Methanex Reports Higher EBITDA and Earnings in the Third Quarter

Methanex Reports Higher EBITDA and Earnings in the Third Quarter 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 10/30/13 -- For the
third quarter of 2013, Methanex Corporation (TSX:MX)(NASDAQ:MEOH)
reported Adjusted EBITDA(1) of $184 million and Adjusted net
income(1) of $117 million ($1.22 per share on a diluted basis(1)).
This compares with Adjusted EBITDA(1) of $157 million and Adjusted
net income(1) of $99 million ($1.02 per share on a diluted basis(1))
for the second quarter of 2013. 
John Floren, President and CEO of Methanex commented, "During the
third quarter, methanol market conditions remained healthy and
pricing increased across all regions, contributing to higher EBITDA
and earnings. We are making solid progress and remain on track to
increase our operating capacity to 8 million tonnes by 2016. We
recently announced the completion of a number of key growth
initiatives in New Zealand, Canada and Chile that will add up to one
million tonnes of annual operating capacity. In addition, our
projects to relocate two production facilities from Chile to
Louisiana are scheduled to add one million tonnes of operating
capacity by the end of 2014 and a further one million tonnes in early
2016." 
Mr. Floren added, "We also recently announced the sale of a 10%
equity interest in the Egypt methanol facility to Arab Petroleum
Investments Corporation (APICORP). This is a win/win transaction that
aligns with APICORP's investment strategy and signals confidence in
the long term prospects of the Egyptian economy. For us, it generates
additional capital to help fund our growth initiatives. In Egypt, we
have built a world-class methanol facility, operated by a
professional staff of highly qualified Egyptians. We continue to
remain optimistic regarding our Egyptian operations and its ability
to create value for shareholders today and well into the future.  
Mr. Floren concluded, "This is an exciting time for our business.
Robust demand for methanol led by energy applications, particularly
in the areas of fuel blending and methanol-to-olefins, is continuing
to support healthy market conditions. Our existing growth projects
have the ability to add capacity when new market supply is limited
and offer significant upside to our earnings and cash flows. With
almost $700 million
 of cash on hand, an undrawn credit facility, a
robust balance sheet and strong cash flow generation, we are well
positioned to grow our business and deliver on our commitment to
return excess cash to shareholders." 
A conference call is scheduled for October 31, 2013 at 12:00 noon ET
(9:00 am PT) to review these third quarter results. To access the
call, dial the Conferencing operator ten minutes prior to the start
of the call at (416) 340-2218, or toll free at (866) 226-1793. A
playback version of the conference call will be available until
November 21, 2013 at (905) 694-9451, or toll free at (800) 408-3053.
The passcode for the playback version is 4459948. Presentation slides
summarizing Q3-13 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
three 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 Third 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 Third 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. Refer to the Additional Information - Supplemental Non-GAAP    
Measures section of the attached Interim Report for the three months ended  
September 30, 2013 for reconciliations to the most comparable GAAP measures.

 
Interim Report for the Three Months Ended September 30, 2013 
At October 30, 2013 the Company had 95,687,579 common shares issued
and outstanding and stock options exercisable for 2,430,984
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.  


 
Contact Information                                                         
Methanex Investor Relations                                                 
1800 - 200 Burrard Street                                                   
Vancouver, BC Canada V6C 3M1                                                
E-mail: invest@methanex.com                                                 
Methanex Toll-Free: 1-800-661-8851                                          

 
THIRD 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 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  Nine Months Ended
                                 -------------------------------------------
($ millions except number of       Sep 30  Jun 30  Sep 30   Sep 30    Sep 30
 shares and per share amounts)       2013    2013    2012     2013      2012
----------------------------------------------------------------------------
Net income (loss) attributable to                                           
 Methanex shareholders             $   87  $   54  $   (3)  $  201  $     72
  Mark-to-market impact of share-                                           
   based compensation, net of tax      30       9       -       67         6
  Geismar project relocation                                                
   expenses, net of tax                 -      22      39       22        41
  Write-off of oil and gas                                                  
   rights, net of tax                   -      14       -       14         -
----------------------------------------------------------------------------
Adjusted net income (1)            $  117  $   99  $   36   $  304  $    119
----------------------------------------------------------------------------
Dilut
ed weighted average shares                                             
 outstanding (millions)                97      96      94       96        95
Adjusted net income per common                                              
 share (1)                         $ 1.22  $ 1.02  $ 0.38   $ 3.16  $   1.26
----------------------------------------------------------------------------
 
--  We recorded Adjusted EBITDA(1) of $184 million for the third quarter of
    2013 compared with $157 million for the second quarter of 2013. The
    increase in Adjusted EBITDA(1) was primarily due to an increase in
    average realized price to $438 per tonne for the third quarter of 2013
    from $425 per tonne for the second quarter of 2013. 
    
--  Production for the third quarter of 2013 was 1,035,000 tonnes compared
    with 1,052,000 tonnes for the second quarter of 2013. Refer to the
    Production Summary section. 
    
--  Sales of Methanex-produced methanol were 1,040,000 tonnes in the third
    quarter of 2013 compared with 1,021,000 in the second quarter of 2013. 
    
--  We recently restarted the 530,000 tonne Waitara Valley facility and
    completed a debottlenecking project at the Motunui facilities. After
    completing a planned major refurbishment at the Motunui 2 facility in
    the fourth quarter of 2013, we expect our New Zealand operations to be
    able to produce at the site's full annual production capacity of up to
    2.4 million tonnes, depending on natural gas composition. We also
    completed the project to debottleneck the Medicine Hat facility which
    increases the site's annual production capacity by 90,000 tonnes. 
    
--  The relocation of two production facilities from Chile to Geismar,
    Louisiana remains on track with Geismar I scheduled to be operational by
    the end of 2014 and Geismar II by early 2016. 
    
--  During the third quarter of 2013, we paid a $0.20 per share dividend to
    shareholders for a total of $19 million. 
    
--  On October 22, 2013, we announced that we had reached an agreement to
    sell a 10% equity interest in EMethanex for $110 million. Subject to the
    completion of certain conditions precedent, we expect the sale to be
    completed in the fourth quarter of 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 Third Quarter 2013 Management's Discussion and Analysis ("MD&A")
dated October 30, 2013 for Methanex Corporation ("the Company")
should be read in conjunction with the Company's condensed
consolidated interim financial statements for the period ended
September 30, 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 Nine Months Ended
                                     ---------------------------------------
($ millions, except per share amounts Sep 30 Jun 30 Sep 30   Sep 30   Sep 30
 and where noted)                       2013   2013   2012     2013     2012
----------------------------------------------------------------------------
Production (thousands of tonnes)                                            
 (attributable to Methanex                                                  
 shareholders)                         1,035  1,052  1,025    3,150    3,004
                                                                            
Sales volumes (thousands of tonnes):                                        
  Methanex-produced methanol                                                
   (attributable to Methanex                                                
   shareholders)                       1,040  1,021  1,053    3,085    2,980
  Purchased methanol                     715    749    641    2,052    1,901
  Commission sales (1)                   237    242    205      698      679
----------------------------------------------------------------------------
  Total sales volumes                  1,992  2,012  1,899    5,835    5,560
                                                                            
Methanex average non-discounted                                             
 posted price ($ per tonne) (2)          502    494    433      490      440
Average realized price ($ per tonne)                                        
 (3)                                     438    425    373      424      380
                                                                            
Adjusted EBITDA (attributable to                                            
 Methanex shareholders) (4)              184    157    104      491      310
Cash flows from operating activities     181    125    122      424      336
Adjusted net income (attributable to                                        
 Methanex shareholders) (4)              117     99     36      304      119
Net income (loss) attributable to                                           
 Methanex shareholders                    87     54     (3)     201       72
                                                                            
Adjusted net income per common share                                        
 (attributable to Methanex                                                  
 shareholders) (4)                      1.22   1.02   0.38     3.16     1.26
Basic net income (loss) per common                                          
 share (attributable to Methanex                                            
 shareholders)                          0.91   0.57  (0.03)    2.12     0.77
Diluted net income (loss) per common                                        
 share (attributable to Methanex                                            
 shareholders)                          0.90   0.56  (0.03)    2.09     0.76
                                                            
                
Common share information (millions of                                       
 shares):                                                                   
  Weighted average number of common                                         
   shares                                 95     95     94       95       94
  Diluted weighted average number of                                        
   common shares                          97     96     94       96       95
  Number of common shares                                                   
   outstanding, end of period             96     95     94       96       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 average 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.                                                                   

 
PRODUCTION SUMMARY 


 
                                                                 YTD     YTD
                                     Q3 2013 Q2 2013 Q3 2012 Q3 2013 Q3 2012
                            Capacity   Prod-   Prod-   Prod-   Prod-   Prod-
(thousands of tonnes)            (1)  uction  uction  uction  uction  uction
----------------------------------------------------------------------------
New Zealand (2)                  608     349     361     346   1,019     730
Atlas (Trinidad) (63.1%                                                     
 interest)                       281     254     201     255     703     646
Titan (Trinidad)                 218     128     169     186     478     597
Egypt (60% interest)             190     168     163      62     464     428
Medicine Hat (Canada) (3)        140     130     129     117     390     349
Chile I and IV                   450       6      29      59      96     254
Geismar I and II                                                            
 (Louisiana, USA) (4)              -       -       -       -       -       -
----------------------------------------------------------------------------
                               1,887   1,035   1,052   1,025   3,150   3,004
----------------------------------------------------------------------------
                                                                            
