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

11. Egypt Insurance Recovery:

The Company experienced an outage at the Egypt plant from April to August 2019. In the quarter ended December 31, 2019, the Company recorded a $50 million ($25 million our share) insurance recovery which partially offset repair costs charged to earnings and lost margins incurred in the second and third quarters of 2019. Subsequently, the final settlement agreement was signed by all parties, and an additional $9.8 million ($4.9 million our share) of insurance proceeds was recorded in the three months ended March 31, 2020.

METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Published: 2021-04-28

Methanex CorporationConsolidated Statements of Income (unaudited) (thousands of U.S. dollars, except number of common shares and per share amounts)
	Three Months Ended
	Mar 31	Mar 31
	2021	2020
Revenue			$	1,015,532 $	745,093
Cost of sales and operating expenses				(746,008)	(598,541)
Depreciation and amortization				(90,452)	(89,987)
Egypt insurance recovery (note 11)				—	9,839
Operating income				179,072	66,404
Earnings of associate (note 4)				13,664	9,070
Finance costs (note 5)				(39,205)	(35,032)
Finance income and other expenses				664	2,843
Income before income taxes				154,195	43,285
Income tax (expense) recovery:
Current				(20,341)	(11,376)
Deferred				(9,949)	1,770
				(30,290)	(9,606)
Net income			$	123,905 $	33,679
Attributable to:
Methanex Corporation shareholders			$	104,687 $	22,770
Non-controlling interests				19,218	10,909
			$	123,905 $	33,679
Income per common share for the period attributable to Methanex Corporation shareholders
Basic net income per common share			$	1.37 $	0.30
Diluted net income per common share (note 7)			$	1.19 $	0.21
Weighted average number of common shares outstanding (note 7)				76,205,917	76,196,080
Diluted weighted average number of common shares outstanding (note 7)				76,375,001	76,196,080
See accompanying notes to condensed consolidated interim financial statements.
METHANEX CORPORATION 2021 FIRST QUARTER
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)						PAGE 1

Methanex CorporationConsolidated Statements of Comprehensive Income (unaudited)(thousands of U.S. dollars)
	Three Months Ended
	Mar 31	Mar 31
	2021	2020
Net income			$	123,905 $	33,679
Other comprehensive income:
Items that may be reclassified to income:
				Change in fair value of cash flow hedges (note 10)		34,340	(50,853)
				Forward element excluded from hedging relationships (note 10)		(6,931)	87,810
				Realized gains on foreign exchange hedges reclassified to revenue		(1,145)	(392)
Taxes on above items				(6,658)	(9,749)
				19,606	26,816
Comprehensive income			$	143,511 $	60,495
Attributable to:
Methanex Corporation shareholders			$	124,293 $	49,586
Non-controlling interests				19,218	10,909
			$	143,511 $	60,495
See accompanying notes to condensed consolidated interim financial statements.
METHANEX CORPORATION 2021 FIRST QUARTER
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)								PAGE 2

Methanex CorporationConsolidated Statements of Financial Position (unaudited)(thousands of U.S. dollars)
	Mar 31	Dec 31
AS AT	2021	2020
ASSETS
Current assets:
Cash and cash equivalents			$	856,238 $	833,841
Trade and other receivables				494,156	412,000
Inventories (note 2)				388,810	308,696
Prepaid expenses				32,759	33,746
Other assets				33,974	6,634
				1,805,937	1,594,917
Non-current assets:
Property, plant and equipment (note 3)				3,664,720	3,677,056
Investment in associate (note 4)				191,914	194,025
Deferred income tax assets				130,428	137,524
Other assets				64,897	92,529
				4,051,959	4,101,134
			$	5,857,896 $	5,696,051
LIABILITIES AND EQUITY
Current liabilities:
Trade, other payables and accrued liabilities			$	693,097 $	600,953
Current maturities on long-term debt (note 6)				41,126	39,771
Current maturities on lease obligations				97,152	97,516
Current maturities on other long-term liabilities				24,402	27,152
				855,777	765,392
Non-current liabilities:
Long-term debt (note 6)				2,305,579	2,323,601
Lease obligations				610,480	624,718
Other long-term liabilities				281,834	327,491
Deferred income tax liabilities				223,795	213,392
				3,421,688	3,489,202
Equity:
Capital stock				441,033	440,723
Contributed surplus				1,845	1,873
Retained earnings				945,434	843,606
Accumulated other comprehensive loss				(115,257)	(137,102)
Shareholders' equity				1,273,055	1,149,100
Non-controlling interests				307,376	292,357
Total equity				1,580,431	1,441,457
			$	5,857,896 $	5,696,051
See accompanying notes to condensed consolidated interim financial statements.
METHANEX CORPORATION 2021 FIRST QUARTER
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)						PAGE 3

