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Methanex Reports Stronger Earnings in the First Quarter of 2013; Increases Dividend 8%


Methanex Reports Stronger Earnings in the First Quarter of 2013; Increases Dividend 8%

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/24/13 -- For the first quarter of 2013, Methanex (TSX:MX)(NASDAQ:MEOH) reported Adjusted EBITDA(1) of $149 million and Adjusted net income(1) of $88 million ($0.92 per share on a diluted basis(1)). This compares with Adjusted EBITDA(1) of $119 million and Adjusted net income(1) of $61 million ($0.64 per share on a diluted basis(1)) for the fourth quarter of 2012.

Methanex also announced that its Board of Directors has approved an 8 percent increase to its quarterly dividend to shareholders, from $0.185 to $0.20 per share. The increased dividend will apply commencing with the dividend payable on June 30, 2013 to holders of common shares on record on June 16, 2013.

John Floren, President and CEO of Methanex commented, "Higher methanol prices in the first quarter contributed to higher Adjusted EBITDA compared to last quarter. Entering the second quarter, methanol demand has continued to be healthy and the pricing environment remains stable. With strong earnings, a positive outlook for the methanol industry and the quality of the expansion plans underway, I am pleased to confirm that our Board of Directors has approved another increase to our regular dividend. This represents the ninth increase since we implemented a dividend in 2002."

Mr. Floren added, "We also announced today that we have made the decision to proceed with the relocation of a second one million tonne plant from our Chile site to Geismar, Louisiana. Our focus in the near term remains the successful execution of both plant relocations and our value-creating growth projects in New Zealand and Medicine Hat. Combined, these projects represent three million tonnes of production capacity that are expected to be completed in increments through early 2016."

Mr. Floren concluded, "With over US$700 million of cash on hand, an undrawn credit facility, a robust balance sheet, and strong cash flow generation, we are well positioned to complete our expansion plans, pursue other strategic growth opportunities and continue to deliver on our commitment to return excess cash to shareholders."

A conference call is scheduled for April 25, 2013 at 12:00 noon ET (9:00 am PT ) to review these first quarter results. To access the call, dial the Conferencing operator ten minutes prior to the start of the call at (416) 340-8527, or toll free at (877) 240-9772. A playback version of the conference call will be available until June 24, 2013 (905) 694-9451, or toll free at (800) 408-3053. The passcode for the playback version is 3021008. Presentation slides summarizing Q1-13 results and a simultaneous audio-only webcast of the conference call can be accessed from our website at www.methanex.com. The webcast will be available on the website for four weeks following the call.

Methanex is a Vancouver-based, publicly traded company and is the world's largest supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX" and on the NASDAQ Global Market in the United States under the trading symbol "MEOH".

FORWARD-LOOKING INFORMATION WARNING

This First Quarter 2013 press release contains forward-looking statements with respect to us and the chemical industry. Refer to Forward-Looking Information Warning in the attached First Quarter 2013 Management's Discussion and Analysis for more information.


 
(1) Adjusted EBITDA, Adjusted net income and Adjusted net income per common 
share are non-GAAP measures which do not have any standardized meaning      
prescribed by GAAP. These measures represent the amounts that are           
attributable to Methanex Corporation shareholders and are calculated by     
excluding the mark-to-market impact of share-based compensation as a result 
of changes in our share price and items considered by management to be non- 
operational, including asset impairment charges. Refer to the Additional    
Information - Supplemental Non-GAAP Measures section of the attached Interim
Report for the three months ended March 31, 2013 for reconciliations to the 
most comparable GAAP measures.                                              

Interim Report for the Three Months Ended March 31, 2013

At April 24, 2013 the Company had 94,942,159 common shares issued and outstanding and stock options exercisable for 3,418,808 additional common shares.

Share Information

Methanex Corporation's common shares are listed for trading on the Toronto Stock Exchange under the symbol MX and on the Nasdaq Global Market under the symbol MEOH.

Transfer Agents & Registrars


 
CIBC Mellon Trust Company                                                   
320 Bay Street Toronto, Ontario                                             
Canada M5H 4A6                                                              
Toll free in North America: 1-800-387-0825                                  

Investor Information

All financial reports, news releases and corporate information can be accessed on our website at www.methanex.com.

FIRST QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS

Except where otherwise noted, all currency amounts are stated in United States dollars.

FINANCIAL AND OPERATIONAL HIGHLIGHTS


 
--  A reconciliation from net income (loss) attributable to Methanex
    shareholders to Adjusted net income(1) and the calculation of Adjusted
    net income per common share(1) is as follows: 
 

 
                                               Three Months Ended           
                                    ----------------------------------------
($ millions except number of shares       Mar 31        Dec 31        Mar 31
 and per share amounts)                      2013         2012          2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income (loss) attributable to                                           
 Methanex shareholders                $        60  $      (140)  $        22
  Mark-to-market impact of share-                                           
   based compensation, net of tax              28            8            17
  Asset impairment charge, net of                                           
   tax                                          -          193             -
----------------------------------------------------------------------------
Adjusted net income (1)               $        88  $        61   $        39
----------------------------------------------------------------------------
Diluted weighted average shares                                             
 outstanding (millions)                        96           94            95
Adjusted net income per common share                                        
 (1)                                  $      0.92  $      0.64   $      0.41
----------------------------------------------------------------------------
 
--  We recorded Adjusted EBITDA(1) of $149 million for the first quarter of
    2013 compared with $119 million for the fourth quarter of 2012. The
    increase in Adjusted EBITDA(1) was primarily due to an increase in
    average realized price to $412 per tonne for the first quarter of 2013
    from $389 per tonne for the fourth quarter of 2012. 
    
 
--  Production for the first quarter of 2013 was 1,057,000 tonnes compared
    with 1,067,000 tonnes for the fourth quarter of 2012. Refer to the
    Production Summary section. 
    
--  Sales of Methanex-produced methanol were 1,024,000 tonnes in the first
    quarter of 2013 compared with 1,059,000 in the fourth quarter of 2012. 
    
--  During the first quarter of 2013, we announced our commitment to restart
    the Waitara Valley facility and complete a debottlenecking project at
    the Motunui site. We expect these initiatives will allow our New Zealand
    operations to operate at their full annual production capacity of up to
    2.4 million tonnes, depending on natural gas composition. 
    
--  We continue to make good progress with our project to relocate an idle
    Chile facility to Geismar, Louisiana. During the first quarter of 2013,
    we signed an agreement with Chesapeake Energy to supply the facility's
    natural gas requirements for a ten-year period. 
    
--   We announced today that we have reached a final investment decision to
    proceed with the relocation of a second Chile facility to the Geismar
    site. We expect this project will add a further 1.0 million tonnes of
    annual operating capacity and is expected to be operational in early
    2016. 
    
--  We also announced today that the Board of Directors has approved an 8
    percent increase to our quarterly dividend to shareholders, from $0.185
    per share to $0.20 per share, effective with the dividend payable June
    30, 2013. 
    
 
(1) These items are non-GAAP measures that do not have any standardized     
meaning prescribed by GAAP and therefore are unlikely to be comparable to   
similar measures presented by other companies. Refer to the Additional      
Information - Supplemental Non-GAAP Measures section for a description of   
each non-GAAP measure and reconciliations to the most comparable GAAP       
measures.                                                                   

This First Quarter 2013 Management's Discussion and Analysis ("MD&A") dated April 24, 2013 for Methanex Corporation ("the Company") should be read in conjunction with the Company's condensed consolidated interim financial statements for the period ended March 31, 2013 as well as the 2012 Annual Consolidated Financial Statements and MD&A included in the Methanex 2012 Annual Report. Unless otherwise indicated, the financial information presented in this interim report is prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The Methanex 2012 Annual Report and additional information relating to Methanex is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Effective January 1, 2013, we adopted new IFRS standards related to consolidation and joint arrangement accounting. Under these new standards, our 63.1% interest in the Atlas entity, which was previously proportionately consolidated in our financial statements, is accounted for using the equity method. This change has been applied retrospectively. As a result, amounts related to Atlas are no longer included in individual line items in our consolidated financial statements and the net assets and net earnings are presented separately. For purposes of analyzing our consolidated financial results in this MD&A, the adjusted EBITDA from our 63.1% interest in the Atlas entity is included in Adjusted EBITDA.

FINANCIAL AND OPERATIONAL DATA


 
                                                     Three Months Ended     
                                                ----------------------------
($ millions, except per share amounts and where    Mar 31    Dec 31   Mar 31
 noted)                                               2013     2012     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Production (thousands of tonnes) (attributable                              
 to Methanex shareholders)                           1,057    1,067      945
                                                                            
Sales volumes (thousands of tonnes):                                        
  Methanex-produced methanol (attributable to                               
   Methanex shareholders)                            1,024    1,059      926
  Purchased methanol                                   588      664      691
  Commission sales (1)                                 219      176      198
----------------------------------------------------------------------------
Total sales volumes                                  1,831    1,899    1,815
                                                                            
Methanex average non-discounted posted price ($                             
 per tonne) (2)                                        474      450      437
Average realized price ($ per tonne) (3)               412      389      382
                                                                            
Adjusted EBITDA (attributable to Methanex                                   
 shareholders) (4)                                     149      119       93
Adjusted cash flows from operating activities                               
 (attributable to Methanex shareholders) (4)           127      101       89
Cash flows from operating activities                   118       76       74
Adjusted net income (attributable to Methanex                               
 shareholders) (4)                                      88       61       39
Net income (loss) attributable to Methanex                                  
 shareholders                                           60     (140)      22
                                                                            
Adjusted net income per common share                                        
 (attributable to Methanex shareholders) (4, 5)       0.92     0.64     0.41
Basic net income (loss) per common share                                    
 (attributable to Methanex shareholders)              0.64    (1.49)    0.24
Diluted net income (loss) per common share                                  
 (attributable to Methanex shareholders)              0.63    (1.49)    0.23
                                                                            
Common share information (millions of shares):                              
  Weighted average number of common shares              95       94       93
  Diluted weighted average number of common                                 
   shares                                               96       94       95
  Number of common shares outstanding, end of                               
   period                                               95       94       94
----------------------------------------------------------------------------
                                                                            
(1) Commission sales represent volumes marketed on a commission basis       
related to the 36.9% of the Atlas methanol facility and 40% of the Egypt    
methanol facility that we do not own.                                       
(2) Methanex a
verage non-discounted posted price represents the average of  
our non-discounted posted prices in North America, Europe and Asia Pacific  
weighted by sales volume. Current and historical pricing information is     
available at http://www.methanex.com/.                                      
(3) Average realized price is calculated as revenue, excluding commissions  
earned and the Egypt non-controlling interest share of revenue but including
an amount representing our share of Atlas revenue, divided by the total     
sales volumes of Methanex-produced (attributable to Methanex shareholders)  
and purchased methanol.                                                     
(4) These items are non-GAAP measures that do not have any standardized     
meaning prescribed by GAAP and therefore are unlikely to be comparable to   
similar measures presented by other companies. Refer to the Additional      
Information - Supplemental Non-GAAP Measures section for a description of   
each non-GAAP measure and reconciliations to the most comparable GAAP       
measures.                                                                   
(5) For the three month period ended December 31, 2012, stock options have  
been excluded from the calculation of diluted net loss per common share     
(attributable to Methanex shareholders) as their effect would be anti-      
dilutive. However, for the calculation of adjusted net income per common    
share (attributable to Methanex shareholders) stock options have been       
included in the denominator and the diluted weighted average number of      
common shares is 95 million.                                                

PRODUCTION SUMMARY


 
                                     Q1 2013             Q4 2012     Q1 2012
(thousands of tonnes)        Capacity(1)  Production  Production  Production
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
New Zealand (2)                      608         309         378         174
Atlas (Trinidad) (63.1%                                                     
 interest)                           281         248         180         127
Titan (Trinidad)                     218         181         189         215
Egypt (60% interest)                 190         133         129         202
Medicine Hat (Canada)                118         131         132         114
Chile I and IV                       450          55          59         113
Geismar I and II (Louisiana,                                                
 USA) (3)                            500           -           -           -
----------------------------------------------------------------------------
                                   2,365       1,057       1,067         945
----------------------------------------------------------------------------
                                                                            
(1) The production capacity of our facilities may be higher than original   
nameplate capacity as, over time, these figures have been adjusted to       
reflect ongoing operating efficiencies. Actual production for a facility in 
any given year may be higher or lower than annual production capacity due to
a number of factors, including natural gas composition or the age of the    
facility's catalyst.                                                        
(2) The annual production capacity of New Zealand represents the two 0.85   
million tonne facilities at Motunui and the 0.53 million tonne facility at  
Waitara Valley. The current operating capacity of the Motunui facilities is 
1.5 million tonnes due to distillation capacity constraints (refer to New   
Zealand section below).                                                     
(3) We are relocating two idle Chile facilities to Geismar, Louisiana. The  
Geismar I facility is expected to be operational by the end of 2014 and the 
Geismar II facility is expected to be operational in early 2016.            