(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 Motunui
facilities and the Waitara Valley facility (refer to the New Zealand section
below).                                                                     
                                                                            
(3) In September 2013, we completed a debottlenecking project which         
increased the annual production capacity of the Medicine Hat facility by    
90,000 tonnes to 560,000 tonnes.                                            
                                                                            
(4) We are relocating two idle Chile facilities to Geismar, Louisiana. The  
Geismar I facility is scheduled to be operational by the end of 2014 and the
Geismar II facility in early 2016.                                          

 
New Zealand 
Our New Zealand methanol facilities produced 349,000 tonnes of
methanol in the third quarter of 2013 compared with 361,000 tonnes in
the second quarter of 2013. We recently restarted the 530,000 tonne
Waitara Valley facility and completed a debottlenecking project at
the Motunui facilities. After completing a planned major
refurbishment at the Motunui 2 facility in the fourth quarter of
2013, we expect our New Zealand operations to be able to produce at
the site's full annual production capacity of up to 2.4 million
tonnes, depending on natural gas composition. 
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 128,000 tonnes
in the third quarter of 2013 compared with 169,000 tonnes in the
second quarter of 2013 and the Atlas facility produced 254,000 tonnes
in the third quarter of 2013 compared with 201,000 tonnes in the
second quarter of 2013. The Titan facility underwent a 30-day planned
turnaround during the third quarter of 2013 and returned to normal
operation in early October. 
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 gas curtailments to the Trinidad site. 
Egypt 
The Egypt methanol facility produced 168,000 tonnes (60% interest) in
the third quarter of 2013 compared with 163,000 tonnes in the second
quarter of 2013. The Egypt facility experienced an unplanned outage
during the third quarter of 2013 which resulted in lost production of
approximately 15,000 tonnes. 
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 our 2012 Annual Report for further details. 
On October 22, 2013, we announced the sale of a 10% equity interest
in the Egypt methanol facility to Arab Petroleum Investments
Corporation (APICORP) for $110 million. Subject to the completion of
certain conditions precedent, we expect the sale to be completed in
the fourth quarter of 2013.  
Medicine Hat, Canada 
During the third quarter of 2013, we produced 130,000 tonnes at our
Medicine Hat facility compared with 129,000 tonnes during the second
quart
er of 2013. In September 2013, we increased the annual
production capacity of the Medicine Hat facility by 90,000 tonnes
through the completion of a debottlenecking project that added
distillation capacity to the site. 
Chile 
After idling our Chile operations in the second quarter of 2013 as a
result of insufficient natural gas feedstock during the southern
hemisphere winter, we restarted the Chile I facility in late
September 2013. Our Chile operations produced 6,000 tonnes during the
third quarter of 2013, supported by natural gas supplies from both
Chile and Argentina through a tolling arrangement. 
The future of our Chile operations is primarily dependent on the
level of natural gas 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 two idle Chile facilities to
Geismar, Louisiana (Geismar I and Geismar II). The 1.0 million tonne
Geismar I facility is scheduled to be operational by the end of 2014
and the 1.0 million tonne Geismar II facility in early 2016. During
the third quarter of 2013, we incurred $67 million of capital
expenditures related to these projects, excluding capitalized
interest. Remaining capital expenditures for these projects are
estimated to be $780 million. 
FINANCIAL RESULTS 
For the third quarter of 2013 we recorded Adjusted EBITDA of $184
million and Adjusted net income of $117 million ($1.22 per share on a
diluted basis). This compares with Adjusted EBITDA of $157 million
and Adjusted net income of $99 million ($1.02 per share on a diluted
basis) for the second quarter of 2013.  
For the third quarter of 2013, we reported net income attributable to
Methanex shareholders of $87 million ($0.90 per share on a diluted
basis) compared with net income attributable to Methanex shareholders
for the second quarter of 2013 of $54 million ($0.56 income per share
on a diluted basis).  
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 attributable to Methanex
shareholders to Adjusted net income and the calculation of Adjusted
net income per common share is as follows:  


 
                                       Three Months Ended  Nine Months Ended
                              ----------------------------------------------
($ millions except number of     Sep 30   Jun 30   Sep 30    Sep 30   Sep 30
 shares and per share amounts)     2013     2013     2012      2013     2012
----------------------------------------------------------------------------
Net income (loss) attributable                                              
 to Methanex shareholders       $    87  $    54  $    (3)  $   201  $    72
  Mark-to-market impact of                                                  
   share-based compensation,                                                
   net of tax                        30        9        -        67        6
  Geismar project relocation                                                
   expenses, net of tax               -       22       39        22       41
  Write-off of oil and gas                                                  
   rights, net of tax                 -       14        -        14        -
----------------------------------------------------------------------------
Adjusted net income (1)         $   117  $    99  $    36   $   304  $   119
----------------------------------------------------------------------------
Diluted weighted average                                                    
 shares outstanding (millions)       97       96       94        96       95
Adjusted net income per common                                              
 share (1)                      $  1.22  $  1.02  $  0.38   $  3.16  $  1.26
----------------------------------------------------------------------------
                                                                            
(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.                                                                   

 
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   Nine Months Ended 
                          --------------------------------------------------
                             Sep 30    Jun 30    Sep 30    Sep 30    Sep 30 
($ millions)                   2013      2013      2012      2013      2012 
----------------------------------------------------------------------------
Consolidated statements of                                                  
 income:                                                                    
  Revenue                   $   758   $   733   $   608   $ 2,143   $ 1,875 
  Cost of sales and                                                         
   operating expenses,                                                      
   excluding mark-to-                                                       
   market impact of share-                                                  
   based compensation          (565)     (571)     (507)   (1,633)   (1,528)
  Adjusted EBITDA of                                                        
   associate (Atlas) (1)         15        18        15        42        24 
----------------------------------------------------------------------------
                                208       180       116       552       371 
Comprised of:                                                               
  Adjusted EBITDA                                                           
   (attributable to                                                         
   Methanex shareholders)                                                   
   (2)                          184       157       104       491       310 
  Attributable to non-                                                      
   controlling interests         24        23        12        61        61 
----------------------------------------------------------------
------------
                                208       180       116       552       371 
  Mark-to-market impact of                                                  
   share-based                                                              
   compensation                 (33)       (9)        -       (73)       (7)
  Depreciation and                                                          
   amortization                 (29)      (29)      (40)      (88)     (114)
  Geismar project                                                           
   relocation expenses and                                                  
   charges                        -       (34)      (61)      (34)      (65)
  Write-off of oil and gas                                                  
   rights                         -       (17)        -       (17)        - 
  Earnings of associate,                                                    
   excluding amount                                                         
   included in Adjusted                                                     
   EBITDA (1)                    (9)      (12)       (9)      (29)      (24)
  Finance costs                 (14)      (15)      (15)      (44)      (49)
  Finance income and other                                                  
   expenses                       2         3        (4)        3        (2)
  Income tax expense            (24)       (1)       15       (37)       (9)
----------------------------------------------------------------------------
  Net income                $   101   $    66   $     2   $   233   $   101 
----------------------------------------------------------------------------
  Net income (loss)                                                         
   attributable to                                                          
   Methanex shareholders    $    87   $    54   $    (3)  $   201   $    72 
----------------------------------------------------------------------------
                                                                            
(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 reconciliation 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:  


 
                                        Q3 2013       Q3 2013   YTD Q3 2013 
                                  compared with compared with compared with 
($ millions)                            Q2 2013       Q3 2012   YTD Q3 2012 
----------------------------------------------------------------------------
Average realized price              $        24   $       115   $       236 
Sales volume                                 (2)            6            26 
Total cash costs                              5           (41)          (81)
----------------------------------------------------------------------------
Increase in Adjusted EBITDA         $        27   $        80   $       181 
----------------------------------------------------------------------------

 
Average realized price 


 
                                        Three Months Ended Nine Months Ended
                                     ---------------------------------------
                                      Sep 30 Jun 30 Sep 30   Sep 30   Sep 30
($ per tonne)                           2013   2013   2012     2013     2012
----------------------------------------------------------------------------
Methanex average non-discounted                                             
 posted price                            502    494    433      490      440
Methanex average realized price          438    425    373      424      380
----------------------------------------------------------------------------

