Methanex Corporation
TSX : MX
NASDAQ : MEOH

Methanex Corporation

July 25, 2012 19:41 ET

Methanex Reports Stronger EBITDA in the Second Quarter-Projects in New Zealand and Louisiana Driving Future Growth

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 25, 2012) - Methanex Corporation (TSX:MX)(NASDAQ:MEOH)(SANTIAGO:METHANEX) For the second quarter of 2012, Methanex reported Adjusted EBITDA(1) of $113 million and Adjusted net income(1) of $44 million ($0.47 per share on a diluted basis(1)). This compares with Adjusted EBITDA(1) of $93 million and Adjusted net income(1) of $39 million ($0.41 per share on a diluted basis(1)) for the first quarter of 2012.

Bruce Aitken, President and CEO of Methanex commented, "Overall methanol demand has remained good and the pricing environment has been relatively stable, despite some demand softness in certain derivatives. We reported higher EBITDA in the second quarter due primarily to higher sales of Methanex-produced methanol."

Mr. Aitken added, "Industry demand growth is expected to significantly exceed new capacity additions over the next few years and we have a number of growth projects in place to capitalize on the positive industry conditions. In New Zealand, the recent restart of a second plant increases our cash generation capability and we are investigating further initiatives which could increase annual production capacity by up to 900,000 tonnes by the end of 2013. We also announced today that we have reached a final investment decision to proceed with the project to relocate an idle Chile facility to Geismar, Louisiana. The project is on track to add one million tonnes of annual production capacity by the end of 2014."

Mr. Aitken concluded, "With over US$600 million of cash on hand, an undrawn credit facility, a robust balance sheet, and strong cash flow generation, we are well positioned to repay our $200 million bond coming due in August, invest in the Louisiana project and other strategic opportunities to grow the Company, and continue to deliver on our commitment to return excess cash to shareholders."

A conference call is scheduled for July 26, 2012 at 12:00 noon ET (9:00 am PT) to review these second quarter results. To access the call, dial the Conferencing operator ten minutes prior to the start of the call at (416) 340-8018, or toll free at (866) 223-7781. A playback version of the conference call will be available for three weeks at (905) 694-9451, or toll free at (800) 408-3053. The passcode for the playback version is 2530127. There will be a simultaneous audio-only webcast of the conference call, which can be accessed from our website at www.methanex.com. The webcast will be available on our website for three weeks following the call.

Methanex is a Vancouver-based, publicly traded company and is the world's largest supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX", on the NASDAQ Global Market in the United States under the trading symbol "MEOH", and on the foreign securities market of the Santiago Stock Exchange in Chile under the trading symbol "Methanex". Methanex can be visited online at www.methanex.com.

FORWARD-LOOKING INFORMATION WARNING

This Second Quarter 2012 press release contains forward-looking statements with respect to us and the chemical industry. Refer to Forward-Looking Information Warning in the attached Second Quarter 2012 Management's Discussion and Analysis for more information.


1.  Adjusted EBITDA, Adjusted net income and Adjusted diluted 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 amounts associated with the 40% non-controlling interest in
    the methanol facility in Egypt, the mark-to-market impact of items which
    impact the comparability of our earnings from one period to another,
    which currently include only the mark-to-market impact of share-based
    compensation as a result of changes in our share price, and Louisiana
    project relocation expenses. Refer to Additional Information -
    Supplemental Non-GAAP Measures of the attached Interim Report
    for the three months ended June 30, 2012 for reconciliations to the most
    comparable GAAP measures. 

2 Interim Report

For the Three Months Ended June 30, 2012

At July 25, 2012 the Company had 93,827,060 common shares issued and outstanding and stock options exercisable for 3,933,537 additional common shares.


Share Information                                                           
Methanex Corporation's common shares are listed for trading on the Toronto  
Stock Exchange under the symbol MX, on the Nasdaq Global Market under the   
symbol MEOH and on the foreign securities market of the Santiago Stock      
Exchange in Chile under the trading symbol Methanex.                        

Transfer Agents & Registrars                                                
CIBC Mellon Trust Company                                                   
320 Bay Street                                                              
Toronto, Ontario, Canada M5H 4A6                                            
Toll free in North America: 1-800-387-0825                                  
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Investor Information                                                        
All financial reports, news releases and corporate information can be       
accessed on our website at http://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                                                              
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SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS

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

FINANCIAL AND OPERATIONAL HIGHLIGHTS


--  For the second quarter of 2012, we recorded net income attributable to
    Methanex shareholders of $52 million compared with $22 million for the
    first quarter of 2012 and $41 million for the second quarter of 2011.
    Adjusted net income(1) for the second quarter of 2012 was $44 million
    ($0.47 per share on a diluted basis(1)) compared wtih $39 million ($0.41
    per share on a diluted basis(1)) for both the first quarter of 2012 and
    the second quarter of 2011. A reconciliation of net income attributable
    to Methanex shareholders to Adjusted net income is as follows: 

                              Three Months Ended            Six Months Ended
                           ----------------------------  -------------------
                             Jun 30    Mar 31   Jun 30      Jun 30    Jun 30
($ millions)                   2012      2012     2011        2012      2011
-------------------------------------------------------  -------------------
Net income attributable to                                                  
 Methanex shareholders      $    52  $     22  $    41    $     74 $      75
  Mark-to-market impact of                                                  
   share-based                                                              
   compensation, net of tax     (10)       17       (2)          7         1
  Louisiana project                                                         
   relocation expenses, net                                                 
   of tax                         2         -        -           2         -
-------------------------------------------------------  -------------------
Adjusted net income (1)     $    44  $     39  $    39    $     83 $      76
-------------------------------------------------------  -------------------

--  We recorded Adjusted EBITDA(1) of $113 million for the second quarter of
    2012 compared with $93 million for the first quarter of 2012. The
    increase in Adjusted EBITDA(1) was primarily driven by an increase in
    sales of Methanex- produced methanol from 926,000 tonnes in the first
    quarter of 2012 to 1,001,000 tonnes in the second quarter of 2012.

--  Global methanol production for the second quarter of 2012 was 1,034,000
    tonnes compared with 945,000 tonnes for the first quarter of 2012.

--  Average realized price for the second quarter of 2012 was $384 per tonne
    compared with $382 per tonne for the first quarter of 2012.

--  During the second quarter of 2012, the Board of Directors approved a 9
    percent increase to our quarterly dividend to shareholders, from $0.17
    to $0.185 per share, and we paid a quarterly dividend of $17 million.

--  We recently completed re-start activities at the second Motunui facility
    in New Zealand and successfully commenced production on July 1, 2012.
    The addition of this second facility adds 0.65 million tonnes of annual
    production capacity and increases the Motunui site capacity to about 1.5
    million tonnes per year.

--  In July 2012, we reached a final investment decision to proceed with the
    project to relocate an idle Chile facility to Geismar, Louisiana. The
    project will add one million tonnes of annual production capacity and is
    expected to be operational by the end of 2014. We have commenced
    dismantling of the plant and expect to receive all key permits by the
    end of 2012. 

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 for a
    description of each non-GAAP measure and reconciliations to the most
    comparable GAAP measures. 

This Second Quarter 2012 Management's Discussion and Analysis ("MD&A") dated July 25, 2012 for Methanex Corporation ("the Company") should be read in conjunction with the Company's condensed consolidated interim financial statements for the period ended June 30, 2012 as well as the 2011 Annual Consolidated Financial Statements and MD&A included in the Methanex 2011 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 2011 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 Six Months Ended
                                      --------------------- ----------------
                                       Jun 30 Mar 31 Jun 30   Jun 30  Jun 30
($ millions, except where noted)         2012   2012   2011     2012    2011
----------------------------------------------------------- ----------------
Production (thousands of tonnes)                                            
 (attributable to Methanex                                                  
 shareholders)                          1,034    945  1,050    1,979   1,851
Sales volumes (thousands of tonnes):                                        
  Produced methanol (attributable to                                        
   Methanex shareholders)               1,001    926    970    1,927   1,818
  Purchased methanol                      569    691    664    1,260   1,499
  Commission sales (1)                    276    198    231      474     403
----------------------------------------------------------- ----------------
  Total sales volumes                   1,846  1,815  1,865    3,661   3,720
Methanex average non-discounted posted                                      
 price ($ per tonne) (2)                  452    437    421      444     428
Average realized price ($ per tonne)                                        
 (3)                                      384    382    363      383     365
Adjusted EBITDA (attributable to                                            
 Methanex shareholders) (4)               113     93    102      206     183
Cash flows from operating activities      135     93     78      229     202
Adjusted cash flows from operating                                          
 activities (attributable to Methanex                                       
 shareholders) (4)                        110     89     86      199     167
Net income attributable to Methanex                                         
 shareholders                              52     22     41       74      75
Adjusted net income (attributable to                                        
 Methanex shareholders) (4)                44     39     39       83      76
Basic net income per common share                                           
 (attributable to Methanex                                                  
 shareholders)                           0.56   0.24   0.44     0.80    0.81
Diluted net income per common share                                         
 (attributable to Methanex                                                  
 shareholders)                           0.50   0.23   0.43     0.78    0.80
Adjusted diluted net income per common                                      
 share (attributable to Methanex                                            
 shareholders) (4)                       0.47   0.41   0.41     0.88    0.81
Common share information (millions of                                       
 shares):                                                                   
  Weighted average number of common                                         
   shares                                  94     93     93       93      93
  Diluted weighted average number of                                        
   common shares                           95     95     95       95      94
  Number of common shares outstanding,                                      
   end of period                           94     94     93       94      93
----------------------------------------------------------- ----------------

1.  Commission sales represent volumes marketed on a commission basis
    related to the 36.9% of the Atlas methanol facility and 40% of the Egypt
    methanol facility that we do not own. 
2.  Methanex average non-discounted posted price represents the average of
    our non-discounted posted prices in North America, Europe and Asia
    Pacific weighted by sales volume. Current and historical pricing
    information is available at www.methanex.com. 
3.  Average realized price is calculated as revenue, excluding commissions
    earned and the Egypt non-controlling interest share of 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 for a description of each
    non-GAAP measure and reconciliations to the most comparable GAAP
    measures. 