New Zealand

Our New Zealand methanol facilities produced 309,000 tonnes of methanol in the first quarter of 2013 compared with 378,000 tonnes in the fourth quarter of 2012. During the first quarter of 2013, the Motunui facilities suffered an equipment failure which resulted in an unplanned outage and lost production of approximately 60,000 tonnes. The equipment was repaired and the Motunui facilities returned to operation at the end of March 2013. We are in the process of refurbishing the Waitara Valley facility and debottlenecking the Motunui facilities which we expect will allow us to produce at the site's full annual production capacity of up to 2.4 million tonnes, depending on natural gas composition, by the end of 2013.

Trinidad

In Trinidad, we own 100% of the Titan facility with an annual production capacity of 875,000 tonnes and have a 63.1% interest in the Atlas facility with an annual production capacity of 1,125,000 tonnes (63.1% interest). The Titan facility produced 181,000 tonnes in the first quarter of 2013 compared with 189,000 tonnes in the fourth quarter of 2012. Production in the first quarter of 2013 was impacted by periodic natural gas curtailments and minor unplanned outages.

The Atlas facility produced 248,000 tonnes in the first quarter of 2013 compared with 180,000 tonnes in the fourth quarter of 2012. The Atlas facility was shut down at the end of September 2012 for repairs and returned to production at the end of October 2012.

We continue to experience some natural gas curtailments to our Trinidad facilities due to a mismatch between upstream commitments to supply the Natural Gas Company of Trinidad and Tobago (NGC) and downstream demand from NGC's customers, which becomes apparent when an upstream supplier has a technical issue or planned maintenance that reduces gas delivery. We are engaged with key stakeholders to find a solution to this issue, but in the meantime expect to continue to experience some gas curtailments to the Trinidad site.

Egypt

The Egypt methanol facility produced 133,000 tonnes (60% interest) in the first quarter of 2013 compared with 129,000 tonnes in the fourth quarter of 2012. Production during the first quarter of 2013 and the fourth quarter of 2012 was impacted by natural gas supply restrictions.

The Egypt facility has experienced periodic natural gas supply restrictions since mid-2012 which have resulted in production below full capacity. This situation may persist in the future and become more acute during the summer months when electricity demand is at its peak. Refer to page 25 of our 2012 Annual Report for further details.

Medicine Hat, Canada

Our 470,000 tonne per year facility in Medicine Hat, Alberta produced 131,000 tonnes in the first quarter of 2013 compared with 132,000 tonnes during the fourth quarter of 2012. The Medicine Hat facility is currently able to produce above stated production capacity due to the age of its catalyst and the composition of the natural gas feedstock. We are currently debottlenecking the Medicine Hat facility which we expect will add a further 90,000 tonnes of annual production capacity by the end of the third quarter of 2013.

Chile

During the first quarter of 2013 we produced 55,000 tonnes in Chile operating one plant at approximately 20% of production capacity. In addition, in March 2013, we began receiving natural gas from Argentina under an arrangement whereby we process the natural gas received and return the methanol produced to Argentina. We produced an additional 6,000 tonnes under this arrangement during the first quarter of 2013 and have continued receiving some natural gas from Argentina in April 2013.

While investments have been made by us and others to accelerate the exploration and development of natural gas in southern Chile, the potential for a significant increase in gas production is more challenging than we had originally anticipated. As a result of the short-term outlook for gas supply in Chile and Argentina, we anticipate idling our Chile operations shortly due to insufficient natural gas feedstock to keep our plant operating through the southern hemisphere winter. We are continuing to work with Empresa Nacional del Petroleo (ENAP) and others to secure sufficient natural gas to sustain our operations and while the restart of a Chile plant is possible later in 2013, the restart is dependent on securing a sustainable natural gas position to operate over the medium term.

The future of our Chile operations is primarily dependent on the level of exploration and development in southern Chile and our ability to secure a sustainable natural gas supply to our facilities on economic terms from Chile and Argentina.

Geismar, Louisiana

We are in the process of relocating the idle Chile II facility to Geismar, Louisiana (Geismar I). The 1.0 million tonne Geismar I facility is expected to be operational by the end of 2014. During the first quarter of 2013 we spent $43 million on this project and remaining expenditures at March 31, 2013 are estimated to be $420 million.

We announced today that we have made a final investment decision to proceed with the relocation of the Chile III facility to the Geismar site (Geismar II). We expect the 1.0 million tonne Geismar II plant to be operational in early 2016. Estimated project costs are $550 million.

FINANCIAL RESULTS

For the first quarter of 2013 we recorded Adjusted EBITDA of $149 million and Adjusted net income of $88 million ($0.92 per share on a diluted basis). This compares with Adjusted EBITDA of $119 million and Adjusted net income of $61 million ($0.64 per share on a diluted basis) for the fourth quarter of 2012.

For the first quarter of 2013, we reported net income attributable to Methanex shareholders of $60 million ($0.63 per share on a diluted basis) compared with a net loss attributable to Methanex shareholders for the fourth quarter of 2012 of $140 million ($1.49 loss per share on a diluted basis). Our results for the fourth quarter of 2012 were impacted by a non-cash before-tax asset impairment charge of $297 million related to the carrying value of our Chile assets.

Effective January 1, 2013, we adopted new IFRS standards related to consolidation and joint arrangement accounting. Under these new standards, our 63.1% interest in the Atlas entity, which was previously proportionately consolidated in our financial statements, is accounted for using the equity method. This change has been applied retrospectively. As a result, amounts related to Atlas are no longer included in individual line items in our consolidated financial statements and the net assets and net earnings are presented separately. For purposes of analyzing our consolidated financial results in this MD&A, the adjusted EBITDA from our 63.1% interest in the Atlas entity is included in Adjusted EBITDA. Our analysis of depreciation and amortization, finance costs, finance income and other expenses and income taxes is consistent with the presentation of our consolidated statements of income and excludes amounts related to Atlas.

We calculate Adjusted EBITDA and Adjusted net income by including amounts related to our equity share of the Atlas (63.1% interest) and Egypt (60% interest) facilities and by excluding the mark-to-market impact of share-based compensation as a result of changes in our share price and items which are considered by management to be non-operational. Refer to the Additional Information - Supplemental Non-GAAP Measures section for a further discussion on how we calculate these measures.

A reconciliation from net income (loss) attributable to Methanex shareholders to Adjusted net income and the calculation of Adjusted net income per common share is as follows:


 
                                               Three Months Ended           
                                    ----------------------------------------
($ millions except number of shares       Mar 31        Dec 31        Mar 31
 and per share amounts)                      2013         2012          2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income (loss) attributable to                                           
 Methanex shareholders                $        60  $      (140)  $        22
  Mark-to-market impact of share-                                           
   based compensation, net of tax              28            8            17
  Asset impairment charge, net of                                           
   tax                                          -          193             -
----------------------------------------------------------------------------
Adjusted net income (1)               $        88  $        61   $        39
----------------------------------------------------------------------------
Diluted weighted average shares                                             
 outstanding (millions)                        96           94            95
Adjusted net income per common share                                        
 (1,2)                                $      0.92  $      0.64   $      0.41
----------------------------------------------------------------------------
                                                                            
(1) These items are non-GAAP measures that do not have any standardized     
meaning prescribed by GAAP and therefore are unlikely to be comparable to   
similar measures presented by other companies. Refer to the Additional      
Information - Supplemental Non-GAAP Measures section for a description of   
each non-GAAP measure and reconciliations to the most comparable GAAP       
measures.                                                                   
(2) For the three months ended December 31, 2012, stock options have been   
excluded from the calculation of diluted net loss per common share          
(attributable to Methanex shareholders) as their effect would be anti-      
dilutive. However, for the calculation of adjusted net income per common    
share (attributable to Methanex shareholders) stock options have been       
included in the denominator and the diluted weighted average number of      
common shares is 95 million.                                                

We review our financial results by analyzing changes in Adjusted EBITDA, mark-to-market impact of share-based compensation, depreciation and amortization, finance costs, finance income and other expenses and income taxes. A summary of our consolidated statements of income is as follows:


 
                                                   Three Months Ended       
                                            --------------------------------
                                               Mar 31      Dec 31    Mar 31 
($ millions)                                      2013       2012      2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Consolidated statements of income:                                          
  Revenue                                     $    652   $    668   $   654 
  Cost of sales and operating expenses,                                     
   excluding mark-to-market impact of share-                                
   based compensation                             (497)      (546)     (535)
  Adjusted EBITDA of associate (Atlas) (1)           9         10        (3)
----------------------------------------------------------------------------
                                                   164        132       116 
Comprised of:                                                               
  Adjusted EBITDA (attributable to Methanex                                 
   shareholders) (2)                               149        119        93 
  Attributable to non-controlling interests         15         13        23 
----------------------------------------------------------------------------
                                                   164        132       116 
  Mark-to-market impact of share-based                                      
   compensation                                    (31)        (8)      (18)
  Depreciation and amortization                    (30)       (35)      (36)
  Asset impairment charge                            -       (297)        - 
  Earnings of associate, excluding amount                                   
   included in Adjusted EBITDA (1)                  (8)       (10)       (4)
  Finance costs                                    (15)       (13)      (16)
  Finance income and other expenses                 (2)         3         2 
  Income tax recovery (expense)                    (12)        93       (11)
----------------------------------------------------------------------------
  Net income (loss)                           $     66   $   (135)  $    33 
----------------------------------------------------------------------------
  Net income (loss) attributable to Methanex                                
   shareholders                               $     60   $   (140)  $    22 
----------------------------------------------------------------------------
                                                                            
(1) Earnings of associate has been divided into an amount included in       
Adjusted EBITDA and an amount excluded from Adjusted EBITDA. The amount     
excluded from Adjusted EBITDA represents depreciation and amortization,     
finance costs, finance income and other expenses and income tax expense     
relating to earnings of associate.                                          
(2) This item is a non-GAAP measure that does not have any standardized     
meaning prescribed by GAAP and therefore is unlikely to be comparable to    
similar measures presented by other companies. Refer to the Additional      
Information - Supplemental Non-GAAP Measures section for a description of   
the non-GAAP measure and reconciliations to the most comparable GAAP        
measure.                                                                    

Adjusted EBITDA (Attributable to Methanex Shareholders)

Our operations consist of a single operating segment - the production and sale of methanol. We review the results of operations by analyzing changes in the components of Adjusted EBITDA. For a discussion of the definitions used in our Adjusted EBITDA analysis, refer to the How We Analyze Our Business section.

The changes in Adjusted EBITDA resulted from changes in the following:


 
                                                    Q1 2013         Q1 2013 
                                              compared with   compared with 
($ millions)                                        Q4 2012         Q1 2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Average realized price                        $          36   $          49 
Sales volume                                            (10)             (1)
Total cash costs                                          4               8 
----------------------------------------------------------------------------
Increase in Adjusted EBITDA                   $          30   $          56 
----------------------------------------------------------------------------

Average realized price


 
                                                       Three Months Ended   
                                                    ------------------------
                                                     Mar 31   Dec 31  Mar 31
($ per tonne)                                           2013    2012    2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Methanex average non-discounted posted price             474     450     437
Methanex average realized price                          412     389     382
----------------------------------------------------------------------------

Methanol market conditions remained healthy and pricing increased during the first quarter of 2013 (refer to the Supply/Demand Fundamentals section for more information). Our average non-discounted posted price for the first quarter of 2013 was $474 per tonne compared with $450 per tonne for the fourth quarter of 2012 and $437 per tonne for the first quarter of 2012. Our average realized price for the first quarter of 2013 was $412 per tonne compared with $389 per tonne for the fourth quarter of 2012 and $382 per tonne for the first quarter of 2012. The change in average realized price for the first quarter of 2013 increased Adjusted EBITDA by $36 million compared with the fourth quarter of 2012 and increased Adjusted EBITDA by $49 million compared with the first quarter of 2012.

Sales volume

Methanol sales volumes excluding commission sales volumes were lower in the first quarter of 2013 compared with the fourth quarter of 2012 by 111,000 tonnes and this resulted in lower Adjusted EBITDA by $10 million.

