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Methanex Reports Fourth Quarter Results and Stronger Earnings in 2011

January 25, 2012

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 25, 2012) - Methanex Corporation (TSX:MX)(NASDAQ:MEOH)(SANTIAGO:Methanex) -

For the fourth quarter of 2011, Methanex reported Adjusted EBITDA(1) of $133 million and net income attributable to Methanex shareholders of $64 million ($0.68 per share on a diluted basis). This compares with Adjusted EBITDA(1) of $111 million and net income attributable to Methanex shareholders of $62 million ($0.59 per share on a diluted basis) for the third quarter of 2011. For the year ended December 31, 2011, Methanex reported Adjusted EBITDA(1) of $427 million and net income attributable to Methanex shareholders of 201 million ($2.06 per share on a diluted basis(2)). This compares with Adjusted EBITDA(1) of $291 million and net income attributable to Methanex shareholders of $96 million ($1.03 per share on a diluted basis) for the year ended December 31, 2010.

Bruce Aitken, President and CEO of Methanex commented, "Methanol demand and pricing has been relatively stable and we reported another good quarter of earnings. For 2011, we are also pleased to have reported record sales volumes and significantly higher earnings, as a result of a healthy methanol pricing environment and higher production due to the start up of the Egypt and Medicine Hat plants over the past year."

Mr. Aitken added, "We have significantly more upside potential to our production and earnings. We recently announced the planned restart of a second plant in New Zealand in mid-2012 and we are aggressively pursuing other initiatives to increase the utilization of our Chile assets, including a project to relocate one of the idle plants to the U.S. Gulf Coast for start-up in the second half of 2014. The outlook for the industry also looks very attractive, as demand growth is expected to significantly exceed new capacity additions over the next few years."

Mr. Aitken concluded, "With over US$300 million of cash on hand, an undrawn credit facility, a robust balance sheet, and strong cash flow generation, we are well positioned to invest in 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 January 26, 2012 at 12:00 noon ET (9:00 am PT) to review these fourth 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 Fourth Quarter 2011 press release contains forward-looking statements with respect to us and the chemical industry. Refer to Forward-Looking Information Warning in the attached Fourth Quarter 2011 Management's Discussion and Analysis for more information.

(1) Adjusted EBITDA is a non-IFRS measure which does not have any standardized meaning prescribed by IFRS. Adjusted EBITDA represents the amount that is attributable to Methanex shareholders and is calculated by deducting the amount of Adjusted EBITDA associated with the 40% non-controlling interest in the methanol facility in Egypt. Commencing with this fourth quarter interim report, we have modified our definition of Adjusted EBITDA to exclude 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. Refer to the Financial Results section for a discussion of this change and Additional Information - Supplemental Non-IFRS Measures for a reconciliation to the most comparable IFRS measure.

(2) For the year ended December 31, 2011, diluted net income per common share is $0.10 lower than basic net income per common share. The large difference between diluted and basic net income per common share is due to the basis for the calculation of diluted net income per common share differing from the accounting treatment for certain types of share-based compensation. See note 8 of the Company's condensed consolidated interim financial statements for the calculation of diluted net income per common share.


4 Interim Report                                                           
For the Three Months Ended December 31, 2011                               

At January 25, 2012 the Company had 93,264,955 common shares issued and   
outstanding and stock options exercisable for 3,425,099 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                                 

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


                                        Three Months Ended      Years Ended
                                  -----------------------------------------
                                    Dec 31  Sep 30  Dec 31   Dec 31  Dec 31
($ millions, except where noted)      2011    2011 2010(7)     2011 2010(7)
---------------------------------------------------------------------------
Production (thousands of tonnes)                                           
 (attributable to Methanex                                                 
 shareholders)                         961   1,035     913    3,847   3,540
Sales volumes (thousands of                                                
 tonnes):                                                                  
 Produced methanol (attributable                                           
  to Methanex shareholders)          1,052     983     831    3,853   3,540
 Purchased methanol                    644     672     806    2,815   2,880
 Commission sales (1)                  208     235     151      846     509
---------------------------------------------------------------------------
 Total sales volumes                 1,904   1,890   1,788    7,514   6,929
Methanex average non-discounted                                            
 posted price ($ per tonne) (2)        456     445     407      440     356
Average realized price ($ per                                              
 tonne) (3)                            388     377     348      374     306
Adjusted EBITDA (attributable to                                           
 Methanex shareholders) (4)            133     111      88      427     291
Cash flows from operating                                                  
 activities                            158     119      13      480     183
Adjusted cash flows from operating                                         
 activities (attributable to                                               
 Methanex shareholders) (5)            122     104      94      392     303
Net income attributable to                                                 
 Methanex shareholders                  64      62      26      201      96
Basic net income per common share                                          
 attributable to Methanex                                                  
 shareholders                         0.69    0.67    0.28     2.16    1.04
Diluted net income per common                                              
 share attributable to Methanex                                            
 shareholders (6)                     0.68    0.59    0.27     2.06    1.03
Common share information (millions                                         
 of shares):                                                               
 Weighted average number of common                                         
  shares                                93      93      92       93      92
 Diluted weighted average number                                           
  of common shares                      94      94      94       94      94
 Number of common shares                                                   
  outstanding, end of period            93      93      93       93      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 http://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 produced (attributable to Methanex       
    shareholders) and purchased methanol.                                  
(4) Adjusted EBITDA is a non-IFRS measure which does not have any          
    standardized meaning prescribed by IFRS. Adjusted EBITDA represents the
    amount that is attributable to Methanex shareholders and is calculated 
    by deducting the amount of Adjusted EBITDA associated with the 40% non-
    controlling interest in the methanol facility in Egypt. Commencing with
    this fourth quarter interim report, we have modified our definition of 
    Adjusted EBITDA to exclude 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. Refer to the   
    Financial Results section for a discussion of this change and         
    Additional Information - Supplemental Non-IFRS Measures for a          
    reconciliation to the most comparable IFRS measure.                    
(5) Adjusted cash flows from operating activities is a non-IFRS measure    
    which does not have any standardized meaning prescribed by IFRS.       
    Adjusted cash flows from operating activities is calculated by 
    Deducting changes in non-cash working capital and the amount of cash
    flows from operating activities associated with the 40% non-controlling
    interest in the methanol facility in Egypt. Refer to Additional
    Information - Supplemental Non-IFRS Measures for a reconciliation to
    the most comparable IFRS measure.                                      
(6) For the year ended December 31, 2011, diluted net income per common    
    share is $0.10 lower than basic net income per common share. The large 
    difference between diluted and basic net income per common share is due
    to the basis for the calculation of diluted net income per common share
    differing from the accounting treatment for certain types of 
    share-based compensation. See note 8 of the Company's condensed
    consolidated interim financial statements for the calculation of 
    diluted net income per common share.                                   
(7) These amounts have been restated in accordance with IFRS and have not  
    been previously disclosed.                                             
---------------------------------------------------------------------------

FOURTH QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS

Except where otherwise noted, all currency amounts are stated in United States dollars. This Fourth Quarter 2011 Management's Discussion and Analysis ("MD&A") dated January 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 March 31, 2011, which were prepared in accordance with International Accounting Standards (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB), as well as the 2010 Annual Consolidated Financial Statements and the MD&A included in the Methanex 2010 Annual Report, which were prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP). The Methanex 2010 Annual Report and additional information relating to Methanex is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. For a discussion of the Company's adoption of International Financial Reporting Standards (IFRS), refer to the International Financial Reporting Standards (IFRS) section of this MD&A.


PRODUCTION SUMMARY
               Annual                                     
(thousands   Capacity       2011       2010    Q4 2011    Q3 2011    Q4 2010
 of tonnes)       (1) Production Production Production Production Production
----------------------------------------------------------------------------

Chile I, II,
 III and IV     3,800        554        935        113        116        208
Atlas
 (Trinidad)
 (63.1%                                                                   
 interest)      1,150        891        884        195        170        266
Titan                                                                       
 (Trinidad)       900        711        891        180        224        233
New                                                                         
 Zealand(2)       850        830        830        211        209        206
Egypt (60%                                                                  
 interest)        760        532          -        132        191          -
Medicine Hat      470        329          -        130        125          -
----------------------------------------------------------------------------
                7,930      3,847      3,540        961      1,035        913
----------------------------------------------------------------------------
(1) The production 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. 
(2) The production capacity of New Zealand represents only our 0.85 million 
    tonne per year Motunui facility that we restarted in late 2008. We      
    recently announced our intention to restart a second Motunui facility in
    mid-2012 (refer to the New Zealand section for more information).       

Chile

For the year ended December 31, 2011, we produced 554,000 tonnes compared with 935,000 tonnes in 2010. We continue to operate our methanol facilities in Chile 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 2010 Annual Report for more information.

During the fourth quarter of 2011, we produced 113,000 tonnes in Chile operating one plant at approximately 40% of capacity. This compares with 116,000 tonnes produced during the third quarter of 2011. Empresa Nacional del Petroleo (ENAP), the state-owned energy supplier, utilizes incremental natural gas during the winter season in southern Chile when residential demand is at its peak. We are working closely with 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 our 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 December 31, 2011, we had contributed approximately $106 million. Over the past few years, we have also provided GeoPark with $57 million (of which approximately $40 million had been repaid at December 31, 2011) to support and accelerate GeoPark's natural gas exploration and development activities. 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 fourth quarter of 2011, approximately 75% of production at our Chilean facilities was produced with natural gas supplied from the Fell and Dorado Riquelme blocks.

Other investment activities are also supporting the acceleration of natural gas exploration and development in areas of southern Chile. Over the past few years, the government of Chile has completed international bidding rounds to assign oil and natural gas exploration areas that lie close to our production facilities and announced the participation of several international oil and gas companies. For two of the exploration blocks, we are participating in a consortium with other international oil and gas companies with GeoPark as the operator. We have approximately a 15% participation in the consortium and at December 31, 2011, we had contributed $9 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 and we are also examining the viability of other projects to increase the utilization of our Chilean assets. We are planning to relocate one of the idle Chile methanol plants with a capacity of approximately 1.0 million tonnes to the Gulf Coast area of the United States. We recently announced that we have secured land in Geismar, Louisiana and are progressing site-specific engineering works. We expect to make a final investment decision in Q3 2012 and the plant to be operational in the second half of 2014. We are also continuing to examine the viability of utilizing coal gasification as an alternative feedstock in Chile.

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 regarding the production rates from existing natural gas fields or 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.

Trinidad

Our equity ownership of methanol facilities in Trinidad represents over 2.0 million tonnes of cost-competitive annual capacity. During the fourth quarter of 2011 we produced 375,000 tonnes compared with an operating capacity of 512,500 tonnes. As a result of an equipment failure in July 2011, our Atlas facility operated at approximately 70% of capacity throughout the fourth quarter. The plant was shut down for a maintenance outage to complete the repair in January 2012 which is expected to last approximately 40 days. In addition, production at our Titan facility was lower than capacity, primarily due to outages for minor repairs and lower gas deliveries. We continue to experience some natural gas curtailments to our Titan facility due to upstream outages. We are engaged with key stakeholders to find a solution to this issue, but in the meantime expect to continue to experience some gas curtailments to our Trinidad site.

New Zealand

During the fourth quarter of 2011, we produced 211,000 tonnes compared with 209,000 tonnes during the third quarter of 2011. We are currently operating one 850,000 tonne per year plant at our Motunui facility in New Zealand.

We recently announced our intention to restart a second Motunui facility in mid-2012. The restart of this facility will add up to 650,000 tonnes of incremental capacity per annum to our New Zealand operations. In support of the restart, Methanex has entered into a ten-year gas supply agreement which is expected to supply up to half of the 1.5 million tonnes of annual capacity at the Motunui site.

We also have an additional 530,000 tonne per year plant at the nearby Waitara Valley site which remains idle. This facility provides additional potential to increase New Zealand production depending on the methanol supply and demand dynamics and the availability of economically priced natural gas.

Egypt

During the fourth quarter of 2011, the Egypt methanol facility (60% interest) produced 132,000 tonnes compared with 191,000 tonnes during the third quarter of 2011. We have a 60% interest in the facility and have marketing rights for 100% of the production.

In November 2011, civil unrest affected various industries near the plant in Damietta, Egypt. For the safety and security of our employees, we took the decision to temporarily curtail operations of the methanol plant. We restarted the facility in early December and since that time, the methanol facility in Egypt has operated well.

