MEOH Methanex Corporation

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NEWS RELEASE	Methanex Corporation 1800 - 200 Burrard St. Vancouver, BC Canada V6C 3M1 Investor Relations: (604) 661-2600 www.methanex.com

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FINANCIAL AND OPERATIONAL DATA

	Three Months Ended							Six Months Ended
($ millions except per share amounts and where noted)	Jun 30 2019		Mar 31 2019		Jun 30 2018			Jun 30 2019		Jun 30 2018
Production (thousands of tonnes) (attributable to Methanex shareholders)	1,820		1,808		1,648			3,628		3,591
Sales volume (thousands of tonnes)
Methanex-produced methanol	1,669		1,921		1,729			3,590		3,613
Purchased methanol	716		473		709			1,189		1,322
Commission sales	216		329		329			545		650
Total sales volume 1	2,601		2,723		2,767			5,324		5,585
Methanex average non-discounted posted price ($ per tonne) 2	391		392		478			391		476
Average realized price ($ per tonne) 3	326		331		405			329		403
Revenue	734		742		950			1,476		1,912
Adjusted revenue	777		799		972			1,576		1,959
Adjusted EBITDA	146		194		275			340		581
Cash flows from operating activities	117		213		290			330		534
Adjusted net income	26		56		143			82		314
Net income (attributable to Methanex shareholders)	50		38		111			89		280
Adjusted net income per common share	0.34		0.73		1.75			1.07		3.79
Basic net income per common share	0.65		0.50		1.36			1.15		3.39
Diluted net income per common share	0.51		0.50		1.36			1.09		3.38
Common share information (millions of shares)
Weighted average number of common shares	77		77		82			77		83
Diluted weighted average number of common shares	77		77		82			77		83
Number of common shares outstanding, end of period	76		77		80			76		80

1

Methanex-produced methanol represents our equity share of volume produced at our facilities and excludes volume marketed on a commission basis related to the 36.9% of the Atlas facility and 50% of the Egypt facility that we do not own. Methanex-produced methanol includes any volume produced by Chile using natural gas supplied from Argentina under a tolling arrangement ("Tolling Volume"). No Tolling Volume has been produced in 2019. There were 48,000 MT of Tolling Volume in the second quarter of 2018 and 88,000 MT of Tolling Volume for the six months ended June 30, 2018.

2	Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe and Asia Pacific weighted by sales volume. Current and historical pricing information is available at www.methanex.com .

3	Average realized price is calculated as revenue, excluding commissions earned and the Egypt non-controlling interest share of revenue, but including an amount representing our share of Atlas revenue, divided by the total sales volume of Methanex-produced and purchased methanol, but excluding Tolling Volume.

METHANEX CORPORATION 2019 SECOND QUARTER NEWS RELEASE    PAGE 2

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

	Three Months Ended										Six Months Ended
($ millions except number of shares and per share amounts)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Net income (attributable to Methanex shareholders)	$	50		$	38		$	111			$	89		$	280
Mark-to-market impact of share-based compensation, net of tax	(24		)	18			32				(7		)	34
Adjusted net income	$	26		$	56		$	143			$	82		$	314
Diluted weighted average shares outstanding (millions)	77			77			82				77			83
Adjusted net income per common share	$	0.34		$	0.73		$	1.75			$	1.07		$	3.79

▪

We recorded net income attributable to Methanex shareholders of $ 50 million during the second quarter of 2019 compared to net income of $ 38 million in the first quarter of 2019 . The increase in earnings is primarily due to the change in the mark-to-market impact of share-based compensation, partially offset by a decrease in sales of Methanex-produced methanol during the second quarter, higher costs and a slight decrease in our average realized methanol price.

▪

We recorded Adjusted EBITDA of $146 million for the second quarter of 2019 compared with $194 million for the first quarter of 2019 . The decrease in Adjusted EBITDA for the second quarter of 2019 compared to the first quarter of 2019 is primarily due to the decrease in sales of Methanex-produced methanol, higher costs and a slight decrease in our average realized methanol price. Adjusted EBITDA for the first and second quarters of 2019 includes the adoption of IFRS 16 which increased Adjusted EBITDA for the first quarter of 2019 by $28 million and for the second quarter of 2019 by $27 million.

▪

Adjusted net income was $26 million for the second quarter of 2019 compared to Adjusted net income of $56 million for the first quarter of 2019 . The decrease in Adjusted net income is primarily due to a decrease in sales of Methanex-produced methanol, higher costs and the slight decrease in average realized price to $326 per tonne for the second quarter of 2019 from $331 per tonne for the first quarter of 2019.

▪	We produced 1,820,000 tonnes in the second quarter of 2019 compared to 1,808,000 tonnes for the first quarter of 2019 .

▪

Total sales volume for the second quarter of 2019 was 2,601,000 tonnes compared with 2,723,000 tonnes for the first quarter of 2019 . Sales of Methanex-produced methanol were 1,669,000 tonnes in the second quarter of 2019 compared with 1,921,000 tonnes in the first quarter of 2019 . In the second quarter of 2019, production exceeded sales of Methanex-produced methanol, resulting in a 151,000 tonne build of produced methanol inventory. This compares to the first quarter of 2019, where sales of Methanex-produced methanol exceeded production by 113,000 tonnes. An inventory build or draw is a result of the timing of produced and purchased methanol volume in and out of inventory.

▪

Total cash costs in the second quarter of 2019 were higher than in the first quarter of 2019 by $30 million decreasing Adjusted EBITDA. Total cash costs include the costs of both produced and purchased methanol, logistics costs and other costs not included in inventory. Our cash costs per tonne for both produced and purchased methanol were lower for the second quarter of 2019 compared to the first quarter of 2019, however the higher proportion of purchased methanol and lower proportion of Methanex-produced methanol sold resulted in higher cash costs and lower Adjusted EBITDA. Logistics costs and other costs were also higher.

▪	On March 18, 2019 we commenced a normal course issuer bid to purchase up to 3,863,298 common shares. To June 30, 2019, we have repurchased 1,069,893 common shares under the bid for $52.8 million.

▪	During the second quarter of 2019 we paid a $0.36 per common share quarterly dividend to shareholders for a total of $ 28 million.

▪

On July 19, 2019, we reached a final investment decision to construct a 1.8 million tonne facility in Geismar, Louisiana adjacent to our Geismar 1 and Geismar 2 facilities. Construction of the Geismar 3 facility will begin later this year and operations are targeted in the second half of 2022. The cost of the project is expected to be between $1.3 to $1.4 billion including costs of approximately $60 million incurred to date.

METHANEX CORPORATION 2019 SECOND QUARTER NEWS RELEASE    PAGE 3

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PRODUCTION HIGHLIGHTS

	Q2 2019				Q1 2019		Q2 2018		YTD Q2 2019		YTD Q2 2018
(thousands of tonnes)	Operating Capacity 1		Production		Production		Production		Production		Production
New Zealand 2	608		446		437		252		883		739
USA (Geismar)	500		530		405		518		935		1,031
Trinidad (Methanex interest) 3	500		384		429		442		813		901
Chile 4	430		290		241		128		531		294
Egypt (50% interest)	158		15		141		165		156		330
Canada (Medicine Hat)	150		155		155		143		310		296
	2,346		1,820		1,808		1,648		3,628		3,591

1

Operating capacity includes only those facilities which are currently capable of operating, but excludes any portion of an asset that is underutilized due to a lack of natural gas feedstock over a prolonged period of time. The operating capacity of our production facilities may be higher than original nameplate capacity as, over time, these figures have been adjusted to reflect ongoing operating efficiencies at these facilities. Actual production for a facility in any given year may be higher or lower than operating capacity due to a number of factors, including natural gas composition or the age of the facility's catalyst.

2	The operating capacity of New Zealand is made up of the two Motunui facilities and the Waitara Valley facility .

3	The operating capacity of Trinidad is made up of the Titan (100% interest) and Atlas (63.1% interest) facilities .

4	The operating capacity of our Chile I and IV facilities is 1.7 million tonnes annually assuming access to natural gas feedstock. For 2018, our operating capacity in Chile was 0.9 million tonnes. In the fourth quarter of 2018 we restarted our 0.8 million tonne Chile IV plant that had been idle since 2007.

▪	New Zealand produced 446,000 tonnes compared with 437,000 tonnes in the first quarter of 2019 . Production continues to be lower than operating capacity as a result of natural gas suppliers completing planned and unplanned maintenance activities. We expect these upstream maintenance activities to continue in the third quarter.

▪	Geismar produced 530,000 tonnes during the second quarter of 2019 compared to 405,000 tonnes during the first quarter of 2019 . Production in Geismar for the second quarter of 2019 set a new quarterly site record following lower production in the first quarter of 2019 due to a scheduled turnaround of the Geismar 1 plant.

▪

Trinidad produced 384,000 tonnes (Methanex interest) compared with 429,000 tonnes in the first quarter of 2019 . Production in Trinidad is lower in the second quarter of 2019 compared to the first quarter of 2019 primarily as a result of the turnaround completed in the Titan plant in April, and an unplanned production outage in May at the Atlas plant. For Trinidad, we continue to guide to approximately 85% operating rates.