PRODUCTION SUMMARY                                                          
                                          Q2      Q1      Q2  YTD Q2  YTD Q2
                                        2012    2012    2011    2012    2011
                            Capacity    Pro-    Pro-    Pro-    Pro-    Pro-
(thousands of tonnes)            (1) duction duction duction duction duction
----------------------------------------------------------------------------
Chile I, II, III and IV (2)      950      82     113     142     195     325
New Zealand (3)                  558     210     174     207     384     410
Atlas (Trinidad) (63.1%                                                     
 interest)                       288     264     127     263     391     526
Titan (Trinidad)                 225     196     215     186     411     307
Egypt (60% interest)             190     164     202     178     366     209
Medicine Hat                     118     118     114      74     232      74
----------------------------------------------------------------------------
                               2,329   1,034     945   1,050   1,979   1,851
----------------------------------------------------------------------------

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. 
2.  In July 2012, we reached a final investment decision to proceed with the
    project to relocate an idle Chile facility to Geismar, Louisiana. The
    Chile capacity in the above table includes 1.0 million tonnes of annual
    production capacity, which is being relocated to Louisiana (refer to the
    Chile section below for more information). 
3.  The production capacity of New Zealand represents the two 0.85 million
    tonne facilities at Motunui and the 0.53 million tonne facility at
    Waitara Valley. In July, we restarted the second Motunui facility, but
    due to current distillation capacity constraints at the Motunui site,
    the combined production capacity of both plants is approximately 1.5
    million tonnes, compared with the combined nameplate capacity of 1.7 -
    1.9 million tonnes, depending on natural gas composition (refer to the
    New Zealand section for more information). 

Chile

We continue to operate our Chile facilities significantly below site capacity. This is primarily due to curtailments of natural gas supply from Argentina - refer to the Management's Discussion and Analysis included in our 2011 Annual Report for more information.

During the second quarter of 2012, we produced 82,000 tonnes in Chile operating one plant at approximately 30% of capacity. We continue to work closely with Empresa Nacional del Petroleo (ENAP) to manage through the seasonality of gas demand with the objective of maintaining our operations throughout the winter season in 2012.

Our primary goal is to progressively increase production at the Chile site with natural gas from suppliers in Chile. We are pursuing investment opportunities with ENAP, GeoPark Chile Limited (GeoPark) and others to help accelerate natural gas exploration and development in southern Chile. We are working with ENAP to develop natural gas in the Dorado Riquelme block. Under the arrangement, we fund a 50% participation in the block and, as at June 30, 2012, we had contributed approximately $111 million. Over the past few years, we have also provided funding to support and accelerate GeoPark's natural gas exploration and development activities in southern Chile. GeoPark has agreed to supply us with all natural gas sourced from the Fell block under a ten-year exclusive supply arrangement that commenced in 2008. During the second quarter of 2012, substantially all production at our Chilean facilities was produced with natural gas supplied from the Fell and Dorado Riquelme blocks. We are also participating in other exploration blocks with international oil and gas companies and as at June 30, 2012, we had contributed $14 million for our share of the exploration costs.

While significant investments have been made in the last few years for natural gas exploration and development in southern Chile, the timelines for significant increases in gas production are much longer than we had originally anticipated and existing gas fields are experiencing declines. As a result, the short-term outlook for gas supply in Chile continues to be challenging.

We announced today that we have reached a final investment decision to proceed with the project to relocate an idle Chile facility to Geismar, Louisiana and we are also examining the viability of other projects to increase the utilization of our Chilean assets.

The future operating rate of our Chile site is primarily dependent on demand for natural gas for residential purposes, which is higher in the southern hemisphere winter, production rates from existing natural gas fields, and the level of natural gas deliveries from future exploration and development activities in southern Chile. We cannot provide assurance that we, ENAP, GeoPark or others will be successful in the exploration and development of natural gas or that we will obtain any additional natural gas from suppliers in Chile on commercially acceptable terms. As a result, we cannot provide assurance in the level of natural gas supply or that we will be able to source sufficient natural gas to operate any capacity in Chile or that we will have sufficient future cash flows from Chile to support the carrying value of our Chilean assets and that this will not have an adverse impact on our results of operations and financial condition.

New Zealand

During the second quarter of 2012, we operated one Motunui facility in New Zealand and produced 210,000 tonnes, which represents full capacity for one Motunui facility. In July, we restarted a second Motunui facility, which adds 650,000 tonnes of annual production capacity to our New Zealand operations and brings the current site capacity to approximately 1.5 million tonnes. We are currently assessing the feasibility of debottlenecking the Motunui site and the potential to restart our nearby 530,000 tonne Waitara Valley plant which could add a further 900,000 tonnes of annual production capacity in New Zealand by the end of 2013.

Trinidad

In Trinidad, we own 100% of the Titan facility with an annual production capacity of 900,000 tonnes and have a 63.1% interest in the Atlas facility with an annual production capacity of 1,150,000 tonnes (63.1% interest). The Titan facility produced 196,000 tonnes in the second quarter of 2012 compared with 215,000 tonnes in the first quarter of 2012. Production in the second quarter of 2012 was lower than the first quarter of 2012 due to minor unplanned maintenance outages and periodic natural gas curtailments.

The Atlas facility produced 264,000 tonnes in the second quarter of 2012 compared with 127,000 tonnes in the first quarter of 2012. The Atlas facility was shut down for a 38 day outage in January 2012 for maintenance and to repair an equipment failure. At the end of the second quarter of 2012, the Atlas facility was operating at approximately 95% of capacity.

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 in Trinidad (NGC) and downstream demand from NGC's customers which becomes apparent when an upstream supply issue arises. We are engaged with key stakeholders to find a solution to this issue, but in the meantime we expect to continue to experience some gas curtailments to our Trinidad site.

Egypt

The Egypt methanol facility produced 164,000 tonnes (60% interest) in the second quarter of 2012 compared with 202,000 tonnes in the first quarter of 2012. We have a 60% equity interest in the facility and marketing rights for 100% of the production. The lower second quarter of 2012 production is due to planned maintenance and inspection activities that commenced late in the quarter and to natural gas restrictions due to upstream gas platform outages and seasonal domestic demand for natural gas electricity generation.

Medicine Hat

Our 470,000 tonne per year facility in Medicine Hat, Alberta produced 118,000 tonnes in the second quarter of 2012 compared with 114,000 tonnes during the first quarter of 2012. We are currently assessing the feasibility of debottlenecking the Medicine Hat facility which could add a further 90,000 tonnes of annual production capacity.

FINANCIAL RESULTS

For the second quarter of 2012 we recorded Adjusted EBITDA of $113 million and Adjusted net income of $44 million ($0.47 per share on a diluted basis). This compares with Adjusted EBITDA of $93 million and Adjusted net income of $39 million ($0.41 per share on a diluted basis) for the first quarter of 2012 and Adjusted EBITDA of $102 million and Adjusted net income of $39 million ($0.41 per share on a diluted basis) for the second quarter of 2011.

We calculate Adjusted EBITDA and Adjusted net income by excluding amounts associated with the 40% non-controlling interest in Egypt that we do not own, 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 for a further discussion on how we calculate these measures.

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


                               Three Months Ended          Six Months Ended 
             -------------------------------------- ------------------------
                   Jun 30       Mar 31      Jun 30        Jun 30      Jun 30
($ millions)         2012         2012        2011          2012        2011
--------------------------------------------------- ------------------------
Net income                                                                  
 attributable                                                               
 to Methanex                                                                
 shareholders $        52  $        22 $        41   $        74 $        75
  Mark-to-                                                                  
   market                                                                   
   impact of                                                                
   share-                                                                   
   based                                                                    
   compens-                                                               
   ation, net                                                               
   of tax             (10)          17          (2)            7           1
  Louisiana                                                                 
   project                                                                  
   relocation                                                               
   expenses,                                                                
   net of tax           2            -           -             2           -
--------------------------------------------------- ------------------------
Adjusted net                                                                
 income (1)   $        44  $        39 $        39   $        83 $        76
--------------------------------------------------- ------------------------
Diluted                                                                     
 weighted                                                                   
 average                                                                    
 shares                                                                     
 outstanding   95,119,964   94,714,364  94,580,090    94,772,610  94,288,918
Adjusted                                                                    
 diluted net                                                                
 income per                                                                 
 common share                                                               
 (1)          $      0.47  $      0.41 $      0.41   $      0.88 $      0.81
--------------------------------------------------- ------------------------

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


                                   Three Months Ended      Six Months Ended 
                           ---------------------------  --------------------
                             Jun 30   Mar 31   Jun 30      Jun 30    Jun 30 
($ millions)                   2012     2012     2011        2012      2011 
------------------------------------------------------  --------------------
Consolidated statements of                                                  
 income:                                                                    
  Revenue                   $   656  $   666  $   623    $  1,322  $  1,242 
  Cost of sales and                                                         
   operating expenses,                                                      
   excluding mark-to-market                                                 
   impact of share-based                                                    
   compensation                (517)    (551)    (506)     (1,068)   (1,046)
------------------------------------------------------  --------------------
                                139      115      117         254       196 
Comprised of:                                                               
  Adjusted EBITDA                                                           
   (attributable to                                                         
   Methanex shareholders)                                                   
   (1)                          113       93      102         206       183 
  Attributable to non-                                                      
   controlling interests         26       22       15          48        13 
------------------------------------------------------  --------------------
                                139      115      117         254       196 
  Mark-to-market impact of                                                  
   share-based compensation      10      (18)       1          (8)       (1)
  Louisiana project                                                         
   relocation expenses           (4)       -        -          (4)        - 
  Depreciation and                                                          
   amortization                 (44)     (38)     (40)        (82)      (69)
------------------------------------------------------  --------------------
  Operating income (1)          101       59       78         160       126 

  Finance costs                 (20)     (18)     (17)        (38)      (27)
  Finance income and other                                                  
   expenses                       -        2        1           2         6 
  Income tax expense            (15)     (10)     (15)        (25)      (25)
------------------------------------------------------  --------------------
  Net income                $    66  $    33  $    47    $     99  $     80 
------------------------------------------------------  --------------------
  Net income attributable                                                   
   to Methanex shareholders $    52  $    22  $    41    $     74  $     75 
------------------------------------------------------  --------------------

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 for a description of each
    non-GAAP measure and reconciliations to the most comparable GAAP
    measures. 

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.