Total cash costs

The primary drivers of changes in our total cash costs are changes in the cost of methanol we produce at our facilities (Methanex-produced methanol) and changes in the cost of methanol we purchase from others (purchased methanol). All of our production facilities except Medicine Hat are underpinned by natural gas purchase agreements with pricing terms that include base and variable price components. We supplement our production with methanol produced by others through methanol offtake contracts and purchases on the spot market to meet customer needs and support our marketing efforts within the major global markets.

We have adopted the first-in, first-out method of accounting for inventories and it generally takes between 30 and 60 days to sell the methanol we produce or purchase. Accordingly, the changes in Adjusted EBITDA as a result of changes in Methanex-produced and purchased methanol costs primarily depend on changes in methanol pricing and the timing of inventory flows.

The impact on Adjusted EBITDA from changes in our cash costs are explained below:


 
                                                    Q1 2013         Q1 2013 
                                              compared with   compared with 
($ millions)                             
           Q4 2012         Q1 2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Methanex-produced methanol costs              $           -   $          (9)
Insurance recovery                                       (9)             (2)
Proportion of Methanex-produced methanol                                    
 sales                                                    5              17 
Purchased methanol costs                                (12)            (19)
Logistics costs                                          12              12 
Other, net                                                8               9 
----------------------------------------------------------------------------
                                              $           4   $           8 
----------------------------------------------------------------------------

Methanex-produced methanol costs

We purchase natural gas for the New Zealand, Trinidad, Egypt and Chile methanol facilities under natural gas purchase agreements where the unique terms of each contract include a base price and a variable price component linked to the price of methanol to reduce our commodity price risk exposure. The variable price component of each gas contract is adjusted by a formula related to methanol prices above a certain level. For the first quarter of 2013 compared with the same period in 2012, Methanex-produced methanol costs were higher by $9 million primarily due to a change in the mix of production sold from inventory.

Insurance recovery

We experienced an equipment failure at our Atlas facility in July 2011. Our operations are covered by business interruption insurance and we finalized our claim and recorded a recovery of $9 million in the fourth quarter of 2012.

Proportion of Methanex-produced methanol sales

The cost of purchased methanol is directly linked to the selling price for methanol at the time of purchase and the cost of purchased methanol is generally higher than the cost of Methanex-produced methanol. Accordingly, an increase in the proportion of Methanex-produced methanol sales results in a decrease in our overall cost structure for a given period. For the first quarter of 2013 compared with the fourth quarter of 2012 and the first quarter of 2012, Methanex-produced methanol sales made up a higher proportion of our total sales and this increased Adjusted EBITDA by $5 million and $17 million, respectively.

Purchased methanol costs

Changes in purchased methanol costs for all periods presented are primarily as a result of changes in methanol pricing.

Logistics costs

Logistics costs vary from period to period depending on the levels of production from each of our production facilities and the resulting impact on our supply chain. Logistics costs were $12 million lower in the first quarter of 2013 compared with each of the fourth quarter of 2012 and the first quarter of 2012. As a result of improvements in our asset portfolio over the past year, we have recently completed several initiatives that have reduced logistics costs and improved the efficiency of our supply chain.

Other, net

In October 2012, we completed a restructuring of our Chile operations which reduced the size of our workforce and resulted in a $5 million charge in the fourth quarter of 2012. During the first quarter of 2012, we incurred a one-time $7 million charge to earnings to terminate a time charter vessel lease contract.

Mark-to-Market Impact of Share-based Compensation

We grant share-based awards as an element of compensation. Share-based awards granted include stock options, share appreciation rights, tandem share appreciation rights, deferred share units, restricted share units and performance share units. For all the share-based awards, share-based compensation is recognized over the related vesting period for the proportion of the service that has been rendered at each reporting date. Share-based compensation includes an amount related to the grant-date value and a mark-to-market impact as a result of subsequent changes in the Company's share price. The grant-date value amount is included in Adjusted EBITDA and Adjusted net income. The mark-to-market impact of share-based compensation as a result of changes in our share price is excluded from Adjusted EBITDA and Adjusted net income and analyzed separately.


 
                                                   Three Months Ended       
                                           ---------------------------------
                                                Mar 31     Dec 31     Mar 31
                                                  2013       2012       2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Methanex Corporation share price (1)         $   40.63  $   31.87  $   32.43
                                                                            
Grant-date fair value expense included in                                   
 Adjusted EBITDA and Adjusted net income     $       6  $       3  $       7
Mark-to-market impact due to change in                                      
 share price                                        31          8         18
----------------------------------------------------------------------------
Total share-based compensation expense       $      37  $      11  $      25
----------------------------------------------------------------------------
                                                                            
(1) US dollar share price of Methanex Corporation as quoted on NASDAQ Global
Market on the last trading day of the respective period.                    

The Methanex Corporation share price increased from $31.87 per share at December 31, 2012 to $40.63 per share at March 31, 2013. As a result of the increase in the share price and the impact on the fair value of the outstanding units, we recorded a $31 million mark-to-market expense on share-based compensation in the first quarter of 2013 compared with an $8 million mark-to-market expense in the fourth quarter of 2012 and an $18 million expense in the first quarter of 2012.

Depreciation and Amortization

Depreciation and amortization was $30 million for the first quarter of 2013 compared with $35 million for the fourth quarter of 2012 and $36 million for the first quarter of 2012. Depreciation and amortization was lower in the first quarter of 2013 compared with the fourth quarter of 2012 and the first quarter of 2012 primarily as a result of the lower carrying value of our Chile assets due to the asset impairment charge recorded in the fourth quarter of 2012.

Finance Costs


 
                                                  Three Months Ended        
                                         -----------------------------------
                                              Mar 31      Dec 31      Mar 31
($ millions)                                    2013        2012        2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Finance costs before capitalized interest  $      16   $      14   $      16
Less capitalized interest                         (1)         (1)          -
----------------------------------------------------------------------------
                                                                            
Finance costs                              $      15   $      13   $      16
----------------------------------------------------------------------------

Finance costs before capitalized interest primarily relate to interest expense on the unsecured notes and limited recourse debt facilities. Capitalized interest relates to interest costs capitalized for the Geismar I project.

Finance Income and Other Expenses


 
                                                  Three Months Ended        
                                          ----------------------------------
                                               Mar 31      Dec 31     Mar 31
($ millions)                                     2013        2012       2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Finance income and other expenses           $      (2)  $       3  $       2
----------------------------------------------------------------------------

The change in finance income and other expenses for all periods presented was primarily due to the impact of changes in foreign exchange rates.

Income Taxes

A summary of our income taxes for the first quarter of 2013 compared with the fourth quarter of 2012 is as follows:


 
                   Three Months Ended          Three Months Ended           
                          Mar 31 2013              Dec 31 2012              
----------------------------------------------------------------------------
                                            Amounts                         
                                          excluding                         
                                              Asset         Asset           
                                         Impairment    Impairment           
($ millions)                    Total        Charge        Charge     Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Profit (loss) before income                                                 
 tax expense                  $    78   $        69   $      (297)  $  (228)
Income tax recovery                                                         
 (expense)                        (12)          (11)          104        93 
----------------------------------------------------------------------------
Net income (loss)             $    66   $        58   $      (193)  $  (135)
----------------------------------------------------------------------------
                                                                            
Effective tax rate                 15%           16%           35%       41%
----------------------------------------------------------------------------

For the first quarter of 2013, the effective tax rate was 15% compared with 16% for the fourth quarter of 2012, excluding the impact of the asset impairment charge recorded in 2012.

We earn the majority of our pre-tax earnings in Trinidad, Egypt, Chile, Canada and New Zealand. In Trinidad and Chile, the statutory tax rate is 35% and in Egypt, the statutory tax rate is 25%. We have significant loss carryforwards in Canada and New Zealand which have not been recognized for accounting purposes and this had an impact on the effective tax rate for the first quarter of 2013 of approximately 10%.

SUPPLY/DEMAND FUNDAMENTALS


 
             Methanex Non-Discounted Regional Posted Prices (1)             
                                                 Apr     Mar     Feb     Jan
(US$ per tonne)                                 2013    2013    2013    2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
United States                                    516     516     482     482
Europe (2)                                       505     476     476     476
Asia                                             450     450     435     435
----------------------------------------------------------------------------
                                                                            
(1) Discounts from our posted prices are offered to customers based on      
various factors.                                                            
(2) EUR390 for Q2 2013 (Q1 2013 - EUR370) converted to United States        
dollars.                                                                    
----------------------------------------------------------------------------

We estimate that methanol demand, excluding methanol demand from integrated methanol to olefins facilities, is currently approximately 53 million tonnes on an annualized basis.

The outlook for methanol demand growth continues to be strong. Traditional chemical derivatives consume about two-thirds of global methanol demand and growth is correlated to industrial production.

Energy-related applications consume the remaining one third of global methanol demand, and the wide disparity between the price of crude oil and that of natural gas and coal has resulted in an increased use of methanol in energy-related applications, such as direct methanol blending into gasoline and DME and biodiesel production. Growth of direct methanol blending into gasoline in China has been particularly strong and we believe that future growth in this application is supported by numerous provincial and national fuel-blending standards, such as M15 or M85 (15% methanol and 85% methanol, respectively).

China is also leading the commercialization of methanol's use as a feedstock to manufacture olefins. The use of methanol to produce olefins, at current energy prices, is proving to be cost competitive relative to the traditional production of olefins from naphtha. There are now five methanol-to-olefins (MTO) plants operating in China with the capacity to consume approximately seven million tonnes of methanol annually. While three of these plants are integrated and purchase methanol only to supplement their production, two of these plants are dependent on merchant methanol supply. We believe demand potential into energy-related applications and olefins production will continue to grow.

During the first quarter of 2013, steady demand and planned and unplanned industry outages contributed to upward pressure on pricing in Europe and North America, while pricing in Asia was relatively stable. Our average non-discounted price in the first quarter was $474 per tonne. Entering the second quarter, market conditions remain healthy and prices are stable. Our European non-discounted price for the second quarter of 2013 increased to EUR390 per tonne ($505 per tonne).

Over the next few years, there is a modest level of new capacity expected to come on-stream relative to demand growth expectations. There is a 0.8 mil lion tonne plant expected to restart in Channelview, Texas in 2013 and a 0.7 million tonne plant expected to start up in Azerbaijan in 2013. We are in the process of refurbishing the Waitara Valley facility and debottlenecking our Motunui facilities in New Zealand and these initiatives are expected to add up to 0.9 million tonnes of additional operating capacity by the end of 2013. We are relocating two idle Chile facilities to Geismar, Louisiana with the first 1.0 million tonne facility expected to start up by the end of 2014 and the second 1.0 million tonne facility expected to start up in early 2016. We expect that production from new capacity in China will be consumed in that country and that higher cost production capacity in China will need to operate in order to satisfy demand growth.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities

Cash flows from operating activities in the first quarter of 2013 were $118 million compared with $76 million for the fourth quarter of 2012 and $74 million for the first quarter of 2012. The changes in cash flows from operating activities resulted from changes in the following:


 
                                                    Q1 2013         Q1 2013 
                                              compared with   compared with 
($ millions)                                        Q4 2012         Q1 2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Change in Adjusted EBITDA (attributable to                                  
 Methanex shareholders)                       $          30   $          56 
Exclude change in Adjusted EBITDA of                                        
 associate (Atlas)                                        1             (12)
Change in cash flows attributable to non-                                   
 controlling interests                                    2              (8)
Changes in non-cash working capital                      13              26 
Income taxes paid                                         7              (2)
Other                                                   (11)            (16)
----------------------------------------------------------------------------
Increase in cash flows from operating                                       
 activities                                   $          42   $          44 
----------------------------------------------------------------------------

Adjusted cash flows from operating activities

Adjusted cash flows from operating activities, which includes an amount representing the cash flows associated with our 63.1% share of the Atlas facility and excludes the amount associated with the 40% non-controlling interest in the methanol facility in Egypt and changes in non-cash working capital, were $127 million in the first quarter of 2013 compared with $101 million for the fourth quarter of 2012 and $89 million for the first quarter of 2012. The changes in Adjusted cash flows from operating activities resulted from changes in the following:


 
                                                    Q1 2013         Q1 2013 
                                              compared with   compared with 
($ millions)                                        Q4 2012         Q1 2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Change in Adjusted EBITDA (attributable to                                  
 Methanex shareholders)                       $          30   $          56 
Income taxes paid                                         7              (2)
Other                                                   (11)            (16)
----------------------------------------------------------------------------
Increase in Adjusted cash flows from                                        
 operating activities                         $          26   $          38 
----------------------------------------------------------------------------

Refer to the Additional Information - Supplemental Non-GAAP Measures section for a reconciliation of Adjusted cash flows from operating activities to the most comparable GAAP measure.