 
Methanol market conditions remained healthy and pricing increased
across all regions during the third quarter of 2013 (refer to the
Supply/Demand Fundamentals section for more information). Our average
non-discounted posted price for the third quarter of 2013 was $502
per tonne compared with $494 per tonne for the second quarter of 2013
and $433 per tonne for the third quarter of 2012. Our average
realized price for the third quarter of 2013 was $438 per tonne
compared with $425 per tonne for the second quarter of 2013 and $373
per tonne for the third quarter of 2012. The change in average
realized price for the third quarter of 2013 increased Adjusted
EBITDA by $24 million compared with the second quarter of 2013 and
increased Adjusted EBITDA by $115 million compared with the third
quarter of 2012. Our average realized price for the nine months ended
September 30, 2013 was $424 per tonne compared with $380 per tonne
for the same period in 2012 and this increased Adjusted EBITDA by
$236 million. 
Sales volume 
Methanol sales volumes excluding commission sales for the three and
nine month periods ended September 30, 2013 were higher than
comparable periods in 2012 by 61,000 tonnes and 256,000 tonnes and
this resulted in higher Adjusted EBITDA by $6 million and $26
million, respectively. 
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:  


 
                                        Q3 2013       Q3 2013   YTD Q3 2013 
                                  compared with compared with compared with 
($ millions)                            Q2 2013       Q3 2012   YTD Q3 2012 
----------------------------------------------------------------------------
Methanex-produced methanol costs    $         3   $        (5)  $       (38)
Proportion of Methanex-produced                                             
 methanol sales                               5            (8)           (9)
Purchased methanol costs                     (3)          (32)          (70)
Logistics costs                               -             4            25 
Other, net                                    -         
    -            11 
----------------------------------------------------------------------------
                                    $         5   $       (41)  $       (81)
----------------------------------------------------------------------------

 
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 third quarter of 2013 compared with
the second quarter of 2013, Methanex-produced methanol costs were
lower by $3 million primarily due to a change in the mix of
production sold from inventory. For the third quarter of 2013 and
nine month period ended September 30, 2013 compared with the same
periods in 2012, Methanex-produced methanol costs were higher by $5
million and $38 million, respectively, primarily due to the impact of
higher realized methanol prices on the variable portion of our
natural gas costs and changes in the mix of production sold from
inventory. 
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 third quarter of 2013
compared with the second quarter of 2013, a higher proportion of
Methanex-produced methanol sales increased Adjusted EBITDA by $5
million. For the third quarter of 2013 and nine month period ended
September 30, 2013 compared with the same periods in 2012, a lower
proportion of Methanex-produced methanol sales decreased Adjusted
EBITDA by $8 million and $9 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. Over the past year, we have completed
several initiatives that have reduced logistics costs and improved
the efficiency of our supply chain. Logistics costs in the third
quarter of 2013 were $4 million lower than the third quarter of 2012
and logistics costs for the nine month period were $25 million lower
than in the same period in 2012. 
Other, net 
We have commenced the process of building a manufacturing
organization in Geismar, Louisiana. Under IFRS, costs incurred
related to organizational build-up are not eligible for
capitalization and are charged directly to earnings as incurred.
During the third quarter of 2013, we incurred approximately $3
million of Geismar organizational build-up costs and the remaining
organizational build-up costs are estimated to be approximately $25
million. 
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 Nine Months Ended
                               ---------------------------------------------
                                  Sep 30   Jun 30   Sep 30   Sep 30   Sep 30
($ millions except share price)     2013     2013     2012     2013     2012
----------------------------------------------------------------------------
Methanex Corporation share                                                  
 price (1)                       $ 51.27  $ 42.84  $ 28.54  $ 51.27  $ 28.54
                                                                            
Grant-date fair value expense                                               
 included in Adjusted EBITDA                                                
 and Adjusted net income         $     5  $     6  $     3  $    17  $    17
Mark-to-market impact due to                                                
 change in share price                33        9        -       73        7
----------------------------------------------------------------------------
Total share-based compensation                                              
 expense                         $    38  $    15  $     3  $    90  $    24
----------------------------------------------------------------------------
                                                                            
(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 $42.84 per share
at June 30, 2013 to $51.27 per share at September 30, 2013. As a
result of the increase in the share price and the resulting impact on
the fair value of the outstanding units, we recorded a $33 million
mark-to-market expense on share-based compensation in the third
quarter of 2013. For the nine month period ended September 30, 2013,
we recorded a $73 million mark-to-market share-based compensation
expense as a result of the increase in the share price from $31.87 at
December 31, 2012 to $51.27 at September 30, 2013.  
Depreciation and Amortization  
Depreciation and amortization was $29 million for the third quarter
of 2013 compared with $29 million for the second quarter of 2013 and
$41 million for the third quarter of 2012. Depreciation and
amortization for the nine month period ended September 30, 2013 was
$88 million compared with $115 million for the same period in 2012.
Depreciation and amortization is lower in 2013 compared with 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   Nine Months Ended 
                          --------------------------------------------------
                             Sep 30    Jun 30    Sep 30    Sep 30    Sep 30 
($ millions)                   2013      2013      2012      2013      2012 
----------------------------------------------------------------------------
Finance costs before                                                        
 capitalized interest       $    16   $    17   $    16   $    49   $    50 
Less capitalized interest        (2)       (2)       (1)       (5)       (1)
----------------------------------------------------------------------------
                                                                            
Finance costs               $    14   $    15   $    15   $    44   $    49 
----------------------------------------------------------------------------

 
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 Geism
ar projects. 
Finance Income and Other Expenses 


 
                                    Three Months Ended    Nine Months Ended 
                              ----------------------------------------------
                                Sep 30  Jun 30  Sep 30     Sep 30    Sep 30 
($ millions)                      2013    2013    2012       2013      2012 
----------------------------------------------------------------------------
Finance income and other                                                    
 expenses                       $    2  $    3  $   (4)  $      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 third quarter of 2013 compared
with the second quarter of 2013 is as follows:  


 
                                     Three Months Ended  Three Months Ended 
                                     September 30, 2013       June 30, 2013 
                                    ----------------------------------------
                                               Adjusted            Adjusted 
                                                    Net                 Net 
                                          Net    Income       Net    Income 
($ millions, except where noted)       Income       (1)    Income       (1) 
----------------------------------------------------------------------------
Amount before income tax              $   124   $   143   $    67   $   114 
Income tax expense                        (23)      (26)       (1)      (15)
----------------------------------------------------------------------------
Amount after income tax               $   101   $   117   $    66   $    99 
----------------------------------------------------------------------------
Effective tax rate                         19%       18%        2%       14%
----------------------------------------------------------------------------
                                                                            
(1) 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.

 
For the third quarter of 2013, the effective tax rate was 19%
compared with 2% for the second quarter of 2013. Adjusted net income
represents the amount that is attributable to Methanex shareholders
and excludes the mark-to-market impact of share-based compensation
and items that are considered by management to be non-operational.
The effective tax rate related to Adjusted net income was 18% for the
third quarter of 2013 compared with 14% for the second quarter of
2013. 
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
loss carryforwards in Canada and New Zealand which have not been
recognized for accounting purposes. In addition, as the Atlas entity
is accounted for using the equity method, any income taxes related to
Atlas are included in earnings of associate and therefore excluded
from total income taxes. 
SUPPLY/DEMAND FUNDAMENTALS  
We estimate that methanol demand, excluding methanol demand from
integrated methanol to olefins facilities, is currently approximately
55 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 three methanol-to-olefins (MTO) plants operating in China
which are dependent on merchant methanol supply and which have the
capacity to consume approximately 3.5 million tonnes of methanol
annually. There are other MTO plants which are integrated and
purchase methanol to supplement their production when required. We
believe demand potential into energy-related applications and olefins
production will continue to grow.  
During the third quarter of 2013, overall market conditions remained
healthy and prices increased. Our average non-discounted price in the
third quarter was $502 per tonne compared with $494 per tonne in the
second quarter. We recently announced an increase in our North
American non-discounted price for November to $599 per tonne. 
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. Over the next few
years, there is a modest level of new capacity expected to come
on-stream relative to demand growth expectations. We recently
announced the restart of our Waitara Valley facility and the
completion of debottlenecking projects in New Zealand and Canada
which have added up to 1.0 million tonnes of additional operating
capacity. A 0.8 million tonne plant in Channelview, Texas is expected
to restart in 2013 and a 0.7 million tonne plant in Azerbaijan is
expected to start-up in 2014. We are relocating two idle Chile
facilities to Geismar, Louisiana with the first 1.0 million tonne
facility scheduled to start up by the end of 2014 and the second 1.0
million tonne facility 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. 