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


                                    Q2 2012         Q2 2012     YTD Q2 2012 
                              compared with   compared with   compared with 
($ millions)                        Q1 2012         Q2 2011     YTD Q2 2011 
----------------------------------------------------------------------------
Average realized price       $            4  $           33  $           57 
Sales volume                             (5)             (6)            (11)
Total cash costs                         21             (16)            (23)
----------------------------------------------------------------------------
Increase in Adjusted EBITDA  $           20  $           11  $           23 
----------------------------------------------------------------------------

Average realized price                                                      

                                        Three Months Ended  Six Months Ended
                                     ---------------------  ----------------
                                      Jun 30 Mar 31 Jun 30    Jun 30  Jun 30
($ per tonne, except where noted)       2012   2012   2011      2012    2011
----------------------------------------------------------  ----------------
Methanex average non-discounted                                             
 posted price (1)                        452    437    421       444     428
Methanex average realized price          384    382    363       383     365
Average discount                         15%    13%    14%       14%     15%
----------------------------------------------------------  ----------------

1.  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. 

Early in the second quarter of 2012, methanol market conditions were tightening and methanol pricing increased. However, global economic uncertainty and lower energy pricing contributed to a moderation of industry supply and demand conditions and methanol pricing declined in the latter part of the quarter (refer to Supply/Demand Fundamentals section for more information). Our average non-discounted posted price for the second quarter of 2012 was $452 per tonne compared with $437 per tonne for the first quarter of 2012 and $421 per tonne for the second quarter of 2011. Our average realized price for the second quarter of 2012 was $384 per tonne compared with $382 per tonne for the first quarter of 2012 and $363 per tonne for the second quarter of 2011. The change in average realized price for the second quarter of 2012 increased Adjusted EBITDA by $4 million compared with the first quarter of 2012 and increased Adjusted EBITDA by $33 million compared with the second quarter of 2011. Our average realized price for the six months ended June 30, 2012 was $383 per tonne compared with $365 per tonne for the same period in 2011 and this increased Adjusted EBITDA by $57 million.

Sales volume

Methanol sales volumes excluding commission sales volumes were lower in the second quarter of 2012 compared with the first quarter of 2012 by 47,000 tonnes and this resulted in lower Adjusted EBITDA by $5 million. Methanol sales volumes excluding commission sales for the three and six month periods ended June 30, 2012 were lower than comparable periods in 2011 by 64,000 tonnes and 130,000 tonnes and this resulted in lower Adjusted EBITDA by $6 million and $11 million, respectively.

Total cash costs

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

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

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


                                    Q2 2012         Q2 2012     YTD Q2 2012 
                              compared with   compared with   compared with 
($ millions)                        Q1 2012         Q2 2011     YTD Q2 2011 
----------------------------------------------------------------------------
Methanex-produced methanol                                                  
 costs                       $            6  $          (10) $          (18)
Proportion of Methanex-                                                     
 produced methanol sales                 15              12              30 
Purchased methanol costs                 (8)            (14)            (23)
Logistics costs                          11               3              (7)
Other, net                               (3)             (7)             (5)
----------------------------------------------------------------------------
                             $           21  $          (16) $          (23)
----------------------------------------------------------------------------

Methanex-produced methanol costs

We purchase natural gas for the Chile, Trinidad, Egypt and New Zealand methanol facilities under natural gas purchase agreements where the terms include a base price and a variable price component linked to the price of methanol. For the second quarter of 2012 compared with the first quarter of 2012, Methanex-produced methanol costs were lower by $6 million primarily due to an improved operating rate at the Atlas facility which resulted in a lower natural gas cost per tonne. Methanex-produced methanol costs were higher for the three and six month periods ended June 30, 2012 compared with the same periods in 2011 by $10 million and $18 million, respectively, primarily due to the impact of higher methanol pricing on natural gas costs.

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 second quarter of 2012 compared with the first quarter of 2012, a higher proportion of Methanex-produced methanol sales increased Adjusted EBITDA by $15 million. Sales of Methanex-produced methanol were higher in the second quarter of 2012 compared to the first quarter of 2012 primarily due to increased sales from the Atlas facility which underwent an outage in the first quarter of 2012 for maintenance and to repair an equipment failure.

For the three and six month periods ended June 30, 2012 compared with the same periods in 2011, a higher proportion of Methanex-produced methanol sales increased Adjusted EBITDA by $12 million and $30 million, respectively. The impact of higher sales volumes from the Egypt and Medicine Hat methanol facilities, which commenced operations in the first half of 2011, was partially offset by lower sales volumes from the Chile and Atlas methanol facilities in 2012.

Purchased methanol costs

Purchased methanol costs were higher for all periods presented primarily as a result of higher methanol pricing.

Logistics costs

For the second quarter of 2012 compared with the first quarter of 2012 and for the six month period ended June 30, 2012 compared with the same period in 2011, logistics cost variances were impacted by a one-time $7 million charge in the first quarter of 2012 to terminate a time charter vessel lease contract.

Other, net

For the three and six month periods ended June 30, 2012 compared with the same periods in 2011, other costs were higher by $2 million and $4 million, respectively, due to a portion of fixed manufacturing costs being charged directly to earnings rather than to inventory due to lower production at our Chile and Atlas facilities. The remaining differences for those periods are primarily due to the accounting for share-based compensation as more fully discussed in the share-based compensation section below.

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. 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 below.


                                     Three Months Ended     Six Months Ended
                           -----------------------------  ------------------
                              Jun 30    Mar 31   Jun 30      Jun 30   Jun 30
                                2012      2012     2011        2012     2011
--------------------------------------------------------  ------------------
Methanex Corporation share                                                  
 price (1)                  $  27.84  $  32.43 $  31.38    $  27.84 $  31.38
Grant-date fair value                                                       
 expense included in                                                        
 Adjusted EBITDA and                                                        
 Adjusted net income               7         7        3          14       11
Mark-to-market impact due                                                   
 to change in share price        (10)       18       (1)          8        1
--------------------------------------------------------  ------------------
Total share-based                                                           
 compensation expense                                                       
 (recovery)                 $     (3) $     25 $      2    $     22 $     12
--------------------------------------------------------  ------------------

1.  US dollar share price of Methanex Corporation as quoted on NASDAQ Global
    Market on the last trading day of the respective period. 

Share appreciation rights (SARs) and tandem share appreciation rights (TSARs) are units that grant the holder the right to receive a cash payment upon exercise for the difference between the market price of the Company's common shares and the exercise price, which is determined at the date of grant. The fair value of SARs and TSARs are re-measured each quarter using the Black-Scholes option pricing model, which considers the market value of the Company's common shares on the last trading day of the quarter.

Deferred, restricted and performance share units are grants of notional common shares that are redeemable for cash upon vesting based on the market value of the Company's common shares and are non-dilutive to shareholders. For deferred, restricted and performance share units, the value is initially measured at the grant date and subsequently re-measured based on the market value of the Company's common shares on the last trading day of each quarter.

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. The grant-date value is recognized in Adjusted EBITDA and Adjusted net income while the mark-to-market impact as a result of subsequent changes in the share price is excluded from Adjusted EBITDA and Adjusted net income.

Louisiana Project Relocation Expenses

In July 2012, we reached a final investment decision to proceed with the project to relocate an idle Chile facility to Geismar, Louisiana with an estimated project cost of approximately $550 million. The project will add one million tonnes of annual production capacity and is expected to be operational by the end of 2014. Under International Financial Reporting Standards, certain costs associated with relocating an asset are not eligible for capitalization and are required to be charged directly to earnings. In addition to the $4 million of Louisiana project relocation expenses charged to earnings in the second quarter of 2012, we expect a further before-tax charge to earnings in the third quarter of 2012, currently estimated to be approximately $35 million, after which we expect the remaining project expenditures to be capitalized. In addition, in association with this decision, we expect to incur a one-time before-tax non-cash charge of approximately $25 million in the third quarter of 2012 related to a portion of the carrying value of the Chile facility that is being relocated to Louisiana.

Depreciation and Amortization

Depreciation and amortization was $44 million for the second quarter of 2012 compared with $38 million for the first quarter of 2012 and $40 million for the second quarter of 2011. Depreciation and amortization was higher in the second quarter of 2012 compared with the first quarter of 2012 and second quarter of 2011 primarily due to higher sales of Methanex-produced methanol. Depreciation and amortization was $82 million for the six month period ended June 30, 2012 compared with $69 million for the same period in 2011. The increase in depreciation and amortization in 2012 compared with 2011 is primarily a result of depreciation associated with the Egypt (100% basis) and Medicine Hat methanol facilities which commenced operations in the first and second quarters of 2011, respectively.


Finance Costs                                                               

                            Three Months Ended             Six Months Ended 
                            ---------------------------  -------------------
                               Jun 30   Mar 31   Jun 30     Jun 30   Jun 30 
($ millions)                     2012     2012     2011       2012     2011 
-------------------------------------------------------  -------------------
Finance costs before                                                        
 capitalized interest        $     20 $     18 $     17   $     38 $     35 
Less capitalized interest           -        -        -          -       (8)
-------------------------------------------------------  -------------------

Finance costs                $     20 $     18 $     17   $     38 $     27 
-------------------------------------------------------  -------------------

Finance costs before capitalized interest for the second quarter of 2012 were $20 million compared with $18 million for the first quarter of 2012 and $17 million for the second quarter of 2011. Finance costs before capitalized interest for the six month period ended June 30, 2012 were $38 million compared with $35 million for the same period in 2011. The increase in finance costs for all periods presented is primarily due to the impact of the interest expense on the $250 million of unsecured notes issued by the Company in late February 2012. The unsecured notes bear an interest rate of 5.25% and mature in 2022. We intend to repay the 8.75% $200 million unsecured notes due in August 2012 with cash on hand.

Capitalized interest relates to interest costs capitalized during the construction of the 1.26 million tonne per year methanol facility in Egypt (100% basis). The Egypt methanol facility commenced production in mid-March 2011 and accordingly, we ceased capitalization of interest costs from this date.


Finance Income and Other                                                    
 Expenses                                                                   

                                      Three Months Ended    Six Months Ended
                             ---------------------------  ------------------
                                Jun 30   Mar 31   Jun 30     Jun 30   Jun 30
($ millions)                      2012     2012     2011       2012     2011
--------------------------------------------------------  ------------------
Finance income and other                                                    
 expenses                     $      - $      2 $      1   $      2 $      6
--------------------------------------------------------  ------------------

Finance income and other expenses for the second quarter of 2012 was nil compared with $2 million for the first quarter of 2012 and $1 million for the second quarter of 2011. 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

The effective tax rate for the second quarter of 2012 was 18% compared with approximately 23% for the first quarter of 2012.

