Methanex Reports Higher Adjusted EBITDA in the First Quarter of 2014

Methanex Reports Higher Adjusted EBITDA in the First Quarter of 2014  VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/29/14 --   For the first quarter of 2014, Methanex (TSX: MX)(NASDAQ: MEOH) reported Adjusted EBITDA(1) of $255 million and Adjusted net income(1) of $160 million ($1.65 per share on a diluted basis(1)). These figures compare with Adjusted EBITDA(1) of $245 million and Adjusted net income(1) of $167 million ($1.72 per share on a diluted basis(1)) for the fourth quarter of 2013.    John Floren, President and CEO of Methanex commented, "This was another excellent quarter. Increased production resulting from our 2013 capacity growth initiatives in New Zealand and Medicine Hat, together with higher methanol pricing, contributed to robust EBITDA and earnings results this quarter." Mr. Floren added, "The methanol industry environment remains favorable. In Q4 2013, we saw methanol prices rise rapidly as a result of industry supply constraints. Late in Q1 2014, several idle plants resumed operation which resulted in methanol pricing moderating to levels seen prior to the supply disruptions. Industry demand remains steady, particularly for methanol into energy, and limited new supply additions are expected in the near to medium term."   Mr. Floren added, "We continue to target methanol production from our Geismar 1 facility in late 2014 and Geismar 2 in early 2016. These two facilities are expected to provide a two million tonne increase in our operating capacity to eight million tonnes by 2016, at a time when new market supply is expected to be limited."   Mr. Floren concluded, "With approximately $700 million of cash on hand, an undrawn credit facility, robust balance sheet, and strong cash flow generation, we are well positioned to deliver on our growth projects, continue to grow our business and deliver on our commitment to return excess cash to shareholders. Our announcement today of a new 5% normal course issuer bid share repurchase program, along with a 25% increase in our quarterly dividend, reflects that commitment."   A conference call is scheduled for April 30, 2014 at 12:00 noon ET (9:00 am PT) to review these first quarter results. To access the call, dial the conferencing operator ten minutes prior to the start of the call at (41 6) 340-2218, or toll free at (866) 226-1793. A playback version of the conference call will be available until May 21, 2014 at (905) 694-9451, or toll free at (800) 408-3053. The passcode for the playback version is 3924003. Presentation slides summarizing Q1-14 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 producer and supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX" and on the NASDAQ Global Market in the United States under the trading symbol "MEOH".  FORWARD-LOOKING INFORMATION WARNING   This First Quarter 2014 press release contains forward-looking statements with respect to us and the chemical industry. Refer to Forward-Looking Information Warning in the attached First Quarter 2014 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 Additional Information - Supplemental        Non-GAAP Measures section of the attached Interim Report for the three       months ended March 31, 2014 for reconciliations to the most comparable       GAAP measures.                                                            Interim Report for the Three Months Ended March 31, 2014     At April 29, 2014 the Company had 96,523,956 common shares issued and outstanding and stock options exercisable for 1,665,436 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                                            FIRST QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS  Except where otherwise noted, all currency amounts are stated in United States dollars.  FINANCIAL AND OPERATIONAL HIGHLIGHTS        --  A reconciliation from net income attributable to Methanex shareholders     to Adjusted net income(1) and the calculation of Adjusted net income per     common share(1) is as follows:                                                      Three Months Ended                                                  ----------------------------------- ($ millions except number of shares and       Mar 31      Dec 31      Mar 31  per share amounts)                             2014        2013        2013 ----------------------------------------------------------------------------   Net income attributable to Methanex                                           shareholders                               $    145    $    128    $     60   Mark-to-market impact of share-based                                          compensation, net of tax                       15          34          28   Write-off of oil and gas rights, net of                                       tax                                             -           5           - ---------------------------------------------------------------------------- Adjusted net income (1)                     $    160    $    167    $     88 ---------------------------------------------------------------------------- Diluted weighted average shares                                               outstanding (millions)                           97          97          96 Adjusted net income per common share (1)    $   1.65    $   1.72    $   0.92 ----------------------------------------------------------------------------   --  We recorded Adjusted EBITDA(1) of $255 million for the first quarter of     2014 compared with $245 million for the fourth quarter of 2013. The     increase in Adjusted EBITDA(1) was primarily due to an increase in our     average realized price to $524 per tonne for the first quarter of 2014     fr om $493 per tonne for the fourth quarter of 2013 and an increase in     sales of Methanex-produced methanol.  --  Production for the first quarter of 2014 was 1,226,000 tonnes compared     with 1,194,000 tonnes for the fourth quarter of 2013. Refer to the     Production Summary section.  --  Sales of Methanex-produced methanol were 1,228,000 tonnes in the first     quarter of 2014 compared with 1,190,000 in the fourth quarter of 2013.  --  We continue to progress our Geismar relocation projects. We are     targeting to be producing methanol from Geismar 1 in late 2014 and from     Geismar 2 in early 2016.   --  During the first quarter of 2014, we paid a $0.20 per share dividend to     shareholders for a total of $19 million.  --  We announced today that the Board of Directors has approved a 25%     increase to our quarterly dividend to shareholders, from $0.20 per share     per quarter to $0.25 per share per quarter, effective with the dividend     payable June 30, 2014.  --  We also announced today that the Board of Directors has approved a 5%     normal course issuer bid under which the Company may repurchase up to     4.8 million common shares.    (1) These items are non-GAAP measures that do not have any standardized          meaning prescribed by GAAP and therefore are unlikely to be comparable       to similar measures presented by other companies. Refer to Additional        Information - Supplemental Non-GAAP Measures section for a description       of each non-GAAP measure and reconciliations to the most comparable GAAP     measures.                                                                 This First Quarter 2014 Management's Discussion and Analysis ("MD&A") dated April 29, 2014 for Methanex Corporation ("the Company") should be read in conjunction with the Company's condensed consolidated interim financial statements for the period ended March 31, 2014 as well as the 2013 Annual Consolidated Financial Statements and MD&A included in the Methanex 2013 Annual Report. Unless otherwise indicated, the financial information presented in this interim report is prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The Methanex 2013 Annual Report and additional information relating to Methanex is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.  FINANCIAL AND OPERATIONAL DATA                                                          Three Months Ended                                                   ---------------------------------- ($ millions, except per share amounts and     Mar 31      Dec 31      Mar 31  where noted)                                   2014        2013        2013 ----------------------------------------------------------------------------   Production (thousands of tonnes)                                              (attributable to Methanex shareholders)       1,226       1,194       1,063   Sales volumes (thousands of tonnes):                                           Methanex-produced methanol (attributable                                      to Methanex shareholders)                   1,228       1,190       1,030   Purchased methanol                             654         663         588   Commission sales                               296         274         219 ----------------------------------------------------------------------------   Total sales volumes (1)                      2,178       2,127       1,837   Methanex average non-discounted posted                                        price ($ per tonne) (2)                         613         557         474 Average realized price ($ per tonne) (3)         524         493         412   Adjusted EBITDA (attributable to Methanex                                     shareholders) (4)                               255         245         149 Cash flows from operating activities             179         162         118 Adjusted net income (attributable to                                          Methanex shareholders) (4)                      160         167          88 Net income attributable to Methanex                                           shareholders                                    145         128          60   Adjusted net income per common share                                          (attributable to Methanex shareholders)                                      (4)                                            1.65        1.72        0.92 Basic net income per common share                                             (attributable to Methanex shareholders)        1.51        1.33        0.64 Diluted net income per common share                                           (attributable to Methanex shareholders)        1.50        1.32        0.63   Common share information (millions of                                         shares):                                                                      Weighted average number of common shares        96          96          95   Diluted weighted average number of                                            common shares                                  97          97          96   Number of common shares outstanding, end                                      of period                                      97          96          95 ---------------------------------------------------------------------------- (1) Methanex-produced methanol includes volumes produced by Chile using          natural gas supplied from Argentina under a tolling arrangement.             Commission sales represent volumes marketed on a commission basis            related to 36.9% of the Atlas methanol facility and the portion 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 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 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                                          Q1 2014               Q4 2013      Q1 2013 (thousands of tonnes)     Capacity(1)   Production   Production   Production ----------------------------------------------------------------------------     New Zealand (2)                   608          500          400          309   Atlas (Trinidad) (63.1%                                                       interest)                        281          249          268          248   Titan (Trinidad)                  218          149          173          181   Egypt (50% interest)(3)           158          139          159          133   Medicine Hat (Canada)             140          122           86          131   Chile I and IV                    430           67          108           61   Geismar 1 and 2                                                               (Louisiana, USA)(4)                -            -            -            - ----------------------------------------------------------------------------                                 1,835        1,226        1,194        1,063 ---------------------------------------------------------------------------- (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 New Zealand section     below).                                                                  (3) On December 9, 2013, we completed a sale of 10% equity interest in the       Egypt facility. Production figures prior to December 9, 2013 reflect a       60% interest.                                                            (4) We are relocating two 1.0 million tonne idle Chile facilities to             Geismar, Louisiana and are targeting to be producing methanol from           Geismar 1 in late 2014 and Geismar 2 by early 2016.                       New Zealand   Our New Zealand methanol facilities produced 500,000 tonnes of methanol in the first quarter of 2014 compared with 400,000 tonnes in the fourth quarter of 2013. With all three facilities now operating, we are able to produce up to 2.4 million tonnes annually, depending on natural gas composition. During the first quarter 2014, production was primarily impacted by an upstream supplier who performed major maintenance on an offshore gas platform resulting in losses of 50,000 tonnes. We continue to work with suppliers in New Zealand to secure gas that will allow our New Zealand facilities to operate at full capacity.   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). Production in Trinidad during the quarter was impacted by a combination of minor unplanned outages and gas curtailments. The Titan facility produced 149,000 tonnes in the first quarter of 2014 compared with 173,000 tonnes in the fourth quarter of 2013. The Atlas facility produced 249,000 tonnes in the first quarter of 2014 compared with 268,000 tonnes in the fourth quarter of 2013.    