Methanex Reports Record Results
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan 29, 2014) - For
the fourth quarter of 2013, Methanex
(TSX:MX)(NASDAQ:MEOH)(SANTIAGO:Methanex) reported Adjusted
EBITDA(1) of $245 million and Adjusted net income(1) of $167
million ($1.72 per share on a diluted basis(1)). This compares with
Adjusted EBITDA(1) of $184 million and Adjusted net income(1) of
$117 million ($1.22 per share on a diluted basis(1)) for the third
quarter of 2013. For the year ended December 31, 2013, Methanex
reported Adjusted EBITDA(1) of $736 million and Adjusted net income
of $471 million ($4.88 per share on a diluted basis(1)). This
compares with Adjusted EBITDA(1) of $429 million and Adjusted net
income of $180 million ($1.90 per share on a diluted basis(1)) for
the year ended December 31, 2012.
John Floren, President and CEO of Methanex commented, "Demand
remained healthy in the fourth quarter, driving methanol pricing
higher amidst industry supply constraints. Increased production
from our plants in New Zealand and Chile, together with strong
methanol pricing, contributed to robust EBITDA and earnings
results. We are pleased to report that 2013 Adjusted net income and
annual sales volume were the highest in the Company's history."
Mr. Floren added, "2014 will be an exciting time for our
business. We recently added one million tonnes of operating
capacity through the growth projects completed in New Zealand and
Medicine Hat. We continue to progress our Geismar relocation
projects and all of the major equipment pieces for Geismar 1 are
now on site in Louisiana. We are targeting to be producing methanol
from Geismar 1 in late 2014 and from Geismar 2 in early 2016. These
key projects support the 3 million tonne increase in our operating
capacity to 8 million tonnes by 2016, a time when new market supply
is expected to be limited."
Mr. Floren concluded, "With over $700 million of cash on hand,
an undrawn credit facility, robust balance sheet, and strong cash
flow generation, we are well positioned to deliver on our growth
projects, continue to grow our business and deliver on our
commitment to return excess cash to shareholders."
A conference call is scheduled for January 30, 2014 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) 340-2218,
or toll free at (866) 226-1793. A
playback version of the conference call will be available until
February 20, 2014 at (905) 694-9451, or
toll free at (800) 408-3053. The
passcode for the playback version is 4459948. Presentation slides
summarizing Q4-13 results and a simultaneous audio-only webcast of
the conference call can be accessed from our website at
www.methanex.com. The webcast will be available on the website for
three weeks following the call.
Methanex is a Vancouver-based, publicly traded company and is
the world's largest producer and supplier of methanol to major
international markets. Methanex shares are listed for trading on
the Toronto Stock Exchange in Canada under the trading symbol "MX"
and on the NASDAQ Global Market in the United States under the
trading symbol "MEOH".
FORWARD-LOOKING INFORMATION WARNING
This Fourth Quarter 2013 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
2013 Management's Discussion and Analysis for more information.
(1) Adjusted EBITDA, Adjusted net
income and Adjusted net income per common share are non-GAAP
measures which do not have any standardized meaning prescribed by
GAAP. These measures represent the amounts that are attributable to
Methanex Corporation shareholders and are calculated by excluding
the mark-to-market impact of share-based compensation as a result
of changes in our share price and items considered by management to
be non-operational. Refer to Additional Information - Supplemental
Non-GAAP Measures section of the attached Interim Report for the
three months ended December 31, 2013 for reconciliations to the
most comparable GAAP measures. |
Interim Report for the Three Months Ended December 31, 2013
At January 29, 2014 the Company had 96,156,491 common shares
issued and outstanding and stock options exercisable for 1,737,606
additional common shares.
Share Information
Methanex Corporation's common shares are listed for trading on
the Toronto Stock Exchange under the symbol MX and on the Nasdaq
Global Market under the symbol MEOH.
Transfer Agents & Registrars |
CIBC Mellon Trust Company |
320 Bay Street |
Toronto, Ontario Canada M5H 4A6 |
Toll free in North America: 1-800-387-0825 |
Investor Information
All financial reports, news releases and corporate information
can be accessed on our website at www.methanex.com.
Contact Information |
Methanex Investor Relations |
1800 - 200 Burrard Street |
Vancouver, BC Canada V6C 3M1 |
E-mail: invest@methanex.com |
Methanex Toll-Free: 1-800-661-8851 |
FOURTH QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
Except where otherwise noted, all currency amounts are stated in
United States dollars.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
- A reconciliation from net income attributable to Methanex
shareholders to Adjusted net income1 and the calculation of
Adjusted net income per common share1 is as follows:
|
Three Months Ended |
|
Years Ended |
($ millions except number of shares and per share
amounts) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Net income (loss) attributable to Methanex
shareholders |
$
128 |
$
87 |
$
(140) |
|
$
329 |
$
(68) |
|
Mark-to-market impact of share-based
compensation, net of tax |
34 |
30 |
8 |
|
101 |
14 |
|
Write-off of oil and gas rights, net of tax |
5 |
- |
- |
|
19 |
- |
|
Geismar project relocation expenses, net of tax |
- |
- |
- |
|
22 |
41 |
|
Asset impairment charge, net of tax |
- |
- |
193 |
|
- |
193 |
Adjusted net income 1 |
$ 167 |
$ 117 |
$ 61 |
|
$ 471 |
$ 180 |
Diluted weighted average shares outstanding
(millions) |
97 |
97 |
94 |
|
96 |
94 |
Adjusted net income per common share 1 |
$ 1.72 |
$ 1.22 |
$ 0.64 |
|
$ 4.88 |
$ 1.90 |
- We recorded Adjusted EBITDA1 of $245 million for the fourth
quarter of 2013 compared with $184 million for the third quarter of
2013. The increase in Adjusted EBITDA1 was primarily due to an
increase in our average realized price to $493 per tonne for the
fourth quarter of 2013 from $438 per tonne for the third quarter of
2013 and an increase in sales of Methanex-produced methanol.
- Production for the fourth quarter of 2013 was 1,194,000 tonnes
compared with 1,035,000 tonnes for the third quarter of 2013. Refer
to the Production Summary section.
- Sales of Methanex-produced methanol were 1,190,000 tonnes in
the fourth quarter of 2013 compared with 1,045,000 in the third
quarter of 2013.
- During the fourth quarter of 2013, we completed a planned major
refurbishment at the Motunui 2 facility. Our New Zealand operations
are now capable of producing at the site's full annual production
capacity of up to 2.4 million tonnes, depending on natural gas
composition.
- We continue to progress our Geismar relocation projects and
during the fourth quarter we reached an important milestone with
all of the major equipment pieces for Geismar 1 now on site in
Louisiana. We are targeting to be producing methanol from Geismar 1
in late 2014 and from Geismar 2 in early 2016.
- In December 2013, we completed an agreement to sell a 10%
equity interest in the Methanex Egypt facility for $110 million. As
we retained control of the entity, the $62.9 million gain realized
on the sale has been recognized as an increase in shareholders'
equity.
- During the fourth quarter of 2013, we paid a $0.20 per share
dividend to shareholders for a total of $19 million.
1These items are
non-GAAP measures that do not have any standardized meaning
prescribed by GAAP and therefore are unlikely to be comparable to
similar measures presented by other companies. Refer to Additional
Information - Supplemental Non-GAAP Measures section for a
description of each non-GAAP measure and reconciliations to the
most comparable GAAP measures. |
This Fourth Quarter 2013 Management's Discussion and Analysis
("MD&A") dated January 29, 2014 for Methanex Corporation ("the
Company") should be read in conjunction with the Company's
condensed consolidated interim financial statements for the period
ended December 31, 2013 as well as the 2012 Annual Consolidated
Financial Statements and MD&A included in the Methanex 2012
Annual Report. Unless otherwise indicated, the financial
information presented in this interim report is prepared in
accordance with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB).
The Methanex 2012 Annual Report and additional information relating
to Methanex is available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
Effective January 1, 2013, we adopted new IFRS standards related
to consolidation and joint arrangement accounting. Under these new
standards, our 63.1% interest in the Atlas entity, which was
previously proportionately consolidated in our financial
statements, is accounted for using the equity method. This change
has been applied retrospectively. As a result, amounts related to
Atlas are no longer included in individual line items in our
consolidated financial statements and the net assets and net
earnings are presented separately. For purposes of analyzing our
consolidated financial results in this MD&A, the Adjusted
EBITDA from our 63.1% interest in the Atlas entity is included in
Adjusted EBITDA.
FINANCIAL AND OPERATIONAL DATA
|
Three Months Ended |
|
Years Ended |
($ millions, except per share amounts and where
noted) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Production (thousands of tonnes) (attributable to
Methanex shareholders) |
1,194 |
1,035 |
1,067 |
|
4,344 |
4,071 |
|
|
|
|
|
|
|
Sales volumes (thousands of tonnes): |
|
|
|
|
|
|
|
Methanex-produced methanol (attributable to Methanex
shareholders) |
1,190 |
1,045 |
1,059 |
|
4,304 |
4,039 |
|
Purchased methanol |
663 |
715 |
664 |
|
2,715 |
2,565 |
|
Commission sales |
274 |
237 |
176 |
|
972 |
855 |
|
Total
sales volumes 1 |
2,127 |
1,997 |
1,899 |
|
7,991 |
7,459 |
|
|
|
|
|
|
|
Methanex average non-discounted posted price ($ per
tonne) 2 |
557 |
502 |
450 |
|
507 |
443 |
Average realized price ($ per tonne) 3 |
493 |
438 |
389 |
|
441 |
382 |
|
|
|
|
|
|
|
Adjusted EBITDA (attributable to Methanex shareholders)
4 |
245 |
184 |
119 |
|
736 |
429 |
Cash flows from operating activities |
162 |
181 |
80 |
|
586 |
416 |
Adjusted net income (attributable to Methanex
shareholders) 4 |
167 |
117 |
61 |
|
471 |
180 |
Net income (loss) attributable to Methanex
shareholders |
128 |
87 |
(140) |
|
329 |
(68) |
|
|
|
|
|
|
|
Adjusted net income per common share (attributable to
Methanex shareholders) 4 |
1.72 |
1.22 |
0.64 |
|
4.88 |
1.90 |
Basic net income (loss) per common share (attributable
to Methanex shareholders) |
1.33 |
0.91 |
(1.49) |
|
3.46 |
(0.73) |
Diluted net income (loss) per common share
(attributable to Methanex shareholders) |
1.32 |
0.90 |
(1.49) |
|
3.41 |
(0.73) |
|
|
|
|
|
|
|
Common share information (millions of shares): |
|
|
|
|
|
|
|
Weighted average number of common shares |
96 |
95 |
94 |
|
95 |
94 |
|
Diluted weighted average number of common shares |
97 |
97 |
94 |
|
96 |
94 |
|
Number of common shares outstanding, end of period |
96 |
96 |
94 |
|
96 |
94 |
1Methanex-produced methanol includes volumes produced by Chile
using natural gas supplied from Argentina under a tolling
arrangement. Commission sales represent volumes marketed on a
commission basis related to the 36.9% of the Atlas methanol
facility and the portion of the Egypt methanol facility that we do
not own. 2Methanex 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/. 3Average realized price is calculated as
revenue, excluding commissions earned and the Egypt non-controlling
interest share of revenue but including an amount representing our
share of Atlas revenue, divided by the total sales volumes of
Methanex-produced (attributable to Methanex shareholders) and
purchased methanol. 4These items are non-GAAP measures that do not
have any standardized meaning prescribed by GAAP and therefore are
unlikely to be comparable to similar measures presented by other
companies. Refer to Additional Information - Supplemental Non-GAAP
Measures section for a description of each non-GAAP measure and
reconciliations to the most comparable GAAP measures. |
PRODUCTION SUMMARY
|
Annual |
2013 |
2012 |
Q4 2013 |
Q3 2013 |
Q4 2012 |
(thousands of tonnes) |
Capacity1 |
Production |
Production |
Production |
Production |
Production |
|
|
|
|
|
|
|
New Zealand 2 |
2,430 |
1,419 |
1,108 |
400 |
349 |
378 |
Atlas (Trinidad) (63.1% interest) |
1,125 |
971 |
826 |
268 |
254 |
180 |
Titan (Trinidad) |
875 |
651 |
786 |
173 |
128 |
189 |
Egypt (50% interest)3 |
630 |
623 |
557 |
159 |
168 |
129 |
Medicine Hat |
560 |
476 |
481 |
86 |
130 |
132 |
Chile I and IV |
1,800 |
204 |
313 |
108 |
6 |
59 |
Geismar 1 and 2 (Louisiana, USA) 4 |
- |
- |
- |
- |
- |
- |
|
7,420 |
4,344 |
4,071 |
1,194 |
1,035 |
1,067 |
1The production
capacity of our facilities may be higher than original nameplate
capacity as, over time, these figures have been adjusted to reflect
ongoing operating efficiencies. Actual production for a facility in
any given year may be higher or lower than annual production
capacity due to a number of factors, including natural gas
composition or the age of the facility's catalyst. |
2The annual
production capacity of New Zealand represents the two Motunui
facilities and the Waitara Valley facility (refer to New Zealand
section below). |
3On December 9,
2013, we completed the sale of a 10% equity interest in the Egypt
facility. Production figures prior to December 9, 2013 reflect a
60% interest. |
4We are
relocating two idle Chile facilities to Geismar, Louisiana and are
targeting to be producing methanol from Geismar 1 in late 2014 and
Geismar 2 by early 2016. |
New Zealand
Our New Zealand methanol facilities produced 400,000 tonnes of
methanol in the fourth quarter of 2013 compared with 349,000 tonnes
in the third quarter of 2013. We completed a major refurbishment at
the Motunui 2 facility during the fourth quarter of 2013. With all
three facilities now operating, we are able to produce at the New
Zealand site's full annual production capacity of up to 2.4 million
tonnes, depending on natural gas composition.