We earn the majority of our pre-tax earnings in Trinidad, Egypt, Chile, Canada and New Zealand. In Trinidad and Chile, the statutory tax rate is 35% and in Egypt, the statutory tax rate is 25%. Our Atlas facility in Trinidad has partial relief from corporation income tax until 2014. We have significant loss carryforwards in Canada and New Zealand which have not been recognized for accounting purposes. During the second quarter of 2012, we earned a higher proportion of our consolidated income from methanol produced in Canada and New Zealand and this contributed to a lower effective tax rate compared with the first quarter of 2012.

In Chile the tax rate consists of a first tier tax that is payable when income is earned and a second tier tax that is due when earnings are distributed from Chile. The second tier tax is initially recorded as deferred income tax expense and is subsequently reclassified to current income tax expense when earnings are distributed.

SUPPLY/DEMAND FUNDAMENTALS

We estimate that methanol demand, excluding methanol demand from integrated methanol to olefins facilities, is currently approximately 51 million tonnes on an annualized basis. Despite some demand softness in certain derivatives in the current economic environment, overall methanol demand has remained good and prices have remained relatively stable.

Traditional chemical derivatives consume about two-thirds of global methanol demand and growth is correlated to industrial production.

Energy derivatives consume about one third of global methanol demand and over the last few years high energy prices have driven strong demand growth for methanol into energy applications such as gasoline blending and DME, primarily in China. Growth of methanol blending into gasoline in China has been particularly strong and we believe that future growth in this application is supported by regulatory changes in that country.

Many provinces in China have implemented fuel blending standards, and China also has national standards in place for methanol fuel blending (M85 & M100, or 85% methanol and 100% methanol, respectively). Methanol demand into olefins ("MTO") is emerging as a significant methanol derivative. There are three integrated and one merchant MTO plants in production and there is a second merchant plant expected to commence operation in 2012 which could consume up to two million tonnes of methanol. We believe demand potential into energy derivatives and olefins production will continue to grow.



Methanex Non-Discounted Regional Posted Prices (1)                          
                                                   July   June    May    Apr
(US$ per tonne)                                    2012   2012   2012   2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
United States                                       439    459    459    446
Europe (2)                                          421    427    429    450
Asia                                                440    465    480    440
----------------------------------------------------------------------------

1.  Discounts from our posted prices are offered to customers based on
    various factors.              
2.  EUR340 for Q3 2012 (Q2 2012 - EUR340) converted to United States
    dollars.          

During the second quarter of 2012, market conditions and the pricing environment were relatively stable. Our average non- discounted price for July 2012 is $433 per tonne.

In July 2012, we restarted an idle plant in New Zealand that added 0.65 million tonnes of annual production capacity and production commenced at a 0.85 million tonne plant in Beaumont, Texas. We have secured an offtake for a substantial quantity of production from the Beaumont facility. Over the next few years, there is a modest level of new capacity expected to come on-stream relative to demand growth expectations. There is a 0.8 million tonne plant expected to restart in Channelview, Texas in late 2013 and a 0.7 million tonne plant expected to start up in Azerbaijan in 2013. In New Zealand, we are assessing the feasibility of initiatives which could increase annual production capacity by up to 900,000 tonnes by the end of 2013 and recently announced that we have reached a final investment decision to proceed with the project to relocate an idle Chile facility to Geismar, Louisiana. The Louisiana project is on track to add one million tonnes of annual production capacity by the end of 2014. We expect that production from new capacity in China will be onsumed in that country and that higher cost production capacity in China will need to operate in order to satisfy demand growth.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities

Cash flows from operating activities in the second quarter of 2012 were $135 million compared with $93 million for the first quarter of 2012 and $78 million for the second quarter of 2011. Cash flows from operating activities for the six month period ended June 30, 2012 were $229 million compared with $202 million for the same period in 2011.

The changes in cash flows from operating activities resulted from changes in the following:


                                        Q2 2012       Q2 2012   YTD Q2 2012 
                                  compared with compared with compared with 
($ millions)                            Q1 2012       Q2 2011   YTD Q2 2011 
----------------------------------------------------------------------------
Adjusted EBITDA (attributable to                                            
 Methanex shareholders)            $         20  $         11  $         23 
Cash flows from operating                                                   
 activities attributable to non-                                            
 controlling interests                        4            11            35 
Changes in non-cash working                                                 
 capital                                     20            25           (37)
Income taxes paid                             3            17            16 
Other                                        (5)           (7)          (10)
----------------------------------------------------------------------------
Increase in cash flows from
 operating activities              $         42  $         57  $         27 
----------------------------------------------------------------------------

Adjusted cash flows from operating activities

Adjusted cash flows from operating activities, which excludes the amounts associated with the 40% non-controlling interests in the methanol facility in Egypt, changes in non-cash working capital and Louisiana project relocation expenses, were $110 million in the second quarter of 2012 compared with $89 million for the first quarter of 2012 and $86 million for the second quarter of 2011. Adjusted cash flows from operating activities for the six month period ended June 30, 2012 were $199 million compared with $167 million for the same period in 2011.

The changes in adjusted cash flows from operating activities resulted from changes in the following:


                                        Q2 2012       Q2 2012   YTD Q2 2012 
                                  compared with compared with compared with 
($ millions)                            Q1 2012       Q2 2011   YTD Q2 2011 
----------------------------------------------------------------------------
Adjusted EBITDA (attributable to                                            
 Methanex shareholders)            $         20  $         11  $         23 
Income taxes paid                             3            17            16 
Other                                        (2)           (4)           (7)
----------------------------------------------------------------------------
Increase in adjusted cash flows
 from operating activities         $         21  $         24  $         32 
----------------------------------------------------------------------------

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

During the second quarter of 2012, the Board of Directors approved a 9 percent increase to our quarterly dividend to shareholders, from $0.17 to $0.185 per share, and we paid a quarterly dividend of $17 million.

We operate in a highly competitive commodity industry and believe it is appropriate to maintain a conservative balance sheet and to maintain financial flexibility. During the first quarter of 2012, we issued $250 million of unsecured notes that mature in 2022 and our cash balance at June 30, 2012 was $623 million. 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 intend to repay the 8.75% $200 million unsecured notes due in August 2012 from cash on hand. We have a strong balance sheet and an undrawn $200 million credit facility provided by highly rated financial institutions that expires in mid-2015.

Our planned capital maintenance expenditure program directed towards maintenance, turnarounds and catalyst changes for existing operations is currently estimated to total approximately $150 million to the end of 2013, including major refurbishments at some of our plants. In July 2012, we reached a final investment decision to proceed with the project to relocate an idle Chile facility to Geismar, Louisiana. The estimated project costs are approximately $550 million and the plant is expected to be operational by the end of 2014.

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

Despite some demand softness in certain derivatives in the current economic environment, overall methanol demand has remained good and pricing relatively stable. In July, we restarted a second Motunui facility in New Zealand which adds 0.65 million tonnes of annual production capacity and increases our cash generation capability.

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 June 30, 2012, 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.

ANTICIPATED CHANGES TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Consolidation and Joint Arrangement Accounting

In May 2011, the IASB issued new accounting standards related to consolidation and joint arrangement accounting. The IASB has revised the definition of "control," which is a criterion for consolidation accounting. In addition, changes to IFRS in the accounting for joint arrangements were issued which, under certain circumstances, removed the option for proportionate consolidation accounting so that the equity method of accounting for such interests would need to be applied. The impact of applying consolidation accounting or equity accounting does not result in any change to net earnings or shareholders' equity, but would result in a significant presentation impact. We are currently assessing the impact of these standards on our financial statements. We currently account for our 63.1% interest in Atlas Methanol Company using proportionate consolidation accounting and this represents the most significant potential change under these new standards. The effective date for these standards is for periods commencing on or after January 1, 2013, with earlier adoption permitted.

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

Adjusted EBITDA (attributable to Methanex shareholders)

Adjusted EBITDA differs from the most comparable GAAP measure, cash flows from operating activities, because it includes share-based compensation excluding mark-to-market impact and does not include changes in non-cash working capital, other cash payments related to operating activities, Louisiana project relocation expenses, other non-cash items, income taxes paid, finance income and other expenses, and Adjusted EBITDA associated with the 40% non-controlling 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 of cash flows from operating activities to Adjusted EBITDA:


                                   Three Months Ended      Six Months Ended 
                        ------------------------------  --------------------
                           Jun 30    Mar 31    Jun 30      Jun 30    Jun 30 
($ thousands)                2012      2012      2011        2012      2011 
------------------------------------------------------  --------------------
Cash flows from                                                             
 operating activities    $135,232  $ 93,400  $ 77,634    $228,632  $202,154 
Add (deduct):                                                               
  Net income                                                                
   attributable to non-                                                     
   controlling interests  (13,907)  (10,730)   (6,220)    (24,637)   (5,144)
  Changes in non-cash                                                       
   working capital         (2,679)   17,424    22,227      14,745   (22,259)
  Other cash payments,                                                      
   including share-based                                                    
   compensation             4,863    10,392     1,662      15,255     6,996 
  Louisiana project                                                         
   relocation expenses      3,686         -         -       3,686         - 
  Share-based                                                               
   compensation                                                             
   excluding mark-to                                                        
   market impact           (7,119)   (6,891)   (3,086)    (14,010)  (10,442)
  Other non-cash items        397    (4,243)   (1,392)     (3,846)   (1,423)
  Income taxes paid         4,024     7,074    20,735      11,098    27,404 
  Finance income and                                                        
   other expenses             293    (1,679)   (1,284)     (1,386)   (6,143)
  Non-controlling                                                           
   interests adjustment                                                     
   (1)                    (12,015)  (11,500)   (8,038)    (23,515)   (8,249)
------------------------------------------------------  --------------------
Adjusted EBITDA                                                             
 (attributable to                                                           
 Methanex shareholders)  $112,775  $ 93,247  $102,238    $206,022  $182,894 
------------------------------------------------------  --------------------

1.  This adjustment represents finance costs, finance income and other
    expenses, income tax expense, and depreciation and amortization
    associated with the 40% non-controlling interest in the methanol
    facility in Egypt. 