▪

The Chile facilities produced 290,000 tonnes during the second quarter of 2019 compared to 241,000 tonnes during the first quarter of 2019 . We have continued to receive reliable gas supply from our partners in Chile and Argentina over the last few months and have resolved the technical issues we faced with the start-up of our Chile IV facility. Late in the second quarter of 2019, we commenced the first phase of our refurbishment of our Chile I plant scheduled to match expected lower natural gas deliveries during the southern hemisphere winter months. Provided that we are able to secure sufficient longer-term natural gas, we will complete the second phase of the refurbishment over the coming years.

▪

The Egypt facility produced 30,000 tonnes (Methanex interest - 15,000 tonnes) in the second quarter of 2019 compared with 282,000 tonnes (Methanex interest - 141,000 tonnes) in the first quarter of 2019 . During the quarter, the Egypt facility experienced an outage and the plant remained off-line for the remainder of the second quarter of 2019 for inspections and repair work. We expect to restart the plant in August 2019. The losses related to the outage are expected to be partially covered by insurance, however no insurance recoveries have been recorded to date.

▪	Medicine Hat produced 155,000 tonnes during the second quarter of 2019 and the first quarter of 2019 .

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Kim Campbell

Manager, Investor Relations

Methanex Corporation

604-661-2600

METHANEX CORPORATION 2019 SECOND QUARTER NEWS RELEASE    PAGE 5

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2		Share Information Methanex Corporation’s common shares are listed for trading on the Toronto Stock Exchange under the symbol MX and on the Nasdaq Global Market under the symbol MEOH. Transfer Agents & Registrars AST Trust Company (Canada) 320 Bay Street Toronto, Ontario Canada M5H 4A6 Toll free in North America: 1-800-387-0825	Investor Information All financial reports, news releases and corporate information can be accessed on our website at www.methanex.com . Contact Information Methanex Investor Relations 1800 - 200 Burrard Street Vancouver, BC Canada V6C 3M1 E-mail: invest@methanex.com Methanex Toll-Free: 1-800-661-8851
	Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2019
At July 30, 2019 the Company had 76,196,080 common shares issued and outstanding and stock options exercisable for 1,232,798 additional common shares.

SECOND QUARTER MANAGEMENT’S DISCUSSION AND ANALYSIS ("MD&A")

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

FINANCIAL AND OPERATIONAL HIGHLIGHTS

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

	Three Months Ended										Six Months Ended
($ millions except number of shares and per share amounts)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Net income (attributable to Methanex shareholders)	$	50		$	38		$	111			$	89		$	280
Mark-to-market impact of share-based compensation, net of tax	(24		)	18			32				(7		)	34
Adjusted net income	$	26		$	56		$	143			$	82		$	314
Diluted weighted average shares outstanding (millions)	77			77			82				77			83
Adjusted net income per common share	$	0.34		$	0.73		$	1.75			$	1.07		$	3.79

1

The Company has used the terms Adjusted EBITDA, Adjusted net income, Adjusted net income per common share, Adjusted revenue and operating income throughout this document. 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 on page 15 of the MD&A for reconciliations to the most comparable GAAP measures.

▪

We recorded net income attributable to Methanex shareholders of $ 50 million during the second quarter of 2019 compared to net income of $ 38 million in the first quarter of 2019. The increase in earnings is primarily due to the change in the mark-to-market impact of share-based compensation, partially offset by a decrease in sales of Methanex-produced methanol during the second quarter, higher costs and a slight decrease in our average realized methanol price.

▪

We recorded Adjusted EBITDA of $146 million for the second quarter of 2019 compared with $194 million for the first quarter of 2019 . The decrease in Adjusted EBITDA for the second quarter of 2019 compared to the first quarter of 2019 is primarily due to the decrease in sales of Methanex-produced methanol, higher costs and a slight decrease in our average realized methanol price. Adjusted EBITDA for the first and second quarters of 2019 includes the adoption of IFRS 16 which increased Adjusted EBITDA for the first quarter of 2019 by $28 million and for the second quarter of 2019 by $27 million.

▪

Adjusted net income was $26 million for the second quarter of 2019 compared to Adjusted net income of $56 million for the first quarter of 2019 . The decrease in Adjusted net income is primarily due to a decrease in sales of Methanex-produced methanol, higher costs and the slight decrease in average realized price to $326 per tonne for the second quarter of 2019 from $331 per tonne for the first quarter of 2019.

▪	Production for the second quarter of 2019 increased to 1,820,000 tonnes compared with 1,808,000 tonnes for the first quarter of 2019 . Refer to the Production Summary section on page 4 of the MD&A.

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▪

Total sales volume for the second quarter of 2019 was 2,601,000 tonnes compared with 2,723,000 tonnes for the first quarter of 2019. Sales of Methanex-produced methanol were 1,669,000 tonnes in the second quarter of 2019 compared with 1,921,000 tonnes in the first quarter of 2019 . In the second quarter of 2019, production exceeded sales of Methanex-produced methanol, resulting in a 151,000 tonne build of produced methanol inventory. This compares to the first quarter of 2019, where sales of Methanex-produced methanol exceeded production by 113,000 tonnes. An inventory build or draw is a result of the timing of produced and purchased methanol volume in and out of inventory.

▪

Total cash costs in the second quarter of 2019 were higher than in the first quarter of 2019 by $30 million decreasing Adjusted EBITDA. Total cash costs include the costs of both produced and purchased methanol, logistics costs and other costs not included in inventory. Our cash costs per tonne for both produced and purchased methanol were lower for the second quarter of 2019 compared to the first quarter of 2019, however the higher proportion of purchased methanol and lower proportion of Methanex-produced methanol sold resulted in higher cash costs and lower Adjusted EBITDA. Logistics costs and other costs were also higher.

▪	On March 18, 2019 we commenced a normal course issuer bid to purchase up to 3,863,298 common shares. To June 30, 2019, we have repurchased 1,069,893 common shares under the bid for $52.8 million.

▪	During the second quarter of 2019 we paid a $0.36 per common share quarterly dividend to shareholders for a total of $ 28 million.

▪

On July 19, 2019, we reached a final investment decision to construct a 1.8 million tonne facility in Geismar, Louisiana adjacent to our Geismar 1 and Geismar 2 facilities. Construction of the Geismar 3 facility will begin later this year and operations are targeted in the second half of 2022. The cost of the project is expected to be between $1.3 to $1.4 billion including costs of approximately $60 million incurred to date.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

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FINANCIAL AND OPERATIONAL DATA

	Three Months Ended							Six Months Ended
($ millions except per share amounts and where noted)	Jun 30 2019		Mar 31 2019		Jun 30 2018			Jun 30 2019		Jun 30 2018
Production (thousands of tonnes) (attributable to Methanex shareholders)	1,820		1,808		1,648			3,628		3,591
Sales volume (thousands of tonnes)
Methanex-produced methanol	1,669		1,921		1,729			3,590		3,613
Purchased methanol	716		473		709			1,189		1,322
Commission sales	216		329		329			545		650
Total sales volume 1	2,601		2,723		2,767			5,324		5,585
Methanex average non-discounted posted price ($ per tonne) 2	391		392		478			391		476
Average realized price ($ per tonne) 3	326		331		405			329		403
Revenue	734		742		950			1,476		1,912
Adjusted revenue	777		799		972			1,576		1,959
Adjusted EBITDA	146		194		275			340		581
Cash flows from operating activities	117		213		290			330		534
Adjusted net income	26		56		143			82		314
Net income (attributable to Methanex shareholders)	50		38		111			89		280
Adjusted net income per common share	0.34		0.73		1.75			1.07		3.79
Basic net income per common share	0.65		0.50		1.36			1.15		3.39
Diluted net income per common share	0.51		0.50		1.36			1.09		3.38
Common share information (millions of shares)
Weighted average number of common shares	77		77		82			77		83
Diluted weighted average number of common shares	77		77		82			77		83
Number of common shares outstanding, end of period	76		77		80			76		80

1

Methanex-produced methanol represents our equity share of volume produced at our facilities and excludes volume marketed on a commission basis related to the 36.9% of the Atlas facility and 50% of the Egypt facility that we do not own. Methanex-produced methanol includes any volume produced by Chile using natural gas supplied from Argentina under a tolling arrangement ("Tolling Volume"). No Tolling Volume has been produced in 2019. There were 48,000 MT of Tolling Volume in the second quarter of 2018 and 88,000 MT of Tolling Volume for the six months ended June 30, 2018.

2	Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe and Asia Pacific weighted by sales volume. Current and historical pricing information is available at www.methanex.com .

