated Financial Results of Continuing Operations



Income from Continuing Operationsin 2010 was $233 million compared to
$9 million for the period from July 6 to December 31, 2009. The improvement was the result of improved economic and business conditions, which resulted in increased demand for our
products and improved margins.

Revenuein 2010 was $4,576 million, significantly higher than $1,612 million for the period from July 6 to
December 31, 2009 primarily due to the longer time period and higher sales prices and volumes.

Feedstock and Operating Costsin 2010 were $3,466 million compared to $1,157 million for the period from July 6 to
December 31, 2009. The large increase in feedstock and operating costs was due to the longer time period and higher average prices for feedstocks as prices rebounded from the effects of the
economic downturn.

Foreign Exchange Lossesin 2010 were $13 million compared to $104 million for the period from July 6 to
December 31, 2009. The difference was due to the effect of a more significant strengthening of the Canadian dollar on Canadian-denominated liabilities in the 2009 period versus 2010 and the
hedging of the Cdn$250 million 7.85% notes that we repaid in August 2010.

Depreciation and Amortizationexpense was $243 million in 2010 up from $131 million during the period from July 6 to
December 31, 2009, primarily due to the longer time period.

Selling, General and Administrativeexpenses were $209 million in 2010 compared to $82 million for the period from
July 6 to December 31, 2009 primarily due to the longer period and increased incentive compensation costs due to improved business performance.

Research and Developmentexpenses were $35 million in 2010 up from $17 million for the period from July 6 to
December 31, 2009 due to the longer time period.

Restructuring Chargeswere $20 million in 2010 compared to $22 million for the period from July 6 to
December 31, 2009. The 2010 restructuring charges were attributed to the write-down of certain of our Performance Styrenics segment's assets, while the charges during the 2009
period were due to restructuring activities, including workforce reductions in Corporate and our Olefins/Polyolefins business unit.

Interest Expense (Net)in 2010 was $183 million, up from $83 million for the period from July 6 to
December 31, 2009. The increase was primarily due to the longer time period and the full impact of interest on the $700 million of notes issued in October 2009.

Income Tax Expensewas a $120 million expense in 2010, up from a $7 million expense for the period from July 6 to
December 31, 2009. The increase was due to taxable income increasing by more than $300 million in 2010 and unrecognized tax losses.



Income (Loss) from Continuing Operationsin 2010 was income of $233 million up
from a loss of $235 million for the period from January 1 to July 5, 2009. The improvement was the result of improved economic and business conditions, which resulted in increased
demand for our products and improved margins.

Revenuein 2010 was $4,576 million, significantly higher than $1,345 million for the period from January 1 to
July 5, 2009 primarily due to the longer time period and higher sales prices and volumes.

Feedstock and Operating Costsin 2010 were $3,466 million compared to $1,167 million for the period from January 1 to
July 5, 2009. The large increase in feedstock and operating costs was due to the longer time period and higher average prices for feedstocks as prices rebounded from the effects of the economic
downturn.

Foreign Exchange Lossesin 2010 were a loss of $13 million compared to a loss of $39 million for the period from
January 1 to July 5, 2009. The difference was due to the effect of a strengthening of the Canadian dollar on Canadian-denominated liabilities in the 2009 period versus 2010 and the
hedging of the Cdn$250 million 7.85% notes that we repaid in August 2010.

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Depreciation and Amortizationexpense was $243 million in 2010 up from $117 million during the period from January 1
to July 5, 2009, primarily due to the longer time period.

Selling, General and Administrativeexpenses were $209 million in 2010 compared to $175 million for the period from
January 1 to July 5, 2009. The 2009 period expenses were higher on a percentage basis primarily due to financial advisor and legal fees of $46 million incurred with respect to the
IPIC Transaction during the 2009 period.

Research and Developmentexpenses were $35 million in 2010 up from $17 million for the period from January 1 to
July 5, 2009 due to the longer time period.

Restructuring Chargeswere $20 million in 2010, down from $41 million during the period from January 1 to
July 5, 2009. Contributing to the higher restructuring charges during the period in 2009 was our decision to exit the DYLARK® engineering resin business during the second quarter
of 2009.

Interest Expense (Net)in 2010 was $183 million, up from $92 million for the period from January 1 to July 5,
2009. The increase was primarily due to the longer time period and the impact of interest on the $700 million of notes issued in October 2009, which was partially offset by additional
amortization expense of debt issue costs as a result of amendments to existing financings and additional financings completed in the first and second quarters of 2009.

Income Tax Expense (Recovery)was a $120 million expense in 2010, compared to a recovery of $62 million for the period from
January 1 to July 5, 2009. The increase was due to taxable income increasing by more than $650 million in 2010.



Income from Continuing Operationsfor the period from July 6 to
December 31, 2009 was $9 million compared to $105 million in 2008. The decrease in income was a result of strong earnings during the first nine months in 2008 and the impact of
the global recession that started during the final three months of 2008 and resulted in slowly recovering economic and business conditions during the 2009 period.

Revenuefor the period from July 6 to December 31, 2009 was $1,612 million, significantly down from
$5,645 million in 2008 primarily due to the shorter time period and lower sales prices and volumes.

Feedstock and Operating Costsfor the period from July 6 to December 31, 2009 were $1,157 million compared to
$5,055 million during 2008. The steep decline in feedstock and operating costs was due to the shorter time period and significantly lower average crude oil, benzene and natural gas prices
during the period in 2009 compared to 2008 that occurred as a result of the reset in commodity and materials prices triggered by the global recession that started in the second half of 2008.

Foreign Exchange Losses (Gains)for the period from July 6 to December 31, 2009 were a loss of $104 million compared
to a gain of $117 million in 2008. The difference was due to the effect of a strengthening Canadian dollar on Canadian-denominated liabilities in the 2009 period and the change of our
functional currency during 2008.

Depreciation and Amortizationexpense was $131 million for the period from July 6 to December 31, 2009, down from
$235 million in 2008, due to the shorter time period. The application of push-down accounting did not impact depreciation as we reassessed and revised the estimated useful lives of
our assets in our Olefins/Polyolefins business at the same time (see "Application of Critical Accounting EstimatesProperty, Plant and Equipment").

Selling, General and Administrativeexpenses were $82 million for the period from July 6 to December 31, 2009
compared to $212 million during 2008, primarily due to the shorter period.

Research and Developmentexpenses were $17 million for the period from July 6 to December 31, 2009, down from
$44 million during 2008 due to the shorter time period and targeted cost savings in the 2009 period, primarily in our styrenics business.

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Restructuring Chargeswere $22 million for the period from July 6 to December 31, 2009, compared to
$32 million during 2008. With the IPIC Transaction complete, previously planned restructuring activities, including workforce reductions in Corporate and our Olefins/Polyolefins business unit,
were resumed in the 2009 period.

Interest Expense (Net)for the period from July 6 to December 31, 2009 was $83 million compared to
$149 million in 2008, primarily lower due to the shorter time period; however, it was higher on a percentage basis due to accretion of discount on notes due to push-down accounting
and costs associated with existing and new financings offset to a small degree as a result of the repayment of $250 million of 7.4% notes due April 1, 2009.

Income Tax Expense (Recovery)was a $7 million expense for the period from July 6 to December 31, 2009, compared to a
recovery of $71 million in 2008 due to the increase in income before taxes. In 2008, the tax recovery as a percent of income before income taxes was higher than would be expected due to
permanent differences on foreign exchange gains and losses, and additional tax for transfer pricing disputes.



(Loss) Income from Continuing Operationsfor the period from January 1 to
July 5, 2009 was a loss of $235 million compared to income of $105 million in 2008. The significant decrease in income was due to weak economic and business conditions in the 2009
period that resulted in lower selling prices and sales volumes that more than offset lower feedstock and operating costs. Higher foreign exchange losses in the 2009 period due to the effect of a
strengthening Canadian dollar on Canadian-denominated liabilities also contributed to the increase in the loss.

Revenuewas $1,345 million for the period from January 1 to July 5, 2009, significantly down from
$5,645 million in 2008 due to the shorter time period. In addition, weak economic and business conditions during the first half of 2009 resulted in lower average selling prices for products in
all business segments as well as lower sales volumes that more than offset lower feedstock and operating costs compared to 2008.

Feedstock and Operating Costswere $1,167 million during the period from January 1 to July 5, 2009 compared to
$5,055 million during 2008. The steep decline in feedstock and operating costs was due to the shorter time period and significantly lower average crude oil, benzene and natural gas prices
during the 2009 period compared to 2008 as a result of the reset in commodity and materials prices triggered by the global recession that started in the second half of 2008.

Foreign Exchange Losses (Gains)for the period from January 1 to July 5, 2009 were a loss of $39 million compared to
a gain of $117 million in 2008. The difference was due to the effect of a strengthening Canadian dollar on Canadian-denominated liabilities in the 2009 period, and the change in
functional currency in 2008.

Depreciation and Amortizationexpense was $117 million in the period from January 1 to July 5, 2009, down from
$235 million in 2008, due to the shorter time period.

Selling, General and Administrativeexpenses were $175 million during the period from January 1 to July 5, 2009
compared to $212 million during 2008. Selling, general and administrative expenses for the 2009 period were higher on a percentage basis compared to 2008 primarily due to financial advisor and
legal fees of $46 million incurred with respect to the IPIC Transaction during the 2009 period.

Research and Developmentexpenses were $17 million during the period from January 1 to July 5, 2009, down from
$44 million during 2008 due to the shorter time period and targeted cost savings, primarily in our styrenics business.

Restructuring Chargeswere $41 million during the period from January 1 to July 5, 2009 compared to
$32 million during 2008. Contributing to the increased restructuring charges during the 2009 period was our decision to exit the DYLARK engineering resin business during the second quarter
of 2009.

Interest Expense (Net)during the period from January 1 to July 5, 2009 was $92 million compared to
$149 million in 2008. The overall decrease was due to the shorter time period, but it increased on a percentage basis primarily due to additional amortization expense of debt issue costs as a
result of amendments to existing financings and additional financings completed in the first half of 2009.

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Income Tax Recoverywas $62 million in the period from January 1 to July 5, 2009 compared to
$71 million in 2008 due to a loss before taxes in the period from January 1 to July 5, 2009. In 2008, the tax recovery as a percent of income before income taxes was higher than
would be expected due to permanent differences on foreign exchange gains and losses, and unrecognized tax losses.

Olefins/Polyolefins Business Unit

Our Olefins/Polyolefins business unit produces and sells ethylene, PE and co-products from its two manufacturing centers
located in Alberta and Ontario, Canada. The business is built on its cost advantaged feedstock (because ethane prices in Alberta are primarily based on natural gas prices when compared to the
U.S. Gulf Coast ("USGC") where ethane tends to trade in a more highly correlated relationship with the crude oil price), world-scale and energy-efficient manufacturing facilities in Alberta and
proprietary technology such as Advanced SCLAIRTECH ("AST") and gas-phase PE process technology as well as PE catalyst technology.

Our
Olefins/Polyolefins business unit contains three reporting segments:



Reporting Segment

Primary Products

Capacity

Manufacturing Sites

Primary FeedstockJoffre Olefins

Ethylene
Co-Products(1)

4.8 Blbs
0.8 Blbs

Joffre, Alberta

EthaneCorunna Olefins

Ethylene
Co-Products(1)

1.8 Blbs
4.7 Blbs

Corunna, Ontario

Crude oil, Condensate,
Propane and ButanePolyethylene

Linear low-density PE
AST-based PE
Low-density PE
High-density PE

3.7 Blbs

Joffre, Alberta
Mooretown, Ontario
St. Clair River, Ontario

Ethylene
(Internally supplied)


(1)The
choice of ethylene feedstock mix determines the type and volume of co-products manufactured.




Ethyleneis the most widely produced petrochemical in the world and is the primary
feedstock used in the production of PE. It is a key building block for a variety of polymers and other chemicals used to manufacture products such as packaging, containers, films and construction
products. Ethylene is primarily transported via pipeline and is regionally traded. Ethylene margins typically expand when operating rates are at or above 90% of nameplate capacity.

Polyethyleneis used to produce every day, consumer staple oriented items such as food packaging, packaging for personal care items, toys
and bottles, and is the most widely used plastic material in the world. Industrial applications include storage drums, industrial wrap, retail packaging and building products. PE resin is globally
traded in established merchant markets. PE margins typically expand when operating rates are at or above 90% of nameplate capacity.

Co-productsare produced in the ethylene manufacturing process and can be grouped into two categories: chemical
co-products and energy co-products. Chemical co-products include propylene, benzene and butadiene-building blocks that are used to make items such as tires, carpet
and clothing fibers, and household goods. Energy co-products include gasoline blending components and fuel oil. The profitability of co-products depends on energy prices and
the supply/demand balance for each co-product. The choice of ethylene feedstock mix determines the type and volume of co-products manufactured.

42

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Table of Contents



Our largest volume product is ethylene, which is the key feedstock for the production of PE. We produce ethylene and
co-products at our Joffre, Alberta, and Corunna, Ontario, manufacturing facilities.



Joffre Olefins produces and sells ethylene and co-products and includes three world-scale ethylene crackers in Joffre,
Alberta. Our share of production capacity from the Joffre crackers, which excludes Dow Chemical Canada ULC's ("Dow's") 50% interest in the Ethylene 3 ("E3") cracker, is 4.8 billion
pounds per year and represents approximately 75% of our total nameplate ethylene production capacity. Approximately half of our production capacity at Joffre supports internal PE production, while the
remainder is sold to third parties. The Joffre crackers have the capacity to produce approximately 830 million pounds per year of co-products such as hydrogen, propylene and other
hydrocarbons.

The
primary feedstock of the Joffre ethylene crackers is ethane, which is extracted from natural gas by third-party field and straddle plant operators and delivered to the Joffre site
via pipeline. The majority of ethane used at the Joffre site is extracted and delivered under medium-to long-term contracts. We can also directly purchase ethane and have the
flexibility to use propane to meet a portion of our feedstock requirements when the economics are favorable.

The
only major use for ethane is as a feedstock for production of ethylene. In Alberta, we typically acquire ethane by purchasing natural gas to replace the energy content of the ethane
removed from the gas stream plus pay a fee for extraction and delivery. Therefore, our feedstock costs are directly linked to the natural gas price in Alberta. Alberta's historically lower cost of
natural gas, due to structural transportation differentials, and more efficient ethane extraction plant infrastructure compared to the USGC contributes to our feedstock cost advantage. In comparison,
USGC ethane prices generally follow the prices of other ethylene feedstocks such as propane and naphtha, which typically track crude oil prices. Ethane prices are also influenced by more traditional
supply and demand dynamics. As a result, the price for ethane on the USGC can be at a substantial premium to the underlying natural gas value.



Corunna Olefins produces and sells ethylene and co-products that result from the manufacture of ethylene and processing of
crude oil and other feedstocks. The Corunna ethylene flexi-cracker has annual production capacity of 1.8 billion pounds of ethylene and 4.7 billion pounds of co-products,
depending on the feedstock used. Most of Corunna's ethylene production is consumed by our PE plants while the majority of its co-products are sold to third parties.

Corunna's
manufacturing assets have the flexibility to process a large range of feedstocks and produce a diverse range of chemical and energy co-products. We are able to
adjust Corunna's feedstock slate between crude oil, crude oil derivatives and natural gas liquids, or NGLs, as market conditions fluctuate. Corunna's crude oil processing unit allows us to purchase
crude oil and produce our own naphtha when it is economically favorable to do so. The Corunna facility can access NGLs, such as propane and
butane from local producers, Western Canada or the United States. The Corunna facility can also access crude oil, condensates and naphtha from various North American supply sources.



The Polyethylene segment produces and sells linear low-density polyethylene ("LLDPE"), low-density polyethylene
("LDPE") and high-density polyethylene ("HDPE").

We
have approximately 3.7 billion pounds of annual PE production capacity from our two units in Joffre, Alberta, and our Mooretown and St. Clair River sites in Ontario. In
2010, we completed a modernization and expansion project of our Mooretown LDPE line. During 2011, we expect to use the projected additional 100 million pounds of annual production capacity, as
well as produce an upgraded product slate, with improved reliability and lower production costs.

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One of the Joffre PE plants, PE2, utilizes Advanced SCLAIRTECH technology to manufacture and sell higher value SURPASS® and
SCLAIR® PE resins. SURPASS resins deliver a unique combination of properties not found in traditional PE resins and are used in film applications, such as food packaging; injection molding
applications, such as ice cream containers and packaging lids; and rotational molding applications, such as dumpsters and industrial storage containers. SCLAIR resins are used in a variety of flexible
packaging applications.

We
are one of only three PE companies worldwide with independent, patented process and single-site catalyst technologies which enable us to produce differentiated higher
value PE resins on a commercial scale.



Our PE is primarily sold into North American markets. We have also historically sold up to 20% of our total sales volume outside North
America to China, Southeast Asia, Central and Latin America and Europe. We own part of a packaging joint venture located in Tianjin, China. We ship bulk PE resin out of the Port of Vancouver to
Tianjin where it is bagged for distribution to customers in China.



We license our proprietary SCLAIRTECH technology and NOVACAT® family of catalysts. Our SCLAIRTECH technology
is licensed for use in 12 plants around the world.

NOVACAT
catalysts are a series of advanced Ziegler-Natta catalysts designed specifically for gas-phase PE reactors that can produce butene and hexene LLDPE with
improved performance characteristics and manufacturing economics.

Outlook for Olefins/Polyolefins Business Unit

We believe that there are several factors that affect the long-term earnings potential of our Olefins/Polyolefins
business unit.

44

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45

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Table of Contents

Olefins/Polyolefins Financial Highlights From Continuing Operations

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

2010

July 6Dec. 31,
2009
Restated(1)

Jan. 1July 5,
2009
Restated(1)

2008
Restated(1)Successor

PredecessorRevenueJoffre Olefins(2)

$
1,519

$
564

$
503

$
2,159Corunna Olefins(2)


2,006


526


437


2,537Polyethylene(2)


1,946


805


698


2,383Eliminations(3)


(1,163
)

(413
)

(380
)

(1,778
)$
4,308

$
1,482

$
1,258

$
5,301Operating Income (Loss)(4)Joffre Olefins

$
384

$
104

$
87

$
621Corunna Olefins


136


(27
)

(78
)

(243
)Polyethylene


300


152


42


(43
)Eliminations(3)


(32
)

(6
)

(8
)

36$
788

$
223

$
43

$
371Polyethylene Sales Volumes(Millions of Pounds)


3,096


1,525


1,536


3,432


Notes: (1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.(2)Before
inter-segment eliminations between the business units.(3)Represents
inter-segment eliminations.(4)See
Supplemental Measures.




2010Annual
2010

July 1 to
Dec. 31
2009

Jan. 1 to
June 30
2009

Annual
2008(U.S. dollars per pound, except where noted)

Q1

Q2

Q3

Q4Benchmark Principal Product Prices:(1)Ethylene(2)

$
0.52

$
0.46

$
0.38

$
0.47

$
0.46

$
0.36

$
0.32

$
0.59PElinear low-density butene liner(3)

$
0.64

$
0.68

$
0.61

$
0.67

$
0.65

$
0.56

$
0.50

$
0.79PEweighted-average benchmark(3)

$
0.67

$
0.70

$
0.63

$
0.68

$
0.67

$
0.60

$
0.53

$
0.81Benchmark Raw Material Prices:(1)AECO natural gas (dollars per mmBTU)(4)

$
4.75

$
3.79

$
3.41

$
3.58

$
3.88

$
3.47

$
3.46

$
7.74NYMEX natural gas (dollars per mmBTU)(4)

$
5.38

$
4.07

$
4.41

$
3.81

$
4.42

$
3.84

$
4.23

$
8.95WTI crude oil (dollars per barrel)(5)

$
78.72

$
78.04

$
76.20

$
85.17

$
79.53

$
72.25

$
51.35

$
99.65


Notes: (1)Average
benchmark prices do not necessarily reflect actual prices realized by us or any other petrochemical company.(2)Source:
Chemical Market Associates, Inc. ("CMAI")-USGC Net Transaction Price.(3)Source:
Townsend Polymer Services Information; Benchmark prices weighted according to our sales volume mix in North America.(4)Source:
Canadian Gas Price Reporter. AECO gas is weighted-average daily spot gas price. NYMEX gas is Henry Hub 3-Day Average Close.(5)Source:
Platt's. NYMEX WTI daily spot-settled price average for calendar month.


46

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Discussion of Financial Results of Olefins/Polyolefins Business Unit



Full Year 2010 Versus July 6 to December 31, 2009

Revenuewas $1,519 million in 2010, up from $564 million during the
period from July 6 to December 31, 2009, due to the longer time period and higher selling prices and sales volumes. During 2010, ethylene supply became tight during periods of planned
and unplanned industry production shutdowns, while demand increased. This resulted in industry average prices for ethylene that were 26% higher in the full year 2010 compared to the second half
of 2009.

Feedstock and Operating Costswere $973 million in 2010, up from $384 million during the period from July 6 to
December 31, 2009. Costs increased in 2010 due to the longer period, higher volumes and higher natural gas and utility costs. Average AECO natural gas prices increased by approximately 12% in
2010 compared to the second half of 2009.

Operating incomewas $384 million in 2010, up from $104 million during the period from July 6 to December 31,
2009. Margins in the full year 2010 were higher than the 2009 period as sales prices increased due to tight supply of ethylene and co-products resulting from planned and unplanned industry
production shutdowns for ethylene, industry utilization of a lighter feed mix that reduced production of certain co-products, and demand growth driven by economic recovery.

Full Year 2010 Versus January 1 to July 5, 2009

Revenuewas $1,519 million in 2010, up from $503 million during the
period from January 1 to July 5, 2009, due to the longer time period and higher selling prices and sales volumes. During 2010, ethylene supply became tight during periods of planned and
unplanned industry production shutdowns, while demand increased. This resulted in industry average prices for ethylene that were 46% higher in the full year 2010 compared to the first half
of 2009.

Feedstock and Operating Costswere $973 million in 2010, up from $374 million during the period from January 1 to
July 5, 2009. Costs increased in 2010 due to the longer period, higher volumes and higher natural gas and utility costs. Average AECO natural gas prices increased by approximately 12% in 2010
compared to the first half of 2009.

Operating incomewas $384 million in 2010, up from $87 million during the period from January 1 to July 5,
2009. Margins in the full year 2010 were higher than the 2009 period as sales prices increased due to tight supply of ethylene and co-products resulting from planned and unplanned industry
production shutdowns for ethylene, industry utilization of a lighter feed mix that reduced production of certain co-products, and demand growth driven by economic recovery.

July 6 to December 31, 2009 Versus Full Year 2008

Revenuewas $564 million in the period from July 6 to December 31,
2009, down from $2,159 million in 2008 due to the shorter time period and lower selling prices and sales volumes. Industry average prices for ethylene were 38% lower in the second half of 2009
compared to full year 2008.

Feedstock and Operating Costswere $384 million in the period from July 6 to December 31, 2009, down from
$1,455 million in 2008. Costs decreased in the time period in 2009 due to the shorter time period, lower volumes and lower natural gas and utility costs, and the lower Canadian dollar exchange
rate. Average AECO natural gas prices were over 50% lower in the second half of 2009 compared to full year 2008.

Operating incomewas $104 million in the period from July 6 to December 31, 2009, down from $621 million in
2008. Margins in the time period in 2009 were lower as sales price declined further than feedstock and operating costs.

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January 1 to July 5, 2009 Versus Full Year 2008

Revenuewas $503 million in the period from January 1 to July 5,
2009, down from $2,159 million in 2008 due to the shorter time period and lower selling prices and lower sales volume. Industry average prices for ethylene were 46% lower in the first half of
2009 compared to full year 2008.

Feedstock and Operating Costswere $374 million in the period from January 1 to July 5, 2009, down from
$1,455 million in 2008. Costs decreased in the time period in 2009 due to the shorter time period, lower sales volume and lower natural gas and utility costs, and the lower Canadian dollar
exchange rate. Average AECO natural gas prices were over 50% lower in the first half of 2009 compared to full year 2008.

Operating incomewas $87 million in the period from January 1 to July 5, 2009, down from $621 million in 2008.
Margins in the time period in 2009 were lower as sales price declined further than feedstock and operating costs.



Full Year 2010 Versus July 6 to December 31, 2009

Revenuewas $2,006 million in 2010, up from $526 million during the
period from July 6 to December 31, 2009. The change was due primarily to the longer time period and an increase in product prices along with higher sales volumes. Co-product
pricing increased due to higher WTI crude oil prices and increased demand combined with reduced supply due to an industry trend towards using lighter ethylene feedstock that resulted in less
co-product production.

Feedstock and Operating Costsin 2010 were $1,837 million, up from $537 million in the period from July 6 to
December 31, 2009. Feedstock prices increased along with the average WTI crude oil price, which was almost 10% higher in 2010 than during the second half of 2009. Feedstock costs were higher
due to the longer time period and higher sales volumes. Operating costs were higher primarily due to the strengthening of the Canadian dollar and higher utility costs.

Operating income (loss)was operating income of $136 million in 2010 up from an operating loss of $27 million during the
period from July 6 to December 31, 2009. The improvement was primarily due to higher margins during 2010 that resulted from higher WTI crude oil price and reduced supply of
co-products in the market while demand increased.

Full Year 2010 Versus January 1 to July 5, 2009

Revenuewas $2,006 million in 2010, up from $437 million during the
period from January 1 to July 5, 2009. The increase was due primarily to the longer time period and an increase in product prices along with higher sales volumes. Co-product
pricing increased due to higher WTI crude oil prices and increased demand combined with reduced supply due to an industry trend towards using lighter ethylene feedstock that resulted in less
co-product production.

Feedstock and Operating Costsin 2010 were $1,837 million, up from $478 million in the period from January 1 to
July 5, 2009. Feedstock prices increased along with the average WTI crude oil price, which was almost 55% higher in 2010 than during the first half of 2009. Feedstock costs were higher due to
the longer time period
and higher sales volumes. Operating costs were higher primarily due to the strengthening of the Canadian dollar and higher utility costs.

Operating income (loss)was operating income of $136 million in 2010 up from an operating loss of $78 million during the
period from January 1 to July 5, 2009. The improvement was primarily due to higher margins during 2010 that resulted from higher WTI crude oil price and reduced supply of
co-products in the market while demand increased.

July 6 to December 31, 2009 Versus Full Year 2008

Revenuewas $526 million in the period from July 6 to December 31,
2009, down from $2,537 million in 2008. The change was due primarily to the shorter time period and a reduction in product prices and decreased

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Table of Contents

sales
volumes. Co-product pricing fell in response to lower WTI crude oil prices, which averaged almost 30% lower in the second half of 2009 compared to 2008.

Feedstock and Operating Costswere $537 million in the period from July 6 to December 31, 2009, down from
$2,708 million in 2008. Feedstock prices were down along with the average WTI crude oil price, which was almost 30% lower in the second half of 2009 compared to 2008. Feedstock costs were lower
due to the shorter time period and lower sales volumes. Operating costs were lower mainly due to the shorter time period, lower utility costs, and a lower Canadian dollar exchange rate.

Operating losswas $27 million in the period from July 6 to December 31, 2009, compared to $243 million in
2008. The improvement was primarily due to lower feedstock costs and more stable flow-through of costs with no need to adjust the value of our inventory. Margins in the time period in 2009
were higher as sales price increased more than feedstock and operating costs.

January 1 to July 5, 2009 Versus Full Year 2008

Revenuewas $437 million in the period from January 1 to July 5,
2009, down from $2,537 million in 2008. The change was due primarily to the shorter time period and a reduction in product prices and decreased sales volumes. Co-product pricing
fell in response to lower WTI crude oil prices, which averaged almost 50% lower in the first half of 2009 compared to 2008.

Feedstock and Operating Costswere $478 million in the period from January 1 to July 5, 2009, down from
$2,708 million in 2008. Feedstock prices were down along with the average WTI crude oil price, which was almost 50% lower in the first half of 2009 compared to 2008. Feedstock costs were lower
due to the shorter time period and lower sales volumes. Operating costs were lower mainly due to the shorter time period, lower utility costs, and a lower Canadian dollar exchange rate.

Operating losswas $78 million in the period from January 1 to July 5, 2009, compared to $243 million in 2008.
The improvement was primarily due to lower feedstock costs and more stable flow-through of costs with no need to adjust the value of our inventory.



Full Year 2010 Versus July 6 to December 31, 2009

Revenuewas $1,946 million in 2010, up from $805 million during the
period from July 6 to December 31, 2009. The increase was primarily due to the longer time period and increased PE sales prices. The average PE sales price was approximately 15% higher
during 2010 compared to the second half of 2009, as feedstock costs increased and demand for our products improved.

Feedstocks and Operating Costswere $1,516 million in 2010 up from $587 million in the period from July 6 to
December 31, 2009. Feedstock and operating costs were higher in 2010 primarily due to the longer time period, higher sales volumes and higher ethylene costs, which were approximately 26% higher
than the second half of 2009. Operating costs were higher primarily due to higher utility costs, an unexpected mechanical failure in our PE2 polyethylene plant that caused an unplanned shutdown
of the line, which was corrected and restarted, and startup costs related to the upgrade of our Mooretown, Ontario, LDPE line.

Operating incomein 2010 was $300 million, up from $152 million during the period July 6 to December 31, 2009.
The increase was due to PE sales prices increasing more than feedstock costs, as demand improved and the industry experienced several supply interruptions during 2010.

Full Year 2010 Versus January 1 to July 5, 2009

Revenuewas $1,946 million in 2010, up from $698 million during the
period from January 1 to July 5, 2009. The increase was primarily due to the longer time period and increased PE sales prices. The average PE sales price was approximately 30% higher in
2010 compared to the first half of 2009, as feedstock costs increased and demand for our products improved.

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Feedstocks and Operating Costswere $1,516 million in 2010 up from $597 million in the period from January 1 to
July 5, 2009. Feedstock and operating costs were higher in 2010 primarily due to the longer time period, higher sales volumes and higher ethylene costs, which were 46% higher than the first
half of 2009. Operating costs were higher primarily due to higher utility costs, an unexpected mechanical failure in our PE2 polyethylene plant that caused an unplanned shutdown of the line,
that was corrected and restarted, and startup costs related to the upgrade of our Mooretown, Ontario, LDPE line.

Operating incomein 2010 was $300 million, up from $42 million during the period January 1 to July 5, 2009.
The increase was due to PE sales prices increasing more than feedstock costs, as demand improved and the industry experienced several supply interruptions during 2010.

July 6 to December 31, 2009 Versus Full Year 2008

Revenuewas $805 million in the period from July 6 to December 31,
2009, down from $2,383 million in 2008. The change primarily was due to the shorter time period and lower PE sales prices. The average PE sales price was almost 30% lower, as the economic
downturn reduced both feedstock costs and demand for products as compared to 2008. In the time period in 2009, demand was steady, but customers did not rebuild their low inventories due to continued
economic uncertainty.

Feedstocks and Operating Costswere $587 million in the period from July 6 to December 31, 2009, down from
$2,298 million in 2008. Feedstock and operating costs were lower in the time period in 2009 primarily due to the shorter time period, lower sales volumes and lower ethylene costs, which were
38% lower than 2008, and lower utility costs.

Operating income(loss) in the period from July 6 to December 31, 2009 was income of $152 million, up from a loss of
$43 million in 2008. The increase was due to PE sales prices increasing more than feedstock costs and lower operating costs.