Methanex CorporationConsolidated Statements of Changes in Equity (unaudited) (thousands of U.S. dollars, except number of common shares)
					Accumulated
	Number of				Other			Non-
	Common	Capital	Contributed	Retained	Comprehensive		Shareholders'	Controlling	Total
	Shares	Stock	Surplus	Earnings		Loss	Equity	Interests	Equity
Balance, December 31, 2019	76,196,080	$440,472	$1,783	$1,039,819	$(150,389)		$1,331,685	$298,675	$1,630,360
Net income										—	—					—	22,770		—	22,770	10,909	33,679
Other comprehensive income										—	—					—	—	26,816		26,816	—	26,816
Compensation expense recorded for stock options										—	—					42	—		—				42	—	42
Dividend payments to Methanex Corporation shareholders										—	—					—	(27,431)		—	(27,431)	—	(27,431)
Distributions made and accrued to non-controlling interests										—	—					—	—		—				—	(5,207)	(5,207)
Equity contributions to non-controlling interest											—	—		—		—	5,500	5,500
Realized hedge losses recognized in cash flow hedges										—	—					—	—	5,487					5,487	—	5,487
Balance, March 31, 2020	76,196,080	$440,472	$1,825	$1,035,158	$(118,086)		$1,359,369	$309,877	$1,669,246
Net income (loss)										—	—					—	(179,448)		—	(179,448)	20,442	(159,006)
Other comprehensive loss										—	—					—	(3,531)	(33,800)		(37,331)	—	(37,331)
Compensation expense recorded for stock options										—	—					95	—		—				95	—	95
Issue of shares on exercise of stock options		5,900	204									—	—		—		204	—	204
Reclassification of grant date fair value on exercise of stock options
										—	47					(47)	—		—				—	—	—
Dividend payments to Methanex Corporation shareholders										—	—					—	(8,573)		—	(8,573)	—	(8,573)
Distributions made and accrued to non-controlling interests										—	—					—	—		—				—	(31,248)	(31,248)
Realized hedge losses recognized in cash flow hedges										—	—					—	—	14,784		14,784	—	14,784
Acquisition of non-controlling interest										—	—					—	—		—				—	(6,714)	(6,714)
Balance, December 31, 2020	76,201,980	$440,723	$1,873	$843,606	$(137,102)		$1,149,100	$292,357	$1,441,457
Net income										—	—					—	104,687		—	104,687	19,218	123,905
Other comprehensive income										—	—					—	—	19,606		19,606	—	19,606
Compensation expense recorded for stock options										—	—					30	—		—				30	—	30
Issue of shares on exercise of stock options		7,300	252									—	—		—		252	—	252
Reclassification of grant date fair value on exercise of stock options
										—	58					(58)	—		—				—	—	—
Dividend payments to Methanex Corporation shareholders										—	—					—	(2,859)		—	(2,859)	—	(2,859)
Distributions made and accrued to non-controlling interests										—	—					—	—		—				—	(4,199)	(4,199)
Realized hedge losses recognized in cash flow hedges										—	—					—	—	2,239					2,239	—	2,239
Balance, March 31, 2021	76,209,280	$441,033	$1,845	$945,434	$(115,257)		$1,273,055	$307,376	$1,580,431
See accompanying notes to condensed consolidated interim financial statements.
METHANEX CORPORATION 2021 FIRST QUARTER
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)													PAGE 4