Adjusted Net Income and Adjusted Diluted Net Income per Common Share

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


                              Three Months Ended           Six Months Ended 
          --------------------------------------- --------------------------
($               Jun 30       Mar 31       Jun 30        Jun 30       Jun 30
 thousands)        2012         2012         2011          2012         2011
------------------------------------------------- --------------------------
Net income                                                                  
 attribu-                                                                  
 table to                                                                   
 Methanex                                                                   
 share-                                                                  
 holders    $   52,238  $    22,081  $    40,529   $    74,319  $    75,139
  Mark-to-                                                                  
   market                                                                   
   impact                                                                   
   of                                                                       
   share-                                                                   
   based                                                                    
   compen-                                                                  
   sation      (10,639)      18,167       (1,426)        7,528        1,298 
  Louis-                                                                  
   iana                                                                     
   project                                                                  
   reloc-                                                                  
   ation                                                                   
   expen-                                                                  
   ses           3,686            -            -         3,686            - 
  Income                                                                    
   taxes                                                                    
   related                                                                  
   to                                                                       
   above                                                                    
   items          (932)      (1,468)         120        (2,400)         (94)
------------------------------------------------- --------------------------
Adjusted                                                                    
 net                                                                        
 income    $    44,353  $    38,780  $    39,223   $    83,133  $    76,343 
------------------------------------------------- --------------------------
Diluted                                                                     
 weighted                                                                   
 average                                                                    
 shares                                                                     
 outstan-                                                                  
 ding       95,119,964   94,714,364   94,580,090    94,772,610   94,288,918 
Adjusted                                                                    
 diluted net                                                               
 income                                                                     
 per                                                                        
 common                                                                     
 share     $      0.47  $      0.41  $      0.41   $      0.88  $      0.81 
------------------------------------------------- --------------------------

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

Adjusted cash flows from operating activities differs from the most comparable GAAP measure, cash flows from operating activities, because it does not include cash flows associated with the 40% non- controlling interest in the methanol facility in Egypt, changes in non-cash working capital and Louisiana project relocation expenses.

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



                                   Three Months Ended      Six Months Ended 
                        ------------------------------  --------------------
                           Jun 30    Mar 31    Jun 30      Jun 30    Jun 30 
($ thousands)                2012      2012      2011        2012      2011 
------------------------------------------------------  --------------------
Cash flows from                                                             
 operating activities    $135,232  $ 93,400  $ 77,634    $228,632  $202,154 
Add (deduct) non-                                                           
 controlling interest                                                       
 adjustment:                                                                
  Net income              (13,907)  (10,730)   (6,220)    (24,637)   (5,144)
  Non-cash items          (12,015)  (11,500)   (8,038)    (23,515)   (8,249)
Changes in non-cash                                                         
 working capital           (2,679)   17,424    22,227      14,745   (22,259)
Louisiana project                                                           
 relocation expenses        3,686         -         -       3,686         - 
------------------------------------------------------  --------------------
Adjusted cash flows from                                                    
 operating activities                                                       
 (attributable to                                                           
 Methanex shareholders)  $110,317  $ 88,594  $ 85,603    $198,911  $166,502 
------------------------------------------------------  --------------------

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        
                                        ------------------------------------
                                           Jun 30   Mar 31   Dec 31   Sep 30
($ thousands, except per share amounts)      2012     2012     2011     2011
----------------------------------------------------------------------------
Revenue                                  $656,103 $665,867 $696,499 $669,702
Net income(1)                              52,238   22,081   63,871   62,316
Adjusted net income (1,2)                  44,353   38,780   64,987   40,497
Basic net income per common share (1)        0.56     0.24     0.69     0.67
Diluted net income per common share (1)      0.50     0.23     0.68     0.59
Adjusted diluted net income per share (1,2)  0.47     0.41     0.69     0.43
----------------------------------------------------------------------------


                                                  Three Months Ended        
                                        ------------------------------------
                                           Jun 30   Mar 31   Dec 31   Sep 30
($ thousands, except per share amounts)      2011     2011     2010     2010
----------------------------------------------------------------------------
Revenue                                  $622,829 $619,007 $570,337 $480,997
Net income (1)                             40,529   34,610   25,508   28,662
Adjusted net income (1,2)                  39,223   37,120   39,448   34,019
Basic net income per common share (1)        0.44     0.37     0.28     0.31
Diluted net income per common share (1)      0.43     0.37     0.27     0.31
Adjusted diluted net income per share (1,2)  0.41     0.39     0.42     0.36
----------------------------------------------------------------------------

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 for a description of each
    non-GAAP measure and reconciliations to the most comparable GAAP
    measures. 

FORWARD-LOOKING INFORMATION WARNING

This Second Quarter 2012 Management's Discussion and Analysis ("MD&A") as well as comments made during the Second Quarter 2012 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," "potential," "estimates," "target," "interest," "planning" 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 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, 
--  commitments, capital or otherwise of third parties to future natural gas
    exploration and development in the vicinity of our plants, 
--  expected capital expenditures, including, without limitation, those to
    support natural gas exploration and development for our plants and the
    restart of our idled methanol facilities, 
--  anticipated production rates of our plants, 
--  expected operating costs, including natural gas feedstock costs and
    logistics costs, 
--  expected tax rates or resolutions to tax disputes, 
--  expected cash flows, earnings capability and share price, 
--  ability to meet covenants or obtain waivers associated with our long-
    term debt obligations, including, without limitation, the Egypt limited
    recourse debt facilities that have conditions associated with
    finalization of certain land title registration and related mortgages
    that require action by Egyptian governmental entities, 
--  availability of committed credit facilities and other financing, 
--  shareholder distribution strategy and anticipated distributions to
    shareholders, 
--  commercial viability of, or ability to execute, future projects, plant
    restarts, capacity expansions, plant relocations or other business
    initiatives or opportunities, including the planned relocation of one of
    our idle Chile methanol plants to Louisiana and certain initiatives in
    New Zealand, 
--  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 results of operations in Egypt and our financial
    condition as a consequence of actions taken 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:


--  supply of, demand for, and price of, methanol, methanol derivatives,
    natural gas, oil and oil derivatives, 
--  success of natural gas exploration in Chile and New Zealand and our
    ability to procure economically priced natural gas in Chile, New
    Zealand, Canada and the United States, 
--  production rates of our facilities, 
--  receipt of permits in connection with the Louisiana relocation 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 natural gas exploration rights, 
--  the establishment of new fuel standards, 
--  operating costs including natural gas feedstock and logistics costs,
    capital costs, tax rates, cash flows, foreign exchange rates and
    interest rates, 
--  availability of committed credit facilities and other financing, 
--  timing of completion and cost of our Louisiana relocation 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 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, 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 supply, demand and price for methanol and its derivatives, including
    demand for methanol for energy uses, 
--  the price of natural gas, oil and oil derivatives, 
--  the success of natural gas exploration and development activities in
    southern Chile and New Zealand and our ability to obtain any additional
    gas in Chile, New Zealand on commercially acceptable terms, 
--  the ability to successfully carry out corporate initiatives and
    strategies, 
--  actions of competitors, suppliers and financial institutions, 
--  actions of governments and governmental authorities, including without
    limitation, the implementation of policies or other measures that could
    impact the supply 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, and 
--  other risks described in our 2011 Management's Discussion and Analysis
    and this Second Quarter 2012 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 on for a reconciliation to the most comparable GAAP measure).

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


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

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

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

We own 63.1% of the Atlas methanol facility and market the remaining 36.9% of its production through a commission offtake agreement. We account for this investment using proportionate consolidation, which results in 63.1% of its results being included in revenues and expenses with the remaining 36.9% portion included as commission income.

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


Methanex Corporation                                                        
Consolidated Statements of Income (unaudited)                               
(thousands of U.S. dollars, except number of common shares and per share    
amounts)                                                                    

----------------------------------------------------------------------------
                             Three Months Ended            Six Months Ended 
                      --------------------------  --------------------------
                            Jun 30       Jun 30        Jun 30        Jun 30 
                              2012         2011          2012          2011 
----------------------------------------------------------------------------
Revenue                $   656,103  $   622,829  $  1,321,970  $  1,241,836 
Cost of sales and                                                           
 operating expenses       (506,769)    (504,907)   (1,075,326)   (1,046,847)
Depreciation and                                                            
 amortization              (44,436)     (39,713)      (82,403)      (69,413)
Louisiana project                                                           
 relocation expenses                                                        
 (note 3)                   (3,686)           -        (3,686)            - 
----------------------------------------------------------------------------
Operating income           101,212       78,209       160,555       125,576 
Finance costs (note 5)     (20,137)     (17,350)      (38,670)      (26,543)
Finance income and                                                          
 other expenses               (293)       1,284         1,386         6,143 
----------------------------------------------------------------------------
Profit before income                                                        
 tax expense                80,782       62,143       123,271       105,176 
Income tax expense:                                                         
  Current                  (10,589)      (8,267)      (15,157)      (16,542)
  Deferred                  (4,048)      (7,127)       (9,158)       (8,351)
----------------------------------------------------------------------------
                           (14,637)     (15,394)      (24,315)      (24,893)
----------------------------------------------------------------------------
Net income             $    66,145  $    46,749  $     98,956  $     80,283 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation                                                      
   shareholders             52,238       40,529        74,319        75,139 
  Non-controlling                                                           
   interests                13,907        6,220        24,637         5,144 
----------------------------------------------------------------------------
                       $    66,145  $    46,749  $     98,956  $     80,283 
----------------------------------------------------------------------------

Income for the period                                                       
 attributable to                                                            
 Methanex Corporation                                                       
 shareholders                                                               
Basic net income per                                                        
 common share (note 6) $      0.56  $      0.44  $       0.80  $       0.81 
Diluted net income per                                                      
 common share (note 6) $      0.50  $      0.43  $       0.78  $       0.80 

Weighted average                                                            
 number of common                                                           
 shares outstanding     93,781,404   92,972,678    93,445,231    92,711,291 
Diluted weighted                                                            
 average number of                                                          
 common shares                                                              
 outstanding            95,119,964   94,580,090    94,772,610    94,288,918 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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    Six Months Ended 
                                    --------------------  ------------------
                                       Jun 30    Jun 30    Jun 30    Jun 30 
                                         2012      2011      2012      2011 
----------------------------------------------------------------------------
Net income                           $ 66,145  $ 46,749  $ 98,956  $ 80,283 
  Other comprehensive income (loss):                                        
    Change in fair value of forward                                         
     exchange contracts, net of tax      (566)     (669)     (871)     (669)
    Change in fair value of interest                                        
     rate swap contracts, net of tax     (747)  (11,859)   (3,360)  (11,664)
    Realized loss on interest rate                                          
     swap contracts reclassified to                                         
     interest expense, net of tax       2,766     3,954     5,702     4,824 
    Realized loss on interest rate                                          
     swap contracts reclassified to                                         
     property, plant and equipment          -         -         -     7,279 
----------------------------------------------------------------------------
                                        1,453    (8,574)    1,471      (230)
----------------------------------------------------------------------------
Comprehensive income                 $ 67,598  $ 38,175  $100,427  $ 80,053 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation shareholders    52,883    35,117    74,853    74,733 
  Non-controlling interests            14,715     3,058    25,574     5,320 
----------------------------------------------------------------------------
                                     $ 67,598  $ 38,175  $100,427  $ 80,053 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to condensed consolidated interim financial          
statements.                                                                 