3	Average realized price is calculated as revenue, excluding commissions earned and the Egypt non-controlling interest share of revenue, but including an amount representing our share of Atlas revenue, divided by the total sales volume of Methanex-produced and purchased methanol, but excluding Tolling Volume.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 3

MANAGEMENT’S DISCUSSION AND ANALYSIS

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PRODUCTION SUMMARY

	Q2 2019				Q1 2019		Q2 2018			YTD Q2 2019		YTD Q2 2018
(thousands of tonnes)	Operating Capacity 1		Production		Production		Production			Production		Production
New Zealand 2	608		446		437		252			883		739
USA (Geismar)	500		530		405		518			935		1,031
Trinidad (Methanex interest) 3	500		384		429		442			813		901
Chile 4	430		290		241		128			531		294
Egypt (50% interest)	158		15		141		165			156		330
Canada (Medicine Hat)	150		155		155		143			310		296
	2,346		1,820		1,808		1,648			3,628		3,591

1

Operating capacity includes only those facilities which are currently capable of operating, but excludes any portion of an asset that is underutilized due to a lack of natural gas feedstock over a prolonged period of time. The operating capacity of our production facilities may be higher than original nameplate capacity as, over time, these figures have been adjusted to reflect ongoing operating efficiencies at these facilities. Actual production for a facility in any given year may be higher or lower than operating capacity due to a number of factors, including natural gas composition or the age of the facility's catalyst.

2	The operating capacity of New Zealand is made up of the two Motunui facilities and the Waitara Valley facility (refer to the New Zealand section below).

3	The operating capacity of Trinidad is made up of the Titan (100% interest) and Atlas (63.1% interest) facilities (refer to the Trinidad section below).

4	The operating capacity of our Chile I and IV facilities is 1.7 million tonnes annually assuming access to natural gas feedstock.

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METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 5

MANAGEMENT’S DISCUSSION AND ANALYSIS

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

	Three Months Ended										Six Months Ended
($ millions)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Consolidated statements of income:
Revenue	$	734		$	742		$	950			$	1,476		$	1,912
Cost of sales and operating expenses	(576		)	(590		)	(712		)		(1,166		)	(1,372		)
Mark-to-market impact of share-based compensation	(29		)	22			39				(7		)	41
Adjusted EBITDA (attributable to associate)	25			37			37				62			75
Amounts excluded from Adjusted EBITDA attributable to non-controlling interests	(8		)	(17		)	(39		)		(25		)	(75		)
Adjusted EBITDA (attributable to Methanex shareholders)	146			194			275				340			581
Mark-to-market impact of share-based compensation	29			(22		)	(39		)		7			(41		)
Depreciation and amortization 1	(86		)	(85		)	(63		)		(171		)	(122		)
Finance costs 1	(30		)	(28		)	(24		)		(58		)	(48		)
Finance income and other expenses	1			—			(2		)		1			1
Income tax expense	(6		)	(9		)	(33		)		(15		)	(78		)
Earnings of associate adjustment 2	(14		)	(19		)	(18		)		(33		)	(36		)
Non-controlling interests adjustment 2	10			7			15				18			23
Net income (attributable to Methanex shareholders)	$	50		$	38		$	111			$	89		$	280
Net income	$	49		$	46		$	135			$	96		$	333

1	Depreciation and amortization and finance costs for the periods ended June 30 and March 31, 2019 include the impact of the adoption of IFRS 16 "Leases". The comparative periods in 2018 have not been restated as the Company has adopted IFRS 16 using the modified retrospective approach.

2	These adjustments represent depreciation and amortization, finance costs, finance income and other expenses and income taxes associated with our 63.1% interest in the Atlas methanol facility and the non-controlling interests.

($ millions)	Q2 2019 compared with Q1 2019			Q2 2019 compared with Q2 2018			YTD Q2 2019 compared with YTD Q2 2018
Average realized price	$	(16	)	$	(191	)	$	(360	)
Sales volume	(1		)	(7		)	(22		)
Total cash costs	(30		)	42			86
IFRS 16 leasing adoption impact 1	(1		)	27			55
Decrease  in Adjusted EBITDA	$	(48	)	$	(129	)	$	(241	)

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 6

MANAGEMENT’S DISCUSSION AND ANALYSIS

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Average realized price

	Three Months Ended							Six Months Ended
($ per tonne)	Jun 30 2019		Mar 31 2019		Jun 30 2018			Jun 30 2019		Jun 30 2018
Methanex average non-discounted posted price	391		392		478			391		476
Methanex average realized price	326		331		405			329		403

($ millions)	Q2 2019 compared with Q1 2019			Q2 2019 compared with Q2 2018			YTD Q2 2019 compared with YTD Q2 2018
Methanex-produced methanol costs	$	1		$	11		$	26
Proportion of Methanex-produced methanol sales	(33		)	(2		)	22
Purchased methanol costs	11			55			87
Logistics costs	(7		)	(10		)	(21		)
Other, net	(2		)	(12		)	(28		)
Increase/(decrease)  in Adjusted EBITDA due to changes in total cash costs	$	(30	)	$	42		$	86

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	Three Months Ended										Six Months Ended
($ millions except share price)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Methanex Corporation share price   1	$	45.46		$	56.86		$	70.70			$	45.46		$	70.70
Grant-date fair value expense included in Adjusted EBITDA and Adjusted net income	5			6			4				11			8
Mark-to-market impact due to change in share price 2	(29		)	22			39				(7		)	41
Total share-based compensation expense (recovery), before tax	$	(24	)	$	28		$	43			$	4		$	49

2	For all periods presented, the mark-to-market impact on share-based compensation is primarily due to changes in the Methanex Corporation share price.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 9

MANAGEMENT’S DISCUSSION AND ANALYSIS

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Finance Costs

	Three Months Ended										Six Months Ended
($ millions)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Finance costs	$	30		$	28		$	24			$	58		$	48

Finance Income and Other Expenses

	Three Months Ended										Six Months Ended
($ millions)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Finance income and other expenses	$	1		$	—		$	(2	)		$	1		$	1

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 10

MANAGEMENT’S DISCUSSION AND ANALYSIS

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Income Taxes

A summary of our income taxes for the second quarter of 2019 compared to the first quarter of 2019 and the six month period ended June 30, 2019 compared to the same period in 2018 is as follows:

	Three months ended June 30, 2019							Three months ended March 31, 2019
($ millions except where noted)	Net Income			Adjusted Net Income				Net Income			Adjusted Net Income
Amount before income tax	$	55		$	36			$	55		$	78
Income tax expense	(6		)	(10		)		(9		)	(22		)
	$	49		$	26			$	46		$	56
Effective tax rate	11		%	27		%		17		%	28		%

	Six months ended June 30, 2019							Six months ended June 30, 2018
($ millions, except where noted)	Net Income			Adjusted Net Income				Net Income			Adjusted Net Income
Amount before income tax	$	111		$	114			$	410		$	413
Income tax expense	(15		)	(32		)		(77		)	(99		)
	$	96		$	82			$	333		$	314
Effective tax rate	14		%	28		%		19		%	24		%

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($ millions)	Q2 2019 compared with Q1 2019			Q2 2019 compared with Q2 2018			YTD Q2 2019 compared with YTD Q2 2018
Change in Adjusted EBITDA (attributable to Methanex shareholders) 1	$	(48	)	$	(129	)	$	(241	)
Deduct change in Adjusted EBITDA of associate	12			12			13
Dividends received from associate	(28		)	(8		)	9
Cash flows attributable to non-controlling interests	(15		)	(31		)	(50		)
Non-cash working capital	(49		)	(66		)	35
Income taxes paid	12			31			18
Share-based payments	17			18			14
Other	3			—			(2		)
Decrease in cash flows from operating activities	$	(96	)	$	(173	)	$	(204	)

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METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 14

MANAGEMENT’S DISCUSSION AND ANALYSIS

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The following tables denote the impact to Adjusted EBITDA and adjusted net income (before tax), depreciation and amortization and finance costs attributable to Methanex and reported for the three month periods ended March 31, 2019 and June 30, 2019 and for the six month period ended June 30, 2019:

	Three Months Ended
	March 31, 2019
($ millions except per share amounts)	Excluding IFRS 16			IFRS 16 impact			Including IFRS 16
Adjusted EBITDA	$	166		$	28		$	194
Less:
Depreciation and amortization	61			24			85
Finance costs	23			5			28
Other	3			—			3
Adjusted net income - before tax	$	79		$	(1	)	$	78

	Three Months Ended
	June 30, 2019
($ millions except per share amounts)	Excluding IFRS 16			IFRS 16 impact			Including IFRS 16
Adjusted EBITDA	$	119		$	27		$	146
Less:
Depreciation and amortization	58			24			82
Finance costs	23			5			28
Other	—			—			—
Adjusted net income - before tax	$	38		$	(2	)	$	36

	Six Months Ended
	June 30, 2019
($ millions except per share amounts)	Excluding IFRS 16			IFRS 16 impact			Including IFRS 16
Adjusted EBITDA	$	285		$	55		$	340
Less:
Depreciation and amortization	119			48			167
Finance costs	46			10			56
Other	3			—			3
Adjusted net income - before tax	$	117		$	(3	)	$	114

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	Three Months Ended										Six Months Ended
($ millions)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Net income (attributable to Methanex shareholders)	$	50		$	38		$	111			$	89		$	280
Mark-to-market impact of share-based compensation	(29		)	22			39				(7		)	41
Depreciation and amortization 1	86			85			63				171			122
Finance costs 1	30			28			24				58			48
Finance income and other expenses	(1		)	—			2				(1		)	(1		)
Income tax expense	6			9			33				15			78
Earnings of associate adjustment 2	14			19			18				33			36
Non-controlling interests adjustment 2	(10		)	(7		)	(15		)		(18		)	(23		)
Adjusted EBITDA (attributable to Methanex shareholders)	$	146		$	194		$	275			$	340		$	581

1	Depreciation and amortization and finance costs for the periods ended March 31, 2019 and June 30, 2019 includes the impact of the adoption of IFRS 16 "Leases". The comparative periods have not been restated as the Company has adopted IFRS 16 using the modified retrospective approach.