January 1 to July 5, 2009 Versus Full Year 2008

Revenuewas $698 million in the period from January 1 to July 5,
2009, down from $2,383 million in 2008. The change primarily was due to the shorter time period and lower PE sales prices. The average PE sales price was almost 40% less, as the economic
downturn reduced both feedstock costs and demand for products. Destocking occurred early in the time period in 2009 and was followed by steady demand and stable, low inventory in the second half of
the time period due to continued economic uncertainty.

Feedstocks and Operating Costswere $597 million in the period from January 1 to July 5, 2009, down from
$2,298 million in 2008. Feedstock and operating costs were lower in the time period in 2009 primarily due to the shorter time period, lower sales volumes and lower ethylene costs, which were
46% lower than 2008, and lower utility costs.

Operating income (loss)in the period from January 1 to July 5, 2009 was income of $42 million, up from a loss of
$43 million in 2008. The increase was due to PE sales prices increasing more than feedstock costs and lower operating costs.

Performance Styrenics Segment



Our Performance Styrenics segment produces EPS and ARCEL® resins in North America. The segment markets EPS resins in North
and South America and Asia and ARCEL globally via direct sales and various distribution and agency agreements.

EPS
resins are used in packaging for food and consumer products and in insulation for the building and construction industry. Currently, sales of our EPS resins account for the majority
of Performance Styrenics'
revenue. As a result, profitability of this business unit is dependent on the cyclical supply/demand balance for EPS.

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ARCEL
resins apply proprietary technology to enable customers to reduce their costs and environmental impact in high performance protective packaging applications. ARCEL resin is used
for protective packaging of damage sensitive goods such as computers, printers, electronics, appliances and furniture. Due to its unique properties, ARCEL resin can earn higher margins over standard,
non-differentiated products.

We
have the capacity to produce 350 million pounds per year of standard EPS and ARCEL resins at our production facilities in Monaca (Beaver Valley), Pennsylvania, and
Painesville, Ohio.

Our
Performance Styrenics segment also includes our interests in EPS-based downstream business and ventures for the building and construction industry, which are collectively
known as SYNTHEON and reported as held for sale.



Styrene is the primary feedstock for the production in this business unit. Our minority interest in LyondellBasell Industries'
Channelview, Texas, propylene oxide/styrene monomer facility supplies 400 million pounds per year of cost-based styrene to our Performance Styrenics business unit, which is
sufficient to meet our anticipated styrene requirements.



In 2009, we restructured this business. These changes included the rationalization of EPS capacity toward more sustainable business
segments and exiting the DYLARK resin business. In 2010, the segment reported positive income, and we believe it can be successful going forward.

During
2010, our Board of Directors approved the sale of SYNTHEON, subject to certain conditions. We anticipated that the sale would be completed during 2010; however, negotiations are
still in progress. Associated results of operations, financial position and cash flows of SYNTHEON are separately reported in our Annual Audited Consolidated Financial Statements as discontinued
operations and assets and liabilities are reported as held for sale.

In
2011, we expect continued improvement in the demand for styrenic polymers for use in construction and packaging as the economy continues to recover. Additionally, we expect growth in
the cup and container market that utilizes our DYLITE® resin.

We
are continuing to evaluate this business unit and are exploring strategic options.



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

2010

July 6Dec. 31, 2009
Restated(1)

Jan. 1July 5, 2009
Restated(1)

2008
Restated(1)Successor

PredecessorRevenue

$
304

$
143

$
93

$
388Operating income (loss)(2)

$
2

$
5

$
(19
)
$
(49
)Sales Volumes(3) (millions of pounds)


260


139


119


328


Notes: (1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.(2)See
Supplemental Measures.(3)Third-party
sales.


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2010Annual
2010

July 1 to
Dec. 31
2009

Jan. 1 to
June 30
2009

Annual
2008(U.S. dollars per pound)

Q1

Q2

Q3

Q4Benchmark Principal Product Prices:(1)Styrene(2)

$
0.68

$
0.65

$
0.55

$
0.63

$
0.63

$
0.56

$
0.43

$
0.73EPS(2)

$
0.91

$
0.94

$
0.88

$
0.91

$
0.91

$
0.92

$
0.83

$
1.07


Notes: (1)Average
benchmark prices do not necessarily reflect actual prices realized by us or any other petrochemical company.(2)Source:
CMAI Contract Market.




Full Year 2010 Versus July 6 to December 31, 2009

Revenuewas $304 million in 2010, up from $143 million during the period
July 6 to December 31, 2009. The increase was due to the longer time period and higher sales volumes. The volume increase was primarily due to higher EPS sales into the construction and
packaging markets.

Feedstock and Operating Costswere $284 million in 2010, up from $126 million during the period July 6 to
December 31, 2009. Costs were higher in 2010 primarily due to the longer time period, higher sales volumes and the 12% increase in the cost of styrene. Operating costs were lower due to
restructuring in the business.

Operating incomein 2010 was $2 million, down from $5 million during the period July 6 to December 31, 2009.
In 2010, lower margins versus the period in 2009 were only partially offset by lower operating costs due to restructuring in 2009.

Full Year 2010 Versus January 1 to July 5, 2009

Revenuewas $304 million in 2010, up from $93 million during the period
January 1 to July 5, 2009. The increase was due to the longer time period, higher sales volumes and higher selling prices. The volume increase was primarily due to higher EPS sales into
the construction and packaging markets. Average EPS pricing was up 10% in 2010 compared to the first half of 2009.

Feedstock and Operating Costsin 2010 were $284 million up from $90 million during the period January 1 to
July 5, 2009. Costs were higher in 2010 primarily due to the longer time period, higher sales volumes and the 45% increase in the cost of styrene compared to the first half of 2009.

Operating income (loss)in 2010 was income of $2 million, up from a loss of $19 million during the period January 1
to July 5, 2009. In 2010, lower margins versus the period in 2009 were offset by lower operating costs due to restructuring in 2009.

July 6 to December 31, 2009 Versus Full Year 2008

Revenuewas $143 million in the period July 6 to December 31,
2009, down from $388 million in 2008. The reduction was due to the shorter time period, lower volumes and lower selling prices. Resin sales volume was low due to the impact of the economic
recession and reduced demand in most construction and packaging markets. Average EPS pricing was down 14% in the second half of 2009 versus 2008.

Feedstock and Operating Costsin the period July 6 to December 31, 2009 were $126 million, down from
$389 million in 2008. Costs were lower in the period in 2009 primarily due to the shorter time period, lower sales volumes and the 24% decrease in the cost of styrene. Operating costs were
lower due to restructuring in the business.

Operating income (loss)in the period July 6 to December 31, 2009 was income of $5 million compared to a loss of
$49 million in 2008. In the 2009 period, margins rose as prices declined less than flow-through feedstock costs and operating costs were lower due to restructuring.

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January 1 to July 5, 2009 Versus Full Year 2008

Revenuewas $93 million in the period January 1 to July 5, 2009,
down from $388 million in 2008. The reduction was due to the shorter time period, lower volumes and lower selling prices. Resin sales volume was low due to the impact of the economic recession
and reduced demand in most construction, automotive and packaging markets. Average EPS pricing was down 23% in first half of 2009 compared to 2008.

Feedstock and Operating Costsin the period January 1 to July 5, 2009 were $90 million, down from $389 million
in 2008. Costs were lower in the 2009 period primarily due to the shorter time period, lower sales volumes and the 40% decrease in the cost of styrene.

Operating lossin the period January 1 to July 5, 2009 was $19 million compared to $49 million in 2008. In the
2009 period margins rose as prices declined less than flow-through feedstock costs.

INEOS NOVA Joint VentureDiscontinued Operations

We sold our 50% interest in the INEOS NOVA joint venture on February 28, 2011 to INEOS. The disposal group is shown as
discontinued operations in our Annual Audited Consolidated Financial Statements.

INEOS
NOVA manufactures and sells styrene and solid polystyrene ("SPS") in North America and SPS and EPS in Europe.



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

2010

July 6Dec. 31,
2009

Jan. 1July 5,
2009

2008Successor

PredecessorRevenue

$
1,495

$
635

$
552

$
1,942Operating income (loss)(1)

$
44

$
(2
)
$
6

$
(103
)Sales Volumes (millions of pounds)(2)


2,405


1,218


1,183


2,502


Notes: (1)See
Supplemental Measures.(2)Third-party
sales. Polystyrene sales consist of SPS sales in North America and SPS and EPS sales in Europe.




2010Annual
2010

July 1 to
Dec. 31
2009

Jan. 1 to
June 30
2009

Annual
2008(U.S. dollars per pound, except where noted)

Q1

Q2

Q3

Q4Benchmark Principal Product Prices:(1)Styrene(2)

$
0.68

$
0.65

$
0.55

$
0.63

$
0.63

$
0.56

$
0.43

$
0.73SPS(2)North America

$
1.11

$
1.05

$
0.87

$
0.92

$
0.98

$
0.97

$
0.81

$
1.08Europe

$
0.72

$
0.74

$
0.71

$
0.80

$
0.74

$
0.64

$
0.48

$
0.82Benchmark raw material prices:(1)Benzene (dollars per gallon)(2)

$
3.56

$
3.32

$
2.87

$
3.26

$
3.25

$
2.97

$
1.60

$
3.57


Notes: (1)Average
benchmark prices do not necessarily reflect actual prices realized by INEOS NOVA or any other petrochemical company.(2)Source:
CMAI Contract Market.


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Full Year 2010 Versus July 6 to December 31, 2009

Revenuewas $1,495 million in 2010, up from $635 million during the
period July 6 to December 31, 2009. Revenue increased due to the longer time period and higher sales volumes and prices. Pricing for SPS was up 27% in Europe and 2% in
North America.

Feedstock and Operating Costswere $1,413 million in 2010, up from $613 million in the period July 6 to
December 31, 2009. The increase was due to the longer time period, higher sales volumes and higher costs for feedstocks. Benzene cost was 10% higher in 2010 versus the second half
of 2009.

Operating income (loss)was income of $44 million in 2010, up from an operating loss of $2 million during the period
July 6 to December 31, 2009. The improvement was mainly due to higher margins, which were higher in 2010 versus the 2009 period due to selling prices that increased more than
flow-through feedstock costs.

Full Year 2010 Versus January 1 to July 5, 2009

Revenuewas $1,495 million in 2010, up from $552 million during the
period January 1 to July 5, 2009. Revenue increased due to the longer time period and higher sales volumes and prices. Pricing for SPS was up 57% in Europe and 22% in
North America.

Feedstock and Operating Costswere $1,413 million in 2010, up from $514 million in the period January 1 to
July 5, 2009. The increase was due to the longer time period, higher sales volumes and higher costs for feedstocks. Benzene cost was approximately 100% higher in 2010 versus the first half
of 2009.

Operating incomewas $44 million in 2010, up from $6 million during the period January 1 to July 5, 2009. The
improvement was mainly due to higher margins, which were higher in 2010 versus the 2009 period due to selling prices that increased more than flow-through feedstock costs.

July 6 to December 31, 2009 Versus Full Year 2008

Revenuewas $635 million in the period July 6 to December 31,
2009, down from $1,942 million in 2008. Revenue declined due to the shorter time period and lower sales volumes and prices. Volume declined due to weaker construction and consumer durables
markets, such as those for automobiles and electronics, due to the economic recession. Pricing for SPS was down 22% in Europe and 10% in North America.

Feedstock and Operating Costswere $613 million in the period July 6 to December 31, 2009, down from
$1,981 million in 2008. The reduction was due to the shorter time period, lower sales volumes and lower feedstock costs. Benzene cost was 17% lower in the second half of 2009
versus 2008.

Operating losswas $2 million in the period July 6 to December 31, 2009, compared to a loss of $103 million in
2008. The improvement was mainly due to higher margins in North American styrene and SPS. Margins were higher in the period in 2009 versus the prior year due to flow-through feedstock
costs that fell more than selling prices.

January 1 to July 5, 2009 Versus Full Year 2008

Revenuewas $552 million in the period January 1 to July 5, 2009,
down from $1,942 million in 2008. Revenue declined due to the shorter time period and lower sales volumes and prices. Volume declined due to weaker construction and consumer durables markets,
such as those for automobiles and electronics, due to the economic recession. Pricing for SPS was down approximately 42% in Europe and 25% in North America.

Feedstock and Operating Costswere $514 million in the period January 1 to July 5, 2009, down from
$1,981 million in 2008. The reduction was due to the shorter time period, lower sales volumes and lower feedstock costs. Benzene cost was 55% lower in the first half of 2009 versus 2008.

Operating income (loss)was income of $6 million in the period January 1 to July 5, 2009, compared to a loss of
$103 million in 2008. The improvement was mainly due to higher margins in North American styrene and SPS. Margins were higher in the period in 2009 compared to the prior year due to
flow-through feedstock costs

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that
fell more than selling prices. In Europe, SPS margins declined as sharply lower sales volumes more than offset higher unit margins resulting from flow-through feedstock costs that
fell more than selling prices.

Corporate Operating Loss and Other Items from Continuing Operations

A listing of before-tax corporate and other items for the periods presented is as follows:

(millions of U.S. dollars)

2010

July 6Dec. 31,
2009
Restated(1)

Jan. 1July 5,
2009
Restated(1)

2008
Restated(1)Successor

PredecessorCorporate operating costs

$
(128
)
$
(53
)
$
(66
)
$
(87
)Stock-based compensation and profit sharing


(13
)




(26
)

58Forward transactions on stock-based compensation








(9
)

(100
)Mark-to-market feedstock derivatives


(15
)

51


6


(87
)IPIC Transaction costs





(1
)

(61
)

Impairment of note receivable


(8
)







Restructuring charges


(20
)

(22
)

(41
)

(32
)Foreign exchange (losses) gains


(8
)

(102
)

(35
)

117Insurance credit


1


2





Depreciation and amortization


(9
)

(4
)

(3
)

(7
)Operating loss

$
(200
)
$
(129
)
$
(235
)
$
(138
)


Note: (1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.




Full Year 2010 Versus July 6 to December 31, 2009

Corporate operating costs were higher in 2010 compared to the period from July 6 to December 31, 2009, primarily due to
the longer time period and also increased incentive compensation costs due to higher net income.

Full Year 2010 Versus January 1 to July 5, 2009

Corporate operating costs were higher in 2010 compared to the period from January 1 to July 5, 2009, primarily due to the
longer time period and increased incentive compensation costs due to higher net income.

July 6 to December 31, 2009 Versus Full Year 2008

Corporate operating costs were lower during the period from July 6 to December 31, 2009 as compared to 2008, primarily
due to the shorter time period.

January 1 to July 5, 2009 Versus Full Year 2008

Corporate operating costs were lower in the period from January 1 to July 5, 2009 compared to 2008, primarily due to the
shorter time period, despite an increase in settlement charges related to payments from our supplemental employee retirement plan.



We had three cash-settled stock-based compensation plans (the Equity Appreciation Plan, the Restricted Stock Unit
Plan and the Deferred Share Unit Plans) that were terminated at closing of the IPIC Transaction. Therefore, no income or expense was recorded during 2010 or the period July 6, 2009 through
December 31, 2009 (see below for cash-settlements).

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During
the period January 1, 2009 through July 5, 2009, we recorded expense of $0 million, $25 million and $1 million, respectively, related to each of
the stock-based compensation plans. The expenses were primarily due to the recognition of stock-based compensation costs for the full vesting of all previously unvested restricted share units upon
closing of the IPIC Transaction. At closing of the IPIC Transaction, outstanding units of the stock-based compensation plans were canceled and the restricted share units and deferred share units were
cash-settled for $6.00 per unit (outstanding equity appreciation units had no value). The total cash settlement for these units was $34 million. In 2008, we recorded income of
$29 million, $14 million and $17 million, respectively, related to each of the stock-based compensation plans.

Stock-based
compensation also included the amount expensed related to the fair value of stock options earned by employees. During 2010 and the periods July 6, 2009 through
December 31, 2009 and January 1, 2009 through July 5, 2009, we had no expenses related to stock option grants. In 2008, we expensed $2 million. At the closing of the IPIC
Transaction, outstanding stock options had no value, were cancelled and the plan was terminated.

The
three stock-based compensation plans were marked to market with changes in the value of our common stock price. In November 2005, we entered into cash-settled
share forward transactions to manage our exposure to fluctuations in stock-based compensation costs related to the stock-based compensation plans. The forward transactions were to be
cash-settled by November 2008, based on the difference between our common stock price on the NYSE, and the average execution price. In 2008, we extended the forward transactions
until November 2009.

Unrealized
gains and losses associated with the forward transactions were recorded as part of Selling, general and administrative expenses, offsetting unrealized gains or losses on the
stock-based compensation plans. At December 31, 2008, the mark-to-market value of the forward transactions was a $118 million unrealized loss reported in accrued
liabilities. One of the forward transactions was cash settled for $42 million in January 2009 and the other forward transaction was cash settled for $88 million in
February 2009. During the periods July 6, 2009 through December 31, 2009 and January 1, 2009 through July 5, 2009, we expensed $0 million and
$9 million, respectively, related to the forward transactions. In 2008, we expensed $100 million. Stock-based compensation expenses net of forward transactions were $42 million in
2008, primarily due to the ineffectiveness of the share forward transactions.

The
forward transactions also included an interest component which was accrued and payable by us on settlement or extension of the forward transactions. Accrued interest for the initial
three-year term totaling $29 million was paid in November 2008 when the forward transactions were extended.

We
had a profit sharing program that was available to most employees. Profit sharing expense in 2010 was $13 million. The profit sharing targets were not achieved in 2009 or 2008
and, therefore, there is no profit sharing expense during either reporting periods in 2009 or in 2008. In 2010, the Remuneration Committee of our Board of Directors approved terminating the profit
sharing program effective January 1, 2011.



We maintain a derivative program to manage risk associated with feedstock purchases. We lock in a portion of our propane and butane
feedstock requirements as a percentage of crude oil using forward contracts that extend to 2012. In 2010 our portfolio also included trades to re-price excess feedstock inventory, and a
small volume of our winter natural gas requirements was locked in at a fixed price. The gain or loss resulting from changes in the market value of these derivatives is recorded through earnings each
period. We classify mark-to-market adjustments on feedstock derivative positions as Corporate items, as they are non-cash items and are not relevant in measuring
business performance. Once positions are realized, any income effects are recorded in business results.

The
mark-to-market value of our open feedstock positions decreased during 2010 resulting in an unrealized loss of $15 million. The $66 million decline and
$21 million decline, as compared to the periods July 6, 2009 through December 31, 2009 and January 1, 2009 through July 5, 2009, respectively, were a result of
changes in forward propane and butane prices relative to crude oil and the number of feedstock positions in place. The mark-to-market value of our open feedstock positions
increased as compared to 2008 during the periods July 6,

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Table of Contents

2009
through December 31, 2009 and January 1, 2009 through July 5, 2009, resulting in an unrealized gain of $51 million and $6 million, respectively.

On
January 1, 2009, we adopted EIC 173,Credit Risk and the Fair Value of Financial Assets and Liabilities, which requires the
mark-to-market value of our open feedstock positions to include consideration of our own credit risk and the credit risk of our counterparties. The adoption of EIC
173 resulted in a one-time credit on January 1, 2009 to opening retained earnings and a corresponding decrease in the mark-to-market liability of
$18 million ($12 million after-tax).



Costs incurred during the period January 1, 2009 through July 5, 2009 include $61 million for financial advisor
fees, legal fees and other related transaction costs triggered by the change in control of NOVA Chemicals on July 6, 2009. During the period July 6 to December 31, 2009, an
additional $1 million in costs were incurred. No costs were incurred in 2010 or 2008.



2010

Restructuring charges consisted of $20 million ($20 million after-tax) related to impairment charges on
assets within our Performance Styrenics segment.

July 6 to December 31, 2009

With the IPIC Transaction complete, previously planned restructuring activities for workforce reductions in Corporate and our
Olefins/Polyolefins business unit were resumed. Restructuring charges of $22 million ($17 million after-tax) were recorded during the period July 6, 2009 through
December 31, 2009 and related to the following:



January 1 to July 5, 2009

During the period January 1, 2009 through July 5, 2009 restructuring charges were $41 million ($41 million
after-tax) related to the following:



As
of December 31, 2010, substantially all of the severance costs due to restructuring activities during 2009 across the Corporation have been paid to employees.

2008

In 2008, we recorded restructuring charges of $32 million before-tax ($28 million after-tax)
related to the following:



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In January 2010, we entered into a series of foreign currency forwards to hedge the foreign currency exposure on the
Cdn$250 million 7.85% notes which were due in August 2010 (the "Canadian Notes"). The foreign currency forwards locked in repayment of the Canadian Notes at
U.S.$237 million. The forward contracts substantially offset the foreign exchange exposure during 2010 on the Canadian Notes. On August 30, 2010, we repaid the Canadian Notes for
U.S.$237 million and the related foreign currency forwards were settled.

Foreign
exchange losses in the periods from July 6, 2009 to December 31, 2009 and from January 1, 2009 to July 5, 2009 were higher than the full year 2010 and
full year 2008, primarily due to the effect of a strengthening Canadian dollar on non-hedged Canadian-denominated liabilities.

In
2008, we undertook a review of the functional currency exposures of all of our businesses and concluded that the currency exposures of our Canadian entities are predominately in
U.S. dollars. Accordingly, as required by GAAP, we commenced recording transactions in our Canadian entities using U.S. dollars as the functional currency effective October 1,
2008. This results in foreign currency impacts of holding Canadian dollar denominated financial assets and liabilities being recorded through the income statement rather than being included in
translation gains and losses deferred in AOCI. We accounted for this change prospectively and any amounts that were previously deferred in AOCI continue to be included in AOCI unless there is a
realized reduction in the net investment in the Canadian entities.



We are one of many participants in OIL, an insurance pool for property and liability risks. We were one of many participants in
sEnergy, an insurance pool for business interruption, but
sEnergy wound up its operations in February 2011. During 2010, we received $7 million for a portion of our investment in sEnergy. Upon dissolution of sEnergy in February 2011, we
received $5 million, which represented the remaining amount of our investment.

We
believe our reserves are adequate to cover any outstanding claims.

2010

We recorded a $1 million ($1 million after-tax) credit due to the reduction of estimated future claims
payments during 2010.

July 6 to December 31, 2009

We recorded a $2 million ($1 million after-tax) credit due to the reduction of estimated future claims
payments during the period July 6, 2009 through December 31, 2009.

January 1 to July 5, 2009

No insurance charges were incurred during the period January 1, 2009 through July 5, 2009.

2008

No insurance charges were incurred during 2008.



Full Year 2010 Versus July 6 to December 31, 2009

Corporate depreciation expense increased $5 million in 2010 compared to the period July 6, 2009 to December 31,
2009 primarily due to the longer time period.

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Full Year 2010 Versus January 1, 2009 to July 5, 2009

Corporate depreciation expense increased $6 million in 2010 compared to the period January 1 to July 5, 2009
primarily due to the longer time period.

July 6 to December 31, 2009 Versus Full Year 2008

Corporate depreciation expense decreased $3 million during the period July 6, 2009 through December 31, 2009 as
compared to 2008 due to the shorter time period and despite the application of push-down accounting which did not impact depreciation as we undertook to relife our assets at the same time
(see "Application of Critical Accounting EstimatesProperty, Plant and Equipment").

January 1, 2009 to July 5, 2009 Versus Full Year 2008

Corporate depreciation expense decreased $4 million during the period January 1, 2009 through July 5, 2009 as
compared to 2008 primarily due to the shorter time period.



2010

In 2010, we recorded a loss of $95 million (before-tax) related to a jury's verdict that we infringed Dow Chemical's
patents. The charge represents the $76 million award and pre-judgment interest, $16 million based on sales of alleged infringing grades of SURPASS polyethylene film resins
plus interest for 2010 and $3 million of other related costs.

Also
during 2010, we recognized a $45 million gain (before-tax) related to an arbitration award which resulted from an insurance claim involving our Corunna facility
that dated back to 2005.

In
addition, we had other insignificant losses totaling $4 million during 2010.

July 6 to December 31, 2009

During the period July 6, 2009 through December 31, 2009, we recognized no other gains and losses.

January 1 to July 5, 2009

During the period January 1, 2009 to July 5, 2009, we recognized a gain of $6 million ($6 million
after-tax) primarily related to the disposition of our interest in LRM Industries, LLC (joint venture).

2008

In 2008, we recognized other losses of $1 million ($1 million after-tax).

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Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations, cash on-hand, borrowings under our revolving credit
facilities and accessing capital markets. We use our accounts receivable securitization programs as additional sources of financing. Our principal uses of cash are operating expenditures, capital
expenditures and debt service.



The following is a summary of cash flow:

(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6Dec. 31,
2009
Restated(1)

Jan. 1July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)Successor

PredecessorFunds from continuing operations

$
577

$
173

$
(60
)
$
208Operating working capital and other


(34
)

(176
)

(186
)

105Cash provided by (used in) operating activities from continuing operations


543


(3
)

(246
)

313Cash provided by (used in) operating activities from discontinued operations


32


(17
)

(12
)

(41
)Proceeds on sales of assets, investments and other capital transactions


1








Capital expenditures and turnaround costs


(149
)

(72
)

(41
)

(183
)Proceeds from redemption of preferred shares


6








Dividends received


1








Intangible asset additions


(5
)







Cash used in investing activities from continuing operations


(146
)

(72
)

(41
)

(183
)Cash used in investing activities from discontinued operations


(19
)

(7
)

(9
)

(27
)(Decrease) increase in long-term debt and bank loans


(315
)

(235
)

494


(91
)Common shares issued





350





3Common share dividends








(7
)

(31
)Cash (used in) from financing activities


(315
)

115


487


(119
)Increase (decrease) in cash due to exchange rates


2


1


(3
)

13Increase (decrease) in cash and cash equivalents


97


17


176


(44
)Cash and cash equivalents, beginning of period


267


250


74


118Cash and cash equivalents, end of period(2)

$
364

$
267

$
250

$
74


Note: (1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.(2)Includes
cash and cash equivalents of discontinued operations.




We expect our working capital will be sufficient for our present requirements.

In
2010, we generated $577 million in funds from continuing operations. During the year, working capital increased by $34 million primarily due to an increase in accounts
receivable offset somewhat by lower inventory. The increase in accounts receivable was primarily due to higher sales prices for our products. The reduction in inventory was primarily due to a
reduction in crude oil inventory as we moved from an overseas supply source to regional supply sources (which significantly shortened our supply chain), somewhat offset by an increase in

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PE inventory
to allow us to better serve our customers. This change in working capital includes $85 million cash collateral posted to secure a bond pending the outcome of our appeal of
the Dow Chemical patent litigation, which is reported as Restricted cash on the Consolidated Balance Sheet. Capital expenditures for 2010 were $126 million and turnaround costs were
$23 million. In 2010, we repaid our $75 million total return swap and our Cdn$250 million 7.85% notes using cash on hand. There were no dividend payments during 2010. The net
increase in cash and cash equivalents in 2010 was $97 million.

During
the time period July 6, 2009 through December 31, 2009, we generated $173 million in funds from continuing operations. This improvement in funds was offset by
a large increase in working capital due to increased inventory, higher raw material prices and higher accounts receivable values in the period resulting in a use of cash from continuing operations of
$3 million. Capital expenditures during the period were $55 million, which were lower than past years due to a need to conserve cash in 2009 to aid liquidity. Turnaround spending was
$16 million in the period, lower than past years as well.

During
this period we also issued $700 million of debt, of which $496 million was used to fully repay all borrowings under our revolving credit facilities. The remainder
was designated for repayment in 2010 of the $75 million outstanding on the total return swap and other general corporate purposes. In addition, IPIC converted its two outstanding debt
facilities with us into equity resulting in $350 million of common shares being issued. Overall, $115 million of cash from financing activities was reported in the period. There were no
dividend payments during the period. The net result was an increase in cash and cash equivalents during the period of $17 million.

During
the time period January 1, 2009 through July 5, 2009, we used $60 million in funds from continuing operations. Additionally, working capital increased by
$186 million primarily due to the cash settlement of the share forward transactions in January and February 2009 (see "Stock-Based Compensation, Forward Transactions and Profit
Sharing") and a $74 million reduction in the balance outstanding on our accounts receivable securitization programs. The result was $246 million used in continuing operations. Capital
expenditures during the period were $35 million, which was lower than past years due to an effort to conserve cash to aid liquidity. Turnaround spending was also reduced from prior years at
$6 million. In April 2009, we repaid our $250 million of 7.4% notes. The net result was an increase in cash and cash equivalents during the period of $176 million.

In
2008, we generated $208 million in funds from continuing operations. During the year, working capital was reduced by $105 million primarily due to a sharp decline in
feedstock costs during the fourth quarter which caused a reduction in the value of inventory, as well as product price decreases which significantly decreased receivables. We recorded a
$128 million write-down in inventory to reflect the net realizable value of inventory at year-end. The decline in inventory and receivables was partially offset by the
decrease in accounts payable which also reflects the decline in feedstock costs. Capital expenditures for
2008 were $144 million and turnaround costs were $39 million. In 2008, we repaid our $125 million of 7.25% debentures that were scheduled to mature in 2028, but were redeemed
early at our option. This debt repayment was funded by cash on hand and borrowings on revolving credit facilities. The total use of cash in financing activities was $119 million primarily made
up of the repayment of the debentures and dividend payments. The net use of cash and cash equivalents in 2008 was $44 million.



We have various contractual cash obligations, including long-term debt repayments and associated interest, contributions to
pension plans, operating leases for office space and railcars and unconditional purchase obligations related to minimum amounts of feedstock and other raw material purchases pursuant to agreements
entered into to secure short- and long-term supply. The long-term debt due in 2011, associated interest, contributions to pension plans, operating leases for office
space and railcars and unconditional purchase obligations will be paid for using cash flow from operations.

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Payments Due By Periodas of Dec. 31, 2010 (millions of U.S. dollars)

Total

2011

2012 to
2013

2014 to
2015

After
2016Long-term debt(1)

$
1,640

$
10

$
803

$
5

$
822Interest payments(2)


749


132


224


152


241Contributions to defined benefit plans(3)


65


65








Contributions to defined contribution plans(3)


10


10








Operating leases(4)


351


44


76


67


164Unconditional purchase obligations(5)


5,354


1,444


1,337


953


1,620Total contractual cash obligations

$
8,169

$
1,705

$
2,440

$
1,177

$
2,847


Notes: (1)Includes
current portion.(2)Interest
payments were calculated using interest rates that were in effect as of December 31, 2010.(3)Includes
estimate for 2011 only.(4)Includes
property, railcar and other equipment leasing commitments. Certain railcar lease agreements contain financial covenants for our subsidiary, NOVA
Chemicals Inc.(5)Raw
material agreements are typically market-based. Obligations have been calculated using current pricing.




We define liquidity as total available revolving credit facilities, less utilization (including letters of credit), plus cash and cash
equivalents. As of December 31, 2010, our total liquidity was $976 million. Our future liquidity is dependent on many factors such as cash generated from ongoing operations, internal
actions taken to reduce costs and conserve cash, and the availability of existing credit facilities and of other potential sources of financing.

A
significant portion of our operations is conducted by our subsidiaries, and we are dependent to a large extent upon cash dividends and distributions or other transfers from our
subsidiaries. Accordingly, our ability to service indebtedness and fund operations is dependent upon the results of operations of our subsidiaries and their ability to provide cash to us. Payments of
any dividends, loans or other distributions from our subsidiaries are not currently subject to material contractual, restrictive governmental regulations or other restrictions.