Methanex CorporationConsolidated Statements of Cash Flows (unaudited)(thousands of U.S. dollars)
	Three Months Ended
	Mar 31	Mar 31
	2021	2020
CASH FLOWS FROM / (USED IN) OPERATING ACTIVITIES
			Net income	$	123,905 $	33,679
			Deduct earnings of associate		(13,664)	(9,070)
			Dividends received from associate		15,775	15,775
			Add (deduct) non-cash items:
			Depreciation and amortization		90,452	89,987
			Income tax expense		30,290	9,606
			Share-based compensation recovery		(17,151)	(11,670)
			Finance costs		39,205	35,032
			Other		1,935	(3,946)
			Income taxes paid		(9,644)	(3,559)
			Other cash payments, including share-based compensation		(7,844)	(1,775)
			Cash flows from operating activities before undernoted		253,259	154,059
			Changes in non-cash working capital (note 9)		(86,069)	(11,594)
					167,190	142,465
CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES
			Dividend payments to Methanex Corporation shareholders		(2,859)	(27,431)
			Interest paid		(16,130)	(21,991)
			Net proceeds on issue of long-term debt (note 6)		—	136,000
			Repayment of long-term debt and financing fees		(18,605)	(17,875)
			Draw on revolving credit facility		—	300,000
			Repayment of lease obligations		(26,282)	(28,405)
			Restricted cash for debt service accounts		—	(89)
			Equity contributions by / acquisitions of non-controlling interests		—	5,500
			Distributions to non-controlling interests		(19,199)	(5,207)
			Proceeds on issue of shares on exercise of stock options		252	—
					(82,823)	340,502
CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
			Property, plant and equipment		(44,009)	(29,809)
			Geismar plant under construction		(20,088)	(89,837)
			Proceeds from sale of assets		—	5,189
			Restricted cash for capital projects		1,694	302
			Changes in non-cash working capital related to investing activities (note 9)		433	37,857
					(61,970)	(76,298)
			Increase in cash and cash equivalents		22,397	406,669
			Cash and cash equivalents, beginning of period		833,841	416,763
			Cash and cash equivalents, end of period	$	856,238 $	823,432
See accompanying notes to condensed consolidated interim financial statements.
METHANEX CORPORATION 2021 FIRST QUARTER
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)							PAGE 5