Medicine Hat

Our 470,000 tonne per year facility in Medicine hat, Alberta was restarted in late April 2011 and has continued to operate well since that time. During the fourth quarter of 2011, we produced 130,000 tonnes compared with 125,000 tonnes during the third quarter of 2011. We have a program in place to purchase natural gas on the Alberta gas market and we believe that the long term natural gas dynamics in North America will support the long term operation of this facility.

FINANCIAL RESULTS

For the fourth quarter of 2011 we recorded Adjusted EBITDA of $133 million and net income attributable to Methanex Corporation shareholders of $64 million ($0.69 basic net income per common share and $0.68 per share on a diluted basis). This compares with Adjusted EBITDA of $111 million and net income attributable to Methanex Corporation shareholders of $62 million ($0.67 basic net income per common share and $0.59 per share on a diluted basis) for the third quarter of 2011 and Adjusted EBITDA of $88 million and net income attributable to Methanex Corporation shareholders of $26 million ($0.28 basic net income per common share and $0.27 per share on a diluted basis) for the fourth quarter of 2010.

For the year ended December 31, 2011, we recorded Adjusted EBITDA of $427 million and net income attributable to Methanex Corporation shareholders of $201 million ($2.16 basic net income per common share and $2.06 per share on a diluted basis). This compares with Adjusted EBITDA of $291 million and net income attributable to Methanex Corporation shareholders of $96 million ($1.04 basic net income per common share and $1.03 per share on a diluted basis) during the same period in 2010.

We review our financial results by analyzing changes in following components:


                              Three Months Ended            Years Ended    
                        ------------------------------ --------------------
                            Dec 31    Sep 30    Dec 31    Dec 31,   Dec 31,
($ millions)                  2011      2011      2010       2011      2010
---------------------------------------------------------------------------
Adjusted EBITDA                                                            
 (attributable to                                                          
 Methanex shareholders)  $     133 $     111 $      88  $     427 $     291
Mark-to-market impact of                                                   
 share-based                                                               
 compensation            $     (1) $      24 $    (15)  $      21 $    (19)
Depreciation and                                                           
 amortization            $    (44) $    (44) $    (32)  $   (157) $   (137)
Finance costs            $    (18) $    (17) $     (7)  $    (62) $    (31)
Finance income and other                                                   
 expenses                $     (3) $     (2) $       3  $       2 $       2
Income taxes             $    (12) $    (19) $    (11)  $    (56) $    (35)
---------------------------------------------------------------------------

Adjusted EBITDA (attributable to Methanex shareholders)

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 our adjusted earnings before interest, taxes, and depreciation and amortization ("Adjusted EBITDA").

We own 60% of the 1.26 million tonne per year Egypt methanol facility and 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 reviewing our operations, we analyze Adjusted EBITDA by excluding the amounts associated with the other investors' 40% non-controlling interest.

Commencing with this fourth quarter interim report, we have modified our definition of Adjusted EBITDA to exclude the mark-to-market impact of items which impact the comparability of our results 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. We grant share-based awards as an element of compensation and, as more fully discussed in the Mark-to-Market Impact of Share-based Compensation section, certain of these awards are marked to market each period with the changes in fair value recognized in earnings for the proportion of the service that has been rendered at the reporting date. We believe excluding the mark-to-market impact of share-based compensation as a result of changes in our share price will provide readers with a better measure of the Company's underlying ability to generate cash from operations and improve the comparability of our results from one period to another. A reconciliation of the change in the definition of Adjusted EBITDA is as follows:


                              Three Months Ended            Years Ended    
                        ------------------------------ --------------------
                            Dec 31    Sep 30    Dec 31     Dec 31    Dec 31
($ millions)                  2011      2011      2010       2011      2010
---------------------------------------------------------------------------
Adjusted EBITDA, as                                                        
 previously defined      $     132 $     135 $      73  $     448 $     272
 Mark-to-market impact                                                     
  on share-based                                                           
  compensation                   1      (24)        15       (21)        19
---------------------------------------------------------------------------
Adjusted EBITDA          $     133 $     111 $      88  $     427 $     291
---------------------------------------------------------------------------

For a further discussion of the definitions used in our Adjusted EBITDA analysis, refer to How We Analyze Our Business section. Also, refer to the Additional Information - Supplemental Non-IFRS Measures section for a reconciliation to the most comparable IFRS measure.

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


                                    Q4 2011         Q4 2011            2011
                              compared with   compared with   compared with
($ millions)                        Q3 2011         Q4 2010            2010
---------------------------------------------------------------------------
Average realized price      $            18 $            70 $           454
Sales volume                              4               5              17
Total cash costs                          -            (30)           (335)
---------------------------------------------------------------------------
                            $            22 $            45 $           136
---------------------------------------------------------------------------
Average realized price                                                     

                                     Three Months Ended      Years Ended   
                                  ------------------------ ----------------
                                    Dec 31  Sep 30  Dec 31   Dec 31  Dec 31
($ per tonne, except where noted)     2011    2011    2010     2011    2010
---------------------------------------------------------------------------
Methanex average non-discounted                                            
 posted price (1)                      456     445     407      440     356
Methanex average realized price        388     377     348      374     306
Average discount                       15%     15%     14%      15%     14%
---------------------------------------------------------------------------

(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.

During the fourth quarter of 2011, methanol demand remained stable, despite the ongoing concern around the global economy (refer to Supply/Demand Fundamentals section for more information). Overall industry supply and demand conditions remained balanced and as a result, the pricing environment remained relatively stable. Our average non-discounted posted price for the fourth quarter of 2011 was $456 per tonne compared with $445 per tonne for the third quarter of 2011 and $407 per tonne for the fourth quarter of 2010. Our average realized price for the fourth quarter of 2011 was $388 per tonne compared with $377 per tonne for the third quarter of 2011 and $348 per tonne for the fourth quarter of 2010. The change in our average realized price for the fourth quarter of 2011 increased Adjusted EBITDA by $18 million compared with the third quarter of 2011 and increased Adjusted EBITDA by $70 million compared with the fourth quarter of 2010. Our average realized price for the year ended December 31, 2011 was $374 per tonne compared with $306 per tonne for the same period in 2010 and this increased Adjusted EBITDA by $454 million.

Sales volume

Total methanol sales volumes excluding commission sales volumes were higher in 2011 than 2010 and this increased Adjusted EBITDA for all periods presented. We increased our sales volumes in 2011 compared with 2010 primarily as a result of increased supply from the new Egypt and Medicine Hat methanol facilities.

Total cash costs

The primary driver of changes in our total cash costs are changes in the cost of methanol we produce at our facilities and changes in the cost of methanol we purchase from others. 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. The variable component is adjusted in relation to changes in methanol prices above pre-determined prices at the time of production. 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 will 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:


                                        Q4 2011       Q4 2011          2011
                                  compared with compared with compared with
($ millions)                            Q3 2011       Q4 2010          2010
---------------------------------------------------------------------------
 Methanex-produced methanol costs $         (8) $        (34) $       (144)
 Insurance recovery                          17            17            17
 Proportion of produced methanol                                           
  sales                                       4            26            24
 Purchased methanol costs                   (6)          (30)         (200)
 Logistics costs                            (3)           (1)          (16)
 Other, net                                 (4)           (8)          (16)
---------------------------------------------------------------------------
Change in Adjusted EBITDA         $           - $        (30) $       (335)
---------------------------------------------------------------------------

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 all periods presented, changes in Methanex-produced methanol costs were primarily due to the impact of changes in methanol prices on our natural gas costs and the timing of inventory flows.

Insurance Recovery

We experienced an equipment failure at our Atlas facility in July 2011 and have operated this facility at approximately 70% of capacity since its restart. Our operations are covered by business interruption insurance and we have recorded the estimated insurance proceeds net of deductibles related to 2011 as a result of this event.

Proportion of produced methanol sales

The cost of purchased methanol is generally higher than the cost of produced methanol. Accordingly, an increase in the proportion of produced methanol sales results in a decrease in our overall cost structure for a given period. For the fourth quarter of 2011 compared with the third quarter of 2011, higher sales of produced methanol increased Adjusted EBITDA by $4 million. For the fourth quarter of 2011 compared with the fourth quarter of 2010, higher sales of produced methanol, primarily due to the impact of sales volumes from the Egypt and Medicine Hat facilities, increased Adjusted EBITDA by $26 million.

For the year ended December 31, 2011 compared with the same period in 2010, higher sales of produced methanol increased Adjusted EBITDA by $24 million. The impact of higher sales volumes from our Egypt and Medicine Hat facilities in 2011 was partially offset by lower sales of methanol produced at our Chile and Titan facilities.

Purchased methanol costs

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

Logistics costs

For the year ended December 31, 2011 compared with same period in 2010, logistics costs were higher by $16 million due primarily to higher bunker fuel costs and fewer backhaul opportunities to recover our ocean vessel costs.

Other, net

For all periods presented, other costs were higher primarily as a portion of fixed manufacturing costs were charged directly to earnings rather than to inventory due to lower production at our facilities in Chile, Trinidad and Egypt as well as the impact of a weaker US dollar on the cost structure of our operations.

Mark-to-Market Impact of Share-based Compensation

We grant share-based awards as an element of compensation. Share-based compensation expense (recovery) includes an amount related to the grant-date fair value and a mark-to-market impact as a result of subsequent changes in the Company's share price. The grant-date fair value amount is included in Adjusted EBITDA and analyzed above. The mark-to-market impact of share-based compensation as a result of changes in the share price is excluded from Adjusted EBITDA and analyzed separately below.


                                   Three Months Ended           Years Ended 
                         ------------------------------ --------------------

                                                            Dec 31    Dec 31
                            Q4 2011   Q3 2011   Q4 2010       2011      2010
                         ---------------------------------------------------
Methanex Corporation                                                        
 share price (1)          $   22.82 $   20.84 $   30.40  $   22.82 $   30.40
Grant-date fair value                                                       
 expense included in                                                        
 Adjusted EBITDA                  3         3         3         16        17
Mark-to-market impact due                                                   
 to change in share price         1      (24)        15       (21)        19
                         ---------------------------------------------------
Total share-based                                                           
 compensation expense                                                       
 (recovery)                       4      (21)        18        (5)        36
                         ---------------------------------------------------
(1) US dollar share price of Methanex Corporation as quoted on NASDAQ Global
    Market on the last trading day of the respective period.                

Share-based awards granted include stock options, share appreciation rights, tandem share appreciation rights, deferred share units, restricted share units and performance share units.

For stock options, the cost is measured based on an estimate of the fair value at the date of grant using the Black-Scholes option pricing model and this grant-date fair value is recognized as compensation expense over the related service period with no subsequent re-measurement in fair value. Accordingly, share-based compensation expense associated with stock options will not vary significantly from period to period.

Commencing in 2010, we granted share appreciation rights (SARs) and tandem share appreciation rights (TSARs) to replace grants of stock options with the objective to reduce dilution to shareholders. SARs and 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. Performance share units have an additional feature where the ultimate number of units that vest will be determined by the Company's total shareholder return in relation to a predetermined target over the period to vesting. The number of units that will ultimately vest will be in the range of 50% to 120% of the original grant. For deferred, restricted and performance share units, the fair 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, the grant-date fair value is recognized in earnings and Adjusted EBITDA over the related service period for the proportion of the service that has been rendered at each reporting date. Any mark-to-market impact as a result of subsequent changes in the share price are also recognized in earnings over the related service period for the proportion of the service that has been rendered at each reporting date but are excluded from Adjusted EBITDA.

Depreciation and Amortization

Depreciation and amortization was $44 million for the fourth and third quarter of 2011 and $32 million for the fourth quarter of 2010. Depreciation and amortization was $157 million for the year ended December 31, 2011 compared with $137 million in the same period in 2010. The increase in depreciation and amortization in 2011 compared with 2010 is primarily a result of the commencement of depreciation associated with the methanol facilities in Egypt (100% basis) and Medicine Hat and due to a portion of depreciation being charged directly to earnings rather than to inventory due to lower production from our Titan and Chile facilities.