Methanex Corporation                                                        
Consolidated Statements of Financial Position (unaudited)                   
(thousands of U.S. dollars)                                                 

----------------------------------------------------------------------------
                                                        Jun 30       Dec 31 
AS AT                                                     2012         2011 
----------------------------------------------------------------------------

ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents                        $   623,209  $   350,711 
  Trade and other receivables                          383,580      378,430 
  Inventories (note 2)                                 245,066      281,015 
  Prepaid expenses                                      35,321       24,465 
----------------------------------------------------------------------------
                                                     1,287,176    1,034,621 
Non-current assets:                                                         
  Property, plant and equipment (note 3)             2,254,972    2,233,023 
  Other assets                                         117,457      125,931 
----------------------------------------------------------------------------
                                                     2,372,429    2,358,954 
----------------------------------------------------------------------------
                                                   $ 3,659,605  $ 3,393,575 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Trade, other payables and accrued liabilities    $   289,159  $   327,130 
  Current maturities on long-term debt (note 4)        252,220      251,107 
  Current maturities on finance leases                   7,031        6,713 
  Current maturities on other long-term                                     
   liabilities                                          21,612       18,031 
----------------------------------------------------------------------------
                                                       570,022      602,981 
Non-current liabilities:                                                    
  Long-term debt (note 4)                              873,620      652,148 
  Finance leases                                        52,370       55,979 
  Other long-term liabilities                          181,856      178,172 
  Deferred income tax liabilities                      313,601      302,332 
----------------------------------------------------------------------------
                                                     1,421,447    1,188,631 
Equity:                                                                     
  Capital stock                                        469,592      455,434 
  Contributed surplus                                   18,793       22,281 
  Retained earnings                                    984,032      942,978 
  Accumulated other comprehensive loss                 (15,434)     (15,968)
----------------------------------------------------------------------------
  Shareholders' equity                               1,456,983    1,404,725 
  Non-controlling interests                            211,153      197,238 
----------------------------------------------------------------------------
  Total equity                                       1,668,136    1,601,963 
----------------------------------------------------------------------------
                                                   $ 3,659,605  $ 3,393,575 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to condensed consolidated interim financial          
statements.                                                                 


Methanex Corporation                                                        
Consolidated Statements of Changes in Equity (unaudited)                    
(thousands of U.S. dollars, except number of common shares)                 

----------------------------------------------------------------------------

                             Number of                                      
                                Common      Capital  Contributed   Retained 
                                Shares        Stock      Surplus   Earnings 
----------------------------------------------------------------------------
Balance, December 31,                                                       
 2010                       92,632,022    $ 440,092   $   25,393 $  813,819 
  Net income                         -            -            -     75,139 
  Other comprehensive                                                       
   income (loss)                     -            -            -          - 
  Compensation expense                                                      
   recorded for stock                                                       
   options                           -            -          472          - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                     534,318       10,180            -          - 
  Reclassification of                                                       
   grant date fair value                                                    
   on exercise of stock                                                     
   options                           -        3,568       (3,568)         - 
  Dividend payments to                                                      
   Methanex Corporation                                                     
   shareholders                      -            -            -    (30,210)
  Distributions to non-                                                     
   controlling interests             -            -            -          - 
  Equity contributions by                                                   
   non-controlling                                                          
   interests                         -            -            -          - 
----------------------------------------------------------------------------
Balance, June 30, 2011      93,166,340      453,840       22,297    858,748 
  Net income                         -            -            -    126,187 
  Other comprehensive                                                       
   income (loss)                     -            -            -    (10,258)
  Compensation expense                                                      
   recorded for stock                                                       
   options                           -            -          365          - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                      81,415        1,213            -          - 
  Reclassification of                                                       
   grant date fair value                                                    
   on exercise of stock                                                     
   options                           -          381         (381)         - 
  Dividend payments to                                                      
   Methanex Corporation                                                     
   shareholders                      -            -            -    (31,699)
  Distributions to non-                                                     
   controlling interests             -            -            -          - 
  Equity contributions by                                                   
   non-controlling                                                          
   interests                         -            -            -          - 
----------------------------------------------------------------------------
Balance, December 31,                                                       
 2011                       93,247,755      455,434       22,281    942,978 
  Net income                         -            -            -     74,319 
  Other comprehensive                                                       
   income                            -            -            -          - 
  Compensation expense                                                      
   recorded for stock                                                       
   options                           -            -          403          - 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                     569,487       10,267            -          - 
  Reclassification of                                                       
   grant date fair value                                                    
   on exercise of stock                                                     
   options                           -        3,891       (3,891)         - 
  Dividend payments to                                                      
   Methanex Corporation                                                     
   shareholders                      -            -            -    (33,265)
  Distributions to non-                                                     
   controlling interests             -            -            -          - 
  Equity contributions by                                                   
   non-controlling                                                          
   interests                         -            -            -          - 
----------------------------------------------------------------------------
Balance, June 30, 2012      93,817,242   $  469,592   $   18,793 $  984,032 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                           Accumulated                                      
                                 Other                      Non-            
                         Comprehensive Shareholders' Controlling      Total 
                                  Loss        Equity   Interests     Equity 
----------------------------------------------------------------------------
Balance, December 31,                                                       
 2010                       $  (26,093) $  1,253,211  $  156,412 $1,409,623
  Net income                         -        75,139       5,144     80,283 
  Other comprehensive                                                       
   income (loss)                  (406)         (406)        176       (230)
  Compensation expense                                                      
   recorded for stock                                                       
   options                           -           472           -        472 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                           -        10,180           -     10,180 
  Reclassification of                                                       
   grant date fair value                                                    
   on exercise of stock                                                     
   options                           -             -           -          - 
  Dividend payments to                                                      
   Methanex Corporation                                                     
   shareholders                      -       (30,210)          -    (30,210)
  Distributions to non-                                                     
   controlling interests             -             -      (1,250)    (1,250)
  Equity contributions by                                                   
   non-controlling                                                          
   interests                         -             -      19,200     19,200 
----------------------------------------------------------------------------
Balance, June 30, 2011         (26,499)    1,308,386     179,682  1,488,068 
  Net income                         -       126,187      21,530    147,717 
  Other comprehensive                                                       
   income (loss)                10,531           273       6,356      6,629 
  Compensation expense                                                      
   recorded for stock                                                       
   options                           -           365           -        365 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                           -         1,213           -      1,213 
  Reclassification of                                                       
   grant date fair value                                                    
   on exercise of stock                                                     
   options                           -             -           -          - 
  Dividend payments to                                                      
   Methanex Corporation                                                     
   shareholders                      -       (31,699)          -    (31,699)
  Distributions to non-                                                     
   controlling interests             -             -     (10,330)   (10,330)
  Equity contributions by                                                   
   non-controlling                                                          
   interests                         -             -           -          - 
----------------------------------------------------------------------------
Balance, December 31,                                                       
 2011                          (15,968)    1,404,725     197,238  1,601,963 
  Net income                         -        74,319      24,637     98,956 
  Other comprehensive                                                       
   income                          534           534         937      1,471 
  Compensation expense                                                      
   recorded for stock                                                       
   options                           -           403           -        403 
  Issue of shares on                                                        
   exercise of stock                                                        
   options                           -        10,267           -     10,267 
  Reclassification of                                                       
   grant date fair value                                                    
   on exercise of stock                                                     
   options                           -             -           -          - 
  Dividend payments to                                                      
   Methanex Corporation                                                     
   shareholders                      -       (33,265)          -    (33,265)
  Distributions to non-                                                     
   controlling interests             -             -     (12,659)   (12,659)
  Equity contributions by                                                   
   non-controlling                                                          
   interests                         -             -       1,000      1,000 
----------------------------------------------------------------------------
Balance, June 30, 2012     $   (15,434)  $ 1,456,983  $  211,153 $1,668,136 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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       Six Months Ended 
                               ----------------------  ---------------------
                                   Jun 30     Jun 30      Jun 30     Jun 30 
                                     2012       2011        2012       2011 
----------------------------------------------------------------------------

CASH FLOWS FROM OPERATING                                                   
 ACTIVITIES                                                                 
  Net income                    $  66,145  $  46,749  $   98,956  $  80,283 
  Add (deduct) non-cash items:                                              
    Depreciation and                                                        
     amortization                  44,436     39,713      82,403     69,413 
    Income tax expense             14,637     15,394      24,315     24,893 
    Share based compensation       (3,518)     1,660      21,540     11,740
    Finance costs                  20,137     17,350      38,670     26,543 
    Other                            (397)     1,392       3,846      1,423 
  Income taxes paid                (4,024)   (20,735)    (11,098)   (27,404)
  Other cash payments,                                                      
   including share-based                                                    
   compensation                    (4,863)    (1,662)    (15,255)    (6,996)
----------------------------------------------------------------------------
  Cash flows from operating                                                 
   activities before undernoted   132,553     99,861     243,377    179,895 
  Changes in non-cash working                                               
   capital (note 8)                 2,679    (22,227)    (14,745)    22,259 
----------------------------------------------------------------------------
                                  135,232     77,634     228,632    202,154 
----------------------------------------------------------------------------

CASH FLOWS FROM FINANCING                                                   
 ACTIVITIES                                                                 
  Dividend payments to Methanex                                             
   Corporation shareholders       (17,357)   (15,839)    (33,265)   (30,210)
  Interest paid, including                                                  
   interest rate swap                                                       
   settlements                     (1,760)    (4,851)    (27,023)   (30,251)
  Net proceeds on issue of                                                  
   long-term debt                       -      2,700     246,548      2,700 
  Repayment of limited recourse                                             
   debt                            (8,134)    (8,641)    (25,288)   (24,840)
  Change in project finance                                                 
   reserve accounts                     -     (2,209)          -     (2,209)
  Equity contributions by non-                                              
   controlling interests                -      3,600       1,000     19,200 
  Cash distributions to non-                                                
   controlling interests           (3,254)    (1,250)    (15,999)    (1,250)
  Proceeds on issue of shares                                               
   on exercise of stock options     2,199      8,524      10,267     10,180 
  Repayment of finance leases                                               
   and other long term                                                      
   liabilities                     (1,662)    (1,514)     (3,292)    (2,845)
----------------------------------------------------------------------------
                                  (29,968)   (19,480)    152,948    (59,525)
----------------------------------------------------------------------------