Methanex CorporationNotes to Condensed Consolidated Interim Financial Statements (unaudited)Except where otherwise noted, tabular dollar amounts are stated in thousands of U.S. dollars.
1. Basis of presentation:
Methanex Corporation ("the Company") is an incorporated entity with corporate offices in Vancouver, Canada. The Company’s operations consist of the production and sale of methanol, a commodity chemical. The Company is the world’s largest producer and supplier of methanol to the major international markets of Asia Pacific, North America, Europe and South America.
These condensed consolidated interim financial statements are prepared in accordance with International Accounting Standards ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB") on a basis consistent with those followed in the most recent annual consolidated financial statements.
These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and were approved and authorized for issue by the Audit, Finance & Risk Committee of the Board of Directors on April 28, 2021.
These condensed consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2020.
2. Inventories:
Inventories are valued at the lower of cost, determined on a first-in first-out basis, and estimated net realizable value. The amount of inventories recognized as an expense in cost of sales and operating expenses and depreciation and amortization for the three months ended March 31, 2021 is $703 million (March 31, 2020 - $607 million).
3. Property, plant and equipment:
	Owned Assets		Right-of-use assets
		(a)		(b)	Total
						Net book value at March 31, 2021	$	3,055,450 $			609,270 $	3,664,720
						Net book value at December 31, 2020	$	3,052,060 $			624,996 $	3,677,056
a)						Owned assets:
								Buildings, Plant
								Installations &	Plants Under	Ocean Going
								Machinery	Construction 1		Vessels	Other	Total
						Cost at March 31, 2021		$	4,910,315 $	411,031 $		210,399 $	155,109 $	5,686,854
						Accumulated depreciation at March 31, 2021			2,479,527	—	30,313	121,564	2,631,404
						Net book value at March 31, 2021		$	2,430,788 $	411,031 $		180,086 $	33,545 $	3,055,450
						Cost at December 31, 2020		$	4,870,299 $	386,905 $		210,099 $	155,882 $	5,623,185
						Accumulated depreciation at December 31, 2020			2,421,563	—	27,926	121,636	2,571,125
						Net book value at December 31, 2020		$	2,448,736 $	386,905 $		182,173 $	34,246 $	3,052,060
1						The Company is constructing a 1.8 million tonne methanol plant in Geismar, Louisiana adjacent to its Geismar 1 and Geismar 2 facilities. Included in Plants Under Construction is total cost incurred to date of $385 million, excluding $26 million of capitalized interest.
METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
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b)	Right-of-use assets:
					Plant
	Ocean Going		Terminals and			Installations and
		Vessels		Tanks	Machinery		Other	Total
Cost at March 31, 2021	$	583,882 $		249,384 $		23,761 $		39,419 $	896,446
Accumulated depreciation at March 31, 2021		162,519		100,254		11,041		13,362	287,176
Net book value at March 31, 2021	$	421,363 $		149,130 $		12,720 $		26,057 $	609,270
Cost at December 31, 2020	$	582,072 $		246,553 $		23,761 $		39,670 $	892,056
Accumulated depreciation at December 31, 2020		152,616			91,834	10,408		12,202	267,060
Net book value at December 31, 2020	$	429,456 $		154,719 $		13,353 $		27,468 $	624,996
4. Interest in Atlas joint venture:
a)	The Company has a 63.1% equity interest in Atlas Methanol Company Unlimited ("Atlas"). Atlas owns a 1.8 million tonne per year methanol production facility in Trinidad. The Company accounts for its interest in Atlas using the equity method. Summarized financial information of Atlas (100% basis) is as follows:
							Mar 31	Dec 31
									Statements of financial position	2021	2020
									Cash and cash equivalents	$		8,973 $	40,815
									Other current assets			114,713	65,434
									Non-current assets			245,450	256,421
									Current liabilities			(55,606)	(43,057)
									Other long-term liabilities, including current maturities					(130,342)	(133,079)
									Net assets at 100%	$		183,188 $	186,534
									Net assets at 63.1%	$		115,592 $	117,703
									Long-term receivable from Atlas			76,322	76,322
									Investment in associate	$		191,914 $	194,025
										Three Months Ended
							Mar 31	Mar 31
									Statements of income	2021	2020
									Revenue	$		130,866 $	79,891
									Cost of sales and depreciation and amortization			(95,748)	(54,541)
									Operating income			35,118	25,350
									Finance costs, finance income and other expenses			(2,740)	(2,697)
									Income tax expense			(10,723)	(8,279)
									Net earnings at 100%	$		21,655 $	14,374
									Earnings of associate at 63.1%	$		13,664 $	9,070
									Dividends received from associate	$		15,775 $	15,775
b)	Atlas Tax Assessments:
The Board of Inland Revenue of Trinidad and Tobago ("the BIR") has audited and issued assessments against Atlas in respect of the 2005 to 2014 financial years. All subsequent tax years remain open to assessment. The assessments relate to the pricing arrangements of certain long-term fixed-price sales contracts with affiliates that commenced in 2005 and continued with affiliates through 2019.
The long-term fixed-price sales contracts with affiliates were established as part of the formation of Atlas and management believes these were reflective of market considerations at that time.
During the periods under assessment and continuing through 2014, approximately 50% of Atlas-produced methanol was
METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
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sold under these fixed-price contracts. From late 2014 through 2019 fixed-price sales represented approximately 10% of Atlas-produced methanol. Atlas had partial relief from corporation income tax until late July 2014.
The Company believes it is impractical to disclose a reasonable estimate of the potential contingent liability due to the wide range of assumptions and interpretations implicit in the assessments.
The Company has lodged objections to the assessments. No deposits have been required to lodge objections. Based on the merits of the cases and advice from legal counsel, the Company believes its position should be sustained, that Atlas has filed its tax returns and paid applicable taxes in compliance with Trinidadian tax law, and as such has not accrued for any amounts relating to these assessments. Contingencies inherently involve the exercise of significant judgment, and as such the outcomes of these assessments and the financial impact to the Company could be material.
The Company anticipates the resolution of this matter through the court systems to be lengthy and, at this time, cannot predict a date as to when this matter is expected to be ultimately resolved.
	5. Finance costs:
		Three Months Ended
		Mar 31	Mar 31
		2021	2020
Finance costs				$	43,243 $	37,233
Less capitalized interest related to Geismar plant under construction					(4,038)	(2,201)
				$	39,205 $	35,032
Finance costs are primarily comprised of interest on the unsecured notes, credit and construction facilities, limited recourse debt facilities, finance lease obligations, amortization of deferred financing fees, and accretion expense associated with site restoration costs. Interest during construction projects is capitalized until the plant is substantially completed and ready for productive use.
	6. Long-term debt:
					Mar 31	Dec 31
As at					2021	2020
Unsecured notes
$300 million at 4.25% due December 1, 2024			298,099	297,999
$700 million at 5.125% due October 15, 2027			691,705	691,434
$700 million at 5.25% due December 15, 2029			694,402	694,282
$300 million at 5.65% due December 1, 2044			295,433	295,410
			1,979,639	1,979,125
Geismar 3 construction facility at LIBOR+3%			176,170	176,335
Other limited recourse debt facilities
5.58% due through June 30, 2031					69,017	69,734
5.35% due through September 30, 2033					77,306	78,391
5.08% due through September 15, 2036					12,839	12,839
Egypt limited recourse debt facilities					31,734	46,948
Total long-term debt 1			2,346,705	2,363,372
Less current maturities 1			(41,126)	(39,771)
		$	2,305,579 $	2,323,601
1	Long-term debt and current maturities are presented net of deferred financing fees.
	METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
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The Company has access to a $300 million committed revolving credit facility, along with the $800 million non-revolving construction facility for the Geismar 3 project. Both are with a syndicate of highly rated financial institutions and expire in July 2024. Significant covenants and default provisions of the credit facilities include:

a) the obligation to maintain a minimum EBITDA to interest coverage ratio, or minimum EBITDA, in excess of the below.