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   On a 100% basis, the Egypt methanol facility produced 278,000 tonnes in the first quarter of 2014 (Methanex share of 139,000 tonnes) compared with 273,000 tonnes (Methanex share of 159,000 tonnes) in the fourth quarter of 2013. Production during the first quarter of 2014 and the fourth quarter of 2013 continued to be impacted by natural gas supply restrictions.   The Egypt facility has experienced periodic natural gas supply restrictions since mid-2012 which have resulted in production below full capacity. This situation may persist in the future and become more acute during the summer months when electricity demand is at its peak. Refer to page 23 of the Risk Factors and Risk Management section of our 2013 Annual Report for further details.  Medicine Hat, Canada   During the first quarter of 2014, we produced 122,000 tonnes at our Medicine Hat facility compared with 86,000 tonnes during the fourth quarter of 2013. The Medicine Hat facility experienced an unplanned outage in the fourth quarter of 2013 and restarted on January 10, 2014.  Chile   During the first quarter of 2014, we produced 67,000 tonnes in Chile operating one plant at approximately 30% of production capacity, supported by natural gas supplies from Chile and from Argentina through a tolling arrangement.   As a result of the short-term outlook for gas supply in Chile and Argentina, we anticipate idling our Chile operations in early May due to insufficient natural gas feedstock to keep our plant operating through the southern hemisphere winter. We are continuing to work with Empresa Nacional del Petroleo (ENAP) and others to secure sufficient natural gas to sustain our operations and while a restart of a Chile plant is possible later in 2014, the restart is dependent on securing a sustainable natural gas supply to our facilities on economic terms from Chile and Argentina to operate over the medium term.   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 continue to progress our two Geismar relocation projects. We are targeting to be producing methanol from the 1.0 million tonne Geismar 1 facility in late 2014 and from the 1.0 million tonne Geismar 2 facility in early 2016. During the first quarter of 2014, we incurred $130 million of capital expenditures related to these projects, excluding capitalized interest.  FINANCIAL RESULTS   For the first quarter of 2014 we recorded Adjusted EBITDA of $255 million and Adjusted net income of $160 million ($1.65 per share on a diluted basis). This compares with Adjusted EBITDA of $245 million and Adjusted net income of $167 million ($1.72 per share on a diluted basis) for the fourth quarter of 2013.   For the first quarter of 2014, we reported net income attributable to Methanex shareholders of $145 million ($1.50 per share on a diluted basis) compared with net income attributable to Methanex shareholders for the fourth quarter of 2013 of $128 million ($1.32 income per share on a diluted basis).   We calculate Adjusted EBITDA and Adjusted net income by including amounts related to our equity share of the Atlas (63.1% interest) and Egypt (50% interest) facilities and by excluding the mark-to-market impact of share-based compensation as a result of changes in our share price and items which are considered by management to be non-operational. Refer to Additional Information - Supplemental Non-GAAP Measures section for a further discussion on how we calculate these measures. Our analysis of depreciation and amortization, finance costs, finance income and other expenses and income taxes is consistent with the presentation of our consolidated statements of income and excludes amounts related to Atlas.    A reconciliation from net income attributable to Methanex shareholders to Adjusted net income and the calculation of Adjusted net income per common share is as follows:                                                           Three Months Ended                                                   ---------------------------------- ($ millions except number of shares and       Mar 31      Dec 31      Mar 31  per share amounts)                             2014        2013        2013 ----------------------------------------------------------------------------   Net income attributable to Methanex                                           shareholders                               $    145    $    128    $     60   Mark-to-market impact of share-based                                          compensation, net of tax                       15          34          28   Write-off of oil and gas rights, net of                                       tax                                             -           5           - ---------------------------------------------------------------------------- Adjusted net income (1)                     $    160    $    167    $     88 ---------------------------------------------------------------------------- Diluted weig hted average shares                                               outstanding (millions)                           97          97          96 Adjusted net income per common share (1)    $   1.65    $   1.72    $   0.92 ----------------------------------------------------------------------------   (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 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, write-off of oil and gas rights, finance costs, finance income and other expenses and income taxes. A summary of our consolidated statements of income is as follows:                                                        Three Months Ended                                                 --------------------------------------                                            Mar 31       Dec 31       Mar 31  ($ millions)                                 2014         2013         2013  ----------------------------------------------------------------------------   Consolidated statements of income:                                             Revenue                               $     968    $     881    $     652    Cost of sales and operating                                                   expenses, excluding mark-to-market                                           impact of share-based compensation        (692)        (634)        (497)   Adjusted EBITDA of associate (Atlas)                                          (1)                                         17           26            9  ----------------------------------------------------------------------------                                               293          273          164  Comprised of:                                                                  Adjusted EBITDA (attributable to                                              Methanex shareholders) (2)                 255          245          149    Attributable to non-controlling                                               interests                                   38           28           15  ----------------------------------------------------------------------------                                               293          273          164  Mark-to-market impact of share-based                                          compensation                                 (18)         (37)         (31) Depreciation and amortization                 (35)         (35)         (30) Write-off of oil and gas rights                 -           (8)           -  Earnings of associate, excluding                                              amount included in Adjusted EBITDA                                           (1)                                           (9)          (9)          (8) Finance costs                                 (11)         (13)         (15) Finance income and other expenses               -            2           (2) Income tax expense                            (52)         (29)         (12) ---------------------------------------------------------------------------- Net income                              $     168    $     144    $      66  ---------------------------------------------------------------------------- Net income attributable to Methanex                                           shareholders                           $     145    $     128    $      60  ----------------------------------------------------------------------------   (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 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 How We Analyze Our Business section.   The changes in Adjusted EBITDA resulted from changes in the following:                                                          Q1 2014            Q1 2014                                             compared with      compared with  ($ millions)                                     Q4 2013            Q1 2013  ----------------------------------------------------------------------------   Average realized price                     $          58      $         209  Sales volume                                           7                 27  Total cash costs                                     (55)              (130) ---------------------------------------------------------------------------- Increase in Adjusted EBITDA                $          10      $         106  ----------------------------------------------------------------------------  Average realized price                                                            Three Months Ended                                                    -------------------------------                                                 Mar 31     Dec 31     Mar 31 ($ per tonne)                                     2014       2013       2013 ----------------------------------------------------------------------------   Methanex average non-discounted posted price       613        557        474 Methanex average realized price                    524        493        412 ----------------------------------------------------------------------------  Entering the first quarter of 2014, methanol prices were higher as a result of strong demand and industry supply issues, primarily in Asia Pacific. Late in the first quarter, several plants returned to operation and pricing began to moderate (refer to Supply/Demand Fundamentals section). Our average non-discounted posted price for the first quarter of 2014 was $613 per tonne compared with $557 per tonne for the fourth quarter of 2013 and $474 per tonne for the first quarter of 2013. Our average realized price for the first quarter of 2014 was $524 per tonne compared with $493 per tonne for the fourth quarter of 2013 and $412 per tonne for the first quarter of 2013. The change in average realized price for the first quarter of 2014 increased Adjusted EBITDA by $58 million compared with the fourth quarter of 2013 and increased Adjusted EBITDA by $209 million compared with the first quarter of 2013.   Sales volume   Methanol sales volumes excluding commission sales volumes were higher for all periods presented and this increased Adjusted EBITDA by the amounts noted in the table above.  Total cash costs   The primary drivers of changes in our total cash costs are changes in the cost of methanol we produce at our facilities (Methanex-produced methanol) and changes in the cost of methanol we purchase from others (purchased methanol). All of our production facilities except Me dicine Hat and Chile are underpinned by natural gas purchase agreements with pricing terms that include base and variable price components. We supplement our production with methanol produced by others through methanol offtake contracts and purchases on the spot market to meet customer needs and support our marketing efforts within the major global markets.   We have adopted the first-in, first-out method of accounting for inventories and it generally takes between 30 and 60 days to sell the methanol we produce or purchase. Accordingly, the changes in Adjusted EBITDA as a result of changes in Methanex-produced and purchased methanol costs primarily depend on changes in methanol pricing and the timing of inventory flows.   The impact on Adjusted EBITDA from changes in our cash costs are explained below:                                                        Q1 2014              Q1 2014                                           compared with        compared with  ($ millions)                                   Q4 2013              Q1 2013  ----------------------------------------------------------------------------   Methanex-produced methanol costs       $           (25)     $           (50) Proportion of Methanex-produced                                               methanol sales                                      6                    3  Purchased methanol costs                           (27)                 (78) Other, net                                          (9)                  (5) ----------------------------------------------------------------------------                                        $           (55)     $          (130) ----------------------------------------------------------------------------  Methanex-produced methanol costs   We purchase natural gas for the New Zealand, Trinidad and Egypt methanol facilities under natural gas purchase agreements where the unique terms of each contract include a base price and a variable price component linked to the price of methanol to reduce our commodity price risk exposure. The variable price component of each gas contract is adjusted by a formula related to methanol prices above a certain level. For the first quarter of 2014 compared with the fourth quarter of 2013 and the first quarter of 2013, Methanex-produced methanol costs were higher by $25 million and $50 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 first quarter of 2014 compared with the fourth quarter of 2013 and the first quarter of 2013, a higher proportion of Methanex-produced methanol sales increased Adjusted EBITDA by $6 million and $3 million, respectively. Sales of Methanex-produced methanol increased in the first quarter of 2014 primarily as a result of higher production from New Zealand.   Purchased methanol costs   Changes in purchased methanol costs for all periods presented are primarily as a result of changes in methanol pricing.  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 first quarter of 2014, we incurred approximately $3 million of Geismar organizational build-up costs compared to $2 million in the fourth quarter of 2013 and nil in the first quarter of 2013. The remaining organizational build-up costs are estimated to be approximately $25 million. The remaining change in other, net compared to the fourth quarter of 2013 primarily relates to an insurance settlement recorded in the fourth quarter of 2013.   