Trinidad
In Trinidad, we own 100% of the Titan facility with an annual
production capacity of 875,000 tonnes and have a 63.1% interest in
the Atlas facility with an annual production capacity of 1,125,000
tonnes (63.1% interest). The Titan facility produced 173,000 tonnes
in the fourth quarter of 2013 compared with 128,000 tonnes in the
third quarter of 2013. The Titan facility underwent a planned
turnaround in the third quarter of 2013 and returned to operation
in early October. The Titan facility also experienced an unplanned
outage during the fourth quarter which resulted in lost production
of approximately 15,000 tonnes. The Atlas facility produced 268,000
tonnes in the fourth quarter of 2013 compared with 254,000 tonnes
in the third quarter of 2013.
We continue to experience some natural gas curtailments to our
Trinidad facilities due to a mismatch between upstream commitments
to supply the Natural Gas Company of Trinidad and Tobago (NGC) and
downstream demand from NGC's customers, which becomes apparent when
an upstream supplier has a technical issue or planned maintenance
that reduces gas delivery. We are engaged with key stakeholders to
find a solution to this issue, but in the meantime expect to
continue to experience gas curtailments to the Trinidad site.
Egypt
On December 9, 2013, we completed the sale of a 10% equity
interest in the Egypt methanol facility to Arab Petroleum
Investments Corporation (APICORP) for $110 million. The production
from this facility attributable to Methanex reflects a 50% interest
after December 9, 2013.
On a 100% basis, the Egypt methanol facility produced 273,000
tonnes in the fourth quarter of 2013 (Methanex share of 159,000
tonnes) compared with 280,000 tonnes (Methanex share of 168,000
tonnes) in the third quarter of 2013. The Egypt facility
experienced an unplanned outage during the fourth quarter of 2013
which resulted in lost production of approximately 35,000 tonnes
(100% basis).
The Egypt facility has experienced periodic natural gas supply
restrictions since mid-2012 which have resulted in production below
full capacity. This situation may persist in the future and become
more acute during the summer months when electricity demand is at
its peak. Refer to page 25 of our 2012 Annual Report for further
details.
Medicine Hat, Canada
During the fourth quarter of 2013, we produced 86,000 tonnes at
our Medicine Hat facility compared with 130,000 tonnes during the
third quarter of 2013. The Medicine Hat facility experienced an
unplanned outage which resulted in lost production of approximately
50,000 tonnes during the fourth quarter of 2013. The facility
restarted on January 10, 2014 and is currently operating.
Chile
After idling our Chile operations during the southern hemisphere
winter as a result of insufficient natural gas feedstock, we
restarted the Chile I facility in September 2013. During the fourth
quarter of 2013, we produced 108,000 tonnes in Chile operating the
facility at approximately 50% of production capacity, supported by
natural gas supplies from both Chile and Argentina through a
tolling arrangement.
The future of our Chile operations is primarily dependent on the
level of natural gas exploration and development in southern Chile
and our ability to secure a sustainable natural gas supply to our
facilities on economic terms from Chile and Argentina.
Geismar, Louisiana
We continue to progress our two Geismar relocation projects and
during the fourth quarter we reached an important milestone with
all of the major equipment pieces for Geismar 1 now on site in
Louisiana. We are targeting to be producing methanol from the 1.0
million tonne Geismar 1 facility in late 2014 and from the 1.0
million tonne Geismar 2 facility in early 2016. During the fourth
quarter of 2013, we incurred $145 million of capital expenditures
related to these projects, excluding capitalized interest.
FINANCIAL RESULTS
For the fourth quarter of 2013 we recorded Adjusted EBITDA of
$245 million and Adjusted net income of $167 million ($1.72 per
share on a diluted basis). This compares with Adjusted EBITDA of
$184 million and Adjusted net income of $117 million ($1.22 per
share on a diluted basis) for the third quarter of 2013. For the
year ended December 31, 2013, we reported Adjusted EBITDA of $736
million and Adjusted net income of $471 million ($4.88 per share on
a diluted basis) compared with Adjusted EBITDA of $429 million and
Adjusted net income of $180 million ($1.90 per share on a diluted
basis) for the year ended December 31, 2012.
For the fourth quarter of 2013, we reported net income
attributable to Methanex shareholders of $128 million ($1.32 per
share on a diluted basis) compared with net income attributable to
Methanex shareholders for the third quarter of 2013 of $87 million
($0.90 income per share on a diluted basis).
On December 9, 2013, we completed the sale of a 10% equity
interest in the Egypt methanol facility to APICORP for $110
million. The transaction decreases Methanex's ownership interest to
approximately 50% with Methanex retaining control. As we retain
control of the entity, under IFRS accounting standards, this is
considered a transaction between equity holders and the $62.9
million gain realized on the sale is recognized as an increase in
shareholders' equity.
We calculate Adjusted EBITDA and Adjusted net income by
including amounts related to our equity share of the Atlas (63.1%
interest) and Egypt (50% interest as of December 9, 2013)
facilities and by excluding the mark-to-market impact of
share-based compensation as a result of changes in our share price
and items which are considered by management to be non-operational.
Refer to Additional Information - Supplemental Non-GAAP Measures
section for a further discussion on how we calculate these
measures. Our analysis of depreciation and amortization, finance
costs, finance income and other expenses and income taxes is
consistent with the presentation of our consolidated statements of
income and excludes amounts related to Atlas.
A reconciliation from net income attributable to Methanex
shareholders to Adjusted net income and the calculation of Adjusted
net income per common share is as follows:
|
Three Months Ended |
|
Years Ended |
($ millions except number of shares and per share
amounts) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Net income (loss) attributable to Methanex
shareholders |
$
128 |
$
87 |
$
(140) |
|
$
329 |
$
(68) |
|
Mark-to-market impact of share-based compensation, net of tax |
34 |
30 |
8 |
|
101 |
14 |
|
Write-off of oil and gas rights, net of tax |
5 |
- |
- |
|
19 |
- |
|
Geismar project relocation expenses, net of tax |
- |
- |
- |
|
22 |
41 |
|
Asset impairment charge, net of tax |
- |
- |
193 |
|
- |
193 |
Adjusted net income 1 |
$ 167 |
$ 117 |
$ 61 |
|
$ 471 |
$ 180 |
Diluted weighted average shares outstanding
(millions) |
97 |
97 |
94 |
|
96 |
94 |
Adjusted net income per common share 1 |
$ 1.72 |
$ 1.22 |
$ 0.64 |
|
$ 4.88 |
$ 1.90 |
1These items are non-GAAP measures that do not have any
standardized meaning prescribed by GAAP and therefore are unlikely
to be comparable to similar measures presented by other companies.
Refer to Additional Information - Supplemental Non-GAAP Measures
section for a description of each non-GAAP measure and
reconciliations to the most comparable GAAP measures. |
We review our financial results by analyzing changes in Adjusted
EBITDA, mark-to-market impact of share-based compensation,
depreciation and amortization, write-off of oil and gas rights,
finance costs, finance income and other expenses and income taxes.
A summary of our consolidated statements of income is as
follows:
|
Three Months Ended |
|
Years Ended |
($ millions) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Consolidated statements of income: |
|
|
|
|
|
|
|
Revenue |
$
881 |
$
758 |
$
668 |
|
$
3,024 |
$
2,543 |
|
Cost
of sales and operating expenses, excluding mark-to-market impact of
share-based compensation |
(634) |
(565) |
(546) |
|
(2,267) |
(2,075) |
|
Adjusted EBITDA of associate (Atlas) 1 |
26 |
15 |
10 |
|
68 |
34 |
|
273 |
208 |
132 |
|
825 |
502 |
Comprised of: |
|
|
|
|
|
|
|
Adjusted EBITDA (attributable to Methanex shareholders) 2 |
245 |
184 |
119 |
|
736 |
429 |
|
Attributable to non-controlling interests |
28 |
24 |
13 |
|
89 |
73 |
|
273 |
208 |
132 |
|
825 |
502 |
|
Mark-to-market impact of share-based compensation |
(37) |
(33) |
(8) |
|
(110) |
(16) |
|
Depreciation and amortization |
(35) |
(29) |
(35) |
|
(123) |
(149) |
|
Write-off of oil and gas rights |
(8) |
- |
- |
|
(25) |
- |
|
Geismar project relocation expenses and charges |
- |
- |
- |
|
(34) |
(65) |
|
Asset
impairment charge |
- |
- |
(297) |
|
- |
(297) |
|
Earnings of associate, excluding amount included in Adjusted EBITDA
1 |
(9) |
(9) |
(10) |
|
(38) |
(34) |
|
Finance costs |
(13) |
(14) |
(13) |
|
(57) |
(61) |
|
Finance income and other expenses |
2 |
2 |
3 |
|
5 |
1 |
|
Income tax expense |
(29) |
(24) |
93 |
|
(66) |
85 |
|
Net income (loss) |
$ 144 |
$101 |
$(135) |
|
$ 377 |
$ (34) |
|
Net income (loss) attributable to Methanex shareholders |
$ 128 |
$ 87 |
$(140) |
|
$ 329 |
$ (68) |
1Earnings of associate has been divided into an amount included in
Adjusted EBITDA and an amount excluded from Adjusted EBITDA. The
amount excluded from Adjusted EBITDA represents depreciation and
amortization, finance costs, finance income and other expenses and
income tax expense relating to earnings of associate. |
2This
item is a non-GAAP measure that does not have any standardized
meaning prescribed by GAAP and therefore is unlikely to be
comparable to similar measures presented by other companies. Refer
to Additional Information - Supplemental Non-GAAP Measures section
for a description of the non-GAAP measure and reconciliation to the
most comparable GAAP measure. |
Adjusted EBITDA (Attributable to Methanex Shareholders)
Our operations consist of a single operating segment - the
production and sale of methanol. We review the results of
operations by analyzing changes in the components of Adjusted
EBITDA. For a discussion of the definitions used in our Adjusted
EBITDA analysis, refer to the How We Analyze Our Business
section.