 
             Methanex Non-Discounted Regional Posted Prices (1)             
                                           Oct       Sep       Aug       Jul
(US$ per tonne)                           2013      2013      2013      2013
----------------------------------------------------------------------------
United States                              549       532       532       532
Europe (2)                                 539       505       505       505
Asia                                       490       470       470       450
----------------------------------------------------------------------------
                                                                            
(1) Discounts from our posted prices are offered to customers based on      
various factors.                                                            
                                                                            
(2) EUR408 for Q4 2013 (Q3 2013 - EUR390) converted to United States        
dollars.                                                                    

 
LIQUIDITY AND CAPITAL RESOURCES 
Cash flows from operating activities in the third quarter of 2013
increased by $56 million to $181 million compared with $125 million
for the second quarter of 2013 and increased by $59 million compared
to $122 million for
 the third quarter of 2012. Cash flows from
operating activities for the nine month period ended September 30,
2013 increased by $88 million to $424 million compared with $336
million for the same period in 2012. The changes in cash flows from
operating activities resulted from changes in the following: 


 
                                        Q3 2013       Q3 2013   YTD Q3 2013 
                                  compared with compared with compared with 
($ millions)                            Q2 2013       Q3 2012   YTD Q3 2012 
----------------------------------------------------------------------------
Change in Adjusted EBITDA                                                   
 (attributable to Methanex                                                  
 shareholders)                      $        27   $        80   $       181 
Exclude change in Adjusted EBITDA                                           
 of associate (Atlas)                         3             -           (18)
Cash flows attributable to non-                                             
 controlling interests                        1            12             - 
Non-cash working capital                      5           (56)          (54)
Income taxes paid                            (5)           (8)          (14)
Geismar project relocation                                                  
 expenses                                    34            35             5 
Share-based payments                         (6)           (6)          (11)
Other                                        (3)            2            (1)
----------------------------------------------------------------------------
Increase in cash flows from                                                 
 operating activities               $        56   $        59   $        88 
----------------------------------------------------------------------------

 
During the third quarter of 2013, we paid a quarterly dividend of
$0.20 per share, or $19 million. 
We operate in a highly competitive commodity industry and believe it
is appropriate to maintain a conservative balance sheet and retain
financial flexibility. At September 30, 2013, our cash balance was
$686 million, including $35 million related to the non-controlling
interest in Egypt. On October 22, 2013, we announced the sale of a
10% equity interest in the Egypt methanol facility to Arab Petroleum
Investments Corporation (APICORP) for $110 million. Subject to the
completion of certain conditions precedent, we expect the sale to be
completed in the fourth quarter of 2013. 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 $70 million to the end
of 2014. We recently restarted the Waitara Valley facility and
completed debottlenecking projects in New Zealand and Medicine Hat.
We are in the process of a major refurbishment of the Motunui 2
facility in New Zealand with estimated remaining capital expenditures
of approximately $100 million. We are relocating two methanol plants
from our Chile site to Geismar, Louisiana. During the third quarter
of 2013, capital expenditures related to the Geismar projects were
$67 million, excluding capitalized interest. Remaining capital
expenditures related to the Geismar projects are approximately $780
million. 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 fourth quarter, market conditions remain healthy and
methanol prices are rising.  
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 September 30, 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 and
operating income. 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, mark-to-market impact of
share-based compensation, Geismar project relocation expenses and
charges and write-off of oil and gas rights. 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
attributable to Methanex shareholders to Adjusted EBITDA: 


 
                                       Three Months Ended Nine Months Ended 
                               ---------------------------------------------
                                 Sep 30   Jun 30   Sep 30   Sep 30   Sep 30 
($ millions)                       2013     2013     2012     2013     2012 
----------------------------------------------------------------------------
Net income (loss) attributable                                              
 to Methanex shareholders        $   87   $   54   $   (3)  $  201   $   72 
  Mark-to-market impact of  
                                                
   share-based compensation          33        9        -       73        7 
  Depreciation and amortization      29       29       41       88      114 
  Geismar project relocation                                                
   expenses and charges               -       34       61       34       65 
  Write-off of oil and gas                                                  
   rights                             -       17        -       17        - 
  Finance costs                      14       15       15       44       49 
  Finance income and other                                                  
   expenses                          (2)      (3)       4       (3)       2 
  Income tax expense (recovery)      24        1      (15)      37        9 
  Earnings of associate,                                                    
   excluding amount included in                                             
   Adjusted EBITDA (1)                9       12        9       29       24 
  Non-controlling interests                                                 
   adjustment (1)                   (10)     (11)      (8)     (29)     (32)
----------------------------------------------------------------------------
Adjusted EBITDA (attributable                                               
 to Methanex shareholders)       $  184   $  157   $  104   $  491   $  310 
----------------------------------------------------------------------------
                                                                            
(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.                          

 
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 Geismar project relocation expenses
and charges and write-off of oil and gas rights. The following table
shows a reconciliation of net income attributable to Methanex
shareholders to Adjusted net income and the calculation of Adjusted
net income per common share:  


 
                                       Three Months Ended Nine Months Ended 
                               ---------------------------------------------
($ millions except number of     Sep 30   Jun 30   Sep 30   Sep 30   Sep 30 
 shares and per share amounts)     2013     2013     2012     2013     2012 
----------------------------------------------------------------------------
Net income (loss) attributable                                              
 to Methanex shareholders        $   87   $   54   $   (3)  $  201   $   72 
  Mark-to-market impact of                                                  
   share-based compensation          33        9        -       73        7 
  Geismar project relocation                                                
   expenses and charges               -       34       61       34       65 
  Write-off of oil and gas                                                  
   rights                             -       17        -       17        - 
  Income tax recovery related                                               
   to above items                    (3)     (15)     (22)     (21)     (25)
----------------------------------------------------------------------------
Adjusted net income              $  117   $   99   $   36   $  304   $  119 
----------------------------------------------------------------------------
Diluted weighted average shares                                             
 outstanding (millions)              97       96       94       96       95 
Adjusted net income per common                                              
 share                           $ 1.22   $ 1.02   $ 0.38   $ 3.16   $ 1.26 
----------------------------------------------------------------------------

 
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 
                                           ---------------------------------
                                             Sep 30  Jun 30  Mar 31  Dec 31 
($ millions, except per share amounts)         2013    2013    2013    2012 
----------------------------------------------------------------------------
Revenue                                      $  758  $  733  $  652  $  668 
Adjusted EBITDA (1,2)                           184     157     149     119 
Net income (loss) (1)                            87      54      60    (140)
Adjusted net income (1,2)                       117      99      88      61 
Basic net income (loss) per common share                                    
 (1)                                           0.91    0.57    0.64   (1.49)
Diluted net income (loss) per common share                                  
 (1)                                           0.90    0.56    0.63   (1.49)
Adjusted net income per share (1,2)            1.22    1.02    0.92    0.64 
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                          Three Months Ended
                                           ---------------------------------
                                             Sep 30   Jun 30  Mar 31  Dec 31
($ millions, except per share amounts)         2012     2012    2012    2011
----------------------------------------------------------------------------
Revenue                                      $  608   $  613  $  654  $  696
Adjusted EBITDA (1,2)                           104      113      93     133
Net income (loss) (1)                            (3)      52      22      64
Adjusted net income (1,2)                        36       44      39      65
Basic net income (loss) per common share                                    
 (1)                                          (0.03)    0.56    0.24    0.69
Diluted net income (loss) per common share                                  
 (1)                                          (0.03)    0.50    0.23    0.68
Adjusted net income per share (1,2)            0.38     0.47    0.41    0.69
----------------------------------------------------------------------------
                                                                            
(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 Third Quarter 2013 Management's Discussion and Analysis ("MD&A")
as well as comments made during the Third 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 s
tatements. 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 operating 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, 
    
--  availability of committed credit facilities and other financing, 
    
--  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 upstream
    natural gas development and the finalization of certain land title
    registration and related mortgages that require action by Egyptian
    governmental entities, 
    
--  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, 
    
--  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
    our ability to procure economically priced natural gas in Chile, New
    Zealand, Trinidad, Canada and the United States, 
    
--  operating 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, 
    
--  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 operating capacity in New Zealand, 
    
--  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 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 Third 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
changes 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 net
income per common share 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 net income per
common share 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         Nine Months Ended 
                        ----------------------------------------------------
                              Sep 30       Sep 30       Sep 30       Sep 30 
                                2013         2012         2013         2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      (As adjusted              (As adjusted
                                        - note 11)                - note 11)
Revenue                  $   758,149  $   607,936  $ 2,143,147  $ 1,875,257 
Cost of sales and                                                           
 operating expenses         (598,633)    (507,683)  (1,706,744)  (1,535,539)
Depreciation and                                                            
 amortization                (28,971)     (40,810)     (87,741)    (114,775)
Geismar project                                                             
 relocation expenses and                                                    
 charges                           -      (60,857)     (33,867)     (64,543)
Write-off of oil and gas                                                    
 rights                            -            -      (16,859)           - 
----------------------------------------------------------------------------
Operating income (loss)      130,545       (1,414)     297,936      160,400 
Earnings (loss) of                                                          
 associate (note 4)            5,968        5,799       13,271         (214)
Finance costs (note 6)       (13,756)     (15,346)     (43,825)     (48,969)
Finance income and other                                                    
 expenses                      1,599       (3,451)       2,670       (1,894)
----------------------------------------------------------------------------
Income (loss) before                                                        
 income tax expense          124,356      (14,412)     270,052      109,323 
Income tax recovery                                                         
 (expense):                                                                 
  Current                    (12,139)      (5,130)     (39,806)     (21,280)
  Deferred                   (11,204)      20,987        2,851       12,358 
----------------------------------------------------------------------------
                   