In
connection with the Arrangement Agreement, IPIC provided us with a $250 million unsecured backstop credit facility (the "Backstop Facility"). The Backstop Facility could
only be used as a single draw to assist us in repaying our $250 million, 7.4% notes due on April 1, 2009. On March 31, 2009, we drew $150 million on the Backstop Facility
to repay the 7.4% notes on April 1, 2009. The amount drawn on the Backstop Facility and all related interest and fees were to be payable upon maturity of the Backstop Facility on
June 30, 2010 or other termination of the Backstop Facility.

On
July 3, 2009, IPIC provided us with an additional $200 million credit facility with substantially the same terms and conditions as the Backstop Facility to enable us to
complete certain inter-company pre-closing reorganization transactions. We drew the full $200 million available under this credit facility on July 3, 2009 and, subsequent to
the closing of the Acquisition on July 6, 2009, repaid the $200 million credit facility and IPIC's holding company subscribed for $200 million of our common stock. We then repaid
the $150 million outstanding under the Backstop Facility and IPIC's holding company subscribed for an additional $150 million of our common stock.

Related
accrued interest and fees totaling $17 million ($12 million after-tax) on the $200 million credit facility and the Backstop Facility were
forgiven by IPIC and reclassified to Contributed surplus.

In
October 2009, we issued $350 million of 8.375% senior notes due 2016 ("unregistered 2016 Notes") and $350 million of 8.625% senior notes due 2019 ("unregistered
2019 Notes") in a transaction exempt from registration under the Securities Act of 1933, as amended. On May 12, 2010, we completed an exchange offer,

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which
resulted in $345 million of the unregistered 2016 Notes and $344.7 million of the unregistered 2019 Notes being exchanged for the same amount of registered and freely tradable 2016
and 2019 notes.

On
March 20, 2010, $95 million of our undrawn bilateral credit facilities expired and were not extended.

We
had entered into a total return swap with respect to the Series A preferred shares of our subsidiary, NOVA Chemicals Inc. The equity notional amount of the total return
swap was $75 million. We allowed the total return swap to terminate in accordance with its terms on March 31, 2010 and repaid the equity notional amount of $75 million. The
associated Series A preferred shares were returned to NOVA Chemicals Inc. and cancelled.

On
August 30, 2010, we repaid our Cdn$250 million 7.85% notes using cash-on-hand. Foreign currency forwards, entered into in January 2010, to
lock in this payment at U.S.$237 million also settled on August 30, 2010.



During 2010, we amended our senior secured revolving credit facility to extend the maturity date one year to November 17, 2013
and increase the size from $350 million to $425 million. In addition, we entered into a new $100 million senior unsecured bilateral credit facility, which expires on
September 20, 2015. Accordingly, we have the following four revolving credit facilities totaling $695 million (less $19 million utilized as of
December 31, 2010):





On November 19, 2010, we entered into an uncommitted revolving standby letter of credit and/or guarantee facility with one of
the banks in the syndicate of lenders for our senior secured revolving credit facility. The facility has a limit of $60 million and is supported by an account performance security guarantee
issued by Export Development Canada. The facility is only available for issuance of standby letters of credit (and/or guarantees) by the bank on our behalf. At closing, we transferred certain existing
standby letters of credit in an aggregate amount of approximately Cdn$26 million that were issued by the bank on our behalf under our senior secured revolving credit facility to this facility.
This facility is not included in our liquidity calculation.



Our off-balance sheet financing activities are limited to participation in accounts receivable securitization programs. We
engage in accounts receivable securitization programs to obtain lower financing rates than those available from other sources. In February 2010, we entered into two new accounts receivable
securitization programs (one in the U.S. and one in Canada) to replace our prior programs before they expired. The programs each have an initial term of two years and each allow for a maximum
funding of $100 million. We do not include any undrawn amounts under the accounts receivable securitization programs as part of liquidity. As of December 31, 2010, the maximum
availability of the programs was $200 million, which represented a $70 million increase in the programs as compared to December 31, 2009. At December 31, 2010 and
December 31, 2009, $154 million and $122 million, respectively, were funded under the programs. Of the total amount, $98 million and $63 million, respectively, were
funded via a special purpose entity ("SPE") that is 100% owned by us. The SPE isolates the sold receivables and the related cash collections for the exclusive benefit of the purchasers. We have no
right to any cash collected from these receivables; therefore, neither the receivables nor any obligation to the purchasers is reflected in our Annual Audited Consolidated Financial Statements. No
other business is conducted through SPE's.

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Under
IFRS, the funded amounts under the programs will be recognized as a secured financing and included in long-term debt (seeFUTURE CHANGES
IN ACCOUNTING POLICIES, Transition to IFRS).



In June 2009, our subsidiary, NOVA Chemicals (Canada) Ltd., entered into a loan agreement for a loan in the principal
amount of Cdn$10 million made available by Her Majesty the Queen in right of the Province of Ontario as represented by the Minister of Economic Development and Trade under Ontario's Advanced
Manufacturing Investment Strategy. We were permitted to use the loan proceeds only to finance certain eligible costs associated with the modernization and expansion of our LDPE capability at our
Mooretown facility that was completed in 2010. We drew down the full Cdn$10 million in the fourth quarter of 2009. The maturity date of the loan is December 1, 2019.



Our senior secured revolving credit facility and our accounts receivable securitization programs are governed by the following
financial covenants, which require quarterly compliance:



2010Q1

Q2

Q3

Q4Senior debt-to-cash flow ratio


0.40


0.29


0.25


0.20Debt-to-capitalization ratio


49.5


44.1


43.4


41.7


See
Supplemental Measures for a discussion of the computations used to calculate these financial ratios.

We
expect to be in compliance with the financial covenants over the next twelve month period. We have reviewed all of our GAAP dependent covenants and contracts and do not anticipate any
significant impact on compliance with the existing covenants as a result of conversion to IFRS on January 1, 2011 (see further discussion atFUTURE CHANGES IN
ACCOUNTING POLICIES, Transition to IFRS).



We have the following financings that are maturing or may be redeemed in the next 12 months: (i) a capital lease totaling
$10 million due in April 2011; and (ii) $400 million relating to 6.5% senior notes due January 15, 2012.

After
the expiration of the $100 million of senior unsecured bilateral facilities on March 20, 2011 and $30 million of senior unsecured bilateral facilities on
September 20, 2011, we will have $565 million of available capacity on our remaining three credit facilities (less $19 million utilized as of December 31, 2010). The
$100 million senior unsecured bilateral facility expiring on March 20, 2011, was replaced on September 8, 2010 with a new facility that will expire in 2015.

Supplemental Measures

We present certain supplemental measures below, which do not have any standardized meaning prescribed by Canadian GAAP and are
therefore unlikely to be comparable to similar measures presented by other companies. We believe that certain non-GAAP financial measures, when presented in conjunction with comparable
GAAP financial measures, are useful to readers because the information is an appropriate measure for evaluating our operating performance. Internally, we use this non-GAAP financial
information as an indicator of business performance, with specific reference to these indicators. These measures should be considered in addition to, and not as a substitute for or superior to,
measures of financial performance prepared in accordance with GAAP.

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Operating
Income (Loss) from continuing operationsequals income (loss) from continuing operations before interest expense (net), other (losses) gains and income taxes
(expense) recovery. This measure assists readers in analyzing our income (loss) from operations.

Reconciliation of Operating Income (loss) to
Consolidated Income (loss) from Continuing
OperationsYear ended
Dec. 31, 2010

July 6Dec. 31,
2009

Jan. 1July 5,
2009

Year Ended
Dec. 31, 2008(millions of U.S. dollars)Successor

PredecessorOperating income (loss) from continuing operations

$
590

$
99

$
(211
)
$
184Interest expense, net


(183
)

(83
)

(92
)

(149
)Other (losses) gains


(54
)




6


(1
)Income tax (expense) recovery


(120
)

(7
)

62


71Income (loss) from continuing operations

$
233

$
9

$
(235
)
$
105


Senior
Debt to Cash Flowequals the drawn amount on any secured credit facilities of the Corporation (including letters of credit), plus the funded amount of our accounts
receivable securitization programs, divided by Consolidated Cash Flow. The Consolidated Cash Flow calculation is performed on a rolling twelve months. This measure is provided to assist readers in
calculating our financial covenant.

Consolidated
Cash Flowequals consolidated net income (loss) plus interest expense, income taxes and depreciation amortization, less all non-cash items. This
measure excludes any extraordinary gains and losses (including gains and losses resulting from the sale of assets) and excludes certain subsidiaries. This measure is provided to assist readers in
calculating our Senior Debt-to-Cash Flow financial covenant.

Debt-to-Capitalizationequals
Net Consolidated Debt, divided by the aggregate of Consolidated Shareholder's Equity, Net Consolidated Debt and Subordinated Shareholder Debt.
This measure is provided to assist readers in calculating our financial covenant.

Net
Consolidated Debtequals long-term debt due within one year and long-term debt as reflected on the most recent quarterly Consolidated Balance
Sheet of the Corporation (excluding debt of certain subsidiaries and any non-recourse debt), plus the funded amount of our accounts receivable securitization programs, less cash and cash
equivalents as reflected on the Consolidated Balance Sheet of the Corporation (excluding cash and cash equivalents of certain subsidiaries) and the outstanding balance of the total return swap. This
measure is provided to assist readers in calculating our Debt-to-Capitalization financial covenant.

Consolidated
Shareholder's Equityequals consolidated shareholder's equity as reflected on the most recent quarterly Consolidated Balance Sheet of the Corporation (excluding
shareholder's equity allocable to certain subsidiaries or equity allocable to assets that secure non-recourse debt), plus the outstanding balance of the total return swap. This measure is
provided to assist readers in calculating our Debt-to-Capitalization financial covenant.

Application of Critical Accounting Estimates

The following represents the estimates most critical to the application of our accounting policies. For a summary of our significant
accounting policies, see Note 2 in the Annual Audited Consolidated Financial Statements.

Purchase Accounting.On July 6, 2009, IPIC acquired 100% of our outstanding common shares for consideration of $6.00 per share. We
elected to
use push-down accounting under CICA 1625,Comprehensive Revaluation of Assets and Liabilities, which resulted in our assets and liabilities
being comprehensively revalued to be consistent with the values recorded by IPIC in accordance with business combination accounting standards. In this respect, we applied prospectively, the principles
of CICA 1582,Business Combinations, in connection with the push-down accounting. As a result, the carrying values of all identifiable
assets and liabilities have been adjusted to their respective fair values on July 6, 2009. In accordance with CICA 1582, the $929 million excess of the acquisition date fair values of
our identifiable assets and liabilities over the total purchase consideration is considered a bargain purchase by IPIC and is recorded as a component of Contributed surplus.

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In
determining the fair values for all identifiable assets and liabilities, management applied judgments in many areas for the period from the middle of 2009 to 2015 with terminal values
beyond that date. These judgments were made with data available on the July 6, 2009 acquisition date. Assumptions were made regarding, among other things, product selling prices, feedstock
costs, future supply/demand dynamics, inflation, discount rate and foreign exchange rates. We based these assumptions on our industry knowledge and CMAI data or other outside sources. In all cases, we
believe the assumptions are fair and reasonable.

Inventories.We carry inventories at the lower of cost or net realizable value. The cost of inventories comprise all costs of purchase,
costs of
conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of purchase include the purchase price (net of discounts and rebates), import
duties and other taxes and transport and handling costs. The costs of conversion include costs directly related to the units of production, such as labor, and a systematic allocation of fixed
(i.e., depreciation) and variable production overhead costs that are incurred in converting the materials into finished goods. Other costs may include non-production overhead costs
or the costs of designing products for specific customers. Financing costs are not included in production costs. Cost is determined on a first-in, first-out ("FIFO") basis as
we believe this basis is the best method to match actual costs incurred with related revenue. In the fourth quarter of 2008, there were significant decreases in prices of crude oil and other liquid
petroleum products used to produce polyethylene, ethylene and co-products at our Corunna facility. As a result, Corunna's commodity feedstocks and manufactured ethylene,
co-products and polyethylene finished goods inventory were written down to the lower of cost or estimated net realizable value as of December 31, 2008, and a write-down
of $128 million was recorded in Feedstock and operating costs in 2008. Estimated net realizable value was determined using accepted benchmark indices. No such write-down occurred in
2009 or 2010.

Property, Plant and Equipment ("PP&E").Our PP&E consists primarily of land, buildings for producing petrochemicals and
manufacturing equipment. We
value PP&E at historical cost. Financing costs incurred during major construction projects are capitalized as part of the cost of the asset until the asset is available for use. Costs related to
turnaround activities are capitalized and amortized over the period remaining until the next turnaround activity, while maintenance and repair costs are expensed as incurred.

Judgmental
aspects of accounting for PP&E involves the selection of an appropriate method of depreciation, estimates of the life of the assets and determining whether an impairment of
our assets exists and measuring such an impairment. These assessments are critical due to their potential impact on earnings and equity.

We
are able to choose from alternative methods of depreciation. The straight-line method was chosen rather than other methods, such as units of production, because the
straight-line method is more conservative, requires less estimation and judgment and is a systematic and rational basis reflecting the period over which the assets' benefit
is realized.

Net
PP&E at December 31, 2010, totaled approximately $3.5 billion. PP&E is tested for impairment at the lowest level for which identifiable cash flows exist. Impairment
testing of the plant assets occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We assess recoverability by comparing the
carrying amount of the asset group to the estimated future cash flows expected to be generated by the assets, undiscounted and without interest charges. If an asset is considered impaired, the
impairment loss to be recognized is measured as the amount by which the asset's carrying amount exceeds its fair value.

The
estimate of PP&E fair value is based on estimated discounted future cash flows expected to be generated by the asset. The assumptions underlying cash flow projections represent
management's best estimates at the time of the impairment review. Factors that management must estimate include: industry and market conditions, sales volume and prices, costs to produce, inflation,
discount rate, etc. A sensitivity analysis of significant estimates and key assumptions is performed which includes an analysis of the probability of potential cash flow outcomes. Changes in key
assumptions or actual conditions, which differ from estimates, could result in an impairment charge. We use reasonable, supportable and, where available, third-party, industry expert assumptions when
performing impairment reviews.

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In
connection with the IPIC Transaction, we applied push-down accounting as described in Note 4 of the Annual Audited Consolidated Financial Statements, and the
carrying value of PP&E was adjusted to its fair value of $3,602 million on July 6, 2009.

Based
on current assets value and expected future cash flows, we have concluded that the carrying value of PP&E in our Olefins/Polyolefins business unit and the INEOS NOVA Joint Venture
segment as of December 31, 2010 was appropriate. Although the Performance Styrenics segment continues to add new packaging applications for items such as televisions and computer equipment,
demand has not materialized as expected due to poor economic conditions and competitive pressure, which resulted in lower sales volumes during 2010. Accordingly, during the fourth quarter of 2010,
management determined that the carrying value of certain assets within the Performance Styrenics segment were greater than the estimated future cash flows. The assets' carrying value at
December 31, 2010 prior to write-down was $26 million. Fair value was estimated to be $6 million. Thus, the assets were written down to the estimated fair value,
resulting in an impairment charge of $20 million ($20 million after-tax).

The
write-down will reduce future depreciation charges in the Performance Sytrenics segment by approximately $2 million per year from 2011 to
approximately 2019.

Intangibles.Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets as a
result of
push-down accounting applied for the IPIC Transaction as described in Note 4 in the Annual Audited Consolidated Financial Statements is fair value as at the closing date of the
Acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and the expenditure is reflected in the consolidated income statement in the year in which the expenditure is incurred.

The
amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end. We made no changes to the
amortization periods or methods of intangible assets during 2010, and have no intangible assets with indefinite useful lives. Intangible assets are assessed for impairment whenever there is an
indication that the intangible assets may be impaired. Based on current asset values and expected future cash flows of all segments, we concluded that the carrying value of intangible assets of all
segments as of December 31, 2010 was appropriate.

Asset Retirement Obligations.United States and Canadian GAAP require companies to record liabilities associated with future plant
decommissioning and site restoration costs on both active and inactive plants at their fair value, based on a discounted value of the expected costs to be paid when the assets are retired. In 2010, we
increased our asset retirement obligation by $4 million as the result of a court denied claim in connection with the Lyondell bankruptcy. Throughout 2010, the obligations were also increased as
a result of the accretion of the liabilities. At December 31, 2010, we had approximately $47 million of accumulated reserve for these activities.

During
2009, as a result of push-down accounting as described in Note 4 in the Annual Audited Consolidated Financial Statements, we increased our asset retirement
obligations by $12 million. The present value of this future obligation (using a credit-adjusted risk-free rate of 10.5% to discount the estimated future cash flows) was
approximately $22 million prior to the IPIC Acquisition. On July 6, 2009, we reassessed the obligation in connection with the IPIC Transaction and the push-down accounting
exercise, and we increased the discount rate. In addition, we adjusted the timing of the obligation to match the assets revised estimated useful lives.

During
2008, there were no business conditions or decisions that resulted in a requirement to increase or decrease the asset retirement obligations associated with active or divested
sites. The obligations were increased as a result of the accretion of the liabilities.

We
undertook an evaluation of the costs to conduct decommissioning and site restoration to satisfy the projected obligations under applicable environmental requirements upon termination
of operations at currently operating plant sites in 2003. Canadian GAAP required that the present value of inflation-adjusted decommissioning and site restoration costs be recorded as increases to the
carrying values of the assets at that time and that this amount be depreciated over the estimated remaining lives of the assets. Because the

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decommissioning
may not take place for 25 years or more, significant uncertainty exists concerning the nature of the decommissioning and site restoration activities that may be required.
Furthermore, significant judgment is involved in the estimation process, because the degree of natural attenuation, evolution of new technologies and potential land uses may mitigate future
environmental liabilities and potential costs. In 2007, we engaged a third-party to perform an in-depth review of our active plant sites and required clean-up and restoration
activities. The third party concluded that our current estimates of the costs to complete these obligations were reasonable at December 31, 2007. Management has reviewed these cost estimates
and believes they are still valid as of December 31, 2010.

The
estimated liability will increase, or accrete, each year over the lives of the active plants until it reaches the $155 million expected to be incurred on closure of the
plants. The resulting expense is referred to as accretion expense and is included in operating expenses. In the years ended December 31, 2010, 2009 and 2008, accretion expense was
$4 million, $2 million and $2 million, respectively.

Pension Plans.We sponsor both defined benefit and defined contribution pension arrangements covering substantially all of our
employees. For the
defined contribution plans, the cost is expensed as earned by employees. For the defined benefit plans, obligations and expense are determined using actual discount rates and assumptions for
mortality, termination, retirement and other rates, as well as the expected return on plan assets and the rate of increase for future compensation. We use current mortality rate tables commonly used
for actuarial calculations and select other assumptions in line with past experience and current economic conditions. The return on plan assets is not the actual return, but an expected rate based on
estimates of long-term rates of return for various asset classes and the investment strategy of the plans. The discount rate is based on actual market interest rates at the measurement
date on high quality debt instruments with terms to maturity that approximate the duration or the projected cash flows of our pension liabilities.

Canadian
GAAP requires that actuarial gains and losses be recognized in our income using a systematic and consistent methodology. For defined benefit pensions, we amortize such gains and
losses over the estimated remaining service lifetime of the employee group to the extent these gains or losses exceed 10% of the greater of the accrued benefit obligation or market value of assets.
This alternative avoids recognizing into income large unrealized gains or losses in individual years. Immediate recognition of such gains and losses would introduce significant volatility into our
earnings. Cumulative unrealized actuarial gains and losses have ranged from a $61 million gain at December 31, 1999, to a $235 million loss at December 31, 2008. In
connection with the IPIC Transaction, we applied push-down accounting as described in Note 4 of the Annual Audited Consolidated Financial Statements. As a result of the
push-down accounting, pension assets were decreased by $65 million and pension liabilities were increased by $219 million to reflect funded status of the plans on
July 6, 2009. Cumulative unrecognized
actuarial gains at December 31, 2009 were $35 million. At December 31, 2010, due primarily to a drop in discount rates, the net unrealized actuarial loss was $19 million.

A
total of $33 million, $27 million and $35 million was contributed in 2010, 2009 and 2008, respectively, to all of our defined benefit pension plans. The
contributions were based on the most recently filed valuations with pension regulators in various countries. We contributed $10 million, $10 million and $12 million in 2010, 2009
and 2008, respectively, to the defined contribution plans.

Funding
for our defined benefit pension plans is largely driven by the North American pension plans, as they constitute a significant portion of our pension plan assets and obligations.
For 2011, funding for the defined benefit plans is expected to be between $60 and $70 million as employees accrue additional pension benefits and special payments are made to cover the
shortfall between assets and liabilities. Contributions to defined contribution plans for 2011 are expected to be $10 million.

Income Taxes.The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current
and future years
for events that have been recognized in our financial statements or tax returns. Judgment is required in assessing current and future tax consequences. Variations in the actual outcome of tax
consequences could materially impact our financial position or results of operations. In connection with the IPIC Transaction, we applied push-down accounting as described in Note 4
of the Annual Audited Consolidated Financial Statements, which increased future tax liabilities by $499 million.

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We
have a valuation allowance and a tax reserve to provide for uncertain tax positions. A valuation allowance is used where it is uncertain that a recorded tax benefit can be utilized in
the future. Our valuation allowance primarily relates to our ability to utilize tax loss carry-forwards. During 2010, there was an increase of $40 million to the valuation allowance. The
allowance was reduced by $205 million in 2009 and increased by $41 million in 2008 primarily related to losses in the United States. A tax reserve is used to provide for potential
tax liabilities associated with possible disputes with tax authorities. During 2010, there was not a significant change in the tax reserve. During 2009, the reserve was increased by $22 million
to provide for certain transfer pricing issues between Canada and the United States. During 2008, the reserve was reduced by $20 million.

Accounting Standards

Description

Date of adoption

ImpactCANADIAN GAAPFurther amendment to CICA 3855,Financial InstrumentsRecognition and Measurement, clarifies that the interest rate used to determine fair value of a
financial instrument should also be the rate used to recognize interest income in subsequent periods.

January 1, 2010

NoneFurther amendments to CICA 3862 require enhanced disclosures for financial instruments including classification of fair value measurements and methods using a fair value hierarchy and, when a valuation technique is used,
the assumptions used in determining fair value of each class of financial assets and liabilities. These amendments are to be applied prospectively.

December 31, 2009

Disclosure only, see Note 23 in our Annual Audited Consolidated Financial StatementsFurther amendments to CICA 3855,Financial InstrumentsRecognition and Measurement, provide criteria with regard to determining whether an embedded prepayment option is
closely related to its host contract. Specifically the amendment provides that an option that compensates the lender for lost interest on reinvestment will be considered closely related to a debt host instrument. This amendment will further harmonize
Canadian GAAP with IFRS and U.S. GAAP.

October 1, 2009

We applied this amendment and determined that senior notes issued in October 2009 do not contain embedded derivatives (See Note 11 in our Annual Audited Consolidated Financial Statements)Scope amendments to CICA 1506,Accounting Changes,provide that this Section shall be applied to a change in individual accounting policies but not to changes in accounting
policies upon the complete replacement of an entity's primary basis of accounting.

Annual and interim financial statements relating to fiscal years beginning on or after July 1, 2009

Our adoption of IFRS on January 1, 2011 did not qualify as an accounting change under CICA 1506


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Description

Date of adoption

ImpactEmerging Issues Committee ("EIC") 173,Credit Risk and the Fair Value of Financial Assets and Financial Liabilities, provides that an entity's own credit risk and the credit
risk of the counterparty should be taken into account in determining the fair value of derivative instruments. The accounting treatment in this Abstract should be applied retrospectively with or without restatement of prior periods to all financial
assets and liabilities measured at fair value in interim and annual financial statements for periods ending on or after the date of issuance of this Abstract.

March 31, 2009

Resulted in a one-time credit to opening retained earnings on January 1, 2009 and a corresponding decrease in mark-to-market feedstock liabilities of $18 million ($12 million after-tax).
During the 2009 Predecessor period, the initial EIC 173 impact was reduced by $16 million ($11 million after-tax) and decreased an additional $9 million ($6 million after-tax) during the 2009 Successor period.Amendments to CICA 1625,Comprehensive Revaluation of Assets and Liabilities, and CICA 3251,Equity, and new standards CICA
1582,Business Combinations, CICA 1601,Consolidated Financial Statements, and CICA 1602,Non-controlling Interests, provide guidance on business combinations and the methodology to be used in the accounting therefor, including the revaluation of assets and liabilities. As a result of the IPIC Transaction, we early adopted these standards.

January 1, 2009

See Note 4 in our Annual Audited Consolidated Financial Statements for the impact of the IPIC Acquisition under CICA 1625, CICA 3251 and CICA 1582; No material impact from CICA 1601 and CICA 1602


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Description

Date of adoption

ImpactCICA 3064,Goodwill and Intangible Assets, replaced CICA 3062,Goodwill and Other Intangible Assets, and
results in withdrawal of CICA 3450,Research and Development Costs, and amendments to Accounting Guideline ("AcG") 11,Enterprises in the Development Stageand CICA 1000,Financial Statement Concepts. The Standard intends to reduce the differences with IFRS in the accounting for intangible assets and results in closer alignment with U.S. GAAP. Under
current Canadian standards, more items are recognized as assets than under IFRS or U.S. GAAP. The objectives of CICA 3064 are to reinforce the principle-based approach to the recognition of assets only in accordance with the definition of
an asset and the criteria for asset recognition; and clarify the application of the concept of matching revenues and expenses such that the current practice of recognizing as assets items that do not meet the definition and recognition criteria is
eliminated. The standard also provides guidance for the recognition of internally developed intangible assets (including research and development activities), ensuring consistent treatment of all intangible assets, whether separately acquired or
internally developed.
Assets such as pre-production costs and start-ups costs, which no longer meet the definition of intangible assets as prescribed by CICA 3064 were removed from the balance sheet and in accordance with CICA 1506,Accounting
Changes, these changes have been applied retrospectively. The effect of the restatement at December 31, 2008 was to decrease Other non-current assets by $27 million, decrease Future income tax liability by
$8 million, decrease Accumulated other comprehensive income by $2 million and increase the Deficit by $17 million. The after-tax impact to net income in 2008 was $8 million.
The following summarizes the impact of the adoption of CICA 3064 in the periods presented:

January 1, 2009

See discussion below




(millions of U.S. dollars)

As
Previously
Reported

Change in
Accounting
Policy

As
RestatedDeficit at Dec. 31, 2007

$
(43
)
$
(25
)
$
(68
)Net loss for the year ended Dec. 31, 2008


(48
)

8


(40
)Other changes during the year ended Dec. 31, 2008


8





8Deficit at Dec. 31, 2008

$
(83
)
$
(17
)
$
(100
)


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Description

Date of adoption

ImpactCICA 3031,Inventories, replaces CICA 3030,Inventories. The new Standard is the Canadian equivalent to IFRS IAS 2,Inventories. The main features of CICA 3031 are: (1) measurement of inventories at the lower of cost and net realizable value, with guidance on the determination of cost, including allocation
of overheads and other costs to inventory; (2) cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects assigned by using a specific identification of their
individual costs; (3) consistent use (by type of inventory with similar nature and use) of either FIFO or weighted-average cost formula; (4) reversal of previous write-downs to net realizable value when there is a subsequent increase
in value of inventories; and (5) possible classification of major spare parts and servicing stand-by equipment as property, plant and equipment (CICA 3061Property, Plant and Equipment, was
amended to reflect this change).

January 1, 2008

One-time credit on January 1, 2008 to opening retained earnings and a corresponding increase in opening inventory of $47 million ($39 million after-tax)Our inventories are carried at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis and beginning January 1, 2008, includes all costs of purchase, costs of
conversion (direct costs and an allocation of fixed and variable production overhead costs) and other costs incurred in bringing the inventories to their present location and condition.


FUTURE CHANGES IN ACCOUNTING POLICIES

Transition to IFRS

In October 2009, the Canadian Accounting Standards Board confirmed that publicly accountable enterprises will be required to
adopt IFRS for interim and annual financial statements for fiscal years beginning on or after January 1, 2011. IFRS is replacing Canadian GAAP for listed companies and other profit oriented
enterprises. We adopted IFRS commencing January 1, 2011 and will publish our first consolidated financial statements prepared in accordance with IFRS for the quarter ended March 31,
2011. These interim financial statements will include IFRS comparative data for the 2010 quarter and an opening statement of financial position on the date of transition to IFRS.

We
developed our IFRS convergence plan in 2008 and continued to assess the impacts of adopting IFRS on our financial reporting, information technology, business policies and our control
environment since that time. An IFRS Technical Steering Team was established to provide overall project governance and approval of decisions on accounting policies and selection of IFRS 1, First-Time Adoption of
International Financial Reporting Standards("IFRS 1"), optional exemptions. As a result of the IPIC
Acquisition in July 2009, the objectives of our IFRS convergence plan were impacted by the requirement that the selected policies need to be consistent with accounting and disclosure policies
of IPIC. All accounting
policy determinations have been reviewed and discussed with our external auditors to confirm our interpretation of the standards.

IFRS Convergence Project

The following is a summary of the key activities that were identified and choices made as part of our IFRS
convergence plan:



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Opening Statement of Financial Position

IFRS 1 provides that when an entity initially adopts IFRS it shall apply all of the standards retrospectively, and the
adjustments that arise from the retrospective conversion to IFRS from an entity's prior GAAP should be directly recognized in retained earnings. The entity is required to explain the effects of the
transition from its prior GAAP by providing a reconciliation of its equity reported under the previous GAAP to the equity balance in its opening statement of financial position under IFRS.

IFRS 1
also provides a number of optional exemptions to the full retrospective application of IFRS on the opening statement of financial position. These optional exemptions are
intended to assist first-time adopters in restating their opening statement of financial position in compliance
with IFRS in a cost effective manner. We have completed an analysis of the impact of the optional exemptions, and have elected to apply the following exemptions:



The
most significant of the IFRS 1 optional exemptions that we will adopt is the election to use fair value as deemed cost for all of our assets and liabilities. Under
IFRS 1, an entity may elect to use the fair value

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measurements
of its assets and liabilities that were determined in accordance with previous GAAP (because of an event such as a privatization or initial public offering) as deemed cost of those assets
and liabilities for IFRS, as of the date of that measurement. The benefit of this election is significant for us because we remeasured at fair values all of our assets and liabilities when we applied
push-down accounting under Canadian GAAP (CICA 1625) to account for the IPIC Acquisition, and the carrying values of all of our identifiable assets and liabilities were restated to their
fair values at the date of the IPIC Acquisition on July 6, 2009. By adopting this election to use fair value as deemed cost, the carrying value of our assets and liabilities that were
determined under push-down accounting, will be recognized as deemed cost under IFRS at July 6, 2009, and the need to retrospectively adjust the carrying values of all of the assets
and liabilities was eliminated. Adopting this election does not obligate us to use the revaluation model for property, plant and equipment, and accordingly we will continue to use the cost model
under IFRS.

This
election also eliminates the need to retrospectively adjust the carrying values of items within property, plant and equipment and intangibles for any inconsistencies with IFRS
standards for recognition, measurement or de-recognition.