The changes in Adjusted EBITDA resulted from changes in the
following:
($ millions) |
Q4 2013 compared with Q3 2013 |
Q4 2013 compared with Q4 2012 |
2013 compared with 2012 |
|
|
|
|
Average realized price |
$
99 |
$
188 |
$
423 |
Sales volume |
5 |
7 |
32 |
Total cash costs |
(43) |
(69) |
(148) |
Increase in Adjusted EBITDA |
$ 61 |
$ 126 |
$ 307 |
Average realized price
|
Three Months Ended |
|
Years Ended |
($ per tonne) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Methanex average non-discounted posted price |
557 |
502 |
450 |
|
507 |
443 |
Methanex average realized price |
493 |
438 |
389 |
|
441 |
382 |
Methanol market conditions remained healthy during the fourth
quarter and pricing increased amidst industry supply constraints
(refer to Supply/Demand Fundamentals section). Our average
non-discounted posted price for the fourth quarter of 2013 was $557
per tonne compared with $502 per tonne for the third quarter of
2013 and $450 per tonne for the fourth quarter of 2012. Our average
realized price for the fourth quarter of 2013 was $493 per tonne
compared with $438 per tonne for the third quarter of 2013 and $389
per tonne for the fourth quarter of 2012. The change in average
realized price for the fourth quarter of 2013 increased Adjusted
EBITDA by $99 million compared with the third quarter of 2013 and
increased Adjusted EBITDA by $188 million compared with the fourth
quarter of 2012. Our average realized price for the year ended
December 31, 2013 was $441 per tonne compared with $382 per tonne
for the same period in 2012 and this increased Adjusted EBITDA by
$423 million.
Sales volume
Methanol sales volumes excluding commission sales volumes were
higher for all periods presented and this increased Adjusted EBITDA
by the amounts noted in the table above.
Total cash costs
The primary drivers of changes in our total cash costs are
changes in the cost of methanol we produce at our facilities
(Methanex-produced methanol) and changes in the cost of methanol we
purchase from others (purchased methanol). All of our production
facilities except Medicine Hat are underpinned by natural gas
purchase agreements with pricing terms that include base and
variable price components. We supplement our production with
methanol produced by others through methanol offtake contracts and
purchases on the spot market to meet customer needs and support our
marketing efforts within the major global markets.
We have adopted the first-in, first-out method of accounting for
inventories and it generally takes between 30 and 60 days to sell
the methanol we produce or purchase. Accordingly, the changes in
Adjusted EBITDA as a result of changes in Methanex-produced and
purchased methanol costs primarily depend on changes in methanol
pricing and the timing of inventory flows.
The impact on Adjusted EBITDA from changes in our cash costs are
explained below:
($ millions) |
Q4 2013 compared with Q3 2013 |
Q4 2013 compared with Q4 2012 |
2013 compared with 2012 |
|
|
|
|
Methanex-produced methanol costs |
$
(22) |
$
(23) |
$
(62) |
Proportion of Methanex-produced methanol sales |
13 |
5 |
(4) |
Purchased methanol costs |
(43) |
(69) |
(138) |
Logistics costs |
(3) |
14 |
38 |
Other, net |
12 |
4 |
18 |
|
$ (43) |
$ (69) |
$ (148) |
Methanex-produced methanol costs
We purchase natural gas for the New Zealand, Trinidad, Egypt and
Chile methanol facilities under natural gas purchase agreements
where the unique terms of each contract include a base price and a
variable price component linked to the price of methanol to reduce
our commodity price risk exposure. The variable price component of
each gas contract is adjusted by a formula related to methanol
prices above a certain level. For the fourth quarter of 2013
compared with the third quarter of 2013, Methanex-produced methanol
costs were higher by $22 million primarily due to the impact of
higher realized methanol prices on the variable portion of our
natural gas costs and changes in the mix of production sold from
inventory. For the fourth quarter and year ended December 31, 2013
compared with the same periods in 2012, Methanex-produced methanol
costs were higher by $23 million and $62 million, respectively,
primarily due to the impact of higher realized methanol prices on
the variable portion of our natural gas costs and changes in the
mix of production sold from inventory.
Proportion of Methanex-produced methanol sales
The cost of purchased methanol is directly linked to the selling
price for methanol at the time of purchase and the cost of
purchased methanol is generally higher than the cost of
Methanex-produced methanol. Accordingly, an increase in the
proportion of Methanex-produced methanol sales results in a
decrease in our overall cost structure for a given period. For the
fourth quarter of 2013 compared with the third quarter of 2013 and
the fourth quarter of 2012, a higher proportion of
Methanex-produced methanol sales increased Adjusted EBITDA by $13
million and $5 million, respectively. Sales of Methanex-produced
methanol increased in the fourth quarter of 2013 primarily as a
result of higher production from New Zealand.
Purchased methanol costs
Changes in purchased methanol costs for all periods presented
are primarily as a result of changes in methanol pricing.
Logistics costs
Logistics costs vary from period to period depending on the
levels of production from each of our production facilities and the
resulting impact on our supply chain. Over the past year, we have
completed several initiatives that have reduced logistics costs and
improved the efficiency of our supply chain. Logistics costs in the
fourth quarter of 2013 were $14 million lower than the fourth
quarter of 2012 and logistics costs for the twelve month period
were $38 million lower than in the same period in 2012.
Other, net
We have commenced the process of building a manufacturing
organization in Geismar, Louisiana. Under IFRS, costs incurred
related to organizational build-up are not eligible for
capitalization and are charged directly to earnings as incurred.
During 2013, we incurred approximately $7 million of Geismar
organizational build-up costs and the remaining organizational
build-up costs are estimated to be approximately $25 million. The
remaining change in other, net for the periods presented primarily
relates to an insurance settlement recorded in the fourth quarter
of 2013 and the impact of a restructuring of our Chile operations
completed in 2012.
Mark-to-Market Impact of Share-based Compensation
We grant share-based awards as an element of compensation.
Share-based awards granted include stock options, share
appreciation rights, tandem share appreciation rights, deferred
share units, restricted share units and performance share units.
For all the share-based awards, share-based compensation is
recognized over the related vesting period for the proportion of
the service that has been rendered at each reporting date.
Share-based compensation includes an amount related to the
grant-date value and a mark-to-market impact as a result of
subsequent changes in the Company's share price. The grant-date
value amount is included in Adjusted EBITDA and Adjusted net
income. The mark-to-market impact of share-based compensation as a
result of changes in our share price is excluded from Adjusted
EBITDA and Adjusted net income and analyzed separately.
|
Three Months Ended |
|
Years Ended |
($ millions except share price) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Methanex Corporation share price 1 |
$
59.24 |
$
51.27 |
$
31.87 |
|
$
59.24 |
$
31.87 |
|
|
|
|
|
|
|
Grant-date fair value expense included in Adjusted EBITDA and
Adjusted net income |
4 |
5 |
3 |
|
21 |
20 |
Mark-to-market impact due to change in share price |
37 |
33 |
8 |
|
110 |
16 |
Total share-based compensation expense |
$ 41 |
$ 38 |
$ 11 |
|
$ 131 |
$ 36 |
1US dollar share price of Methanex Corporation as
quoted on NASDAQ Global Market on the last trading day of the
respective period. |
The Methanex Corporation share price increased from $51.27 per
share at September 30, 2013 to $59.24 per share at December 31,
2013. As a result of the increase in the share price and the
resulting impact on the fair value of the outstanding units, we
recorded a $37 million mark-to-market expense on share-based
compensation in the fourth quarter of 2013. For the year ended
December 31, 2013, we recorded a $110 million mark-to-market
share-based compensation expense as a result of the increase in the
share price from $31.87 at December 31, 2012 to $59.24 at December
31, 2013.
Depreciation and Amortization
Depreciation and amortization was $35 million for the fourth
quarter of 2013 compared with $29 million for the third quarter of
2013 and $35 million for the fourth quarter of 2012. Depreciation
and amortization was higher in the fourth quarter of 2013 compared
with the third quarter of 2013 primarily due to high sales volumes
of Methanex-produced methanol. Depreciation and amortization for
the year ended December 31, 2013 was $123 million compared with
$149 million for the same period in 2012. Depreciation and
amortization is lower for the year ended December 31, 2013 compared
with the year ended December 31, 2012 primarily as a result of the
lower carrying value of our Chile assets due to the asset
impairment charge recorded in the fourth quarter of 2012.
Write-off of Oil and Gas Rights
Over the past few years, we have participated with international
oil and gas companies in exploration activities in southern Chile.
Based on the outlook for natural gas deliveries under certain of
these arrangements, we have recorded a non-cash $8 million ($5
million after-tax) charge to earnings in the fourth quarter of 2013
to write off the carrying value of the assets. The only remaining
oil and gas activity for the Company relates to a producing
property, Dorado Riquelme, in southern Chile.
Finance Costs
|
Three Months Ended |
|
Years Ended |
($ millions) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Finance costs before capitalized interest |
$
16 |
$
16 |
$
14 |
|
$
65 |
$
63 |
Less capitalized interest |
(3) |
(2) |
(1) |
|
(8) |
(2) |
|
|
|
|
|
|
|
Finance costs |
$ 13 |
$ 14 |
$ 13 |
|
$ 57 |
$ 61 |
Finance costs before capitalized interest primarily relate to
interest expense on the unsecured notes and limited recourse debt
facilities. Capitalized interest relates to interest costs
capitalized for the Geismar projects.
Finance Income and Other Expenses
|
Three Months Ended |
|
Years Ended |
($ millions) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Finance income and other expenses |
$ 2 |
$ 2 |
$ 3 |
|
$ 5 |
$ 1 |
The change in finance income and other expenses for all periods
presented was primarily due to the impact of changes in foreign
exchange rates.
Income Taxes
A summary of our income taxes for the year ended December 31,
2013 compared with 2012 is as follows:
|
Year Ended December 31, 2013 |
|
Year Ended December 31, 2012 |
($ millions, except where noted) |
Net Income |
Adjusted Net Income 1 |
|
Net Income |
Adjusted Net Income 1 |
|
|
|
|
|
|
Amount before income tax |
$
443 |
$
562 |
|
$
(119) |
$
217 |
Income tax recovery (expense) |
(66) |
(91) |
|
85 |
(37) |
Amount after income tax |
$ 377 |
$ 471 |
|
$ (34) |
$ 180 |
|
|
|
|
|
|
Effective tax rate |
15% |
16% |
|
71% |
17% |
1This
item is a non-GAAP measure that does not have any standardized
meaning prescribed by GAAP and therefore is unlikely to be
comparable to similar measures presented by other companies. Refer
to Additional Information - Supplemental Non-GAAP Measures section
for a description of the non-GAAP measure and reconciliation to the
most comparable GAAP measure. |
For the year ended December 31, 2013, the effective tax rate was
15% compared with 71% for the year ended December 31, 2012.
Adjusted net income represents the amount that is attributable to
Methanex shareholders and excludes the mark-to-market impact of
share-based compensation and items that are considered by
management to be non-operational. The effective tax rate related to
Adjusted net income was 16% for the year ended December 31, 2013
compared with 17% for the year ended December 31, 2012.