          (23,343)      15,857      (36,955)      (8,922)
----------------------------------------------------------------------------
Net income               $   101,013  $     1,445  $   233,097  $   100,401 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation                                                      
   shareholders               87,106       (2,571)     201,372       71,748 
  Non-controlling                                                           
   interests                  13,907        4,016       31,725       28,653 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                         $   101,013  $     1,445  $   233,097  $   100,401 
----------------------------------------------------------------------------
                                                                            
Income per share for the period attributable to Methanex Corporation        
 shareholders                                                               
  Basic net income                                                          
   (loss) per common                                                        
   share                 $      0.91  $     (0.03) $      2.12  $      0.77 
  Diluted net income                                                        
   (loss) per common                                                        
   share                 $      0.90  $     (0.03) $      2.09  $      0.76 
                                                                            
Weighted average number                                                     
 of common shares                                                           
 outstanding (note 7)     95,488,882   93,880,221   95,046,274   93,691,597 
Diluted weighted average                                                    
 number of common shares                                                    
 outstanding (note 7)     96,554,316   93,880,221   96,244,865   94,887,279 
                                                                            
See accompanying notes to condensed consolidated interim financial          
statements.                                                                 
                                                                            
                                                                            
Methanex Corporation                                                        
Consolidated Statements of Comprehensive Income (unaudited)                 
(thousands of U.S. dollars, except number of common shares and per share    
amounts)                                                                    
                                                                            
                                   Three Months Ended     Nine Months Ended 
                                --------------------------------------------
                                    Sep 30     Sep 30     Sep 30     Sep 30 
                                      2013       2012       2013       2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income                        $101,013   $  1,445   $233,097   $100,401 
  Other comprehensive income,                                               
   net of taxes:                                                            
    Items that may be                                                       
     reclassified to income:                                                
        Change in fair value of                                             
         forward exchange                                                   
         contracts                   5,737        528      1,291       (343)
        Change in fair value of                                             
         interest rate swap                                                 
         contracts                    (602)    (1,744)      (902)    (5,104)
        Realized loss on                                                    
         interest rate swap                                                 
         contracts reclassified                                             
         to finance costs            2,745      2,719      8,128      8,421 
----------------------------------------------------------------------------
                                     7,880      1,503      8,517      2,974 
----------------------------------------------------------------------------
Comprehensive income              $108,893   $  2,948   $241,614   $103,375 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation                                                      
   shareholders                     94,128     (1,458)   206,998     73,395 
  Non-controlling interests         14,765      4,406     34,616     29,980 
----------------------------------------------------------------------------
                                  $108,893   $  2,948   $241,614   $103,375 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated interim financial          
statements.                                                                 
                                                                            
                                                                            
Methanex Corporation                                                        
Consolidated Statements of Financial Position (unaudited)                   
(thousands of U.S. dollars)                                                 
                                                                            
                                                                            
                                                       Sep 30        Dec 31 
AS AT                                                    2013          2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                              (As adjusted -
                                                                    note 11)
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents                       $   686,238   $   727,385 
  Trade and other receivables                         471,331       417,156 
  Inventories (note 2)                                254,520       256,340 
  Prepaid expenses                                     29,723        25,588 
----------------------------------------------------------------------------
                                                    1,441,812     1,426,469 
Non-current assets:                                                         
  Property, plant and equipment (note 3)            2,048,021     1,762,873 
  Investment in associate (note 4)                    198,408       184,665 
  Other assets                                         63,932        68,554 
----------------------------------------------------------------------------
                                                    2,310,361     2,016,092 
---------------------
-------------------------------------------------------
                                                  $ 3,752,173   $ 3,442,561 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Trade, other payables and accrued liabilities   $   494,512   $   377,666 
  Current maturities on long-term debt (note 5)        41,504        38,290 
  Current maturities on other long-term                                     
   liabilities                                         66,564        30,322 
----------------------------------------------------------------------------
                                                      602,580       446,278 
Non-current liabilities:                                                    
  Long-term debt (note 5)                           1,126,841     1,156,081 
  Other long-term liabilities                         192,758       200,212 
  Deferred income tax liabilities                     161,812       162,253 
----------------------------------------------------------------------------
                                                    1,481,411     1,518,546 
Equity:                                                                     
  Capital stock                                       518,981       481,779 
  Contributed surplus                                   7,561        15,481 
  Retained earnings                                   951,301       805,661 
  Accumulated other comprehensive loss                 (7,419)      (13,045)
----------------------------------------------------------------------------
  Shareholders' equity                              1,470,424     1,289,876 
  Non-controlling interests                           197,758       187,861 
----------------------------------------------------------------------------
  Total equity                                      1,668,182     1,477,737 
----------------------------------------------------------------------------
                                                  $ 3,752,173   $ 3,442,561 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
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                 Contributed       Retained 
                          Shares Capital Stock       Surplus       Earnings 
----------------------------------------------------------------------------
Balance, December                                                           
 31, 2011             93,247,755 $     455,434 $      22,281  $     942,978 
  Net income                   -             -             -         71,748 
  Other                                                                     
   comprehensive                                                            
   income                      -             -             -              - 
  Compensation                                                              
   expense recorded                                                         
   for stock options           -             -           564              - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options               720,455        13,267             -              - 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                     -         5,159        (5,159)             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                -             -             -        (50,649)
  Distributions to                                                          
   non-controlling                                                          
   interests                   -             -             -              - 
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                   -             -             -              - 
----------------------------------------------------------------------------
Balance, September                                                          
 30, 2012             93,968,210       473,860        17,686        964,077 
  Net income                                                       (139,853)
  Other                                                                     
   comprehensive                                                            
   income (loss)                                                     (1,135)
  Compensation                                                              
   expense recorded                                                         
   for stock options           -             -           162              - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options               341,760         5,552             -              - 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                     -         2,367        (2,367)             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                -             -             -        (17,428)
  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                   -             -             -        201,372 
  Other                                                                     
   comprehensive                                                            
   income                      -             -             -              - 
  Compensation                                                              
   expense recorded                                                         
   for stock options           -             -           582              - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options             1,349,824        28,700             -              - 
  Reclassification               
                                           
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                     -         8,502        (8,502)             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                -             -             -        (55,732)
  Distributions to                                                          
   non-controlling                                                          
   interests                   -             -             -              - 
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                   -             -             -              - 
----------------------------------------------------------------------------
Balance, September                                                          
 30, 2013             95,659,794 $     518,981 $       7,561  $     951,301 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
                      Accumulated                                           
                            Other                        Non-               
                    Comprehensive Shareholders'   Controlling               
                             Loss        Equity     Interests  Total Equity 
----------------------------------------------------------------------------
Balance, December                                                           
 31, 2011            $    (15,968) $  1,404,725  $    197,238  $  1,601,963 
  Net income                    -        71,748        28,653       100,401 
  Other                                                                     
   comprehensive                                                            
   income                   1,647         1,647         1,327         2,974 
  Compensation                                                              
   expense recorded                                                         
   for stock options            -           564             -           564 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                      -        13,267             -        13,267 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                      -             -             -             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                 -       (50,649)            -       (50,649)
  Distributions to                                                          
   non-controlling                                                          
   interests                    -             -       (42,292)      (42,292)
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                    -             -         1,000         1,000 
----------------------------------------------------------------------------
Balance, September                                                          
 30, 2012                 (14,321)    1,441,302       185,926     1,627,228 
  Net income                    -      (139,853)        4,877      (134,976)
  Other                                                                     
   comprehensive                                                            
   income (loss)            1,276           141           834           975 
  Compensation                                                              
   expense recorded                                                         
   for stock options            -           162             -           162 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                      -         5,552             -         5,552 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                      -             -             -             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                 -       (17,428)            -       (17,428)
  Distributions to                                                          
   non-controlling                                                          
   interests                    -             -        (3,776)       (3,776)
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                    -             -             -             - 
----------------------------------------------------------------------------
Balance, December                                                           
 31, 2012                 (13,045)    1,289,876       187,861     1,477,737 
  Net income                    -       201,372        31,725       233,097 
  Other                                                                     
   comprehensive                                                            
   income                   5,626         5,626         2,891         8,517 
  Compensation                                                              
   expense recorded                                                         
   for stock options            -           582             -           582 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                      -        28,700             -        28,700 
  Reclassification                                                          
   of grant date                                                            
   fair value on                                                            
   exercise of stock                                                        
   options                      -             -             -             - 
  Dividend payments                                                         
   to Methanex                                                              
   Corporation                                                              
   shareholders                 -       (55,732)            -       (55,732)
  Distributions to                                                          
   non-controlling                                                          
   interests                    -             -       (25,719)      (25,719)
  Equity                                                                    
   contributions by                                                         
   non-controlling                                                          
   interests                    -             -         1,000         1,000 
----------------------------------------------------------------------------
Balance, September                                                          
 30, 2013            $     (7,419) $  1,470,424  $    197,758  $  1,668,182 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consoli
dated interim financial          
statements.                                                                 
                                                                            