Mark-to-Market Impact of Share-based Compensation   We grant share-based awards as an element of compensation. Share-based awards granted include stock options, share appreciation rights, tandem share appreciation rights, deferred share units, restricted share units and performance share units. For all the share-based awards, share-based compensation is recognized over the related vesting period for the proportion of the service that has been rendered at each reporting date. Share-based compensation includes an amount related to the grant-date value and a mark-to-market impact as a result of subsequent changes in the Company's share price. The grant-date value amount is included in Adjusted EBITDA and Adjusted net income. The mark-to-market impact of share-based compensation as a result of changes in our share price is excluded from Adjusted EBITDA and Adjusted net income and analyzed separately.                                                        Three Months Ended                                                ----------------------------------------                                           Mar 31        Dec 31        Mar 31 ($ millions except share price)             2014          2013          2013 ----------------------------------------------------------------------------   Methanex Corporation share price                                              (1 )                                 $    63.94    $    59.24    $    40.63   Grant-date fair value expense                                                 included in Adjusted EBITDA and                                              Adjusted net income                           7             4             6 Mark-to-market impact due to change                                           in share price                               18            37            31 ---------------------------------------------------------------------------- Total share-based compensation                                                expense                              $       25    $       41    $       37 ----------------------------------------------------------------------------   (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 US $59.24 per share at December 31, 2013 to US $63.94 per share at March 31, 2014. As a result of the increase in the share price and the resulting impact on the fair value of the outstanding units, we recorded an $18 million mark-to-market expense on share-based compensation in the first quarter of 2014 compared with a $37 million mark-to-market share-based compensation expense in the fourth quarter of 2013 and a $31 million expense in the first quarter of 2013.   Depreciation and Amortization    Depreciation and amortization was $35 million for the first quarter of 2014 compared with $35 million for the fourth quarter of 2013 and $30 million for the first quarter of 2013. Depreciation and amortization was higher in the first quarter of 2014 compared with the first quarter of 2013 primarily due to higher sales volumes of Methanex-produced methanol.   Finance Costs                                                       Three Months Ended                                                ----------------------------------------                                          Mar 31        Dec 31        Mar 31  ($ millions)                               2014          2013          2013  ----------------------------------------------------------------------------   Finance costs before capitalized                                              interest                             $      16     $      16     $      16  Less capitalized interest                    (5)            (3)           (1) ----------------------------------------------------------------------------   Finance costs                         $      11     $      13     $      15  ----------------------------------------------------------------------------  Finance costs before capitalized interest primarily relate to interest expense on the unsecured notes and limited recourse debt facilities. Capitalized interest relates to interest costs capitalized for the Geismar projects.  Finance Income and Other Expenses                                                        Three Months Ended                                                 --------------------------------------                                            Mar 31       Dec 31       Mar 31  ($ millions)                                 2014         2013         2013  ----------------------------------------------------------------------------   Finance income and other expenses       $       -    $       2    $      (2) ----------------------------------------------------------------------------  The change in finance income and other expenses for all periods presented was primarily due to the impact of changes in foreign exchange rates.  Income Taxes   A summary of our income taxes for the first quarter of 2014 compared with the fourth quarter of 2013 is as follows:                                    Three Months Ended        Three Months Ended                                   March 31, 2014           December 31, 2013                              ------------------------- --------------------------                                         Adjusted                   Adjusted  ($ millions, except             Net          Net           Net          Net   where noted)                Income    Income(1)        Income    Income(1)  ------------------------------------------------- --------------------------   Amount before income tax  $     220    $     210     $     173    $     203  Income tax expense              (52)         (50)          (29)         (36) ------------------------------------------------- -------------------------- Amount after income tax   $     168    $     160     $     144    $     167  ------------------------------------------------- --------------------------   Effective tax rate               24%          24%           17%          18% ----------------------------------------------------------------------------   (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 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 first quarter of 2014, the effective tax rate was 24% compared with 17% for the fourth 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 24% for the first quarter of 2014 compared with 18% for the fourth quarter of 2013. Entering the first quarter of 2014, all previously unrecognized tax benefits in Canada and New Zealand were fully utilized, which contributed to an increase in the effective tax rate.   We earn the majority of our 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%. The statutory rates in Canada and New Zealand are 25% and 28%, respectively. 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                      Methanex Non-Discounted Regional Posted Prices (1)                                                Apr          Mar          Feb          Jan (US$ per tonne)                  2014         2014         2014         2014 ----------------------------------------------------------------------------   United States                     599          632          632          632 Europe (2)                        565          610          610          610 Asia Pacific                      480          590          590          590 ---------------------------------------------------------------------------- (1) Discounts from our posted prices are offered to customers based on           various factors.                                                         (2) EUR412 for Q2 2014 (Q1 2014 - EUR450) converted to United States             dollars.                                                                 ----------------------------------------------------------------------------  We estimate that methanol demand, excluding methanol demand from integrated methanol to olefins facilities, is currently approximately 57 million tonnes on an annualized basis.   Entering the first quarter of 2014, we experienced rising methanol prices due to continued supply constraints, primarily in Asia Pacific. During the quarter, several plants returned to operation and pricing began to moderate. Our average non-discounted price in the first quarter of 2014 was $613 per tonne compared with $557 per tonne in the fourth quarter of 2013. We recently announced our North American non-discounted price for May at $565 per tonne and our Asia Pacific price at $460 per tonne.   The outlook for methanol demand growth continues to be strong. Traditional chemical derivatives consume about 60% of global methanol demand and growth is correlated to industrial production.   Energy-related applications consume the remaining 40% 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, 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 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 over 3 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.   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 are relocating two idle Chile facilities to Geismar, Louisiana and are targeting to be producing methanol from the first 1.0 million tonne facility by late 2014 and the second 1.0 million tonne facility in early 2016. A 1.3 million tonne Celanese plant is currently under construction in Bishop, Texas. We expect that production from new capacity in China will be consumed in that country and that higher cost production capacity in China will need to operate in order to satisfy demand growth.  LIQUIDITY AND CAPIT AL RESOURCES   Cash flows from operating activities in the first quarter of 2014 increased by $17 million to $179 million compared with $162 million for the fourth quarter of 2013 and increased by $61 million compared to $118 million for the first quarter of 2013. The changes in cash flows from operating activities resulted from changes in the following:                                                           Q1 2014           Q1 2014                                              compared with     compared with  ($ millions)                                      Q4 2013           Q1 2013  ----------------------------------------------------------------------------   Change in Adjusted EBITDA (attributable                                       to Methanex shareholders)                  $          10     $         106  Exclude change in Adjusted EBITDA of                                          associate (Atlas)                                      9                (8) Cash flows attributable to non-                                               controlling interests                                 10                23  Non-cash working capital                               (9)              (44) Income taxes paid                                       4                (2) Share-based payments                                  (16)              (19) Other                                                   9                 5  ---------------------------------------------------------------------------- Increase in cash flows from operating                                         activities                                 $          17     $          61  ----------------------------------------------------------------------------  During the first quarter of 2014, we paid a quarterly dividend of $0.20 per share, or $19 million. Additionally, on April 29, 2014, the Board of Directors approved a 25% increase to our quarterly dividend to shareholders, from $0.20 to $0.25 per share per quarter. The increased dividend will apply commencing with the dividend payable June 30, 2014 to holders of common shares of record on June 16, 2014.  On April 29, 2014, the Board of Directors approved a 5% normal course issuer bid, which allows us to repurchase for cancellation up to 4.8 million shares.  We operate in a highly competitive commodity industry and believe it is appropriate to maintain a conservative balance sheet and retain financial flexibility. At March 31, 2014, our cash balance was $709 million, including $52 million related to the non-controlling interest in Egypt. We invest our cash only in highly rated instruments that have maturities of three months or less to ensure preservation of capital and appropriate liquidity. We have a strong balance sheet and an undrawn $400 million credit facility provided by highly rated financial institutions that expires in mid-2016.   Our planned capital maintenance expenditure program directed towards maintenance, turnarounds and catalyst changes for existing operations is currently estimated to total approximately $140 million to the end of 2015. Capital expenditures during the first quarter, excluding the Geismar projects, were $15 million. We are relocating two methanol plants from our Chile site to Geismar, Louisiana. During the first quarter of 2014, capital expenditures related to the Geismar projects were $130 million, excluding capitalized interest. The remaining budgeted capital expenditures related to the Geismar projects are $505 million, excluding capitalized interest.   We believe we are well positioned to meet our financial commitments, invest to grow the Company and continue to deliver on our commitment to return excess cash to shareholders.  SHORT-TERM OUTLOOK   Entering the second quarter, methanol prices have moderated with additional supply re-entering the market, primarily in Asia Pacific. The methanol price will ultimately depend on the strength of the global economy, industry operating rates, global energy prices, new supply additions and the strength of global demand. We believe that our financial position and financial flexibility, outstanding global supply network and competitive-cost position will provide a sound basis for Methanex to continue to be the leader in the methanol industry and to invest to grow the Company.  