Accounting Policy Differences with Significant Impact

We completed an assessment of the impact of adopting IFRS based on the standards as they currently exist, and have identified the
following key accounting differences between Canadian GAAP and IFRS:







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Estimated Impact of Adopting IFRS

The following is a summary of the expected equity impact of adopting IFRS in the opening statement of financial position on
January 1, 2010 (in millions of U.S. dollars):

Equity as reported under Canadian GAAP at January 1, 2010

$
1,793Increases (decreases) in equity resulting from IFRS adjustments (after- tax):Employee benefit plans (paragraph (c) above)


14Asset retirement obligations (paragraph (d) above)


(35
)Other


(2
)Equity as restated under IFRS at January 1, 2010

$
1,770


The
areas impacted by IFRS discussed above should not be regarded as a comprehensive list of changes that will result from our transition to IFRS. We continue to work on the convergence
project and monitor and assess the development of standards to understand the application of the IFRS principles which will affect the quantification of our IFRS adjustments on January 1, 2010
and subsequent reporting periods.

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Market and Regulatory Risk

The Audit Committee of our Board of Directors regularly reviews foreign exchange, interest rate and commodity hedging activity and
monitors compliance with the our hedging policy. Our policy prohibits the use of financial instruments for speculative purposes and limits hedging activity to the underlying net economic exposure. See
Note 23 in our Annual Audited Consolidated Financial Statements for additional information.



We are exposed to both translation and transaction effects resulting from changes in currency exchange rates. Through
September 30, 2008, all of our operations were considered self-sustaining and were translated into U.S. dollars for reporting purposes using the current rate method.
Resulting translation gains or losses were deferred in AOCI until there was a realized reduction of the net investment in the foreign operation. Transaction currency effects occur when we incur
monetary assets or liabilities in a currency different from our functional currency.

In
the third quarter of 2008, the INEOS NOVA joint venture obtained independent financing through a North American accounts receivable securitization program. This significantly
eliminated the joint venture's reliance on us to fund operations. As a result of this change in circumstances, we undertook a review of the functional currency exposures of all of our businesses and
concluded that the currency exposures of our Canadian entities predominately are now U.S. dollars. Accordingly, as required by GAAP, we commenced recording transactions in our Canadian entities
using U.S. dollars as the functional currency effective October 1, 2008. This results in all foreign currency impacts of holding Canadian dollar denominated financial assets and
liabilities being recorded through the income statement rather than being included in translation gains and losses deferred in AOCI. We accounted for this change prospectively and any amounts that had
been previously deferred in AOCI continue to be included in AOCI unless there is a realized reduction in the net investment in the Canadian entities. The translated amount on September 30,
2008, became the historical basis for all items as of October 1, 2008. We continue to hold investments in joint ventures and other subsidiaries with differing functional currencies and these
will continue to be classified as self-sustaining operations, with translation gains and losses deferred in AOCI.

We
have established a policy which provides a framework for foreign currency management, hedging strategies and approved hedging instruments. Hedging instruments may be used to minimize
the gains and losses due to short-term foreign currency exchange rate fluctuations. The exposure that may be hedged in accordance with our foreign exchange policy is limited to operational
transaction exposure and is generally used only to balance out our cash positions. Foreign currency risks resulting from the translation of assets and liabilities of foreign operations into our
functional currency are generally not hedged; however, we may hedge this risk under certain circumstances. We have not changed our policies as a result of the change in functional currency. To address
the risks associated with having the U.S. dollar as our functional currency, we:



Foreign
currency risks also may result from certain investing activities such as the acquisition and disposal of investments in foreign companies and may be caused by financial
liabilities in foreign currencies and loans in foreign currencies that are extended to affiliated entities for financing purposes. In recent years, these risks generally have not been hedged.

Our
subsidiaries and affiliated entities generally execute their operating activities in their respective local currencies. We historically have not used currency derivatives to hedge
such payments.

At
December 31, 2010 and December 31, 2009, we had no outstanding foreign currency derivative instruments.

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Our
investing, financing and operating activities are exposed to currency risks. Currency risks, as defined by CICA 3862, arise when a monetary financial instrument is denominated
in a currency other than the functional currency. As of December 31, 2010 and 2009, we had a net monetary liability position of $252 million and $675 million, respectively, in
non-U.S. dollar currencies at their respective current exchange rates. Each 10% weakening (strengthening) of the Canadian dollar against the U.S. dollar would decrease
(increase) the value of the net liability by $19 million and $47 million after-tax, respectively. Any change in the Euro would not be material.

Beginning
January 1, 2011, our income statement exposure will be reduced to approximately a $3 million after-tax decrease (increase) with each 10% weakening
(strengthening) of the Canadian dollar against the U.S. dollar. This change results from moving to IFRS under which foreign currency gains and losses on pension obligations are reported
in AOCI.



We use commodity-based derivatives to manage our exposure to price fluctuations on crude oil, refined products and natural gas
transactions. The instruments are used to moderate the risk of adverse short-term price movements. Occasionally, longer-term positions will be taken to manage price risk for
anticipated supply requirements. The extent to which commodity-based derivatives are used depends on market conditions and requires adherence to our hedging policy. We limit our positions in futures
markets to proprietary feedstock requirements and do not use derivative instruments for speculative purposes.

Commodity
swaps are sometimes used and designated as fair value hedges intended to hedge the fair value of our crude inventory against changes in the market price. As of
December 31, 2010 and December 31, 2009, we had no outstanding commodity-based derivatives designated as fair value hedges. Unrealized gains and losses on derivative instruments
designated and qualifying as fair value hedging instruments, as well as the offsetting unrealized gains and losses on the hedged items, are included in income in the same accounting period within
Feedstock and operating costs in the Consolidated Statements of Income (Loss).

In
addition, we utilize options, swaps and futures instruments as economic hedges of commodity price exposures, but do not meet the hedge accounting criteria of CICA 3865, Hedges, or are not
designated as qualifying hedges. Gains and losses on these commodity-based derivatives are included in Feedstock and operating costs
in the Consolidated Statements of Income (Loss).

The
notional volume and fair value of outstanding derivative contracts for crude oil and refined products that do not qualify for hedge accounting are as follows:

Dec. 31, 2010

Dec. 31, 2009(millions of U.S. dollars, except as noted)

Crude oil

Propane

Butane

Crude oil

Propane

ButaneNotional volumemm bbls


1.5


0.9


0.9


2.9


2.7


1.9Weighted-average price per bbl

$
94.75

$
48.46

$
72.67

$
88.61

$
45.75

$
72.25Fair value

$
2

$
4

$
(4
)
$
16

$
17

$
(15
)Term to maturitymonths


1 - 24


1 - 24


1 - 24


1 - 36


1 - 36


4 - 36


The
notional volume and fair value of outstanding derivative contracts for natural gas that do not qualify for hedge accounting are as follows:

Dec. 31,(millions of U.S. dollars, except as noted)

2010

2009Notional volumemm gjs


1.8


Weighted-average price per gj

$
3.75

$
Fair value

$


$
Term to maturitymonths


1 - 3





We
lock in a portion of our propane and butane feedstock requirements as a percentage of crude oil using forward contracts that extend to 2012. In 2010, our portfolio also included
trades to re-price excess feedstock

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inventory,
and a small volume of our winter natural gas requirements was locked in at a fixed price. Changes in forward propane and butane prices as a percentage of forward crude oil prices and a
decrease in the notional volumes drove the mark-to-market decrease in 2010 as compared to 2009. As of December 31, 2010, each 10% change in the price of crude oil,
propane and butane would have impacted the value of our derivative contracts and change net income by approximately $11 million, $4 million and $4 million, after tax,
respectively. As of December 31, 2009, each 10% change in the price of crude oil, propane and butane would impact the value of our derivative contracts and change net income by approximately
$14 million, $10 million and $5 million, after tax, respectively. As of December 31, 2010, any reasonably possible change in the natural gas price would not impact the
value of our derivative contracts materially. The sensitivity analysis of our commodity derivative contracts does not consider any adjustments for credit risk. See "Price, Volume and Cost Influence
Profitability" for further sensitivity analysis of our primary feedstocks, which does not include the above commodity derivatives. There are no other items except as noted, that are excluded or
partially excluded from this analysis. As of December 31, 2010, we
remain exposed to price risk on open commodity derivatives until their maturity. There have been no other changes in our market risk exposure or how this risk is managed.



Equity forward contracts were used to manage exposures to fluctuations in our stock-based compensation costs, as the costs of the plans
varied as the market price of the underlying common shares changed. As a result of the IPIC Transaction on July 6, 2009, all stock-based compensation plans were terminated; therefore, we are no
longer exposed to fluctuations in stock-based compensation costs. For further details on our equity forward contracts, see "Stock-Based Compensation, Forward Transactions and Profit Sharing."



Liquidity risk is the risk that we will not have sufficient funds available to meet our liabilities. We seek to maintain liquidity
within a targeted range in the form of cash and cash equivalents and undrawn revolving credit facilities to position us to make scheduled cash payments, pay down debt, ensure ready access to capital,
and assist in the solvency and financial flexibility of company operations. Adjustments to the liquidity reserve are made upon changes to economic conditions, anticipated future debt maturities,
underlying risks inherent in our operations and capital requirements to maintain and grow operations. Liquidity totaled $976 million at December 31, 2010 and $796 million at
December 31, 2009 (2009 was restated for discontinued operations, see Note 3 in our Annual Audited Consolidated Financial Statements).

Repayment
of amounts due within one year may be funded by cash flows from operations, cash on-hand, undrawn revolving credit facilities, accounts receivable securitization
programs and internal actions taken to reduce costs and conserve cash. Capital markets transactions may also be used in managing the balance between maturing obligations and available liquidity. Our
future liquidity is dependent on factors such as cash generated from ongoing operations, internal actions taken to reduce costs and conserve cash and other potential sources of financing.



Counterparty credit risk on financial instruments arises from the possibility that a counterparty to an instrument in which we are
entitled to receive payment fails to perform on its obligations under the contract. This includes any cash amounts owed to us by those counterparties, less any amounts owed to the counterparty by us
where a legal right of offset exists and also includes the fair value
of contracts with individual counterparties which are recorded in the Annual Audited Consolidated Financial Statements.

For
derivative financial instruments, we have established a limit on contingent exposure for each counterparty based on the counterparty's credit rating. Credit exposure is managed
through credit approval and monitoring procedures. We do not anticipate that any counterparties we currently transact with will fail to meet their obligations. At December 31, 2010 and
December 31, 2009, we had no credit exposure for foreign currency, interest rate or share-based instruments. At December 31, 2010 we had $7 million of credit exposure for
commodity-based instruments (December 31, 2009$17 million).

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In
order to manage credit and liquidity risk, we invest only in highly rated instruments that have maturities of nine months or less. Limits on the term of an investment, the type of
investment and concentration limits per institution are established. Typically we invest only in overnight bank term deposits.

Trade
credit risk includes an unexpected loss in cash and earnings if a customer is unable to pay its obligations or the value of security provided declines. Trade receivables over
30 days were down from 3% at December 31, 2009 to 1% at December 31, 2010. There is no indication as of December 31, 2010, that the debtors will not meet their obligations.
Historically, trade receivable credit losses (bad debt write-offs) have been immaterial and bad debt expense continued to be immaterial in 2010.



We are committed to the Responsible Care® initiative as the basis for our overall safety, health, environment, security and
risk program. Responsible Care is a global industry initiative that is currently practiced by the chemical industry in over 50 countries worldwide. Responsible Care was created by the Chemistry
Industry Association of Canada in 1985 and adopted by the American Chemistry Council in the United States in 1988. As a participant in Responsible Care, we are committed to the responsible
management of our products through their life cycle, the safety of our operations, the continuous reduction of the emissions and wastes from our facilities and sustainability.

Similar
to other companies that manufacture and sell plastics and chemicals, we are subject to extensive environmental laws and regulations. These laws and regulations concern the
manufacturing, processing and importation of certain substances, discharges or releases to air, land or water and the generation, handling, storage, transportation, treatment, disposal and
clean-up of regulated materials.

Although
we believe that our businesses, operations and facilities are being operated in material compliance with applicable environmental laws and regulations, the operation of any
petrochemical facility and the distribution of petrochemical products involve the risk of accidental discharges of hazardous materials, personal injury and property and environmental damage.

From
time to time, we have entered into consent agreements or have been subject to administrative orders for pollution abatement or remedial action. Under some environmental laws, we may
be subject to strict and, under certain circumstances, joint and several liability for the costs of environmental contamination on or from our properties and at off-site locations where we
disposed of or arranged for disposal or treatment of hazardous substances and may also incur liability for related damages to natural resources. We have been named as a potentially responsible party
under the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or its state equivalents, at several third-party sites. Provision has been made in our financial
statements to cover the estimated costs. Nevertheless, we cannot provide any assurance that we will not incur substantial costs and liabilities resulting from future events or unknown circumstances
which exceed our reserves or will be material.

In
2002, Canada ratified the Kyoto Protocol, and agreed to regulate reductions in air emissions that contribute to climate change. In 2007, the Canadian federal government released its
plan for reducing industrial air emissions, including an ultimate goal of reducing greenhouse gas ("GHG") emissions by 20% from 2006 levels by 2020 and by 60% to 70% by 2050. In December 2010,
Canada signed the Copenhagen Accord committing to reduce national GHG emissions by 17% from 2005 levels by 2020.

The
Canadian federal government, recognizing the recent global economic recession and Canada's approximate 2% contribution of global GHGs, has indicated an intent to balance national
environmental and energy policies between economic renewal and sustainable development. In addition, the Canadian federal government has stated that GHG reduction objectives require a systemic
approach of regulating emissions sector by sector and, where appropriate, alignment with the United States. To date, the Canadian federal government emphasis remains on GHG emissions associated
with transportation and coal fired electricity generation. We anticipate legally binding federal GHG emission reduction requirements to be imposed on our operations in Canada, although the scope and
timing for such requirements and the related impacts are uncertain.

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Many
Canadian provinces are also considering or implementing GHG emissions reduction legislation. In Alberta, theSpecified Gas Emitters
Regulationunder theClimate Change and Emissions Management Actcame into effect in 2007, imposing annual reductions
requirements on facilities that emit over 100,000 tons of GHGs per year. In compliance with the regulations, we submitted the GHG emissions baseline data and the 2007 and 2008 emissions data
and have satisfied the requirements associated with reducing GHG emissions intensity by 12% from the 2003-2005 baseline. Recently, the Ontario legislature passed Bill 185, the Environmental Protection Amendment Act (Greenhouse
Gas Emissions Trading), providing the foundation for the province's cap and trade program to reduce
GHG emissions, which is expected to come into force in 2012. Ontario has also indicated its intent to align such a program with the other provinces and
states participating in the Western Climate Initiative. On December 1, 2009, Ontario filed its Greenhouse Gas Emissions Reporting Regulation under the Environmental Protection Act. This
regulation came into force on January 1, 2010 and provides for the annual reporting of GHGs by prescribed facilities that emit 25,000 tons of carbon dioxide equivalent or more
per year.

Although
the United States has not ratified the Kyoto Protocol, it is a signatory to the Copenhagen Accord. Additionally, a number of federal laws and regulations related to GHG
emissions are being considered by the U.S. Environmental Protection Agency ("EPA") and in Congress. Various state and regional laws, regulations and initiatives have been enacted or are being
considered, including the Regional Greenhouse Gas Initiative, the Midwestern Regional Greenhouse Gas Reduction Accord, and the Western Climate Initiative.

In
September 2009, the EPA issued the Final Mandatory Reporting of Greenhouse Gases Rule requiring facilities that emit more than 25,000 tons of GHGs per year to collect
data beginning January 1, 2010 with the first annual reports due March 31, 2011. In May 2010, the EPA released thePrevention of Significant Deterioration
and Title V Greenhouse Gas Tailoring Ruleimposing requirements upon new and modified major stationary sources emitting more than 75,000 tons of GHGs per year. This rule
requires new or modified sources beginning January 2, 2011 to obtain permits on the basis of acceptable GHG controls or mitigation, the standards for which are established within the current
Clean Air Act framework of pre-construction permitting and limitation of emissions using best available control technology or the equivalent. The rule allows for a phased in approach to
the development of such standards. The emissions from NOVA Chemicals' U.S.-based facilities are significantly below the threshold and are not subject to this rule.

Summarized Quarterly Financial Information

2010

2009(1)(millions of U.S. dollars)

Oct. 1 to
Dec. 31

July 1 to
Sept. 30(1)

Apr. 1 to
June 30(1)

Jan. 1 to
Mar. 31(1)

Oct. 1 to
Dec. 31

July 6 to
Sept. 30

July 1 to
July 5

Apr. 1 to
June 30

Jan. 1 to
Mar. 31Successor

PredecessorRevenue

$
1,170

$
1,072

$
1,244

$
1,090

$
841

$
771

$
36

$
720

$
589Operating income (loss) from continuing operations

$
129

$
113

$
214

$
134

$
84

$
15

$
(45
)
$
(50
)
$
(116
)Income (loss) from continuing operations

$
48

$
44

$
56

$
85

$
28

$
(19
)
$
(33
)
$
(82
)
$
(120
)Net income (loss)

$
60

$
54

$
51

$
94

$
17

$
(19
)
$
(33
)
$
(83
)
$
(123
)


(1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.


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Fourth Quarter 2010 Overview

Income from continuing operations in the fourth quarter of 2010 was $48 million compared to $28 million in the fourth
quarter of 2009. In the fourth quarter of 2010, earnings
were higher as business conditions were improved versus the same quarter in 2009. The Olefins/Polyolefins business unit margins and volumes were higher resulting in the majority of the change.

Three Months Ended(millions of U.S. dollars)

Dec. 31, 2010

Dec. 31, 2009(1)Revenue

$
1,170

$
841Operating income (loss) from continuing operations(2)Olefins/Polyolefins(3)

$
213

$
111Performance Styrenics


1


1Corporate


(85
)

(28
)Operating income from continuing operations

$
129

$
84Income from continuing operations

$
48

$
28Net income

$
60

$
17


Notes: (1)Restated
for discontinued operations. See Note 3 in our Annual Audited Consolidated Financial Statements.(2)See
Supplemental Measures.(3)Olefins/Polyolefins
consists of Joffre Olefins, Corunna Olefins, and Polyethylene segments.


The Olefins/Polyolefins business unit reported operating income from continuing operations of $213 million in the fourth quarter of 2010,
which was up from $111 million in the fourth quarter of 2009. This increase was due to sales prices that rose more than feedstock costs for all products and higher volumes.

The
Joffre Olefins segment reported operating income from continuing operations of $97 million in the fourth quarter of 2010 compared to operating income of $47 million in
the fourth quarter of 2009. Operating income was higher quarter-over-quarter due to sales prices that increased more than feedstock costs and higher volume.

The
Corunna Olefins segment reported operating income from continuing operations of $16 million in the fourth quarter of 2010, which was an improvement from an operating loss of
$4 million in the fourth quarter of 2009. Operating income was higher quarter-over-quarter due to sales prices that increased more than feedstock costs and higher volume.

The
Polyethylene segment reported operating income from continuing operations of $122 million in the fourth quarter of 2010, improved from $77 million in the fourth quarter
of 2009. The increase was primarily due to sales prices that increased more than feedstock costs.

The
Performance Styrenics segment reported operating income from continuing operations of $1 million in the fourth quarter of both 2010 and 2009. In the fourth quarter of 2010,
feedstock prices increased more than sales prices resulting in lower margins, which were offset by lower operating costs due to restructuring within the segment compared to the fourth quarter
of 2009.

Corporate
operating cost from continuing operations was $85 million in the fourth quarter of 2010 compared to $28 million in the fourth quarter of 2009. The higher
quarter-over-quarter cost was primarily due to the strengthening of the Canadian dollar, the write-down of
Performance Styrenics assets and a note receivable and the increase of certain pension liabilities, in connection with the sale of our interest in the INEOS NOVA joint venture.

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Item 6.    Directors, Senior Management and Employees

6.A. DIRECTORS AND SENIOR MANAGEMENT

Directors

The following table sets forth, as of December 31, 2010, the name of each of our directors, his age, his residence, principal
occupation(s) during the five preceding years and the period during which he has served as a director. The terms of office of the directors continue until their successors are elected
or appointed.

Name and Residence

Age

Period During
Which a Director
of NOVA Chemicals

Principal Occupation During
The Preceding Five YearsGerhard Roiss(1), Chairman
Vienna, Austria


58

Since November 10, 2009

Deputy Chairman of the Executive Board of Aktiengesellschaft ("OMV"); Managing Director, OMV Refining & Marketing GmbHMohamed Al Mehairi,
Abu Dhabi, United Arab Emirates


35

Since July 6, 2009

Director, Investment Department, IPICPhilip J. Brown
New York, U.S.A.


55

Since July 6, 2009

Attorney, Torys LLPMark Garrett
Vienna, Austria


48

Since November 10, 2009

Chief Executive Officer, Borealis AG; prior to April 2007, Global Segment Head, Water and Paper Treatment, Ciba Specialty Chemicals Inc.Stephen B. Soules
Calgary, Alberta, Canada


58

Since December 1, 2010

Advisor to organizations in the Canadian energy and technology sectors; prior to 2009, Executive Vice President, CFO and Director Canbriam Energy Inc.; prior to 2007, Executive Vice President, CFO, Director and
Trustee at Esprit Energy TrustGeorg F. Thoma
Dusseldorf, Germany


66

Since July 6, 2009

Attorney, Shearman & Sterling LLPRandy G. Woelfel
Pennsylvania, U.S.A.


55

Since November 10, 2009

Chief Executive Officer, NOVA Chemicals; prior to November 16, 2009, Chief Executive Officer, Designate, NOVA Chemicals; prior to October 2009, President, Cereplast, Inc.; prior to March 2008,
Managing Director, Houston Technology Center; prior to January 2007, President, Basell North America


(1)On
December 31, 2010, Gerhard Roiss resigned as a Director and the Chairman of our Board of Directors and on January 1, 2011, His Excellency
Khadem Al Qubaisi, Managing Director of IPIC, was appointed a Director and the Chairman of the Board of Directors.


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Executive Officers(1)

The following table sets forth, as of December 31, 2010, the name of each of our executive officers, his residence, present
positions within the Corporation and his principal occupations during the five preceding years.

Name and Residence

Age

Present Principal
Occupation

Principal Occupation During
The Preceding Five YearsRandy G. Woelfel
Pennsylvania, U.S.A

55

Chief Executive Officer

Chief Executive Officer, NOVA Chemicals; prior to November 16, 2009, Chief Executive Officer Designate, NOVA Chemicals; prior to October 2009, President, Cereplast, Inc.; prior to March 2008, Managing
Director, Houston Technology Center; prior to January 2007, President, Basell North AmericaTodd D. Karran
Pennsylvania, U.S.A.

46

Senior Vice President and Chief Financial Officer

Senior Vice President and Chief Financial Officer, NOVA Chemicals; prior to June 2010, Senior Vice President, Chief Financial Officer and Treasurer, NOVA Chemicals; prior to November 2009, Vice President,
Corporate Development and Treasurer, NOVA Chemicals; prior to November 2007, Vice President, Treasury and Corporate Development, NOVA Chemicals; prior to September 2007, Vice President and Chief Information Officer, NOVA Chemicals; prior to
September 2006, Vice President IT Applications and Decision Support, NOVA ChemicalsWilliam G. Greene
Pennsylvania, U.S.A

56

Senior Vice President, Operations

Senior Vice President, Operations, NOVA Chemicals; prior to December 2009, Vice President, Manufacturing and Corporate Engineering, NOVA Chemicals; prior to November 2007, Vice President, Manufacturing, NOVA
Chemicals; prior to September 2006, Vice President, Manufacturing Olefins/Polyolefins, NOVA ChemicalsRainer Gunz
Alberta, Canada

42

Senior Vice President, Corporate Business Development

Senior Vice President, Corporate Business Development; prior to June 2010, Vice President, Business Development, Borealis AG; prior to March 2010, Head of Plastics, OMV R&M GmbHGrant Thomson
Alberta, Canada

56

Senior Vice President and President, Olefins and Feedstock

Senior Vice President and President, Olefins and Feedstock, NOVA Chemicals; prior to December 2009, Vice President, President Feedstock and Olefins, NOVA Chemicals; prior to April 2008, Senior Vice President,
 Olefins and Feedstocks, NOVA Chemicals; prior to September 2006, Vice President, Natural Gas and NGL, NOVA Chemicals


(1)On
December 30, 2010, Marilyn Horner resigned as Senior Vice President and Chief Human Resources Officer. Subsequent to the end of 2010, Christopher
Bezaire was appointed as Senior Vice President, Polyethylene Business.


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There are no family relationships among any of our directors or executive officers. There are no material arrangements or understandings between
any two or more directors or executive officers pursuant to which any person was selected as a director or officer.

Each
of the officers is appointed by the Board of Directors, to serve, subject to the discretion of the Board of Directors, until their successors are appointed or they resign.

6.B. COMPENSATION

EXECUTIVE COMPENSATION

For purposes of this annual report, "Named Executive Officer" ("NEO") means an individual who, at any time during the
year, was:



Based
on the foregoing definition, during the last completed fiscal year, there were six (6) NEOs, namely: CEO, Randy G. Woelfel; Senior Vice President and CFO, Todd D. Karran;
Senior Vice President, Operations, William G. Greene; Senior Vice President and President Olefins and Feedstock, Grant C. Thomson; Vice President, General Counsel and Assistant Corporate Secretary,
William C. Mitchell; and former Senior Vice President, Chief Human Resources Officer, Marilyn N. Horner.

Unless
otherwise noted, all compensation amounts paid in Canadian dollars are expressed in U.S. dollars using the following exchange rates:



Remuneration Committee Information

Composition of the Remuneration Committee

The Remuneration Committee of the Board of Directors (the "Board") is responsible for overseeing key compensation and human
resources policies including the overall executive compensation strategy of NOVA Chemicals and the on-going monitoring of the strategy's implementation. Prior to July 1, 2010, the
Remuneration Committee was composed of Mohamed Al Mehairi (Chairman), David Davies, Gerhard Roiss and Georg Thoma. On July 1, 2010, Mr. Davies resigned from the Board of Directors and on
December 31, 2010, Dr. Roiss resigned. Effective February 1, 2011, Mark Garrett was appointed to the Remuneration Committee. The Remuneration Committee is currently composed of
Mohamed Al Mehairi (Chairman), Georg Thoma and Mark Garrett. None of the members of the Remuneration Committee is or was formerly an executive or employee of NOVA Chemicals.

Governance

The Remuneration Committee recognizes the importance of maintaining sound governance practices for the development and administration
of executive compensation and compensation programs, and has instituted

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processes
that enhance the Remuneration Committee's ability to effectively carry out its responsibilities. Examples include:



The
Remuneration Committee directs management to gather information and provide initial analyses and commentary. The Remuneration Committee reviews this material along with other
information received from external consultants in its deliberations when making executive compensation and other decisions. All matters considered, approved or recommended by the Remuneration
Committee are reported to the full Board.

External Advice

The Remuneration Committee Chairman has direct access to independent external compensation consultants on executive compensation and
human resources matters. These consultants provide objective and expert analysis, advice and information on executive compensation trends, regulatory changes and evolving best practices. They also
provide advice on compensation program design and compensation recommendations to assist the Remuneration Committee in making informed, fair and reasonable decisions.

Until
October 2010, Towers Watson was retained to provide executive compensation consulting services. Towers Watson also provides actuarial services for the Corporation's North
American defined benefit pension plans, and retirement and benefits consulting services, as required. In October 2010, Pay Governance LLC, an independent executive compensation firm, was
retained to provide executive compensation consulting services.

Compensation Discussion and Analysis

The following is the Compensation Discussion and Analysis which outlines and explains all significant elements of compensation awarded
to, earned by, or paid to the NEOs during 2010.

Compensation Philosophy

NOVA Chemicals' executive compensation policies and programs are designed to attract, retain and motivate key executives through
competitive and cost effective approaches that reinforce executive accountability and reward the achievement of business results. Executive compensation consists of four main elements: (a) base
salary, (b) annual incentive compensation awarded under NOVA Chemicals' Incentive Compensation Plan, (c) long-term incentive compensation, and (d) retirement, benefit
and perquisite programs. The relative weighting of each element is aligned with our philosophy of linking pay to performance. A substantial percentage of executives' compensation is provided in the
form of performance-based variable compensation with a greater emphasis on variable components for senior executives. Actual incentive compensation awards are directly linked to corporate and business
unit results and many of the performance measures are aligned with shareholder and other key stakeholders' interests, including financial and non-financial goals (see "Incentive
Compensation Plan" and "Long-Term Incentive Programs"). Executive retirement and benefits programs are generally consistent with broader employee programs in the same country. Where
certain programs, such as perquisites, are only provided to executives or senior management, they reflect competitive practice and particular business needs and objectives.

The
compensation level for all executives, including the NEOs, is reviewed annually by the Remuneration Committee. A benchmarking process that assesses the policy or target levels of
base salary, annual incentive compensation and long-term incentive compensation is conducted each year by the external compensation consultant (see "Benchmark Review"). In addition,
the Remuneration Committee seeks and obtains input from the CEO on base salary, and targeted annual incentive and long-term incentive compensation, for executives other than the CEO. The
overall objective in setting executive compensation is to ensure that the total targeted value and mix of compensation for each executive compares at the median (50th percentile)
of the comparator

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group
(see "Benchmark Review") for the same or similar role. In setting target total compensation, the Remuneration Committee does not consider compensation previously awarded to an individual.
The Remuneration Committee does consider other factors such as each individual's experience and expertise before approving adjustments to compensation. In the case of the NOVA Management Board, the
Remuneration Committee determines the value and mix of compensation with input from the external compensation consultant and makes a recommendation to the Board for approval.

Benefits,
retirement programs and perquisites are reviewed periodically by the Remuneration Committee to ensure these programs continue to offer competitive benefits that are cost
effective and valued by the organization.

Benchmark Review

The Remuneration Committee annually monitors comparative total compensation information, using data prepared by the external
compensation consultant, to ensure that target levels of overall compensation are competitive with similar North American chemical companies. Comparator group information is also used in determining
base salary ranges, annual incentive compensation target awards and assessing the competitiveness of NOVA Chemicals' long-term incentive compensation awards for all executives, including
the NEOs.

NOVA
Chemicals benchmarks against North American chemical companies with whom it competes for talent. Many positions are similar across the industry, and the comparator group effectively
represents competitive pay levels for comparable positions. In certain cases, the comparator group is expanded to include a broader chemical company comparator group or general industry to ensure
sufficient data is considered and to reflect the broader market for staff positions.

The
Remuneration Committee reviews the composition of the comparator group periodically for continued relevance. In October 2009, Towers Watson conducted a review of the
comparator group. This review was initiated to ensure that the comparator group continued to be representative of those companies with which NOVA Chemicals competes for talent and to be more
reflective of compensation practices of privately owned companies. As a result of this review, four additional companies were added to the comparator group. For determining 2010 compensation, NOVA
Chemicals' comparator group included the following chemical companies:

Air Products and Chemicals, Inc.

FMC CorporationAshland Inc.

Georgia Gulf CorporationBASF (North America)

Lanxess CorporationBayer MaterialScience AG

The Lubrizol CorporationCabot Corporation

LyondellBasell IndustriesChevron Phillips Chemical Company LLC

Methanex CorporationThe Dow Chemical Company

PPG Industries, Inc.Eastman Chemical Company

Praxair, Inc.E.I. du Pont de Nemours and Company


Key Elements of Compensation

The major elements of the executive compensation program are base salary, annual incentive compensation awards, and
long-term incentive compensation. In addition, the NEOs are eligible to and participate in group benefit and retirement plans. In any particular year, NOVA Chemicals' NEOs and other
executives may be paid more or less than executives at comparable chemical companies depending on corporate and individual performance, as well as their relative experience.