In periods where the covenant has been waived, the covenant has been denoted as "not applicable":

Four quarters ended

Minimum interest coverage ratio 2

Minimum EBITDA 1 2

Q1 2021

not applicable

$30 million

Q2 2021

not applicable

$70 million

Q3 2021

1.00x

not applicable

Q4 2021

1.25x

not applicable

Q1 2022 & thereafter

2.00x

not applicable

1 EBITDA is defined under the terms of the credit facilities. 2 The minimum EBITDA or minimum interest coverage ratio provision may be fully waived for any two of the remaining measurement periods until Q4

2021.

b) the obligation to maintain a maximum debt to capitalization ratio of 60% for periods through to June 30, 2023, and

57.5% thereafter,

c) a default if payment is accelerated by a creditor on any indebtedness of $50 million or more of the Company and its

subsidiaries, except for the limited recourse subsidiaries, and

d) a default if a default occurs that permits a creditor to demand repayment on any other indebtedness of $50 million or

more of the Company and its subsidiaries, except for the limited recourse subsidiaries.

The credit facilities are secured by certain assets of the Company, and also include other customary covenants including restrictions on the incurrence of additional indebtedness, restrictions against the sale or abandonment of the Geismar 3 project, as well as requirements associated with completion of plant construction and commissioning.

During the quarter ended March 31, 2021, the Company repaid $1.9 million on its other limited recourse debt facilities. Other limited recourse debt facilities relate to financing for certain of our ocean going vessels which we own through less than wholly-owned entities under the Company's control.

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

During the quarter, the Company made repayments of $15.5 million on its Egypt limited recourse debt facilities. The Egypt limited recourse debt balance is fully classified as current as the remaining repayments are required to be made by March 31, 2022.

The Egypt limited recourse debt facilities have covenants and default provisions that apply only to the Egypt entity, including restrictions on the incurrence of additional indebtedness and a requirement to fulfill certain conditions before the payment of cash or other shareholder distributions.

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

As at March 31, 2021, management believes the Company was in compliance with all significant terms and default provisions related to long-term debt obligations.

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7. Net income per common share:
Diluted net income per common share is calculated by considering the potential dilution that would occur if outstanding stock options and, under certain circumstances, tandem share appreciation rights ("TSARs") were exercised or converted to common shares.
Outstanding TSARs may be settled in cash or common shares at the holder’s option and for purposes of calculating diluted net income per common share, the more dilutive of the cash-settled and equity-settled method is used, regardless of how the plan is accounted for. Accordingly, TSARs that are accounted for using the cash-settled method will require adjustments to the numerator and denominator if the equity-settled method is determined to have a dilutive effect on diluted net income per common share as compared to the cash-settled method. The equity-settled method was more dilutive for the three months ended March 31, 2021, and an adjustment was required for both the numerator and denominator. The equity-settled method was more dilutive for the three months ended March 31, 2020, and an adjustment was required for the numerator. No adjustment was required for the denominator as the weighted average share price at March 31, 2020 was lower than the exercise price for all outstanding TSARs.
Stock options and, if calculated using the equity-settled method, TSARs, are considered dilutive when the average market price of the Company’s common shares during the period disclosed exceeds the exercise price of the stock option or TSAR. For the three months ended March 31, 2021 stock options were dilutive, resulting in an adjustment to the denominator. For the three months ended March 31, 2020, stock options were not dilutive, resulting in no adjustment to the denominator.
A reconciliation of the numerator used for the purposes of calculating diluted net income per common share is as follows:
	Three Months Ended
	Mar 31	Mar 31
	2021	2020
			Numerator for basic net income per common share	$	104,687 $	22,770
			Adjustment for the effect of TSARs:
			Cash-settled recovery included in net income		(11,184)	(4,820)
			Equity-settled expense		(2,464)	(1,945)
			Numerator for diluted net income per common share	$	91,039 $	16,005
A reconciliation of the denominator used for the purposes of calculating diluted net income per common share is as follows:
	Three Months Ended
	Mar 31	Mar 31
	2021	2020
			Denominator for basic net income per common share		76,205,917	76,196,080
			Effect of dilutive stock options		6,461	—
			Effect of dilutive TSARs		162,623	—
			Denominator for diluted net income per common share		76,375,001	76,196,080
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8. Share-based compensation:
a.	Share appreciation rights ("SARs"), TSARs and stock options:
	(i)	Outstanding units:
	Information regarding units outstanding at March 31, 2021 is as follows:
		SARs	TSARs
		Weighted Average	Weighted Average
				(per share amounts in USD)	Number of Units	Exercise Price	Number of Units	Exercise Price
				Outstanding at December 31, 2020					840,772 $	50.61	2,340,490 $	45.43
				Granted		39,490								38.79	338,260	38.79
				Exercised		(5,100)								34.59	(6,867)								33.04
				Cancelled		(4,268)								52.86	(1,500)								54.65
				Expired					(136,455)	73.13	(226,430)	73.13
				Outstanding at March 31, 2021					734,439 $	45.88	2,443,953 $	41.98
			Stock Options
			Weighted Average
				(per share amounts in USD)			Number of Units	Exercise Price
				Outstanding at December 31, 2020							173,251 $	49.44
				Granted				6,880									38.79
				Exercised				(7,300)									34.59
				Expired							(27,210)	73.13
				Outstanding at March 31, 2021							145,621 $	45.25
													Units Outstanding at March 31, 2021	Units Exercisable at March 31, 2021
														Weighted Average
													Remaining	Number	Weighted		Weighted
				Range of Exercise Prices(per share amounts in USD)										Contractual Life	of Units	Average	Number of Units	Average
													(Years)	Outstanding	Exercise Price				Exercisable	Exercise Price
				SARs:
				$25.97 to $35.51											3.40	254,971 $	32.58				190,861 $	33.70
				$38.79 to $50.17											3.85	163,573	47.41				124,083	50.15
				$54.65 to $78.59											2.32	315,895	55.83				306,341	55.74
															3.04	734,439 $	45.88				621,285 $	47.85
				TSARs:
				$25.97 to $35.51											4.79	1,061,120 $	30.79				553,744 $	32.17
				$38.79 to $50.17											5.08	649,444	44.08				296,637	50.05
				$54.65 to $78.59											3.70	733,389	56.31				638,272	56.01
															4.54	2,443,953 $	41.98	1,488,653 $				45.96
				Stock options:
				$25.97 to $35.51											3.03	56,007 $	33.12				45,713 $	33.99
				$38.79 to $50.17											3.81	30,914	47.64				24,034	50.17
				$54.65 to $78.59											2.44	58,700	55.57				56,230	55.48
															2.96	145,621 $	45.25				125,977 $	46.67
METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
																	PAGE 6