CONTROLS AND PROCEDURES   For the three months ended March 31, 2014, 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 50% 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                                                 --------------------------------------                                            Mar 31       Dec 31       Mar 31  ($ millions)                                 2014         2013         2013  ----------------------------------------------------------------------------   Net income attributable to Methanex                                           shareholders                           $     145    $     128    $      60    Mark-to-market impact of share-based                                          compensation                                18           37           31    Depreciation and amortization                35           35           30    Write-off of oil and gas rights               -            8            -    Financ e costs                                11           13           15    Finance income and other expenses             -           (2)           2    Income tax expense                           52           29           12    Earnings of associate, excluding                                              amount included in Adjusted EBITDA                                           (1)                                          9            9            8    Non-controlling interests adjustment                                          (1)                                        (15)         (12)          (9) ---------------------------------------------------------------------------- Adjusted EBITDA (attributable to                                              Methanex shareholders)                 $     255    $     245    $     149  ----------------------------------------------------------------------------   (1) These adjustments represent depreciation and amortization, finance           costs, finance income and other expenses and income tax expense              associated with the 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                                                 -------------------------------------- ($ millions except number of shares        Mar 31       Dec 31       Mar 31   and per share amounts)                      2014         2013         2013  ----------------------------------------------------------------------------   Net income attributable to Methanex                                           shareholders                           $     145    $     128    $      60    Mark-to-market impact of share-based                                          compensation                                18           37           31    Write-off of oil and gas rights               -            8            -    Income tax recovery related to above                                          items                                       (3)          (6)          (3) ---------------------------------------------------------------------------- Adjusted net income                     $     160    $     167    $      88  ---------------------------------------------------------------------------- Diluted weighted average shares                                               outstanding (millions)                        97           97           96  Adjusted net income per common share    $    1.65    $    1.72    $    0.92  ----------------------------------------------------------------------------  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                                              ------------------------------------------- ($ millions, except per share        Mar 31     Dec 31     Sep 30     Jun 30  amounts)                              2014       2013       2013       2013 ----------------------------------------------------------------------------   Revenue                            $    968   $    881   $    758   $    733 Adjusted EBITDA (1,2)                   255        245        184        157 Net income (1)                          145        128         87         54 Adjusted net income (1,2)               160        167        117         99 Basic net income per common share                                             (1)                                   1.51       1.33       0.91       0.57 Diluted net income per common                                                 share (1)                             1.50       1.32       0.90       0.56 Adjusted net income per share                                                 (1,2)                                 1.65       1.72       1.22       1.02 ----------------------------------------------------------------------------                                                      Three Months Ended                                              ------------------------------------------- ($ millions, except per share        Mar 31     Dec 31     Sep 30     Jun 30  amounts)                              2013       2012       2012       2012 ----------------------------------------------------------------------------   Revenue                            $    652   $    668   $    608   $    613 Adjusted EBITDA (1,2)                   149        119        104        113 Net income (loss) (1)                    60       (140)        (3)        52 Adjusted net income (1,2)                88         61         36         44 Basic net income (loss) per                                                   common share (1)                      0.64      (1.49)     (0.03)      0.56 Diluted net income (loss) per                                                 common share (1)                      0.63      (1.49)     (0.03)      0.50 Adjusted net income per share                                                 (1,2)                                 0.92       0.64       0.38       0.47 ----------------------------------------------------------------------------   (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 Additional        Information - Supplemental Non-GAAP Measures section for a description       of each non-GAAP measure and reconciliations to the most comparable GAAP     measures.                                                                 FORWARD-LOOKING INFORMATION WARNING   This First Quarter 2014 Management's Discussion and Analysis ("MD&A") as well as comments made during the First Quarter 2014 investor conference call contain forward-looking statements with respect to us and our industry. These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. Statements that include the words "believes", "expects", "may", "will", "should", "potential", "estimates", "anticipates", "aim", "goal" or other comparable terminology and similar statements of a future or forward-looking nature identify forward-looking statements.   More particularly and without limitation, any statements regarding the following are forward-looking statements:        --  expected demand for methanol and its derivatives,  --  expected new methanol supply or restart of idled capacity and timing for     start-up of the same,  --  expected shutdowns (either temporary or permanent) or restarts of     existing methanol supply (including our own facilities), including,     without limitation, the timing and length of planned maintenance     outages,  --  expected methanol and energy prices,  --  expected levels of methanol purchases from traders or other third     parties,  --  expected levels, timing and availability of economically priced natural     gas supply to each of our plants,  --  capital committed by third parties towards future natural gas     exploration  and development in the vicinity of our plants,  --  our expected capital expenditures,  --  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 or continue to obtain waivers     associated with our long-term debt obligations, including, without     limitation, the Egypt limited recourse debt facilities that have     conditions associated with the payment of cash or other distributions     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"),  --  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,  --  our ability to procure natural gas feedstock on commercially acceptable     terms,  --  operating rates of our facilities,  --  receipt of remaining required permits in connection with our Geismar     project,  --  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 rights to purchase     natural gas,  --  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 project,  --  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, and   --  enforcement of contractual arrangements and ability to perform     contractual obligations by customers, natural gas and other suppliers     and other third parties.   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,  --  our ability to obtain natural gas feedstock on commercially acceptable     terms to underpin current operations and future production growth     opportunities,  --  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,  --  our ability to meet timeline and budget targets for our Geismar project,     including cost pressures arising from labour costs,  --  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 1 natural     gas supply agreement, and  --  other risks described in our 2013 Management's Discussion and Analysis     and this First Quarter 2014 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.   On December 9, 2013, we completed the sale of a 10% equity interest in the Egypt methanol facility. At March 31, 2014, we own 50% of the 1.26 million tonne per year Egypt methanol facility and market the remaining 50% 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' non-controlling interests.        Methanex Corporation                                                         Consolidated Statements of Income (unaudited)                                (thousands of U.S. dollars, except number of common shares and per share      amounts)                                                                                                                        Three Months Ended                                                    ---------------------------------                                                     Mar 31           Mar 31                                                        2014             2013  ---------------------------------------------------------------------------- ----------------------------------------------------------------------------   Revenue                                      $     968,478    $     651,899  Cost of sales and operating expenses              (709,872)        (527,995) Depreciation and amortization                      (34,811)         (29,817) ---------------------------------------------------------------------------- Operating income                                   223,795           94,087  Earnings of associate (note 4)                       7,411            1,286  Finance costs (note 6)                             (10,838)         (15,451) Finance income and other expenses                     (363)          (1,627) ---------------------------------------------------------------------------- Income before income taxes                         220,005           78,295  Income tax expense:                                                            Current                                          (26,378)          (4,391)   Deferred                                         (25,288)          (7,671) ----------------------------------------------------------------------------                                                    (51,666)         (12,062) ---------------------------------------------------------------------------- Net income                                   $     168,339    $      66,233  ---------------------------------------------------------------------------- Attributable to:                                                               Methanex Corporation shareholders                145,102           60,267    Non-controlling interests                         23,237            5,966  ----------------------------------------------------------------------------                                              $     168,339    $      66,233  ----------------------------------------------------------------------------   Income per share for the period                                               attributable to Methanex Corporation                                         shareholders                                                                  Basic net income per common share          $        1.51    $        0.64    Diluted net income per common share        $        1.50    $        0.63    Weighted average number of common shares                                      outstanding (note 7)                           96,298,231       94,514,188  Diluted weighted average number of common                                     shares outstanding (note 7)                    96,997,489       95,717,869    See accompanying notes to condensed consolidated interim financial            statements.                                                                   Methanex Corporation                                                         Consolidated Statements of Comprehensive Income (unaudited)                  (thousands of U.S. dollars)                                                                                                      Three Months Ended                                                    ---------------------------------                                                     Mar 31           Mar 31                                                        2014             2013  ---------------------------------------------------------------------------- ----------------------------------------------------------------------------   Net income                                   $     168,339    $      66,233    Other comprehensive income, net of taxes:                                      Items that may be reclassified to                                             income:                                                                       Change in fair value of forward                                               exchange contracts                              148             (184)       Change in fair value of interest rate                                         swap contracts                                  (266)            (296)       Realized loss on interest rate swap                                           contracts reclassified to finance                                            costs                                         2,213            2,591  ----------------------------------------------------------------------------                                                      2,095            2,111  ---------------------------------------------------------------------------- Comprehensive income                         $     170,434    $      68,344  ---------------------------------------------------------------------------- Attributable to:                                                               Methanex Corporation shareholders                145,728           61,460    Non-controlling interests                         24,706            6,884  ----------------------------------------------------------------------------                                              $     170,434    $      68,344  ----------------------------------------------------------------------------   See accompanying notes to condensed consolidated interim financial            statements.                                                                   