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The
following table summarizes each component of the total direct compensation(1) ("TDC") for the NEOs and other executives:

Base Salary

Incentive Compensation Plan

Long-Term Incentive PlansThe fixed portion of compensation tied to market competitiveness, level of responsibility and demonstrated experience

Annual variable compensation which provides awards contingent on achievement of financial and non-financial metrics that support NOVA Chemicals' corporate and business/function/ individual performance

Long-term variable compensation where grants are awarded to align the interests of management with the long term interests of NOVA Chemicals' shareholder and other key stakeholders


(1)NOVA
Chemicals does not consider retirement benefits, benefits programs or perquisites direct compensation.


The targeted mix of TDCbase salary, targeted annual incentive compensation and targeted annual value of long-term
incentive compensationfor 2010 for each Named Executive Officer who is currently a NEO is as follows:

R.G. Woelfel

T.D. Karran

W.G. Greene

G.C. Thomson

W.C. MitchellGRAPHIC

GRAPHIC

GRAPHIC

GRAPHIC

GRAPHIC


Based
on the benchmark review for 2010, the Remuneration Committee and the Board determined that the NEOs' TDC remained competitive and no increases were made to the NEOs' TDC
for 2010.



Base salaries for all executives, including the NEOs, are paid within salary ranges established for each position on the basis of the
level of responsibility relative to other positions in NOVA Chemicals. The salary range for each position is determined through an annual comparative salary survey of NOVA Chemicals' North American
chemical companies comparator groups.

Base
salary is targeted at the median (50th percentile) of the comparator group for each executive. Individual salaries within each range are determined by each
executive's experience, expertise and contribution to NOVA Chemicals.

For
2010, based on the benchmark analysis, no increases were made to the NEOs' base salaries.



Annual incentive compensation is awarded to executives, including the NEOs, senior managers and other leaders under the Incentive
Compensation Plan, which is designed to align incentive compensation awards to actual business results, address uncontrollable elements and motivate participants. This plan provides cash awards based
on corporate and business/functional/individual performance, measured against objectives which are typically determined at the beginning of each performance period. As an executive's responsibility
level increases, incentive compensation represents an increasing portion of total cash compensation. The Incentive Compensation Plan constitutes a significant part of total cash compensation for
the NEOs.

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Incentive
Compensation Plan awards are based on two categories:



The
2010 targeted awards for all Incentive Compensation Plan participants, including the NEOs, were weighted 30% on corporate performance and 70% on business/functional/individual
performance.

Objectives
under corporate performance and business/functional/individual performance are typically set at the beginning of the performance period by the Remuneration Committee. For
2010, the Remuneration Committee evaluated corporate performance based on the three corporate objectives identified above that NOVA Chemicals believed were important to successfully drive the 2010
operating plan. The Remuneration Committee determined the significance of the objectives and weighted each accordingly as follows:

Weighting

Performance Objective

Reason for Objective15%

Net Profit

    Measures the profitability in the context of operating performance. The emphasis is on delivering strong, recurring profits, and defining and delivering a clear path for profitability
growth10%

Net Operational Cash Flow

    Measures how well NOVA Chemicals manages its cash flow. NOVA Chemicals consistently aims to manage its working capital efficiently and demonstrate prudent cash management5%

Responsible Care includes two objectives, each weighed equally:

    Measures NOVA Chemicals' commitment to providing a safe working environment    Total Recordable Case Rate

    Measures the number of recordable employee injuries or illnesses    Process fires

    Measures any fire or evidence of a flamereducing process fires reduces the risk of serious injury, or major equipment or environmental damage


Business/functional/individual
performance is measured using financial, operational and strategic objectives specific to each participant's role. These objectives are a mix of
quantitative and qualitative measures and may relate to:



The
Remuneration Committee sets a performance range for all objectives. Target performance is meant to be challenging yet achievable and, if met, the payout for that objective is 100%.
If threshold performance is not achieved, no payout is awarded. Maximum performance is meant to be a stretch objective resulting in exceptional results. If maximum performance is met or exceeded, the
payout is 250% of target for that objective.

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The
actual incentive compensation award paid each year, if any, is determined with reference to achievement of the various objectives in the performance categories described above.
Following the performance period, actual performance is assessed against target performance for each objective. The performance rating by which the incentive compensation award is calculated is
pro-rated between threshold and maximum performance depending on actual performance under each objective.

Provision
is also made in the Incentive Compensation Plan to pay incentive compensation awards in excess of the target award, to a maximum established by the Remuneration Committee, if
performance is exceptional.

For
2010, corporate objectives were 216.7% of target: 250% for net profit, 250% for net operational cash flow and 50% for Responsible Care.

In
accordance with "COC Agreements" (see "NEO AgreementsChange of Control Agreements"), Messrs. Greene and Thomson, and Ms. Horner are entitled to
receive an incentive compensation award at the greater of the average of their 2008, 2007 and 2006 incentive compensation awards and actual performance.

The
NEOs overall performance rating and payout amounts for 2010 were as follows:

Performance Rating

Payout AmountR.G. Woelfel


168%

$
428,700T.D. Karran


168%

$
261,950W.G. Greene


169%

$
264,300G.C. Thomson


175%

$
287,090W.C. Mitchell


132%

$
184,650M.N. Horner


163%

$
288,650




A significant portion of an executive's compensation is awarded as long-term incentives. This supports the compensation
objective of linking pay to long term corporate performance by putting compensation at risk. For 2010, NOVA Chemicals decided to grant 40% of the 2010 long term incentive award as a time based,
retention award and establish the criteria for the remainder of the award in 2011. The 40% time based portion of the 2010 award vested on February 10, 2011 and was paid at the end of
February 2011. Generally, participants must be employed with the Corporation on the vesting date to receive payment.

Annual
reviews are conducted to ensure that NOVA Chemicals' long-term incentive program provides comparable expected value to similar North American chemical companies. The
value of long-term incentive grants awarded to the NEOs and other key employees are determined by the Remuneration Committee. NEOs' grants are based on information from an annual
comparator group analysis of the value and mix of total direct compensation conducted by the external compensation consultant, including base salary, incentive compensation and long-term
incentives. Based on
this analysis, the Remuneration Committee examined the long-term incentive practices of our comparator group to determine the 50th percentile long-term
incentive award for each executive position. In determining long-term incentive compensation awards, the Remuneration Committee does not consider the value or terms of outstanding awards.



The NEOs and other executives participate, on a contributory and non-contributory basis, in the retirement plans offered to
NOVA Chemicals' salaried employees. Canadian employees hired prior to January 1, 2000 participate in a registered plan that offers either defined contribution or defined benefit provisions.
Canadian employees hired on or after January 1, 2000 participate in the defined contribution component of the Canadian plans. U.S. salaried employees who were hired prior to
January 1, 2008 have accrued pension benefits under NOVA Chemicals' U.S. salaried defined benefit plan and participate in the U.S. salaried defined contribution plan.
U.S. salaried employees hired on or after January 1, 2008 participate only in the U.S. defined contribution plan.

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NOVA
Chemicals' salaried employees, including the NEOs, may also participate in supplemental executive retirement plans ("SERPs") which are non-registered, unfunded
supplemental retirement plans. The primary purpose of the SERPs is to provide retirement benefits that cannot be paid from registered plans due to tax limits. The SERPs also provide retirement
benefits to NEOs and other key employees who have relocation arrangements. In addition, U.S. executives may participate in the U.S. Savings and Profit Sharing Restoration Plan
(the "Restoration Plan"), the purpose of which is to continue defined contributions for executives who exceed legislated maximums.



Non-cash compensation includes employee benefits and perquisites. NOVA Chemicals' non-cash compensation
programs are designed to approximate the median of North American chemical companies and are periodically benchmarked against NOVA Chemicals' comparator groups. NEOs do not receive any
non-cash compensation that is different from that received by other executives, other than annual perquisite allowance. In addition, retirement benefits as described under "Supplemental
Executive Retirement Plans and Supplemental Pension Agreements," annual financial and tax planning services and club memberships have been provided to certain NEOs.

Summary Compensation Table

The following table sets forth the compensation the Named Executive Officers earned in the fiscal years ended December 31, 2008,
2009 and 2010:

Compensatory Changes to
Pension Value(5)Cash Incentive
Compensation
Awards
(Non-Equity)(4)Long-Term
Incentive
Compensation(2)(3)



DC Employer
Contributions(7)

All Other
Compensation(8)(9)

Total
Compensation(U.S. dollars)

Year

Salary(1)

DB Value(6)Name and Principal PositionR.G. Woelfel


2010


425,000


467,500


428,700


N/A
(11)

42,903


103,409
(12)

1,467,512Chief Executive Officer


2009


86,164
(10)

N/A


51,700


N/A
(11)

8,091


53,598
(13)

199,5532008


N/A


N/A


N/A


N/A
(11)

N/A


N/A


N/AT.D. Karran


2010


312,000


312,000


261,950


0
(15)

48,636


18,268


952,854Senior Vice President and


2009


276,167
(14)

189,700


228,400


0
(15)

39,362


243,104
(16)

976,734Chief Financial Officer


2008


260,865


180,215


159,300


0
(15)

44,328


21,064


665,773W.G. Greene


2010


312,000


312,000


264,300


0
(18)

74,018


19,962


982,280Senior Vice President, Operations(17)


2009


312,000


312,000


216,700


0
(18)

71,774


20,571


933,0442008


312,000


312,000


165,450


0
(18)

77,126


34,161


900,737G.C. Thomson


2010


328,558


318,323


287,090


118,000


N/A


32,257


1,084,228Senior Vice President, President, Olefins


2009


281,090


336,302


206,268


60,000


N/A


19,201


902,861and Feedstock(19)


2008


276,514


186,302


159,890


111,000


N/A


40,429


774,135W.C. Mitchell


2010


280,800


280,800


184,650


5,000


58,849


19,762


829,861Vice President, General Counsel and


2009


229,000


114,500


139,550


16,000


52,970


19,225


571,245Assistant Corporate Secretary


2008


229,000


114,500


126,500


16,000


59,085


22,841


567,926M.N. Horner


2010


340,000


527,000


288,650


25,000
(18)

103,252


2,931,427
(21)

4,215,329Former Senior Vice President and Chief


2009


340,000


527,000


272,300


0
(18)

87,628


32,222


1,295,150Human Resources Officer


2008


319,000
(20)

312,000


206,830


58,000


84,141


69,327
(22)

1,049,298


---

Notes:

2010

2009

2008R.G. Woelfel


7%


N/A


N/AT. D. Karran


6%


6%


6%W.G. Greene


7%


6%


6%G.C. Thomson


N/A


N/A


N/AW.C. Mitchell


27%


25%


20%M.N. Horner


8%


8%


8%


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Retirement Plans

Defined Benefit Programs

NOVA Chemicals sponsors defined benefit programs in Canada and the United States both of which have been redesigned and are not
available to new hires. Messrs. Greene and Mitchell are the only NEOs who meet the eligibility requirements for transition benefits in the U.S defined benefit plans. These NEOs accrued benefits
under the U.S. defined benefit plan. Mr. Karran participates in the U.S. defined benefit plan but was not eligible for transition benefits. His benefit was frozen as of
December 31, 2007. Mr. Woelfel was hired after the U.S. defined benefit plan was frozen and does not participate in NOVA Chemicals' defined benefit programs. Mr. Thomson
participates in the Canadian defined benefit programs.



The Canadian defined benefit pension component under NOVA Chemicals' Canadian pension plans for salaried employees provides retirement
income based on the employee's years of service and the average base salary of the highest 36 consecutive months of the employee's final 10 years of service ("Highest Average Earnings")
adjusted to reflect benefits payable under government sponsored plans.

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NOVA Chemicals' Canadian defined benefit pension component provides a benefit formula that is integrated with the Canada Pension Plan. The
non-contributory annual benefit is equal to the sum of (a) plus (b) where:



Average
Maximum Pensionable Earnings is the three year average of the year's maximum pensionable earnings as determined in accordance with theCanada Pension
Plan Act.

Married
retirees receive a 60% joint and survivor pension benefit, and single retirees receive an annuity for life guaranteed for five years after the pension benefits commence. Pension
benefits are indexed, as applicable, after retirement based on a formula of 75% of the increase in the national Canadian consumer price index minus 1% up to a maximum of 5%.

Normal
retirement age under the defined benefit pension component is 65, however, a member can retire with full benefits at age 62. Members may also elect early retirement and receive a
reduced pension if they are between ages 55 and 62.

On
December 31, 1999, NOVA Chemicals introduced a defined contribution pension component to its Canadian pension plans for salaried employees. Employees were permitted to make a
one-time irrevocable election to convert their defined benefits to the defined contribution pension or remain with their defined benefit pension. Mr. Thomson and Ms. Horner
elected to remain in the defined benefit pension component. Mr. Karran was also a Canadian resident at that time and elected to convert his defined benefit to defined contribution pension. All
Canadian employees who joined NOVA Chemicals after December 31, 1999 are members of the defined contribution pension component of the Canadian pension plans for salaried employees
(see "Defined Contribution Programs").



All U.S. salaried employees hired prior to December 31, 2007 participate in a defined benefit pension plan. Effective
December 31, 2007, NOVA Chemicals froze this defined benefit plan and amended the defined contribution plan (see "Defined Contribution Programs") to provide certain enhancements.
Employees who had attained the age of 50 with at least one year of service as of December 31, 2007 ("Transition Employees") qualify for transition benefits, including earnings escalation
for purposes of calculating defined benefits, for up to five years. Messrs. Greene and Mitchell and Ms. Horner were eligible for these transition benefits. Mr. Karran did not
qualify for transition benefits. Mr. Woelfel was hired subsequent to the freeze date and is not eligible to participate in the defined benefit programs. Mr. Thomson participates in the
Canadian defined benefit programs.

The
benefit formula for the U.S. defined benefit plan is 1.2% of the Final Average Earnings multiplied by credited service. Final Average Earnings is the average of the highest
36 consecutive months of base salary in the 10 years prior to December 31, 2007 or for Transition Employees, the earlier of December 31, 2012 and the Transition Employee's
termination date. The pension benefit for a single retiree is a whole life benefit while a married retiree's benefit is a 100% joint and survivor benefit. Such benefit is provided by reducing the
whole life benefit during the life of the retiree in order to provide 100% of that reduced benefit to the surviving spouse.

Normal
retirement age under the U.S. defined benefit plan is 65, however, a member can retire with full benefits at age 62. Members may also elect early retirement and receive a
reduced pension if they are between the ages of 55 and 62 and have at least five years service.

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NOVA Chemicals' defined benefit pension programs are subject to theIncome
Tax Actor the Internal Revenue Code ("IRC") maximum annual benefit accrual limits. NOVA Chemicals has adopted Supplemental Executive Retirement Plans ("SERPs") to
provide supplementary pension payments, computed with reference to the earned pension under NOVA Chemicals' defined benefit pension programs. These supplementary payments are above the maximum annual
benefit accrual permitted by theIncome Tax Actor the IRC and, therefore, are not deductible for income tax purposes by NOVA Chemicals until
paid to the respective executive or employee. The aggregate supplementary pension benefits are generally equivalent to the benefit which would be earned under NOVA Chemicals' pension plans without the
maximum annual benefit accrual limit described above. For senior U.S. executives, including the NEOs, other than Mr. Woelfel who is not eligible to participate in the defined benefit
programs, Final Average Earnings are calculated using base salary plus incentive compensation awards under the U.S. SERP. Consistent with the redesign of the U.S. defined benefit pension
plan, the U.S. SERP was frozen as of December 31, 2007 other than for transition benefits, and relocation and special pension arrangements as detailed below.

The
SERPs also provide supplementary pension payments to executives who have relocation arrangements. Ms. Horner and Mr. Greene relocated from Canada to the U.S., and
Mr. Thomson relocated from Canada to the U.S. and then back to Canada. These NEOs have service in Canada and the U.S., and are entitled to the relocation pension arrangement. Under this
arrangement, executives receive the greater of the total of their accrued benefits under each defined benefit program in which they have participated or the accrued benefit under the defined benefit
program from which they retire assuming credited service under that plan recognizes all of the executive's service with the Corporation.



The following table summarizes the defined benefit pensions as of December 31, 2010 for each NEO, other than Mr. Woelfel.
Mr. Woelfel does not participate in NOVA Chemicals' defined benefit programs. Mr. Karran participates in the U.S. defined benefit programs but his benefits were frozen as of
December 31, 2007. The values in the following tables are based on the same actuarial assumptions, methods and measurement dates used by NOVA Chemicals for financial reporting purposes and do
not represent the value of the pension benefit a NEO would receive on retirement.

Years of Credited Service(1)

Final Average
Earnings

Accrued (Projected)
Annual Pension Benefit(2)

Estimated Annual
Pension Benefit at Age 65(3)(4)Under the
Canadian
Defined Benefit
Component
(#)Under the U.S.
Defined Benefit
Pension Plan
(#)U.S. Defined
Benefit
Pension Plan

Canadian
Defined Benefit
Component(10)



U.S. Defined
Benefit
Pension Plan

Canadian
Defined Benefit
Pension Plan(U.S. dollars, except as noted)

U.S.

Canada

SERP

SERPNameT.D. Karran


4.7


N/A


311,500


N/A


11,800


N/A


33,600


11,800


N/A


33,600W.G. Greene(5)


8.3


14.6


529,500


317,700


24,000


35,100


65,000


24,000


35,100


65,000G.C. Thomson(5)


10.8


10.7


491,300


307,500


25,900


25,600


62,500


25,900


25,600


62,500W.C. Mitchell


4.9


N/A


394,200


N/A


13,800


N/A


9,400


13,800


N/A


9,400M.N. Horner(5)(6)


7.8


14.2


595,700


351,500


22,600


34,000


76,500


22,600


34,000


76,500


Notes: (1)Years
of credited service is the service used to calculate the defined benefit pension benefit. Service under the U.S. defined benefit programs
includes service while resident in the U.S. prior to December 31, 2007, the date the U.S. defined benefit pension programs were frozen. Credited service under the Canadian defined
benefit component includes service while resident in Canada.(2)These
values represent the single life annuity payable at age 65 for the U.S. programs and a 60% joint and survivor annuity for the Canadian
defined benefit pension component reflecting pay and service as of December 31, 2010 for all NEOs except for Ms. Horner where the amounts are as of December 30, 2010.(3)Age
62 is the earliest age an individual can receive full retirement benefits.(4)Assuming
each NEO remains with NOVA Chemicals until his normal retirement date reflecting projected service, if applicable, and pay as of
December 31, 2010, other than Ms. Horner whose employment was terminated on December 30, 2010.(5)Messrs. Greene
and Thomson, and Ms. Horner are entitled to receive the greater of: the sum of their Canadian and U.S. pension benefits,
and their U.S. or Canadian pension benefit assuming all of their service was in the U.S. or Canada depending on the country from which they retire.(6)Ms. Horner
elected to receive her benefit as a lump sum payment (see following table).


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The change in the defined benefit pension for each NEO participating in a defined benefit program for 2010 is as follows:

Annual Benefits
Payable ($)Accrued
(Projected)
Obligation
at Dec. 31,
2009(2)

Compensatory
Changes Related to
Current Service
Cost and Earnings
Increases(1)(2)

Non-Compensatory
Changes Related to
Financing Costs and
Non-Compensation
Assumption Changes(3)

Change in
Obligation
since
Dec. 31,
2009Number
of Years
Credited
Service(1)

Accrued
(Projected)
Obligation at
Dec. 31, 2010(2)(U.S. dollars, except as noted)

At Year
End(2)

At Age
65(2)NameT.D. Karran(4)


4.7


N/A
(5)

45,400


250,000


N/A


19,000


19,000


269,000W.G. Greene(4)


22.9


103,500
(6)

124,100


1,261,000


(4,000
)

288,000


284,000


1,545,000G.C. Thomson


21.5


93,300
(6)

114,000


1,038,000


118,000


166,000


284,000


1,322,000W.C. Mitchell(4)


4.9


20,500
(6)

23,200


249,000


5,000


16,000


21,000


270,000M.N. Horner(4)


22.0


N/A
(5)

133,100


1,207,000


25,000


151,000


176,000


1,383,000
(7)


Notes: (1)Years
of credited service is the service used to calculate the defined pension benefit. Service under the U.S. defined benefit pension programs was
frozen as of December 31, 2007. Years of credited service under the Canadian defined benefit pension component represents credited service as of date of transfer to the U.S.(2)These
values are based on the same actuarial assumptions, methods and measurement date used by NOVA Chemicals for financial statement reporting purposes,
which may be different than the assumptions used to calculate pension benefits payable to a NEO. The values reflect service as of the measurement date and future increases in salaries, as applicable.
These values do not represent the value of the pension benefit that a NEO would receive on retirement.(3)Reflects
the impact of interest on prior year's obligations, changes in discount rates used to measure the obligations and the impact of assumption and
employee demographic changes.(4)The
assumptions used to calculate pension values for accounting purposes assume future salary increases. These NEOs do not quality for Transition Benefits
or did not receive a salary increase in 2010.(5)Mr. Karran
and Ms. Horner were not early retirement eligible and not eligible to receive an annual benefit as at
December 31, 2010.(6)These
values represent Messrs. Greene, Thomson and Mitchell's early retirement annuity immediately payable as at December 31, 2010.(7)Ms. Horner
elected to receive her benefit as a lump sum payment on December 30, 2010.(8)The
key actuarial assumptions used in calculating these values are as follows:


U.S. Defined Benefit Programs

December 31, 2010

December 31, 2009Discount Rate

4.60%

4.70%Salary Increase

4.00%

4.50%Percent Electing a Lump Sum

100%

100%Lump sum interest rate    Other NEOs

    4.60%

    4.70%Mortality    Other NEOs

    IRS Prescribed Table for 2011 Lump Sum Distributions

    IRS Prescribed Table for 2010 Lump Sum DistributionsRetirement    Other NEOs

    Age-related table with an average retirement age of 63

    Age-related table with an average retirement age of 63


Canadian Defined Benefit Programs

December 31, 2010

December 31, 2009Discount Rate

5.10%

5.80%Salary Increase

4.00%

4.00%Indexing

0.50%

0.50%


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Canadian Defined Benefit Programs

December 31, 2010

December 31, 2009Escalation of ITA Maximum Pension for Registered Plan

$2,494 in 2010 per year of service, escalating 2.75% thereafter

$2,444 in 2009 per year of service, escalating 2.75% thereafterMortality

UP 1994 projected to 2020 using Scale AA

UP 1994 projected to 2020 using Scale AAPercent of Retiring Members Electing a Lump Sum

Eastern Region Plan20%
Western Region Plan40%

Eastern Region Plan20%
Western Region Plan40%Retirement

Age-related table with an average retirement age of 62

Age-related table with an average retirement age of 62


The
method used to determine estimated pension benefits may not be identical to the method used by other companies. Therefore, the estimated pension benefits may not be directly
comparable to other companies' estimated pension benefits.

Defined Contribution Programs

NOVA Chemicals sponsors defined contribution programs in Canada and the United States.



Canadian employees who joined NOVA Chemicals after December 31, 1999, and employees who elected to convert their defined
benefits to the defined contribution component of the
Canadian pension plans as explained above, participate in the Canadian defined contribution program. NOVA Chemicals contributes 6% of a Canadian employee's base salary to a defined contribution
account and the employee may elect to make voluntary contributions. Contributions are locked in until the employee terminates from NOVA Chemicals. Mr. Karran was an active participant until he
relocated to the U.S. in 2000. He continues to maintain an account in the Canadian program.



The U.S. Savings and Profit Sharing Plan (the "U.S. Savings Plan") was redesigned when the U.S. defined
benefit pension plan was frozen. Effective January 1, 2008, NOVA Chemicals makes contributions to each U.S. employee's account of 3% of total pay and matching contributions of up to 6%
of total pay for total Corporation contribution of up to 9% of total pay. Transition Employees receive, until the earlier of December 31, 2012 and the Transition Employee's termination date, an
additional transition contribution of 5% of total pay. Total pay includes base salary, incentive compensation awards, profit sharing, shift differential and overtime. In addition, employees may make
voluntary employee contributions to the plan. All of the NEOs participate in the U.S. Savings Plan.



NOVA Chemicals' defined contribution programs are also subject to maximum annual contributions under theIncome
Tax Actand the IRC. NOVA Chemicals has adopted a SERP in Canada and the Restoration Plan in the U.S. to provide a mechanism to continue defined contributions for
employees who exceed the legislated maximums.

The
Canadian SERP provides a notional account for contributions or conversion amounts that exceed the legislated maximums. The accounts are credited with earnings equivalent to the
earnings of the balanced fund that is offered as an investment under the Canadian defined contribution program. Mr. Karran has a notional defined contribution account under the
Canadian SERP.

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In the U.S., when total pay of an executive, including the NEOs, exceeds the legislated maximum, excess Corporation contributions are made to the Restoration
Plan. In addition, participants may elect, prior to each performance year, to make voluntary employee contributions to the Restoration Plan of their base salary, incentive compensation award and
profit sharing. If an employee elects to make voluntary contributions, Corporation matching contributions are made to the Restoration Plan after total pay exceeds the IRC maximums. All of the NEOs,
other than Mr. Woelfel, participated in the Restoration Plan in 2009.



The following table summarizes each NEO's defined contribution account for 2010:

COMPENSATORY

NON-COMPENSATORYAccount Balance
Jan. 1, 2010

2010 Corporation Contributions(1)

2010 Employee Contributions

2010 Investment Earnings

Account Balance
Dec. 31, 2010(U.S. dollars)

Savings
Plan

Restoration
Plan /
Canadian
SERP

Savings
Plan(1)

Restoration
Plan /
Canadian
SERP

Savings
Plan

Restoration
Plan /
Canadian
SERP

Savings
Plan

Restoration
Plan /
Canadian
SERP

Savings
Plan

Restoration
Plan /
Canadian
SERPR.G. Woelfel


27,870


N/A


22,050


20,853


22,000


33,369


3,269


953


75,190


55,175T.D. Karran


407,393


142,861


22,050


26,586


16,500


32,424


69,023


22,672


514,095


224,544W.G. Greene


186,935


172,791


34,300


39,718


22,000


34,842


14,429


5,049


257,664


252,400G.C. Thomson(2)


198,724


6,236


N/A


N/A


N/A


N/A


17,543


551


216,268


6,787W.C. Mitchell


112,146


116,778


34,300


24,549


17,200


74,200


1,262


(1,891
)

166,355


213,636M.N. Horner


197,577


193,763


34,300


82,099


22,000


66,513


26,965


28,559


280,842


370,934
(3)


Notes: (1)Includes
NOVA Chemicals' contributions: 3% basic contributions, 5% transition contributions, if applicable, and up to 6% matching contributions for NEOs
actively participating in these plans.(2)Mr. Thomson
is not an active participant of any defined contribution programs. These values represent Mr. Thomson's defined contribution
accounts earned when he resided in the U.S. together with earnings thereon.(3)Ms. Horner
received a distribution of this account on December 30, 2010.


NEO Agreements

Change of Control Agreements

NOVA Chemicals entered into Key Employee Termination Benefit Agreements (the "COC Agreements") with executives, including
Messrs. Greene and Thomson, and Ms. Horner, to induce them to remain with NOVA Chemicals in the event of a change of control. IPIC's acquisition of NOVA Chemicals pursuant to the
Arrangement Agreement constituted a change of control and the COC
Agreements became effective on the Arrangement Date. The COC Agreements provide that on the termination without cause or constructive dismissal of such NEO within three years following the change of
control, the NEO is entitled to receive a lump sum severance payment (based on base salary, incentive compensation and other compensation) and continuation of certain benefits during the severance
period, which is 30 months for Ms. Horner, 21 months for Mr. Greene and 18 months for Mr. Thomson. Mr. Greene is entitled to receive an additional
$100,000 upon termination of employment. Mr. Thomson is entitled to receive Cdn$330,600 within 30 days after July 6, 2012 if Mr. Thomson does not resign or retire prior to
July 6, 2012. If NOVA Chemicals terminates Mr. Thomson before July 6, 2012, Mr. Thomson will receive an additional $330,600 in severance. Ms. Horner's COC Agreement,
as amended, also provided that she could terminate her employment on or before December 31, 2010 and receive the severance benefits. In addition, Ms. Horner is entitled to relocation
costs to Calgary or equivalent location as set out in NOVA Chemicals' Relocation Guidelines, and a tax equalization payment in the event her severance payment is subject to the change of control
golden parachute excise tax. Ms. Horner's employment was terminated on December 30, 2010 and she received a severance payment pursuant to her COC Agreement (see "Summary
Compensation Table" and "Payments on Separation from Service").

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Employment Contracts

NOVA Chemicals and its subsidiaries have entered into employment contracts with certain NOVA Chemicals' executives, including
Messrs. Woelfel, Karran and Mitchell. The employment contracts provide for a three year term of service for Mr. Woelfel and an indefinite term of service for Messrs. Karran
and Mitchell.

In
the event of termination of Messrs. Woelfel, Karran or Mitchell's employment other than for cause (as defined in the employment contract), resignation or retirement,
each is entitled to be paid a lump sum payment equal to 18 months severance, conditional upon execution and delivery of a release. For these individuals, the lump sum payments are based on:
a) base salary in effect at the time of termination; b) Incentive Compensation Plan award calculated at target; c) Savings Plan contributions; and d) perquisite allowance.
In addition, these NEOs are entitled to continued medical, dental and life insurance coverage, financial counseling and outplacement support if they are terminated without cause.

Each
NEO has also agreed not to disclose or use for his own benefit confidential information, except as necessary to perform his or her duties to NOVA Chemicals or as required by law.
Also, during his employment with NOVA Chemicals, no NEO may engage in or render services to a competing business and for a one year period after termination of employment, no NEO may solicit
customers, suppliers or employees to terminate their relationship with NOVA Chemicals.

Payments on Separation of Service

The following tables set forth the circumstances that trigger payments or provision of benefits under the NEO Agreements and the
estimated value of the payments assuming the triggering event occurred on December 31, 2010. For Ms. Horner, who terminated from NOVA Chemicals on December 30, 2010 pursuant to
her COC Agreement, only the value of her payment following change of control is disclosed.