2	These adjustments represent depreciation and amortization, finance costs, finance income and other expenses and income taxes associated with our 63.1% interest in the Atlas methanol facility and the non-controlling interests.

Adjusted Net Income and Adjusted Net Income per Common Share

Adjusted net income and Adjusted net income per common share are non-GAAP measures because they exclude the mark-to-market impact of share-based compensation and the impact of certain items associated with specific identified events. The following table shows a reconciliation of net income attributable to Methanex shareholders to Adjusted net income and the calculation of Adjusted net income per common share:

	Three Months Ended										Six Months Ended
($ millions except number of shares and per share amounts)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Net income (attributable to Methanex shareholders)	$	50		$	38		$	111			$	89		$	280
Mark-to-market impact of share-based compensation, net of tax	(24		)	18			32				(7		)	34
Adjusted net income	$	26		$	56		$	143			$	82		$	314
Diluted weighted average shares outstanding (millions)	77			77			82				77			83
Adjusted net income per common share	$	0.34		$	0.73		$	1.75			$	1.07		$	3.79

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	Three Months Ended										Six Months Ended
($ millions)	Jun 30 2019			Mar 31 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Revenue	$	734		$	742		$	950			$	1,476		$	1,912
Methanex share of Atlas revenue 1	72			106			95				178			188
Non-controlling interests' share of revenue 1	(28		)	(47		)	(72		)		(75		)	(139		)
Other adjustments	(1		)	(2		)	(1		)		(3		)	(2		)
Adjusted revenue (attributable to Methanex shareholders)	$	777		$	799		$	972			$	1,576		$	1,959

1	Excludes intercompany transactions with the Company.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 17

MANAGEMENT’S DISCUSSION AND ANALYSIS

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QUARTERLY FINANCIAL DATA (UNAUDITED)

Our operations consist of a single operating segment - the production and sale of methanol. Quarterly results vary due to the average realized price of methanol, sales volume and total cash costs. The first and second quarter of 2019 reflects the adoption of IFRS 16. Financial information in all comparative periods does not reflect the impact of IFRS 16. Refer to the Adoption of New Accounting Standards section on page 14 . A summary of selected financial information is as follows:

	Three Months Ended
($ millions except per share amounts)	Jun 30 2019			Mar 31 2019			Dec 31 2018			Sep 30 2018
Revenue	$	734		$	742		$	977		$	1,044
Adjusted EBITDA	146			194			197			293
Net income (attributable to Methanex shareholders)	50			38			161			128
Adjusted net income	26			56			90			152
Basic net income per common share	0.65			0.50			2.07			1.62
Diluted net income per common share	0.51			0.50			1.68			1.61
Adjusted net income per common share	0.34			0.73			1.15			1.92

	Three Months Ended
($ millions except per share amounts)	Jun 30 2018			Mar 31 2018			Dec 31 2017			Sep 30 2017
Revenue	$	950		$	962		$	861		$	720
Adjusted EBITDA	275			306			254			143
Net income (attributable to Methanex shareholders)	111			169			68			32
Adjusted net income	143			171			143			52
Basic net income per common share	1.36			2.02			0.81			0.38
Diluted net income per common share	1.36			2.00			0.81			0.38
Adjusted net income per common share	1.75			2.03			1.70			0.60

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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 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Revenue	$	734,365		$	949,946			$	1,476,124		$	1,911,771
Cost of sales and operating expenses	(576,302		)	(711,668		)		(1,166,622		)	(1,372,233		)
Depreciation and amortization	(85,637		)	(62,748		)		(170,956		)	(121,920		)
Operating income	72,426			175,530				138,546			417,618
Earnings of associate (note 5)	11,109			18,836				29,163			39,298
Finance costs	(29,579		)	(23,771		)		(57,999		)	(47,951		)
Finance income and other expenses	1,399			(2,239		)		1,317			1,410
Income before income taxes	55,355			168,356				111,027			410,375
Income tax (expense) recovery:
Current	(9,938		)	(17,657		)		(30,401		)	(50,645		)
Deferred	3,971			(15,204		)		15,113			(26,928		)
	(5,967		)	(32,861		)		(15,288		)	(77,573		)
Net income	$	49,388		$	135,495			$	95,739		$	332,802
Attributable to:
Methanex Corporation shareholders	$	50,235		$	111,366			$	88,699		$	280,049
Non-controlling interests	(847		)	24,129				7,040			52,753
	$	49,388		$	135,495			$	95,739		$	332,802
Income per common share for the period attributable to Methanex Corporation shareholders
Basic net income per common share	$	0.65		$	1.36			$	1.15		$	3.39
Diluted net income per common share (note 7)	$	0.51		$	1.36			$	1.09		$	3.38
Weighted average number of common shares outstanding (note 7)	76,746,080			81,663,627				76,997,554			82,669,196
Diluted weighted average number of common shares outstanding (note 7)	76,883,889			81,737,585				77,183,984			82,739,559

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 1

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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Methanex Corporation

Consolidated Statements of Comprehensive Income (unaudited)

(thousands of U.S. dollars)

	Three Months Ended							Six Months Ended
	Jun 30 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Net income	$	49,388		$	135,495			$	95,739		$	332,802
Other comprehensive income (loss):
Items that may be reclassified to income:
Change in fair value of cash flow hedges (note 10)	(41,973		)	11,583				(82,130		)	(13,428		)
Forward element excluded from hedging relationships (note 10)	23,017			(24,165		)		67,570			1,966
Items that will not be reclassified to income:
Actuarial gain on defined benefit pension plans	—			—				—			845
Taxes on above items	4,409			2,926				3,308			2,410
	(14,547		)	(9,656		)		(11,252		)	(8,207		)
Comprehensive income	$	34,841		$	125,839			$	84,487		$	324,595
Attributable to:
Methanex Corporation shareholders	$	35,688		$	101,710			$	77,447		$	271,842
Non-controlling interests	(847		)	24,129				7,040			52,753
	$	34,841		$	125,839			$	84,487		$	324,595

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 2

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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Methanex Corporation

Consolidated Statements of Financial Position (unaudited)

(thousands of U.S. dollars)

AS AT	Jun 30 2019			Dec 31 2018
ASSETS
Current assets:
Cash and cash equivalents	$	227,969		$	256,077
Trade and other receivables	468,818			514,568
Inventories (note 2)	361,850			387,959
Prepaid expenses	32,599			32,541
Other assets (note 3)	33,424			60,931
	1,124,660			1,252,076
Non-current assets:
Property, plant and equipment (note 4)	3,453,247			3,025,095
Investment in associate (note 5)	183,038			197,821
Deferred income tax assets	71,677			59,532
Other assets (note 3)	69,483			74,475
	3,777,445			3,356,923
	$	4,902,105		$	4,608,999
LIABILITIES AND EQUITY
Current liabilities:
Trade, other payables and accrued liabilities	$	575,441		$	617,414
Current maturities on long-term debt (note 6)	387,770			383,793
Current maturities on lease liabilities	89,569			12,347
Current maturities on other long-term liabilities	24,143			33,799
	1,076,923			1,047,353
Non-current liabilities:
Long-term debt (note 6)	1,055,662			1,074,493
Lease liabilities	544,869			187,413
Other long-term liabilities	215,675			210,685
Deferred income tax liabilities	270,128			281,214
	2,086,334			1,753,805
Equity:
Capital stock	440,472			446,544
Contributed surplus	1,688			1,597
Retained earnings	1,098,485			1,145,476
Accumulated other comprehensive loss	(92,115		)	(82,404		)
Shareholders' equity	1,448,530			1,511,213
Non-controlling interests	290,318			296,628
Total equity	1,738,848			1,807,841
	$	4,902,105		$	4,608,999
Subsequent events (note 6)

See accompanying notes to condensed consolidated interim financial statements.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 3

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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Methanex Corporation

Consolidated Statements of Changes in Equity (unaudited)

(thousands of U.S. dollars, except number of common shares)