CASH FLOWS FROM INVESTING                                                   
 ACTIVITIES                                                                 
  Property, plant and equipment   (48,471)   (39,322)   (105,913)   (78,782)
  Oil and gas assets               (5,156)   (11,897)    (11,955)   (17,497)
  GeoPark repayments                3,409      2,454      10,039      7,551 
  Changes in non-cash working                                               
   capital related to investing                                             
   activities (note 8)            (15,922)    (3,570)     (1,253)    (2,071)
----------------------------------------------------------------------------
                                  (66,140)   (52,335)   (109,082)   (90,799)
----------------------------------------------------------------------------
  Increase in cash and cash                                                 
   equivalents                     39,124      5,819     272,498     51,830 
  Cash and cash equivalents,                                                
   beginning of period            584,085    239,805     350,711    193,794 
----------------------------------------------------------------------------
  Cash and cash equivalents,                                                
   end of period                $ 623,209  $ 245,624  $  623,209  $ 245,624 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to condensed consolidated interim financial          
statements.                                                                 


Methanex Corporation                                                        
Notes to Condensed Consolidated Interim Financial Statements (unaudited)    
Except where otherwise noted, tabular dollar amounts are stated in thousands
of U.S. dollars.                                                            

1. Basis of presentation:

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

These condensed consolidated interim financial statements are prepared in accordance with International Accounting Standards (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB) on a basis consistent with those followed in the most recent annual consolidated financial statements. These condensed consolidated interim financial statements include the Egypt methanol facility on a consolidated basis, with the other investors' 40% share presented as non-controlling interest, and the Company's proportionate share of the Atlas methanol facility.

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 July 25, 2012.

2. Inventories:

Inventories are valued at the lower of cost, determined on a first-in first-out basis, and estimated net realizable value. The amount of inventories included in cost of sales and operating expenses and depreciation and amortization for the three and six month periods ended June 30, 2012 is $497 million (2011 - $490 million) and $1,015 million (2011 - $997 million), respectively.

3. Property, plant and equipment:


                               Buildings,                                   
                                    Plant                                   
                          Installations &     Oil & Gas                     
                                Machinery    Properties    Other       Total
----------------------------------------------------------------------------
Cost at June 30, 2012    $      3,317,802 $      79,958 $ 67,069 $ 3,464,829
Accumulated depreciation                                                    
 at June 30, 2012               1,142,088        43,319   24,450   1,209,857
----------------------------------------------------------------------------
Net book value at June                                                      
 30, 2012                $      2,175,714 $      36,639 $ 42,619 $ 2,254,972
----------------------------------------------------------------------------
Cost at December 31,                                                        
 2011                    $      3,210,923 $      77,486 $ 88,642 $ 3,377,051
Accumulated depreciation                                                    
 at December 31, 2011           1,070,267        32,990   40,771   1,144,028
----------------------------------------------------------------------------
Net book value at                                                           
 December 31, 2011       $      2,140,656 $      44,496 $ 47,871 $ 2,233,023
----------------------------------------------------------------------------

Subsequent to June 30, 2012, the Company made a final investment decision to proceed with the project to relocate an idle Chile facility to Geismar, Louisiana with an estimated project cost of approximately $550 million. Under International Financial Reporting Standards, certain costs incurred in relation to relocating an asset are not eligible for capitalization to Property, Plant and Equipment and are required to be charged directly to income. At June 30, 2012, the Company had incurred $19.3 million in expenditures related to this project, of which $15.6 million was recorded to Property, Plant and Equipment, and the remaining $3.7 million was recognized as Louisiana project relocation expenses in the Consolidated Statements of Income. The Company estimates that additional expenditures of approximately $35 million will be incurred in relation to the relocation which will be charged directly to income. In addition, the Company expects to incur a before-tax non-cash charge to income of approximately $25 million in the three month period ending September 30, 2012 related to a portion of the carrying value of the Chile facility that is being relocated to Louisiana.

4. Long-term debt:


                                                         Jun 30      Dec 31 
                                                           2012        2011 
----------------------------------------------------------------------------
Unsecured notes                                                             
  8.75% due August 15, 2012                          $  199,748  $  199,643 
  6.00% due August 15, 2015                             149,229     149,119 
  5.25% due March 1, 2022                               246,467           - 
----------------------------------------------------------------------------
                                                        595,444     348,762 
Atlas limited recourse debt facilities                   57,037      64,397 
Egypt limited recourse debt facilities                  454,696     470,208 
Other limited recourse debt facilities                   18,663      19,888 
----------------------------------------------------------------------------
                                                      1,125,840     903,255 
Less current maturities                                (252,220)   (251,107)
----------------------------------------------------------------------------
                                                     $  873,620  $  652,148 
----------------------------------------------------------------------------

The Company has a $200 million unsecured revolving bank facility provided by highly rated financial institutions which expires mid-2015.

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

At June 30, 2012, management believes the Company was in compliance with all of the covenants and default provisions related to long-term debt obligations.

5. Finance costs:


                                       Three Months Ended  Six Months Ended 
                                     --------------------  -----------------
                                         Jun 30    Jun 30   Jun 30   Jun 30 
                                           2012      2011     2012     2011 
---------------------------------------------------------  -----------------
Finance costs                         $  20,137 $  17,350 $ 38,670 $ 34,643 
Less capitalized interest related to                                        
 Egypt plant under construction               -         -        -   (8,100)
----------------------------------------------------------------------------
                                      $  20,137 $  17,350 $ 38,670 $ 26,543 
----------------------------------------------------------------------------

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 of the Egypt methanol facility was capitalized until the plant was substantially completed and ready for productive use in mid-March of 2011. 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.

6.Net income per common share:

Diluted net income per common share is calculated by giving effect to the potential dilution that would occur if outstanding stock options and 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 cash-settled and equity-settled is used, regardless of how the plan is accounted for. Accordingly, TSARs that are accounted for using the cash-settled method will require an adjustment to the numerator and denominator if the equity-settled method is determined to have a dilutive effect on diluted net income per common share.

During the three month period ended June 30, 2012, the Company's share price declined and the Company recorded a share-based compensation recovery related to TSARs. For this period, the equity-settled method has been determined to be the more dilutive for purposes of calculating diluted net income per common share.

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


                                      Three Months Ended    Six Months Ended
                                   ---------------------  ------------------
                                       Jun 30     Jun 30    Jun 30    Jun 30
                                         2012       2011      2012      2011
--------------------------------------------------------  ------------------
Numerator for basic net income per                                          
 common share                       $  52,238  $  40,529 $  74,319 $  75,139
  Adjustment for the effect of                                              
   TSARs:                                                                   
    Cash settled recovery included                                          
     in net income                     (2,762)         -         -         -
    Equity settled expense             (2,021)         -         -         -
----------------------------------------------------------------------------
Numerator for diluted net income                                            
 per common share                   $  47,455  $  40,529 $  74,319 $  75,139
----------------------------------------------------------------------------

Stock options and 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 number of common shares used for the purposes of calculating basic and diluted net income per common share is as follows:


                                    Three Months Ended      Six Months Ended
                                --------------------------------------------
                                     Jun 30     Jun 30     Jun 30     Jun 30
                                       2012       2011       2012       2011
----------------------------------------------------------------------------
Denominator for basic net income                                            
 per common share                93,781,404 92,972,678 93,445,231 92,711,291
  Effect of dilutive stock                                                  
   options                        1,225,970  1,607,412  1,327,379  1,577,627
  Effect of dilutive TSARs          112,590          -          -          -
----------------------------------------------------------------------------
Denominator for diluted net                                                 
 income per common share (1)     95,119,964 94,580,090 94,772,610 94,288,918
----------------------------------------------------------------------------

1.  3,391,757 outstanding stock options for each of the three and six month
    periods ended June 30, 2012, respectively, are dilutive and have been
    included in the diluted weighted average number of common shares.
    1,170,645 outstanding TSARs for the three month period ended June 30,
    2012 are dilutive and have been included in the diluted weighted average
    number of common shares. 

For the three month and six month periods ended June 30, 2012, basic and diluted net income per common share attributable to Methanex shareholders were as follows:


                                      Three Months Ended   Six Months Ended 
                                    --------------------  ------------------
                                        Jun 30    Jun 30    Jun 30    Jun 30
                                          2012      2011      2012      2011
--------------------------------------------------------  ------------------
Basic net income per common share    $    0.56 $    0.44 $    0.80 $    0.81
Diluted net income per common share  $    0.50 $    0.43 $    0.78 $    0.80
----------------------------------------------------------------------------

7. Share-based compensation:


a. Stock options, share appreciation rights (SARs) and tandem share
    appreciation rights (TSARs):


i. Outstanding Units: 

Information regarding units outstanding and exercisable at June 30, 2012 is as follows:


                        Units Outstanding at            Units Exercisable at
                               June 30, 2012                   June 30, 2012
                    --------------------------------------------------------
                        Weighted                                            
                         Average              Weighted              Weighted
                       Remaining      Number   Average      Number   Average
Range of Exercise    Contractual    of Units  Exercise    of Units  Exercise
 Prices             Life (Years) Outstanding     Price Exercisable     Price
----------------------------------------------------------------------------
Stock options:                                                              
  $6.33 to 11.56             3.5   1,071,055 $    6.54   1,071,055 $    6.54
  $20.76 to 25.22            1.4   1,396,477     23.26   1,369,877     23.22
  $28.43 to 31.73            3.0   1,008,225     28.72     882,125     28.44
----------------------------------------------------------------------------
                             2.5   3,475,757 $   19.69   3,323,057 $   19.23
----------------------------------------------------------------------------
SARs:                                                                       
  $25.22 to 31.74            5.7     918,625 $   28.61     274,626 $   26.19
----------------------------------------------------------------------------
TSARs:                                                                      
  $23.36 to 31.88            5.7   1,816,035 $   28.44     620,380 $   26.12
----------------------------------------------------------------------------

ii. Compensation expense related to stock options: 

For the three and six month periods ended June 30, 2012, compensation expense related to stock options included in cost of sales and operating expenses was $0.2 million (2011 - $0.2 million) and $0.4 million (2011 - $0.5 million), respectively. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model.


iii. Compensation expense related to SARs and TSARs: 

Compensation expense for SARs and TSARs is initially 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 June 30, 2012 was $16.4 million compared with the recorded liability of $12.0 million. The difference between the fair value and the recorded liability of $4.4 million will be recognized over the weighted average remaining service period of approximately 1.8 years. The weighted average fair value of the vested SARs and TSARs was estimated at June 30, 2012 using the Black-Scholes option pricing model.