SEVERANCE AMOUNT (U.S. dollars, except as noted)R.G. Woelfel(3)

Severance
Period (#
of months)

Base
Salary

Incentive
Compensation
Amount

Other
Employee
Benefits(1)

Additional Lump
Sum Value of
Pension(2)

Excise Tax
Payment

Total
Incremental
ObligationRetirement


N/A


N/A


N/A


N/A


N/A


N/A


0Resignation


N/A


N/A


N/A


N/A


N/A


N/A


0Involuntary Termination without Cause


18


637,500


382,500


214,528


N/A


N/A


1,234,528Involuntary Termination for Cause


N/A


N/A


N/A


N/A


N/A


N/A


0Termination Following Change of Control


18


637,500


382,500


214,528


N/A


0


1,234,528




SEVERANCE AMOUNT (U.S. dollars, except as noted)T.D. Karran

Severance
Period (#
of months)

Base
Salary

Incentive
Compensation
Amount

Other
Employee
Benefits(1)

Additional Lump
Sum Value of
Pension(2)

Excise Tax
Payment

Total
Incremental
ObligationRetirement


N/A


N/A


N/A


N/A


N/A


N/A


0Resignation


N/A


N/A


N/A


N/A


N/A


N/A


0Involuntary Termination without Cause


18


468,000


234,000


149,087


17,700


N/A


868,787Involuntary Termination for Cause


N/A


N/A


N/A


N/A


N/A


N/A


0Termination Following Change of Control


18


468,000


234,000


149,087


17,700


0


868,787


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Table of Contents



SEVERANCE AMOUNT (U.S. dollars, except as noted)W.G. Greene(4)

Severance
Period (#
of months)

Base
Salary

Incentive
Compensation
Amount

Other
Employee
Benefits(1)

Additional Lump
Sum Value of
Pension(2)

Excise Tax
Payment

Total
Incremental
ObligationRetirement


N/A


N/A


N/A


N/A


N/A


N/A


0Resignation


N/A


N/A


N/A


N/A


N/A


N/A


0Involuntary Termination without Cause


21


546,000


339,180


275,822
(5)

75,200


N/A


1,236,202Involuntary Termination for Cause


N/A


N/A


N/A


N/A


N/A


N/A


0Termination Following Change of Control


21


546,000


339,180


275,822


75,200


0


1,263,202




SEVERANCE AMOUNT (U.S. dollars, except as noted)G.C. Thomson(4)

Severance
Period (#
of months)

Base
Salary

Incentive
Compensation
Amount

Other
Employee
Benefits(1)

Additional Lump
Sum Value of
Pension(2)

Excise Tax
Payment

Total
Incremental
ObligationRetirement


N/A


N/A


N/A


N/A


N/A


N/A


0Resignation


N/A


N/A


N/A


N/A


N/A


N/A


0Involuntary Termination without Cause


18


492,837


219,613


373,541
(6)

291,500


N/A


1,377,491Involuntary Termination for Cause


N/A


N/A


N/A


N/A


N/A


N/A


0Termination Following Change of Control


18


492,837


219,613


373,541


291,500


0


1,377,491




SEVERANCE AMOUNT (U.S. dollars, except as noted)W.C. Mitchell

Severance
Period (#
of months)

Base
Salary

Incentive
Compensation
Amount

Other
Employee
Benefits(1)

Additional Lump
Sum Value of
Pension(2)

Excise Tax
Payment

Total
Incremental
ObligationRetirement


N/A


N/A


N/A


N/A


N/A


N/A


0Resignation


N/A


N/A


N/A


N/A


N/A


N/A


0Involuntary Termination without Cause


18


421,200


210,600


160,600


31,400


N/A


823,800Involuntary Termination for Cause


N/A


N/A


N/A


N/A





N/A


0Termination Following Change of Control


18


421,000


210,600


160,600


31,400


0


823,800




SEVERANCE AMOUNT (U.S. dollars, except as noted)M.N. Horner

Severance
Period (#
of months)

Base
Salary

Incentive
Compensation
Amount

Other
Employee
Benefits(1)

Additional Lump
Sum Value of
Pension(2)

Excise Tax
Payment

Total
Incremental
ObligationTermination Following Change of Control(7)


30


850,000


547,793


257,613


426,706


818,625


2,900,737


Notes: (1)NOVA
Chemicals pays annual premiums for post-retirement benefits up to an annual maximum of $6,000 for single retirees and $12,000 for married
retirees for U.S. employees hired prior to January 1, 2008, who are age 55 or older with five years service at the time of separation or who meet these requirements during their
severance period. Canadian employees who are age 55 or older with five years of service at the time of separation or who meet these requirements during their severance period receive lifetime retiree
medical to a maximum amount of $30,000.(2)Does
not include pension values accrued under the Retirement Planssee "Retirement PlansDefined Benefit Pension Obligations."(3)Mr. Woelfel's
employment contract provides that he is entitled to 18 months severance if he is involuntarily terminated without cause or
constructively dismissed on or before December 31, 2012.(4)Messrs. Greene
and Thomson's termination of employment is governed by their COC Agreements until July 6, 2012.(5)Mr. Greene
is entitled to receive $100,000 in addition to his 21 months' severance payment if NOVA Chemicals terminates his employment.


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(6)Mr. Thomson
is entitled to receive Cdn$330,600 in addition to his 18 months' severance payment if NOVA Chemicals terminates his employment
before July 6, 2012.(7)Ms. Horner's
COC Agreement provided that NOVA Chemicals would reimburse her amounts owed under Section 280G of the IRC due to excess
"parachute" payments.


COMPENSATION OF DIRECTORS

Directors who are not full time employees of NOVA Chemicals receive compensation for their service as directors.
Non-employee director compensation is comprised of: (i) an annual retainer; (ii) annual committee membership retainer; and (iii) annual committee
chair retainer.

Non-employee
directors, other than the Chairman of the Board, are paid an annual retainer of $175,000. The Chairman of the Board is paid an annual retainer of $350,000.
Committee members who are not the Chair of the Committee receive an additional $50,000 retainer. Committee Chairs receive an additional $80,000 retainer. The compensation (in U.S. dollars) for
non-employee directors during 2010 is as follows:

Name

Annual Retainer
Fee

Annual Committee
Retainer Fee

Annual Committee
Chair Fee

Supplemental
Director Fee

TotalMohamed Al Mehairi(1)


175,000


50,000


80,000


175,000


480,000Philip J. Brown


175,000











175,000David C. Davies(2)


72,917


20,833


33,333





127,083Mark Garrett


175,000








175,000


350,000Gerhard Roiss(3)


350,000


100,000








450,000Georg F. Thoma(4)


175,000


100,000





175,000


450,000Stephen Soules(5)


14,000





3,333





17,333


Notes: (1)Mr. Al
Mehairi is a member of the Audit Committee and Chair of the Remuneration Committee.(2)Mr. Davies
resigned on July 1, 2010. He was a member of the Remuneration Committee and Chair of the Audit Committee. These values reflect
pro-rated payments to his resignation date.(3)Dr. Roiss
was Chairman of the Board, and a member of the Audit and Remuneration Committees. Dr. Roiss resigned from the Board on
December 31, 2010.(4)Mr. Thoma
is a member of the Audit and Remuneration Committees.(5)Mr. Soules
was appointed to the Board of Directors and Chair of the Audit Committee in December 2010. These values reflect
pro-rated payments for the period in 2010 that Mr. Soules was a director and Chair of the Audit Committee.


Indebtedness of Directors and Executives

As at March 8, 2011 and during fiscal 2010, none of the current or former directors and executives of NOVA Chemicals or any
associate of any such director or executive was indebted to NOVA Chemicals.

6.C. BOARD PRACTICES



The Board of Directors ("Board") currently consists of seven members. Directors are elected annually and serve until their successors
are elected or appointed, they resign, they are removed from office or their office is earlier vacated in accordance with the by-laws of the Corporation or with the provisions of the Business Corporations Act(New Brunswick). Each of the directors has served in his respective capacity since his election; see the tables above
in Item 6.A. for the period during which each director and member of senior management has served in that office.

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There are no director service contracts between us and our directors providing for benefits upon termination of employment, other than
an employment agreement with Randy Woelfel.



The Board has established two standing committees (the "Committees") and has delegated certain of its responsibilities to each
of the Committees. In this regard, each Committee has been mandated to perform certain advisory functions, and to make recommendations and report to the Board. The two standing committees of the Board
are the Audit Committee and the Remuneration Committee.

Each
of the Committees has the authority to retain outside advisors to assist in the discharge of its respective responsibilities. Each of the Committees reviews its respective charter
at least annually and, as required, recommends changes to the Board. Each of the Committees has a charter; a brief summary of the Committee charters follows, together with current Committee
membership.



Chairman:
Stephen Soules
Other Members: Mohamed Al Mehairi and Georg Thoma

The
Audit Committee of the Board reviews and enquires into matters affecting our financial reporting, our system of internal accounting and financial controls and procedures and our
financial audit procedures and plans; oversees the policies and practices relating to corporate compliance and risk management strategies; reviews and approves the external auditor's proposed audit
scope and approach and the performance of the external auditors; reviews with management the mandate and appointment of internal auditors; oversees the funding, administration and investment of the
trust funds associated with our retirement plans; and reviews with management and reports to the Board of Directors on our financing plans and objectives.

The
Board approves, on the recommendation of the Audit Committee, all fees paid to the external auditors in respect of audit services. In addition, in accordance with applicable rules
regarding audit committees, the Audit Committee reviews and approves (in advance) the scope and related fees for all non-audit services that are to be provided by the external
auditors. In doing so, the Audit Committee considers whether the provision of these non-audit services may impact the objectivity and independence of the external auditor.

All
members of the Audit Committee are financially literate, and Mr. Soules is an audit committee financial expert as defined by the U.S. Securities and Exchange Commission
rules.



Chairman:
Mohamed Al Mehairi
Other Members: Mark Garrett, Georg Thoma

The
Remuneration Committee of the Board is responsible for overseeing our policies and practices with respect to human resources. In this regard, the Remuneration Committee reviews
recommendations for the appointment of persons to senior executive positions, and considers terms of employment including succession planning and matters of compensation. This Committee recommends to
the Board the goals and objectives used to determine executive leadership compensation, and evaluates the NOVA Management Board's performance. For additional information relating to the compensation
of our senior executives in 2010, see "Item 6.B. Compensation."

6.D. EMPLOYEES

As of December 31, 2010, we employed approximately 2,445 full-time employees globally.

Collective
bargaining agreements with various unions, covering approximately 320, or 13%, of the approximately 2,430 North American employees, are in place at certain plants
located in Ontario and Pennsylvania. A collective bargaining agreement involving approximately 210 employees at our olefins plant in

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Corunna,
Ontario, was re-negotiated in 2010 with an expiration date of March 31, 2013. A collective bargaining agreement involving approximately 110 employees at the
polystyrene plant at the Beaver Valley site in Monaca, Pennsylvania, was re-negotiated in 2009 with an expiration date of March 15, 2012. We engage in continuous dialogue with the
unions to address current issues and proactively address potential bargaining items.

We
provide medical, health, life insurance, retirement plans and other benefits to our employees, which are comparable with other companies in the chemical industry where our operations
are located.

6.E. SHARE OWNERSHIP

IPIC's subsidiary, NOVA Chemicals Holding GmbH, holds all of our issued and outstanding Common Shares, which are our only class
of shares issued and outstanding.

Item 7.    Major Shareholders and Related Party Transactions

7.A. MAJOR SHAREHOLDERS

IPIC's subsidiary, NOVA Chemicals Holding GmbH, holds all of our issued and outstanding Common Shares.

In
addition to owning NOVA Chemicals, IPIC has other investments in the chemicals industry, including Borealis AG ("Borealis"), a petrochemicals company in Europe, and OMV
Aktiengesellschaft ("OMV"), one of the largest oil and gas groups in Central and Southeastern Europe, with significant investments in petrochemicals. Borealis is jointly controlled by IPIC (with 64%
of the share capital) and OMV (with 36% of the share capital). In addition, IPIC owns approximately 20% of the share capital of OMV.

IPIC,
OMV and Borealis entered into an Agreement in Principle ("AiP") in August 2009 to define our future corporate governance structure. The AiP contemplates that Borealis will
acquire from IPIC 24.9% of our share capital. If the AiP is implemented, OMV will share control of our company with IPIC. The AiP received the antitrust clearance of the European Commission on
October 27, 2009. As of the date of this annual report, the parties have not taken any actions to implement the AiP and no determination has been made whether to proceed with the transactions
contemplated by the AiP.

7.B. RELATED PARTY TRANSACTIONS

Our Agreements with Executive Officers

For a description of the change of control agreements and employment agreements with the NEOs, see "Item 6.B.
CompensationNEO Agreements."

Directors' and Officers' Insurance

We maintain directors' and officers' liability insurance with policy limits of $100 million in the aggregate, subject to a
deductible in respect of corporate reimbursement of $1 million for each loss. We are generally to be reimbursed for payments made under corporate indemnity provisions on behalf of our directors
and officers, and individual directors and officers (or their heirs and legal representatives) are generally covered for losses arising during the performance of their duties for which they are
not indemnified by us. Major exclusions from coverage include claims arising from illegal acts, those acts which result in illegal personal profit, violation of any fiduciary duty under the
U.S. Employee Retirement Income Security Act of 1974, pollution damage (except for resultant shareholder actions), claims for financial impairment or while such director or officer is no longer
acting in an insured capacity and claims brought by us against a director or officer, except for derivative actions.

Effective
as of the closing of the IPIC acquisition ("IPIC Closing"), we obtained and fully paid the premium for the extension of the directors' and officers' insurance policies for a
claims reporting or run-off and extended reporting period of seven years from and after the IPIC Closing with respect to any claim related to any period of time at or prior to the IPIC
Closing, and with terms, conditions, retentions and limits of liability that were no less advantageous to each present and former director, officer, trustee and employee of the Corporation and our
subsidiaries than the coverage provided under our existing policies prior to the IPIC Closing (which terms are consistent with our current policy described above) with respect to any actual or alleged
error, misstatement,

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misleading
statement, act, omission, neglect, breach of duty or any matter claimed against a director, officer or employee of the Corporation or any of our subsidiaries by reason of him or her serving
in such capacity
that existed or occurred at or prior to the IPIC Closing (including in connection with the approval or completion of the IPIC Transaction).

Director Indemnity Agreements

Prior to the IPIC Transaction, we entered into indemnity agreements with our former directors containing provisions that may require us
to, among other things, indemnify such directors against certain liabilities that may arise by reason of their status or service as our former directors, to obtain the approval of a court, if
required, to meet such indemnity obligations, to reimburse such directors for related taxes and duties, and to advance their expenses incurred as a result of any proceeding against them as to which
they could be indemnified, provided that any expenses advanced not actually required shall be repaid. The right to indemnification will only apply where the director acted honestly and in good faith
with a view to the best interest of the entity that he served and, in the case of a criminal or administrative action, had reasonable grounds for believing that his conduct was lawful. The indemnity
agreements further provide that such former directors must give written notice upon becoming aware of any proceeding which may give rise to the indemnification obligation and that such directors have
the right to independent legal counsel at their expense, unless we have approved such independent counsel, upon which we are obligated to pay such approved counsel's legal fees.

Following
the IPIC Transaction, we entered into indemnity agreements with each of our current directors containing provisions that may require us and from time to time, certain of our
affiliates, to, among other things, indemnify such directors against certain liabilities that may arise by reason of their status or service as our directors, and obtain the approval of a court, if
required, to meet such indemnity obligations. The directors are entitled to reimbursement for time spent responding to or testifying in connection with any proceedings involving us, tax
gross-up payments to the extent such directors are not entitled to certain tax deductions related to the indemnification payments, and reimbursement of their expenses incurred as a result
of any proceeding against them as to which they could be indemnified, provided that any expenses not actually incurred shall be repaid. The right to indemnification will only apply where the director
acted honestly and in good faith with a view to the best interest of the entity that it serves and, in the case of a criminal or administrative action, had reasonable grounds for believing that his
conduct was lawful. The indemnity agreements further provide that we shall be the indemnitor of first resort and that we are required to advance the full amount of expenses incurred by
the directors.

7.C. INTERESTS OF EXPERTS AND COUNSEL

Not
Applicable

Item 8.    Financial Information

8.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See "Item 17. Financial Statements" for our Annual Audited Consolidated Financial Statements, related notes and other financial
information filed with this annual report on Form 20-F.

8.B. SIGNIFICANT CHANGES

Except as otherwise disclosed in this annual report, there have been no material changes in our financial position, operations or cash
flows since December 31, 2010.

Item 9.    The Offer and Listing

9.A. OFFER AND LISTING DETAILS

Not
Applicable

103

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Table of Contents

9.B. PLAN OF DISTRIBUTION

Not
Applicable

9.C. MARKETS

Not
Applicable

9.D. SELLING SHAREHOLDERS

Not
Applicable

9.E. DILUTION

Not
Applicable

9.F. EXPENSES OF THE ISSUE

Not
Applicable

Item 10.    Additional Information

10.A. SHARE CAPITAL

Not
Applicable

10.B. MEMORANDUM AND ARTICLES OF ASSOCIATION

REGISTOR

NOVA Chemicals was continued under the provisions of theBusiness Corporations Act(New Brunswick) (the "Act") on July 6, 2009, with a corporation number of 645481. Our Articles of Continuance ("Articles") do not restrict the business which we may
carry on.

ARTICLES AND BY-LAWS

The following brief description of provisions of the Act, our Articles and General By-Law No. 3
("By-Laws") does not purport to be complete and is subject in all respects to the provisions of the Act and our Articles and By-Laws.



Our By-Laws provide that a director who is a party to a material transaction or material contract, or proposed material
transaction or material contract with us, is a director of, or acts in a capacity similar to a director of, or has a material interest in any person who is a party to a material transaction or
material contract or proposed material transaction or material contract with us shall disclose the nature and extent of his interest at the time and in the manner provided in the Act. Except as
provided in the Act and explained in the following paragraph, no such director shall vote on any resolution to approve any such transaction. If a material transaction or material contract is made
between us and one or more of our directors, or between us and another person of which a director of NOVA Chemicals is a director or in which he has a material interest, the transaction is neither
void nor voidable by reason only of that relationship, or by reason only that a director with an interest in the transaction or contract is present at or is counted to determine the presence of a
quorum at a meeting of directors or committee of directors that authorized the transaction, if the director disclosed his interest in accordance with the provisions of the Act and the transaction or
contract was approved by the directors or the shareholder and it was reasonable and fair to us at the time it was approved.

The
Act provides that a director who is materially interested in a contract may not vote on any resolution to approve the contract unless the contract is (i) an arrangement by way
of security for money lent to or obligations undertaken by the director for the benefit of us or an affiliate, (ii) relates primarily to the director's remuneration as a director, officer,
employee or agent of the Company or an affiliate, (iii) is for indemnity or

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insurance
for the director against liability incurred by the director acting in his or her capacity as director, or (iv) is with an affiliate.



Our By-Laws provide that the directors may from time to time: (i) borrow money on our credit, (ii) issue,
re-issue, sell or pledge debt obligations or guarantee of NOVA Chemicals, (iii) to the extent permitted by the Act, give, directly or indirectly, financial assistance to any person
by means of a loan, a guarantee to secure the performance of an obligation or otherwise, and (iv) mortgage, hypothecate, pledge or otherwise create a security interest in or other interest in
or charge upon all or any property (including the undertaking and rights) of NOVA Chemicals, owned or subsequently acquired, to secure any obligation of NOVA Chemicals.



A holding company controlled by IPIC currently owns all of our equity. Our By-Laws provide that a resolution in writing
signed by all the shareholders or signed counterparts of such resolution by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed
at a meeting of the shareholders duly called, constituted and held.

Our
By-Laws provide that, subject to the Act, an annual meeting of shareholders shall be held on such day and at such time in each year as the Board may from time to time
determine, for the purpose of considering the financial statements and reports required by the Act to be placed before the annual meeting, electing directors, appointing auditors and for the
transaction of such other business as may properly be brought before the meeting. The Act requires that, subject to certain exceptions, the directors must call a special meeting of shareholders upon
the requisition of at least ten percent of our issued shares entitled to vote at the meeting being requisitioned.

The
Act provides that for purposes of determining shareholders entitled to receive notice of a meeting of shareholders, the directors may fix a record date in advance so long as the date
is not more than 50 or less than 21 days before the date of the meeting. Where no record date is fixed, the record date is the close of business on the day immediately preceding the day notice
is given or the day of the meeting itself if no notice is given. The Act and our By-Laws provide that notice of the time and place of each shareholder meeting shall be sent not less than
21 nor more than 50 days before the meeting to (i) each shareholder entitled to vote, (ii) each director, and (iii) our auditor. If special business is to be
transacted, the notice must state or be accompanied by a statement of the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment on the proposal. All
business transacted at a special meeting of shareholders and all business transacted at an annual shareholder meeting, except consideration of the financial statements and auditor's report, election
of directors and reappointment of the auditor constitutes special business.

Our
By-Laws provide that a quorum for the transaction of business at any meeting of shareholders shall be met if the holders of not less than 10% of the shares entitled to
vote at the meeting are present in person or represented by proxy.

Our
By-laws also state that the only persons entitled to be present at a meeting of shareholders shall be those persons entitled to vote thereat, the directors and our
auditors and others who, although not entitled to vote, are entitled or required under any provision of the Act or our Articles or By-Laws to be present at the meeting. Any other person
may be admitted only on the invitation of the Chairman of the meeting or with the consent of the meeting.



We are authorized to issue an unlimited number of Common Shares, first preferred shares and second preferred shares. Currently, only
Common Shares are issued and outstanding.



Each Common Share has one vote and our directors stand for election on an annual basis. The holders of the Common Shares are entitled
to attend and vote at all meetings of shareholders except meetings of only the

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holders
of another class or series of our shares. In addition, subject to the preferential rights attaching to any of our shares ranking in priority to the Common Shares, the holders of the Common
Shares are entitled to receive any dividends that may be declared by the Board of Directors on the Common Shares. Subject to the rights of the holders of shares of the Corporation ranking in priority
to the Common Shares, the holders of the Common Shares are entitled to participate rateably amongst themselves and rateably with the holders of any shares ranking on a parity with the Common Shares in
any distribution of the remaining property of the Corporation in the event of the dissolution, liquidation or winding-up of NOVA Chemicals or any other distribution of its property amongst
its shareholders for the purposes of winding-up its affairs.



Subject to the following and to applicable law, the first preferred shares as a class are not entitled to receive notice of, attend or
vote at meetings of the shareholders of the Corporation. The first preferred shares may from time to time be issued in one or more series, and the Board of Directors may fix from time to time before
such issue the number of first preferred shares that is to comprise each series and the designation, rights, privileges, restrictions and conditions attaching to each series of first preferred shares,
including any voting rights, the rate or amount of dividends or the method of calculating dividends, the dates of payment thereof, the terms and conditions of redemption, purchase and conversion, if
any, and any sinking fund or other provisions. If issued, the first preferred shares of each series will, with respect to the payment of dividends and the distribution of assets on return of capital
in the event of liquidation, dissolution or winding-up of NOVA Chemicals, whether voluntary or involuntary, or any other return of capital or distribution of the assets of the Corporation
amongst its shareholders for the purpose of winding-up its affairs, have preference over the Common Shares, the second preferred shares and over any other shares of the Corporation ranking
by their terms junior to the first preferred shares of the series. The first preferred shares of any series may also be given such other preferences over the Common Shares, the second preferred shares
and any other shares ranking junior to such first preferred shares as may be established by the Board of Directors.



Subject to the following and to applicable law, the second preferred shares as a class are not entitled to receive notice of, attend or
vote at meetings of the shareholders of the Corporation. The second preferred shares may from time to time be issued in one or more series, and the Board of Directors may fix from time to time before
such issue the number of second preferred shares that is to comprise each series and the designation, rights, privileges, restrictions and conditions attaching to each series of second preferred
shares, including any voting rights, the rate or amount of dividends or the method of calculating dividends, the dates of payment thereof, the terms and conditions of redemption, purchase and
conversion, if any, and any sinking fund or other provisions. If issued, the second preferred shares of each series will, with respect to the payment of dividends and the distribution of assets on
return of capital in the event of liquidation, dissolution or winding-up of NOVA Chemicals, whether voluntary or involuntary, or any other return of capital or distribution of the assets
of the Corporation amongst its shareholders for the purpose of winding-up its affairs, have preference over the Common Shares and over any other shares of the Corporation ranking by their
terms junior to the second preferred shares of the series. The second preferred shares of any series may also be given such other preferences over the Common Shares and any other shares ranking junior
to such second preferred shares as may be established by the Board of Directors.



Our Articles provide that the number of directors comprising the entire Board is a minimum of one and a maximum of 15. We currently
have a fixed number of seven directors. All of our directors have been elected to serve until the next annual meeting or until his successor is elected or appointed.

Under
the Act and provided that a quorum of directors remains in office, vacancies may be filled by the directors. If less than a quorum of directors remains in office, or if there has
been a failure to elect the required fixed number of directors, any vacancy must be filled by the shareholders and the directors are required to call a special meeting of the shareholders to fill the
vacancy. No person is required to hold any equity of the Corporation to qualify as a director.

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10.C. MATERIAL CONTRACTS

The following is a summary of each material contract, other than contracts entered into in the ordinary course of business, to which we
are a party:

Senior secured revolving credit facility

We have a senior secured revolving credit facility provided by a syndicate of lenders, which matures on November 17, 2013 and is
available for Prime Loans, USBR Loans, LIBOR Loans, Swingline Advances, Bankers' Acceptances, and Letters of Credit. On October 28, 2010, we amended our senior secured revolving credit facility
to extend the maturity date one year to November 17, 2013 and increase the size from $350 million to $425 million.

Loans
under our senior secured revolving credit facility bear interest at a floating rate, which is calculated as a base rate plus an applicable pricing margin. The applicable pricing
margins vary with the type of loan and range between 2.50% and 4.75%. The base rate depends on the type of advance we choose.

Our
senior secured revolving credit facility contains financial covenants, which require quarterly compliance. The covenants require a maximum senior debt to cash flow ratio of 3:1 and a
debt to capitalization ratio not to exceed 60% at the end of each quarter. In addition to the financial covenants, this credit facility also limits our ability to, among other things, incur additional
liens, sell certain assets, make distributions on or repurchase equity, incur additional debt, enter into hedging arrangements, enter into operating leases, engage in reorganizations or mergers, or
change the character of our business. Certain of these covenants are subject to exceptions and materiality qualifiers. Moreover, this credit facility limits distributions during any four consecutive
fiscal quarters equal to the greater of (A) 55% of consolidated free cash flow for such four fiscal quarters, and (B) $10 million.

Borrowings
under our senior secured revolving credit facility are secured by a fixed and floating lien on certain of our real property and a security interest in certain of our personal
property. Further, we have provided a guarantee to the lenders covering certain hedging transactions entered into with our restricted subsidiaries. Our obligations under our senior secured revolving
credit facility have also been guaranteed by our restricted subsidiaries.

Voluntary
prepayments of principal amounts outstanding and voluntary reductions of the unutilized portion of the credit facilities are permitted at any time, upon the giving of proper
notice and subject to minimum dollar amounts.

Our
senior secured revolving credit facility contains customary events of default, including, but not limited to, payment defaults, breach of covenant, incorrect representations or
warranties, cross default of other indebtedness, cross default of secured swap obligations, certain events of bankruptcy, insolvency or dissolution, judgment defaults, change of control, and
invalidity of any loan documents or provisions thereof supporting the credit facilities. Certain of the events of default are subject to exceptions and materiality qualifiers.

The
terms used in this summary have specific meanings as used in the senior secured revolving credit facility.

Indemnity Agreements

Reference is made to "Item 7.B. Related Party TransactionsDirector Indemnity Agreements."

10.D. EXCHANGE CONTROLS

There are currently no limitations imposed by Canadian federal or provincial laws on the rights of non-resident or foreign
owners of our securities to hold or vote the securities held. There are also no such limitations imposed by our Articles and By-Laws with respect to our Common Shares.

10.E. TAXATION

Not
Applicable

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Table of Contents

10.F. DIVIDENDS AND PAYING AGENTS

Not
Applicable

10.G. STATEMENT BY EXPERTS

Not
Applicable

10.H. DOCUMENTS ON DISPLAY

We file periodic reports and other information with the SEC. These reports include certain financial and statistical information about
us and may be accompanied by exhibits. You may read and copy this information at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549,
or obtain copies of this information by mail from the public reference room at the prescribed rates. You may call the SEC at 1-800-SEC-0330 for
further information on the SEC's Public Reference Room. The SEC also maintains an Internet website that contains reports and other information about companies like us who file electronically with the
SEC. The URL of that website is http://www.sec.gov.

10.I. SUBSIDIARY INFORMATION

Not
Applicable

Item 11.    Quantitative and Qualitative Disclosures About Market Risk

The Audit Committee of our Board regularly reviews foreign exchange, interest rate and commodity hedging activity and monitors
compliance with the our hedging policy. Our policy prohibits the use of financial instruments for speculative purposes and limits hedging activity to the underlying net economic exposure. See
"Item 5  Operating and Financial Review and Prospects" and Note 23 in our Annual Audited Consolidated Financial Statements contained in this
annual report on Form 20-F for quantitative and qualitative disclosure of market risk.

Item 12.    Description of Securities Other than Equity Securities

12.A. DEBT SECURITIES

Not
Applicable

12.B. WARRANTS AND RIGHTS

Not
Applicable

12.C. OTHER SECURITIES

Not
Applicable

12.D. AMERICAN DEPOSITORY SHARES

Not
Applicable

PART II

Item 13.    Defaults, Dividend Arrearages and Delinquencies

Not
Applicable

Item 14.    Material Modifications to the Rights of Security Holders and Use of Proceeds

Not
Applicable

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Table of Contents

Item 15.    Controls and Procedures

(a)   Disclosure Controls and Procedures

Based
on our management's evaluation (with the participation of our principal executive officer and principal financial officer), as of December 31, 2010, our principal executive
officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

(b)   Management's Annual Report on Internal Control over Financial Reporting

The
report of management on our internal control over financial reporting is located under the heading "Management's Annual Report on Internal Control Over Financial Reporting" in our
Annual Audited Consolidated Financial Statements included in this annual report on Form 20-F.

(c)   Attestation Report of the Registered Public Accounting Firm

Not
Applicable

(d)   Changes in Internal Control Over Financial Reporting

There
were no changes in our internal control over financial reporting identified in connection with the above evaluation that occurred during the period covered by this annual report on
Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16A.    Audit Committee Financial Expert

Our Board of Directors has determined that Stephen Soules is an "audit committee financial expert" (as defined in
Item 16A of Form 20-F) serving on our Audit Committee. Stephen Soules is an "independent" director, as defined under NYSE rules.

Item 16B.    Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. You can view our Code of Ethics for CEO and Senior Financial Officers on the Governance page on our website at
http://www.novachemicals.com/governance.

Item 16C.    Principal Accountant Fees and Services

The following fees were billed to us by Ernst & Young LLP and approved by the Board of Directors during the prior
two years:

(U.S. dollars)

2010

2009Audit Fees

$
2,443,201

$
2,583,957Audit-Related Fees


90,409


1,595,598Tax Fees


41,982


45,761Total Fees

$
2,575,592

$
4,225,316


Audit
fees include fees for the audit of our Annual Audited Consolidated Financial Statements, statutory audits of subsidiaries, review of quarterly reports, provision of consent letters
and comfort letters in connection

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with
certain regulatory matters. Fee amounts for 2010 are based on invoices relating to the 2010 year-end audit that have been received and those expected to be billed.

Audit-related
fees include fees for services that are related to the audit of our Annual Audited Consolidated Financial Statements. These services include an audit of our conversion to a
new consolidation software platform, consultation with respect to IFRS, non-statutory audits of subsidiaries and affiliates, and consultation on accounting and disclosure matters.

Tax
fees include fees for advice on tax compliance and planning, customs filings for us and our subsidiaries, and advice on tax-related matters.

Our
Board of Directors approves, on the recommendation of the Audit Committee, all fees paid to the external auditors. In addition, in accordance with applicable rules regarding audit
committees, the Audit Committee reviews and approves (in advance) the scope and related fees for all non-audit services which are to be provided by the external auditors. In
considering whether to approve non-audit services, the Audit Committee considers whether the provision of these non-audit services may impact the objectivity and independence
of the external auditor and, in respect of non-audit services provided by Ernst & Young LLP in 2010, the Audit Committee has concluded that it does not.