Finance Costs                                                              

                              Three Months Ended            Years Ended    
                        ------------------------------ --------------------
                            Dec 31    Sep 30    Dec 31     Dec 31    Dec 31
($ millions)                  2011      2011      2010       2011      2010
---------------------------------------------------------------------------
Finance costs before                                                       
 capitalized interest    $      18 $      17 $      17  $      69 $      69
Less capitalized                                                           
 interest                        -         -      (10)        (7)      (38)
---------------------------------------------------------------------------
Finance costs            $      18 $      17 $       7  $      62 $      31
---------------------------------------------------------------------------

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            Years Ended    
                        ------------------------------ --------------------
                            Dec 31    Sep 30    Dec 31     Dec 31    Dec 31
($ millions)                  2011      2011      2010       2011      2010
---------------------------------------------------------------------------
Finance income and other                                                   
 expenses                $     (3) $     (2) $       3  $       2 $       2
---------------------------------------------------------------------------

Finance income and other expenses for the fourth quarter of 2011 was an expense of $3 million compared with an expense of $2 million for the third quarter of 2011 and income of $3 million for the fourth quarter of 2010. Finance income and other expenses for the year ended December 31, 2011 was $2 million income compared with $2 million income for the year ended December 31, 2010. 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 fourth quarter of 2011 was approximately 14% compared with approximately 20% for the third quarter of 2011. The effective tax rate for the year ended December 31, 2011 was 20% compared with 32% for the year ended December 31, 2010, excluding the impact of a gain on the sale of land and terminal assets in Kitimat, Canada recorded in 2010.

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. During the three months and year ended December 31, 2011, we earned a higher proportion of our consolidated income from methanol produced in Canada and New Zealand and a lower proportion of our consolidated income from methanol produced in Chile, and this contributed to a lower effective tax rate compared with the same periods in 2010. We have significant loss carryforwards in Canada and New Zealand which have not been recognized for accounting purposes.

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 grew at approximately 6% in 2011 and is currently approximately 49 million tonnes on an annualized basis. Increases in demand have been driven by both traditional and energy derivatives in Asia (particularly in China). Entering the first quarter of 2012, despite continued concerns around the global economic outlook, we have not seen any significant impact on global methanol demand.

Traditional derivatives account for about two-thirds of global methanol demand and are correlated to industrial production.

Energy derivatives account for 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, DME, and olefins production primarily in China. 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 an M85 (or 85% methanol) national standard took effect December 1, 2009. We believe demand potential into energy derivatives will be stronger in a high energy price environment.


Methanex Non-Discounted Regional Posted Prices (1)                         
                                                Jan     Dec     Nov     Oct
(US$ per tonne)                                2012    2011    2011    2011
---------------------------------------------------------------------------
United States                                   446     459     459     459
Europe (2)                                      411     418     429     439
Asia                                            440     470     470     470
---------------------------------------------------------------------------
(1) Discounts from our posted prices are offered to customers based on     
 various factors.                                                          
(2) EUR320 for Q1 2012 (Q4 2011 - EUR320) converted to United States       
 dollars.                                                                  
---------------------------------------------------------------------------

During the fourth quarter of 2011, as a result of steady demand and planned and unplanned industry outages, market conditions and the pricing environment were relatively stable. Our average non-discounted price for January 2012 is approximately $434 per tonne and we recently announced our North America non-discounted price for February at $446 per tonne, which is unchanged from January.

Over the next few years, there is a modest level of new capacity expected to come on-stream relative to demand growth expectations. We recently announced that we are planning to restart an idle plant in New Zealand in mid-2012 that will add 0.65 million tonnes of capacity and relocate a plant from Chile with an approximate capacity of 1.0 million tonnes to Geismar, Louisiana which we expect to be operational in the second half of 2014. There is also a 0.85 million tonne plant expected to restart in Beaumont, Texas in 2012, a 0.8 million tonne plant expected to restart in Channelview, Texas in 2013, and a 0.7 million tonne plant expected to start up in Azerbaijan in 2014. We expect that production from new capacity in China will be consumed in that country and that higher cost production capacity in China will need to operate in order to satisfy demand growth.

LIQUIDITY AND CAPITAL RESOURCES

Consolidated cash flows from operating activities in the fourth quarter of 2011 were $158 million compared with $119 million for the third quarter of 2011 and $13 million for the fourth quarter of 2010. The change in consolidated cash flows from operating activities in the fourth quarter of 2011 compared with the third quarter of 2011 and the fourth quarter of 2010 is primarily a result of changes in Adjusted EBITDA and changes in non-cash working capital.

Adjusted cash flows from operating activities, which excludes the amounts associated with the 40% non-controlling interests in the methanol facility in Egypt and changes in non-cash working capital, were $122 million in the fourth quarter of 2011 compared with $104 million for the third quarter of 2011 and $94 million for the fourth quarter of 2010. The change in Adjusted cash flows from operating activities in the fourth quarter of 2011 compared with the third quarter of 2011 and the fourth quarter of 2010 is primarily a result of changes in Adjusted EBITDA. Refer to the Additional Information - Supplemental Non-IFRS Measures section for a reconciliation of Adjusted cash flows from operating activities to the most comparable IFRS measure.

During the fourth quarter of 2011, we paid a quarterly dividend of $0.17 per share, or $16 million.

The Egypt limited recourse debt facilities required that certain conditions associated with plant construction and commissioning be met by September 30, 2011 ("project completion"). Project completion was achieved during the third quarter of 2011. In connection with achieving project completion, we agreed to a covenant to complete by March 31, 2012 certain land title registrations and related mortgages which require action by Egyptian government entities and which we do not expect to complete by March 31, 2012 and will seek a waiver from the lenders. We do not believe that the finalization of these items is material. We cannot assure you that we will be able to obtain a waiver from the lenders. Refer to note 5 of the Company's condensed consolidated interim financial statements for further information.

At December 31, 2011, management believes the Company was in compliance with all of the covenants and default provisions related to its long-term debt obligations.

We have agreements in place to participate in or support natural gas exploration and development in southern Chile and during the fourth quarter of 2011, we spent $8 million to support these initiatives.

We operate in a highly competitive commodity industry and believe it is appropriate to maintain a conservative balance sheet and to maintain financial flexibility. Our cash balance at December 31, 2011 was $351 million including $37 million related to the non-controlling interest in Egypt. We have a strong balance sheet and an undrawn $200 million credit facility provided by highly rated financial institutions that was extended early in the third quarter of 2011 to mid-2015. We intend to refinance the $200 million notes due August 2012. 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. Our planned capital maintenance expenditure program directed towards major maintenance, turnarounds and catalyst changes for existing operations, is currently estimated to total approximately $60 million to the end of 2012. We also recently announced our intention to restart a second facility in New Zealand with an estimated future capital cost of $60 million.

We believe we are well positioned to meet our financial commitments and continue to invest to grow the Company.

SHORT-TERM OUTLOOK

Despite continued concerns regarding the health of the global economy, we have not seen a significant change in demand for methanol and pricing remains relatively stable entering the first quarter of 2012.

We increased our production in 2011 with the new 1.26 million tonne per year methanol facility in Egypt and our 470,000 tonne per year plant in Medicine Hat, Alberta. These facilities are operating well and have increased our earnings capability. Our Atlas facility is currently undergoing a maintenance outage after which we expect it to return to operating at full capacity. We also recently announced our intention to restart a second plant in New Zealand in mid-2012.

The methanol price will ultimately depend on the strength of the global economy, industry operating rates, global energy prices, new supply additions, the rate of industry restructuring 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 December 31, 2011, 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.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Transition from Canadian generally accepted accounting principles (Canadian GAAP) to IFRS

The first quarter of 2011 ended March 31, 2011 with comparative financial results for 2010 was our first interim period reported under IFRS. All comparative figures in this fourth quarter interim report have been restated to be in accordance with IFRS, unless specifically noted otherwise.

Our financial statements were prepared in accordance with Canadian GAAP until December 31, 2010. While IFRS uses a conceptual framework similar to Canadian GAAP, there are significant differences in recognition, measurement and disclosures. In our MD&A in the 2010 Annual Report, we disclosed the significant impacts on transition to IFRS. The transition to IFRS had a cumulative impact on January 1, 2010 of $25 million to the shareholders' equity, excluding the presentation reclassification of the non-controlling interest. The disclosure in our MD&A in the 2010 Annual Report is consistent with the impacts disclosed in the condensed consolidated interim financial statements. For a description of the significant accounting policies the Company has adopted under IFRS, including the estimates and judgments we consider most significant in applying those accounting policies, please refer to note 2 of the condensed consolidated interim financial statements included in the interim report for the three months ended March 31, 2011.

The adoption of IFRS resulted in some changes to the consolidated balance sheets and income statements of the Company previously reported under Canadian GAAP. To help users of the financial statements better understand the impact of the adoption of IFRS on the Company, we have provided reconciliations from Canadian GAAP to IFRS for total assets, liabilities, and equity, as well as net income and comprehensive income for the comparative reporting periods. Please refer to note 13 of the condensed consolidated interim financial statements for the reconciliations between IFRS and Canadian GAAP for the period ended December 31, 2010 and refer to note 18 of the condensed consolidated interim financial statements for the period ended March 31, 2011 for the reconciliations between IFRS and Canadian GAAP at the date of transition, January 1, 2010 and for the year ended December 31, 2010.

IFRS 1 First-time Adoption of International Financial Reporting Standards

Adoption of IFRS requires the application of IFRS 1, First-time Adoption of International Financial Reporting Standards, which provides guidance for an entity's initial adoption of IFRS. IFRS 1 gives entities adopting IFRS for the first time a number of optional exemptions and mandatory exceptions, in certain areas, to the general requirement for full retrospective application of IFRS. In our MD&A in the 2010 Annual Report, we disclosed the optional exemptions available under IFRS 1 that we elected on transition to IFRS. The elections as previously disclosed are consistent with the elections as disclosed in the condensed consolidated interim financial statements. Please refer to note 13 of the condensed consolidated interim financial statements for the period ended March 31, 2011 for a detailed description of the IFRS 1 exemptions we elected to apply.

IFRS Conversion

Our plan to convert our consolidated financial statements to IFRS at the change over date of January 1, 2011 with comparative financial results included a formal project governance structure that included the Audit, Finance and Risk Committee, senior management, and an IFRS steering committee to monitor progress and review and approve recommendations. The IFRS transition plan progressed according to schedule and was comprehensive and addressed topics such as the impact of IFRS on accounting policies and implementation decisions, infrastructure, business activities, compensation matters and control activities.

Anticipated changes to 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.

Leases

As part of their global conversion project, the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board ("FASB") issued a joint Exposure Draft in 2010 proposing that lessees would be required to recognize all leases on the statement of financial position. We have a fleet of ocean-going vessels under time charter agreements with terms of up to 15 years, which are currently accounted for as operating leases. The proposed rules would require these time charter agreements to be recorded on the Consolidated Statements of Financial Position, resulting in a material increase to total assets and liabilities. The IASB and FASB currently expect to issue a re-exposed draft in 2012.

ADDITIONAL INFORMATION - SUPPLEMENTAL NON-IFRS MEASURES

In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), we present certain supplemental non-IFRS measures. These are Adjusted EBITDA and Adjusted cash flows from operating activities. These measures do not have any standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. These supplemental non-IFRS measures are provided to assist readers in determining our ability to generate cash from operations. 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.

These measures should be considered in addition to, and not as a substitute for, net income, cash flows and other measures of financial performance and liquidity reported in accordance with IFRS.

Adjusted EBITDA (attributable to Methanex shareholders)

Adjusted EBITDA differs from the most comparable IFRS measure, cash flows from operating activities, because it does not include changes in non-cash working capital, other cash payments related to operating activities, share-based compensation excluding mark-to-market impact, other non-cash items, taxes paid, finance income and other expenses, and Adjusted EBITDA associated with the 40% non-controlling interest in the methanol facility in Egypt.