We earn the majority of our pre-tax earnings in Trinidad, Egypt,
Chile, Canada and New Zealand. In Trinidad and Chile, the statutory
tax rate is 35% and in Egypt, the statutory tax rate is 25%. As the
Atlas entity is accounted for using the equity method, any income
taxes related to Atlas are included in earnings of associate and
therefore excluded from total income taxes. The statutory rates in
Canada and New Zealand are 25% and 28%, respectively. As of
December 31, 2013, we have used substantially all previously
unrecognized tax benefits in Canada and New Zealand and as a result
the effective tax rates expected to be realized in these
jurisdictions in the future will more closely reflect their
statutory rates.
SUPPLY/DEMAND FUNDAMENTALS
We estimate that methanol demand, excluding methanol demand from
integrated methanol to olefins facilities, is currently
approximately 57 million tonnes on an annualized basis.
The outlook for methanol demand growth continues to be strong.
Traditional chemical derivatives consume about 60% of global
methanol demand and growth is correlated to industrial
production.
Methanex Non-Discounted Regional Posted Prices 1 |
(US$ per tonne) |
Jan 2014 |
Dec 2013 |
Nov 2013 |
Oct 2013 |
|
|
|
|
|
United States |
632 |
632 |
599 |
549 |
Europe 2 |
610 |
539 |
539 |
539 |
Asia Pacific |
590 |
550 |
520 |
490 |
1Discounts from our posted prices are offered to customers based on
various factors. |
2EUR450 for Q1 2014 (Q4 2013 - EUR408) converted to United States
dollars. |
Energy-related applications consume the remaining 40% of global
methanol demand, and the wide disparity between the price of crude
oil and that of natural gas and coal has resulted in an increased
use of methanol in energy-related applications, such as direct
methanol blending into gasoline and DME and biodiesel production.
Growth of direct methanol blending into gasoline in China has been
particularly strong and we believe that future growth in this
application is supported by numerous provincial and national
fuel-blending standards, such as M15 or M85 (15% methanol and 85%
methanol, respectively).
China is also leading the commercialization of methanol's use as
a feedstock to manufacture olefins. The use of methanol to produce
olefins, at current energy prices, is proving to be cost
competitive relative to the traditional production of olefins from
naphtha. There are now three methanol-to-olefins (MTO) plants
operating in China which are dependent on merchant methanol supply
and which have the capacity to consume over 3 million tonnes of
methanol annually. There are other MTO plants which are integrated
and purchase methanol to supplement their production when required.
We believe demand potential into energy-related applications and
olefins production will continue to grow.
During the fourth quarter of 2013, demand remained healthy and
prices increased amidst industry supply constraints. Our average
non-discounted price in the fourth quarter was $557 per tonne
compared with $502 per tonne in the third quarter. We recently
announced rolls in our North American and Asia Pacific
non-discounted prices for February at $632 per tonne and $590 per
tonne, respectively.
The methanol price will ultimately depend on the strength of the
global economy, industry operating rates, global energy prices, new
supply additions and the strength of global demand. Over the next
few years, there is a modest level of new capacity expected to come
on-stream relative to demand growth expectations. A 0.8 million
tonne plant in Channelview, Texas was recently restarted and a 0.7
million tonne plant in Azerbaijan is expected to start exporting
methanol in 2014. We are relocating two idle Chile facilities to
Geismar, Louisiana and are targeting to be producing methanol from
the first 1.0 million tonne facility by late 2014 and the second
1.0 million tonne facility in early 2016. 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
Cash flows from operating activities in the fourth quarter of
2013 decreased by $19 million to $162 million compared with $181
million for the third quarter of 2013 and increased by $82 million
compared to $80 million for the fourth quarter of 2012. Cash flows
from operating activities for the year ended December 31, 2013
increased by $170 million to $586 million compared with $416
million for the same period in 2012. The changes in cash flows from
operating activities resulted from changes in the following:
($ millions) |
Q4 2013 compared with Q3 2013 |
Q4 2013 compared with Q4 2012 |
2013 compared with 2012 |
|
|
|
|
Change in Adjusted EBITDA (attributable to Methanex
shareholders) |
$
61 |
$
126 |
$
307 |
Exclude change in Adjusted EBITDA of associate (Atlas) |
(11) |
(16) |
(34) |
Cash
flows attributable to non-controlling interests |
4 |
15 |
16 |
Non-cash working capital |
(51) |
(29) |
(79) |
Income taxes paid |
(3) |
1 |
(15) |
Share-based payments |
(15) |
(20) |
(31) |
Other |
(4) |
5 |
6 |
Increase in cash flows from operating activities |
$ (19) |
$ 82 |
$ 170 |
During the fourth quarter of 2013, we paid a quarterly dividend
of $0.20 per share, or $19 million.
We operate in a highly competitive commodity industry and
believe it is appropriate to maintain a conservative balance sheet
and retain financial flexibility. Our cash generation is strong in
the current methanol price environment and we recently completed
the sale of a 10% equity interest in the Egypt methanol facility
for $110 million. At December 31, 2013, our cash balance was $733
million, including $59 million related to the non-controlling
interest in Egypt. We invest our cash only in highly rated
instruments that have maturities of three months or less to ensure
preservation of capital and appropriate liquidity. We have a strong
balance sheet and an undrawn $400 million credit facility provided
by highly rated financial institutions that expires in
mid-2016.
Our planned capital maintenance expenditure program directed
towards maintenance, turnarounds and catalyst changes for existing
operations is currently estimated to total approximately $70
million to the end of 2014. Capital expenditures during the fourth
quarter, excluding the Geismar projects, were $72 million,
primarily related to the major refurbishment of the Motunui 2
facility in New Zealand. We are relocating two methanol plants from
our Chile site to Geismar, Louisiana. During the fourth quarter of
2013, capital expenditures related to the Geismar projects were
$145 million, excluding capitalized interest. The remaining
budgeted capital expenditures related to the Geismar projects are
$635 million, excluding capitalized interest.
We believe we are well positioned to meet our financial
commitments, invest to grow the Company and continue to deliver on
our commitment to return excess cash to shareholders.
SHORT-TERM OUTLOOK
Entering the first quarter, market conditions remain healthy and
methanol prices are stable.
The methanol price will ultimately depend on the strength of the
global economy, industry operating rates, global energy prices, new
supply additions and the strength of global demand. We believe that
our financial position and financial flexibility, outstanding
global supply network and competitive-cost position will provide a
sound basis for Methanex to continue to be the leader in the
methanol industry and to invest to grow the Company.
CONTROLS AND PROCEDURES
For the three months ended December 31, 2013, no changes were
made in our internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
ADDITIONAL INFORMATION - SUPPLEMENTAL NON-GAAP MEASURES
In addition to providing measures prepared in accordance with
International Financial Reporting Standards (IFRS), we present
certain supplemental non-GAAP measures. These are Adjusted EBITDA,
Adjusted net income, Adjusted net income per common share and
operating income. These measures do not have any standardized
meaning prescribed by generally accepted accounting principles
(GAAP) and therefore are unlikely to be comparable to similar
measures presented by other companies. These supplemental non-GAAP
measures are provided to assist readers in determining our ability
to generate cash from operations and improve the comparability of
our results from one period to another. We believe these measures
are useful in assessing operating performance and liquidity of the
Company's ongoing business on an overall basis. We also believe
Adjusted EBITDA is frequently used by securities analysts and
investors when comparing our results with those of other
companies.
Adjusted EBITDA (attributable to Methanex shareholders)
Adjusted EBITDA differs from the most comparable GAAP measure,
net income attributable to Methanex shareholders, because it
excludes depreciation and amortization, finance costs, finance
income and other expenses, income tax expense, mark-to-market
impact of share-based compensation, Geismar project relocation
expenses and charges and write-off of oil and gas rights. Adjusted
EBITDA includes an amount representing our 63.1% interest in the
Atlas facility and our 50% interest in the methanol facility in
Egypt.
Adjusted EBITDA and Adjusted net income exclude the
mark-to-market impact of share-based compensation related to the
impact of changes in our share price on share appreciation rights,
tandem share appreciation rights, deferred share units, restricted
share units and performance share units. The mark-to-market impact
related to performance share units that is excluded from Adjusted
EBITDA and Adjusted net income is calculated as the difference
between the grant date value determined using a Methanex total
shareholder return factor of 100% and the fair value recorded at
each period end. As share-based awards will be settled in future
periods, the ultimate value of the units is unknown at the date of
grant and therefore the grant date value recognized in Adjusted
EBITDA and Adjusted net income may differ from the total settlement
cost.
The following table shows a reconciliation from net income
attributable to Methanex shareholders to Adjusted EBITDA:
|
Three Months Ended |
|
Years Ended |
($ millions) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Net income (loss) attributable to Methanex
shareholders |
$
128 |
$
87 |
$(140) |
|
$
329 |
$
(68) |
|
Mark-to-market impact of share-based compensation |
37 |
33 |
8 |
|
110 |
16 |
|
Depreciation and amortization |
35 |
29 |
35 |
|
123 |
149 |
|
Write-off of oil and gas rights |
8 |
- |
- |
|
25 |
- |
|
Geismar project relocation expenses and charges |
- |
- |
- |
|
34 |
65 |
|
Asset
impairment charges |
- |
- |
297 |
|
- |
297 |
|
Finance costs |
13 |
14 |
13 |
|
57 |
61 |
|
Finance income and other expenses |
(2) |
(2) |
(3) |
|
(5) |
(1) |
|
Income tax expense (recovery) |
29 |
24 |
(93) |
|
66 |
(85) |
|
Earnings of associate, excluding amount included in Adjusted EBITDA
1 |
9 |
9 |
10 |
|
38 |
34 |
|
Non-controlling interests adjustment 1 |
(12) |
(10) |
(8) |
|
(41) |
(39) |
Adjusted EBITDA (attributable to Methanex
shareholders) |
$ 245 |
$ 184 |
$ 119 |
|
$ 736 |
$ 429 |
1These adjustments represent depreciation and amortization, finance
costs, finance income and other expenses and income tax expense
associated with the non-controlling interest in the methanol
facility in Egypt and our 63.1% interest in the Atlas methanol
facility. |
Adjusted Net Income and Adjusted Net Income per Common Share
Adjusted net income and Adjusted net income per common share are
non-GAAP measures because they exclude the mark-to-market impact of
share-based compensation and items that are considered by
management to be non-operational, including Geismar project
relocation expenses and charges and write-off of oil and gas
rights. The following table shows a reconciliation of net income
attributable to Methanex shareholders to Adjusted net income and
the calculation of Adjusted net income per common share:
|
Three Months Ended |
|
Years Ended |
($ millions except number of shares and per share
amounts) |
Dec 31 2013 |
Sep 30 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
|
Net income (loss) attributable to Methanex
shareholders |
$
128 |
$
87 |
$
(140) |
|
$
329 |
$
(68) |
|
Mark-to-market impact of share-based compensation |
37 |
33 |
8 |
|
110 |
16 |
|
Write-off of oil and gas rights |
8 |
- |
- |
|
25 |
- |
|
Geismar project relocation expenses and charges |
- |
- |
- |
|
34 |
65 |
|
Asset impairment charge |
- |
- |
297 |
|
- |
297 |
|
Income tax recovery related to above items |
(6) |
(3) |
(104) |
|
(27) |
(130) |
Adjusted net income |
$ 167 |
$ 117 |
$ 61 |
|
$ 471 |
$ 180 |
Diluted weighted average shares outstanding
(millions) |
97 |
97 |
94 |
|
96 |
94 |
Adjusted net income per common share |
$ 1.72 |
$ 1.22 |
$ 0.64 |
|
$ 4.88 |
$ 1.90 |
Operating Income
Operating income is reconciled directly to a GAAP measure in our
consolidated statements of income.