Item 16D.    Exemptions from the Listing Standards for Audit Committees

Not
Applicable

Item 16E.    Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not
Applicable

Item 16F.    Change of Registrant's Certifying Accountant

Not
Applicable

Item 16G.    Corporate Governance

Not
Applicable

PART III

Item 17.    Financial Statements

Our Annual Audited Consolidated Financial Statements for the fiscal year ending December 31, 2010, including the notes thereto
and together with auditor's report thereon, are included in this annual report beginning on page F-1.

Item 18.    Financial Statements

Not
Applicable

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Table of Contents

Item 19.    Exhibits

Exhibit No.

Description1.1

Certificate and Articles of Continuance of NOVA Chemicals Corporation dated July 6, 2009 (1)1.2

General By-Law No. 3 of NOVA Chemicals Corporation dated July 6, 2009 (1)2.1

Indenture, dated as of October 16, 2009, between NOVA Chemicals Corporation, as Issuer and U.S. Bank National Association, as Trustee in respect of the 8.375% Senior Notes due 2016 and 8.625% Senior Notes due
2019 (2)2.2

Indenture, dated as of September 21, 1995, between NOVA Chemicals Corporation, as successor to NOVACOR Chemicals Ltd., and JP Morgan Trust Company, N.A., as successor trustee to The First National Bank of
Chicago (3)2.3

Indenture, dated as of January 13, 2004, between NOVA Chemicals Corporation, as Issuer and U.S. Bank National Association, as Trustee (4)2.4

Indenture, dated as of October 31, 2005, between NOVA Chemicals Corporation, as Issuer and U.S. Bank National Association, as Trustee (5)4.1

Restated Credit Agreement, dated as of November 17, 2009, among the NOVA Chemicals Corporation, as Borrower, The Toronto-Dominion Bank, as Administrative Agent, and the lenders from time to time party thereto (6)4.2
*
First Amending Agreement, dated as of October 28, 2010, to Restated Credit Agreement, dated as of November 17, 2009, among NOVA Chemicals Corporation, as Borrower, The Toronto-Dominion Bank, as Administrative
Agent and the lenders from time to time party thereto4.3

Form of Indemnity Agreement by and among NOVA Chemicals Corporation and former directors (7)4.4

Form of Indemnity Agreement by and among NOVA Chemicals Corporation and Directors (8)7.1
*
Computation of Earnings to Fixed Charges8.1
*
List of Subsidiaries12.1
*
Certification of Randy Woelfel, Chief Executive Officer of NOVA Chemicals Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
*
Certification of Todd Karran, Senior Vice President and Chief Financial Officer of NOVA Chemicals Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
*
Certification of Randy Woelfel, Chief Executive Officer of NOVA Chemicals Corporation, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2
*
Certification of Todd Karran, Senior Vice President and Chief Financial Officer of NOVA Chemicals Corporation, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002


(1)Incorporated
by reference from the Report on Form 6-K of NOVA Chemicals Corporation filed on August 6, 2009.(2)Incorporated
by reference from Exhibit 4.1 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.(3)Incorporated
by reference from Exhibit 7.1 to the Registration Statement on Form F-9 of NOVA Chemicals Corporation,
File No. 333-6108.(4)Incorporated
by reference from Exhibit 7.1 to the Registration Statement on Form F-10 of NOVA Chemicals Corporation,
File No. 333-113038.(5)Incorporated
by reference from the Report on Form 6-K of NOVA Chemicals Corporation filed on November 1, 2005.(6)Incorporated
by reference from Exhibit 10.1 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.(7)Incorporated
by reference from Exhibit 10.3 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.(8)Incorporated
by reference from Exhibit 10.4 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.*Filed
herewith.


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Table of Contents

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.

NOVA Chemicals CorporationBy:

/s/ TODD D. KARRANName: Todd D. Karran
Title: Senior Vice President and Chief Financial
           Officer


Date:
March 9, 2011

112

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



PageManagement's Report

F-1Management's Annual Report on Internal Control Over Financial
Reporting

F-2Independent Auditors' Report of Registered Public Accounting
Firm

F-3Consolidated Statements of Income (Loss)

F-4Consolidated Statements of Comprehensive Income (Loss)

F-4Consolidated Balance Sheets

F-5Consolidated Statements of Cash Flows

F-6Consolidated Statements of Changes in Shareholder's Equity

F-7Notes to Consolidated Financial Statements

F-8


F-i

---





MANAGEMENT'S REPORT

To
the Shareholder of NOVA Chemicals Corporation

The
Consolidated Financial Statements and other financial information included in this annual report have been prepared by management. It is management's responsibility to ensure that
sound judgment, appropriate accounting principles and methods and reasonable estimates have been used in the preparation of this information. They also ensure that all information presented
is consistent.

Management
also is responsible for establishing and maintaining internal controls and procedures over the financial reporting process. The internal control system includes an internal
audit function and an established business conduct policy that applies to all employees. In addition, the Company has adopted a code of ethics that applies to its Chief Executive Officer, Chief
Financial Officer and Corporate Controller. The business conduct policy and the code of ethics can be viewed on NOVA Chemicals' website (www.novachemicals.com). Management believes the system of
internal controls, review procedures and established policies provide reasonable assurance as to the reliability and relevance of financial reports.
Management also believes that NOVA Chemicals' operations are conducted in conformity with the law and with a high standard of business conduct.

As
at year-end, we have reported that internal control over financial reporting is effective. In compliance with Section 302 of the United States Sarbanes-Oxley
Act of 2002, NOVA Chemicals' Chief Executive Officer and Chief Financial Officer will provide to the Securities and Exchange Commission a certification related to NOVA Chemicals' annual disclosure
document in the U.S. (Form 20-F). The same certification will be provided to the Canadian Securities Administrators.

The
Board of Directors ("Board") is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control. The Board carries out this
responsibility principally through its Audit Committee. The Audit Committee reviews the financial statements and annual report on Form 20-F and recommends them to the Board
for approval. The Audit Committee meets with management, internal auditors and external auditors to discuss internal controls, auditing matters and financial reporting issues. Internal and external
auditors have full and unrestricted access to the Audit Committee. The Audit Committee also recommends a firm of external auditors to be appointed by the shareholder.

/s/ Randy Woelfel RANDY WOELFELChief Executive Officer

/s/ Todd Karran TODD KARRANSenior Vice President and Chief Financial OfficerMarch 9, 2011
Calgary, Canada


F-1

---





MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The following report is provided by management in respect of NOVA Chemicals' internal control over financial reporting
(as defined in Rules 13a-15f and 15d-15f under the United States Securities Exchange Act of 1934):

/s/ Randy Woelfel RANDY WOELFELChief Executive Officer

/s/ Todd Karran TODD KARRANSenior Vice President and Chief Financial OfficerMarch 9, 2011
Calgary, Canada


F-2

---





INDEPENDENT AUDITORS' REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM

TO THE SHAREHOLDER OF NOVA CHEMICALS CORPORATION

We
have audited the accompanying consolidated financial statements of NOVA Chemicals Corporation, which comprise the consolidated balance sheets as at December 31, 2010 and
December 31, 2009, and the consolidated statements of income (loss), comprehensive income (loss), cash flows and changes in shareholder's equity for the year-ended
December 31, 2010, the periods from January 1, 2009 to July 5, 2009 and July 6, 2009 to December 31, 2009 and the year-ended December 31, 2008 and
a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with
Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in
accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We were not engaged to
perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no
such opinion.

An
audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the
auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements, evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We
believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of NOVA
Chemicals Corporation as at December 31, 2010 and December 31, 2009, and the results of its operations and its cash flows for the year-ended December 31, 2010, the
periods from January 1, 2009 to July 5, 2009 and July 6, 2009 to December 31, 2009 and
the year-ended December 31, 2008 in accordance with Canadian generally accepted accounting principles.

GRAPHICERNST & YOUNG LLPChartered Accountants
March 9, 2011
Calgary, Canada


F-3

---





CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)(millions of U.S. dollars)

Successor

PredecessorRevenue

$
4,576

$
1,612

$
1,345

$
5,645Feedstock and operating costs (excluding depreciation)


3,466


1,157


1,167


5,055Selling, general and administrative


209


82


175


212Research and development


35


17


17


44Foreign exchange loss (gain) (Note 23)


13


104


39


(117
)Restructuring charges (Note 16)


20


22


41


32Depreciation and amortization


243


131


117


2353,986


1,513


1,556


5,461Operating income (loss) from continuing operations


590


99


(211
)

184Interest expense, net (Note 11)


(183
)

(83
)

(92
)

(149
)Other (losses) gains (Note 17)


(54
)




6


(1
)(237
)

(83
)

(86
)

(150
)Income (loss) from continuing operations before income taxes


353


16


(297
)

34Income tax (expense) recovery (Note 18)


(120
)

(7
)

62


71Income (loss) from continuing operations


233


9


(235
)

105Income (loss) from discontinued operations, net of income taxes (Note 3)


26


(11
)

(4
)

(145
)Net income (loss)

$
259

$
(2
)
$
(239
)
$
(40
)


(1)Restated
for discontinued operations. See Note 3.


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009

Jan. 1-July 5,
2009

Year ended
Dec. 31, 2008(millions of U.S. dollars)

Successor

PredecessorNet income (loss)

$
259

$
(2
)
$
(239
)
$
(40
)Other comprehensive (loss) income:Unrealized gain on available-for-sale securities, net of tax of $0











1Unrealized (loss) gain on translation of self-sustaining foreign operations


(3
)

5


4


(147
)(3
)

5


4


(146
)Comprehensive income (loss)

$
256

$
3

$
(235
)
$
(186
)


See
accompanying Notes to Consolidated Financial Statements

F-4

---





CONSOLIDATED BALANCE SHEETS

December 31 (millions of U.S. dollars)

2010

2009
Restated(1)ASSETSCurrent assetsCash and cash equivalents

$
300

$
232Accounts receivable (Note 5)


374


305Inventories (Note 6)


450


494Prepaid expenses and other assets


57


44Future income taxes (Note 18)


2


3Assets held for sale (Note 3)


321


2511,504


1,329Intangible assets, net (Note 7)


465


492Restricted cash (Note 8)


85


Other non-current assets (Note 8)


87


121Future income taxes (Note 18)


63


58Property, plant and equipment, net (Note 9)


3,456


3,553Assets held for sale (Note 3)


10


43$
5,670

$
5,596LIABILITIES AND SHAREHOLDER'S EQUITYCurrent liabilitiesAccounts payable and accrued liabilities (Note 10)

$
579

$
555Future income taxes (Note 18)


2


6Long-term debt due within one year (Note 11)


10


312Liabilities associated with assets held for sale (Note 3)


245


142836


1,015Long-term debt (Note 11)


1,531


1,512Deferred credits and long-term liabilities (Note 12)


419


366Future income taxes (Note 18)


835


804Liabilities associated with assets held for sale (Note 3)





1063,621


3,803SHAREHOLDER'S EQUITYCommon shares (Note 4 and 13)


849


849Contributed surplus (Note 4)


941


941Accumulated other comprehensive income (Note 4)


2


5Reinvested earnings (deficit) (Note 4)


257


(2
)2,049


1,793$
5,670

$
5,596Contingencies and commitments (Notes 11, 21 and 26)


(1)Restated
for discontinued operations. See Note 3.


On behalf of the Board of Directors:

/s/ Stephen Soules STEPHEN SOULESChairman of the Audit Committee

/s/ Randy Woelfel RANDY WOELFELDirector


See
accompanying Notes to Consolidated Financial Statements

F-5

---





CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions of U.S. dollars)

Year Ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year Ended
Dec. 31, 2008
Restated(1)Successor

PredecessorOPERATING ACTIVITIESNet income (loss)

$
259

$
(2
)
$
(239
)
$
(40
)(Income) loss from discontinued operations


(26
)

11


4


145Income (loss) from continuing operations

$
233

$
9

$
(235
)
$
105Depreciation and amortization


243


131


117


235Future income tax expense (recovery) (Note 18)


27


(15
)

8


(128
)Other losses (gains) (Note 17)


4





(6
)

1Stock option expense (Note 14)











2Unrealized loss (gain) on derivatives (Note 23)


15


(51
)

(6
)

87Unrealized foreign exchange loss (gain)


6


86


45


(119
)Amortization of bond discounts


29


13





Non-cash restructuring charges (Note 16)


20





17


25577


173


(60
)

208Changes in non-cash working capitalAccounts receivable


(61
)

(62
)

(55
)

276Inventories


49


(123
)

36


217Accounts payable and accrued liabilities


21


(2
)

(136
)

(250
)Other current assets


(9
)




(6
)

(46
)


(187
)

(161
)

197Changes in non-current assets and liabilities


(34
)

11


(25
)

(92
)Cash provided by (used in) operating activities from continuing operations


543


(3
)

(246
)

313Cash provided by (used in) operating activities from discontinued operations


32


(17
)

(12
)

(41
)Cash provided by (used in) operating activities


575


(20
)

(258
)

272INVESTING ACTIVITIESCapitalized interest





(1
)




Proceeds on sales of assets, investments and other capital transactions


1








Property, plant and equipment additions


(126
)

(55
)

(35
)

(144
)Intangible asset additions


(5
)







Turnaround costs, long-term investments and other assets


(23
)

(16
)

(6
)

(39
)Proceeds from redemption of preferred shares


6








Dividends received


1








Cash used in investing activities from continuing operations


(146
)

(72
)

(41
)

(183
)Cash used in investing activities from discontinued operations


(19
)

(7
)

(9
)

(27
)Cash used in investing activities


(165
)

(79
)

(50
)

(210
)FINANCING ACTIVITIESDecrease in current bank loans








(1
)

(1
)(Decrease) increase in revolving debt





(736
)

546


37Long-term debt additions





704


201


1Long-term debt repayments


(315
)

(203
)

(252
)

(128
)Common shares issued (Note 4)





350





3Common share dividends








(7
)

(31
)Cash (used in) provided by financing activities


(315
)

115


487


(119
)Increase (decrease) in cash due to exchange rates


2


1


(3
)

13Increase (decrease) in cash and cash equivalents


97


17


176


(44
)Cash and cash equivalents, beginning of period


267


250


74


118Cash and cash equivalents, end of period

$
364

$
267

$
250

$
74Less cash and cash equivalents of assets held for sale, end of period (Note 3)


(64
)

(35
)

(10
)

(34
)Cash and cash equivalents of continuing operations, end of period

$
300

$
232

$
240

$
40Cash tax payments, net of refunds

$
16

$
(5
)
$
(28
)
$
47Cash interest payments

$
161

$
62

$
80

$
190


(1)Restated
for discontinued operations. See Note 3.


See accompanying Notes to Consolidated Financial Statements

F-6

---





CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6Dec. 31,
2009

Jan. 1July 5,
2009

Year ended
Dec. 31, 2008Successor

PredecessorCommon sharesBalance at beginning of period

$
849

$
508

$
508

$
505Common shares issued





350





3Push-down adjustment (Note 4)





(9
)




Balance at end of period

$
849

$
849

$
508

$
508Contributed surplusBalance at beginning of period

$
941

$
27

$
25

$
27Push-down adjustment (Note 4)





902





Forgiveness of IPIC fees/interest (Note 4)





12





Contribution of post-retirement plans to INEOS NOVA (Note 19)











(4
)Stock option compensation cost











2Other








2


Balance at end of period

$
941

$
941

$
27

$
25Reinvested earnings (deficit)Balance at beginning of period

$
(2
)
$
(327
)
$
(100
)
$
(68
)Net income (loss)


259


(2
)

(239
)

(40
)Push-down adjustment (Note 4)





327





Adoption of inventory full costing (Note 2)











39Adoption of EIC 173 (Note 2)








12


Common share dividends











(31
)Balance at end of period

$
257

$
(2
)
$
(327
)
$
(100
)Accumulated other comprehensive incomeBalance at beginning of period

$
5

$
466

$
462

$
608Push-down adjustment (Note 4)





(466
)




Other comprehensive (loss) income:Unrealized (loss) gain on translation of self-sustaining foreign operations


(3
)

5


4


(147
)Unrealized gain on available-for-sale securities











1Balance at end of period

$
2

$
5

$
466

$
462Total shareholder's equity

$
2,049

$
1,793

$
674

$
895Common shares(1)Balance at beginning of period


141,494,222


83,160,889


83,160,889


83,054,528Common shares issuedIPIC (Note 4)





58,333,333





Common shares issued for cash on exercise of stock options (Note 14)











105,197Common shares issued as share appreciation rights on exercise of stock options (Note 14)











1,164Balance at end of period


141,494,222


141,494,222


83,160,889


83,160,889


(1)Unlimited
number of authorized voting common shares without par value, non-voting first preferred shares and non-voting second
preferred shares. Currently only common shares are issued and outstanding.
See
accompanying Notes to Consolidated Financial Statements


F-7

---





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        All amounts in U.S. dollars, unless otherwise noted.

1.     BASIS OF PRESENTATION



F-8

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

1.     BASIS OF PRESENTATION (Continued)



2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Description

Date of adoption

ImpactCANADIAN GAAPFurther amendment to CICA 3855,Financial InstrumentsRecognition and Measurement, clarifies that the interest rate used to determine fair value of a
financial instrument should also be the rate used to recognize interest income in subsequent periods.

January 1, 2010

None


F-9

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Description

Date of adoption

ImpactFurther amendments to CICA 3862,Financial Instruments: Disclosures, requires enhanced disclosures for financial instruments including classification of fair value
measurements and methods using a fair value hierarchy and, when a valuation technique is used, the assumptions used in determining fair value of each class of financial assets and liabilities. These amendments are to be applied
prospectively.

December 31, 2009

Disclosure only, see Note 23Further amendments to CICA 3855,Financial InstrumentsRecognition and Measurement, provide criteria with regard to determining whether an embedded prepayment
option is closely related to its host contract. Specifically the amendment provides that an option that compensates the lender for lost interest on reinvestment will be considered closely related to a debt host instrument. This amendment further
harmonizes Canadian GAAP with International Financial Reporting Standards ("IFRS") and U.S. GAAP.

October 1, 2009

We applied this amendment and determined that senior notes issued in October 2009 (See Note 11) do not contain embedded derivativesScope amendments to CICA 1506,Accounting Changes,provide that this Section shall be applied to a change in individual accounting policies but not to changes in
accounting policies upon the complete replacement of an entity's primary basis of accounting.

Annual and interim financial statements relating to fiscal years beginning on or after July 1, 2009

Our adoption of IFRS on January 1, 2011 did not qualify as an accounting change under CICA 1506Emerging Issues Committee ("EIC") 173,Credit Risk and the Fair Value of Financial Assets and Financial Liabilities, provides that an entity's own credit risk and the
credit risk of the counterparty should be taken into account in determining the fair value of derivative instruments. The accounting treatment in this Abstract should be applied retrospectively with or without restatement of prior periods to all
financial assets and liabilities measured at fair value in interim and annual financial statements for periods ending on or after the date of issuance of this Abstract.

March 31, 2009

Resulted in a one-time credit to opening retained earnings on January 1, 2009 and a corresponding decrease in mark-to-market feedstock liabilities of $18 million ($12 million after-tax). During the 2009
Predecessor period, the initial EIC 173 impact was reduced by $16 million ($11 million after-tax), and decreased an additional $9 million ($6 million after-tax) during the 2009 Successor period.


F-10

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Description

Date of adoption

ImpactAmendments to CICA 1625,Comprehensive Revaluation of Assets and Liabilities, and CICA 3251,Equity, and new standards
CICA 1582,Business Combinations, CICA 1601,Consolidated Financial Statements, and CICA 1602,Non-controlling
Interests, provide guidance on business combinations and the methodology to be used in the accounting therefor, including the revaluation of assets and liabilities. As a result of the IPIC transaction, we early adopted these
standards.

January 1, 2009

See Note 4 for the impact of the IPIC acquisition under CICA 1625, CICA 3251 and CICA 1582; No material impact from CICA 1601 and CICA 1602CICA 3064,Goodwill and Intangible Assets, replaced CICA 3062,Goodwill and Other Intangible Assets, and
results in withdrawal of CICA 3450,Research and Development Costs, and amendments to Accounting Guideline ("AcG") 11,Enterprises in the Development Stage,
and CICA 1000,Financial Statement Concepts. The Standard intends to reduce the differences with IFRS in the accounting for intangible assets and results in closer alignment with U.S. GAAP. Under
current Canadian standards, more items are recognized as assets than under IFRS or U.S. GAAP. The objectives of CICA 3064 are to reinforce the principle-based approach to the recognition of assets only in accordance with the definition of
an asset and the criteria for asset recognition; and clarify the application of the concept of matching revenues and expenses such that the current practice of recognizing as assets items that do not meet the definition and recognition criteria is
eliminated. The Standard also provides guidance for the recognition of internally developed intangible assets (including research and development activities), ensuring consistent treatment of all intangible assets, whether separately acquired or
internally developed.

January 1, 2009

See discussion below


F-11

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Description

Date of adoption

ImpactAssets such as pre-production costs and start-ups costs, which no longer meet the definition of intangible assets as prescribed by CICA 3064, were removed from the balance sheet and in accordance with CICA
1506,Accounting Changes, these changes have been applied retrospectively. The effect of the restatement at December 31, 2008 was to decrease Other non-current assets by $27 million, decrease
our Future income tax liability by $8 million, decrease Accumulated other comprehensive income by $2 million and increase the Deficit by $17 million. The after-tax impact to net loss in 2008 was to decrease the net loss by
$8 million.The following summarizes the impact of the adoption of CICA 3064 in the periods presented:




(millions of U.S. dollars)

As Previously
Reported

Change in
Accounting
Policy

As RestatedDeficit at Dec. 31, 2007

$
(43
)
$
(25
)
$
(68
)Net loss for the year ended Dec. 31, 2008


(48
)

8


(40
)Other changes during the year ended Dec. 31, 2008


8





8Deficit at Dec. 31, 2008

$
(83
)
$
(17
)
$
(100
)




CICA 3031,Inventories, replaces CICA 3030,Inventories. The new Standard is the Canadian equivalent to International
Accounting Standard ("IAS") 2,Inventories. The main features of CICA 3031 are: (1) measurement of inventories at the lower of cost and net realizable value, with guidance on the determination
of cost, including allocation of overheads and other costs to inventory; (2) cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects assigned by using a specific
identification of their individual costs; (3) consistent use (by type of inventory with similar nature and use) of either first-in, first-out ("FIFO") or weighted-average cost formula; (4) reversal of previous write-downs to net
realizable value when there is a subsequent increase in value of inventories; and (5) possible classification of major spare parts and servicing stand-by equipment as property, plant and equipment (CICA 3061Property,
Plant and Equipment, was amended to reflect this change).

January 1, 2008

One-time credit on January 1, 2008 to opening retained earnings and a corresponding increase in opening inventory of $47 million ($39 million after-tax)Our inventories are carried at the lower of cost or net realizable value. Cost is determined on a FIFO basis and beginning January 1, 2008, includes all costs of purchase, costs of conversion
(direct costs and an allocation of fixed and variable production overhead costs) and other costs incurred in bringing the inventories to their present location and condition.


---

F-12

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



F-13

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



F-14

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



F-15

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



Software

3 to 5 yearsContracts

6 to 20 yearsLicenses and technology

10 to 20 years




F-16

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



F-17

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



F-18

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





F-19

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



3.     DISCONTINUED OPERATIONS



F-20

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

3.     DISCONTINUED OPERATIONS (Continued)



Year ended Dec. 31, 2010Successor(millions of U.S. dollars)

INJV

SYNTHEON

TOTALTotal revenues

$
1,495

$
33

$
1,528Income (loss) from discontinued operations before income taxes

$
39

$
(14
)
$
25Income tax recovery





1


1Income (loss) from discontinued operations, net of income taxes

$
39

$
(13
)
$
26




July 6-Dec. 31, 2009

Jan. 1-July 5, 2009

Year ended Dec. 31, 2008Successor

Predecessor(millions of U.S. dollars)

INJV

SYNTHEON

TOTAL

INJV

SYNTHEON

TOTAL

INJV

SYNTHEON

TOTALTotal revenues

$
635

$
13

$
648

$
552

$
12

$
564

$
1,942

$
45

$
1,987(Loss) income from discontinued operations before income taxes

$
(4
)
$
(7
)
$
(11
)
$
3

$
(8
)
$
(5
)
$
(115
)
$
(21
)
$
(136
)Income tax recovery (expense)











1





1


(9
)




(9
)(Loss) income from discontinued operations, net of income taxes

$
(4
)
$
(7
)
$
(11
)
$
4

$
(8
)
$
(4
)
$
(124
)
$
(21
)
$
(145
)


F-21

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

3.     DISCONTINUED OPERATIONS (Continued)



Dec. 31, 2010

Dec. 31, 2009(millions of U.S. dollars)

INJV

SYNTHEON

TOTAL

INJV

SYNTHEON

TOTALCurrent assetsCash and cash equivalents

$
61

$
3

$
64

$
33

$
2

$
35Accounts receivable


80


10


90


75


9


84Inventories


123


4


127


125


3


128Prepaid expenses and other assets


12


1


13


3


1


4Property, plant and equipment, net


27





27








Current assets held for sale

$
303

$
18

$
321

$
236

$
15

$
251Non-current assetsIntangibles assets, net

$


$
1

$
1

$


$
1

$
1Other non-current assets











24





24Future income taxes











1





1Property, plant and equipment, net





9


9


10


7


17Non-current assets held for sale

$


$
10

$
10

$
35

$
8

$
43Current liabilitiesBank loans

$


$


$


$


$
1

$
1Accounts payable and accrued liabilities


148


10


158


135


6


141Future income taxes


4





4








Deferred credits and other liabilities


83





83








Current liabilities associated with assets held for sale

$
235

$
10

$
245

$
135

$
7

$
142Non-Current liabilitiesDeferred credits and other liabilities

$


$


$


$
99

$


$
99Future income taxes











7





7Non-Current liabilities associated with assets held for sale

$


$


$


$
106

$


$
106


F-22

---





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

4.     IPIC ACQUISITION



(millions of U.S. dollars)

July 6, 2009
before
push-down
adjustment

Push-down
adjustments



IPIC
additional
equity
contribution



July 6, 2009
adjustedAssetsCurrent assetsCash and cash equivalents

$
250

$





$





$
250Accounts receivable


316














316Inventories


486


(2
)

(a)








484Prepaid expenses and other assets


37














37Future income taxes


19


(19
)

(a)








1,108


(21
)










1,087Intangible assets





510


(a)








510Other non-current assets


180


(84
)

(a)








96Future income taxes


64


(4
)

(a)








60Property, plant and equipment, net


2,714


888


(a)








3,602$
4,066

$
1,289




$





$
5,355Liabilities and Shareholder's EquityCurrent liabilitiesBank loans

$
1

$





$





$
1Accounts payable and accrued liabilities


657


11


(a)


(17
)

(c)


651Future income taxes


1


12


(a)








13Long-term debt due within one year


980








(350
)

(c)


6301,639


23





(367
)




1,295Long-term debt


1,129


(106
)

(a)








1,023Future income taxes


336


464


(a)


5


(c)


805Deferred credits and long-term liabilities


288


154


(a)








4423,392


535





(362
)




3,565Shareholder's equityCommon shares


508


(9
)

(b)


350


(c)


849Contributed surplus


27


902


(b)


12


(c)


941Accumulated other comprehensive income


466


(466
)

(b)








Deficit


(327
)

327


(b)








674


754





362





1,790$
4,066

$
1,289




$





$
5,355






F-23

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

4.     IPIC ACQUISITION (Continued)





(millions of U.S. dollars, unless otherwise noted)Share price$/share

$
6Shares outstandingmillions


83.2$
499Cash


(250
)Long-term debt


2,003Other liabilities


519Total purchase price

$
2,771




(millions of U.S. dollars)

Fair Value
Adjusted
AmountsCurrent assets

$
1,087Intangible assets


510Other non-current assets


96Future income taxes


60Property, plant and equipment


3,602Total assets acquired by IPIC

$
5,355Current liabilities


(669
)Long-term debt


(2,003
)Future income taxes


(813
)Unfavorable supply contracts


(12
)Other long-term liabilities


(430
)Total liabilities assumed

$
(3,927
)Net assets acquired by IPIC

$
1,428Cash paid


(499
)IPIC bargain purchase

$
929




F-24

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

4.     IPIC ACQUISITION (Continued)



F-25

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

4.     IPIC ACQUISITION (Continued)



Land

Indefinite lifePlant and equipment

5 - 20 yearsNon-facility equipment

3 - 20 years




Balance sheet line item (millions of U.S. dollars)

Push-down adjustment
increase (decrease)Other non-current assets

$
(65
)Accounts payable and accrued liabilities


7Deferred credits and long-term liabilities


212




F-26

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

4.     IPIC ACQUISITION (Continued)



Balance sheet line item (millions of U.S. dollars)

Push-down adjustment
(decrease)Accounts payable and accrued liabilities

$
(2
)Deferred credits and long-term liabilities


(70
)$
(72
)




5.     ACCOUNTS RECEIVABLE

December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Trade(2)

$
123

$
80Affiliate trade(2)


49


36172


116Allowance for doubtful accounts(2)


(6
)

(5
)166


111Trade accruals(2)


52


42Recoverable taxes


12


6Fair value of commodity-based derivatives(3)


2


6Other(2)(4)


95


90327


255Income taxes receivable


47


50$
374

$
305






F-27

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

5.     ACCOUNTS RECEIVABLE (Continued)





December 31 (millions of U.S. dollars, unless otherwise noted)

2010

2009

2008Amount sold at end of year

$
154

$
122

$
175Loss, dilution and other reserves (as a % of eligible accounts receivable)


26%


35%


22%Interest expense, net of servicing fees

$
7

$
7

$
10




December 31 (millions of U.S. dollars)

2010

2009

2008Proceeds from (repayment of) new securitizations

$
35

$
(21
)
$
(44
)Proceeds from collections reinvested in revolving period securitizations(1)

$
1,142

$
671

$
1,809Servicing fees received(2)

$
2

$
1

$
2Other cash flows received(3)

$
1,032

$
661

$
538






F-28

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.