	Number of Common Shares		Capital Stock		Contributed Surplus		Retained Earnings		Accumulated Other Comprehensive Loss		Shareholders Equity		Non- Controlling Interests		Total Equity
Balance, December 31, 2017	83,770,254		$480,331		$2,124		$1,088,150		$(69,841)		1,500,764		$244,347		$1,745,111
Net income	—		—		—		280,049		—		280,049		52,753		332,802
Other comprehensive income	—		—		—		548		(8,755)		(8,207	)	—		(8,207	)
Compensation expense recorded for stock options	—		—		200		—		—		200		—		200
Issue of shares on exercise of stock options	36,890		1,314		—		—		—		1,314		—		1,314
Reclassification of grant date fair value on exercise of stock options	—		379		(379	)	—		—		—		—		—
Payments for repurchase of shares	(3,850,000	)	(22,096	)	—		(230,548	)	—		(252,644	)	—		(252,644	)
Dividend payments to Methanex Corporation shareholders	—		—		—		(54,195	)	—		(54,195	)	—		(54,195	)
Distributions made and accrued to non-controlling interests	—		—		—		—		—		—		(16,337	)	(16,337	)
Equity contributions by non-controlling interests	—		—		—		—		—		—		—		—
Balance, June 30, 2018	79,957,144		$459,928		$1,945		$1,084,004		$(78,596)		$1,467,281		$280,763		$1,748,044
Net income	—		—		—		288,933		—		288,933		36,249		325,182
Other comprehensive income (loss)	—		—		—		1		(3,808)		(3,807	)	—		(3,807	)
Compensation expense recorded for stock options	—		—		162		—		—		162		—		162
Issue of shares on exercise of stock options	46,224		1,896		—		—		—		1,896		—		1,896
Reclassification of grant date fair value on exercise of stock options	—		510		(510	)	—		—		—		—		—
Payments for repurchase of shares	(2,740,095	)	(15,790	)	—		(175,981	)	—		(191,771	)	—		(191,771	)
Dividend payments to Methanex Corporation shareholders	—		—		—		(51,481	)	—		(51,481	)	—		(51,481	)
Distributions made and accrued to non-controlling interests	—		—		—		—		—		—		(20,384	)	(20,384	)
Equity contributions by non-controlling interests	—		—		—		—		—		—		—		—
Balance, December 31, 2018	77,263,273		$446,544		$1,597		$1,145,476		$(82,404)		$1,511,213		$296,628		$1,807,841
Net income	—		—		—		88,699		—		88,699		7,040		95,739
Other comprehensive income (loss)	—		—		—		(1,541	)	(9,711)		(11,252	)	—		(11,252	)
Compensation expense recorded for stock options	—		—		117		—		—		117		—		117
Issue of shares on exercise of stock options	2,700		86		—		—		—		86		—		86
Reclassification of grant date fair value on exercise of stock options	—		26		(26	)	—		—		—		—		—
Payment for shares repurchased	(1,069,893	)	(6,184	)	—		(46,621	)	—		(52,805	)	—		(52,805	)
Dividend payments to Methanex Corporation shareholders	—		—		—		(53,015	)	—		(53,015	)	—		(53,015	)
Distributions made and accrued to non-controlling interests	—		—		—		—		—		—		(9,995	)	(9,995	)
Impact of adoption of IFRS 16	—		—		—		(34,513	)	—		(34,513	)	(3,355	)	(37,868	)
Balance, June 30, 2019	76,196,080		$440,472		$1,688		$1,098,485		$(92,115)		$1,448,530		$290,318		$1,738,848

See accompanying notes to condensed consolidated interim financial statements.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 4

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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Methanex Corporation

Consolidated Statements of Cash Flows (unaudited)

(thousands of U.S. dollars)

	Three Months Ended							Six Months Ended
	Jun 30 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
CASH FLOWS FROM / (USED IN) OPERATING ACTIVITIES
Net income	$	49,388		$	135,495			$	95,739		$	332,802
Deduct earnings of associate	(11,109		)	(18,836		)		(29,163		)	(39,298		)
Dividends received from associate	7,572			15,775				43,539			34,707
Add (deduct) non-cash items:
Depreciation and amortization	85,637			62,748				170,956			121,920
Income tax expense	5,967			32,861				15,288			77,573
Share-based compensation expense	(23,942		)	42,718				3,860			48,583
Finance costs	29,579			23,771				57,999			47,951
Other	1,278			(568		)		1,792			546
Income taxes paid	(13,515		)	(44,516		)		(39,638		)	(57,838		)
Other cash payments, including share-based compensation	(10,028		)	(21,824		)		(31,133		)	(38,713		)
Cash flows from operating activities before undernoted	120,827			227,624				289,239			528,233
Changes in non-cash working capital (note 9)	(4,080		)	62,120				40,745			6,134
	116,747			289,744				329,984			534,367
CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES
Payments for repurchase of shares	(47,049		)	(214,688		)		(52,805		)	(252,644		)
Dividend payments to Methanex Corporation shareholders	(27,517		)	(26,584		)		(53,015		)	(54,195		)
Interest paid	(35,789		)	(29,358		)		(54,041		)	(43,929		)
Repayment of long-term debt and financing fees	(1,531		)	(2,088		)		(16,668		)	(90,639		)
Repayment of lease obligation	(21,392		)	(1,992		)		(46,326		)	(4,180		)
Restricted cash for debt service accounts	—			(95		)		(100		)	(390		)
Distributions to non-controlling interests	(320		)	(2,658		)		(21,620		)	(33,908		)
Proceeds on issue of shares on exercise of stock options	—			851				86			1,314
Proceeds from other limited recourse debt	—			—				—			86,000
Changes in non-cash working capital related to financing activities (note 9)	1,780			1,044				1,780			7,027
	(131,818		)	(275,568		)		(242,709		)	(385,544		)
CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
Property, plant and equipment	(66,408		)	(78,874		)		(155,055		)	(134,695		)
Restricted cash for capital projects	33,440			18,114				36,527			(64,300		)
Changes in non-cash working capital related to investing activities (note 9)	(9,100		)	(4,201		)		3,145			(5,053		)
	(42,068		)	(64,961		)		(115,383		)	(204,048		)
Increase (decrease) in cash and cash equivalents	(57,139		)	(50,785		)		(28,108		)	(55,225		)
Cash and cash equivalents, beginning of period	285,108			371,039				256,077			375,479
Cash and cash equivalents, end of period	$	227,969		$	320,254			$	227,969		$	320,254

See accompanying notes to condensed consolidated interim financial statements.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 5

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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Methanex Corporation

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

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

1.	Basis of presentation:

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

These condensed consolidated interim financial statements are prepared in accordance with International Accounting Standards ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB") on a basis consistent with those followed in the most recent annual consolidated financial statements except for the adoption of IFRS 16 as described in our condensed consolidated interim financial statements for the three months ended March 31, 2019.

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 31, 2019 .

These condensed consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2018 .

Adoption of IFRS 16 "Leases"

The Company adopted IFRS 16, Leases ("IFRS 16" or "the standard") as issued by the IASB in 2016, which eliminates the current operating/finance lease dual accounting model for lessees and replaces it with a single, on-balance sheet accounting model, similar to the previous finance lease accounting. The standard replaces IAS 17, Leases ("IAS 17") and related interpretations and is effective for annual periods beginning on or after January 1, 2019.

The Company transitioned to IFRS 16 in accordance with the modified retrospective approach, under which the cumulative effect of initial application is recognized in retained earnings at January 1, 2019. The modified retrospective approach does not require restatement of comparative periods. As part of the initial application of IFRS 16, the Company has elected to use hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 1

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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On transition to IFRS 16, the Company recognized $411 million of lease assets and $453 million of lease liabilities, with the difference of $42 million ($38 million net of tax), recorded as an adjustment in equity. When measuring operating lease commitments, the Company discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted-average rate applied is 4.4%. The following reconciliation to the opening balance for lease liabilities as at January 1, 2019 is based upon the operating lease commitments as at December 31, 2018:

	Jan 1 2019
Operating lease commitments at December 31, 2018	$	427,289
Discounted using the incremental borrowing rate at January 1, 2019	4.4		%
Finance lease liabilities recognized as at December 31, 2018	$	358,440
Recognition exemption for:
Short-term leases	(777		)
Leases of low-value assets	(8		)
Extension and termination options reasonably certain to be exercised	75,753
Scope changes due to IFRS 16	18,880
Other	594
Lease liabilities at January 1, 2019	$	452,882

The Company has updated its accounting policy for leasing to reflect the adoption of IFRS 16 as detailed below.

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

•	the contract involves the use of an identified asset - this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;

•	the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

•	the Company has the right to direct the use of the asset. The Company has the right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used.

For contracts that contain a lease, the Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is assessed for impairment losses, should a trigger be identified and adjusted for impairment if required.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 2

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Short-term leases and lease of low-value assets

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets, except for terminal and vessel leases. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Critical accounting estimates and judgments

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. The assessment is reviewed upon a trigger by a significant event or a significant change in circumstances.

Certain leases contain non-lease components, excluded from the right-of-use asset and lease liability, related to operating charges for ocean vessels and terminal facilities. Judgment is applied in determination of the stand-alone price of the lease and non-lease components.

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 recognized as an expense in cost of sales and operating expenses and depreciation and amortization for the three and six month periods ended June 30, 2019 is $556 million ( 2018 - $646 million) and $1,126 million ( 2018 - $1,289 million), respectively.