(ii) Compensation expense related to SARs and TSARs:
Compensation expense for SARs and TSARs is measured based on their fair value and is recognized over the vesting period. Changes in fair value each period are recognized in net income for the proportion of the service that has been rendered at each reporting date. The fair value at March 31, 2021 was $30.5 million compared with the recorded liability of $25.0 million. The difference between the fair value and the recorded liability is $5.5 million and will be recognized over the weighted average remaining vesting period of approximately 1.3 years. The weighted average fair value was estimated at March 31, 2021 using the Black-Scholes option pricing model.
For the three months ended March 31, 2021, compensation expense related to SARs and TSARs included a recovery in cost of sales and operating expense of $15.2 million (March 31, 2020 - a recovery of $7.0 million). This included a recovery of $18.1 million (March 31, 2020 - a recovery of $9.2 million) related to the effect of the change in the Company’s share price for the three months ended March 31, 2021.
b)	Deferred, restricted and performance share units (old plan and new plan):
Deferred, restricted and performance share units (old plan and new plan) outstanding at March 31, 2021 are as follows:
						Number of
	Number of Deferred		Number of Restricted		Number of Performance	Performance
		Share Units		Share Units	Share Units (old plan)		Share Units (new plan)
Outstanding at December 31, 2020		122,947		228,872				146,801	443,170
Granted		18,906		132,360					—	258,970
Performance factor impact on redemption 1			—							—	(110,354)			—
Granted in-lieu of dividends												143	342	—	674
Redeemed			—							—	(36,447)			—
Cancelled			—	(8,645)					—	(6,354)
Outstanding at March 31, 2021		141,996		352,929					—	696,460
1	Performance share units granted prior to 2019 have a feature where the ultimate number of units that vest are adjusted by a performance factor of the original grant as determined by the Company’s total shareholder return in relation to a predetermined target over the period to vesting. All units relate to performance share units redeemed in the quarter ended March 31, 2021.
Performance share units granted in 2019 and subsequently reflect a new long-term incentive plan. The performance share units granted under the new plan are redeemable for cash based on the market value of the Company's common shares and are non-dilutive to shareholders. They vest over three years and include two performance factors: (i) relative total shareholder return of Methanex shares versus a specific market index (the market performance factor) and (ii) three year average Return on Capital Employed (the non-market performance factor). The market performance factor is measured by the Company at the grant date and reporting date using a Monte-Carlo simulation model to determine fair value. The non-market performance factor reflects management's best estimate to determine the expected number of units to vest. Based on these performance factors, the performance share unit payout will range between 0% to 200%, with the first payout of the new performance share units in 2022.
Compensation expense for deferred, restricted and performance share units (old plan and new plan) is measured at fair value based on the market value of the Company’s common shares and is recognized over the vesting period. Changes in fair value are recognized in net income for the proportion of the service that has been rendered at each reporting date. The fair value of deferred, restricted and performance share units at March 31, 2021 was $47.3 million compared with the recorded liability of $28.0 million. The difference between the fair value and the recorded liability of $19.3 million will be recognized over the weighted average remaining vesting period of approximately 2.8 years.
For the three months ended March 31, 2021, compensation expense related to deferred, restricted and performance share units (old plan and new plan) included in cost of sales and operating expenses was a recovery of $2.0 million (2020 - a recovery of $4.7 million). This included a recovery of $7.2 million (March 31, 2020 - a recovery of $8.4 million) related to the effect of the change in the Company’s share price for the three months ended March 31, 2021.
													METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
																PAGE 7