                                                                            
Methanex Corporation                                                        
Consolidated Statements of Cash Flows (unaudited)                           
(thousands of U.S. dollars)                                                 
                                                                            
                                 Three Months Ended       Nine Months Ended 
                            ------------------------------------------------
                                 Sep 30      Sep 30      Sep 30      Sep 30 
                                   2013        2012        2013        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        (As adjusted            (As adjusted
                                          - note 11)              - note 11)
CASH FLOWS FROM OPERATING                                                   
 ACTIVITIES                                                                 
  Net income                  $ 101,013   $   1,445   $ 233,097   $ 100,401 
  Add (deduct) loss                                                         
   (earnings) of associate       (5,968)     (5,799)    (13,271)        214 
  Add (deduct) non-cash                                                     
   items:                                                                   
    Depreciation and                                                        
     amortization                28,971      40,810      87,741     114,775 
    Geismar project                                                         
     relocation non-cash                                                    
     charges                          -      25,688           -      25,688 
    Write-off of oil and gas                                                
     rights                           -           -      16,859           - 
    Income tax expense                                                      
     (recovery)                  23,343     (15,857)     36,955       8,922 
    Share based compensation                                                
     expense                     38,022       3,340      90,029      24,880 
    Finance costs                13,756      15,346      43,825      48,969 
    Other                         1,096       7,078         795      10,036 
  Income taxes paid             (12,142)     (4,154)    (27,493)    (14,439)
  Other cash payments,                                                      
   including share-based                                                    
   compensation                  (8,760)     (3,622)    (26,755)    (19,159)
----------------------------------------------------------------------------
  Cash flows from operating                                                 
   activities before                                                        
   undernoted                   179,331      64,275     441,782     300,287 
  Changes in non-cash                                                       
   working capital (note 9)       1,282      57,165     (17,741)     35,144 
----------------------------------------------------------------------------
                                180,613     121,440     424,041     335,431 
----------------------------------------------------------------------------
                                                                            
CASH FLOWS FROM FINANCING                                                   
 ACTIVITIES                                                                 
  Dividend payments to                                                      
   Methanex Corporation                                                     
   shareholders                 (19,141)    (17,384)    (55,732)    (50,649)
  Interest paid, including                                                  
   interest rate swap                                                       
   settlements                  (21,103)    (30,542)    (48,860)    (55,553)
  Net proceeds on issue of                                                  
   long-term debt                     -           -           -     246,548 
  Repayment of long-term                                                    
   debt and limited recourse                                                
   debt                         (19,099)   (217,682)    (38,579)   (235,448)
  Equity contributions by                                                   
   non-controlling interests          -           -       1,000       1,000 
  Cash distributions to non-                                                
   controlling interests        (12,695)    (29,633)    (25,719)    (45,632)
  Proceeds from limited                                                     
   recourse debt                      -           -      10,000           - 
  Proceeds on issue of                                                      
   shares on exercise of                                                    
   stock options                  4,549       3,000      28,700      13,267 
  Other                            (953)       (860)     (2,808)    (15,156)
----------------------------------------------------------------------------
                                (68,442)   (293,101)   (131,998)   (141,623)
----------------------------------------------------------------------------
                                                                            
CASH FLOWS FROM INVESTING                                                   
 ACTIVITIES                                                                 
  Property, plant and                                                       
   equipment                   (101,409)    (19,055)   (197,641)    (94,820)
  Geismar plants under                                                      
   construction                 (67,416)    (24,281)   (164,493)    (38,604)
  Other assets                   (5,199)     (5,719)    (10,949)     (7,635)
  Changes in non-cash                                                       
   working capital related                                                  
   to investing activities                                                  
   (note 9)                      39,577      (7,540)     39,893      (8,855)
----------------------------------------------------------------------------
                               (134,447)    (56,595)   (333,190)   (149,914)
----------------------------------------------------------------------------
  Increase (decrease) in                                                    
   cash and cash equivalents    (22,276)   (228,256)    (41,147)     43,894 
  Cash and cash equivalents,                                                
   beginning of period          708,514     613,595     727,385     341,445 
----------------------------------------------------------------------------
  Cash and cash equivalents,                                                
   end of period              $ 686,238   $ 385,339   $ 686,238   $ 385,339 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
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. dollar
s. 
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 International Financial Reporting Standards
(IFRS) 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 October 30,
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 and nine month periods
ended September 30, 2013 is $506 million (2012 - $470 million) and
$1,519 million (2012 - $1,389 million), respectively. 
3. Property, plant and equipment:  


 
                   Buildings,                                               
                        Plant                                               
                Installations Plants Under   Oil & Gas                      
                  & Machinery Construction  Properties     Other       Total
----------------------------------------------------------------------------
Cost at                                                                     
 September 30,                                                              
 2013            $  3,048,809 $    244,741 $     5,404 $  81,654 $ 3,460,608
Accumulated                                                                 
 depreciation at                                                            
 September 30,                                                              
 2013               1,301,342            -      77,236    34,009   1,412,587
----------------------------------------------------------------------------
Net book value                                                              
 at September                                                               
 30, 2013        $  1,747,467 $    244,741 $     8,168 $  47,645 $ 2,048,021
----------------------------------------------------------------------------
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
----------------------------------------------------------------------------

 
The Company is relocating two idle Chile facilities to Geismar,
Louisiana with Geismar I scheduled to start up by the end of 2014 and
Geismar II in early 2016. During the three months ended September 30,
2013, the Company incurred capital expenditures related to the
Geismar projects of $67 million, excluding capitalized interest.
Remaining capital expenditures for these projects is estimated to be
$780 million, excluding capitalized interest. 
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:  


 
                                                       Sep 30        Dec 31 
Summarized Financial Information as at                   2013          2012 
----------------------------------------------------------------------------
Cash and cash equivalents                         $     8,241   $    28,883 
Other current assets                                  147,982       104,933 
Non-current assets                                    381,659       407,362 
Current liabilities                                   (42,870)      (65,005)
Long-term debt, including current maturities          (68,673)      (80,594)
Other long-term liabilities, including current                              
 maturities                                          (133,529)     (123,801)
----------------------------------------------------------------------------
Net assets at 100%                                $   292,810   $   271,778 
----------------------------------------------------------------------------
                                                                            
Net assets at 63.1%                               $   184,763   $   171,492 
Long-term receivable from Atlas                        13,645        13,173 
----------------------------------------------------------------------------
                                                                            
Investment in associate                           $   198,408   $   184,665 
----------------------------------------------------------------------------
                                                                            
                                                                            
                                   Three Months Ended     Nine Months Ended 
                                --------------------------------------------
                                   Sep 30     Sep 30     Sep 30     Sep 30  
Summarized Financial Information      2013       2012       2013       2012 
----------------------------------------------------------------------------
Revenue                          $ 100,657  $  84,581  $ 264,438  $ 199,777 
Cost of sales and depreciation                                              
 and amortization                  (84,576)   (70,884)  (226,020)  (188,075)
----------------------------------------------------------------------------
Operating income                    16,081     13,697     38,418     11,702 
Finance costs, finance income                                               
 and other expenses                 (2,895)    (2,857)    (9,767)   (11,127)
Income tax expense                  (3,727)    (1,648)    (7,619)      (913)
----------------------------------------------------------------------------
Net earnings (loss) at 100%      $   9,459  $   9,192  $  21,032  $    (338)
----------------------------------------------------------------------------
Earnings (loss) of associate at                                             
 63.1%                           $   5,968  $   5,799  $  13,271  $    (214)
----------------------------------------------------------------------------

 
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:  


 
                                                       Sep 30        Dec 31 
As at                                                    2013          2012 
----------------------------------------------------------------------------
Unsecured notes                                                             
                                                                            
  $350 million at 3.25% due December 15, 2019     $   344,316   $   343,828 
  $250 million at 5.25% due March 1, 2022             246,566       246,326 
  $150 million at 6.00% due August 15, 2015           149,520       149,344 
----------------------------------------------------------------------------
                                                      740,402       739,498 
Egypt limited recourse debt facilities                404,259       438,631 
Other limited recourse debt facilities                 23,684        16,242 
----------------------------------------------------------------------------
Total long-term debt (1)                            1,168,345     1,194,371 
Less current maturities                               (41,504)      (38,290)
----------------------------------------------------------------------------
                                                  $ 1,126,841   $ 1,156,081 
----------------------------------------------------------------------------
                                                                            
(1) Long-term debt is presented net of deferred financing fees.             