During the first quarter of 2013, we paid a quarterly dividend of $0.185 per share, or $18 million. Additionally, on April 24, 2013, the Board of Directors approved an 8 percent increase to our quarterly dividend to shareholders, from $0.185 to $0.20 per share. The increased dividend will apply commencing with the dividend payable June 30, 2013 to holders of common shares of record on June 16, 2013.

We operate in a highly competitive commodity industry and believe it is appropriate to maintain a conservative balance sheet and retain financial flexibility. At March 31, 2013, our cash balance was $727 million, including $25 million related to the non-controlling interest in Egypt. We invest our cash only in highly rated instruments that have maturities of three months or less to ensure preservation of capital and appropriate liquidity. We have a strong balance sheet and an undrawn $400 million credit facility provided by highly rated financial institutions that expires in mid-2016.

Our planned capital maintenance expenditure program directed towards maintenance, turnarounds and catalyst changes for existing operations is currently estimated to total approximately $50 million to the end of 2013, excluding the New Zealand operations. We are making good progress with our project to relocate the Chile II facility to Geismar, Louisiana with plant start-up expected by the end of 2014. During the first quarter of 2013, we spent $43 million on the project and the remaining project expenditures are approximately $420 million. We are also making good progress with our initiatives to increase production capacity in Medicine Hat and New Zealand. Remaining capital expenditures for these projects to the end of 2013 is approximately $230 million. We have also committed to relocate a second idle Chile facility to the Geismar site with estimated project costs of $550 million. The second Geismar facility is expected to commence operations in early 2016. We believe that we have the financial capacity to fund these growth initiatives with cash on hand, cash generated from operations and the undrawn bank facility.

We believe we are well positioned to meet our financial commitments, invest to grow the Company and continue to deliver on our commitment to return excess cash to shareholders.

SHORT-TERM OUTLOOK

Entering the second quarter, market conditions remain healthy and prices are stable.

The methanol price will ultimately depend on the strength of the global economy, industry operating rates, global energy prices, new supply additions and the strength of global demand. We believe that our financial position and financial flexibility, outstanding global supply network and competitive-cost position will provide a sound basis for Methanex to continue to be the leader in the methanol industry and to invest to grow the Company.

CONTROLS AND PROCEDURES

For the three months ended March 31, 2013, no changes were made in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ADDITIONAL INFORMATION - SUPPLEMENTAL NON-GAAP MEASURES

In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), we present certain supplemental non-GAAP measures. These are Adjusted EBITDA, Adjusted net income, Adjusted net income per common share, operating income and Adjusted cash flows from operating activities. These measures do not have any standardized meaning prescribed by generally accepted accounting principles (GAAP) and therefore are unlikely to be comparable to similar measures presented by other companies. These supplemental non-GAAP measures are provided to assist readers in determining our ability to generate cash from operations and improve the comparability of our results from one period to another. We believe these measures are useful in assessing operating performance and liquidity of the Company's ongoing business on an overall basis. We also believe Adjusted EBITDA is frequently used by securities analysts and investors when comparing our results with those of other companies.

Adjusted EBITDA (attributable to Methanex shareholders)

Adjusted EBITDA differs from the most comparable GAAP measure, net income attributable to Methanex shareholders, because it excludes depreciation and amortization, finance costs, finance income and other expenses, income tax expense (recovery), mark-to-market impact of share-based compensation and asset impairment charges. Adjusted EBITDA includes an amount representing our 63.1% interest in the Atlas facility and our 60% interest in the methanol facility in Egypt.

Adjusted EBITDA and Adjusted net income exclude the mark-to-market impact of share-based compensation related to the impact of changes in our share price on share appreciation rights, tandem share appreciation rights, deferred share units, restricted share units and performance share units. The mark-to-market impact related to performance share units that is excluded from Adjusted EBITDA and Adjusted net income is calculated as the difference between the grant date value determined using a Methanex total shareholder return factor of 100% and the fair value recorded at each period end. As share-based awards will be settled in future periods, the ultimate value of the units is unknown at the date of grant and therefore the grant date value recognized in Adjusted EBITDA and Adjusted net income may differ from the total settlement cost.

The following table shows a reconciliation from net income (loss) attributable to Methanex shareholders to Adjusted EBITDA:


 
                                                  Three Months Ended        
                                           ---------------------------------
                                               Mar 31     Dec 31     Mar 31 
($ millions)                                     2013       2012       2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income (loss) attributable to Methanex                                  
 shareholders                                $     60   $   (140)  $     22 
  Finance costs                                    15         13         16 
  Finance income and other expenses                 2         (3)        (2)
  Income tax expense (recovery)                    12        (93)        11 
  Depreciation and amortization                    30         35         36 
  Mark-to-market impact of share-based                                      
   compensation                                    31          8         18 
  Asset impairment charge                           -        297          - 
  Earnings of associate, excluding amount                                   
   included in Adjusted EBITDA (1)                  8         10          4 
  Non-controlling interests adjustment (1)         (9)        (7)       (12)
----------------------------------------------------------------------------
Adjusted EBITDA (attributable to Methanex                                   
 shareholders)                               $    149   $    119   $     93 
----------------------------------------------------------------------------
                                                                            
(1) These adjustments represent depreciation and amortization, finance      
costs, finance income and other expenses and income tax expense associated  
with the 40% non-controlling interest in the methanol facility in Egypt and 
our 63.1% interest in the Atlas methanol facility which is accounted for    
using equity accounting.                                                    

Adjusted Net Income and Adjusted Net Income per Common Share

Adjusted net income and Adjusted net income per common share are non-GAAP measures because they exclude the mark-to-market impact of share-based compensation and items that are considered by management to be non-operational, including asset impairment charges. The following table shows a reconciliation of net income (loss) attributable to Methanex shareholders to Adjusted net income and the calculation of Adjusted net income per common share:


 
                                                  Three Months Ended        
                                           ---------------------------------
($ millions except number of shares and per   Mar 31      Dec 31     Mar 31 
 share amounts)                                  2013       2012       2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income (loss) attributable to Methanex                                  
 shareholders                                $     60   $   (140)  $     22 
  Mark-to-market impact of share-based                                      
   compensation                                    31          8         18 
  Asset impairment charge                           -        297          - 
  Income tax expense (recovery) related to                                  
   above items                                     (3)      (104)        (1)
----------------------------------------------------------------------------
Adjusted net income                          $     88   $     61   $     39 
----------------------------------------------------------------------------
Diluted weighted average shares outstanding        96         94         95 
Adjusted net income per common share (1)     $   0.92   $   0.64   $   0.41 
----------------------------------------------------------------------------
                                                                            
(1) For the three months ended December 31, 2012, stock options have been   
excluded from the calculation of diluted net loss per common share          
(attributable to Methanex shareholders) as their effect would be anti-      
dilutive. However, for the calculation of adjusted net income per common    
share (attributable to Methanex shareholders) stock options have been       
included in the denominator and the diluted weighted average number of      
common shares is 95 million.                                                

Adjusted Cash Flows from Operating Activities (attributable to Methanex shareholders)

Adjusted cash flows from operating activities differs from the most comparable GAAP measure, cash flows from operating activities, because it includes cash flows associated with our 63.1% equity share of the Atlas facility and does not include cash flows associated with the 40% non-controlling interest in the methanol facility in Egypt or changes in non-cash working capital.

The following table shows a reconciliation of cash flows from operating activities to adjusted cash flows from operating activities:


 
                                                    Three Months Ended      
                                              ------------------------------
                                                Mar 31     Dec 31    Mar 31 
($ millions)                                       2013      2012      2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Cash flows from operating activities            $   118   $    76   $    74 
Add (deduct):                                                               
  Cash flows related to associate (Atlas) (1)         9        10        (3)
  Cash flows related to non-controlling                                     
   interests (2)                                    (15)      (13)      (23)
  Changes in non-cash working capital                15        28        41 
----------------------------------------------------------------------------
Adjusted cash flows from operating activities                               
 (attributable to Methanex shareholders)        $   127   $   101   $    89 
----------------------------------------------------------------------------
                                                                            
(1) Cash flows related to associate represents the amount related to our    
63.1% equity share of the Atlas facility that is accounted for using the    
equity method.                                                              
(2) Cash flows related to non-controlling interests represents the amount   
attributable to non-controlling interests that are consolidated in the      
financial statements.                                                       

Operating Income

Operating income is reconciled directly to a GAAP measure in our consolidated statements of income.

QUARTERLY FINANCIAL DATA (UNAUDITED)

A summary of selected financial information for the prior eight quarters is as follows:


 
                                                    Three Months Ended      
                                              ------------------------------
                                               Mar 31 Dec 31  Sep 30  Jun 30
($ millions, except per share amounts)           2013   2012    2012    2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Revenue                                        $  652 $  668  $  608  $  613
Adjusted EBITDA (1,2)                             149    119     104     113
Net income (loss) (1)                              60   (140)     (3)     52
Adjusted net income (1,2)                          88     61      36      44
Basic net income (loss) per common share (1)     0.64  (1.49)  (0.03)   0.56
Diluted net income (loss) per common share (1)   0.63  (1.49)  (0.03)   0.50
Adjusted net income per share (1,2)              0.92   0.64    0.38    0.47
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                     Three Months Ended     
                                                ----------------------------
                                                 Mar 31 Dec 31 Sep 30 Jun 30
($ millions, except per share amounts)             2012   2011   2011   2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Revenue                                          $  654 $  696 $  670 $  623
Adjusted EBITDA (1,2)                                93    133    111    102
Net income (1)                                       22     64     62     41
Adjusted net income (1,2)                            39     65     40     39
Basic net income per common share (1)              0.24   0.69   0.67   0.44
Diluted net income per common share (1)            0.23   0.68   0.59   0.43
Adjusted net income per share (1,2)                0.41   0.69   0.43   0.41
----------------------------------------------------------------------------
                                                                            
(1) Attributable to Methanex Corporation shareholders.                      
(2) These items are non-GAAP measures that do not have any standardized     
meaning prescribed by GAAP and therefore are unlikely to be comparable to   
similar measures presented by other companies. Refer to the Additional      
Information - Supplemental Non-GAAP Measures section for a description of   
each non-GAAP measure and reconciliations to the most comparable GAAP       
measures.                                                                   

FORWARD-LOOKING INFORMATION WARNING

This First Quarter 2013 Management's Discussion and Analysis ("MD&A") as well as comments made during the First Quarter 2013 investor conference call contain forward-looking statements with respect to us and our industry. These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. Statements that include the words "believes," "expects," "may," "will," "should," "potential," "estimates," "anticipates," "aim," "goal" or other comparable terminology and similar statements of a future or forward-looking nature identify forward-looking statements.

More particularly and without limitation, any statements regarding the following are forward-looking statements:


 
--  expected demand for methanol and its derivatives, 
    
--  expected new methanol supply or restart of idled capacity and timing for
    start-up of the same, 
    
--  expected shutdowns (either temporary or permanent) or restarts of
    existing methanol supply (including our own facilities), including,
    without limitation, the timing and length of planned maintenance
    outages, 
    
--  expected methanol and energy prices, 
    
--  expected levels of methanol purchases from traders or other third
    parties, 
    
--  expected levels, timing and availability of economically priced natural
    gas supply to each of our plants, 
    
--  capital committed by third parties towards future natural gas
    exploration and development in the vicinity of our plants, 
    
--  our expected capital expenditures, including, without limitation, those
    to support natural gas exploration and development for our plants and
    the restart of our idled methanol facilities, 
    
--  anticipated production rates of our plants, 
    
--  expected operating costs, including natural gas feedstock costs and
    logistics costs, 
    
--  expected tax rates or resolutions to tax disputes, 
    
--  expected cash flows, earnings capability and share price, 
    
--  ability to meet covenants or obtain waivers associated with our long-
    term debt obligations, including, without limitation, the Egypt limited
    recourse debt facilities that have conditions associated with
    finalization of certain land title registration and related mortgages
    that require action by Egyptian governmental entities, 
    
--  availability of committed credit facilities and other financing, 
    
--  our shareholder distribution strategy and anticipated distributions to
    shareholders, 
    
--  commercial viability and timing of, or our ability to execute, future
    projects, plant restarts, capacity expansions, plant relocations, or
    other business initiatives or opportunities, including the planned
    relocation of idle Chile methanol plants to Geismar, Louisiana
    ("Geismar") and certain initiatives in New Zealand and Canada, 
    
--  our financial strength and ability to meet future financial commitments,
    
--  expected global or regional economic activity (including industrial
    production levels), 
    
--  expected outcomes of litigation or other disputes, claims and
    assessments, 
    
--  expected actions of governments, government agencies, gas suppliers,
    courts, tribunals or other third parties, and 
    
--  expected impact on our operations in Egypt or our financial condition as
    a consequence of civil unrest or actions taken or inaction by the
    Government of Egypt and its agencies. 