Methanex Corporation                                                         Consolidated Statements of Financial Position (unaudited)                    (thousands of U.S. dollars)                                                                                                        Mar 31           Dec 31  AS AT                                                 2014             2013  ---------------------------------------------------------------------------- ----------------------------------------------------------------------------   ASSETS                                                                       Current assets:                                                                Cash and cash equivalents                  $     709,213    $     732,736    Trade and other receivables                      575,987          534,130    Inventories (note 2)                             304,766          313,809    Prepaid expenses                                  22,372           20,533  ----------------------------------------------------------------------------                                                  1,612,338        1,601,208  Non-current assets:                                                            Property, plant and equipment (note 3)         2,344,819        2,230,938    Investment in associate (note 4)                 223,662          216,095    Other assets                                      66,044           65,253  ----------------------------------------------------------------------------                                                  2,634,525        2,512,286  ----------------------------------------------------------------------------                                              $   4,246,863    $   4,113,494  ----------------------------------------------------------------------------   LIABILITIES AND EQUITY                                                       Current liabilities:                                                           Trade, other payables and accrued                                             liabilities                               $     650,407    $     618,181    Current maturities on long-term debt                                          (note 5)                                         42,724           41,504    Current maturities on other long-term                                         liabilities                                     106,665           85,648  ----------------------------------------------------------------------------                                                    799,796          745,333  Non-current liabilities:                                                       Long-term debt (note 5)                        1,106,942        1,126,802    Other long-term liabilities                      120,462          188,520    Deferred income tax liabilities                  173,493          147,506  ----------------------------------------------------------------------------                                                  1,400,897        1,462,828  Equity:                                                                        Capital stock                                    541,275          531,573    Contributed surplus                                3,087            4,994    Retained earnings                              1,252,507        1,126,700    Accumulated other comprehensive loss              (4,918)          (5,544) ----------------------------------------------------------------------------   Shareholders' equity                           1,791,951        1,657,723    Non-controlling interests                        254,219          247,610  ----------------------------------------------------------------------------   Total equity                                   2,046,170        1,905,333  ----------------------------------------------------------------------------                                              $   4,246,863    $   4,113,494  ----------------------------------------------------------------------------   See accompanying notes to condensed consolidated interim financial            statements.                                                                   Methanex Corporation                                                         Consolidated Statements of Changes in Equity (unaudited)                     (thousands of U.S. dollars, except number of common shares)                                                                                    Accumulated                   Number of              Contri-                       Other                      Common   Capital      buted    Retained   Comprehensive                      Shares     Stock    Surplus    Earnings            Loss  ---------------------------------------------------------------------------- Balance,                                                                      December 31,                                                                 2012           94,309,970 $ 481,779 $   15,481  $  805,661  $      (13,045) Net income               -         -          -      60,267               -  Other                                                                         comprehensive                                                                income                  -         -          -           -           1,193  Compensation                                                                  expense                                                                      recorded for                                                                 stock options           -         -        223           -               -  Issue of shares                                                               on exercise of                                                               stock options     587,689    13,088          -           -               -  Reclassification                                                              of grant date                                                                fair value on                                                                exercise of                                                                  stock options           -     4,132     (4,132)          -               -  Dividend                                                                      payments to                                                                  Methanex                                                                     Corporation                                                                  shareholders            -         -          -     (17,534)              -  Distributions to                                                              non-controlling                                                               interests               -         -          -           -               -  Equity                                                                        contributions                                                                by non-                                                                      controlling                                                                  interests               -         -          -           -               -  ---------------------------------------------------------------------------- Balance, March                                                                31, 2013       94,897,659   498,999     11,572     848,394         (11,852) Net income               -         -          -     268,900               -  Other                                                                         comprehensive                                                                income                  -         -          -       5,362           4,855  Compensation                                                                  expense                                                                      recorded for                                                                 stock options           -         -        499           -               -  Sale of partial                                                               interest in                                                                  subsidiary              -         -          -      61,447           1,453  Issue of shares                                                               on exercise of                                                               stock options   1,203,310    25,497          -           -               -  Reclassification                                                              of grant date                                                                fair value on                                                                exercise of                                                                  stock options           -     7,077     (7,077)          -               -  Dividend                                                                      payments to                                                                  Methanex                                                                     Corporation                                                                  shareholders            -         -          -     (57,403)              -  Distributions to                                                              non-controlling                                                              interests               -         -          -           -               -  ---------------------------------------------------------------------------- Balance,                                                                      December 31,                                                                 2013           96,100,969   531,573      4,994   1,126,700          (5,544) Net income               -         -          -     145,102               -  Other                                                                         comprehensive                                                                income                  -         -          -           -             626  Compensation                                                                  expense                                                                      recorded for                                                                 stock options           -         -        227           -               -  Issue of shares                                                               on exercise of                                                               stock options     422,987     7,568          -           -               -  Reclassification                                                              of grant date                                                                fair value on                                                                exercise of                                                                  stock options           -     2,134     (2,134)          -               -  Dividend                                                                      payments to                                                                  Methanex                                                                     Corporation                                                                  shareholders            -         -          -     (19,295)              -  Distributions to                                                              non-controlling                                                              interests               -         -          -           -               -  ---------------------------------------------------------------------------- Balance, March                                                                31, 2014       96,523,956 $ 541,275 $    3,087  $1,252,507  $       (4,918) ----------------------------------------------------------------------------                                                   Non-                                         Shareholders'       Controlling             Total                              Equity         Interests            Equity  ----------------------------------------------------------------------- Balance,                                                                 December 31,                                                            2012            $       1,289,876  $        187,861  $      1,477,737  Net income                  60,267             5,966            66,233  Other                                                                    comprehensive                                                           income                      1,193               918             2,111  Compensation                                                             expense                                                                 recorded for                                                            stock options                 223                 -               223  Issue of shares                                                          on exercise of                                                          stock options              13,088                 -            13,088  Reclassification                                                         of grant date                                                           fair value on                                                           exercise of                                                             stock options                   -                 -                 -  Dividend                                                                 payments to                                                             Methanex                                                                