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


                            Three Months Ended             Years Ended     
                    --------------------------------- ---------------------
                         Dec 31     Sep 30     Dec 31     Dec 31     Dec 31
($ thousands)              2011       2011       2010       2011       2010
---------------------------------------------------------------------------
Cash flows from                                                            
 operating                                                                 
 activities          $  158,434 $  119,119 $   12,720 $  479,707 $  182,546
Add (deduct):                                                              
 Net (income) loss                                                         
  attributable to                                                          
  non-controlling                                                          
  interests             (9,249)   (12,281)        199   (26,674)      1,990
 Changes in non-cash                                                       
  working capital      (18,851)      5,722     81,472   (35,388)    120,618
 Other cash                                                                
  payments,                                                                
  including share-                                                         
  based compensation      1,484      1,823        164     10,303      6,049
 Share-based                                                               
  compensation                                                             
  excluding mark-to-                                                       
  market impact (1)     (2,653)    (3,254)    (2,982)   (16,349)   (16,746)
 Other non-cash                                                            
  items                 (4,408)      2,372      (770)    (3,459)    (8,047)
 Income taxes paid       13,935      4,992        159     46,331      9,090
 Finance income and                                                        
  other expenses          2,891      1,585    (2,587)    (1,667)    (2,454)
 Non-controlling                                                           
  interests                                                                
  adjustment (2)        (8,160)    (9,046)      (573)   (25,455)    (2,043)
---------------------------------------------------------------------------
Adjusted EBITDA                                                            
 (attributable to                                                          
 Methanex                                                                  
 shareholders)       $  133,423 $  111,032 $   87,802 $  427,349 $  291,003
---------------------------------------------------------------------------
(1) This adjustment represents a change to the definition of Adjusted
    EBITDA. See analysis of the change in the Adjusted EBITDA (attributable
    to Methanex shareholders) section.                             
(2) This adjustment represents finance costs, income tax expense, and     
    depreciation and amortization associated with the 40% non-controlling 
    interest in the methanol facility in Egypt.                           

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

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

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


                            Three Months Ended             Years Ended     
                    --------------------------------- ---------------------
                         Dec 31     Sep 30     Dec 31     Dec 31     Dec 31
($ thousands)              2011       2011       2010       2011       2010
---------------------------------------------------------------------------
Cash flows from                                                            
 operating                                                                 
 activities          $  158,434 $  119,119 $   12,720 $  479,707 $  182,546
Add (deduct) non-                                                          
 controlling                                                               
 interest                                                                  
 adjustment:                                                               
 Net (income) loss      (9,249)   (12,281)        199   (26,674)      1,990
 Non-cash items         (8,359)    (8,992)      (569)   (25,245)    (2,024)
Changes in non-cash                                                        
 working capital       (18,851)      5,722     81,472   (35,388)    120,618
---------------------------------------------------------------------------
Adjusted cash flows                                                        
 from operating                                                            
 activities                                                                
 (attributable to                                                          
  Methanex                                                                 
  shareholders)      $  121,975 $  103,568 $   93,822 $  392,400 $  303,130
---------------------------------------------------------------------------


QUARTERLY FINANCIAL DATA (UNAUDITED)                                       

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

                                            Three Months Ended             
                               --------------------------------------------
($ thousands, except per share      Dec 31     Sep 30     Jun 30     Mar 31
 amounts)                             2011       2011       2011       2011
---------------------------------------------------------------------------
Revenue                         $  696,499 $  669,702 $  622,829 $  619,007
Net income(2)                       63,871     62,316     40,529     34,610
Net income before unusual                                                  
 item(2)                            63,871     62,316     40,529     34,610
Basic net income per common                                                
 share(2)                             0.69       0.67       0.44       0.37
Basic net income per common                                                
 share before unusual item(2)         0.68       0.67       0.44       0.37
Diluted net income per common                                              
 share(2)                             0.69       0.59       0.43       0.37
Diluted net income per common                                              
 share before unusual item(2)         0.68       0.59       0.43       0.37
---------------------------------------------------------------------------

                                            Three Months Ended             
                               --------------------------------------------
($ thousands, except per share      Dec 31     Sep 30     Jun 30     Mar 31
 amounts)                         2010 (1)   2010 (1)   2010 (1)   2010 (1)
---------------------------------------------------------------------------
Revenue                         $  570,337 $  480,997 $  448,543 $  466,706
Net income(2)                       25,508     28,662     14,804     27,045
Net income before unusual                                                  
 item(2)                            25,508      6,439     14,804     27,045
Basic net income per common                                                
 share(2)                             0.28       0.31       0.16       0.29
Basic net income per common                                                
 share before unusual item(2)         0.27       0.07       0.16       0.29
Diluted net income per common                                              
 share(2)                             0.28       0.31       0.15       0.29
Diluted net income per common                                              
 share before unusual item(2)         0.27       0.07       0.15       0.29
---------------------------------------------------------------------------
(1) These amounts have been restated in accordance with IFRS.            
(2) Attributable to Methanex Corporation shareholders.                    

FORWARD-LOOKING INFORMATION WARNING

This Fourth Quarter 2011 Management's Discussion and Analysis ("MD&A") as well as comments made during the Fourth Quarter 2011 investor conference call contain forward-looking statements with respect to us and our industry. Statements that include the words "believes", "expects", "may", "will", "should", "intends", "plans", "potential", "estimates", "anticipates", 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 shut downs (either temporary or permanent) or re-starts of
    existing methanol supply (including our own facilities), including,
    without limitation, timing and length of planned maintenance outages, 
--  expected methanol and energy prices, 
--  expected levels, timing and availability of economically-priced natural
    gas supply to each of our plants, including without limitation, levels
    of natural gas supply from investments in natural gas exploration and
    development in Chile and New Zealand, 
--  capital committed by third parties towards future natural gas
    exploration and development, 
--  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, including without
    limitation, our Chilean facilities, the new methanol plant in Egypt and
    the restarted Motunui 1 facility, 
--  expected operating costs, including natural gas feedstock costs and
    logistics costs, 
--  expected tax rates or resolutions to tax disputes, 
--  expected cash flows and earnings capability, 
--  ability to meet covenants or obtain waivers associated with our long-
    term debt obligations, including without limitation, the Egypt limited
    recourse debt facilities which have conditions associated with
    finalization of certain land title registration and related mortgages
    which require actions 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, 
--  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, 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
    and Canada, 
--  production rates of our facilities, 
--  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, rights to purchase natural gas or 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, 
--  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, 
--  accuracy and sustainability of opinions provided by our legal,
    accounting and other professional advisors, 
--  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, and Canada 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, 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 2010 Management's Discussion and Analysis
    and this Fourth Quarter 2011 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 our adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (refer to the Additional Information - Supplemental Non-IFRS Measures section for a reconciliation to the most comparable IFRS measure), mark-to-market impact of share-based compensation, depreciation and amortization, finance costs, finance income and other expenses, and income taxes.

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 our Adjusted EBITDA are average realized price, cash costs and sales volume which are defined and calculated as follows:


PRICE     The change in our 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 income.                                                

CASH COST The change in our 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. 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 our 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 our 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% through a commission offtake agreement. We account for this investment using proportionate consolidation which results in 63.1% of the revenues and expenses being included in our financial statements 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% 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 results, we analyze Adjusted EBITDA and Adjusted cash flows from operating activities excluding the amounts associated with the other investors' 40% non-controlling interest and include these results 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              Years Ended       
                    ---------------------------- ---------------------------
                            Dec 31        Dec 31        Dec 31        Dec 31
                              2011          2010          2011          2010
----------------------------------------------------------------------------

Revenue              $     696,499 $     570,337 $   2,608,037 $   1,966,583
Cost of sales and                                                           
 operating expenses                                                         
 (note 6)                (546,873)     (497,336)   (2,107,320)   (1,694,865)
Depreciation and                                                            
 amortization (note                                                         
 6)                       (43,558)      (31,694)     (156,667)     (137,214)
Gain on sale of                                                             
 Kitimat assets                  -             -             -        22,223
----------------------------------------------------------------------------
Operating income           106,068        41,307       344,050       156,727
Finance costs (note                                                         
 7)                       (17,868)       (7,396)      (61,797)      (30,648)
Finance income and                                                          
 other expenses            (2,891)         2,587         1,667         2,454
----------------------------------------------------------------------------
Profit before income                                                        
 tax expense                85,309        36,498       283,920       128,533
Income tax expense:                                                         
 Current                   (8,897)      (10,314)      (36,241)      (29,463)
 Deferred                  (3,292)         (875)      (19,679)       (5,041)
----------------------------------------------------------------------------
                          (12,189)      (11,189)      (55,920)      (34,504)
----------------------------------------------------------------------------
Net income           $      73,120 $      25,309 $     228,000 $      94,029
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
 Methanex                                                                   
  Corporation                                                               
  shareholders              63,871        25,508       201,326        96,019
 Non-controlling                                                            
  interests                  9,249         (199)        26,674       (1,990)
----------------------------------------------------------------------------
                     $      73,120 $      25,309 $     228,000 $      94,029
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Income for the                                                              
 period attributable                                                        
 to Methanex                                                                
 Corporation                                                                
 shareholders                                                               
 Basic net income                                                           
  per common share 
  (note 8)           $        0.69 $        0.28 $        2.16 $        1.04
 Diluted net income                                                         
  per common share                                                          
  (note 8)           $        0.68 $        0.27 $        2.06 $        1.03
 Basic net income                                                           
  per common share                                                          
  before unusual                                                            
  item (note 8)      $        0.69 $        0.28 $        2.16 $        0.80
 Diluted net income                                                         
  per common share                                                          
  before unusual                                                            
  item (note 8)      $        0.68 $        0.27 $        2.06 $        0.79

Weighted average                                                            
 number of common                                                           
 shares outstanding     93,239,059    92,347,561    93,026,482    92,218,320
Diluted weighted                                                            
 average number of                                                          
 common shares                                                              
 outstanding            94,236,703    93,951,536    94,360,956    93,509,799

See accompanying notes to condensed consolidated interim financial
statements.


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

                                  Three Months Ended        Years Ended     
                                ---------------------- ---------------------
                                     Dec 31     Dec 31     Dec 31     Dec 31
                                       2011       2010       2011       2010
----------------------------------------------------------------------------

Net income                       $   73,120 $   25,309 $  228,000 $   94,029
 Other comprehensive income                                                 
  (loss):                                                                   
  Change in fair value of                                                   
   forward exchange contracts,                                              
   net of tax                           361          -        326          -
  Change in fair value of                                                   
   interest rate swap contracts,                                            
   net of tax                         (157)      3,954    (3,764)   (25,985)
  Realized loss on interest rate                                            
   swap reclassified to interest                                            
   expense                            3,995          -     12,816          -
  Realized loss on Interest rate                                            
   swap reclassified to                                                     
   property, plant and equipment          -          -      7,279     15,682
  Actuarial losses on defined                                               
   benefit pension plans, net of                                            
   tax                             (10,258)    (1,139)   (10,258)    (1,139)
----------------------------------------------------------------------------
                                    (6,059)      2,815      6,399   (11,442)
----------------------------------------------------------------------------
Comprehensive income             $   67,061 $   28,124 $  234,399 $   82,587
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
  Methanex Corporation                                                      
   shareholders                      56,275     26,742    201,193     88,697
  Non-controlling interests          10,786      1,382     33,206    (6,110)
----------------------------------------------------------------------------
                                 $   67,061 $   28,124 $  234,399 $   82,587
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to condensed consolidated interim financial          
statements.                                                                


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

                                                        Dec 31        Dec 31
                                                          2011          2010
----------------------------------------------------------------------------