We believe that we have a reasonable basis for making such forward-looking statements. The forward-looking statements in this document are based on our experience, our perception of trends, current conditions and expected future developments as well as other factors. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included in these forward-looking statements, including, without limitation, future expectations and assumptions concerning the following:


 
--  the supply of, demand for, and price of methanol, methanol derivatives,
    natural gas, coal, oil and oil derivatives, 
    
--  the success of our natural gas exploration and development in Chile and
    New Zealand and our ability to procure economically priced natural gas
    in Chile, New Zealand, Trinidad, Canada and the United States, 
    
--  receipt of governmental approvals related to natural gas exploration
    rights, 
    
--  the establishment of new fuel standards, 
    
--  operating costs including natural gas feedstock and logistics costs,
    capital costs, tax rates, cash flows, foreign exchange rates and
    interest rates, 
    
--  the availability of committed credit facilities and other financing, 
    
--  timing of completion and cost of our Geismar projects and our
    initiatives to increase production in New Zealand and Canada, 
    
    
--  production rates of our facilities, 
    
--  receipt of remaining required permits in connection with our Geismar
    projects, 
    
--  receipt or issuance of third-party consents or approvals, including,
    without limitation, governmental registrations of land title and related
    mortgages in Egypt, governmental approvals related to natural gas
    exploration rights or rights to purchase natural gas, 
    
--  global and regional economic activity (including industrial production
    levels), 
    
--  absence of a material negative impact from major natural disasters, 
    
--  absence of a material negative impact from changes in laws or
    regulations, 
    
--  absence of a material negative impact from political instability in the
    countries in which we operate, 
    
--  enforcement of contractual arrangements and ability to perform
    contractual obligations by customers, natural gas and other suppliers
    and other third parties, and 
    
--  satisfaction of conditions precedent contained in the Geismar I natural
    gas supply agreement. 

However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties primarily include those attendant with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions, including, without limitation:


 
--  conditions in the methanol and other industries including fluctuations
    in the supply, demand for and price of methanol and its derivatives,
    including demand for methanol for energy uses, 
    
--  the price of natural gas, coal, oil and oil derivatives, 
    
--  the success of natural gas exploration and development activities in
    southern Chile and New Zealand and our ability to obtain any additional
    gas in Chile and New Zealand on commercially acceptable terms, 
    
--  the ability to successfully carry out corporate initiatives and
    strategies, 
    
--  actions of competitors, suppliers and financial institutions, 
    
--  conditions within the natural gas delivery systems that may prevent
    delivery of our natural gas supply requirements, 
    
--  competing demand for natural gas, especially with respect to domestic
    needs for gas and electricity in Chile and Egypt, 
    
--  actions of governments and governmental authorities, including, without
    limitation, the implementation of policies or other measures that could
    impact the supply of or demand for methanol or its derivatives, 
    
--  changes in laws or regulations, 
    
--  import or export restrictions, anti-dumping measures, increases in
    duties, taxes and government royalties, and other actions by governments
    that may adversely affect our operations or existing contractual
    arrangements, 
    
--  world-wide economic conditions, 
    
--  satisfaction of conditions precedent contained in the Geismar I natural
    gas supply agreement, and 
    
--  other risks described in our 2012 Management's Discussion and Analysis
    and this First Quarter 2013 Management's Discussion and Analysis. 

Having in mind these and other factors, investors and other readers are cautioned not to place undue reliance on forward-looking statements. They are not a substitute for the exercise of one's own due diligence and judgment. The outcomes anticipated in forward-looking statements may not occur and we do not undertake to update forward-looking statements except as required by applicable securities laws.

HOW WE ANALYZE OUR BUSINESS

Our operations consist of a single operating segment - the production and sale of methanol. We review our results of operations by analyzing changes in the components of Adjusted EBITDA (refer to the Additional Information - Supplemental Non-GAAP Measures section for a description of each non-GAAP measure and reconciliations to the most comparable GAAP measures).

In addition to the methanol that we produce at our facilities ("Methanex-produced methanol"), we also purchase and re-sell methanol produced by others ("purchased methanol") and we sell methanol on a commission basis. We analyze the results of all methanol sales together, excluding commission sales volumes. The key drivers of change in Adjusted EBITDA are average realized price, cash costs and sales volume which are defined and calculated as follows:

PRICE

The change in Adjusted EBITDA as a result of changes in average realized price is calculated as the difference from period to period in the selling price of methanol multiplied by the current period total methanol sales volume excluding commission sales volume plus the difference from period to period in commission revenue.

CASH COST

The change in Adjusted EBITDA as a result of changes in cash costs is calculated as the difference from period to period in cash costs per tonne multiplied by the current period total methanol sales volume excluding commission sales volume in the current period. The cash costs per tonne is the weighted average of the cash cost per tonne of Methanex-produced methanol and the cash cost per tonne of purchased methanol. The cash cost per tonne of Methanex-produced methanol includes absorbed fixed cash costs per tonne and variable cash costs per tonne. The cash cost per tonne of purchased methanol consists principally of the cost of methanol itself. In addition, the change in Adjusted EBITDA as a result of changes in cash costs includes the changes from period to period in unabsorbed fixed production costs, consolidated selling, general and administrative expenses and fixed storage and handling costs.

VOLUME

The change in Adjusted EBITDA as a result of changes in sales volume is calculated as the difference from period to period in total methanol sales volume excluding commission sales volumes multiplied by the margin per tonne for the prior period. The margin per tonne for the prior period is the weighted average margin per tonne of Methanex-produced methanol and margin per tonne of purchased methanol. The margin per tonne for Methanex-produced methanol is calculated as the selling price per tonne of methanol less absorbed fixed cash costs per tonne and variable cash costs per tonne. The margin per tonne for purchased methanol is calculated as the selling price per tonne of methanol less the cost of purchased methanol per tonne.

We own 63.1% of the Atlas methanol facility and market the remaining 36.9% of its production through a commission offtake agreement. A contractual agreement between us and our partners establishes joint control over Atlas. As a result, we account for this investment using the equity method of accounting, which results in 63.1% of the net assets and net earnings of Atlas being presented separately in the consolidated statements of financial position and consolidated statements of income, respectively. For purposes of analyzing our business, Adjusted EBITDA, Adjusted net income and Adjusted cash flows from operating activities include an amount representing our 63.1% equity share in Atlas.

We own 60% of the 1.26 million tonne per year Egypt methanol facility and market the remaining 40% of its production through a commission offtake agreement. We account for this investment using consolidation accounting, which results in 100% of the revenues and expenses being included in our financial statements with the other investors' interests in the methanol facility being presented as "non-controlling interests". For purposes of analyzing our business, Adjusted EBITDA, Adjusted net income and Adjusted cash flows from operating activities exclude the amount associated with the other investors' 40% non-controlling interests.


 
Methanex Corporation                                                        
Consolidated Statements of Income (unaudited)                               
(thousands of U.S. dollars, except number of common shares and per share    
 amounts)                                                                   
                                                                            
                                                         Three Months Ended 
                                              ------------------------------
                                                      Mar 31         Mar 31 
                                                        2013           2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                               (As adjusted 
                                                                  - note 11)
Revenue                                        $     651,899  $     653,538 
Cost of sales and operating expenses                (527,995)      (552,964)
Depreciation and amortization                        (29,817)       (35,401)
----------------------------------------------------------------------------
Operating income                                      94,087         65,173 
Earnings (loss) of associate (note 4)                  1,286         (7,328)
Finance costs (note 6)                               (15,451)       (16,033)
Finance income and other expenses                     (1,627)         1,838 
----------------------------------------------------------------------------
Income before income tax expense                      78,295         43,650 
Income tax expense:                                                         
  Current                                             (4,391)        (5,297)
  Deferred                                            (7,671)        (5,542)
----------------------------------------------------------------------------
                                                     (12,062)       (10,839)
----------------------------------------------------------------------------
Net income                                     $      66,233  $      32,811 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation shareholders                   60,267         22,081 
  Non-controlling interests                            5,966         10,730 
----------------------------------------------------------------------------
                                               $      66,233  $      32,811 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Income for the period attributable to Methanex                              
 Corporation shareholders                                                   
  Basic net income per common share            $        0.64  $        0.24 
  Diluted net income per common share          $        0.63  $        0.23 
                                                                            
Weighted average number of common shares                                    
 outstanding (note 7)                             94,514,188     93,407,866 
Diluted weighted average number of common                                   
 shares outstanding (note 7)                      95,717,869     94,714,364 
                                                                            
See accompanying notes to condensed consolidated interim financial          
 statements.                                                                
                                                                            
                                                                            
Methanex Corporation                                                        
Consolidated Statements of Comprehensive Income (unaudited)                 
(thousands of U.S. dollars)                                                 
                                                                            
                                                         Three Months Ended 
                                                      ----------------------
                                                          Mar 31     Mar 31 
                                                            2013       2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income                                             $  66,233  $  32,811 
Other comprehensive income, net of taxes:                                   
  Items that may be reclassified to income:                                 
    Change in fair value of forward exchange contracts      (184)      (305)
    Change in fair value of interest rate swap                              
     contracts                                              (296)    (2,613)
    Realized loss on interest rate swap contracts                           
     reclassified to interest expense                      2,591      2,936 
----------------------------------------------------------------------------
                                                           2,111         18 
----------------------------------------------------------------------------
Comprehensive income                                   $  68,344  $  32,829 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation shareholders                       61,460     21,970 
  Non-controlling interests                                6,884     10,859 
----------------------------------------------------------------------------
                                                       $  68,344  $  32,829 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated interim financial          
 statements.                                                                
                                                                            
                                                                            
Methanex Corporation                                                        
Consolidated Statements of Financial Position (unaudited)                   
(thousands of U.S. dollars)                                                 
                                                                            
                                           Mar 31       Dec 31        Jan 1 
AS AT                                        2013         2012         2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                           (As          (As 
                                                    adjusted -   adjusted - 
                                                       note 11)     note 11)
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents           $   726,851  $   727,385  $   341,445 
  Trade and other receivables             441,584      417,156      374,287 
  Inventories (note 2)                    289,467      256,340      274,276 
  Prepaid expenses                         21,697       25,588       22,614 
----------------------------------------------------------------------------
                                        1,479,599    1,426,469    1,012,622 
Non-current assets:                                                         
  Property, plant and equipment (note                                       
   3)                                   1,813,520    1,762,873    1,976,693 
  Investment in associate (note 4)        185,990      184,665      171,707 
  Other assets                             71,813       68,554      122,627 
----------------------------------------------------------------------------
                                        2,071,323    2,016,092    2,271,027 
----------------------------------------------------------------------------
                                      $ 3,550,922  $ 3,442,561  $ 3,283,649 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Trade, other payables and accrued                                         
   liabilities                        $   437,807  $   377,666  $   360,712 
  Current maturities on long-term                                           
   debt (note 5)                           40,444       38,290      236,063 
  Current maturities on other long-                                         
   term liabilities                        40,517       30,322       21,441 
----------------------------------------------------------------------------
                                          518,768      446,278      618,216 
Non-current liabilities:                                                    
  Long-term debt (note 5)               1,146,443    1,156,081      601,293 
  Other long-term liabilities             177,495      200,212      188,149 
  Deferred income tax liabilities         170,623      162,253      274,028 
----------------------------------------------------------------------------
                                        1,494,561    1,518,546    1,063,470 
Equity:                                                                     
  Capital stock                           498,999      481,779      455,434 
  Contributed surplus                      11,572       15,481       22,281 
  Retained earnings                       848,394      805,661      942,978 
  Accumulated other comprehensive                                           
   loss                                   (11,852)     (13,045)     (15,968)
----------------------------------------------------------------------------
  Shareholders' equity                  1,347,113    1,289,876    1,404,725 
  Non-controlling interests               190,480      187,861      197,238 
----------------------------------------------------------------------------
  Total equity                          1,537,593    1,477,737    1,601,963 
----------------------------------------------------------------------------
                                      $ 3,550,922  $ 3,442,561  $ 3,283,649 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated interim financial          
 statements.                                                                
                                                                            
                                                                            
Methanex Corporation                                                        
Consolidated Statements of Changes in Equity (unaudited)                    
(thousands of U.S. dollars, except number of common shares)                 
                                                                            