QUARTERLY FINANCIAL DATA (UNAUDITED)
A summary of selected financial information for the prior eight
quarters is as follows:
|
Three Months Ended |
($ millions, except per share amounts) |
Dec 31 2013 |
Sep 30 2013 |
Jun 30 2013 |
Mar 31 2013 |
|
|
|
|
|
Revenue |
$
881 |
$
758 |
$
733 |
$
652 |
Adjusted EBITDA 1,2 |
245 |
184 |
157 |
149 |
Net
income 1 |
128 |
87 |
54 |
60 |
Adjusted net income 1,2 |
167 |
117 |
99 |
88 |
Basic
net income per common share 1 |
1.33 |
0.91 |
0.57 |
0.64 |
Diluted net income per common share 1 |
1.32 |
0.90 |
0.56 |
0.63 |
Adjusted net income per share 1,2 |
1.72 |
1.22 |
1.02 |
0.92 |
|
|
|
|
|
|
Three Months Ended |
($ millions, except per share amounts) |
Dec 31 2012 |
Sep 30 2012 |
Jun 30 2012 |
Mar 31 2012 |
|
|
|
|
|
Revenue |
$
668 |
$
608 |
$
613 |
$
654 |
Adjusted EBITDA 1,2 |
119 |
104 |
113 |
93 |
Net
income (loss) 1 |
(140) |
(3) |
52 |
22 |
Adjusted net income 1,2 |
61 |
36 |
44 |
39 |
Basic
net income (loss) per common share 1 |
(1.49) |
(0.03) |
0.56 |
0.24 |
Diluted net income (loss) per common share 1 |
(1.49) |
(0.03) |
0.50 |
0.23 |
Adjusted net income per share 1,2 |
0.64 |
0.38 |
0.47 |
0.41 |
1Attributable to Methanex Corporation shareholders. |
2These items are non-GAAP measures that do not have any
standardized meaning prescribed by GAAP and therefore are unlikely
to be comparable to similar measures presented by other companies.
Refer to Additional Information - Supplemental Non-GAAP Measures
section for a description of each non-GAAP measure and
reconciliations to the most comparable GAAP measures. |
FORWARD-LOOKING INFORMATION WARNING
This Fourth Quarter 2013 Management's Discussion and Analysis
("MD&A") as well as comments made during the Fourth Quarter
2013 investor conference call contain forward-looking statements
with respect to us and our industry. These statements relate to
future events or our future performance. All statements other than
statements of historical fact are forward-looking statements.
Statements that include the words "believes," "expects," "may,"
"will," "should," "potential," "estimates," "anticipates," "aim,"
"goal" or other comparable terminology and similar statements of a
future or forward-looking nature identify forward-looking
statements.
More particularly and without limitation, any statements
regarding the following are forward-looking statements:
- expected demand for methanol and its derivatives,
- expected new methanol supply or restart of idled capacity and
timing for start-up of the same,
- expected shutdowns (either temporary or permanent) or restarts
of existing methanol supply (including our own facilities),
including, without limitation, the timing and length of planned
maintenance outages,
- expected methanol and energy prices,
- expected levels of methanol purchases from traders or other
third parties,
- expected levels, timing and availability of economically priced
natural gas supply to each of our plants,
- capital committed by third parties towards future natural gas
exploration and development in the vicinity of our plants,
- our expected capital expenditures, including, without
limitation, those to support natural gas exploration and
development for our plants,
- anticipated operating rates of our plants,
- expected operating costs, including natural gas feedstock costs
and logistics costs,
- expected tax rates or resolutions to tax disputes,
- expected cash flows, earnings capability and share price,
- availability of committed credit facilities and other
financing,
- ability to meet covenants or obtain waivers associated with our
long-term debt obligations, including, without limitation, the
Egypt limited recourse debt facilities that have conditions
associated with upstream natural gas development and the
finalization of certain land title registration and related
mortgages that require action by Egyptian governmental
entities,
- our shareholder distribution strategy and anticipated
distributions to shareholders,
- commercial viability and timing of, or our ability to execute,
future projects, plant restarts, capacity expansions, plant
relocations, or other business initiatives or opportunities,
including the planned relocation of idle Chile methanol plants to
Geismar, Louisiana ("Geismar"),
- our financial strength and ability to meet future financial
commitments,
- expected global or regional economic activity (including
industrial production levels),
- expected outcomes of litigation or other disputes, claims and
assessments,
- expected actions of governments, government agencies, gas
suppliers, courts, tribunals or other third parties, and
- expected impact on our operations in Egypt or our financial
condition as a consequence of civil unrest or actions taken or
inaction by the Government of Egypt and its agencies.
We believe that we have a reasonable basis for making such
forward-looking statements. The forward-looking statements in this
document are based on our experience, our perception of trends,
current conditions and expected future developments as well as
other factors. Certain material factors or assumptions were applied
in drawing the conclusions or making the forecasts or projections
that are included in these forward-looking statements, including,
without limitation, future expectations and assumptions concerning
the following:
- the supply of, demand for, and price of methanol, methanol
derivatives, natural gas, coal, oil and oil derivatives,
- the success of our natural gas exploration and development in
Chile,
- our ability to procure natural gas feedstock on commercially
acceptable terms,
- operating rates of our facilities,
- receipt of remaining required permits in connection with our
Geismar projects,
- 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 or rights to purchase
natural gas,
- the establishment of new fuel standards,
- operating costs including natural gas feedstock and logistics
costs, capital costs, tax rates, cash flows, foreign exchange rates
and interest rates,
- the availability of committed credit facilities and other
financing,
- timing of completion and cost of our Geismar projects,
- global and regional economic activity (including industrial
production levels),
- absence of a material negative impact from major natural
disasters,
- absence of a material negative impact from changes in laws or
regulations,
- absence of a material negative impact from political
instability in the countries in which we operate,
- enforcement of contractual arrangements and ability to perform
contractual obligations by customers, natural gas and other
suppliers and other third parties, and
- satisfaction of conditions precedent contained in the Geismar 1
natural gas supply agreement.
However, forward-looking statements, by their nature, involve
risks and uncertainties that could cause actual results to differ
materially from those contemplated by the forward-looking
statements. The risks and uncertainties primarily include those
attendant with producing and marketing methanol and successfully
carrying out major capital expenditure projects in various
jurisdictions, including, without limitation:
- conditions in the methanol and other industries including
fluctuations in the supply, demand for and price of methanol and
its derivatives, including demand for methanol for energy
uses,
- the price of natural gas, coal, oil and oil derivatives,
- the success of natural gas exploration and development
activities in southern Chile,
- our ability to obtain natural gas feedstock on commercially
acceptable terms to underpin current operations and future
production growth opportunities,
- the ability to successfully carry out corporate initiatives and
strategies,
- actions of competitors, suppliers and financial
institutions,
- conditions within the natural gas delivery systems that may
prevent delivery of our natural gas supply requirements,
- our ability to meet timeline and budget targets for our Geismar
projects, including cost pressures arising from labour costs,
- competing demand for natural gas, especially with respect to
domestic needs for gas and electricity in Chile and Egypt,
- actions of governments and governmental authorities, including,
without limitation, the implementation of policies or other
measures that could impact the supply of or demand for methanol or
its derivatives,
- changes in laws or regulations,
- import or export restrictions, anti-dumping measures, increases
in duties, taxes and government royalties, and other actions by
governments that may adversely affect our operations or existing
contractual arrangements,
- world-wide economic conditions,
- satisfaction of conditions precedent contained in the Geismar 1
natural gas supply agreement, and
- other risks described in our 2012 Management's Discussion and
Analysis and this Fourth Quarter 2013 Management's Discussion and
Analysis.
Having in mind these and other factors, investors and other
readers are cautioned not to place undue reliance on
forward-looking statements. They are not a substitute for the
exercise of one's own due diligence and judgment. The outcomes
anticipated in forward-looking statements may not occur and we do
not undertake to update forward-looking statements except as
required by applicable securities laws.
HOW WE ANALYZE OUR BUSINESS
Our operations consist of a single operating segment - the
production and sale of methanol. We review our results of
operations by analyzing changes in the components of Adjusted
EBITDA (refer to the Additional Information - Supplemental Non-GAAP
Measures section for a description of each non-GAAP measure and
reconciliations to the most comparable GAAP measures).
In addition to the methanol that we produce at our facilities
("Methanex-produced methanol"), we also purchase and re-sell
methanol produced by others ("purchased methanol") and we sell
methanol on a commission basis. We analyze the results of all
methanol sales together, excluding commission sales volumes. The
key drivers of changes in Adjusted EBITDA are average realized
price, cash costs and sales volume which are defined and calculated
as follows:
PRICE
The change in Adjusted EBITDA as a result of changes in average
realized price is calculated as the difference from period to
period in the selling price of methanol multiplied by the current
period total methanol sales volume excluding commission sales
volume plus the difference from period to period in commission
revenue.
CASH COST
The change in Adjusted EBITDA as a result of changes in cash
costs is calculated as the difference from period to period in cash
costs per tonne multiplied by the current period total methanol
sales volume excluding commission sales volume in the current
period. The cash costs per tonne is the weighted average of the
cash cost per tonne of Methanex-produced methanol and the cash cost
per tonne of purchased methanol. The cash cost per tonne of
Methanex-produced methanol includes absorbed fixed cash costs per
tonne and variable cash costs per tonne. The cash cost per tonne of
purchased methanol consists principally of the cost of methanol
itself. In addition, the change in Adjusted EBITDA as a result of
changes in cash costs includes the changes from period to period in
unabsorbed fixed production costs, consolidated selling, general
and administrative expenses and fixed storage and handling
costs.
VOLUME
The change in Adjusted EBITDA as a result of changes in sales
volume is calculated as the difference from period to period in
total methanol sales volume excluding commission sales volumes
multiplied by the margin per tonne for the prior period. The margin
per tonne for the prior period is the weighted average margin per
tonne of Methanex-produced methanol and margin per tonne of
purchased methanol. The margin per tonne for Methanex-produced
methanol is calculated as the selling price per tonne of methanol
less absorbed fixed cash costs per tonne and variable cash costs
per tonne. The margin per tonne for purchased methanol is
calculated as the selling price per tonne of methanol less the cost
of purchased methanol per tonne.
We own 63.1% of the Atlas methanol facility and market the
remaining 36.9% of its production through a commission offtake
agreement. A contractual agreement between us and our partners
establishes joint control over Atlas. As a result, we account for
this investment using the equity method of accounting, which
results in 63.1% of the net assets and net earnings of Atlas being
presented separately in the consolidated statements of financial
position and consolidated statements of income, respectively. For
purposes of analyzing our business, Adjusted EBITDA, Adjusted net
income and Adjusted net income per common share include an amount
representing our 63.1% equity share in Atlas.
On December 9, 2013, we completed the sale of a 10% equity
interest in the Egypt methanol facility. At December 31, 2013, we
own 50% of the 1.26 million tonne per year Egypt methanol facility
and market the remaining 50% of its production through a commission
offtake agreement. We account for this investment using
consolidation accounting, which results in 100% of the revenues and
expenses being included in our financial statements with the other
investors' interests in the methanol facility being presented as
"non-controlling interests". For purposes of analyzing our
business, Adjusted EBITDA, Adjusted net income and Adjusted net
income per common share exclude the amount associated with the
other investors' non-controlling interests.