 
During the three months ended September 30, 2013, the Company made
repayments on its Egypt limited recourse debt facilities of $18.2
million and other limited recourse debt facilities of $0.9 million.  
At September 30, 2013, management believes the Company was in
compliance with all significant covenants and default provisions
related to long-term debt obligations. 
6. Finance costs:  


 
                                     Three Months Ended   Nine Months Ended 
                                    ----------------------------------------
                                       Sep 30    Sep 30    Sep 30    Sep 30 
                                         2013      2012      2013      2012 
----------------------------------------------------------------------------
Finance costs                        $ 16,039  $ 16,020  $ 48,835  $ 49,643 
Less capitalized interest related to                                        
 Geismar plants under construction     (2,283)     (674)   (5,010)     (674)
----------------------------------------------------------------------------
                                     $ 13,756  $ 15,346  $ 43,825  $ 48,969 
----------------------------------------------------------------------------

 
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. 
A reconciliation of the numerator used for the purpose of calculating
diluted net income per common share is as follows:  


 
                                       Three Months Ended  Nine Months Ended
                                       -------------------------------------
                                          Sep 30   Sep 30    Sep 30   Sep 30
                                            2013     2012      2013     2012
----------------------------------------------------------------------------
Numerator for basic net income (loss)                                       
 per common share                       $ 87,106 $ (2,571) $201,372 $ 71,748
  Adjustment for the effect of TSARs:                                       
    Cash settled recovery included in                                       
     net income                                -      306         -        -
    Equity settled expense                     -     (733)        -        -
----------------------------------------------------------------------------
Numerator for diluted net income (loss)                                     
 per common share                       $ 87,106 $ (2,998) $201,372 $ 71,748
----------------------------------------------------------------------------

 
Stock options and, if calculated using the equity-settled method,
TSARs 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
denominator used for the purposes of calculating basic and diluted
net income per common share is as follows: 


 
                                  Three Months Ended       Nine Months Ended
                            ------------------------------------------------
                                  Sep 30      Sep 30      Sep 30      Sep 30
                                    2013        2012        2013        2012
----------------------------------------------------------------------------
Denominator for basic net                                                   
 income per common share      95,488,882  93,880,221  95,046,274  93,691,597
Effect of dilutive stock                                                    
 options                       1,065,434           -   1,198,591   1,195,682
----------------------------------------------------------------------------
Denominator for diluted net                                                 
 income per common share      96,554,316  93,880,221  96,244,865  94,887,279
----------------------------------------------------------------------------

 
For the three month and nine month periods ended September 30, 2013
and 2012, basic and diluted net income (loss) per common share
attributable to Methanex shareholders were as follows: 


 
                                               Three Months      Nine Months
                                                      Ended            Ended
                                           ---------------------------------
                                             Sep 30  Sep 30   Sep 30  Sep 30
                                   
            2013    2012     2013    2012
----------------------------------------------------------------------------
Basic net income (loss) per common share    $  0.91 $ (0.03) $  2.12 $  0.77
Diluted net income (loss) per common share  $  0.90 $ (0.03) $  2.09 $  0.76
----------------------------------------------------------------------------

 
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 September 30, 2013 is as
follows: 


 
                                        SARs                  TSARs         
                              ----------------------------------------------
                                             Weighted               Weighted
                                              Average                Average
                                Number of    Exercise  Number of    Exercise
                                    Units       Price      Units       Price
----------------------------------------------------------------------------
Outstanding at December 31,                                                 
 2012                             897,525   $   28.63  1,815,535   $   28.45
  Granted                         360,900       38.24    544,200       38.24
  Exercised                       (98,176)      27.01    (31,400)      27.27
  Cancelled                        (5,500)      30.86     (2,700)      31.73
----------------------------------------------------------------------------
Outstanding at June 30, 2013    1,154,749   $   31.76  2,325,635   $   30.75
----------------------------------------------------------------------------
  Exercised                       (24,482)      27.61   (239,700)      25.33
  Cancelled                             -           -     (2,200)      30.91
----------------------------------------------------------------------------
Outstanding at September 30,                                                
 2013                           1,130,267   $   31.85  2,083,735   $   31.37
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                          Stock Options     
                                                     -----------------------
                                                                    Weighted
                                                                     Average
                                                       Number of    Exercise
                                                           Units       Price
----------------------------------------------------------------------------
Outstanding at December 31, 2012                       2,982,947   $   19.97
  Granted                                                 75,600       38.24
  Exercised                                           (1,018,520)      23.39
  Cancelled                                              (48,128)      16.13
----------------------------------------------------------------------------
Outstanding at June 30, 2013                           1,991,899   $   19.01
----------------------------------------------------------------------------
  Exercised                                             (331,304)      14.19
----------------------------------------------------------------------------
Outstanding at September 30, 2013                      1,660,595   $   19.97
----------------------------------------------------------------------------
                                                                            
                                                                            
                          Units Outstanding at         Units Exercisable at 
                           September 30, 2013           September 30, 2013  
                  ----------------------------------------------------------
                      Weighted                                              
                       Average               Weighted               Weighted
                     Remaining   Number of    Average   Number of    Average
Range of Exercise  Contractual       Units   Exercise       Units   Exercise
 Prices           Life (Years) Outstanding      Price Exercisable      Price
----------------------------------------------------------------------------
SARs:                                                                       
  $23.36 to 29.18          4.0     453,637  $   26.86     360,326  $   26.40
  $31.73 to 38.24          6.0     676,630      35.20      93,670      31.73
----------------------------------------------------------------------------
                           5.2   1,130,267  $   31.85     453,996  $   27.50
----------------------------------------------------------------------------
TSARs:                                                                      
  $23.36 to 29.18          4.0     911,545  $   27.03     748,464  $   26.65
  $31.73 to 38.24          5.9   1,172,190      34.75     205,760      31.73
----------------------------------------------------------------------------
                           5.0   2,083,735  $   31.37     954,224  $   27.74
----------------------------------------------------------------------------
Stock options:                                                              
  $6.33 to 11.56           2.4     631,765  $    6.40     631,765  $    6.40
  $23.92 to 38.24          2.1   1,028,830      28.30     876,180      27.21
----------------------------------------------------------------------------
                           2.2   1,660,595  $   19.97   1,507,945  $   18.49
----------------------------------------------------------------------------

 
(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 September 30, 2013 was $64.4 million compared with the
recorded liability of $54.4 million. The difference between the fair
value and the recorded liability of $10.0 million will be recognized
over the weighted average remaining vesting period of approximately
1.6 years. The weighted average fair value was estimated at September
30, 2013 using the Black-Scholes option pricing model. 
For the three and nine month periods ended September 30, 2013,
compensation expense related to SARs and TSARs included an expense in
cost of sales and operating expenses of $22.3 million (2012 - expense
of $0.1 million) and an expense of $46.2 million (2012 - expense of
$7.2 million), respectively. This included an expense of $20.3
million (2012 - recovery of $1.1 million) and an expense of $39.4
million (2012 - expense of $0.3 million) related to the effect of the
change in the Company's share price for the three and nine month
periods ended September 30, 2013.  
(iii) Compensation expense related to stock options: 
For the three and nine month periods ended September 30, 2013,
compensation expense related to stock options included in cost of
sales and operating expenses was $0.2 million (2012 - $0.2 million)
and $0.6 million (2012 - $0.6 million), respectively. The fair value
of each stock option grant was estimated on the grant date using the
Black-Scholes option pricing model. 
b) Deferred, restricted and performance share units:  
Deferred, restricted and performance share units outstanding at
September 30, 2013 are as follows: 


 
                                         Number of    Number of   Number of 
                                          Deferred   Restricted Performance 
                                       Share Units  Share Units Share Units 
----------------------------------------------------------------------------
Outstanding at December 31, 2012           566,850       38,883   1,053,869 
  Granted                                   10,122       22,500     304,600 
  Granted in-lieu of dividends               4,860          573       8,788 
  Redeemed                                 (49,432)           -    (410,177)
  Cancelled                                      -            -      (7,690)
----------------------------------------------------------------------------
Outstanding at June 30, 2013               532,400       61,956     949,390 
----------------------------------------------------------------------------
  Granted                                      525            -           - 
  Granted in-lieu of dividends               2,074          244       3,748 
  Cancelled                                      -            -        (414)
-------------------------------------------------
---------------------------
Outstanding at September 30, 2013          534,999       62,200     952,724 
----------------------------------------------------------------------------

 
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 net income 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
September 30, 2013 was $88.5 million compared with the recorded
liability of $72.7 million. The difference between the fair value and
the recorded liability of $15.8 million will be recognized over the
weighted average remaining vesting period of approximately 1.8 years. 
For the three and nine month periods ended September 30, 2013,
compensation expense related to deferred, restricted and performance
share units included in cost of sales and operating expenses was an
expense of $15.5 million (2012 - expense of $3.1 million) and an
expense of $43.2 million (2012 - expense of $17.1 million),
respectively. This included an expense of $13.0 million (2012 -
expense of $1.1 million) and an expense of $33.9 million (2012 -
expense of $7.3 million) related to the effect of the change in the
Company's share price for the three and nine month periods ended
September 30, 2013.  
Changes in non-cash working capital:  
Changes in non-cash working capital for the three and nine month
periods ended September 30, 2013 were as follows: 