9.	Changes in non-cash working capital:
Changes in non-cash working capital for the three months ended March 31, 2021 and 2020 were as follows:
	Three Months Ended
	Mar 31	Mar 31
	2021	2020
			Changes in non-cash working capital:
			Trade and other receivables	$	(82,156) $	(2,612)
			Inventories		(80,114)	(39,707)
			Prepaid expenses		987	5,430
			Trade, other payables and accrued liabilities		92,144	79,192
					(69,139)	42,303
			Adjustments for items not having a cash effect and working capital changes relating to taxes
			and interest paid		(16,497)	(16,040)
			Changes in non-cash working capital having a cash effect	$	(85,636) $	26,263
			These changes relate to the following activities:
			Operating	$	(86,069) $	(11,594)
			Investing		433	37,857
			Changes in non-cash working capital	$	(85,636) $	26,263
10. Financial instruments:
Financial instruments are either measured at amortized cost or fair value.
In the normal course of business, the Company's assets, liabilities and forecasted transactions, as reported in U.S. dollars, are impacted by various market risks including, but not limited to, natural gas prices and currency exchange rates. The time frame and manner in which the Company manages those risks varies for each item based on the Company's assessment of the risk and the available alternatives for mitigating risks.
The Company uses derivatives as part of its risk management program to mitigate variability associated with changing market values. Changes in fair value of derivative financial instruments are recorded in earnings unless the instruments are designated as cash flow hedges. The Company designates as cash flow hedges derivative financial instruments to hedge its risk exposure to fluctuations in natural gas prices and derivative financial instruments to hedge its risk exposure to fluctuations in the Euro compared to the U.S. dollar.
The fair value of derivative instruments is determined based on industry-accepted valuation models using market observable inputs and are classified within Level 2 of the fair value hierarchy. The fair value of all of the Company's derivative contracts as presented in the consolidated statements of financial position are determined based on present values and the discount rates used are adjusted for credit risk. The effective portion of the changes in fair value of derivative financial instruments designated as cash flow hedges is recorded in other comprehensive income. The spot element of forward contracts in the hedging relationships is recorded in other comprehensive income as the change in fair value of cash flow hedges. The change in the fair value of the forward element of forward contracts is recorded separately in other comprehensive income as the forward element excluded from the hedging relationships. Once a commodity hedge settles, the amount realized during the period and not recognized immediately in the statement of income is reclassified from accumulated other comprehensive income (equity) to inventory and ultimately through cost of goods sold. Foreign currency hedges settled, are realized during the period directly to the statement of income reclassified from the statement of other comprehensive income.
Until settled, the fair value of the derivative financial instruments will fluctuate based on changes in commodity prices or foreign currency exchange rates.
METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
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Natural gas forward contracts

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

The Company has entered into forward contracts to manage its exposure to changes in natural gas prices for the Geismar site including (i) 40,000 mmbtu per day over the remaining term of 2021-2025, (ii) 50,000 mmbtu per day for 2023 to 2032, and (iii) 30,000 mmbtu per day from 2027-2029, which have been designated as cash flow hedges. Natural gas is fungible across the Geismar site. The Company has also entered into physical forward contracts to manage its exposure to changes in natural gas prices for the Medicine Hat facility. The Company has designated contracts for the 2021 and 2022 periods as cash flow hedges. Other costs incurred to transport natural gas from the contracted delivery point, either Henry Hub or AECO, to the relevant production facility represent an insignificant portion of the overall underlying risk and are recognized as incurred outside of the hedging relationship.