ASSETS                                                                      
Current assets:                                                             
 Cash and cash equivalents                       $     350,711 $     193,794
 Trade and other receivables                           378,430       320,027
 Inventories (note 2)                                  281,015       229,657
 Prepaid expenses                                       24,465        26,877
----------------------------------------------------------------------------
                                                     1,034,621       770,355
Non-current assets:                                                         
 Property, plant and equipment (note 3)              2,233,023     2,258,576
 Other assets                                          125,931       111,762
----------------------------------------------------------------------------
                                                     2,358,954     2,370,338
----------------------------------------------------------------------------
                                                 $   3,393,575 $   3,140,693
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities:                                                        
 Trade, other payables and accrued liabilities   $     327,130 $     259,039
 Current maturities on long-term debt (note 5)         251,107        49,965
 Current maturities on finance leases                    6,713        11,570
 Current maturities on other long-term                                      
  liabilities                                           18,031         9,677
----------------------------------------------------------------------------
                                                       602,981       330,251
Non-current liabilities:                                                    
 Long-term debt (note 5)                               652,148       896,976
 Finance leases                                         55,979        67,842
 Other long-term liabilities                           178,172       140,570
 Deferred income tax liabilities                       302,332       295,431
----------------------------------------------------------------------------
                                                     1,188,631     1,400,819
Equity:                                                                     
 Capital stock                                         455,434       440,092
 Contributed surplus                                    22,281        25,393
 Retained earnings                                     942,978       813,819
 Accumulated other comprehensive loss                 (15,968)      (26,093)
----------------------------------------------------------------------------
 Shareholders' equity                                1,404,725     1,253,211
 Non-controlling interests                             197,238       156,412
----------------------------------------------------------------------------
 Total equity                                        1,601,963     1,409,623
----------------------------------------------------------------------------
                                                 $   3,393,575 $   3,140,693
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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, January 1, 2010      92,108,242 $   427,792 $    26,981 $   776,139
 Net income (loss)                     -           -           -      96,019
 Other comprehensive loss              -           -           -     (1,139)
 Compensation expense                                                       
  recorded for stock options           -           -       1,475           -
 Issue of shares on exercise
  of stock options               523,780       9,237           -           -
 Reclassification of grant                                                  
  date fair value on exercise
  of stock options                     -       3,063     (3,063)           -
 Dividend payments to Methanex
  Corporation shareholders             -           -           -    (57,200)
 Distributions to 
  non-controlling interests            -           -           -           -
 Equity contributions by                                                    
  non-controlling interests            -           -           -           -
----------------------------------------------------------------------------
Balance, December 31, 2010    92,632,022     440,092      25,393     813,819
 Net income                            -           -           -     201,326
 Other comprehensive income                                                 
  (loss)                               -           -           -    (10,258)
 Compensation expense                                                       
  recorded for stock options           -           -         837           -
 Issue of shares on exercise                                                
  of stock options               615,733      11,393           -           -
 Reclassification of grant
  date fair value on exercise
  of stock options                     -       3,949     (3,949)           -
 Dividend payments to Methanex                                            
  Corporation shareholders             -           -           -    (61,909)
 Distributions to                                                           
  non-controlling interests            -           -           -           -
 Equity contributions by                                                    
  non-controlling interests            -           -           -           -
----------------------------------------------------------------------------
Balance, December 31, 2011    93,247,755 $   455,434 $    22,281 $   942,978
----------------------------------------------------------------------------
----------------------------------------------------------------------------

                             Accumulated                   
                                   Other      Share-        Non-
                           Comprehensive    holders' Controlling       Total
                                    Loss      Equity   Interests      Equity
----------------------------------------------------------------------------
Balance, January 1, 2010     $  (19,910) $ 1,211,002 $   137,272 $ 1,348,274
 Net income (loss)                     -      96,019     (1,990)      94,029
 Other comprehensive loss        (6,183)     (7,322)     (4,120)    (11,442)
 Compensation expense                                                       
  recorded for stock options           -       1,475           -       1,475
 Issue of shares on exercise                                                
  of stock options                     -       9,237           -       9,237
 Reclassification of grant                                                  
  date fair value on exercise
  of stock options                     -           -           -           -
 Dividend payments to Methanex                                
  Corporation shareholders             -    (57,200)           -    (57,200)
 Distributions to                                                           
  non-controlling interests            -           -       (750)       (750)
 Equity contributions by                                                   -
  non-controlling interests            -           -      26,000      26,000
----------------------------------------------------------------------------
Balance, December 31, 2010      (26,093)   1,253,211     156,412   1,409,623
 Net income                            -     201,326      26,674     228,000
 Other comprehensive income                                                 
  (loss)                          10,125       (133)       6,532       6,399
 Compensation expense                                                       
  recorded for stock options           -         837           -         837
 Issue of shares on exercise                                                
  of stock options                     -      11,393           -      11,393
 Reclassification of grant                                                  
  date fair value on exercise
  of stock options                     -           -           -           -
 Dividend payments to Methanex
  Corporation shareholders             -    (61,909)           -    (61,909)
 Distributions to                                                           
  non-controlling interests            -           -    (11,580)    (11,580)
 Equity contributions by                                                    
  non-controlling interests            -           -      19,200      19,200
----------------------------------------------------------------------------
Balance, December 31, 2011   $  (15,968) $ 1,404,725 $   197,238 $ 1,601,963
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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           Years Ended      
                           ------------------------ ------------------------
                                 Dec 31      Dec 31       Dec 31      Dec 31
                                   2011        2010         2011        2010
----------------------------------------------------------------------------

CASH FLOWS FROM OPERATING                                                   
 ACTIVITIES                                                                 
 Net income                 $    73,120 $    25,309  $   228,000 $    94,029
 Add (deduct) non-cash                                                      
  items:                                                                    
  Depreciation and                                                          
   amortization                  43,558      31,694      156,667     137,214
  Gain on sale of Kitimat                                                   
   assets                             -           -            -    (22,223)
  Income tax expense             12,189      11,189       55,920      34,504
  Share based compensation        3,859      18,157      (4,890)      36,084
  Finance costs                  17,868       7,396       61,797      30,648
  Other                           4,408         770        3,459       8,047
 Income taxes paid             (13,935)       (159)     (46,331)     (9,090)
 Other cash payments,                                                       
  including share-based                                                     
  compensation                  (1,484)       (164)     (10,303)     (6,049)
----------------------------------------------------------------------------
 Cash flows from operating                                                  
  activities before                                                         
  undernoted                    139,583      94,192      444,319     303,164
 Changes in non-cash                                                        
  working capital (note 10)      18,851    (81,472)       35,388   (120,618)
----------------------------------------------------------------------------
                                158,434      12,720      479,707     182,546
----------------------------------------------------------------------------

CASH FLOWS FROM FINANCING                                                   
 ACTIVITIES                                                                 
 Dividend payments             (15,852)    (14,331)     (61,909)    (57,200)
 Interest paid, including                                                   
  interest rate swap                                                        
  settlements                   (5,062)     (6,741)     (60,467)    (63,704)
 Change in project finance                                                  
  reserve accounts                3,918         372     (27,291)         372
 Repayment of limited                                                       
  recourse debt                 (8,133)     (7,628)     (49,650)    (30,991)
 Equity contributions by                                                    
  non-controlling interests           -       7,600       19,200      26,000
 Distributions to non-                                                      
  controlling interests         (6,989)           -      (8,239)       (750)
 Proceeds from limited                                                      
  recourse debt                       -           -        2,700      67,515
 Proceeds on issue of                                                       
  shares on exercise of                                                     
  stock options                     370       7,837       11,393       9,237
 Repayment of finance                                                       
  leases, including other                                                   
  long term liabilities         (1,574)     (2,858)      (5,964)    (11,583)
----------------------------------------------------------------------------
                               (33,322)    (15,749)    (180,227)    (61,104)
----------------------------------------------------------------------------

CASH FLOWS FROM INVESTING                                                   
 ACTIVITIES                                                                 
 Proceeds from sale of                                                      
  assets                              -      31,771            -      31,771
 Property, plant and                                                        
  equipment                    (35,171)    (37,420)    (127,524)   (122,082)
 Oil and gas assets             (8,329)     (5,403)     (30,098)    (24,233)
 GeoPark repayments                   -      14,531        7,551      20,227
 Other assets                         -       (307)            -       (769)
 Changes in non-cash                                                        
  working capital related                                                   
  to investing activities                                                   
  (note 10)                       8,124       1,812        7,508     (2,350)
----------------------------------------------------------------------------
                               (35,376)       4,984    (142,563)    (97,436)
----------------------------------------------------------------------------
 Increase in cash and cash                                                  
  equivalents                    89,736       1,955      156,917      24,006
 Cash and cash equivalents,                                                 
  beginning of period           260,975     191,839      193,794     169,788
----------------------------------------------------------------------------
 Cash and cash equivalents,                                                 
  end of period             $   350,711 $   193,794  $   350,711 $   193,794
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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 the major international markets of 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 the significant accounting policies disclosed in note 2 of the March 31, 2011 interim financial statements and therefore should be read in conjunction with the condensed consolidated interim financial statements for the period ended March 31, 2011. These condensed consolidated interim financial statements are part of the period covered by the Company's first International Financial Reporting Standards (IFRS) consolidated financial statements for the year ending December 31, 2011 and therefore IFRS 1, First Time Adoption of IFRS has been applied. The 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 January 25, 2012.

The Company's condensed consolidated interim financial statements were prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP) until December 31, 2010. The period ended March 31, 2011, with comparative results for 2010, was the Company's first IFRS condensed consolidated interim financial statements. Canadian GAAP differs from IFRS in some areas and accordingly, the significant accounting policies applied in the preparation of these condensed consolidated interim financial statements have been consistently applied to all periods presented except in instances where IFRS 1 either requires or permits an exemption. An explanation of how the transition from Canadian GAAP to IFRS has affected the reported consolidated statements of income, comprehensive income, financial position, and cash flows of the Company for the period ended December 31, 2010 is provided in note 13. This note includes information on the provisions of IFRS 1 and the exemptions that the Company elected to apply at the date of transition, January 1, 2010, and reconciliations of equity, net income and comprehensive income for the comparative period ended December 31, 2010. For a summary of the impact of transition from Canadian GAAP to IFRS at the date of transition, January 1, 2010, as well as for the year ended December 31, 2010, refer to note 18 of the condensed consolidated interim financial statements for the first quarter of 2011 ended March 31, 2011.

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 interests, and our proportionate share of the Atlas methanol facility.

2. Inventories:

Inventories are valued at the lower of cost, determined on a first-in first-out basis, and estimated net realizable value. The amount of inventories included in cost of sales and operating expenses and depreciation and amortization for the three months and year ended December 31, 2011 is $539 million (2010 - $451 million) and $2,052 million (2010 - $1,598 million), respectively.

3. Property, plant and equipment:


                            Buildings,                                      
                                 Plant                                      
                         Installations                                      
                                     &     Oil & Gas                        
                             Machinery    Properties       Other       Total
----------------------------------------------------------------------------

Cost at December 31,                                                        
 2011                    $   3,218,909 $      77,486 $    88,642 $ 3,385,037
Accumulated depreciation                                                    
 at December 31, 2011        1,078,253        32,990      40,771   1,152,014
----------------------------------------------------------------------------
Net book value at                                                           
 December 31, 2011       $   2,140,656 $      44,496 $    47,871 $ 2,233,023
----------------------------------------------------------------------------
Cost at December 31,                                                        
 2010                    $   3,097,928 $      54,049 $   116,203 $ 3,268,180
Accumulated depreciation                                                    
 at December 31, 2010          929,079        20,092      60,433   1,009,604
----------------------------------------------------------------------------
Net book value at                                                           
 December 31, 2010       $   2,168,849 $      33,957 $    55,770 $ 2,258,576
----------------------------------------------------------------------------

Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To the extent that methanol facilities in a particular location are interdependent as a result of common infrastructure and/or feedstock from shared sources that can be shared within a facility location, assets are grouped based on site locations as a single cash-generating unit. The four methanol facilities at the Company's Chile site, the Chile oil and gas properties included in the table above, and the Chile oil and gas assets accounted for as Other Assets are considered as a single cash generating unit ("Chile cash-generating unit") and production from the site was lower than expected in 2011 as a result of lower natural gas deliveries. As a consequence, the carrying value of the Chile cash-generating unit, being $650 million on a pre-tax basis and $460 million on a post-tax basis, was tested for recoverability.

Recoverability was tested by comparing the carrying value of the Chile cash-generating unit to estimated pre-tax fair value, which was determined by measuring the pre-tax discounted cash flows expected to be generated from the assets over their estimated useful life. There are two key variables that impact the estimate of future cash flows: (1) the methanol price and (2) the price and availability of natural gas feedstock. Short-term methanol price estimates were based on current supply and demand fundamentals and current methanol prices. Long-term methanol price estimates were based on the Company's view of long-term supply and demand and consideration was given to many factors, including, but not limited to, estimates of global industrial production rates, energy prices, changes in general economic conditions, future global methanol production capacity, industry operating rates and the global industry cost structure. The Company's estimate of the price and availability of natural gas took into consideration the current contracted terms for supply to the methanol facilities, as well as factors influencing the exploration and development of natural gas in southern Chile.

The estimated future cash flows were discounted to a present value using a pre-tax discount rate based on the Company's weighted average cost of capital. Based on the test performed, the carrying value of the Company's Chile cash-generating unit is recoverable.