 
                                   Three Months Ended     Nine Months Ended 
                                 -------------------------------------------
                                     Sep 30    Sep 30     Sep 30     Sep 30 
                                       2013      2012       2013       2012 
----------------------------------------------------------------------------
Decrease (increase) in non-cash                                             
 working capital:                                                           
  Trade and other receivables      $  5,930  $ 10,270)  $(54,175)  $(26,960)
  Inventories                        16,416    20,195      1,820     45,260 
  Prepaid expenses                    1,505     6,185     (4,135)    (2,601)
  Trade, other payables and                                                 
   accrued liabilities, including                                           
   long-term payables included in                                           
   other long-term liabilities       12,227    33,476     99,199     12,189 
----------------------------------------------------------------------------
                                     36,078    49,586     42,709     27,888 
Adjustments for items not having                                            
 a cash effect and working                                                  
 capital changes relating to                                                
 taxes and interest paid              4,781        39    (20,557)    (1,599)
----------------------------------------------------------------------------
Changes in non-cash working                                                 
 capital having a cash effect      $ 40,859  $ 49,625   $ 22,152   $ 26,289 
----------------------------------------------------------------------------
                                                                            
These changes relate to the                                                 
 following activities:                                                      
  Operating                        $  1,282  $ 57,165   $(17,741)  $ 35,144 
  Investing                          39,577    (7,540)    39,893     (8,855)
----------------------------------------------------------------------------
Changes in non-cash working                                                 
 capital                           $ 40,859  $ 49,625   $ 22,152   $ 26,289 
----------------------------------------------------------------------------

 
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
Statements of Financial Position at fair value. Derivative financial
instruments are classified as held-for-trading and are recorded on
the Consolidated Statements 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, Egypt interest rate swaps, and New Zealand dollar
hedges 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 $315
million as at September 30, 2013. The notional amount decreases over
the expected repayment period. At September 30, 2013, these interest
rate swap contracts had a negative fair value of $19.4 million
(December 31, 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 and buy New Zealand dollar at a fixed USD
exchange rate. At September 30, 2013, the Company had outstanding
forward exchange contracts designated as cash flow hedges to sell a
notional amount of EUR19.1 million and buy a notional amount of NZD
$69.4 million in exchange for US dollars. The euro contracts had a
negative fair value of $0.7 million recorded in current liabilities
and the New Zealand dollar contracts had a positive fair value of
$1.8 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: 


 
                                                    September 30, 2013      
                                              ------------------------------
As at                                          Carrying Value     Fair Value
----------------------------------------------------------------------------
Long-term debt                                    $ 1,184,319    $ 1,195,607
----------------------------------------------------------------------------

 
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 September
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 Comp
any'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 and nine months ended September 30, 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 and nine months ended September
30, 2012 are as follows:  


 
Consolidated Statement of Financial Position                                
As at December 31, 2012                                                     
                                                                            
                                                  Restatement               
                                                     of Atlas               
                                  As Previously     to Equity               
                                         Stated        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 and Comprehensive Income                   
Three months ended September 30, 2012                                       
                                                                            
                                                  Restatement               
                                  As Previously   of Atlas to               
                                         Stated Equity Method   As Adjusted 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue                             $   655,330   $   (47,394)  $   607,936 
Cost of sales and operating                                                 
 expenses                              (538,994)       31,311      (507,683)
Depreciation and amortization           (47,689)        6,879       (40,810)
Geismar project relocation                                                  
 expenses and changes                   (60,857)            -       (60,857)
----------------------------------------------------------------------------
Operating income                          7,790        (9,204)       (1,414)
Earnings of associate                         -         5,799         5,799 
Finance costs                           (17,764)        2,418       (15,346)
Finance income and other expenses        (3,398)          (53)       (3,451)
----------------------------------------------------------------------------
Income before income tax expense        (13,372)       (1,040)      (14,412)
Income tax expense:                                         -               
  Current                                (6,844)        1,714        (5,130)
  Deferred                               21,661          (674)       20,987 
----------------------------------------------------------------------------
                                         14,817         1,040        15,857 
----------------------------------------------------------------------------
Net income                          $     1,445   $         -   $     1,445 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Change in fair value of forward                                             
 exchange contracts, net of tax             528             -           528 
Change in fair value of interest                                            
 rate swap contracts, net of tax         (1,744)            -        (1,744)
Realized loss on interest rate                                              
 swap contracts reclassified to                                             
 finance costs, net of tax                2,719             -         2,719 
----------------------------------------------------------------------------
Comprehensive income                $  
   2,948   $         -   $     2,948 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation                                                      
   shareholders                          (1,458)            -        (1,458)
  Non-controlling interests               4,406             -         4,406 
----------------------------------------------------------------------------
                                    $     2,948   $         -   $     2,948 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Consolidated Statement of Income and Comprehensive Income                   
Nine months ended September 30, 2012                                        
                                                                            
                                                  Restatement               
                                  As Previously   of Atlas to               
                                         Stated Equity Method   As Adjusted 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue                             $ 1,977,300   $  (102,043)  $ 1,875,257 
Cost of sales and operating                                                 
 expenses                            (1,614,320)       78,781    (1,535,539)
Depreciation and amortization          (130,092)       15,317      (114,775)
Geismar project relocation                                                  
 expenses and changes                   (64,543)            -       (64,543)
----------------------------------------------------------------------------
Operating income                        168,345        (7,945)      160,400 
Loss of associate                             -          (214)         (214)
Finance costs                           (56,434)        7,465       (48,969)
Finance income and other expenses        (2,012)          118        (1,894)
----------------------------------------------------------------------------
Income before income tax expense        109,899          (576)      109,323 
Income tax expense:                                                         
  Current                               (22,001)          721       (21,280)
  Deferred                               12,503          (145)       12,358 
----------------------------------------------------------------------------
                                         (9,498)          576        (8,922)
----------------------------------------------------------------------------
Net income                          $   100,401   $         -   $   100,401 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Change in fair value of forward                                             
 exchange contracts, net of tax            (343)            -          (343)
Change in fair value of interest                                            
 rate swap contracts, net of tax         (5,104)            -        (5,104)
Realized loss on interest rate                                              
 swap contracts reclassified to                                             
 finance costs, net of tax                8,421             -         8,421 
----------------------------------------------------------------------------
Comprehensive income                $   103,375   $         -   $   103,375 
----------------------------------------------------------------------------
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Attributable to:                                                            
  Methanex Corporation                                                      
   shareholders                          73,395             -        73,395 
  Non-controlling interests              29,980             -        29,980 
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                                    $   103,375   $         -   $   103,375 
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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 in a change to the presentation of the Company's
Consolidated Statements of Comprehensive Income. 
12. Subsequent Event:  
On October 22, 2013, the Company agreed to sell a 10% interest in
Egyptian Methanex Methanol Company S.A.E. (EMethanex) for cash
proceeds of $110 million. The sale is subject to the completion of
certain conditions precedent. Methanex will continue to account for
EMethanex using consolidation accounting and as a result will
recognize the difference between the proceeds received and the
carrying value of its investment as a change in shareholders' equity. 


 
Methanex Corporation                                                        
Quarterly History (unaudited)                                               
                                                                            
                                      YTD 2013   Q3 2013   Q2 2013   Q1 2013
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METHANOL SALES VOLUMES                                                      
(thousands of tonnes)                                                       
                                                                            
Methanex-produced                        3,085     1,040     1,021     1,024
Purchased methanol                       2,052       715       749       588
Commission sales (1)                       698       237       242       219
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                                         5,835     1,992     2,012     1,831
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METHANOL PRODUCTION                                                         
(thousands of tonnes)                                                       
                                                                            
New Zealand                              1,019       349       361       309
Atlas, Trinidad (63.1%)                    703       254       201       248
Titan, Trinidad                            478       128       169       181
Egypt (60%)                                464       168       163       133
Medicine Hat                               390       130       129       131
Chile                                       96         6        29        61
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                                         3,150     1,035     1,052     1,063
-----------------------------------
-----------------------------------------
                                                                            
AVERAGE REALIZED METHANOL PRICE (2)                                         
  ($/tonne)                                424       438       425       412
  ($/gallon)                              1.28      1.32      1.28      1.24
                                                                            
PER SHARE INFORMATION ($ per share)                                         
 (3)                                                                        
  Basic net income (loss)                 2.12      0.91      0.57      0.64
  Diluted net income (loss)               2.09      0.90      0.56      0.63
  Adjusted net income (4)                 3.16      1.22      1.02      0.92
 
                                                                            
                                        2012      Q4      Q3      Q2      Q1
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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
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                                       7,459   1,899   1,899   1,846   1,815
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METHANOL PRODUCTION                                                         
(thousands of tonnes)                                                       
                                                                            
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
Chile                                    313      59      59      82     113
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                                       4,071   1,067   1,025   1,034     945
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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 net income (4)               1.90    0.64    0.38    0.47    0.41
 
                                        2011      Q4      Q3      Q2      Q1
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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
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                                       7,514   1,904   1,890   1,865   1,855
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METHANOL PRODUCTION                                                         
(thousands of tonnes)                                                       
                                                                            
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       -
Chile                                    554     113     116     142     183
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                                       3,847     961   1,035   1,050     801
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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 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 sale
s 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:
Methanex Corporation - Investor Inquiries
Sandra Daycock
Director, Investor Relations
604-661-2600
invest@methanex.com
www.methanex.com
 
 
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