6.     INVENTORIES

December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Materials and supplies

$
29

$
28Raw materials


159


274Finished goods


262


192$
450

$
494




Year ended December 31 (millions of U.S. dollars)

2010

2009
Restated(1)

2008
Restated(1)Cost of inventories included in Feedstock and operating costs and Depreciation and amortization(2)

$
3,448

$
2,326

$
5,046






7.     INTANGIBLES

December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Software

$
22

$
17Contracts


375


375Licenses and technology


117


117514


509Accumulated amortization


(49
)

(17
)$
465

$
492




8.     OTHER NON-CURRENT ASSETS

December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Investments(2)

$
21

$
28Advances receivable from affiliate(3)(4)


49


60Other assets(5)


17


33$
87

$
121Restricted cash(6)

$
85

$







F-29

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

8.     OTHER NON-CURRENT ASSETS (Continued)





December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Note receivable(2)(3)

$
5

$
13Fair value of commodity-based derivatives(4)


2


12Other assets and deferred costs


10


8$
17

$
33








F-30

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

8.     OTHER NON-CURRENT ASSETS (Continued)



F-31

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

8.     OTHER NON-CURRENT ASSETS (Continued)



(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009

Jan. 1-July 5,
2009

Year ended
Dec. 31, 2008Successor

PredecessorRevenue

$
1,878

$
779

$
644

$
2,393Operating expenses, depreciation and income taxes


(1,760
)

(742
)

(614
)

(2,387
)Net income

$
118

$
37

$
30

$
6




December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Current assets

$
383

$
283Plant, property and equipment and other assets


1,020


1,096Current liabilities


(254
)

(166
)Long-term liabilities


(24
)

(125
)Venturers' equity

$
1,125

$
1,088




(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009

Jan. 1-July 5,
2009

Year ended
Dec. 31, 2008Successor

PredecessorCash inflows (outflows) from:Operating activities

$
65

$
10

$
(13
)
$
150Financing activities

$


$
(1
)
$


$
(8
)Investing activities

$
(37
)
$
17

$
(12
)
$
(22
)




(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009

Jan. 1-July 5,
2009

Year ended
Dec. 31, 2008Successor

PredecessorRevenue

$
1,514

$
624

$
526

$
1,874Operating expenses, depreciation and income taxes


(1,476
)

(628
)

(514
)

(1,998
)Net income (loss)

$
38

$
(4
)
$
12

$
(124
)


F-32

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

8.     OTHER NON-CURRENT ASSETS (Continued)



December 31 (millions of U.S. dollars)

2010

2009Current assets

$
314

$
242Plant, property and equipment and other assets


2


38Current liabilities


(241
)

(138
)Long-term liabilities





(106
)Venturers' equity

$
75

$
36




(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009

Jan. 1-July 5,
2009

Year ended
Dec. 31, 2008Successor

PredecessorCash inflows (outflows) from:Operating activities

$
47

$
5

$
(14
)
$
(11
)Financing activities

$


$


$


$
Investing activities

$
(18
)
$
21

$
(9
)
$
(21
)


9.     PROPERTY, PLANT AND EQUIPMENT

December 31 (millions of U.S. dollars)

2010(1)

2009
Restated(1)(2)Plant and equipment

$
3,679

$
3,514Assets under capital lease


6


6Land


44


44Assets under construction(3)


71


983,800


3,662Accumulated depreciation(4)


(344
)

(109
)$
3,456

$
3,553








F-33

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

9.     PROPERTY, PLANT AND EQUIPMENT (Continued)



10.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Accounts payableTrade(2)

$
280

$
365Accrued taxes


5


4Other(2)


48


32333


401Accrued liabilitiesInterest(2)


30


32Pension and post-retirement benefit obligations (Note 19)


49


16Income taxes payable


67


6Fair value of commodity-based derivatives(3)


2


Advances and notes due to affiliate(2)


22


Trade accruals and other accrued liabilities(2)


76


100246


154$
579

$
555






F-34

---







NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

11.   LONG-TERM DEBT

2010

2009December 31 (millions of U.S. dollars, unless otherwise noted)

Maturity

Amount

Weighted-
average
year-end
interest
rate

Amount

Weighted-
average
year-end
interest
rateRevolving credit facilities(1)


2011 - 2015

$





$



Unsecured debentures and notes(1)(2)


2012 - 2025


1,501


6.7
%

1,709


6.9
%Preferred shares(1)(3)


2010








75


5.2
%Other unsecured debt(4)


2011 - 2020


40


4.9
%

40


4.6
%1,541





1,824Less amounts due within one year





(10
)




(312
)$
1,531




$
1,512








December 31 (millions of U.S. dollars, unless otherwise noted)

Face
amount

Stated
interest rate2010

2009Maturity2010(1)

$
239


7.85%

$


$
2342012(2)

$
400


6.5%


389


3782013(2)

$
400


Floating(3)


355


3422016(2)

$
350


8.375%


341


3402019(2)

$
350


8.625%


340


3392025(2)

$
100


7.875%


76


76$
1,501

$
1,709






F-35

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

11.   LONG-TERM DEBT (Continued)





F-36

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

11.   LONG-TERM DEBT (Continued)





2010Q1

Q2

Q3

Q4Senior debt-to-cash flow ratio


0.40


0.29


0.25


0.20Debt-to-capitalization ratio


49.5


44.1


43.4


41.7




F-37

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

11.   LONG-TERM DEBT (Continued)



(millions of U.S. dollars)2011

$
102012


4012013


4022014


32015


2Thereafter


822$
1,640




(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)Successor

PredecessorInterest on long-term debt

$
159

$
68

$
73

$
126Interest on bank loans, securitizations and other


30


19


23


35189


87


96


161Interest capitalized during plant construction





(1
)




Interest income


(6
)

(3
)

(4
)

(12
)$
183

$
83

$
92

$
149






F-38

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.



12.   DEFERRED CREDITS AND LONG-TERM LIABILITIES

December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Long-term liabilitiesPension and post-retirement benefit obligations (Note 19)

$
242

$
292Reserve for Dow patent litigation (Note 21)


92


Notes payable(2)





12Asset retirement obligations (Note 20)


47


37Other long-term liabilities(2)


38


25$
419

$
366






13.   COMMON SHARES



December 31 (number of shares)

2010

2009

2008Under the employee incentive stock option plan(1)(2)








7,078,735Under the director compensation plan(1)








47,800





7,126,535








14.   STOCK-BASED COMPENSATION



F-39

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

14.   STOCK-BASED COMPENSATION (Continued)



Period from
Jan. 1July 5, 2009

Year ended
Dec. 31, 2008Options

Weighted-
Average
Exercise
Price
(Cdn$)

Options

Weighted-
Average
Exercise
Price
(Cdn$)Outstanding at beginning of period


2,544,533

$
30.58


2,826,041

$
30.47Granted








122,700

$
28.21Exercisedsettled in shares








(105,197
)
$
26.05Exercisedretired for cash








(18,921
)
$
25.57Exercisedsettled as SARs(1)








(10,594
)
$
26.35Cancelled


(2,544,533
)
$
30.58


(269,496
)
$
30.60Outstanding at end of period




$



2,544,533

$
30.58Exercisable at end of period




$



2,367,886

$
30.39






F-40

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

14.   STOCK-BASED COMPENSATION (Continued)



Period from
Jan. 1-July 5, 2009

Year ended
Dec. 31, 2008Options

Weighted-
Average
Exercise
Price
(U.S. $)

Options

Weighted-
Average
Exercise
Price
(U.S. $)Outstanding at beginning of period


1,296,826

$
37.47


1,228,526

$
38.16Granted








97,650

$
27.89Cancelled


(1,296,826
)
$
37.47


(29,350
)
$
34.50Outstanding at end of period




$



1,296,826

$
37.47Exercisable at end of period




$



1,023,873

$
38.87




Weighted-Average Assumptions

Period from
Jan. 1-July 5,
2009

2008Expected dividend yield (%)





1.4Expected volatility (%)





32.5Risk-free interest rate (%)





3.0Expected life (years)





4.0Fair value of options granted during the year

$


$
6.6




F-41

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

14.   STOCK-BASED COMPENSATION (Continued)



Period from
Jan. 1-July 5, 2009

Year ended Dec. 31, 2008Units

Weighted-
Average
Redemption
Price
(U.S.$)

Units

Weighted-
Average
Redemption
Price
(U.S.$)Outstanding at beginning of period


2,560,677

$
22.05


2,574,352

$
22.08Redeemed








(1,250
)
$
17.42Cancelled


(2,560,677
)
$
22.05


(12,425
)
$
27.90Outstanding at end of period




$



2,560,677

$
22.05Exercisable at end of period




$



2,560,677

$
22.05




Period from
Jan. 1-July 5, 2009

Year ended
Dec. 31, 2008Restricted Stock Units

Units

UnitsOutstanding at beginning of period


1,498,521


994,980Granted


3,750,661


702,911Dividend equivalents credited


89,682


26,504Redeemed


(5,324,294
)

(223,182
)Cancelled


(14,570
)

(2,692
)Outstanding at end of period





1,498,521




F-42

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

14.   STOCK-BASED COMPENSATION (Continued)



15.   DEFERRED SHARE UNIT PLANS



Period from
Jan. 1-July 5, 2009

Year ended
Dec. 31, 2008Employee Deferred Share Units

Units

Weighted-
Average
Price
(U.S.$)

Units

Weighted-
Average
Price
(U.S.$)Outstanding at beginning of period


576,924

$
4.58


564,701

$
21.42Earned


31,290

$
5.95


12,223

$
20.94Redeemed


(608,214
)
$
6.00




$
Outstanding at end of period




$



576,924

$
4.58




Period from
Jan. 1-July 5, 2009

Year ended
Dec. 31, 2008Non-Employee Directors Deferred Share Units

Units

Weighted-
Average
Price
(U.S.$)

Units

Weighted-
Average
Price
(U.S.$)Outstanding at beginning of period


165,892

$
4.60


117,427

$
31.73Earned


26,730

$
6.00


48,465

$
12.14Redeemed


(192,622
)
$
6.00




$
Outstanding at end of period




$



165,892

$
4.60




F-43

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

15.   DEFERRED SHARE UNIT PLANS (Continued)



16.   RESTRUCTURING CHARGES







F-44

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

17.   OTHER (LOSSES) GAINS

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)(millions of U.S. dollars)

Before-Tax

After-Tax

Before-Tax

After-Tax

Before-Tax

After-Tax

Before-Tax

After-TaxSuccessor

PredecessorDow Chemical patent litigation(2)

$
(95
)
$
(68
)
$


$


$


$


$


$
Insurance claim(3)


45


32

















Other


(4
)

(3
)







6


6


(1
)

(1
)$
(54
)
$
(39
)
$


$


$
6

$
6

$
(1
)
$
(1
)


---



F-45

---







NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

18.   INCOME TAXES



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

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)Successor

PredecessorIncome (loss) from continuing operations before income taxes

$
353

$
16

$
(297
)
$
34Statutory income tax rate


28.0%


29.0%


29.0%


29.5%Computed income tax expense (recovery)


99


5


(86
)

10Increase (decrease) in taxes resulting from:Permanent difference on capital gains and losses


6





8


Lower (higher) effective foreign tax rates


2


3


2


(4
)Income tax rate adjustments(2)





(22
)




Increase (decrease) in valuation allowance(3)


6


(9
)

14


(8
)Permanent difference on foreign exchange gains and losses(4)











(56
)(Reduction) increase in tax reserve(5)


(3
)

22





(20
)Other


10


8





7Income tax expense (recovery)

$
120

$
7

$
(62
)
$
(71
)Current income tax expense (recovery)

$
93

$
22

$
(70
)
$
57Future income tax expense (recovery)


27


(15
)

8


(128
)Income tax expense (recovery)

$
120

$
7

$
(62
)
$
(71
)






F-46

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

18.   INCOME TAXES (Continued)



(millions of U.S. dollars)

2010

2009
Restated(1)Investment tax credits

$
63

$
57Reserves not currently deductible


2


2Other





2Future income tax asset

$
65

$
61




(millions of U.S. dollars)

2010

2009
Restated(1)Basis difference in plant and equipment

$
(858
)
$
(866
)Unrealized foreign exchange gains (losses)





6Reserves not currently deductible


69


40Losses available to be carried forward


155


113Other


(69
)

(9
)Valuation allowance


(134
)

(94
)Future income tax liability

$
(837
)
$
(810
)








F-47

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

18.   INCOME TAXES (Continued)



(millions of U.S. dollars)

Year ended
Dec. 31,
2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)Successor

PredecessorIncome (loss) from continuing operations before income taxesCanadian

$
362

$
57

$
(233
)
$
6Foreign


(9
)

(41
)

(64
)

28$
353

$
16

$
(297
)
$
34Current income tax expense (recovery)Canadian

$
82

$
19

$
(71
)
$
55Foreign


11


3


1


2$
93

$
22

$
(70
)
$
57Future income tax expense (recovery)Canadian

$
32

$
(1
)
$
5

$
(131
)Foreign


(5
)

(14
)

3


3$
27

$
(15
)
$
8

$
(128
)Total income tax expense (recovery)

$
120

$
7

$
(62
)
$
(71
)




19.   EMPLOYEE FUTURE BENEFITS



F-48

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

19.   EMPLOYEE FUTURE BENEFITS (Continued)



F-49

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

19.   EMPLOYEE FUTURE BENEFITS (Continued)



Pension Plans

Post Retirement Plans(millions of U.S. dollars)

Year ended
Dec. 31,
2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
Dec. 31, 2008
Restated(1)Successor

Predecessor

Successor

PredecessorCurrent service cost

$
14

$
8

$
6

$
19

$
1

$


$


$
1Interest cost on accrued benefit obligations


46


23


21


47


6


3


3


5Actual (return) loss on plan assets


(55
)

(36
)

(17
)

120











Actuarial loss (gain) on accrued benefit obligations


53


(11
)

65


(125
)

12








Costs arising in the period


58


(16
)

75


61


19


3


3


6Differences between costs arising in the period and costs recognized in the period in respect of the long-term nature of employee future benefit
costs:Loss (return) on plan assets


10


15


(2
)

(156
)










Transitional (asset) obligations








(3
)

(6
)










1Actuarial (gain) loss


(53
)

11


(58
)

120


(12
)







1Past service and actual plan amendments























(1
)Net defined benefit costs recognized


15


10


12


19


7


3


3


7Curtailment/special termination charge


11




















Settlement charge








16


1











Total benefit cost recognized

$
26

$
10

$
28

$
20

$
7

$
3

$
3

$
7


---



F-50

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

19.   EMPLOYEE FUTURE BENEFITS (Continued)



Pension Plans

Post Retirement Plans(millions of U.S. dollars)

Year ended
2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)

Year ended
2010

July 6-Dec. 31,
2009
Restated(1)

Jan. 1-July 5,
2009
Restated(1)Successor

Predecessor

Successor

PredecessorChange in benefit obligationsBenefit obligation at beginning of period

$
806

$
758

$
688

$
99

$
80

$
82Current service cost


19


11


7


1





Interest cost


46


23


21


6


3


3Experience loss (gain)


70


(5
)

71


4


14


(2
)Settlement gain


(9
)

(8
)

(41
)







Employee contributions











2


1


1Curtailment


10














Benefits paid


(63
)

(23
)

(19
)

(7
)

(3
)

(3
)NOVA Chemicals' share of obligations transferred to INEOS NOVA JV





(15
)










(2
)Foreign currency exchange rate loss


28


65


31


3


4


1Benefit obligation at end of period

$
907

$
806

$
758

$
108

$
99

$
80Change in plan assetsFair value of plan

$
612

$
538

$
510

$


$


$
Actual return on plan assets at beginning of period


61


49


10








Employer and employee contributions


49


19


54


7


3


2Settlement loss


(9
)

(8
)

(41
)







Benefits paid


(63
)

(23
)

(19
)

(7
)

(3
)

(2
)NOVA Chemicals' share of assets transferred to INEOS NOVA JV





(11
)










Foreign currency exchange rate gain


20


48


24








Fair value of plan assets at end of period

$
670

$
612

$
538

$


$


$
Funded statusPlan assets in deficiency of benefit obligation

$
(237
)
$
(194
)
$
(220
)
$
(108
)
$
(99
)
$
(80
)Unrecognized net transitional (asset) obligation








(24
)







6Unrecognized prior service cost

















(14
)Unrecognized net actuarial loss (gain)


19


(35
)

291


19


14


18Net amounts recognized in consolidated balance sheets

$
(218
)
$
(229
)
$
47

$
(89
)
$
(85
)
$
(70
)


---



F-51

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

19.   EMPLOYEE FUTURE BENEFITS (Continued)



Pension Plans

Post
Retirement PlansWeighted-average assumptions used to determine end of year obligations

2010

2009
Restated(1)

2010

2009
Restated(1)Discount rate


5.0%


5.8%


5.4%


6.1%Assumed long-term rate of return on plan assets(2)


7.4%


7.4%





Rate of increase in future compensation


3.9%


3.9%





Long-term health care inflation(3)








5.0%


5.0%Initial health care trend rate








7.2%


7.8%








(millions of U.S. dollars)

Accrued Benefit
Obligation

Fair Value
of AssetsDecember 31, 2010

$
907

$
670December 31, 2009(1)

$
806

$
612




(millions of U.S. dollars)

Pension Plans

Post-
Retirement
Plans2011

$
36

$
72012

$
37

$
72013

$
39

$
82014

$
41

$
82015

$
44

$
8Five Years Thereafter

$
267

$
41




F-52

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

19.   EMPLOYEE FUTURE BENEFITS (Continued)



Target
Allocation

Percentage of
Plan Assets2009
Restated(1)Year ended December 31

2011

2010Asset CategoryEquities


60%


61%


59%Fixed Income


40%


39%


41%Total


100%


100%


100%








F-53

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

19.   EMPLOYEE FUTURE BENEFITS (Continued)



20.   ASSET RETIREMENT OBLIGATIONS



Year ended December 31 (millions of U.S. dollars)

2010

2009
Restated(1)Beginning of year

$
37

$
20Additions


4


Increase in obligation due to push-down accounting (see Note 4)





12Increase in obligation as a result of changes in Canadian dollar


2


3Increase in present value of the obligations (accretion expense)


4


2End of year

$
47

$
37






21.   CONTINGENCIES AND COMMITMENTS



F-54

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

21.   CONTINGENCIES AND COMMITMENTS (Continued)



F-55

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

21.   CONTINGENCIES AND COMMITMENTS (Continued)



22.   SEGMENTED INFORMATION



F-56

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

22.   SEGMENTED INFORMATION (Continued)



(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31, 2009
Restated

Jan. 1-July 5, 2009
Restated

Year ended
Dec. 31, 2008
RestatedSuccessor

PredecessorJoffre Olefins

$
818

$
290

$
240

$
1,104Corunna Olefins


1,258


305


261


1,516Polyethylene


1,939


804


697


2,373Performance Styrenics


217


116


92


324Eliminations


(12
)

(9
)

(4
)

(64
)Total revenue from continuing operations from external customers

$
4,220

$
1,506

$
1,286

$
5,253






F-57

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

22.   SEGMENTED INFORMATION (Continued)



(millions of U.S. dollars)

Year ended
Dec. 31,
2010

July 6-Dec. 31,
2009
Restated

Jan. 1-July 5,
2009
Restated

Year ended
Dec. 31, 2008
RestatedSuccessor

PredecessorJoffre Olefins

$
701

$
274

$
263

$
1,055Corunna Olefins


748


221


176


1,021Polyethylene


7


1


1


10Performance Styrenics


87


27


1


64Eliminations


(1,187
)

(417
)

(382
)

(1,758
)Total intercompany and affiliate revenue from continuing operations

$
356

$
106

$
59

$
392




(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated

Jan. 1-July 5,
2009
Restated

Year ended
Dec. 31, 2008
RestatedSuccessor

PredecessorJoffre Olefins

$
1,519

$
564

$
503

$
2,159Corunna Olefins


2,006


526


437


2,537Polyethylene


1,946


805


698


2,383Performance Styrenics


304


143


93


388Eliminations


(1,199
)

(426
)

(386
)

(1,822
)Total revenue from continuing operations

$
4,576

$
1,612

$
1,345

$
5,645






F-58

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

22.   SEGMENTED INFORMATION (Continued)



(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009
Restated

Jan. 1-July 5,
2009
Restated

Year ended
Dec. 31, 2008
RestatedSuccessor

PredecessorJoffre Olefins

$
384

$
104

$
87

$
621Corunna Olefins


136


(27
)

(78
)

(243
)Polyethylene


300


152


42


(43
)Performance Styrenics


2


5


(19
)

(49
)Corporate


(200
)

(129
)

(235
)

(138
)Eliminations


(32
)

(6
)

(8
)

36Total operating income (loss) from continuing operations

$
590

$
99

$
(211
)
$
184Interest expense (net)


(183
)

(83
)

(92
)

(149
)Other (losses) gains


(54
)




6


(1
)Income tax (expense) recovery


(120
)

(7
)

62


71Income (loss) from continuing operations

$
233

$
9

$
(235
)
$
105




(millions of U.S. dollars)

Year ended
Dec. 31,
2010

July 6-Dec. 31,
2009
Restated

Jan. 1-July 5,
2009
Restated

Year ended
Dec. 31, 2008
RestatedSuccessor

PredecessorJoffre Olefins

$
144

$
77

$
33

$
65Corunna Olefins


19


12


32


64Polyethylene


68


34


37


76Performance Styrenics


3


4


12


23Corporate


9


4


3


7Total depreciation and amortization from continuing operations

$
243

$
131

$
117

$
235






F-59

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

22.   SEGMENTED INFORMATION (Continued)



(millions of U.S. dollars)

Year ended
Dec. 31,
2010

July 6-Dec. 31,
2009
Restated

Jan. 1-July 5,
2009
Restated

Year ended
Dec. 31, 2008
RestatedSuccessor

PredecessorJoffre Olefins

$
20

$
3

$
3

$
15Corunna Olefins


28


12


8


41Polyethylene


75


35


24


77Performance Styrenics


3


5





11Total capital expenditures for continuing operations

$
126

$
55

$
35

$
144




(millions of U.S. dollars)

2010

2009
Restated(1)Joffre Olefins

$
2,485

$
2,566Corunna Olefins


498


549Polyethylene


1,625


1,543Performance Styrenics


114


142INEOS NOVA Joint Venture(2)


234


229Corporate(2)


739


569Eliminations


(25
)

(2
)Total assets

$
5,670

$
5,596






(millions of U.S. dollars)

Year ended
Dec. 31,
2010

July 6-Dec. 31,
2009
Restated

Jan. 1-July 5,
2009
Restated

Year ended
Dec. 31, 2008
RestatedSuccessor

PredecessorCanada

$
1,814

$
561

$
546

$
2,453United States


2,182


786


603


2,322Europe and Other


224


159


137


478$
4,220

$
1,506

$
1,286

$
5,253






F-60

---







NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

22.   SEGMENTED INFORMATION (Continued)



(millions of U.S. dollars)

2010

2009
Restated(2)Canada

$
4,916

$
4,878United States


434


417Europe and Other


320


301$
5,670

$
5,596






23.   FINANCIAL INSTRUMENTS



Year ended Dec. 31, 2010Carrying
amounts
Dec. 31,
2010(millions of U.S. dollars)

From interest
income
(expense), net

Impairment
charges

Realized/
Unrealized loss

Net
lossHeld-for-trading financial assets
(Notes 5 and 8)(1)

$
304

$


$


$
(12
)
$
(12
)Held-for-trading financial liabilities (Note 10)

$
2











Loans and receivables (Notes 5 and 8)

$
452


4


(8
)




(4
)Available-for-sale securities(2)

$
18











Other financial liabilities (Notes 10, 11 and 12)

$
2,025


(181
)







(181
)$
(177
)
$
(8
)
$
(12
)
$
(197
)






F-61

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



From interest
income
(expense), net







Net gain
(loss)Carrying
amounts

Impairment
charges(1)

Realized/Unrealized
gain (loss)July 6
Dec. 31,
2009
Restated(2)

Jan. 1
July 5,
2009
Restated(2)

July 6
Dec. 31,
2009
Restated(2)

Jan. 1
July 5,
2009
Restated(2)(millions of U.S. dollars)

Dec. 31,
2009
Restated(2)

Jan. 1
Dec. 31,
2009

July 6
Dec. 31,
2009

Jan. 1
July 5,
2009Successor

Predecessor



Successor

Predecessor

Successor

PredecessorHeld-for-trading financial assets (Notes 5 and 8)(3)

$
250

$


$


$


$
48

$
5

$
48

$
5Held-for-trading financial liabilities

$






(4
)







(9
)




(13
)Loans and receivables (Notes 5 and 8)

$
316


2


3











2


3Available-for-sale securities(4)

$
24


1














1


Other financial liabilities (Notes 10, 11 and 12)

$
2,377


(83
)

(88
)










(83
)

(88
)$
(80
)
$
(89
)
$


$
48

$
(4
)
$
(32
)
$
(93
)








(millions of U.S. dollars)

Carrying
amounts
2010

Level 1

Level 2

Level 3

Carrying
amounts
2009

Level 1

Level 2

Level 3Held-for-trading financial assets

$
304

$
300

$
4

$


$
250

$
232

$
18

$
Available-for-sale securities


13


13








12


12





$
317

$
313

$
4

$


$
262

$
244

$
18

$





F-62

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



Carrying
Amount(1)

Estimated Fair
Value(2)December 31 (millions of U.S. dollars)

2010

2009

2010

2009Long-term debt

$
1,541

$
1,824

$
1,699

$
1,925






F-63

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



Increase in depreciation and amortization

$
(6
)Increase in foreign exchange income


117Decrease in tax expense


31$
142






F-64

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



F-65

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



Dec. 31, 2010

Dec. 31, 2009(millions of U.S. dollars, except as noted)

Crude oil

Propane

Butane

Crude oil

Propane

ButaneNotional volumemm bbls


1.5


0.9


0.9


2.9


2.7


1.9Weighted-average price per bbl

$
94.75

$
48.46

$
72.67

$
88.61

$
45.75

$
72.25Fair value

$
2

$
4

$
(4
)
$
16

$
17

$
(15
)Term to maturitymonths


1 - 24


1 - 24


1 - 24


1 - 36


1 - 36


4 - 36




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

Dec. 31, 2010

Dec. 31, 2009Notional volumemm gjs


1.8


Weighted-average price per gj

$
3.75

$
Fair value

$


$
Term to maturitymonths


1 - 3





(millions of U.S. dollars)

Year ended
Dec. 31. 2010

July 6-Dec. 31,
2009

Jan. 1-July 5,
2009

Year ended
Dec. 31, 2008Successor

PredecessorUnrealized (loss) gain

$
(15
)
$
51

$
6

$
(87
)Realized gain (loss)

$
3

$
(3
)
$
(1
)
$
(22
)




F-66

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



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

Change(1)

Decrease
in After-Tax
Income

Decrease
in Comprehensive
IncomeCrude oil


+10%

$
60

$
60Natural gas


+10%

$
22

$
22Propane


+10%

$
25

$
25Butane


+10%

$
35

$
35






F-67

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



Dec. 31, 2010(millions of U.S. dollars)

Due within
1 year

Due between
1 year and
5 years

Due after
5 yearsCurrent other liabilities (Note 10)

$
337

$


$
Long-term debt (Note 11)


10


808


822Other long-term liabilities (Note 12)


191


22


10$
538

$
830

$
832




F-68

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

23.   FINANCIAL INSTRUMENTS (Continued)



F-69

---





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

24.   UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES



(millions of U.S. dollars)

Year ended
Dec. 31, 2010

July 6-Dec. 31,
2009

Jan.1-July 5,
2009

Year ended
Dec. 31, 2008Successor

PredecessorNet income (loss) in accordance with Canadian GAAP

$
259

$
(2
)
$
(239
)
$
(40
)Add (deduct) adjustments for:Derivative instruments and hedging activities(1)











12Stock-based compensation(2)








(1
)

4Net income (loss) in accordance with U.S. GAAP

$
259

$
(2
)
$
(240
)
$
(24
)Comprehensive income (loss) in accordance with Canadian GAAP

$
256

$
3

$
(235
)
$
(186
)Add (deduct) adjustments to Canadian GAAP net income (loss) for:Derivative instruments and hedging activities(1)











12Stock-based compensation(2)








(1
)

4Pension liability adjustments (less tax of $16, $(3), $26, and $(11), respectively)(3)


(47
)

7


(45
)

(34
)Comprehensive income (loss) in accordance with U.S. GAAP

$
209

$
10

$
(281
)
$
(204
)




2010

2009

2008Accumulated other comprehensive incomeUnrealized gain on translation of self-sustaining foreign operations

$
2

$
5

$
462Pension liability adjustment(3)


(40
)

7


(161
)Accumulated other comprehensive income in accordance with U.S. GAAP

$
(38
)
$
12

$
301




December 31 (millions of U.S. dollars)

2010

2009(4)Balance sheet items in accordance with U.S. GAAP(1)(6)Current assets(4)

$
1,519

$
1,329Intangibles and other assets(3)(4)


695


714Property, plant, and equipment, net


3,456


3,553Current liabilities(1)


(836
)

(1,015
)Long-term debt(1)


(1,531
)

(1,512
)Deferred income taxes(1)(2)(3)(5)


(781
)

(763
)Deferred credits and long-term liabilities(1)(2)(3)(5)


(513
)

(506
)Shareholder's equity(3)(5)

$
2,009

$
1,800


F-70

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

24.   UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)



F-71

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

24.   UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)



25.   NEW ACCOUNTING PRONOUNCEMENTS



F-72

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All amounts in U.S. dollars, unless otherwise noted.

26.   SUBSEQUENT EVENTS



F-73

---





Table of Contents

EXHIBIT INDEX

Exhibit No.

Description1.1

Certificate and Articles of Continuance of NOVA Chemicals Corporation dated July 6, 2009 (1)1.2

General By-Law No. 3 of NOVA Chemicals Corporation dated July 6, 2009 (1)2.1

Indenture, dated as of October 16, 2009, between NOVA Chemicals Corporation, as Issuer and U.S. Bank National Association, as Trustee in respect of the 8.375% Senior Notes due 2016 and 8.625% Senior Notes due
2019 (2)2.2

Indenture, dated as of September 21, 1995, between NOVA Chemicals Corporation, as successor to NOVACOR Chemicals Ltd., and JP Morgan Trust Company, N.A., as successor trustee to The First National Bank of
Chicago (3)2.3

Indenture, dated as of January 13, 2004, between NOVA Chemicals Corporation, as Issuer and U.S. Bank National Association, as Trustee (4)2.4

Indenture, dated as of October 31, 2005, between NOVA Chemicals Corporation, as Issuer and U.S. Bank National Association, as Trustee (5)4.1

Restated Credit Agreement, dated as of November 17, 2009, among NOVA Chemicals Corporation, as Borrower, The Toronto-Dominion Bank, as Administrative Agent and the lenders from time to time party thereto (6)4.2
*
First Amending Agreement, dated as of October 28, 2010, to Restated Credit Agreement, dated as of November 17, 2009, among NOVA Chemicals Corporation, as Borrower, The Toronto-Dominion Bank, as Administrative
Agent and the lenders from time to time party thereto4.3

Form of Indemnity Agreement by and among NOVA Chemicals Corporation and former directors (7)4.4

Form of Indemnity Agreement by and among NOVA Chemicals Corporation and Directors (8)7.1
*
Computation of Earnings to Fixed Charges8.1
*
List of Subsidiaries12.1
*
Certification of Randy Woelfel, Chief Executive Officer of NOVA Chemicals Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
*
Certification of Todd Karran, Senior Vice President and Chief Financial Officer of NOVA Chemicals Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
*
Certification of Randy Woelfel, Chief Executive Officer of NOVA Chemicals Corporation, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2
*
Certification of Todd Karran, Senior Vice President and Chief Financial Officer of NOVA Chemicals Corporation, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002


(1)Incorporated
by reference from the Report on Form 6-K of NOVA Chemicals Corporation filed on August 6, 2009.(2)Incorporated
by reference from Exhibit 4.1 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.(3)Incorporated
by reference from Exhibit 7.1 to the Registration Statement on Form F-9 of NOVA Chemicals Corporation,
File No. 333-6108.(4)Incorporated
by reference from Exhibit 7.1 to the Registration Statement on Form F-10 of NOVA Chemicals Corporation,
File No. 333-113038.(5)Incorporated
by reference from the Report on Form 6-K of NOVA Chemicals Corporation filed on November 1, 2005.(6)Incorporated
by reference from Exhibit 10.1 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.(7)Incorporated
by reference from Exhibit 10.3 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.(8)Incorporated
by reference from Exhibit 10.4 to the Registration Statement on Form F-4 of NOVA Chemicals Corporation,
File No. 333-163915.*Filed
herewith.


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