                                                                            
                       Number of                                            
                          Common       Capital   Contributed       Retained 
                          Shares         Stock       Surplus       Earnings 
----------------------------------------------------------------------------
Balance, December                                                           
 31, 2011             93,247,755 $     455,434 $      22,281  $     942,978 
  Net income                   -             -             -         22,081 
  Other                                                                     
   comprehensive                                                            
   income (loss)               -             -             -              - 
  Compensation                                                              
   expense recorded                                                         
   for stock options           -             -           227              - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options               458,920         8,068             -              - 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                     -         3,083        (3,083)             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                -             -             -        (15,908)
  Distributions to                                                          
   non-controlling                                                          
   interests                   -             -             -              - 
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                   -             -             -              - 
----------------------------------------------------------------------------
Balance, March 31,                                                          
 2012                 93,706,675       466,585        19,425        949,151 
  Net income (loss)                                                 (90,186)
  Other                                                                     
   comprehensive                                                            
   income (loss)                                                     (1,135)
  Compensation                                                              
   expense recorded                                                         
   for stock options           -             -           499              - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options               603,295        10,751             -              - 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                     -         4,443        (4,443)             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                -             -             -        (52,169)
  Distributions to                                                          
   non-controlling                                                          
   interests                   -             -             -              - 
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                   -             -             -              - 
----------------------------------------------------------------------------
Balance, December                                                           
 31, 2012             94,309,970       481,779        15,481        805,661 
  Net income                   -             -             -         60,267 
  Other                                                                     
   comprehensive                                                            
   income                      -             -             -              - 
  Compensation                                                              
   expense recorded                                                         
   for stock options           -             -           223              - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options               587,689        13,088             -              - 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                     -         4,132        (4,132)             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                -             -             -        (17,534)
  Distributions to                                                          
   non-controlling                                                          
   interests                   -             -             -              - 
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                   -             -             -              - 
----------------------------------------------------------------------------
Balance, March 31,                                                          
 2013                 94,897,659 $     498,999 $      11,572  $     848,394 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated interim financial          
 statements.                                                                
                                                                            
                                                                            
 
Methanex Corporation                                                        
Consolidated Statements of Changes in Equity (unaudited)                    
(thousands of U.S. dollars, except number of common shares)                 
                                                                            
                      Accumulated                                           
                            Other                        Non-               
                    Comprehensive Shareholders'   Controlling         Total 
                             Loss        Equity     Interests        Equity 
----------------------------------------------------------------------------
Balance, December                                                           
 31, 2011            $    (15,968) $  1,404,725  $    197,238  $  1,601,963 
  Net income                    -        22,081        10,730        32,811 
  Other                                                                     
   comprehensive                                                            
   income (loss)             (111)         (111)          129            18 
  Compensation                                                              
   expense recorded                                                         
   for stock options            -           227             -           227 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                      -         8,068             -         8,068 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                      -             -             -             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                 -       (15,908)            -       (15,908)
  Distributions to                                                         
 
   non-controlling                                                          
   interests                    -             -        (9,405)       (9,405)
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                    -             -         1,000         1,000 
----------------------------------------------------------------------------
Balance, March 31,                                                          
 2012                     (16,079)    1,419,082       199,692     1,618,774 
  Net income (loss)             -       (90,186)       22,800       (67,386)
  Other                                                                     
   comprehensive                                                            
   income (loss)            3,034         1,899         2,032         3,931 
  Compensation                                                              
   expense recorded                                                         
   for stock options            -           499             -           499 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                      -        10,751             -        10,751 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                      -             -             -             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                 -       (52,169)            -       (52,169)
  Distributions to                                                          
   non-controlling                                                          
   interests                    -             -       (36,663)      (36,663)
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                    -             -             -             - 
----------------------------------------------------------------------------
Balance, December                                                           
 31, 2012                 (13,045)    1,289,876       187,861     1,477,737 
  Net income                    -        60,267         5,966        66,233 
  Other                                                                     
   comprehensive                                                            
   income                   1,193         1,193           918         2,111 
  Compensation                                                              
   expense recorded                                                         
   for stock options            -           223             -           223 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                      -        13,088             -        13,088 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                      -             -             -             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                 -       (17,534)            -       (17,534)
  Distributions to                                                          
   non-controlling                                                          
   interests                    -             -        (5,265)       (5,265)
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                    -             -         1,000         1,000 
----------------------------------------------------------------------------
Balance, March 31,                                                          
 2013                $    (11,852) $  1,347,113  $    190,480  $  1,537,593 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated interim financial          
 statements.                                                                
                                                                            
                                                                            
Methanex Corporation                                                        
Consolidated Statements of Cash Flows (unaudited)                           
(thousands of U.S. dollars)                                                 
                                                                            
                                                         Three Months Ended 
                                                    ------------------------
                                                         Mar 31      Mar 31 
                                                           2013        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                              (As adjusted -
                                                                    note 11)
CASH FLOWS FROM OPERATING ACTIVITIES                                        
  Net income                                          $  66,233   $  32,811 
  Add (deduct) loss (earnings) of associate              (1,286)      7,328 
  Add non-cash items:                                                       
    Depreciation and amortization                        29,817      35,401 
    Income tax expense                                   12,062      10,839 
    Share based compensation expense                     36,313      25,058 
    Finance costs                                        15,451      16,033 
    Other                                                   464       5,786 
  Income taxes paid                                      (8,783)     (7,074)
  Other cash payments, including share-based                                
   compensation                                         (17,555)    (12,030)
----------------------------------------------------------------------------
  Cash flows from operating activities before                               
   undernoted                                           132,716     114,152 
  Changes in non-cash working capital (note 9)          (15,037)    (40,194)
----------------------------------------------------------------------------
                                                        117,679      73,958 
----------------------------------------------------------------------------
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES                                        
  Dividend payments to Methanex Corporation                                 
   shareholders                                         (17,534)    (15,908)
  Interest paid, including interest rate swap                               
   settlements                                          (21,211)    (24,249)
  Net proceeds on issue of long-term debt                     -     246,548 
  Repayment of long-term debt and limited recourse                          
   debt                                                 (18,267)    (17,154)
  Equity contributions by non-controlling interests       1,000       1,000 
  Cash distributions to non-controlling interests        (5,265)    (12,745)
  Proceeds from limited recourse debt                    10,000           - 
  Proceeds on issue of shares on exercise of stock                          
   options                                               13,088       8,068 
  Other                                                    (919)    (13,450)
----------------------------------------------------------------------------
                                                        (39,108)    172,110 
----------------------------------------------------------------------------
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES                                        
  Property, plant and equipment                         (33,619)    (42,551)
  Louisiana project expenditures                        (43,398)          - 
  Oil and gas assets                                     (7,656)     (6,801)
  GeoPark repayments                                      6,864       6,630 
  Changes in non-cash working capital related to                            
   investing activities (note 9)                         (1,296)     12,832 
----------------------------------------------------------------------------
                                                        (79,105)    (29,890)
----------------------------------------------------------------------------
  Increase (decrease) in cash and cash equivalents         (534)    216,178 
  Cash and cash equivalents, beginning of period        727,385     341,445 
----------------------------------------------------------------------------
  Cash and cash equivalents, end of period            $ 726,851   $ 557,623 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated interim financial          
 statements.                                                                

Methanex Corporation

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Except where otherwise noted, tabular dollar amounts are stated in thousands of U.S. dollars.

1. Basis of presentation:

Methanex Corporation (the Company) is an incorporated entity with corporate offices in Vancouver, Canada. The Company's operations consist of the production and sale of methanol, a commodity chemical. The Company is the world's largest supplier of methanol to major international markets in Asia Pacific, North America, Europe and Latin America.

These condensed consolidated interim financial statements are prepared in accordance with International Accounting Standards (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB) on a basis consistent with those followed in the most recent annual consolidated financial statements, except as described in note 11 below. As described in note 11, the Company has adopted new IFRS standards effective January 1, 2013 with retrospective application and as a result the comparative periods have been restated.

These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and were approved and authorized for issue by the Audit, Finance & Risk Committee of the Board of Directors on April 24, 2013.

2. Inventories:

Inventories are valued at the lower of cost, determined on a first-in first-out basis, and estimated net realizable value. The amount of inventories included in cost of sales and operating expenses and depreciation and amortization for the three months ended March 31, 2013 is $469 million (2012 - $495 million).

3. Property, plant and equipment:


 
                     Buildings,                                             
                          Plant                                             
                  Installations Plants Under  Oil & Gas                     
                    & Machinery Construction Properties    Other       Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Cost at March 31,                                                           
 2013              $  2,887,814 $    120,104 $   82,436 $ 80,379 $ 3,170,733
Accumulated                                                                 
 depreciation at                                                            
 March 31, 2013       1,251,572            -     75,448   30,193   1,357,213
----------------------------------------------------------------------------
Net book value at                                                           
 March 31, 2013    $  1,636,242 $    120,104 $    6,988 $ 50,186 $ 1,813,520
----------------------------------------------------------------------------
                                                                            
Cost at December                                                            
 31, 2012          $  2,866,013 $     75,238 $   80,368 $ 68,906 $ 3,090,525
Accumulated                                                                 
 depreciation at                                                            
 December 31, 2012    1,225,202            -     74,151   28,299   1,327,652
----------------------------------------------------------------------------
Net book value at                                                           
 December 31, 2012 $  1,640,811 $     75,238 $    6,217 $ 40,607 $ 1,762,873
----------------------------------------------------------------------------
                                                                            
Cost at January 1,                                                          
 2012              $  2,816,808 $      1,326 $   77,486 $ 88,642 $ 2,984,262
Accumulated                                                                 
 depreciation at                                                            
 January 1, 2012        933,808            -     32,990   40,771   1,007,569
----------------------------------------------------------------------------
Net book value at                                                           
 January 1, 2012   $  1,883,000 $      1,326 $   44,496 $ 47,871 $ 1,976,693
----------------------------------------------------------------------------

The Company is in the process of relocating an idle Chile facility to Geismar, Louisiana. During the three months ended March 31, 2013, the Company incurred $43 million in relation to this project under construction, excluding capitalized interest. Remaining capital costs to complete the project are estimated to be $420 million, excluding capitalized interest.

In April 2013, the Company made a final investment decision to relocate a second idle Chile facility to Geismar, Louisiana. The Company estimates total project costs, excluding capitalized interest, of $550 million w ith plant start-up expected in early 2016.

4. Investment in Atlas methanol facility:

a) The Company has a 63.1% equity interest in Atlas Methanol Company Unlimited (Atlas). Atlas owns a 1.8 million tonne per year methanol production facility in Trinidad. Effective January 1, 2013, the Company accounts for its interest in Atlas using the equity method (refer to note 11). Summarized financial information of Atlas (100% basis) is as follows:


 
                                             Mar 31      Dec 31       Jan 1 
Summarized Financial Information as at         2013        2012        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Cash and cash equivalents                    10,781      28,883      14,685 
Other current assets                        134,630     104,933     102,872 
Non-current assets                          398,494     407,362     411,465 
Current liabilities                         (58,218)    (65,005)    (29,473)
Non-current liabilities, including                                          
 current maturities                        (212,054)   (204,395)   (227,430)
----------------------------------------------------------------------------
Net assets at 100%                        $ 273,633   $ 271,778   $ 272,119 
----------------------------------------------------------------------------
                                                                            
Net assests at 63.1%                      $ 172,662   $ 171,492   $ 171,707 
Long-term receivable from Atlas              13,328      13,173           - 
----------------------------------------------------------------------------
                                                                            
Investment in associate                   $ 185,990   $ 184,665   $ 171,707 
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                         Three Months Ended 
                                                    ------------------------
                                                        Mar 31      Mar 31  
Summarized Financial Information                           2013        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Revenue                                               $  85,366   $  26,884 
Cost of sales and depreciation and amortization         (79,298)    (36,122)
----------------------------------------------------------------------------
Operating income (loss)                                   6,068      (9,238)
Finance costs, finance income and other expenses         (3,421)     (4,214)
Income tax (expense) recovery                              (609)      1,839 
----------------------------------------------------------------------------
Net earnings (loss) at 100%                           $   2,038   $ (11,613)
----------------------------------------------------------------------------
Earnings (loss) of associate at 63.1%                 $   1,286   $  (7,328)
----------------------------------------------------------------------------

b) Contingent liability:

The Board of Inland Revenue of Trinidad and Tobago has issued assessments against Atlas in respect of the 2005 and 2006 financial years. All subsequent tax years remain open to assessment. The assessments relate to the pricing arrangements of certain long-term fixed price sales contracts that extend to 2014 and 2019 related to methanol produced by Atlas. The impact of the amounts in dispute for the 2005 and 2006 financial years is not significant. Atlas has partial relief from corporation income tax until 2014.

The Company has lodged objections to the assessments. Based on the merits of the cases and legal interpretation, management believes its position should be sustained.