4. Interest in Atlas joint venture:

The Company has a 63.1% joint venture interest in Atlas Methanol Company (Atlas). Atlas owns a 1.7 million tonne per year methanol production facility in Trinidad. Included in the condensed consolidated interim financial statements are the following amounts representing the Company's proportionate interest in Atlas:


                                                          Dec 31      Dec 31
Consolidated Statements of Financial Position               2011        2010
----------------------------------------------------------------------------
Cash and cash equivalents                            $     9,266 $    10,676
Other current assets                                      92,259      79,511
Property, plant and equipment                            281,263     276,114
Other assets                                               9,429      12,548
Trade, other payables and accrued liabilities             32,990      23,934
Long-term debt, including current maturities
 (note 5)                                                 64,397      79,577
Finance leases and other long-term liabilities,                             
 including current maturities                             49,305      52,480
Deferred income tax liabilities                           20,814      18,893
----------------------------------------------------------------------------

                             Three Months Ended              Years Ended   
                           ------------------------ ------------------------
Consolidated Statements          Dec 31      Dec 31       Dec 31      Dec 31
 of Income                         2011        2010         2011        2010
----------------------------------------------------------------------------
Revenue                     $    43,401 $    56,008  $   224,902 $   180,314
Expenses                       (38,077)    (48,820)    (199,303)   (165,947)
----------------------------------------------------------------------------
Income before income taxes        5,324       7,188       25,599      14,367
Income tax expense              (1,360)     (2,366)      (4,853)     (4,749)
----------------------------------------------------------------------------
Net income                  $     3,964 $     4,822  $    20,746 $     9,618
----------------------------------------------------------------------------


                             Three Months Ended              Years Ended   
                           ------------------------ ------------------------
Consolidated Statements of       Dec 31      Dec 31       Dec 31      Dec 31
 Cash Flows                        2011        2010         2011        2010
--------------------------------------------------- ------------------------
Cash flows from operating                                                   
 activities                 $   (3,412) $    18,527  $    36,062 $    33,671
Cash outflows from                                                          
 financing activities           (6,269)     (9,145)     (19,641)    (22,622)
Cash outflows from                                                          
 investing activities           (8,282)     (1,881)     (17,831)     (8,625)
--------------------------------------------------- ------------------------

5. Long-term debt:


                                                          Dec 31      Dec 31
                                                            2011        2010
----------------------------------------------------------------------------
Unsecured notes                                                             
 8.75% due August 15, 2012                           $   199,643 $   199,112
 6.00% due August 15, 2015                               149,119     148,908
----------------------------------------------------------------------------
                                                         348,762     348,020
Atlas limited recourse debt facilities                    64,397      79,577
Egypt limited recourse debt facilities                   470,208     499,706
Other limited recourse debt facilities                    19,888      19,638
----------------------------------------------------------------------------
                                                         903,255     946,941
Less current maturities                                (251,107)    (49,965)
----------------------------------------------------------------------------
                                                     $   652,148 $   896,976
----------------------------------------------------------------------------

During the three months and year ended December 31, 2011, the Company made repayments on its Atlas limited recourse debt facilities of $7.5 million and $15.5 million, respectively, and other limited recourse debt facilities of $0.6 million and $2.4 million, respectively. The Company also made repayments on its Egypt limited recourse debt facilities of $31.7 million during the year ended December 31, 2011.

The covenants governing the Company's unsecured notes apply to the Company and its subsidiaries excluding the Atlas joint venture and Egypt entity ("limited recourse subsidiaries") and include restrictions on liens and sale and lease- back transactions, or merger or consolidation with another corporation or sale of all or substantially all of the Company's assets. The indenture also contains customary default provisions.

The Company has a $200 million unsecured revolving bank facility provided by highly rated financial institutions and this was extended in early July 2011 to May 2015. This facility contains covenant and default provisions in addition to those of the unsecured notes as described above. Significant covenants and default provisions under this facility include:

a) the obligation to maintain an EBITDA to interest coverage ratio of greater than 2:1 and a debt to capitalization ratio of less than or equal to 50%, calculated on a four quarter trailing average basis in accordance with definitions in the credit agreement which include adjustments related to the limited recourse subsidiaries,

b) a default if payment is accelerated by the creditor on any indebtedness of $10 million or more of the Company and its subsidiaries except for the limited recourse subsidiaries, and

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

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 which apply only to these entities including restrictions on the incurrence of additional indebtedness and 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 required that certain conditions associated with plant construction and commissioning be met by September 30, 2011 ("project completion"). Project completion was achieved during the third quarter of 2011. In connection with achieving project completion, we agreed to a covenant to complete by March 31, 2012 certain land title registrations and related mortgages which require action by Egyptian government entities and which we do not expect to complete by March 31, 2012 and will seek a waiver from the lenders. We do not believe that the finalization of these items is material. We cannot assure you that we will be able to obtain a waiver 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 and to accelerate the due date of the principal and accrued interest on any outstanding loans.

At December 31, 2011, management believes the Company was in compliance with all of the covenants and default provisions related to long-term debt obligations.

6. Expenses by function:


                              Three Months Ended           Years Ended      
                           ------------------------ ------------------------
                                 Dec 31      Dec 31       Dec 31      Dec 31
                                   2011        2010         2011        2010
--------------------------------------------------- ------------------------
Cost of sales               $   491,772 $   435,310  $ 1,910,889 $ 1,507,161
Selling and distribution         84,975      74,016      319,026     270,176
Administrative expenses          13,684      19,704       34,072      54,742
--------------------------------------------------- ------------------------
Total expenses by function  $   590,431 $   529,030  $ 2,263,987 $ 1,832,079
--------------------------------------------------- ------------------------

Cost of sales and operating                                                 
 expenses                   $   546,873 $   497,336  $ 2,107,320 $ 1,694,865
Depreciation and                                                            
 amortization                    43,558      31,694      156,667     137,214
--------------------------------------------------- ------------------------
Total expenses per                                                          
 Consolidated Statements of                                                 
 Income                     $   590,431 $   529,030  $ 2,263,987 $ 1,832,079
--------------------------------------------------- ------------------------

Included in total expenses for the three months and year ended December 31, 2011 are employee expenses, including share-based compensation expense, of $43.1 million (2010 - $47.3 million) and $130.5 million (2010 - $141.7 million), respectively.

7.Finance costs:


                                 Three Months Ended              Years Ended
                           ------------------------ ------------------------
                                 Dec 31      Dec 31       Dec 31      Dec 31
                                   2011        2010         2011        2010
--------------------------------------------------- ------------------------
Finance costs               $    17,868 $    17,205  $    69,027 $    68,723
Less: capitalized interest                                                  
 related to construction of                                                 
 Egypt plant                          -     (9,809)      (7,230)    (38,075)
--------------------------------------------------- ------------------------
                            $    17,868 $     7,396  $    61,797 $    30,648
--------------------------------------------------- ------------------------

Finance costs are primarily comprised of interest on borrowings and finance lease obligations, 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 of September 28, 2007 to March 31, 2015.

8. 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 which are accounted for as cash-settled for accounting purposes will require an adjustment to the numerator and denominator if they are determined to have a dilutive effect on diluted net income per common share.

During the year ended December 31, 2011, the Company's share price declined and the Company recorded a share based compensation recovery related to TSARs. For the year ended December 31, 2011, 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           Years Ended      
                           ------------------------ ------------------------
                                 Dec 31      Dec 31       Dec 31      Dec 31
                                   2011        2010         2011        2010
--------------------------------------------------- ------------------------
Numerator for basic net                                                     
 income per common share    $    63,871 $    25,508  $   201,326 $    96,019
 Adjustment for the effect                                                  
  of TSARs:                                                                 
  Cash-based settlement                                                     
   recovery included in net                                                 
   income                             -           -      (2,416)           -
  Equity-based settlement                                                   
   expense                            -           -      (4,327)           -
--------------------------------------------------- ------------------------
Numerator for diluted net                                                   
 income per common share    $    63,871 $    25,508  $   194,583 $    96,019
--------------------------------------------------- ------------------------

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             Years Ended
                           ------------------------ ------------------------
                                 Dec 31      Dec 31       Dec 31      Dec 31
                                   2011        2010         2011        2010
--------------------------------------------------- ------------------------
Denominator for basic net                                                   
 income per common share     93,239,059  92,347,561   93,026,482  92,218,320
 Effect of dilutive stock                                                   
  options                       997,644   1,603,975    1,305,480   1,291,479
 Effect of dilutive TSARs             -           -       28,994           -
--------------------------------------------------- ------------------------
Denominator for diluted net                                                 
 income per common share                                                    
 (1)                         94,236,703  93,951,536   94,360,956  93,509,799
--------------------------------------------------- ------------------------
(1) 2,159,090 and 3,039,284 outstanding options for the three months and
    year ended December 31, 2011, respectively, are dilutive and have been
    included in the diluted weighted average number of common shares.
    724,905 outstanding TSARs for the year ended December 31, 2011 are
    dilutive and have been included in the diluted weighted average number
    of common shares.

For the three months and year ended December 31, 2011, basic and diluted net income per common share attributable to Methanex shareholders were as follows:


                              Three Months Ended           Years Ended      
                           ------------------------ ------------------------
                                 Dec 31      Dec 31       Dec 31      Dec 31
                                   2011        2010         2011        2010
--------------------------------------------------- ------------------------
Basic net income per common                                                 
 share                      $      0.69 $      0.28  $      2.16 $      1.04
Diluted net income per                                                      
 common share               $      0.68 $      0.27  $      2.06 $      1.03
----------------------------------------------------------------------------

9. Share-based compensation:

a) Stock options:

(i) Outstanding stock options:

Common shares reserved for outstanding stock options at December 31, 2011:


                                Options Denominated     Options Denominated 
                                         in CAD                  in USD
                               ---------------------- ----------------------
                                   Number    Weighted     Number    Weighted
                                       of     Average         of     Average
                                    Stock    Exercise      Stock    Exercise
                                  Options       Price    Options       Price
----------------------------------------------------- ----------------------
Outstanding at December 31, 2010    2,250 $      9.56  4,574,257 $     18.95
 Granted                                -           -     67,800       28.74
 Exercised                        (2,250)        9.56  (583,548)       18.85
 Cancelled                              -           -   (24,370)       17.16
----------------------------------------------------------------------------
Outstanding at September 30, 2011       - $         -  4,034,139 $     19.14
 Granted                                -           -          -           -
 Exercised                              -           -   (29,935)       12.38
 Cancelled                              -           -          -           -
----------------------------------------------------------------------------
Outstanding at December 31, 2011        - $         -  4,004,204 $     19.19
----------------------------------------------------------------------------

Information regarding the stock options outstanding at December 31, 2011 is as follows:


                         Options Outstanding at       Options Exercisable at
                            December 31, 2011            December 31, 2011
                  ---------------------------------- -----------------------
                     Weighted                               
                      Average      Number                 Number    
                    Remaining          of   Weighted          of    Weighted
                  Contractual       Stock    Average       Stock     Average
Range of Exercise        Life     Options   Exercise     Options    Exercise
 Prices               (Years) Outstanding      Price Exercisable       Price
---------------------------------------------------- -----------------------
Options denominated                                                         
 in USD                                                                     
 $6.33 to 11.56           3.9   1,208,140 $    6.56      778,535 $      6.67
 $17.85 to 22.52          1.1     950,950     20.48      950,950       20.48
 $23.92 to 28.74          2.9   1,845,114     26.79    1,721,914       26.77
----------------------------------------------------------------------------
                          2.8   4,004,204 $   19.19    3,451,399 $     20.55
----------------------------------------------------------------------------

(ii) Compensation expense related to stock options:

For the three months and year ended December 31, 2011, compensation expense related to stock options included in cost of sales and operating expenses was $0.1 million (2010 - $0.2 million) and $0.8 million (2010 - $1.4 million), respectively. The fair value of the stock option grant was estimated on the date of grant using the Black-Scholes option pricing model.

b) Share appreciation rights and tandem share appreciation rights:

During 2010, the Company's stock option plan was amended to include tandem share appreciation rights (TSARs) and a new plan was introduced for share appreciation rights (SARs). A SAR gives the holder a right to receive a cash payment equal to the amount the market price of the Company's common shares exceeds the exercise price. A TSAR gives the holder the choice between exercising a regular stock option or surrendering the option for a cash payment equal to the amount the market price of the Company's common shares exceeds the exercise price. All SARs and TSARs granted have a maximum term of seven years with one-third vesting each year after the date of grant.