3.	Other assets:

As at June 30, 2019 , the Company holds $33.4 million (December 31, 2018 - $66.5 million) in cash and short-term, highly liquid investments held under restricted terms. The entire balance (December 31, 2018 - $60.9 million) has been recorded as current as it is expected to be spent within one year. Use of the funds is primarily restricted for the construction of certain vessels, certain capital projects and funding of a debt service account.

4.	Property, plant and equipment:

	Owned Assets (a)			Right-of-use assets (b)			Total
Net book value at June 30, 2019	$	2,899,182		$	554,065		$	3,453,247
Net book value at December 31, 2018	$	2,857,266		$	167,829		$	3,025,095

a)	Owned assets

	Buildings, Plant Installations & Machinery			Ocean Going Vessels			Other			Total
Cost at June 30, 2019	$	4,765,085		$	197,628		$	210,619		$	5,173,332
Accumulated depreciation at June 30, 2019	2,124,597			31,061			118,492			2,274,150
Net book value at June 30, 2019	$	2,640,488		$	166,567		$	92,127		$	2,899,182
Cost at December 31, 2018	$	4,698,142		$	183,419		$	189,058		$	5,070,619
Accumulated depreciation at December 31, 2018	2,047,735			48,426			117,192			2,213,353
Net book value at December 31, 2018	$	2,650,407		$	134,993		$	71,866		$	2,857,266

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Subsequent to the quarter, the Company reached a final investment decision to construct a 1.8 million tonne facility in Geismar, Louisiana adjacent to its Geismar 1 and Geismar 2 facilities. The cost of the project is expected to be between $1.3 to $1.4 billion including costs of approximately $60 million incurred to date included in other.

b)	Right-of-use (leased) assets

	Ocean Going Vessels			Terminals and Tanks			Plant Installations and Machinery			Other			Total
Cost at June 30, 2019	$	392,620		$	212,668		$	19,943		$	33,717		$	658,948
Accumulated depreciation at June 30, 2019	50,960			44,301			6,590			3,032			104,883
Net book value at June 30, 2019	$	341,660		$	168,367		$	13,353		$	30,685		$	554,065
Cost at December 31, 2018	$	87,800		$	113,978		$	16,032		$	—		$	217,810
Accumulated depreciation at December 31, 2018	15,204			29,333			5,444			—			49,981
Net book value at December 31, 2018	$	72,596		$	84,645		$	10,588		$	—		$	167,829
Cost at January 1, 2019	$	370,654		$	207,721		$	19,705		$	30,399		$	628,479
Accumulated depreciation at January 1, 2019	15,204			29,333			5,344			—			49,881
Net book value at January 1, 2019	$	355,450		$	178,388		$	14,361		$	30,399		$	578,598

5.	Interest in Atlas joint venture:

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

Statements of financial position	Jun 30 2019			Dec 31 2018
Cash and cash equivalents	$	23,967		$	9,367
Other current assets	78,216			104,742
Non-current assets	241,341			255,822
Current liabilities	(31,954		)	(32,022		)
Other long-term liabilities, including current maturities	(142,448		)	(145,359		)
Net assets at 100%	$	169,122		$	192,550
Net assets at 63.1%	$	106,716		$	121,499
Long-term receivable from Atlas	76,322			76,322
Investment in associate	$	183,038		$	197,821

	Three Months Ended							Six Months Ended
Statements of income	Jun 30 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Revenue	$	93,762		$	129,377			$	196,329		$	262,100
Cost of sales and depreciation and amortization	(63,254		)	(79,444		)		(118,331		)	(159,360		)
Operating income	30,508			49,933				77,998			102,740
Finance costs, finance income and other expenses	(3,232		)	(3,047		)		(5,778		)	(5,638		)
Income tax expense	(9,671		)	(17,035		)		(26,003		)	(34,823		)
Net earnings at 100%	$	17,605		$	29,851			$	46,217		$	62,279
Earnings of associate at 63.1%	$	11,109		$	18,836			$	29,163		$	39,298
Dividends received from associate	$	7,572		$	15,775			$	43,539		$	34,707

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 4

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b)	Contingent liability:

The Board of Inland Revenue of Trinidad and Tobago has audited and issued assessments against Atlas in respect of the 2005 to 2012 financial years. All subsequent tax years remain open to assessment. The assessments relate to the pricing arrangements of certain long-term fixed-price sales contracts with affiliates that commenced in 2005 and continue through 2019. The long-term fixed-price sales contracts with affiliates were established as part of the formation of Atlas and management believes were reflective of market considerations at that time. Atlas had partial relief from corporation income tax until late July 2014.

During the periods under assessment and continuing through 2014, approximately 50% of Atlas produced methanol was sold under these fixed-price contracts. From late 2014 through 2019 fixed-price sales represent approximately 10% of Atlas produced methanol.

The Company believes it is impractical to disclose a reasonable estimate of the potential contingent liability due to the wide range of assumptions and interpretations implicit in the assessments.

The Company has lodged objections to the assessments. No deposits have been required to lodge objections. Based on the merits of the cases and advice from legal counsel, the Company believes its position should be sustained, that Atlas has filed its tax returns and paid applicable taxes in compliance with Trinidadian tax law, and as such has not accrued for any amounts relating to these assessments. Contingencies inherently involve the exercise of significant judgment, and as such the outcomes of these assessments and the financial impact to the Company could be material.

The Company anticipates the resolution of this matter in the court system to be lengthy and, at this time, cannot predict a date as to when this matter is expected to be resolved.

6.	Long-term debt:

As at	Jun 30 2019			Dec 31 2018
Unsecured notes
$350 million at 3.25% due December 15, 2019	$	349,523		$	349,026
$250 million at 5.25% due March 1, 2022	248,693			248,480
$300 million at 4.25% due December 1, 2024	297,418			297,232
$300 million at 5.65% due December 1, 2044	295,278			295,238
	1,190,912			1,189,976
Egypt limited recourse debt facilities	88,453			101,226
Other limited recourse debt facilities	164,067			167,084
Total long-term debt 1	1,443,432			1,458,286
Less current maturities 1	(387,770		)	(383,793		)
	$	1,055,662		$	1,074,493

1	Long-term debt and current maturities are presented net of deferred financing fees.

During the quarter ended June 30, 2019 , the Company made repayments of $1.5 million on its other limited recourse debt facilities. Other limited recourse debt facilities relate to financing for certain of our ocean going vessels which we own through less than wholly-owned entities under the Company's control.

Subsequent to the quarter, the Company renewed and extended its $300 million committed revolving credit facility with a syndicate of highly rated financial institutions that expires in July 2024. The Company also secured an additional $800 million non-revolving term facility for the construction of a methanol plant that is expected to cost $1.3 billion to $1.4 billion in Geismar, Louisiana adjacent to its existing Geismar 1 and Geismar 2 facilities ("G3 Project"). The new credit facility has a five-year term expiring July 2024.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 5

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Significant covenants and default provisions of the two facilities include:

a) the obligation to maintain an EBITDA to interest coverage ratio of greater than or equal to 2:1 calculated on a four-quarter trailing basis, where for only one quarter during the term of the credit facility the ratio can be as low as, but not less than 1.25:1, and a debt to capitalization ratio of less than or equal to 57.5%, both calculated in accordance with definitions in the credit agreement that include adjustment to limited recourse subsidiaries.

b) a default if payment is accelerated by a creditor on any indebtedness of $50 million or more of the Company and its subsidiaries, except for the limited recourse subsidiaries, and

c) a default if a default occurs that permits a creditor to demand repayment on any other indebtedness of $50 million or more of the Company and its subsidiaries, except for the limited recourse subsidiaries.

    

The credit facilities also include other customary covenants including restrictions on the incurrence of additional indebtedness, restrictions against the sale or abandonment of the G3 Project, as well as requirements associated with completion of plant construction and commissioning by no later than July 2023.

The limited recourse debt facilities are described as limited recourse as they are secured only by the assets of the entity that carries the debt. Accordingly, the lenders to the limited recourse debt facilities have no recourse to the Company or its other subsidiaries.

The Egypt limited recourse debt facilities have covenants and default provisions that apply only to the Egypt entity, including restrictions on the incurrence of additional indebtedness and a requirement to fulfill certain conditions before the payment of cash or other shareholder distributions. Since 2015, certain conditions had not been met, resulting in a restriction on shareholder distributions from the Egypt entity. Under amended terms reached in 2017, shareholder distributions are permitted if the average gas deliveries over the prior 12 months are greater than 70% of gas nominations.

The Egypt limited recourse debt facilities contain covenants to complete certain mortgage registrations. The Company has sought and received waivers from lenders relating to these covenants until March 31, 2020. The Company does not believe that the finalization of these mortgage registrations are material. Whilst these covenants have been waived multiple times by the lenders, and circumstances have not materially changed, the Company cannot provide assurance that we will be able to obtain future waivers from the lenders.

Failure to comply with any of the covenants or default provisions of the long-term debt facilities described above could result in a default under the applicable credit agreement that would allow the lenders to not fund future loan requests, accelerate the due date of the principal and accrued interest on any outstanding loans or restrict the payment of cash or other distributions.