Methanex Corporation
Consolidated Statements of Income
(unaudited)
(thousands of U.S. dollars, except number of common shares
and per share amounts)
|
Three Months Ended |
|
Years Ended |
|
Dec 31 |
Dec 31 |
|
Dec 31 |
Dec 31 |
|
2013 |
2012 |
|
2013 |
2012 |
|
|
(As adjusted - note 13) |
|
|
(As adjusted - note 13) |
Revenue |
$
880,900 |
$
667,407 |
|
$
3,024,047 |
$
2,542,664 |
Cost of sales and operating expenses |
(671,460) |
(555,430) |
|
(2,378,204) |
(2,090,969) |
Depreciation and amortization |
(35,594) |
(34,636) |
|
(123,335) |
(149,411) |
Write-off of oil and gas rights (note 4) |
(7,939) |
- |
|
(24,798) |
- |
Geismar project relocation expenses and charges |
- |
- |
|
(33,867) |
(64,543) |
Asset impairment charge |
- |
(296,976) |
|
- |
(296,976) |
Operating income (loss) |
165,907 |
(219,635) |
|
463,843 |
(59,235) |
Earnings (loss) of associate (note 6) |
17,528 |
(1) |
|
30,799 |
(214) |
Finance costs (note 8) |
(12,582) |
(12,495) |
|
(56,407) |
(61,464) |
Finance income and other expenses |
1,776 |
2,962 |
|
4,446 |
1,068 |
Income (loss) before income taxes |
172,629 |
(229,169) |
|
442,681 |
(119,845) |
Income tax recovery (expense): |
|
|
|
|
|
|
Current |
(43,812) |
(8,489) |
|
(83,618) |
(29,770) |
|
Deferred |
15,086 |
102,682 |
|
17,937 |
115,040 |
|
(28,726) |
94,193 |
|
(65,681) |
85,270 |
Net income (loss) |
$ 143,903 |
$ (134,976) |
|
$ 377,000 |
$ (34,575) |
Attributable to: |
|
|
|
|
|
|
Methanex Corporation shareholders |
127,795 |
(139,853) |
|
329,167 |
(68,105) |
|
Non-controlling interests |
16,108 |
4,877 |
|
47,833 |
33,530 |
|
$ 143,903 |
$ (134,976) |
|
$ 377,000 |
$ (34,575) |
|
|
|
|
|
|
Income per share for the period attributable to
Methanex Corporation shareholders |
|
|
|
|
|
|
Basic
net income (loss) per common share |
$
1.33 |
$
(1.49) |
|
$
3.46 |
$
(0.73) |
|
Diluted net income (loss) per common share |
$
1.32 |
$
(1.49) |
|
$
3.41 |
$
(0.73) |
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (note 9) |
95,890,700 |
94,092,591 |
|
95,259,066 |
93,755,509 |
|
Diluted weighted average number of common shares outstanding (note
9) |
96,824,404 |
94,092,591 |
|
96,430,842 |
93,755,509 |
|
|
|
|
|
|
See accompanying notes to condensed consolidated
interim financial statements. |
Methanex Corporation
Consolidated Statements of Comprehensive Income
(unaudited)
(thousands of U.S. dollars)
|
Three Months Ended |
|
Years Ended |
|
Dec 31 |
Dec 31 |
|
Dec 31 |
Dec 31 |
|
2013 |
2012 |
|
2013 |
2012 |
|
|
|
|
|
|
Net income (loss) |
$
143,903 |
$
(134,976) |
|
$
377,000 |
$
(34,575) |
|
Other
comprehensive income, net of taxes: |
|
|
|
|
|
|
Items
that may be reclassified to income: |
|
|
|
|
|
|
Change in fair value of forward exchange contracts |
(1,348) |
23 |
|
(57) |
(320) |
|
Change in fair value of interest rate swap contracts |
(34) |
(690) |
|
(936) |
(5,794) |
|
Realized loss on interest rate swap contracts reclassified to
finance costs |
2,680 |
2,777 |
|
10,808 |
11,198 |
|
Actuarial gains (losses) on defined benefit pension plans |
5,362 |
(1,135) |
|
5,362 |
(1,135) |
|
6,660 |
975 |
|
15,177 |
3,949 |
Comprehensive income (loss) |
$ 150,563 |
$ (134,001) |
|
$ 392,177 |
$ (30,626) |
Attributable to: |
|
|
|
|
|
|
Methanex Corporation shareholders |
133,579 |
(139,712) |
|
340,577 |
(66,317) |
|
Non-controlling interests |
16,984 |
5,711 |
|
51,600 |
35,691 |
|
$ 150,563 |
$ (134,001) |
|
$ 392,177 |
$ (30,626) |
|
|
|
|
|
|
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 |
AS AT |
2013 |
2012 |
|
|
(As adjusted - note 13) |
ASSETS |
|
|
Current assets: |
|
|
|
Cash
and cash equivalents |
$
732,736 |
$
727,385 |
|
Trade
and other receivables |
534,130 |
417,156 |
|
Inventories (note 2) |
313,809 |
256,340 |
|
Prepaid expenses |
20,533 |
25,588 |
|
1,601,208 |
1,426,469 |
Non-current assets: |
|
|
|
Property, plant and equipment (note 3) |
2,230,938 |
1,762,873 |
|
Investment in associate (note 6) |
216,095 |
184,665 |
|
Other assets |
65,253 |
68,554 |
|
2,512,286 |
2,016,092 |
|
$ 4,113,494 |
$ 3,442,561 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Current liabilities: |
|
|
|
Trade, other payables and accrued liabilities |
$
618,181 |
$
377,666 |
|
Current maturities on long-term debt (note 7) |
41,504 |
38,290 |
|
Current maturities on other long-term liabilities |
85,648 |
30,322 |
|
745,333 |
446,278 |
Non-current liabilities: |
|
|
|
Long-term debt (note 7) |
1,126,802 |
1,156,081 |
|
Other
long-term liabilities |
188,520 |
200,212 |
|
Deferred income tax liabilities |
147,506 |
162,253 |
|
1,462,828 |
1,518,546 |
Equity: |
|
|
|
Capital stock |
531,573 |
481,779 |
|
Contributed surplus |
4,994 |
15,481 |
|
Retained earnings |
1,126,700 |
805,661 |
|
Accumulated other comprehensive loss |
(5,544) |
(13,045) |
|
Shareholders' equity |
1,657,723 |
1,289,876 |
|
Non-controlling interests |
247,610 |
187,861 |
|
Total equity |
1,905,333 |
1,477,737 |
|
$ 4,113,494 |
$ 3,442,561 |
|
|
|
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 ofCommonShares |
CapitalStock |
ContributedSurplus |
RetainedEarnings |
AccumulatedOtherComprehensiveLoss |
Shareholders'Equity |
Non-ControllingInterests |
TotalEquity |
Balance, December 31, 2011 |
93,247,755 |
|
455,434 |
|
22,281 |
|
|
942,978 |
|
|
(15,968 |
) |
|
1,404,725 |
|
|
197,238 |
|
|
1,601,963 |
|
|
Net income (loss) |
- |
|
- |
|
- |
|
|
(68,105 |
) |
|
- |
|
|
(68,105 |
) |
|
33,530 |
|
|
(34,575 |
) |
|
Other comprehensive income (loss) |
- |
|
- |
|
- |
|
|
(1,135 |
) |
|
2,923 |
|
|
1,788 |
|
|
2,161 |
|
|
3,949 |
|
|
Compensation expense recorded for stock options |
- |
|
- |
|
726 |
|
|
- |
|
|
- |
|
|
726 |
|
|
- |
|
|
726 |
|
|
Issue of shares on exercise of stock options |
1,062,215 |
|
18,819 |
|
- |
|
|
- |
|
|
- |
|
|
18,819 |
|
|
- |
|
|
18,819 |
|
|
Reclassification of grant date fair value on exercise of stock
options |
- |
|
7,526 |
|
(7,526 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Dividend payments to Methanex Corporation shareholders |
- |
|
- |
|
- |
|
|
(68,077 |
) |
|
- |
|
|
(68,077 |
) |
|
- |
|
|
(68,077 |
) |
|
Distributions to non-controlling interests |
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(46,068 |
) |
|
(46,068 |
) |
|
Equity contributions by non-controlling interests |
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,000 |
|
|
1,000 |
|
Balance, December 31, 2012 |
94,309,970 |
|
481,779 |
|
15,481 |
|
|
805,661 |
|
|
(13,045 |
) |
|
1,289,876 |
|
|
187,861 |
|
|
1,477,737 |
|
|
Net income |
- |
|
- |
|
- |
|
|
329,167 |
|
|
- |
|
|
329,167 |
|
|
47,833 |
|
|
377,000 |
|
|
Other comprehensive income |
- |
|
- |
|
- |
|
|
5,362 |
|
|
6,048 |
|
|
11,410 |
|
|
3,767 |
|
|
15,177 |
|
|
Compensation expense recorded for stock options |
- |
|
- |
|
722 |
|
|
- |
|
|
- |
|
|
722 |
|
|
- |
|
|
722 |
|
|
Sale of interest in subsidiary |
- |
|
- |
|
- |
|
|
61,447 |
|
|
1,453 |
|
|
62,900 |
|
|
47,100 |
|
|
110,000 |
|
|
Issue of shares on exercise of stock options |
1,790,999 |
|
38,585 |
|
- |
|
|
- |
|
|
- |
|
|
38,585 |
|
|
- |
|
|
38,585 |
|
|
Reclassification of grant date fair value on exercise of stock
options |
- |
|
11,209 |
|
(11,209 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Dividend payments to Methanex Corporation shareholders |
- |
|
- |
|
- |
|
|
(74,937 |
) |
|
- |
|
|
(74,937 |
) |
|
- |
|
|
(74,937 |
) |
|
Distributions to non-controlling interests |
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(39,951 |
) |
|
(39,951 |
) |
|
Equity contributions by non-controlling interests |
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,000 |
|
|
1,000 |
|
Balance, December 31, 2013 |
96,100,969 |
$ |
531,573 |
$ |
4,994 |
|
$ |
1,126,700 |
|
$ |
(5,544 |
) |
$ |
1,657,723 |
|
$ |
247,610 |
|
$ |
1,905,333 |
|
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 |
|
2013 |
2012 |
|
2013 |
2012 |
|
|
(As adjusted - note 13) |
|
|
(As adjusted - note 13) |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income (loss) |
$
143,903 |
$
(134,976) |
|
$
377,000 |
$
(34,575) |
|
Add (deduct) loss (earnings) of associate |
(17,528) |
1 |
|
(30,799) |
214 |
|
Add (deduct) non-cash items: |
|
|
|
|
|
|
|
Depreciation and amortization |
35,594 |
34,636 |
|
123,335 |
149,411 |
|
|
Write-off of oil and gas rights |
7,939 |
- |
|
24,798 |
- |
|
|
Geismar project relocation non-cash charges |
- |
- |
|
- |
25,688 |
|
|
Asset
impairment charge |
- |
296,976 |
|
- |
296,976 |
|
|
Income tax expense (recovery) |
28,726 |
(94,193) |
|
65,681 |
(85,270) |
|
|
Share
based compensation expense |
40,844 |
11,027 |
|
130,873 |
35,907 |
|
|
Finance costs |
12,582 |
12,495 |
|
56,407 |
61,464 |
|
|
Other |
569 |
6,165 |
|
1,364 |
16,201 |
|
Income taxes paid |
(15,246) |
(13,815) |
|
(42,739) |
(28,254) |
|
Other cash payments, including share-based
compensation |
(25,841) |
(14,615) |
|
(52,596) |
(33,774) |
|
Cash flows from operating activities before
undernoted |
211,542 |
103,701 |
|
653,324 |
403,988 |
|
Changes in non-cash working capital (note 11) |
(49,786) |
(23,394) |
|
(67,527) |
11,750 |
|
161,756 |
80,307 |
|
585,797 |
415,738 |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
Dividend payments to Methanex Corporation
shareholders |
(19,205) |
(17,428) |
|
(74,937) |
(68,077) |
|
Interest paid, including interest rate swap
settlements |
(6,586) |
(4,673) |
|
(55,446) |
(60,226) |
|
Net proceeds on issue of long-term debt and limited
recourse debt |
- |
343,796 |
|
10,000 |
590,344 |
|
Repayment of long-term debt and limited recourse
debt |
(912) |
(613) |
|
(39,491) |
(236,061) |
|
Cash distributions to non-controlling interests |
(14,232) |
(3,777) |
|
(39,951) |
(49,409) |
|
Proceeds on issue of shares on exercise of stock
options |
9,885 |
5,552 |
|
38,585 |
18,819 |
|
Sale of interest in subsidiary |
110,000 |
- |
|
110,000 |
- |
|
Other |
(969) |
(3,546) |
|
(2,777) |
(17,702) |
|
77,981 |
319,311 |
|
(54,017) |
177,688 |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
Property, plant and equipment |
(71,726) |
(18,974) |
|
(269,367) |
(113,794) |
|
Geismar plants under construction |
(144,976) |
(35,308) |
|
(309,469) |
(73,912) |
|
Other assets |
(4,659) |
(15,218) |
|
(15,608) |
(22,853) |
|
Changes in non-cash working capital related to
investing activities (note 11) |
28,122 |
11,928 |
|
68,015 |
3,073 |
|
(193,239) |
(57,572) |
|
(526,429) |
(207,486) |
|
Increase in cash and cash equivalents |
46,498 |
342,046 |
|
5,351 |
385,940 |
|
Cash and cash equivalents, beginning of period |
686,238 |
385,339 |
|
727,385 |
341,445 |
|
Cash and cash equivalents, end of period |
$ 732,736 |
$ 727,385 |
|
$ 732,736 |
$ 727,385 |
|
|
|
|
|
|
See accompanying notes to condensed consolidated
interim financial statements. |
Methanex Corporation
Notes to Condensed Consolidated Interim Financial Statements
(unaudited)
Except where otherwise noted, tabular dollar amounts are stated
in thousands of U.S. dollars.