5. Long-term debt:


 
                                             Mar 31      Dec 31       Jan 1 
As at                                          2013        2012        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Unsecured notes                                                             
                                                                            
   $350 million at 3.25% due December                                       
   15, 2019                              $  343,909  $  343,828  $        - 
   $250 million at 5.25% due March 1,                                       
   2022                                     246,408     246,326           - 
   $150 million at 6.00% due August 15,                                     
   2015                                     149,399     149,344     149,119 
   $200 million at 8.75% due August 15,                                     
   2012                                           -           -     199,643 
----------------------------------------------------------------------------
                                            739,716     739,498     348,762 
Egypt limited recourse debt facilities      421,479     438,631     470,208 
Other limited recourse debt facilities       25,692      16,242      18,386 
----------------------------------------------------------------------------
                                          1,186,887   1,194,371     837,356 
Less current maturities                     (40,444)    (38,290)   (236,063)
----------------------------------------------------------------------------
                                         $1,146,443  $1,156,081  $  601,293 
----------------------------------------------------------------------------

During the three months ended March 31, 2013, the Company made repayments on its Egypt limited recourse debt facilities of $18.3 million. During the three months ended March 31, 2013, the Company issued $10.0 million of other limited recourse debt.

The Egypt limited recourse debt facilities are described as limited recourse as they are secured only by the assets of the Egypt entity. Accordingly, the lenders to the limited recourse debt facilities have no recourse to the Company or its other subsidiaries. The Egypt limited recourse debt facilities have customary covenants and default provisions that apply only to the Egypt entity, including restrictions on the incurrence of additional indebtedness, a requirement to fulfill certain conditions before the payment of cash or other distributions and a restriction on these distributions if there is a default subsisting. The Egypt limited recourse debt facilities also contain a covenant to complete certain land title registrations and related mortgages that require action by Egyptian government entities. Under the terms of a waiver received from the lenders in March 2013, the Company is required to complete the covenant by March 31, 2014. The Company does not believe that the finalization of these items is material to the security provided to the lenders.

At March 31, 2013, management believes the Company was in compliance with all of the covenants and default provisions related to long-term debt obligations.

6. Finance costs:


 
                                                          Three Months Ended
                                                     -----------------------
                                                          Mar 31     Mar 31 
                                                            2013        2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Finance costs                                          $  16,518   $  16,033
Less capitalized interest related to Louisiana plant                        
 under construction                                       (1,067)          -
----------------------------------------------------------------------------
                                                       $  15,451   $  16,033
----------------------------------------------------------------------------

Finance costs are primarily comprised of interest on borrowings and finance lease obligations, the effective portion of interest rate swaps designated as cash flow hedges, amortization of deferred financing fees, and accretion expense associated with site restoration costs. Interest during construction is capitalized until the plant is substantially completed and ready for productive use.

The Company has interest rate swap contracts on its Egypt limited recourse debt facilities to swap the LIBOR-based interest payments for an average aggregated fixed rate of 4.8% plus a spread on approximately 75% of the Egypt limited recourse debt facilities for the period to March 31, 2015.

7. Net income per common share:

Diluted net income per common share is calculated by considering the potential dilution that would occur if outstanding stock options and, under certain circumstances, tandem share appreciation rights (TSARs) were exercised or converted to common shares.

Outstanding TSARs may be settled in cash or common shares at the holder's option and for purposes of calculating diluted net income per common share, the more dilutive of the cash-settled and equity-settled method is used, regardless of how the plan is accounted for. Accordingly, TSARs that are accounted for using the cash-settled method will require adjustments to the numerator and denominator if the equity-settled method is determined to have a dilutive effect on diluted net income per common share.

Stock options and TSARs, if calculated using the equity-settled method, are considered dilutive when the average market price of the Company's common shares during the period disclosed exceeds the exercise price of the stock option or TSAR. A reconciliation of the number of common shares used for the purposes of calculating basic and diluted net income per common share is as follows:


 
                                                          Three Months Ended
                                                    ------------------------
                                                          Mar 31      Mar 31
                                                            2013        2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Denominator for basic net income per common share     94,514,188  93,407,866
  Effect of dilutive stock options                     1,203,681   1,306,498
                                                                            
----------------------------------------------------------------------------
Denominator for diluted net income per common share   95,717,869  94,714,364
----------------------------------------------------------------------------

8. Share-based compensation:

a) Share appreciation rights (SARs), tandem share appreciation rights (TSARs) and stock options:

(i) Outstanding units:

Information regarding units outstanding at March 31, 2013 is as follows:


 
                                          SARs                 TSARs        
                                 -------------------------------------------
                                              Weighted              Weighted
                                               Average               Average
                                  Number of   Exercise  Number of   Exercise
                                      Units      Price      Units      Price
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Outstanding at January 1, 2012      623,547  $   26.72  1,219,735  $   26.65
  Granted                           353,890      31.64    652,000      31.69
  Exercised                         (55,331)     26.07    (15,800)     25.93
  Cancelled                         (24,581)     29.10    (40,400)     27.61
----------------------------------------------------------------------------
Outstanding at December 31, 2012    897,525  $   28.63  1,815,535  $   28.45
----------------------------------------------------------------------------
  Granted                           360,900      38.24    544,200      38.24
  Exercised                         (67,781)     27.43    (23,400)     27.41
  Cancelled                          (5,500)     30.86          -          -
----------------------------------------------------------------------------
Outstanding at March 31, 2013     1,185,144  $   31.62  2,336,335  $   30.74
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                               Stock Options
                                                     -----------------------
                                                                    Weighted
                                                                     Average
                                                        Number of   Exercise
                                                            Units      Price
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Outstanding at January 1, 2012                          4,004,204  $   19.19
  Granted                                                  84,000      31.73
  Exercised                                            (1,062,215)     18.03
  Cancelled                                               (43,042)     18.13
----------------------------------------------------------------------------
Outstanding at December 31, 2012                        2,982,947  $   19.97
----------------------------------------------------------------------------
  Granted                                                  75,600      38.24
  Exercised                                              (587,689)     22.13
  Cancelled                                               (48,128)     16.13
----------------------------------------------------------------------------
Outstanding at March 31, 2013                           2,422,730  $   20.09
----------------------------------------------------------------------------
                                                                            
                                                                            
                          Units Outstanding at         Units Exercisable at 
                             March 31, 2013               March 31, 2013    
                   ---------------------------------------------------------
                      Weighted                                              
                       Average                                              
                     Remaining               Weighted               Weighted
                   Contractual    Number of   Average    Number of   Average
Range of Exercise         Life        Units  Exercise        Units  Exercise
 Prices                (Years)  Outstanding     Price  Exercisable     Price
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
SARs:                                                                       
  $23.36 to 29.18          4.4      503,444 $   26.80      406,800 $   26.39
  $31.73 to 38.24          6.5      681,700     35.18       97,740     31.73
----------------------------------------------------------------------------
                           5.6    1,185,144 $   31.62      504,540 $   27.42
----------------------------------------------------------------------------
                                                                            
TSARs:                                                                      
  $23.36 to 29.18          4.4    1,156,245 $   26.66      985,898 $   26.31
  $31.73 to 38.24          6.4    1,180,090     34.73      208,230     31.73
----------------------------------------------------------------------------
                           5.4    2,336,335 $   30.74    1,194,128 $   27.26
----------------------------------------------------------------------------
Stock options:                                                              
  $6.33 to 11.56           2.9      875,490 $    6.39      875,490 $    6.39
  $20.76 to 38.24          2.2    1,547,240     27.84    1,394,590     27.11
----------------------------------------------------------------------------
                           2.5    2,422,730 $   20.09    2,270,080 $   19.12
----------------------------------------------------------------------------

(ii) Compensation expense related to SARs and TSARs:

Compensation expense for SARs and TSARs is measured based on their fair value and is recognized over the vesting period. Changes in fair value each period are recognized in net income for the proportion of the service that has been rendered at each reporting date. The fair value at March 31, 2013 was $43.0 million compared with the recorded liability of $32.0 million. The difference between the fair value and the recorded liability of $11.0 million will be recognized over the weighted average remaining vesting period of approximately 2.0 years. The weighted average fair value of the vested SARs and TSARs was estimated at March 31, 2013 using the Black-Scholes option pricing model.

For the three months ended March 31, 2013, compensation expense related to SARs and TSARs included an expense in cost of sales and operating expenses of $17.0 million (2012 - $10.7 million). This included an expense of $15.0 million (2012 - expense of $7.8 million) related to the effect of the change in the Company's share price for the three months ended March 31, 2013.

(iii) Compensation expense related to stock options:

For the three months ended March 31, 2013, compensation expense related to stock options included in cost of sales and operating expenses was $0.2 million (2012 - $0.2 million). The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model.

b) Deferred, restricted and performance share units:

Deferred, restricted and performance share units outstanding at March 31, 2013 are as follows:


 
                                        Number of    Number of    Number of 
                                         Deferred   Restricted  Performance 
                                      Share Units  Share Units  Share Units 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Outstanding at January 1, 2012            597,911       48,588    1,103,049 
  Granted                                  21,649       20,400      358,330 
  Granted in-lieu of dividends             13,821        1,502       25,339 
  Redeemed                                (66,531)     (31,607)    (413,138)
  Cancelled                                     -            -      (19,711)
----------------------------------------------------------------------------
Outstanding at December 31, 2012          566,850       38,883    1,053,869 
----------------------------------------------------------------------------
  Granted                                   9,725       22,500      304,600 
  Granted in-lieu of dividends              2,391          280        4,305 
  Redeemed                                (49,432)           -     (410,177)
  Cancelled                                     -            -       (5,810)
----------------------------------------------------------------------------
Outstanding at March 31, 2013             529,534       61,663      946,787 
----------------------------------------------------------------------------

Compensation expense for deferred, restricted and performance share units is measured at fair value based on the market value of the Company's common shares and is recognized over the vesting period. Changes in fair value are recognized in earnings for the proportion of the service that has been rendered at each reporting date. The fair value of deferred, restricted and performance share units at March 31, 2013 was $65.4 million compared with the recorded liability of $48.5 million. The difference between the fair value and the recorded liability of $16.9 million will be recognized over the weighted average remaining vesting period of approximately 2.1 years.

For the three months ended March 31, 2013, compensation expense related to deferred, restricted and performance share units included in cost of sales and operating expenses was an expense of $19.1 million (2012 -$14.1 million). This included an expense of $15.7 million (2012 - expense of $10.3 million) related to the effect of the change in the Company's share price for the three months ended March 31, 2013.

9. Changes in non-cash working capital:

Changes in non-cash working capital for the three months ended March 31, 2013 were as follows:


 
                                                         Three Months Ended 
                                                      ----------------------
                                                          Mar 31     Mar 31 
                                                            2013       2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Decrease (increase) in non-cash working capital:                            
  Trade and other receivables                          $ (24,428) $    (941)
  Inventories                                            (33,127)    13,364 
  Prepaid expenses                                         3,891        921 
  Trade, other payables and accrued liabilities,                            
   including long-term payables included in other                           
   long-term liabilities                                  37,708    (56,777)
----------------------------------------------------------------------------
                                                         (15,956)   (43,433)
Adjustments for items not having a cash effect and                          
 working capital changes relating to taxes and                              
 interest paid                                              (377)    16,071 
----------------------------------------------------------------------------
Changes in non-cash working capital having a cash                           
 effect                                                $ (16,333) $ (27,362)
----------------------------------------------------------------------------
                                                                            
These changes relate to the following activities:                           
  Operating                                            $ (15,037) $ (40,194)
  Investing                                               (1,296)    12,832 
----------------------------------------------------------------------------
Changes in non-cash working capital                    $ (16,333) $ (27,362)
----------------------------------------------------------------------------

10. Financial instruments:

Financial instruments are either measured at amortized cost or fair value. Held-to-maturity investments, loans and receivables and other financial liabilities are measured at amortized cost. Held-for-trading financial assets and liabilities and available-for-sale financial assets are measured on the Consolidated Statement of Financial Position at fair value. Derivative financial instruments are classified as held-for-trading and are recorded on the Consolidated Statement of Financial Position at fair value unless exempted. Changes in fair value of held-for-trading derivative financial instruments are recorded in earnings unless the instruments are designated as cash flow hedges.

The euro hedges and the Egypt interest rate swaps designated as cash flow hedges are measured at fair value based on industry-accepted valuation models and inputs obtained from active markets.