As at June 30, 2019 , management believes the Company was in compliance with all significant terms and default provisions related to long-term debt obligations.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 6

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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7.	Net income per common share:

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

Outstanding TSARs may be settled in cash or common shares at the holder’s option and for purposes of calculating diluted net income per common share, the more dilutive of the cash-settled and equity-settled method is used, regardless of how the plan is accounted for. Accordingly, TSARs that are accounted for using the cash-settled method will require adjustments to the numerator and denominator if the equity-settled method is determined to have a dilutive effect on diluted net income per common share as compared to the cash-settled method. The equity-settled method was more dilutive for the three and six month periods ended June 30, 2019, and an adjustment was required for both the numerator and the denominator. For the three and six month periods ended June 30, 2018 the cash-settled method was more dilutive and no adjustment was required for both the numerator and the denominator.

Stock options and, if calculated using the equity-settled method, TSARs are considered dilutive when the average market price of the Company’s common shares during the period disclosed exceeds the exercise price of the stock option or TSAR. For the three and six month periods ended June 30, 2019 and June 30, 2018 , stock options were considered dilutive, resulting in an adjustment to the denominator in both periods.

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

	Three Months Ended						Six Months Ended
	Jun 30 2019			Jun 30 2018			Jun 30 2019			Jun 30 2018
Numerator for basic net income per common share	$	50,235		111,366			$	88,699		280,049
Adjustment for the effect of TSARs:
Cash-settled expense included in net income	(9,207		)	—			(1,083		)	—
Equity-settled expense	(1,873		)	—			(3,838		)	—
Numerator for basic and diluted net income per common share	$	39,155		111,366			$	83,778		280,049

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

	Three Months Ended					Six Months Ended
	Jun 30 2019		Jun 30 2018			Jun 30 2019		Jun 30 2018
Denominator for basic net income per common share	76,746,080		81,663,627			76,997,554		82,669,196
Effect of dilutive stock options	24,127		73,958			44,881		70,363
Effect of dilutive TSARs	113,682		—			141,549		—
Denominator for diluted net income per common share	76,883,889		81,737,585			77,183,984		82,739,559

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 7

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8.	Share-based compensation:

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

(i)	Outstanding units:

Information regarding units outstanding at June 30, 2019 is as follows:

	SARs						TSARs
(per share amounts in USD)	Number of Units		Weighted Average Exercise Price				Number of Units		Weighted Average Exercise Price
Outstanding at December 31, 2018	896,883		$	51.27			1,447,301		$	51.24
Granted	29,320		57.60				272,860		57.60
Exercised	(32,361	)	38.33				(41,602	)	36.66
Cancelled	(9,834	)	64.08				(12,734	)	48.66
Outstanding at March 31, 2019	884,008		$	51.81			1,665,825		$	52.66
Granted	—		—				—		—
Exercised	(1,734	)	34.59				(3,367	)	42.97
Cancelled	(12,700	)	48.80				(10,867	)	50.99
Outstanding at June 30, 2019	869,574		$	51.89			1,651,591		$	52.70

	Stock Options
(per share amounts in USD)	Number of Units		Weighted Average Exercise Price
Outstanding at December 31, 2018	198,221		$48.55
Granted	7,410		57.60
Exercised	(2,700	)	31.73
Outstanding at March 31, 2019	202,931		$	49.11
Granted	—		—
Exercised	—		—
Cancelled	—		—
Outstanding at June 30, 2019	202,931		$49.11

	Units Outstanding at June 30, 2019							Units Exercisable at June 30, 2019
Range of Exercise Prices (per share amounts in USD)	Weighted Average Remaining Contractual Life (Years)		Number of Units Outstanding		Weighted Average Exercise Price			Number of Units Exercisable		Weighted Average Exercise Price
SARs:
$25.97 to $35.51	3.63		192,547		$34.51			192,547		$34.51
$38.24 to $50.17	3.44		195,384		46.47			144,063		45.15
$54.65 to $78.59	3.43		481,643		61.04			363,726		62.71
	3.48		869,574		$51.89			700,336		$51.34
TSARs:
$25.97 to $35.51	3.67		309,637		$34.59			309,637		$34.59
$38.24 to $50.17	3.87		365,385		47.75			263,636		46.82
$54.65 to $78.59	4.54		976,569		60.28			487,807		63.79
	4.23		1,651,591		$52.70			1,061,080		$51.06
Stock options:
$25.97 to $35.51	3.67		53,767		$34.59			53,767		$34.59
$38.24 to $50.17	2.51		57,754		43.70			48,551		42.47
$54.65 to $78.59	3.41		91,410		61.06			69,400		62.78
	3.22		202,931		$49.11			171,718		$48.21

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 8

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(ii)	Compensation expense related to SARs and TSARs:

Compensation expense for SARs and TSARs is measured based on their fair value and is recognized over the vesting period. Changes in fair value each period are recognized in net income for the proportion of the service that has been rendered at each reporting date. The fair value at June 30, 2019 was $15.1 million compared with the recorded liability of $14.0 million. The difference between the fair value and the recorded liability of $1.1 million will be recognized over the weighted average remaining vesting period of approximately 1.4 years. The weighted average fair value was estimated at June 30, 2019 using the Black-Scholes option pricing model.

For the three and six month periods ended June 30, 2019 , compensation expense related to SARs and TSARs included a recovery in cost of sales and operating expenses of $14.9 million ( 2018 - $26.8 million) and $2.0 million (2018 - $29.3 million), respectively . This included a recovery of $16.8 million ( 2018 - $24.4 million) and $6.0 million (2018 - $24.4 million), respectively, related to the effect of the change in the Company’s share price for the three and six month periods ended June 30, 2019 .

(iii)	Compensation expense related to stock options:

For the three and six month periods ended June 30, 2019 , compensation expense related to stock options included in cost of sales and operating expenses was $0.1 million ( 2018 - $0.1 million) and $0.2 million (2018 - $0.2 million), respectively. The fair value of each stock option grant was estimated on the grant date using the Black-Scholes option pricing model.

b)	Deferred, restricted and performance share units (old plan and new plan):

Deferred, restricted and performance share units (old plan and new plan) outstanding at June 30, 2019 are as follows:

	Number of Deferred Share Units		Number of Restricted Share Units		Number of Performance Share Units (old plan)		Number of Performance Share Units (new plan)
Outstanding at December 31, 2018	209,092		17,361		579,778		—
Granted	8,577		74,520		—		134,930
Performance factor impact on redemption 1	—		—		132,215		—
Granted in-lieu of dividends	985		529		1,784		777
Redeemed	(47,083	)	—		(396,635	)	—
Cancelled	—		—		(5,989	)	—
Outstanding at March 31, 2019	171,571		92,410		311,153		135,707
Granted	2,204		4,000		—		—
Granted in-lieu of dividends	965		680		2,367		1,068
Redeemed	(49,678	)	(9,966	)	—		—
Cancelled	—		(264	)	(13,112	)	(263	)
Outstanding at June 30, 2019	125,062		86,860		300,408		136,512

1	Performance share units granted prior to 2019 have a feature where the ultimate number of units that vest are adjusted by a performance factor of the original grant as determined by the Company’s total shareholder return in relation to a predetermined target over the period to vesting. These units relate to performance share units redeemed in the quarter ended June 30, 2019.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 9

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Performance share units granted in 2019 reflect a new long-term incentive plan. The performance share units granted under the new plan are redeemable for cash based on the market value of the Company's common shares and are non dilutive to shareholders. They vest over three years and include two performance factors: (i) relative total shareholder return of Methanex shares versus a specific market index (the market performance factor) and (ii) three year average Return on Capital Employed (the non-market performance factor). The market performance factor is measured by the Company at the grant date and reporting date using a Monte-Carlo simulation model to determine fair value. The non-market performance factor reflects management's best estimate to determine the expected number of units to vest. Based on these performance factors the performance share unit payout will range between 0% to 200%, with the first payout of the new performance share units in 2022.

Compensation expense for deferred, restricted and performance share units (old plan and new plan) is measured at fair value based on the market value of the Company’s common shares and is recognized over the vesting period. Changes in fair value are recognized in net income for the proportion of the service that has been rendered at each reporting date. The fair value of deferred, restricted and performance share units at June 30, 2019 was $18.2 million compared with the recorded liability of $13.6 million. The difference between the fair value and the recorded liability of $4.6 million will be recognized over the weighted average remaining vesting period of approximately 2.2 years.

For the three and six month periods ended June 30, 2019 , compensation expense related to deferred, restricted and performance share units (old plan and new plan) included in cost of sales and operating expenses was a recovery of $9.1 million ( 2018 - $15.8 million) and an expense of $5.8 million (2018 - $19.1 million), respectively. This included a recovery of $12.7 million ( 2018 - $14.1 million) and $1.3 million (2018 - $16.4 million), respectively, related to the effect of the change in the Company’s share price for the three and six month periods ended June 30, 2019 .