1. Basis of presentation:
Methanex Corporation (the Company) is an incorporated entity
with corporate offices in Vancouver, Canada. The Company's
operations consist of the production and sale of methanol, a
commodity chemical. The Company is the world's largest supplier of
methanol to major international markets in Asia Pacific, North
America, Europe and Latin America.
These condensed consolidated interim financial statements are
prepared in accordance with International Accounting Standards
(IAS) 34, Interim Financial Reporting, as issued by the
International Accounting Standards Board (IASB) on a basis
consistent with those followed in the most recent annual
consolidated financial statements, except as described in note 13
below. As described in note 13, the Company has adopted new
International Financial Reporting Standards (IFRS) effective
January 1, 2013 with retrospective application and as a result the
comparative periods have been restated.
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 January
29, 2014.
2. Inventories:
Inventories are valued at the lower of cost, determined on a
first-in first-out basis, and estimated net realizable value. The
amount of inventories included in cost of sales and operating
expenses and depreciation and amortization for the three months and
year ended December 31, 2013 is $595 million (2012 - $482 million)
and $2,114 million (2012 - $1,871 million), respectively.
3. Property, plant and equipment:
|
Buildings, Plant Installations & Machinery |
Plants Under Construction |
Oil & Gas Properties |
Other |
Total |
|
|
|
|
|
|
Cost at December 31, 2013 |
$
3,100,597 |
$
393,044 |
$
86,312 |
$82,556 |
$3,662,509 |
Accumulated depreciation at December 31, 2013 |
1,317,329 |
- |
78,228 |
36,014 |
1,431,571 |
Net book value at December 31, 2013 |
$ 1,783,268 |
$ 393,044 |
$ 8,084 |
$46,542 |
$2,230,938 |
|
|
|
|
|
|
Cost at December 31, 2012 |
$
2,866,013 |
$
75,238 |
$
80,368 |
$ 68,906 |
$3,090,525 |
Accumulated depreciation at December 31, 2012 |
1,225,202 |
- |
74,151 |
28,299 |
1,327,652 |
Net book value at December 31, 2012 |
$ 1,640,811 |
$ 75,238 |
$ 6,217 |
$ 40,607 |
$1,762,873 |
The Company is relocating two idle Chile facilities to Geismar,
Louisiana with Geismar 1 targeted to be producing methanol by late
2014 and Geismar 2 in early 2016. During the three months ended
December 31, 2013, the Company incurred capital expenditures
related to the Geismar projects of $145 million, excluding
capitalized interest. The remaining budgeted capital expenditures
for these projects are $635 million, excluding capitalized
interest.
4. Write-off of oil and gas rights:
The Company has participated with international oil and gas
companies in exploration activities in southern Chile. Based on the
outlook for natural gas deliveries under certain of these
arrangements, the Company recorded a non-cash $8 million ($5
million after-tax) charge to earnings in the fourth quarter of 2013
to write off the carrying value of the assets.
5. Sale of interest in subsidiary:
In December 2013, the Company completed the sale of a 10% equity
interest in Egyptian Methanex Methanol Company S.A.E. (EMethanex)
for cash proceeds of $110 million. The sale reduces the Company's
interest in EMethanex to approximately 50% while retaining control
of the entity. The sale has been accounted for as a transaction
between equity holders as Methanex controls EMethanex before and
after the transaction and the $62.9 million gain on sale has been
reflected as an increase in shareholders' equity.
6. Investment in Atlas methanol facility:
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. Effective January 1,
2013, the Company accounts for its interest in Atlas using the
equity method (refer to note 13). Summarized financial information
of Atlas (100% basis) is as follows:
|
Dec 31 |
Dec 31 |
Summarized Financial Information as at |
2013 |
2012 |
|
|
|
Cash and cash equivalents |
$
20,776 |
$
28,883 |
Other current assets |
161,765 |
104,933 |
Non-current assets |
378,890 |
407,362 |
Current liabilities |
(47,359) |
(65,005) |
Long-term debt, including current maturities |
(56,752) |
(80,594) |
Other long-term liabilities, including current maturities |
(136,730) |
(123,801) |
Net assets at 100% |
$ 320,590 |
$ 271,778 |
|
|
|
Net assets at 63.1% |
$
202,292 |
$
171,492 |
Long-term receivable from Atlas |
13,803 |
13,173 |
|
|
|
Investment in associate |
$ 216,095 |
$ 184,665 |
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
Summarized Financial Information |
Dec 31 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
Revenue |
$114,973 |
$
47,657 |
|
$379,411 |
$
247,434 |
Cost of sales and depreciation and amortization |
(75,459) |
(40,743) |
|
(301,479) |
(228,818) |
Operating income |
39,514 |
6,914 |
|
77,932 |
18,616 |
Finance costs, finance income and other expenses |
(3,132) |
(5,369) |
|
(12,899) |
(16,496) |
Income tax expense |
(8,604) |
(1,546) |
|
(16,223) |
(2,459) |
Net earnings (loss) at 100% |
$ 27,778 |
$ (1) |
|
$ 48,810 |
$ (339) |
Earnings (loss) of associate at 63.1% |
$17,528 |
$ (1) |
|
$ 30,799 |
$ (214) |
b. Contingent liability: The Board of Inland Revenue of Trinidad
and Tobago has issued assessments against Atlas in respect of the
2005, 2006 and 2007 financial years. All subsequent tax years
remain open to assessment. The assessments relate to the pricing
arrangements of certain long-term fixed price sales contracts that
extend to 2014 and 2019 related to methanol produced by Atlas.
Atlas has partial relief from corporation income tax until 2014.
The Company has lodged objections to the assessments. Based on the
merits of the cases and legal interpretation, management believes
its position should be sustained.
7. Long-term debt:
|
Dec 31 |
Dec 31 |
As at |
2013 |
2012 |
|
|
|
Unsecured notes |
|
|
|
|
|
$350
million at 3.25% due December 15, 2019 |
$
344,530 |
$
343,828 |
$250
million at 5.25% due March 1, 2022 |
246,650 |
246,326 |
$150 million at 6.00% due August 15, 2015 |
149,581 |
149,344 |
|
740,761 |
739,498 |
Egypt
limited recourse debt facilities |
404,722 |
438,631 |
Other limited recourse debt facilities |
22,823 |
16,242 |
Total
long-term debt 1 |
1,168,306 |
1,194,371 |
Less current maturities |
(41,504) |
(38,290) |
|
$ 1,126,802 |
$ 1,156,081 |
1
Long-term debt is presented net of deferred financing fees. |
During the three months and year ended December 31, 2013, the
Company made repayments on its other limited recourse debt
facilities of $0.9 million and $3.6 million, respectively. The
Company has also made repayments on its Egypt limited recourse debt
facilities of $35.8 million and issued $10.0 million of other
limited recourse debt during the year ended December 31, 2013.
At December 31, 2013, management believes the Company was in
compliance with all significant terms and default provisions
related to long-term debt obligations.
8. Finance costs:
|
Three Months Ended |
|
Years Ended |
|
Dec 31 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
Finance costs |
$
15,908 |
$
13,404 |
|
$
64,742 |
$63,047 |
Less capitalized interest related to Geismar plants under
construction |
(3,326) |
(909) |
|
(8,335) |
(1,583) |
|
$ 12,582 |
$ 12,495 |
|
$ 56,407 |
$61,464 |
Finance costs are primarily comprised of interest on borrowings
and finance lease obligations, the effective portion of interest
rate swaps designated as cash flow hedges, amortization of deferred
financing fees, and accretion expense associated with site
restoration costs. Interest during construction is capitalized
until the plant is substantially completed and ready for productive
use.
The Company has interest rate swap contracts on its Egypt
limited recourse debt facilities to swap the LIBOR-based interest
payments for an average aggregated fixed rate of 4.8% plus a spread
on approximately 75% of the Egypt limited recourse debt facilities
for the period to March 31, 2015.
9. Net income per common share:
Diluted net income per common share is calculated by considering
the potential dilution that would occur if outstanding stock
options and, under certain circumstances, tandem share appreciation
rights (TSARs) were exercised or converted to common shares.
Outstanding TSARs may be settled in cash or common shares at the
holder's option and for purposes of calculating diluted net income
per common share, the more dilutive of the cash-settled and
equity-settled method is used, regardless of how the plan is
accounted for. Accordingly, TSARs that are accounted for using the
cash-settled method will require adjustments to the numerator and
denominator if the equity-settled method is determined to have a
dilutive effect on diluted net income per common share.