Corporation                                                             shareholders              (17,534)                -           (17,534) Distributions to                                                         non-controlling                                                         interests                       -            (5,265)           (5,265) Equity                                                                   contributions                                                           by non-                                                                 controlling                                                             interests                       -             1,000             1,000  ----------------------------------------------------------------------- Balance, March                                                           31, 2013                1,347,113           190,480         1,537,593  Net income                 268,900            41,867           310,767  Other                                                                    comprehensive                                                           income                     10,217             2,849            13,066  Compensation                                                             expense                                                                 recorded for                                                            stock options                 499                 -               499  Sale of partial                                                          interest in                                                             subsidiary                 62,900            47,100           110,000  Issue of shares                                                          on exercise of                                                          stock options              25,497                 -            25,497  Reclassification                                                         of grant date                                                           fair value on                                                           exercise of                                                             stock options                   -                 -                 -  Dividend                                                                 payments to                                                             Methanex                                                                Corporation                                                             shareholders              (57,403)                -           (57,403) Distributions to                                                         non-controlling                                                         interests                       -           (34,686)          (34,686) ----------------------------------------------------------------------- Balance,                                                                 December 31,                                                            2013                    1,657,723           247,610         1,905,333  Net income                 145,102            23,237           168,339  Other                                                                    comprehensive                                                           income                        626             1,469             2,095  Compensation                                                             expense                                                                 recorded for                                                            stock options                 227                 -               227  Issue of shares                                                          on exercise of                                                          stock options               7,568                 -             7,568  Reclassification                                                         of grant date                                                           fair value on                                                           exercise of                                                             stock options                   -                 -                 -  Dividend                                                                 payments to                                                             Methanex                                                                Corporation                                                             shareholders              (19,295)                -           (19,295) Distributions to                                                         non-controlling                                                         interests                       -           (18,097)          (18,097) ----------------------------------------------------------------------- Balance, March                                                           31, 2014        $       1,791,951  $        254,219  $      2,046,170  ----------------------------------------------------------------------- See accompanying notes to condensed consolidated interim financial            statements.                                                                   Methanex Corporation                                                         Consolidated Statements of Cash Flows (unaudited)                            (thousands of U.S. dollars)                                                                                                      Three Months Ended                                                    ---------------------------------                                                     Mar 31           Mar 31                                                        2014             2013  ---------------------------------------------------------------------------- ----------------------------------------------------------------------------   CASH FLOWS FROM OPERATING ACTIVITIES                                           Net income                                 $     168,339    $      66,233    Deduct earnings of associate                      (7,411)          (1,286)   Add (deduct) non-cash items:                                                   Depreciation and amortization                   34,811           29,817      Income tax expense                              51,666           12,062      Share based compensation expense                25,246           36,313      Finance costs                                   10,838           15,451      Other                                             (277)             464    Income taxes paid                                (11,358)          (8,783)   Other cash payments, including share-                                         based compensation                              (34,709)         (17,555) ----------------------------------------------------------------------------   Cash flows from operating activities                                          before undernoted                               237,145          132,716    Changes in non-cash working capital (note                                     9)                                              (58,074)         (15,037) ----------------------------------------------------------------------------                                                    179,071          117,679  ----------------------------------------------------------------------------   CASH FLOWS FROM FINANCING ACTIVITIES                                           Dividend payments to Methanex Corporation                                     shareholders                                    (19,295)         (17,534)   Interest paid, including interest rate                                        swap settlements                                (21,001)         (21,211)   Repayment of long-term debt and limited                                       recourse debt                                   (19,520)         (18,267)   Cash distributions to non-controlling                                         interests                                       (18,097)          (5,265)   Proceeds from limited recourse debt                    -           10,000    Proceeds on issue of shares on exercise                                       of stock options                                  7,568           13,088    Other                                             (1,015)              81  ----------------------------------------------------------------------------                                                    (71,360)         (39,108) ----------------------------------------------------------------------------   CASH FLOWS FROM INVESTING ACTIVITIES                                           Property, plant and equipment                    (15,828)         (33,619)   Geismar plants under construction               (12 7,914)         (43,398)   Other assets                                      (4,863)            (792)   Changes in non-cash working capital                                           related to investing activities (note 9)         17,371           (1,296) ----------------------------------------------------------------------------                                                   (131,234)         (79,105) ----------------------------------------------------------------------------   Decrease in cash and cash equivalents            (23,523)            (534)   Cash and cash equivalents, beginning of                                       period                                          732,736          727,385  ----------------------------------------------------------------------------   Cash and cash equivalents, end of period   $     709,213    $     726,851  ----------------------------------------------------------------------------   See accompanying notes to condensed consolidated interim financial            statements.                                                                   Methanex Corporation                                                         Notes to Condensed Consolidated Interim Financial Statements (unaudited)     Except where otherwise noted, tabular dollar amounts are stated in thousands of U.S. dollars.                                                              1. Basis of presentation:   Methanex Corporation (the Company) is an incorporated entity with corporate offices in Vancouver, Canada. The Company's operations consist of the production and sale of methanol, a commodity chemical. The Company is the world's largest producer and supplier of methanol to the major international markets of Asia Pacific, North America, Europe and South 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.  These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and were approved and authorized for issue by the Audit, Finance & Risk Committee of the Board of Directors on April 29, 2014.  2. Inventories:   Inventories are valued at the lower of cost, determined on a first-in first-out basis, and estimated net realizable value. The amount of inventories included in cost of sales and operating expenses and depreciation and amortization for the three months ended March 31, 2014 is $691 million (2013 - $469 million).  3. Property, plant and equipment:                            Buildings,                                                                        Plant       Plants                                                   Installations        Under    Oil & Gas                                        & Machinery Construction   Properties    Other       Total ----------------------------------------------------------------------------   Cost at March                                                                 31, 2014       $   3,115,259   $  525,641  $    86,779  $83,598  $3,811,277 Accumulated                                                                   depreciation at                                                              March 31, 2014     1,349,657            -       79,085   37,716   1,466,458 ---------------------------------------------------------------------------- Net book value                                                                at March 31,                                                                 2014           $   1,765,602   $  525,641  $     7,694  $45,882  $2,344,819 ----------------------------------------------------------------------------   Cost at December                                                              31, 2013       $   3,100,597   $  393,044  $    86,312  $82,556  $3,662,509 Accumulated                                                                   depreciation at                                                              December 31,                                                                 2013               1,317,329            -       78,228   36,014   1,431,571 ---------------------------------------------------------------------------- Net book value                                                                at December 31,                                                              2013           $   1,783,268   $  393,044  $     8,084  $46,542  $2,230,938 ----------------------------------------------------------------------------  The Company is relocating two idle Chile facilities to Geismar, Louisiana with Geismar 1 targeted to be producing methanol by late 2014 and Geismar 2 in early 2016. During the three months ended March 31, 2014, the Company incurred capital expenditures related to the Geismar projects of $130 million, excluding capitalized interest. The remaining budgeted capital expenditures for these projects are $505 million, excluding capitalized interest.  