9.	Changes in non-cash working capital:

Changes in non-cash working capital for the three and six month periods ended June 30, 2019 and 2018 were as follows:

	Three Months Ended							Six Months Ended
	Jun 30 2019			Jun 30 2018				Jun 30 2019			Jun 30 2018
Changes in non-cash working capital:
Trade and other receivables	$	7,305		$	27,071			$	45,750		$	178
Inventories	(25,578		)	7,084				26,109			(45,378		)
Prepaid expenses	(4,473		)	2,160				(58		)	2,054
Trade, other payables and accrued liabilities	4,919			(544		)		(41,973		)	28,695
	(17,827		)	35,771				29,828			(14,451		)
Adjustments for items not having a cash effect and working capital changes relating to taxes and interest paid	6,427			23,192				15,842			22,559
Changes in non-cash working capital having a cash effect	$	(11,400	)	$	58,963			$	45,670		$	8,108
These changes relate to the following activities:
Operating	$	(4,080	)	$	62,120			$	40,745		$	6,134
Financing	1,780			1,044				1,780			7,027
Investing	(9,100		)	(4,201		)		3,145			(5,053		)
Changes in non-cash working capital	$	(11,400	)	$	58,963			$	45,670		$	8,108

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 10

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10. Financial instruments:

Financial instruments are either measured at amortized cost or fair value.

In the normal course of business, the Company's assets, liabilities and forecasted transactions, as reported in U.S. dollars, are impacted by various market risks including, but not limited to, natural gas prices and currency exchange rates. The time frame and manner in which the Company manages those risks varies for each item based on the Company's assessment of the risk and the available alternatives for mitigating risks.

The Company uses derivatives as part of its risk management program to mitigate variability associated with changing market values. Changes in fair value of derivative financial instruments are recorded in earnings unless the instruments are designated as cash flow hedges. The Company designates as cash flow hedges derivative financial instruments to hedge its risk exposure to fluctuations in natural gas prices and derivative financial instruments to hedge its risk exposure to fluctuations in the euro compared to the U.S. dollar.

The fair value of derivative instruments is determined based on industry-accepted valuation models using market observable inputs and are classified within Level 2 of the fair value hierarchy. The fair value of all of the Company's derivative contracts as presented in the consolidated statements of financial position are determined based on present values and the discount rates used are adjusted for credit risk. The effective portion of the changes in fair value of derivative financial instruments designated as cash flow hedges is recorded in other comprehensive income. The spot element of forward contracts in the hedging relationships is recorded in other comprehensive income as the change in fair value of cash flow hedges. The change in the fair value of the forward element of forward contracts is recorded separately in other comprehensive income as the forward element excluded from the hedging relationships.

Until settled, the fair value of the derivative financial instruments will fluctuate based on changes in commodity prices or foreign currency exchange rates.

Natural gas forward contracts

The Company manages its exposure to changes in natural gas prices for a portion of its North American natural gas requirements by executing a number of fixed price forward contracts.

During the quarter, the Company entered into a physical forward contract for the equivalent of approximately one-third of Geismar 3's natural gas requirements for delivery in 2026 to 2032, designated as a cash flow hedge, to manage its exposure to changes in natural gas prices for the Geismar facilities. This is in addition to its existing forward contracts for the Geismar 2 facility, all of which have been designated as cash flow hedges. Natural gas is fungible across the Geismar site. The Company has also entered into physical forward contracts to manage its exposure to changes in natural gas prices for the Medicine Hat facility. The Company has designated contracts for the 2021 and 2022 periods as cash flow hedges. Other costs incurred to transport natural gas from the contracted delivery point, either Henry Hub or AECO, to the relevant production facility represent an insignificant portion of the overall underlying risk and are recognized as incurred outside of the hedging relationship.

Subsequent to the quarter end, the Company entered into a physical forward contract for the equivalent of approximately one-third of Geismar 3's natural gas requirements for delivery in 2023 to 2025 to further manage its exposure to changes in natural gas prices for the Geismar facilities. The contract has been designated as a cash flow hedge.

As at June 30, 2019 , the Company had outstanding forward contracts in North America designated as cash flow hedges with a notional amount of $834 million ( December 31, 2018 - $426 million ) and a net negative fair value of $119.9 million ( December 31, 2018 - negative fair value $105.7 million ), of which $122.4 million is included in other long-term liabilities offset by $2.5 million included in other assets.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 11

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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Euro forward exchange contracts

The Company manages its foreign currency exposure to euro denominated sales by executing a number of forward contracts which it has designated as cash flow hedges for its highly probable forecast euro collections.

As at June 30, 2019 , the Company had outstanding forward exchange contracts designated as cash flow hedges to sell a notional amount of 22 million euros ( December 31, 2018 - 45 million euros). The euro contracts had a negative fair value of $0.2 million included in accounts payable ( December 31, 2018 - positive fair value $0.3 million included in current assets).

Fair value

The fair value of the Company’s derivative financial instruments as disclosed above are determined based on Bloomberg quoted market prices and confirmations received from counterparties, which are adjusted for credit risk.

The table below shows the nominal net cash flows for derivative hedging instruments, excluding credit risk adjustments, based upon contracted settlement dates. The amounts reflect the maturity profile of the hedging instruments and are subject to change based on the prevailing market rate at each of the future settlement dates. Financial asset derivative positions are held with investment-grade counterparties and therefore the settlement day risk exposure is considered to be negligible.

	Cash inflows (outflows) by term to maturity
	1 year or less		1-3 years		3-5 years		More than 5 years		Total
Natural gas forward contracts	(13,871	)	(39,616	)	(40,135	)	(41,651	)	$	(135,273	)
Euro forward exchange contracts	(232	)	—		—		—		$	(232	)

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

	June 30, 2019
As at	Carrying Value			Fair Value
Long-term debt excluding deferred financing fees	$	1,455,834		$	1,469,337

Long-term debt consists of limited recourse debt facilities and unsecured notes. There is no publicly traded market for the limited recourse debt facilities. The fair value of the limited recourse debt facilities as disclosed on a recurring basis and categorized as Level 2 within the fair value hierarchy is estimated by reference to current market rates as at the reporting date. The fair value of the unsecured notes disclosed on a recurring basis and also categorized as Level 2 within the fair value hierarchy is estimated using quoted prices and yields as at the reporting date. The fair value of the Company’s long term debt will fluctuate until maturity.

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 12

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

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Methanex Corporation

Quarterly History (unaudited)

	2019		Q2		Q1		2018		Q4		Q3		Q2		Q1
METHANOL SALES VOLUME
(thousands of tonnes)
Methanex-produced   1	3,590		1,669		1,921		7,002		1,599		1,790		1,729		1,884
Purchased methanol	1,189		716		473		3,032		908		802		709		613
Commission sales   1	545		216		329		1,174		245		279		329		321
	5,324		2,601		2,723		11,208		2,752		2,871		2,767		2,818
METHANOL PRODUCTION
(thousands of tonnes)
New Zealand	883		446		437		1,606		389		478		252		487
Geismar (Louisiana, USA)	935		530		405		2,078		527		520		518		513
Trinidad (Methanex interest)	813		384		429		1,702		448		353		442		459
Egypt (50% interest)	156		15		141		613		155		128		165		165
Medicine Hat (Canada)	310		155		155		600		160		144		143		153
Chile	531		290		241		612		206		112		128		166
	3,628		1,820		1,808		7,211		1,885		1,735		1,648		1,943
AVERAGE REALIZED METHANOL PRICE   2
($/tonne)	329		326		331		405		401		413		405		402
($/gallon)	0.99		0.98		1.00		1.22		1.21		1.24		1.22		1.21
ADJUSTED EBITDA 3	340		146		194		1,071		197		293		275		306
PER SHARE INFORMATION 3 ($ per common share attributable to Methanex shareholders)
Adjusted net income	1.07		0.34		0.73		6.86		1.15		1.92		1.75		2.03
Basic net income	1.15		0.65		0.50		7.07		2.07		1.62		1.36		2.02
Diluted net income	1.09		0.51		0.50		6.92		1.68		1.61		1.36		2.00

1

Methanex-produced methanol represents our equity share of volume produced at our facilities and excludes volume marketed on a commission basis related to the 36.9% of the Atlas facility and 50% of the Egypt facility that we do not own. Methanex-produced methanol includes any volume produced by Chile using natural gas supplied from Argentina under a tolling arrangement ("Tolling Volume"). No Tolling Volume has been produced in 2019. There were 48,000 MT of Tolling Volume in the second quarter of 2018 and 88,000 MT of Tolling Volume for the six months ended June 30, 2018.

2	Average realized price is calculated as revenue, excluding commissions earned and the Egypt non-controlling interest share of revenue, but including an amount representing our share of Atlas revenue, divided by the total sales volume of Methanex-produced and purchased methanol, but excluding Tolling Volume.

3	The first and second quarter of 2019 reflects the adoption of IFRS 16. Financial information in all comparative periods do not reflect the impact of IFRS 16. Refer to the Adoption of New Accounting Standards section on page 14 .

 

METHANEX CORPORATION 2019 SECOND QUARTER    PAGE 13

QUARTERLY HISTORY (UNAUDITED)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized.

	METHANEX CORPORATION
Date: July 31, 2019	By:	/s/ KEVIN PRICE
		Name:		Kevin Price
		Title:		General Counsel and Corporate Secretary

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