(i) Outstanding SARs and TSARs:

SARs and TSARs outstanding at December 31, 2011:


                                        SARs                   TSARs        
                               ---------------------- ----------------------
                                   Number                 Number           
                                       of    Exercise         of    Exercise
                                    Units   Price USD      Units   Price USD
----------------------------------------------------- ----------------------
Outstanding at December 31,                                                 
 2010                             388,965 $     25.22    735,505 $     25.19
 Granted                          274,210       28.69    498,190       28.78
 Exercised                       (14,030)       25.22    (7,800)       25.22
 Cancelled                       (19,298)       25.64    (6,160)       27.14
----------------------------------------------------------------------------
Outstanding at September 30,                                                
 2011                             629,847 $     26.72  1,219,735 $     26.65
 Granted                                -           -          -           -
 Exercised                              -           -          -           -
 Cancelled                        (6,300)       26.56          -           -
----------------------------------------------------------------------------
Outstanding at December 31,                                                 
 2011(1)                          623,547 $     26.72  1,219,735 $     26.65
----------------------------------------------------------------------------
(1) At December 31, 2011, 346,693 SARs and TSARs were exercisable. The
    Company has common shares reserved for outstanding TSARs.           

(ii) 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 related service period. Changes in fair value each period are recognized in earnings for the proportion of the service that has been rendered at each reporting date. The fair value at December 31, 2011 was $6.3 million compared with the recorded liability of $5.0 million. The difference between the fair value and the recorded liability of $1.3 million will be recognized over the weighted average remaining service period of approximately 1.7 years. The weighted average fair value of the vested SARs and TSARs was estimated at December 31, 2011 using the Black-Scholes option pricing model.

For the three months and year ended December 31, 2011, compensation expense related to SARs and TSARs included an expense in cost of sales and operating expenses of $1.0 million (2010 - $4.2 million) and a recovery of $3.5 million (2010 - expense of $8.6 million), respectively. This included an expense of $0.1 million (2010 - $3.4 million) and a recovery of $10.4 million (2010 - expense of $3.0 million) related to the effect of the change in the Company's share price for the three months and year ended December 31, 2011 respectively.

c) Deferred, restricted and performance share units:

Deferred, restricted and performance share units outstanding at December 31, 2011 are as follows:


                                                    Number of      Number of
                                     Number of     Restricted    Performance
                                Deferred Share          Share          Share
                                         Units          Units          Units
----------------------------------------------------------------------------
Outstanding at December 31, 2010       557,187         46,604      1,169,617
 Granted                                24,533         17,100        281,470
 Granted in-lieu of dividends           10,812          1,204         20,670
 Redeemed                                    -              -      (343,931)
 Cancelled                                   -              -       (19,331)
----------------------------------------------------------------------------
Outstanding at September 30, 2011      592,532         64,908      1,108,495
 Granted                                   983              -              -
 Granted in-lieu of dividends            4,396            362          8,217
 Redeemed                                    -       (16,682)              -
 Cancelled                                   -              -       (13,663)
----------------------------------------------------------------------------
Outstanding at December 31, 2011       597,911         48,588      1,103,049
----------------------------------------------------------------------------

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 related service 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 December 31, 2011 was $38.0 million compared with the recorded liability of $35.5 million. The difference between the fair value and the recorded liability of $2.5 million will be recognized over the weighted average remaining service period of approximately 1.4 years.

For the three months and year ended December 31, 2011, compensation expense related to deferred, restricted and performance share units included in cost of sales and operating expenses was an expense of $2.6 million (2010 - $13.6 million) and a recovery of $2.2 million (2010 - expense of $26.0 million), respectively. This included an expense of $1.2 million (2010 - $11.9 million) and a recovery of $10.9 million (2010 - expense of $16.4 million) related to the effect of the change in the Company's share price for the three months and year ended December 31, 2011, respectively.

10. Changes in non-cash working capital:

Changes in non-cash working capital for the three months and years ended December 31, 2011 were as follows:


                              Three Months Ended           Years Ended      
                           ------------------------ ------------------------
                                 Dec 31      Dec 31       Dec 31      Dec 31
                                   2011        2010         2011        2010
--------------------------------------------------- ------------------------
Decrease (increase) in non-                                                 
 cash working capital:                                                      
 Trade and other                                                            
  receivables               $  (41,776) $   (1,952)  $  (58,403) $  (62,609)
 Inventories                   (35,886)    (44,570)     (51,358)    (58,753)
 Prepaid expenses                 6,541     (6,540)        2,412     (2,984)
 Trade, other payables and                                                  
  accrued liabilities,                                                      
  including long term                                                       
  payables                       96,180      15,968      119,170      20,340
--------------------------------------------------- ------------------------
                                 25,059    (37,094)       11,820   (104,006)

Adjustments for items not                                                   
 having a cash effect and                                                   
 working capital changes                                                    
 relating to taxes and                                                      
 interest paid                    1,916    (42,566)       31,075    (18,962)
--------------------------------------------------- ------------------------
Changes in non-cash working                                                 
 capital having a cash                                                      
 effect                     $    26,170 $  (79,660)  $    42,091 $ (122,968)
--------------------------------------------------- ------------------------

These changes relate to the                                                 
 following activities:                                                      
 Operating                  $    18,851 $  (81,472)  $    35,388 $ (120,618)
 Investing                        8,124       1,812        7,508     (2,350)
--------------------------------------------------- ------------------------
Changes in non-cash working                                                 
 capital                    $    26,975 $  (79,660)  $    42,091 $ (122,968)
--------------------------------------------------- ------------------------

11. Financial instruments:

The following table provides the carrying value of each category of financial assets and liabilities and the related balance sheet item:


                                                          Dec 31      Dec 31
                                                            2011        2010
----------------------------------------------------------------------------
Financial assets:                                                           

Financial assets held for trading:                                         
 Derivative instruments designated as cash flow                            
  hedges(1)                                          $       300 $         -
 Loans and receivables:                                                     
  Cash and cash equivalents                              350,711     193,794
  Trade and other receivables, excluding current                            
   portion of GeoPark financing                          332,642     272,575
  Project financing reserve accounts included in                            
   other assets                                           39,839      12,548
GeoPark financing, including current portion              18,072      25,868
----------------------------------------------------------------------------
Total financial assets(2)                            $   741,564 $   504,785
----------------------------------------------------------------------------
Financial liabilities:                                                      
 Other financial liabilities:                                               
  Trade, other payables and accrued liabilities      $   357,534 $   231,994
  Long-term debt, including current portion              903,255     946,941
 Financial liabilities held for trading:                                    
  Derivative instruments designated as cash flow                            
   hedges(1)                                              41,536      43,488
----------------------------------------------------------------------------
Total financial liabilities                          $ 1,302,325 $ 1,222,423
----------------------------------------------------------------------------
(1) The euro hedges   
    and the Egypt interest rate swaps designated as cash flow hedges are    
    measured at fair value based on industry accepted valuation models and  
    inputs obtained from active markets.                                    
(2) The carrying amount of the financial assets represents the maximum      
    exposure to credit risk at the respective reporting periods.            

At December 31, 2011, all of the Company's financial instruments are recorded on the balance sheet at amortized cost with the exception of cash and cash equivalents, derivative financial instruments and project financing reserve accounts included in other assets which are recorded at fair value.

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 $367 million as at December 31, 2011. The notional amounts decrease over the expected repayment period. At December 31, 2011, these interest rate swap contracts had a negative fair value of $41.5 million (2010 - $43.5 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 December 31, 2011, the Company had outstanding forward exchange contracts designated as cash flow hedges to sell a notional amount of 28.2 million euro in exchange for US dollars and these euro contracts had a positive fair value of $0.3 million recorded in trade and other receivables. Changes in fair value of derivative financial instruments designated as cash flow hedges have been recorded in other comprehensive income.

The Company has entered into natural gas purchase agreements related its Medicine Hat facility at fixed prices ranging from $3.79/mmbtu to $4.50/mmbtu. The contracts cover approximately 80% of the natural gas requirements when operating the facility at capacity to March 2013 and approximately 50% of the requirements for the period from April 2013 to October 2013.

12. Contingent Liability:

The Board of Inland Revenue of Trinidad and Tobago issued an assessment in 2011 against our 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 related to methanol produced by Atlas that extend to 2014 and 2019. 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.

13. Transition to International Financial Reporting Standards:

For a description of the significant IFRS accounting policies, refer to note 2 of the condensed consolidated interim financial statements for the first quarter ended March 31, 2011. Those IFRS accounting policies have been applied in preparing the condensed consolidated interim financial statements for the three months and year ended December 31, 2011, the comparative information presented in these interim financial statements for the three months and year ended December 31, 2010, the year ended December 31, 2010 and in the preparation of an opening IFRS statement of financial position at January 1, 2010, the Company's date of transition. An explanation of the IFRS 1 exemptions and the required reconciliations between IFRS and Canadian GAAP are described below:

IFRS 1 First-Time Adoption of International Financial Reporting Standards

In preparing these condensed consolidated interim financial statements, the Company has applied IFRS 1, First-time Adoption of International Financial Reporting Standards, which provides guidance for an entity's initial adoption of IFRS. IFRS 1 gives entities adopting IFRS for the first time a number of optional and mandatory exceptions, in certain areas, to the general requirement for full retrospective application of IFRS. The following are the optional exemptions available under IFRS 1 that the Company has elected to apply:

Business combinations

The Company has elected to apply IFRS 3, Business Combinations, prospectively to business combinations that occur after the date of transition. The Company has elected this exemption under IFRS 1, which removes the requirement to retrospectively restate all business combinations prior to the date of transition to IFRS.

Employee benefits

The Company has elected to recognize all cumulative actuarial gains and losses on defined benefit pension plans existing at the date of transition immediately into retained earnings, rather than continuing to defer and amortize into the results of operations. Refer to note 18 (b) of the March 31, 2011 condensed consolidated interim financial statements for the impact on transition to IFRS.

Fair value or revaluation as deemed cost

The Company has used the amount determined under a previous GAAP revaluation as the deemed cost for certain assets. The Company elected the exemption for certain assets which were written down under Canadian GAAP, as the revaluation was broadly comparable to fair value under IFRS. The carrying value of those assets on transition to IFRS is therefore, consistent with the Canadian GAAP carrying value on the transition date.

Share-based payments

The Company elected to not apply IFRS 2, Share-based Payments, to equity instruments granted before November 7, 2002 and those granted but fully vested before the date of transition to IFRS. As a result, the Company has applied IFRS 2 for stock options granted after November 7, 2002 that were not fully vested at January 1, 2010.

Site restoration costs

The Company has elected to apply the IFRS 1 exemption whereby it has measured the site restoration costs at January 1, 2010 in accordance with the requirements in IAS 37, Provisions, by estimating the amount that would have been in property, plant and equipment when the liabilities first arose, and discounted the transition date liability to that date using the best estimate of the historical risk-free discount rate.

Oil and Gas Properties

The Company has elected to carry forward the Canadian GAAP full cost method of accounting oil and gas asset carrying value as of January 1, 2010 as the balance on transition to IFRS.

Reconciliations between IFRS and Canadian GAAP

IFRS 1 requires an entity to reconcile equity, comprehensive income and cash flows for comparative periods. The Company's adoption of IFRS did not have a significant impact on total operating, investing or financing cash flows in the prior periods. However, it did result in some presentation changes. Under Canadian GAAP, interest paid included in profit and loss was classified as operating activities and capitalized interest was classified as investing activities. Under IFRS, interest paid, including capitalized interest, is classified as financing activities. There were no other significant adjustments to the statement of cash flows. In preparing these condensed consolidated interim financial statements, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Canadian GAAP. An explanation of how the transition from Canadian GAAP to IFRS has affected the Company's statements of financial position, income, and comprehensive income is provided below:

Reconciliation of Assets, Liabilities and Equity

The below table provides a summary of the adjustments to the Company's statement of financial position at December 31, 2010. For a summary of the adjustments to the Company's statement of financial position at January 1, 2010, refer to note 18 of the condensed consolidated interim financial statements for the first quarter ended March 31, 2011.