4. Interest in Atlas joint venture:   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. The Company accounts for its interest in Atlas using the equity method. Summarized financial information of Atlas (100% basis) is as follows:                                                             Mar 31           Dec 31  Consolidated statements of financial                                          position as at                                       2014             2013  ----------------------------------------------------------------------------   Cash and cash equivalents                    $      58,539    $      20,776  Other current assets                               137,892          161,765  Non-current assets                                 370,686          378,890  Current liabilities                                (43,694)         (47,359) Long-term debt, including current                                             maturities                                        (56,752)         (56,752) Other long-term liabilities, including                                        current maturities                               (134,336)        (136,730) ---------------------------------------------------------------------------- Net assets at 100%                           $     332,335    $     320,590  ----------------------------------------------------------------------------   Net assets at 63.1%                          $     209,703    $     202,292  Long-term receivable from Atlas                     13,959           13,803  ----------------------------------------------------------------------------   Investment in associate                      $     223,662    $     216,095  ----------------------------------------------------------------------------                                                     Three Months Ended                                                    ---------------------------------                                                     Mar 31           Mar 31  Consolidated statements of income                     2014             2013  ----------------------------------------------------------------------------   Revenue                                      $     116,027    $      85,366  Cost of sales and depreciation and                                            amortization                                      (98,398)         (79,298) ---------------------------------------------------------------------------- Operating income                                    17,629            6,068  Finance costs, finance income and other                                       expenses                                           (2,750)           (3,421) Income tax expense                                  (3,134)            (609) ---------------------------------------------------------------------------- Net earnings at 100%                         $      11,745    $       2,038  ---------------------------------------------------------------------------- Earnings of associate at 63.1%               $       7,411    $       1,286  ----------------------------------------------------------------------------  b) Contingent liability:   The Board of Inland Revenue of Trinidad and Tobago has issued assessments against Atlas in respect of the 2005, 2006 and 2007 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. Atlas has partial relief from corporation income tax until mid-2014.   The Company has lodged objections to the assessments. Based on the merits of the cases and legal interpretation, management believes its position should be sustained.  5. Long-term debt:                                                             Mar 31           Dec 31  As at                                                 2014             2013  ----------------------------------------------------------------------------   Unsecured notes                                                                  $350 million at 3.25% due December 15,                                        2019                                      $     344,744    $     344,530    $250 million at 5.25% due March 1, 2022          246,736          246,650    $150 million at 6.00% due August 15, 2015        149,644          149,581  ----------------------------------------------------------------------------                                                    741,124          740,761  Egypt limited recourse debt facilities             386,587          404,722  Other limited recourse debt facilities              21,955           22,823  ---------------------------------------------------------------------------- Total long-term debt (1)                         1,149,666        1,168,306  Less current maturities                            (42,724)         (41,504) ----------------------------------------------------------------------------                                              $   1,106,942    $   1,126,802  ----------------------------------------------------------------------------  (1) Long-term debt is presented net of deferred financing fees.  During the three months ended March 31, 2014, the Company has made repayments on its Egypt limited recourse debt facilities of $18.6 million. The Company also made repayments on its other limited recourse debt facilities of $0.9 million.   At March 31, 2014, management believes the Company was in compliance with all significant terms and default provisions related to long-term debt obligations.  6. Finance costs:                                                           Three Months Ended                                                    ---------------------------------                                                     Mar 31           Mar 31                                                        2014             2013  ----------------------------------------------------------------------------   Finance costs                                $      15,521    $      16,518  Less capitalized interest related to                                          Geismar plants under construction                  (4,683)          (1,067) ----------------------------------------------------------------------------                                              $      10,838    $      15,451  ----------------------------------------------------------------------------  Finance costs are primarily comprised of interest on borrowings and finance lease obligations, the effective portion of interest rate swaps designated as cash flow hedges, amortization of deferred financing fees, and accretion expense associated with site restoration costs. Interest during construction is capitalized until the plant is substantially completed and ready for productive use.   The Company has interest rate swap contracts on its Egypt limited recourse debt facilities to swap the LIBOR-based interest payments for an average aggregated fixed rate of 4.8% plus a spread on approximately 75% of the Egypt limited recourse debt facilities for the period to March 31, 2015.  7. Net income per common share:   Diluted net income per common share is calculated by considering the potential dilution that would occur if outstanding stock options and, under certain circumstances, tandem share appreciation rights (TSARs) were exercised or converted to common shares.   Outstanding TSARs may be settled in cash or common shares at the holder's option and for purposes of calculating diluted net income per common share, the more dilutive of the cash-settled and equity-settled method is used, regardless of how the plan is accounted for. Accordingly, TSARs that are accounted for using the cash-settled method will require adjustments to the numerator and denominator if the equity-settled method is determined to have a dilutive effect on diluted net income per common share.   Stock options and, 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                                                    -------------------------------                                                       Mar 31          Mar 31                                                         2014            2013 ----------------------------------------------------------------------------   Denominator for basic net income per common                                   share                                            96,298,231      94,514,188   Effect of dilutive stock options                   699,258       1,203,681 ---------------------------------------------------------------------------- Denominator for diluted net income per common                                 share                                            96,997,489      95,717,869 ----------------------------------------------------------------------------  8. Share-based compensation:   a) Share appreciation rights (SARs), tandem share appreciation rights (TSARs) and stock options:   (i) Outstanding units:  Information regarding units outstanding at March 31, 2014 is as follows:                                      SARs                          TSARs                              ----------------------------  ----------------------------                                       Weighted                      Weighted (per share amounts   Number of         Average     Number of         Average  in USD)                 Units  Exercise Price         Units  Exercise Price ----------------------------------------------  ----------------------------   Outstanding at                                                                December 31, 2013   1,093,117   $       32.02     1,858,585   $       31.83   Granted              203,190           73.13       303,850           72.66   Exercised           (190,229)          28.90      (283,750)          30.21   Cancelled            (10,750)          33.95        (6,900)          35.69 ----------------------------------------------  ---------------------------- Outstanding at                                                                March 31, 2014      1,095,328   $       40.17     1,871,785   $       38.69 ----------------------------------------------  ------------ ----------------                                                       Stock Options                                                     -----------------------------------                                              Number of      Weighted Average (per share amounts in USD)                       Units        Exercise Price ----------------------------------------------------------------------------   Outstanding at December 31, 2013             1,219,420        $        19.15   Granted                                       45,600                 73.13   Exercised                                   (422,987)                17.72   Cancelled                                     (2,500)                35.90   Expired                                      (22,835)                22.82 ---------------------------------------------------------------------------- Outstanding at March 31, 2014                  816,698        $        22.75 ----------------------------------------------------------------------------                             Units Outstanding at          Units Exercisable at                              March 31, 2014                March 31, 2014                       ----------------------------------  ---------------------                        Weighted                                              Range of Exercise       Average              Weighted               Weighted  Prices               Remaining      Number   Average       Number   Average (per share amounts  Contractual    of Units  Exercise     of Units  Exercise  in USD)           Life (Years) Outstanding     Price  Exercisable     Price -----------------------------------------------------  ---------------------   SARs:                                                                          $23.36 to 31.74           4.2     546,138 $   29.13      426,457 $   28.49   $31.88 to 73.13           6.3     549,190     51.15      109,000     38.24 ----------------------------------------------------------------------------                             5.2   1,095,328 $   40.17      535,457 $   30.47 ----------------------------------------------------------------------------   TSARs:                                                                         $23.36 to 31.74           4.1   1,026,745 $   28.91      812,678 $   28.18   $31.88 to 73.13           6.3     845,040     50.57      180,560     38.10 ----------------------------------------------------------------------------                             5.1   1,871,785 $   38.69      993,238 $   29.98 ---------------------------------------------------------------------------- Stock options:                                                                 $6.33 to 25.22            2.1     388,035 $    8.76      388,035 $    8.76   $28.43 to 73.13           3.4     428,663     35.41      307,163     29.69 ----------------------------------------------------------------------------                             2.7     816,698 $   22.75      695,198 $   18.01 ----------------------------------------------------------------------------  (ii) Compensation expense related to SARs and TSARs:   Compensation expense for SARs and TSARs is measured based on their fair value and is recognized over the vesting period. Changes in fair value each period are recognized in net income for the proportion of the service that has been rendered at each reporting date. The fair value at March 31, 2014 was $82.1 million compared with the recorded liability of $72.3 million. The difference between the fair value and the recorded liability of $9.8 million will be recognized over the weighted average remaining vesting period of approximately 1.9 years. The weighted average fair value was estimated at March 31, 2014 using the Black-Scholes option pricing model.   For the three months ended March 31, 2014, compensation expense related to SARs and TSARs included an expense in cost of sales and operating expenses of $18.2 million (2013 - expense of $17.0 million). This included an expense of $14.4 million (2013 - expense of $15.0 million) related to the effect of the change in the Company's share price for the three months ended March 31, 2014.   (iii) Compensation expense related to stock options:   For the three months ended March 31, 2014, compensation expense related to stock options included in cost of sales and operating expenses was $0.2 million (2013 - $0.2 million). 