The Egypt limited recourse debt facilities bear interest at LIBOR plus a spread. The Company has interest rate swap contracts to swap the LIBOR-based interest payments for an average aggregated fixed rate of 4.8% plus a spread on approximately 75% of the Egypt limited recourse debt facilities for the period to March 31, 2015. The Company has designated these interest rate swaps as cash flow hedges. These interest rate swaps had an outstanding notional amount of $329 million as at March 31, 2013. The notional amount decreases over the expected repayment period. At March 31, 2013, these interest rate swap contracts had a negative fair value of $25.9 million (2012 - $32.7 million) recorded in other long-term liabilities. The fair value of these interest rate swap contracts will fluctuate until maturity.

The Company also designates as cash flow hedges forward exchange contracts to sell euro at a fixed USD exchange rate. At March 31, 2013, the Company had outstanding forward exchange contracts designated as cash flow hedges to sell a notional amount of EUR17.2 million in exchange for US dollars and these euro contracts had a positive fair value of $0.8 million (2012 - negative fair value of $0.2 million) recorded in other assets. Changes in fair value of derivative financial instruments designated as cash flow hedges have been recorded in other comprehensive income.

The carrying values of the Company's financial instruments approximate their fair values, except as follows:


 
                                                              March 31, 2013
                                                  --------------------------
                                                       Carrying             
As at                                                     Value   Fair Value
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Long-term debt                                      $ 1,186,887  $ 1,240,180
----------------------------------------------------------------------------

There is no publicly traded market for the limited recourse debt facilities, the fair value of which is estimated by reference to current market prices for debt securities with similar terms and characteristics. The fair value of the unsecured notes was calculated by reference to a limited number of small transactions in March 2013. The fair value of the Company's unsecured notes will fluctuate until maturity.

11. Adoption of New Accounting Standards:

a) Effective January 1, 2013, the Company has adopted the following new IASB accounting standards related to consolidation and joint arrangements: IFRS 10, Consolidated Financial Statements; IFRS 11, Joint Arrangements; and IFRS 12, Disclosure of Interests in Other Entities.

As a result of the adoption of these new standards, the Company's 63.1% interest in the Atlas entity is accounted for using the equity method. The Company has restated its Consolidated Statement of Financial Position as at January 1, 2012 and December 31, 2012 and its Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2012. Reconciliations of the restatements of the Consolidated Statement of Financial Position as at December 31, 2012 and Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2012 are as follows:


 
Consolidated Statement of Financial Position                                
As at December 31, 2012                                                     
                                               As   Restatement             
                                       Previously   of Atlas to             
                                           Stated Equity Method As Adjusted 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents            $  745,610  $    (18,225) $  727,385 
  Trade and other receivables             429,203       (12,047)    417,156 
  Inventories                             253,023         3,317     256,340 
  Prepaid expenses                         28,314        (2,726)     25,588 
----------------------------------------------------------------------------
                                        1,456,150       (29,681)  1,426,469 
Non-current assets:                                                         
  Property, plant and equipment         2,014,748      (251,875)  1,762,873 
  Investment in associate                       -       184,665     184,665 
  Other assets                             73,724        (5,170)     68,554 
----------------------------------------------------------------------------
                                        2,088,472       (72,380)  2,016,092 
----------------------------------------------------------------------------
                                       $3,544,622  $   (102,061) $3,442,561 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Trade, other payables and accrued                                         
   liabilities                         $  353,744  $     23,922  $  377,666 
  Current maturities on long-term debt     53,334       (15,044)     38,290 
  Current maturities on other long-                                         
   term liabilities                        33,903        (3,581)     30,322 
----------------------------------------------------------------------------
                                          440,981         5,297     446,278 
Non-current liabilities:                                                    
  Long-term debt                        1,191,891       (35,810)  1,156,081 
  Other long-term liabilities             242
,435       (42,223)    200,212 
  Deferred income tax liabilities         191,578       (29,325)    162,253 
----------------------------------------------------------------------------
                                        1,625,904      (107,358)  1,518,546 
Equity:                                                                     
  Capital stock                           481,779             -     481,779 
  Contributed surplus                      15,481             -      15,481 
  Retained earnings                       805,661             -     805,661 
  Accumulated other comprehensive loss    (13,045)            -     (13,045)
----------------------------------------------------------------------------
  Shareholders' equity                  1,289,876             -   1,289,876 
  Non-controlling interests               187,861             -     187,861 
----------------------------------------------------------------------------
  Total equity                          1,477,737             -   1,477,737 
----------------------------------------------------------------------------
                                       $3,544,622  $   (102,061) $3,442,561 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
 

 
Consolidated Statement of Income                                            
Three months ended March 31, 2012                                           
                                               As   Restatement             
                                       Previously   of Atlas to             
                                           Stated Equity Method As Adjusted 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue                                $  665,867  $    (12,329) $  653,538 
Cost of sales and operating expenses     (568,557)       15,593    (552,964)
Depreciation and amortization             (37,967)        2,566     (35,401)
----------------------------------------------------------------------------
Operating income                           59,343         5,830      65,173 
Earnings of associate                           -        (7,328)     (7,328)
Finance costs                             (18,533)        2,500     (16,033)
Finance income and other expenses           1,679           159       1,838 
----------------------------------------------------------------------------
Profit before income tax expense           42,489         1,161      43,650 
Income tax expense:                                                         
  Current                                  (4,568)         (729)     (5,297)
  Deferred                                 (5,110)         (432)     (5,542)
----------------------------------------------------------------------------
                                           (9,678)       (1,161)    (10,839)
----------------------------------------------------------------------------
Net income                             $   32,811  $          -  $   32,811 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Change in fair value of forward                                             
 exchange contracts, net of tax              (305)            -        (305)
Change in fair value of interest rate                                       
 swap contracts, net of tax                (2,613)            -      (2,613)
Realized loss on interest rate swap                                         
 reclassified to interest expense, net                                      
 of tax                                     2,936             -       2,936 
----------------------------------------------------------------------------
Comprehensive income                   $   32,829  $          -  $   32,829 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                -             -           - 
  Methanex Corporation shareholders        21,970             -      21,970 
  Non-controlling interests                10,859             -      10,859 
----------------------------------------------------------------------------
                                       $   32,829  $          -  $   32,829 
----------------------------------------------------------------------------

b) Effective January 1, 2013, the Company adopted IFRS 13, Fair Value Measurements. As a result of this new standard, incremental disclosures have been provided in note 10 to these condensed consolidated interim financial statements.

c) Effective January 1, 2013, the Company adopted the revised IFRS 19, Employee Benefits. The adoption of this standard has not had a significant impact on the Company.

d) Effective January 1, 2013, the Company adopted the revised IAS, Presentation of Financial Statements. The adoption of this standard has resulted is a change to the presentation of the Company's Consolidated Statements of Comprehensive Income.

12. Subsequent Event:

In a prior period, the Company made a commitment to fund 50% of the cost of certain exploratory hydrocarbon wells in New Zealand. As at March 31, 2013, the Company had incurred approximately $15 million of costs related to this arrangement which were recorded on the Consolidated Statement of Financial Position as oil and gas properties in Other Assets. The Company has no future commitments under these arrangements. In April 2013 the operator of the drilling program announced their intention to abandon one of the wells. At the date of this report the Company has not had the opportunity to analyze the operator's data from the drilling program. During the second quarter of 2013, the Company will evaluate whether an event has occurred which would require a re-assessment of the carrying value of the investment.


 
Methanex Corporation                          
Quarterly History (unaudited)                 
                                              
                                       Q1 2013
----------------------------------------------
                                              
                                              
METHANOL SALES VOLUMES                        
(thousands of tonnes)                         
                                              
Methanex-produced                        1,024
Purchased methanol                         588
Commission sales (1)                       219
----------------------------------------------
                                              
                                         1,831
----------------------------------------------
                                              
METHANOL PRODUCTION                           
(thousands of tonnes)                         
                                              
Chile                                       55
New Zealand                                309
Atlas, Trinidad (63.1%)                    248
Titan, Trinidad                            181
Egypt (60%)                                133
Medicine Hat                               131
----------------------------------------------
                                              
                                         1,057
----------------------------------------------
                                              
AVERAGE REALIZED METHANOL                     
 PRICE (2)                                    
  ($/tonne)                                412
  ($/gallon)                              1.24
                                              
PER SHARE INFORMATION ($                      
 per share) (3)                               
Basic net income (loss)                   0.64
Diluted net income (loss)                 0.63
Adjusted diluted net                          
 income (4)                               0.92
 
Methanex Corporation                                                        
Quarterly History (unaudited)                                               
                                                                            
                                                                            
                               2012        Q4        Q3         Q2        Q1
----------------------------------------------------------------------------
                                                                            
                                                                            
METHANOL SALES VOLUMES                                                      
(thousands of tonnes)                                                       
                                                                            
Methanex-produced             4,039     1,059     1,053      1,001       926
Purchased methanol            2,565       664       641        569       691
Commission sales (1)            855       176       205        276       198
----------------------------------------------------------------------------
                                                                            
                              7,459     1,899     1,899      1,846     1,815
----------------------------------------------------------------------------
                                                                            
METHANOL PRODUCTION                                                         
(thousands of tonnes)                                                       
                                                                            
Chile                           313        59        59         82       113
New Zealand                   1,108       378       346        210       174
Atlas, Trinidad (63.1%)         826       180       255        264       127
Titan, Trinidad                 786       189       186        196       215
Egypt (60%)                     557       129        62        164       202
Medicine Hat                    481       132       117        118       114
----------------------------------------------------------------------------
                                                                            
                              4,071     1,067     1,025      1,034       945
----------------------------------------------------------------------------
                                                                            
AVERAGE REALIZED METHANOL                                                   
 PRICE (2)                                                                  
  ($/tonne)                     382       389       373        384       382
  ($/gallon)                   1.15      1.17      1.12       1.15      1.15
                                                                            
PER SHARE INFORMATION ($                                                    
 per share) (3)                                                             
Basic net income (loss)       (0.73)    (1.49)    (0.03)      0.56      0.24
Diluted net income (loss)     (0.73)    (1.49)    (0.03)      0.50      0.23
Adjusted diluted net                                                        
 income (4)                    1.90      0.64      0.38       0.47      0.41
 
Methanex Corporation                                                        
Quarterly History (unaudited)                                               
                                                                            
                                2011        Q4        Q3        Q2        Q1
----------------------------------------------------------------------------
                                                                            
                                                                            
METHANOL SALES VOLUMES                                                      
(thousands of tonnes)                                                       
                                                                            
Methanex-produced              3,853     1,052       983       970       848
Purchased methanol             2,815       644       672       664       835
Commission sales (1)             846       208       235       231       172
----------------------------------------------------------------------------
                                                                            
                               7,514     1,904     1,890     1,865     1,855
----------------------------------------------------------------------------
                                                                            
METHANOL PRODUCTION                                                         
(thousands of tonnes)                                                       
                                                                            
Chile                            554       113       116       142       183
New Zealand                      830       211       209       207       203
Atlas, Trinidad (63.1%)          891       195       170       263       263
Titan, Trinidad                  711       180       224       186       121
Egypt (60%)                      532       132       191       178        31
Medicine Hat                     329       130       125        74         -
----------------------------------------------------------------------------
                                                                            
                               3,847       961     1,035     1,050       801
----------------------------------------------------------------------------
                                                                            
AVERAGE REALIZED METHANOL                                                   
 PRICE (2)                                                                  
  ($/tonne)                      374       388       377       363       367
  ($/gallon)                    1.12      1.17      1.13      1.09      1.10
                                                                            
PER SHARE INFORMATION ($                                                    
 per share) (3)                                                             
Basic net income (loss)         2.16      0.69      0.67      0.44      0.37
Diluted net income (loss)       2.06      0.68      0.59      0.43      0.37
Adjusted diluted net                                                        
 income (4)                     1.93      0.69      0.43      0.41      0.39
                                                                            
(1) Commission sales represent volumes marketed on a commission basis       
related to the 36.9% of the Atlas methanol facility and 40% of the Egypt    
methanol facility that we do not own.                                       
(2) Average realized price is calculated as revenue, excluding commissions  
earned and the Egypt non-controlling interest share of revenue but including
an amount representing our share of Atlas revenue, divided by the total     
sales volumes of Methanex-produced (attributable to Methanex shareholders)  
and purchased methanol.                                                     
(3) Per share information calculated using amounts attributable to Methanex 
shareholders.                                                               
(4) This item is a non-GAAP measure that does not have any standardized     
meaning prescribed by GAAP and therefore is unlikely to be comparable to    
similar measures presented by other companies. Refer to the Additional      
Information - Supplemental Non-GAAP Measures section for a description of   
the non-GAAP measure and reconciliation to the most comparable GAAP measure.

Contacts: Sandra Daycock Director, Investor Relations Methanex Corporation 604 661 2600 or Toll-Free: 1 800 661 8851 invest@methanex.com www.methanex.com

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