For the three months ended March 31, 2021, the Company reclassified $2.2 million of natural gas hedge settlements from accumulated other comprehensive income. Realized losses related to settlements of natural gas hedges are presented separately within the Consolidated Statement of Changes in Equity for all periods presented for comparative purposes. Amounts for prior periods were previously included in Comprehensive Income in our Condensed Quarterly Financial Statements issued in 2020.

As at March 31, 2021, the Company had outstanding forward contracts in North America designated as cash flow hedges with a notional amount of $956.7 million (December 31, 2020 - $1,005.6 million) and a net negative fair value of $150.4 million (December 31, 2020 - negative fair value $177.4 million), of which $12.7 million is included in other current liabilities, $143.7 million is included in other long term liabilities, $1.9 million is included in other current assets, and $4.1 million is included in other non-current assets.

Euro forward exchange contracts

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

As at March 31, 2021, the Company had outstanding forward exchange contracts designated as cash flow hedges to sell a notional amount of 126.2 million euros (December 31, 2020 - 12.2 million euros). The euro contracts had a positive fair value of $0.9 million included in other current assets (December 31, 2020 - negative fair value of $0.6 million included in other current liabilities).

Fair value

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

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

Cash outflows (inflows) by term to maturity

More than

1 year or less

1-3 years

3-5 years

5 years

Total

Natural gas forward contracts

10,926

42,451

53,892

78,233 $

185,502

Euro forward exchange contracts

(930)

—

— $

(930)

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

March 31, 2021

As at

Carrying Value

Fair Value

Long-term debt excluding deferred financing fees

2,365,370 $

2,423,554

METHANEX CORPORATION 2021 FIRST QUARTER NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

PAGE 9

Methanex CorporationQuarterly History (unaudited)
	Q1 2021	2020	Q4	Q3	Q2	Q1	2019	Q4	Q3	Q2	Q1
METHANOL SALES VOLUME
(thousands of tonnes)
Methanex-produced 1		1,518	6,704 1,480 1,531 1,717 1,976					7,611 2,056 1,965 1,669 1,921
Purchased methanol		1,014	2,994 1,192		836	418	548	2,492	623	680	716	473
Commission sales 1		261	1,042	196	311	271	264	1,031	307	179	216	329
		2,793 10,740 2,868 2,678 2,406 2,788 11,134 2,986 2,824 2,601 2,723
METHANOL PRODUCTION
(thousands of tonnes)
New Zealand		369	1,672	439	340	450	443	1,865	513	469	446	437
USA (Geismar)		422	2,040	556	513	441	530	1,929	480	514	530	405
Trinidad (Methanex interest)		275	998	161	167	241	429	1,743	456	474	384	429
Egypt (50% interest)		148	578	145	153	147	133	392	151	85	15	141
Canada (Medicine Hat)		161	490	111	81	145	153	610	151	149	155	155
Chile		221	836	195	118	204	319	1,050	373	146	290	241
		1,596	6,614 1,607 1,372 1,628 2,007					7,589 2,124 1,837 1,820 1,808
AVERAGE REALIZED METHANOL PRICE 2
($/tonne)		363	247	282	217	211	267	295	256	272	326	331
($/gallon)		1.09	0.74	0.85	0.65	0.63	0.80	0.89	0.77	0.82	0.98	1.00
ADJUSTED EBITDA		242	346	136	40	32	138	566	136	90	146	194
PER SHARE INFORMATION($ per common share attributable to Methanex shareholders)
Basic net income (loss)		1.37	(2.06) (0.35) (1.15) (0.85)				0.30	1.15	0.12 (0.13)		0.65	0.50
Diluted net income (loss)		1.19	(2.06) (0.35) (1.15) (0.85)				0.21	1.01	0.12 (0.21)		0.51	0.50
Adjusted net income (loss)		1.07	(1.62)	0.15 (1.03) (0.84)			0.10	0.93	0.13 (0.27)		0.34	0.73
1	Methanex-produced methanol represents our equity share of volume produced at our facilities and excludes volume marketed on a commission basis related to the 36.9% of the Atlas facility and 50% of the Egypt facility that we do not own.
2 Average realized price is calculated as revenue, excluding commissions earned and the Egypt non-controlling interest share of revenue, but including an amount
representing our share of Atlas revenue, divided by the total sales volume of Methanex-produced and purchased methanol.

METHANEX CORPORATION 2021 FIRST QUARTER
QUARTERLY HISTORY (UNAUDITED)										PAGE 11