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 March 31, 2014 are as follows:                                           Number of       Number of      Number of                                Deferred Share      Restricted    Performance                                         Units     Share Units    Share Units  ----------------------------------------------------------------------------   Outstanding at December 31,                                                   2013                                346,814          44,131        946,446    Granted                              4,200           7,000        139,160    Granted performance                                                           factor(1)                               -               -         55,677    Granted in-lieu of                                                            dividends                           1,012             152          2,381    Redeemed                           (27,052)              -       (334,062)   Cancelled                                -               -         (6,663) ---------------------------------------------------------------------------- Outstanding at March 31, 2014        324,974          51,283        802,939  ---------------------------------------------------------------------------- (1) Performance share units have a feature where the ultimate number of          units that vest are adjusted by a performance factor of the original         grant as determined by the Company's total shareholder return in             relation to a predetermined target over the period to vesting.            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 March 31, 2014 was $77.7 million compared with the recorded liability of $64.0 million. The difference between the fair value and the recorded liability of $13.7 million will be recognized over the weighted average remaining vesting period of approximately 1.6 years.  For the three months ended March 31, 2014, compensation expense related to deferred, restricted and performance share units included in cost of sales and operating expenses was an expense of $6.8 million (2013 - expense of $19.1 million). This included an expense of $3.1 million (2013 - expense of $15.7 million) related to the effect of the change in the Company's share price for the three months ended March 31, 2014.   9. Changes in non-cash working capital:   Changes in non-cash working capital for the three months ended March 31, 2014 were as follows:                                                          Three Months Ended                                                    ---------------------------------                                                     Mar 31           Mar 31                                                        2014             2013  ----------------------------------------------------------------------------   Decrease (increase) in non-cash working                                       capital:                                                                      Trade  and other receivables                $     (41,857)   $     (24,428)   Inventories                                        9,043          (33,127)   Prepaid expenses                                  (1,839)           3,891    Trade, other payables and accrued                                             liabilities, including long-term                                             payables included in other long-term                                         liabilities                                       6,267           37,708  ----------------------------------------------------------------------------                                                    (28,386)         (15,956) Adjustments for items not having a cash                                       effect and working capital changes                                           relating to taxes and interest paid               (12,317)            (377) ---------------------------------------------------------------------------- Changes in non-cash working capital having                                    a cash effect                               $     (40,703)   $     (16,333) ----------------------------------------------------------------------------   These changes relate to the following                                         activities:                                                                   Operating                                  $     (58,074)   $     (15,037)   Investing                                         17,371           (1,296) ---------------------------------------------------------------------------- Changes in non-cash working capital          $     (40,703)   $     (16,333) ----------------------------------------------------------------------------  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 and Egypt interest rate swaps designated as cash flow hedges are measured at fair value based on industry-accepted valuation models and inputs obtained from active markets.   The Egypt limited recourse debt facilities bear interest at LIBOR plus a spread. The Company has interest rate swap contracts to swap the LIBOR-based interest payments for an average aggregated fixed rate of 4.8% plus a spread on approximately 75% of the Egypt limited recourse debt facilities for the period to March 31, 2015. These interest rate swaps had an outstanding notional amount of $302 million as at March 31, 2014. The notional amount decreases over the expected repayment period. At March 31, 2014, these interest rate swap contracts had a negative fair value of $13.1 million (December 31, 2013 - negative $19.8 million) recorded in current liabilities. The fair value of these interest rate swap contracts will fluctuate until maturity.   The Company also designates as cash flow hedges forward exchange contracts to sell euro at a fixed USD exchange rate. At March 31, 2014, the Company had outstanding forward exchange contracts designated as cash flow hedges to sell a notional amount of EUR33.4 million in exchange for US dollars. The euro contracts had a positive fair value of $0.2 million recorded in current liabilities. Changes in fair value of derivative financial instruments designated as cash flow hedges have been recorded in other comprehensive income.   The carrying values of the Company's financial instruments approximate their fair values, except as follows:                                                            March 31, 2014                                                    ----------------------------------- As at                                       Carrying Value        Fair Value ----------------------------------------------------------------------------   Long-term debt excluding deferred                                             financing fees                            $     1,164,140   $     1,199,539 ----------------------------------------------------------------------------  There is no publicly traded market for the limited recourse debt facilities. The fair value disclosed on a recurring basis and categorized as Level 2 within the fair value hierarchy is estimated by reference to current market prices for debt securities with similar terms and characteristics. The fair value of the unsecured notes disclosed on a recurring basis and also categorized as Level 2 within the fair value hierarchy was estimated by reference to a limited number of small transactions in March 2014. The fair value of the Company's unsecured notes will fluctuate until maturity.        Methanex Corporation                                                         Quarterly History(unaudited)                                                                      Q1 2014      2013        Q4        Q3        Q2        Q1 ----------------------------------------------------------------------------   METHANOL SALES                                                                VOLUMES                                                                     (thousands of                                                                 tonnes)                                                                       Methanex-                                                                     produced            1,228     4,304     1,190     1,045     1,039     1,030 Purchased                                                                     methanol              654     2,715       663       715       749       588 Commission sales                                                              (1)                   296       972       274       237       242       219 ----------------------------------------------------------------------------                        2,178     7,991     2,127     1,997     2,030     1,837 ----------------------------------------------------------------------------   METHANOL                                                                      PRODUCTION                                                                  (thousands of                                                                 tonnes)                                                                       New Zealand            500     1,419       400       349       361       309 Atlas, Trinidad                                                               (63.1%)               249       971       268       254       201       248 Titan, Trinidad        149       651       173       128       169       181 Egypt (50%) (2)        139       623       159       168       163       133 Medicine Hat           122       476        86       130       129       131 Chile                   67       204       108         6        29        61 ----------------------------------------------------------------------------                        1,226     4,344     1,194     1,035     1,052     1,063 ----------------------------------------------------------------------------   AVERAGE REALIZED                                                              METHANOL PRICE                                                               (3)                                                                         ($/tonne)              524       441       493       438       425       412 ($/gallon)            1.58      1.33      1.48      1.32      1.28      1.24   PER SHARE                                                                      INFORMATION ($                                                               per share) (4)                                                              Basic net income                                                              (loss)               1.51      3.46      1.33      0.91      0.57      0.64 Diluted net                                                                   income (loss)        1.50      3.41      1.32      0.90      0.56      0.63 Adjusted net                                                                  income (5)           1.65      4.88      1.72      1.22      1.02      0.92   ----------------------------------------------------------------------------   Methanex Corporation                                                         Quarterly History(unaudited)                                                                           2012          Q4          Q3          Q2          Q1 ----------------------------------------------------------------------------   METHANOL SALES                                                                VOLUMES                                                                     (thousands of                                                                 tonnes)                                                                       Methanex-                                                                     produced              4,039       1,059       1,053       1,001         926 Purchased                                                                     methanol              2,565         664         641         569         691 Commission sales                                                              (1)                     855         176         205         276         198 ----------------------------------------------------------------------------                          7,459       1,899       1,899       1,846       1,815 ----------------------------------------------------------------------------   METHANOL                                                                      PRODUCTION                                                                  (thousands of                                                                 tonnes)                                                                       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 (50%) (2)          557         129          62         164         202 Medicine Hat             481         132         117         118         114 Chile                    313          59          59          82         113 ----------------------------------------------------------------------------                          4,071       1,067       1,025       1,034         945 ----------------------------------------------------------------------------   AVERAGE REALIZED                                                              METHANOL PRICE                                                               (3)                                                                         ($/tonne)                382         389         373         384         382 ($/gallon)              1.15        1.17        1.12        1.15        1.15   PER SHARE                                                                     INFORMATION ($                                                               per share) (4)                                                              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 (5)             1.90        0.64        0.38        0.47        0.41   ---------------------------------------------------------------------------- (1) Methanex-produced methanol includes volumes produced by Chile using          natural gas supplied from Argentina under a tolling arrangement.             Commission sales represent volumes marketed on a commission basis            related to the 36.9% of the Atlas methanol facility and the portion of       the Egypt methanol facility that we do not own.                            (2) On December 9, 2013, we completed a sale of 10% equity interest in the       Egypt facility. Production figures prior to December 9, 2013 reflect a       60% interest.                                                              (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) Per share information calculated using amounts attributable to Methanex      shareholders.                                                              (5) 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 Additional           Information - Supplemental Non-GAAP Measures section for a description       of the non-GAAP measure and reconciliation to the most comparable GAAP       measure.                                                                     Contacts: Sandra Daycock Director, Investor Relations Methanex Corporation 604-661-2600 or Toll Free: 1 800 661 8851 Website: www.methanex.com