                                                                      Dec 31
                                                                        2010
----------------------------------------------------------------------------
Total assets per Canadian GAAP                                 $   3,070,159
 Leases (a)                                                           55,114
 Employee benefits (b)                                              (12,126)
 Site restoration costs (c)                                            3,595
 Borrowing costs (d)                                                  23,951
----------------------------------------------------------------------------
Total assets per IFRS                                          $   3,140,693
----------------------------------------------------------------------------
Total liabilities per Canadian GAAP                            $   1,793,532
 Leases (a)                                                           68,657
 Employee benefits (b)                                                 5,658
 Site restoration costs (c)                                            7,709
 Borrowing costs (d)                                                   9,580
 Uncertain tax positions (e)                                           7,158
 Share-based payments (f)                                              5,738
 Deferred tax impact and other adjustments (g)                      (10,549)
 Reclassification of non-controlling interests (h)                 (156,413)
----------------------------------------------------------------------------
Total liabilities per IFRS                                     $   1,731,070
----------------------------------------------------------------------------
Total equity per Canadian GAAP                                 $   1,276,628
 Leases (a)                                                         (13,543)
 Employee benefits (b)                                              (17,784)
 Site restoration costs (c)                                          (4,114)
 Borrowing costs (d)                                                  14,370
 Uncertain tax positions (e)                                         (7,158)
 Share-based payments (f)                                            (5,738)
 Deferred tax impact and other adjustments (g)                        10,549
 Reclassification of non-controlling interests (h)                   156,413
----------------------------------------------------------------------------
Total equity per IFRS                                          $   1,409,623
----------------------------------------------------------------------------
Total liabilities and equity per IFRS                          $   3,140,693
----------------------------------------------------------------------------

Reconciliation of Net Income

The below table provides a summary of the adjustments to net income for the three months and year ended December 31, 2010.


                                              Three Months Ended  Year Ended
                                                     Dec 31 2010 Dec 31 2010
----------------------------------------------------------------------------
Net income per Canadian GAAP                         $    27,867 $   101,733
 Leases (a)                                                 (92)       (397)
 Employee benefits (b)                                   (1,127)       (100)
 Site restoration costs (c)                                (459)       (500)
 Uncertain tax positions (e)                               (728)     (1,793)
 Share based payments (f)                                  (689)     (4,588)
 Deferred tax impact and other adjustments (g)               736       1,791
 Investment in associates (i)                                  -       (127)
----------------------------------------------------------------------------
 Total adjustments                                       (2,359)     (5,714)
----------------------------------------------------------------------------
Net income per IFRS attributable to Methanex                                
 Corporation shareholders                            $    25,508 $    96,019
Net loss per IFRS attributable to non-controlling                           
 interests                                                 (199)     (1,990)
----------------------------------------------------------------------------
Total net income                                     $    25,309 $    94,029
----------------------------------------------------------------------------

Reconciliation of Comprehensive Income

The below table provides a summary of the adjustments to comprehensive income for the three months and year ended December 31, 2010.


                                              Three Months Ended  Year Ended
                                                     Dec 31 2010 Dec 31 2010
----------------------------------------------------------------------------
Comprehensive income per Canadian GAAP               $    30,239 $    86,140
 IFRS/CDN GAAP differences to net income (see table                         
  above)                                                 (2,359)     (5,714)
 Employee benefits - actuarial losses                    (1,139)     (1,139)
 Borrowing costs transferred to property, plant and                         
  equipment (d)                                                -       9,410
----------------------------------------------------------------------------
Comprehensive income per IFRS attributable to                               
 Methanex Corporation shareholders                   $    26,742 $    88,697
Comprehensive loss per IFRS attributable to non-                            
 controlling interests                                     1,382     (6,110)
----------------------------------------------------------------------------
Total comprehensive income                           $    28,124 $    82,587
----------------------------------------------------------------------------

The items noted above in the reconciliations of the statement of financial position, income and comprehensive income from Canadian GAAP to IFRS are described below:

a) Leases:

Under Canadian GAAP, an arrangement at inception that can only be fulfilled through the use of a specific asset or assets, and which conveys a right to use that asset, may be a lease or contain a lease. Regardless of whether the arrangement takes the legal form of a lease, an asset and corresponding liability should be recorded. However, Canadian GAAP has grandfathering provisions that exempt contracts entered into before 2004 from these requirements.

IFRS has similar accounting requirements as Canadian GAAP for lease-like arrangements, with IFRS requiring full retrospective application. The Company has long-term oxygen supply contracts for its Atlas and Titan methanol plants in Trinidad, executed prior to 2004, which are regarded as finance leases under these standards. Accordingly, the oxygen supply contracts are required to be accounted for as finance leases from original inception of the lease. The Company measured the value of these finance leases and applied finance lease accounting retrospectively from inception to determine the IFRS impact. As at December 31, 2010 this results in an increase to property, plant and equipment of $55.1 million and other long-term liabilities of $68.6 million with a corresponding decrease to retained earnings of $13.5 million.

In comparison to Canadian GAAP, for the three months and year ended December 31, 2010, this accounting treatment resulted in lower cost of sales and operating costs, higher finance costs and higher depreciation and amortization charges, with no significant impact to net earnings.

b) Employee benefits:

The Company elected the IFRS 1 exemption to recognize all cumulative actuarial gains and losses on defined benefit pension plans existing at the date of transition immediately in retained earnings. As at December 31, 2010 this results in a decrease to retained earnings of $17.8 million, a decrease to other assets of $12.1 million and an increase to other long-term liabilities of $5.7 million.

In comparison to Canadian GAAP for the three months and year ended December 31, 2010, net earnings decreased by approximately $1.1 million and $0.1 million, respectively. This includes an adjustment to the Company's 2010 financial statements as previously reported under IFRS to reflect the impact of foreign exchange on the cumulative actuarial losses as reported.

c) Site restoration costs:

Under IFRS, the Company recognizes a liability to dismantle and remove assets or to restore a site upon which the assets are located. The Company is required to determine a best estimate of site restoration costs for all sites whereas under Canadian GAAP site restoration costs were not recognized with respect to assets with indefinite or indeterminate lives. In addition, under IFRS a change in the market-based discount rate will result in a change in the measurement of the provision. As at December 31, 2010, adjustments to the financial statements to recognize site restorations costs are recognized as an increase to other long-term liabilities of approximately $7.7 million and an increase to property, plant and equipment of approximately $3.6 million, with the balancing amount recorded as a decrease to retained earnings to reflect the depreciation expense and interest accretion since the date the liabilities first arose. In comparison to Canadian GAAP for the three months and year ended December 31, 2010, there was no significant impact to net earnings.

d) Borrowing costs:

IAS 23 prescribes the accounting treatment and eligibility of borrowing costs. The Company has entered into interest rate swap contracts to hedge the variability in LIBOR-based interest payments on its Egypt limited recourse debt facilities. Under Canadian GAAP, cash settlements for these swaps during construction are recorded in accumulated other comprehensive income for the Company's 60% portion and 40% is recorded in non-controlling interest. Under IFRS, the cash settlements during construction are recorded to property, plant and equipment. Accordingly, there is an increase to property, plant and equipment of approximately $24.0 million at December 31, 2010. The increase to property, plant and equipment is offset by an increase to accumulated other comprehensive income of approximately $14.4 million and an increase in non-controlling interest of approximately $9.6 million at December 31, 2010, with no impact on net earnings.

e) Uncertain tax positions:

IAS 12 prescribes recognition and measurement criteria of a tax position taken or expected to be taken in a tax return. As at December 31, 2010, this resulted in an increase to income tax liabilities and a decrease to retained earnings of approximately $7.2 million in comparison to Canadian GAAP. For the three months and year ended December 31, 2010 this has resulted in a decrease in net earnings of $0.7 million and $1.8 million, respectively, with a corresponding increase to income tax liabilities.

f) Share-based payments:

During 2010, the Company made its first grant of SARs and TSARs in connection with the employee long-term incentive compensation plan.

Under Canadian GAAP, both SARs and TSARs are accounted for using the intrinsic value method. The intrinsic value related to SARs and TSARs is measured by the amount the market price of the Company's common shares exceeds the exercise price of a unit. Changes in intrinsic value each period are recognized in earnings for the proportion of the service that has been rendered at each reporting date. Under IFRS, SARs and TSARs are required to be accounted for using a fair value method. The fair value related to SARs and TSARs is estimated using an option pricing model. Changes in fair value estimated using an option pricing model each period are recognized in earnings for the proportion of the service that has been rendered at each reporting date.

The fair value estimated using an option pricing model will be higher than the intrinsic value due to the time value included in the estimated fair value. Accordingly, it is expected that the difference between the accounting expense under IFRS compared with Canadian GAAP would be higher near the beginning of the life of a SAR or TSAR with this difference narrowing as time passes and with total accounting expense ultimately being the same on the date of exercise.

The difference in the fair value method under IFRS compared with the intrinsic value method under Canadian GAAP, has resulted in a decrease to net earnings of approximately $0.7 million and $4.6 million for the three months and year ended December 31, 2010, respectively. The difference in the fair value method under IFRS compared with the intrinsic value method under Canadian GAAP resulted in an increase to other long-term liabilities of approximately $5.7 million and corresponding decrease to shareholders' equity as at December 31, 2010.

g) Deferred tax impact and other adjustments:

This adjustment primarily represents the income tax effect of the adjustments related to accounting differences between Canadian GAAP and IFRS. As at December 31, 2010, this has resulted in a decrease to deferred tax liabilities and increase to retained earnings of approximately $10.5 million. For the three months and year ended December 31, 2010, this has resulted in an increase in net earnings of $0.7 million and $1.8 million respectively.

h) Reclassification of non-controlling interests from liabilities:

The Company has a 60% interest in EMethanex, the Egyptian company through which it has developed the Egyptian methanol project. The Company accounts for this investment using consolidation accounting which results in 100% of the assets and liabilities of EMethanex being included in the financial statements. The other investors' interest in the project is presented as "non-controlling interests". Under Canadian GAAP, the non-controlling interests is classified as a liability whereas under IFRS the non-controlling interests is classified as equity, but presented separately from the parent's shareholder equity. This reclassification results in a decrease to liabilities and an increase in equity of approximately $156.4 million as at December 31, 2010.

i) Investment in associates:

In 2010, the Company had a 20% equity interest in a DME production facility in China. The Company also had a methanol sales agreement to supply methanol to this facility and these adjustments represent the difference between Canadian GAAP and IFRS in the timing of recognition of earnings associated with methanol sales to the equity investment.


Methanex Corporation                                       
Quarterly History (unaudited)                                   

                                                2010                        
                 2011    Q4    Q3    Q2    Q1    (3)    Q4    Q3    Q2    Q1
----------------------------------------------------------------------------

METHANOL SALES 
 VOLUMES                                                                    
(thousands of                                                               
 tonnes)                                                                    

Company                                                                     
 produced       3,853 1,052   983   970   848  3,540   831   885   900   924
Purchased                                                                   
 methanol       2,815   644   672   664   835  2,880   806   792   678   604
Commission                                                                  
 sales (1)        846   208   235   231   172    509   151   101   107   150
----------------------------------------------------------------------------

                7,514 1,904 1,890 1,865 1,855  6,929 1,788 1,778 1,685 1,678
----------------------------------------------------------------------------

METHANOL                                                                    
 PRODUCTION                                                                 
(thousands of                                                               
 tonnes)                                                                    

Chile             554   113   116   142   183    935   208   194   229   304
Titan, Trinidad   711   180   224   186   121    891   233   217   224   217
Atlas, Trinidad                                                             
 (63.1%)          891   195   170   263   263    884   266   284    96   238
New Zealand       830   211   209   207   203    830   206   200   216   208
Medicine Hat      329   130   125    74     -      -     -     -     -     -
Egypt (60%)       532   132   191   178    31      -     -     -     -     -
----------------------------------------------------------------------------

                3,847   961 1,035 1,050   801  3,540   913   895   765   967
----------------------------------------------------------------------------
AVERAGE                                                                     
 REALIZED                                                                   
 METHANOL PRICE(2)                                    

 ($/tonne)        374   388   377   363   367    306   348   286   284   305
 ($/gallon)      1.12  1.17  1.13  1.09  1.10   0.92  1.05  0.86  0.85  0.92

PER SHARE                                                                   
 INFORMATION(4)                                                             
 ($ per share)                                                              
 Basic net                                                                  
  income         2.16  0.69  0.67  0.44  0.37   1.04  0.28  0.31  0.16  0.29
 Diluted net                                                                
  income         2.06  0.68  0.59  0.43  0.37   1.03  0.27  0.31  0.15  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 produced (attributable to Methanex        
    shareholders) and purchased methanol.                                   
(3) The 2010 figures and related quarterly information are reported in      
    accordance with IFRS as the company's date of transition from Canadian  
    GAAP to IFRS was January 1, 2010. These figures have not been previously
    disclosed.                                                              
(4) Per share information calculated using net income attributable to       
    Methanex shareholders.                                                  



FOR FURTHER INFORMATION PLEASE CONTACT:

Jason Chesko
Director, Investor Relations
Methanex Corporation
604 661 2600 or Toll Free: 1 800 661 8851
www.methanex.com