For the three and six month periods ended June 30, 2012, compensation expense related to SARs and TSARs included a recovery in cost of sales and operating expenses of $3.6 million (2011 - recovery of $1.1 million) and an expense of $7.1 million (2011 - expense of $3.9 million), respectively. This included a recovery of $6.4 million (2011 - recovery of $2.6 million) and an expense of $1.4 million (2011 - recovery of $0.4 million) related to the effect of the change in the Company's share price for the three and six month periods ended June 30, 2012, respectively.


b. Deferred, restricted and performance share units:

Deferred, restricted and performance share units outstanding at June 30, 2012 are as follows:


                                         Number of    Number of   Number of 
                                          Deferred   Restricted Performance 
                                       Share Units  Share Units Share Units 
----------------------------------------------------------------------------

Outstanding at December 31, 2011           597,911       48,588   1,103,049 
  Granted                                   19,358       20,400     358,330 
  Granted in-lieu of dividends               3,237          362       5,468 
  Redeemed                                       -            -    (413,138)
  Cancelled                                      -            -      (8,393)
----------------------------------------------------------------------------
Outstanding at March 31, 2012              620,506       69,350   1,045,316 
----------------------------------------------------------------------------
  Granted                                      540            -           - 
  Granted in-lieu of dividends               3,692          457       6,884 
  Redeemed                                 (66,531)           -           - 
  Cancelled                                      -            -           - 
----------------------------------------------------------------------------
Outstanding at June 30, 2012               558,207       69,807   1,052,200 
----------------------------------------------------------------------------

Compensation expense for deferred, restricted and performance share units is measured at fair value based on the market value of the Company's common shares and is recognized over the vesting period. Changes in fair value are recognized in earnings for the proportion of the service that has been rendered at each reporting date. The fair value of deferred, restricted and performance share units at June 30, 2012 was $44.5 million compared with the recorded liability of $37.5 million. The difference between the fair value and the recorded liability of $7.0 million will be recognized over the weighted average remaining service period of approximately 1.8 years.

For the three and six month periods ended June 30, 2012, compensation expense related to deferred, restricted and performance share units included in cost of sales and operating expenses was a recovery of $0.1 million (2011 - expense of $2.6 million) and an expense of $14.0 million (2011 - expense of $7.4 million), respectively. This included a recovery of $4.1 million (2011 - expense of $1.1 million) and an expense of $6.2 million (2011 - expense of $1.7 million) related to the effect of the change in the Company's share price for the three and six month periods ended June 30, 2012, respectively.

8. Changes in non-cash working capital:

Changes in non-cash working capital for the three months and years ended June 30, 2012 were as follows:


                                   Three Months Ended      Six Months Ended 
                                --------------------------------------------
                                    Jun 30     Jun 30     Jun 30     Jun 30 
                                      2012       2011       2012       2011 
----------------------------------------------------------------------------
Decrease (increase) in non-cash                                             
 working capital:                                                           
  Trade and other receivables    $ (11,938) $  (6,418) $  (5,150) $ (31,417)
  Inventories                       23,508    (26,516)    35,949     (7,093)
  Prepaid expenses                 (11,644)    (3,413)   (10,856)    (4,403)
  Trade, other payables and                                                 
   accrued liabilities,                                                     
   including long-term payables                                             
   included in other long-term                                              
   liabilities                       4,658      4,322    (35,927)    50,923 
----------------------------------------------------------------------------
                                     4,584    (32,025)   (15,984)     8,010 
Adjustments for items not having                                            
 a cash effect and working                                                  
 capital changes relating to                                                
 taxes and interest paid           (17,827)     6,228        (14)    12,178 
----------------------------------------------------------------------------
Changes in non-cash working                                                 
 capital having a cash effect    $ (13,243) $ (25,797) $ (15,998) $  20,188 
----------------------------------------------------------------------------

These changes relate to the                                                 
 following activities:                                                      
  Operating                      $   2,679  $ (22,227) $ (14,745) $  22,259 
  Investing                        (15,922)    (3,570)    (1,253)    (2,071)
----------------------------------------------------------------------------
Changes in non-cash working                                                 
 capital                         $ (13,243) $ (25,797) $ (15,998) $  20,188 
----------------------------------------------------------------------------

9. Financial instruments:

The Egypt limited recourse debt facilities bear interest at LIBOR plus a spread. The Company has interest rate swap contracts to swap the LIBOR-based interest payments for an average aggregated fixed rate of 4.8% plus a spread on approximately 75% of the Egypt limited recourse debt facilities for the period to March 31, 2015. The Company has designated these interest rate swaps as cash flow hedges. These interest rate swaps had outstanding notional amounts of $355 million as at June 30, 2012. The notional amounts decrease over the expected repayment period. At June 30, 2012, these interest rate swap contracts had a negative fair value of $36.8 million (2011 - $41.5 million) recorded in other long-term liabilities. The fair value of these interest rate swap contracts will fluctuate until maturity.

The Company also designates as cash flow hedges forward exchange contracts to sell euro at a fixed USD exchange rate. At June 30, 2012, the Company had outstanding forward exchange contracts designated as cash flow hedges to sell a notional amount of 68.6 million euro in exchange for US dollars and these euro contracts had a negative fair value of $1.1 million (2011 - positive fair value of $0.3 million) recorded in trade, other payables and accrued liabilities. Changes in fair value of derivative financial instruments designated as cash flow hedges have been recorded in other comprehensive income.

10. Contingent liability:

The Board of Inland Revenue of Trinidad and Tobago issued an assessment in 2011 against the Company's 63.1% owned joint venture, Atlas Methanol Company Unlimited ("Atlas"), in respect of the 2005 financial year. All subsequent tax years remain open to assessment. The assessment relates to the pricing arrangements of certain long- term fixed price sales contracts that extend to 2014 and 2019 related to methanol produced by Atlas. The impact of the amount in dispute for the 2005 financial year is nominal as Atlas was not subject to corporation income tax in that year. Atlas has partial relief from corporation income tax until 2014.

The Company has lodged an objection to the assessment. Based on the merits of the case and legal interpretation, management believes its position should be sustained.


Methanex Corporation                                                       
Quarterly History (unaudited)                                              


                               YTD                                         
                              2012   Q2 2012   Q1 2012   2011     Q4     Q3
---------------------------------------------------------------------------
METHANOL SALES VOLUMES                                                     
(thousands of tonnes)                                                      
Methanex-produced            1,927     1,001       926  3,853  1,052    983
Purchased methanol           1,260       569       691  2,815    644    672
Commission sales (1)           474       276       198    846    208    235
---------------------------------------------------------------------------
                             3,661     1,846     1,815  7,514  1,904  1,890
---------------------------------------------------------------------------
METHANOL PRODUCTION                                                        
(thousands of tonnes)                                                      
Chile                          195        82       113    554    113    116
New Zealand                    384       210       174    830    211    209
Atlas, Trinidad (63.1%)        391       264       127    891    195    170
Titan, Trinidad                411       196       215    711    180    224
Egypt (60%)                    366       164       202    532    132    191
Medicine Hat                   232       118       114    329    130    125
---------------------------------------------------------------------------
                             1,979     1,034       945  3,847    961  1,035
---------------------------------------------------------------------------
AVERAGE REALIZED METHANOL                                                  
 PRICE (2)                                                                 
  ($/tonne)                    383       384       382    374    388    377
  ($/gallon)                  1.15      1.15      1.15   1.12   1.17   1.13
PER SHARE INFORMATION3($                                                   
 per share)                                                                
   Basic net income           0.80      0.56      0.24   2.16   0.69   0.67
   Diluted net income         0.78      0.50      0.23   2.06   0.68   0.59
   Adjusted net income4       0.88      0.47      0.41   1.92   0.69   0.43



                                Q2     Q1   2010     Q4     Q3     Q2     Q1
----------------------------------------------------------------------------
METHANOL SALES VOLUMES                                                      
(thousands of tonnes)                                                       
Methanex-produced              970    848  3,540    831    885    900    924
Purchased methanol             664    835  2,880    806    792    678    604
Commission sales (1)           231    172    509    151    101    107    150
----------------------------------------------------------------------------
                             1,865  1,855  6,929  1,788  1,778  1,685  1,678
----------------------------------------------------------------------------
METHANOL PRODUCTION                                                         
(thousands of tonnes)                                                       
Chile                          142    183    935    208    194    229    304
New Zealand                    207    203    830    206    200    216    208
Atlas, Trinidad (63.1%)        263    263    884    266    284     96    238
Titan, Trinidad                186    121    891    233    217    224    217
Egypt (60%)                    178     31      -      -      -      -      -
Medicine Hat                    74      -      -      -      -      -      -
----------------------------------------------------------------------------
                             1,050    801  3,540    913    895    765    967
----------------------------------------------------------------------------
AVERAGE REALIZED METHANOL                                                   
 PRICE (2)                                                                  
  ($/tonne)                    363    367    306    348    286    284    305
  ($/gallon)                  1.09   1.10   0.92   1.05   0.86   0.85   0.92
PER SHARE INFORMATION3($                                                    
 per share)                                                                 
   Basic net income           0.44   0.37   1.04   0.28   0.31   0.16   0.29
   Diluted net income         0.43   0.37   1.03   0.27   0.31   0.15   0.29
   Adjusted diluted net
    income(4)                 0.41   0.39   0.93   0.42   0.13   0.09   0.29

1.  Commission sales represent volumes marketed on a commission basis
    related to the 36.9% of the Atlas methanol facility and 40% of the Egypt
    methanol facility that we do not own.
2.  Average realized price is calculated as revenue, excluding commissions
    earned and the Egypt non-controlling interest share of revenue, divided
    by the total sales volumes of Methanex-produced (attributable to
    Methanex shareholders) and purchased methanol.
3.  Per share information calculated using net income attributable to
    Methanex shareholders.
4.  This item is a non-GAAP measure that does not have any standardized
    meaning prescribed by GAAP and therefore is unlikely to be comparable to
    similar measures presented by other companies. Refer to Additional
    Information - Supplemental Non-GAAP Measures for a description of the
    non-GAAP measure and reconciliation to the most comparable GAAP measure.

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