Stock options and, if calculated using the equity-settled
method, TSARs are considered dilutive when the average market price
of the Company's common shares during the period disclosed exceeds
the exercise price of the stock option or TSAR. A reconciliation of
the denominator used for the purposes of calculating basic and
diluted net income per common share is as follows:
|
Three Months Ended |
|
Years Ended |
|
Dec 31 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
Denominator for basic net income per common share |
95,890,700 |
94,092,591 |
|
95,259,066 |
93,755,509 |
Effect of dilutive stock options |
933,704 |
- |
|
1,171,776 |
- |
Denominator for diluted net income per common share |
96,824,404 |
94,092,591 |
|
96,430,842 |
93,755,509 |
For the three months and year
ended December 31, 2013 and 2012, basic and diluted net income
(loss) per common share attributable to Methanex shareholders were
as follows:
|
Three Months Ended |
|
Years Ended |
|
Dec 31 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
Basic
net income (loss) per common share |
$
1.33 |
$
(1.49) |
|
$
3.46 |
$
(0.73) |
Diluted net income (loss) per common share |
$ 1.32 |
$ (1.49) |
|
$ 3.41 |
$ (0.73) |
Share-based compensation:
a. Share appreciation rights (SARs), tandem share appreciation
rights (TSARs) and stock options: (i) Outstanding units:
Information regarding units outstanding at December 31, 2013 is as
follows:
|
SARs |
|
TSARs |
|
Number of Units |
Weighted Average Exercise Price |
|
Number of Units |
Weighted Average Exercise Price |
|
|
|
|
|
|
Outstanding at December 31, 2012 |
897,525 |
$
28.63 |
|
1,815,535 |
$
28.45 |
|
Granted |
360,900 |
38.24 |
|
544,200 |
38.24 |
|
Exercised |
(122,658) |
27.13 |
|
(271,100) |
25.56 |
|
Cancelled |
(5,500) |
30.86 |
|
(4,900) |
31.36 |
Outstanding at September 30, 2013 |
1,130,267 |
$ 31.85 |
|
2,083,735 |
$ 31.37 |
|
Exercised |
(37,150) |
26.99 |
|
(225,150) |
27.62 |
Outstanding at December 31, 2013 |
1,093,117 |
$ 32.02 |
|
1,858,585 |
$ 31.83 |
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
|
|
|
Number of Units |
Weighted Average Exercise Price |
|
|
|
|
|
|
Outstanding at December 31, 2012 |
|
|
|
2,982,947 |
$
19.97 |
|
Granted |
|
|
|
75,600 |
38.24 |
|
Exercised |
|
|
|
(1,349,824) |
21.13 |
|
Cancelled |
|
|
|
(48,128) |
16.13 |
Outstanding at September 30, 2013 |
|
|
|
1,660,595 |
$ 19.97 |
|
Exercised |
|
|
|
(441,175) |
22.23 |
Outstanding at December 31, 2013 |
|
|
|
1,219,420 |
$ 19.15 |
|
|
|
|
|
|
|
Units Outstanding at December 31, 2013 |
|
Units Exercisable at December 31, 2013 |
Range of Exercise Prices |
Weighted Average Remaining Contractual Life (Years) |
Number of Units Outstanding |
Weighted Average Exercise Price |
|
Number of Units Exercisable |
Weighted Average Exercise Price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SARs: |
|
|
|
|
|
|
|
$23.36 to 29.18 |
3.7 |
423,337 |
$
26.93 |
|
333,359 |
$
26.47 |
|
$31.73 to 38.24 |
5.7 |
669,780 |
35.24 |
|
86,820 |
31.73 |
|
4.9 |
1,093,117 |
$ 32.02 |
|
420,179 |
$ 27.55 |
|
|
|
|
|
|
|
TSARs: |
|
|
|
|
|
|
|
$23.36 to 29.18 |
3.7 |
702,395 |
$
26.94 |
|
539,314 |
$
26.39 |
|
$31.73 to 38.24 |
5.6 |
1,156,190 |
34.79 |
|
189,760 |
31.73 |
|
4.9 |
1,858,585 |
$ 31.83 |
|
729,074 |
$ 27.78 |
Stock options: |
|
|
|
|
|
|
|
$6.33
to 11.56 |
2.1 |
532,715 |
$
6.41 |
|
532,715 |
$
6.41 |
|
$23.92 to 38.24 |
2.4 |
686,705 |
29.03 |
|
534,055 |
27.46 |
|
2.3 |
1,219,420 |
$ 19.15 |
|
1,066,770 |
$ 16.95 |
10. Share-based compensation (continued):
a. Share appreciation rights (SARs), tandem share appreciation
rights (TSARs) and stock options (continued):
(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 December 31, 2013 was $78.5 million
compared with the recorded liability of $69.7 million. The
difference between the fair value and the recorded liability of
$8.8 million will be recognized over the weighted average remaining
vesting period of approximately 1.6 years. The weighted average
fair value was estimated at December 31, 2013 using the
Black-Scholes option pricing model.
For the three months and year ended December 31, 2013,
compensation expense related to SARs and TSARs included an expense
in cost of sales and operating expenses of $24.5 million (2012 -
expense of $3.6 million) and an expense of $70.7 million (2012 -
expense of $10.8 million), respectively. This included an expense
of $21.8 million (2012 - expense of $2.8 million) and an expense of
$61.2 million (2012 - expense of $3.1 million) related to the
effect of the change in the Company's share price for the three
months and year ended December 31, 2013.
(iii) Compensation expense related to stock options:
For the three months and year ended December 31, 2013,
compensation expense related to stock options included in cost of
sales and operating expenses was $0.1 million (2012 - $0.1 million)
and $0.7 million (2012 - $0.7 million), respectively. The fair
value of each stock option grant was estimated on the grant date
using the Black-Scholes option pricing model.
b. Deferred, restricted and performance share units:
Deferred, restricted and performance share units outstanding at
December 31, 2013 are as follows:
|
Number of Deferred Share Units |
Number of Restricted Share Units |
Number of Performance Share Units |
|
|
|
|
Outstanding at December 31, 2012 |
566,850 |
38,883 |
1,053,869 |
|
Granted |
10,647 |
22,500 |
304,600 |
|
Granted in-lieu of dividends |
6,934 |
817 |
12,536 |
|
Redeemed |
(49,432) |
- |
(410,177) |
|
Cancelled |
- |
- |
(8,104) |
Outstanding at September 30, 2013 |
534,999 |
62,200 |
952,724 |
|
Granted |
362 |
- |
- |
|
Granted in-lieu of dividends |
1,169 |
154 |
3,299 |
|
Redeemed |
(189,716) |
(18,223) |
- |
|
Cancelled |
- |
- |
(9,577) |
Outstanding at December 31, 2013 |
346,814 |
44,131 |
946,446 |
Compensation expense for deferred, restricted and performance
share units is measured at fair value based on the market value of
the Company's common shares and is recognized over the vesting
period. Changes in fair value are recognized in net income for the
proportion of the service that has been rendered at each reporting
date. The fair value of deferred, restricted and performance share
units at December 31, 2013 was $90.4 million compared with the
recorded liability of $77.3 million. The difference between the
fair value and the recorded liability of $13.1 million will be
recognized over the weighted average remaining vesting period of
approximately 1.6 years.
For the three months and year ended December 31, 2013,
compensation expense related to deferred, restricted and
performance share units included in cost of sales and operating
expenses was an expense of $16.3 million (2012 - expense of $7.3
million) and an expense of $59.5 million (2012 - expense of $24.4
million), respectively. This included an expense of $15.3 million
(2012 - expense of $5.2 million) and an expense of $49.2 million
(2012 - expense of $12.4 million) related to the effect of the
change in the Company's share price for the three months and year
ended December 31, 2013.
11. Changes in non-cash working capital:
Changes in non-cash working capital for the three months and
year ended December 31, 2013 were as follows:
|
Three Months Ended |
|
Years Ended |
|
Dec 31 2013 |
Dec 31 2012 |
|
Dec 31 2013 |
Dec 31 2012 |
|
|
|
|
|
|
Decrease (increase) in non-cash working capital: |
|
|
|
|
|
|
Trade
and other receivables |
$
(62,799) |
$
(15,909) |
|
$(116,974) |
$
(42,869) |
|
Inventories |
(59,289) |
(27,324) |
|
(57,469) |
17,936 |
|
Prepaid expenses |
9,190 |
(374) |
|
5,055 |
(2,975) |
|
Trade, other payables and accrued liabilities, including long-term
payables included in other long-term liabilities |
127,438 |
24,530 |
|
226,637 |
36,719 |
|
14,540 |
(19,077) |
|
57,249 |
8,811 |
Adjustments for items not having a cash effect and
working capital changes relating to taxes and interest paid |
(36,204) |
7,611 |
|
(56,761) |
6,012 |
Changes in non-cash working capital having a cash
effect |
$ (21,664) |
$ (11,466) |
|
$ 488 |
$ 14,823 |
|
|
|
|
|
|
These changes relate to the following activities: |
|
|
|
|
|
|
Operating |
$
(49,786) |
$
(23,394) |
|
$
(67,527) |
$
11,750 |
|
Investing |
28,122 |
11,928 |
|
68,015 |
3,073 |
Changes in non-cash working capital |
$ (21,664) |
$ (11,466) |
|
$ 488 |
$ 14,823 |
12. Financial instruments:
Financial instruments are either measured at amortized cost or
fair value. Held-to-maturity investments, loans and receivables and
other financial liabilities are measured at amortized cost.
Held-for-trading financial assets and liabilities and
available-for-sale financial assets are measured on the
Consolidated Statements of Financial Position at fair value.
Derivative financial instruments are classified as held-for-trading
and are recorded on the Consolidated Statements of Financial
Position at fair value unless exempted. Changes in fair value of
held-for-trading derivative financial instruments are recorded in
earnings unless the instruments are designated as cash flow
hedges.
The euro hedges, Egypt interest rate swaps, and New Zealand
dollar hedges designated as cash flow hedges are measured at fair
value based on industry-accepted valuation models and inputs
obtained from active markets.
The Egypt limited recourse debt facilities bear interest at
LIBOR plus a spread. The Company has interest rate swap contracts
to swap the LIBOR-based interest payments for an average aggregated
fixed rate of 4.8% plus a spread on approximately 75% of the Egypt
limited recourse debt facilities for the period to March 31, 2015.
These interest rate swaps had an outstanding notional amount of
$315 million as at December 31, 2013. The notional amount decreases
over the expected repayment period. At December 31, 2013, these
interest rate swap contracts had a negative fair value of $19.8
million (December 31, 2012 - $32.7 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 and buy New Zealand dollar at a fixed USD
exchange rate. At December 31, 2013, the Company had outstanding
forward exchange contracts designated as cash flow hedges to sell a
notional amount of EUR106.2 million and buy a notional amount of
NZD $7.1 million in exchange for US dollars. The euro contracts had
a negative fair value of $0.6 million recorded in current
liabilities and the New Zealand dollar contracts had a positive
fair value of $0.2 million recorded in other assets. Changes in
fair value of derivative financial instruments designated as cash
flow hedges have been recorded in other comprehensive income.
The carrying values of the Company's financial instruments
approximate their fair values, except as follows:
|
December 31, 2013 |
As at |
Carrying Value |
Fair Value |
|
|
|
Long-term debt excluding deferred financing fees |
$ 1,183,534 |
$ 1,205,740 |
There is no publicly traded market for the limited recourse debt
facilities, the fair value of which is estimated by reference to
current market prices for debt securities with similar terms and
characteristics. The fair value of the unsecured notes was
calculated by reference to a limited number of small transactions
in December 2013. The fair value of the Company's unsecured notes
will fluctuate until maturity.
13. Adoption of New Accounting Standards:
a) Effective January 1, 2013, the Company has adopted the
following new IASB accounting standards related to consolidation
and joint arrangements: IFRS 10, Consolidated Financial
Statements; IFRS 11, Joint Arrangements; and IFRS 12,
Disclosure of Interests in Other Entities.
As a result of the adoption of these new standards, the
Company's 63.1% interest in the Atlas entity is accounted for using
the equity method. The Company has restated its Consolidated
Statement of Financial Position as at January 1, 2012 and December
31, 2012 and its Consolidated Statement of Income and Comprehensive
Income for the three months and year ended December 31, 2012.
Reconciliations of the restatements of the Consolidated Statement
of Financial Position as at December 31, 2012 and Consolidated
Statement of Income and Comprehensive Income for the three months
and year ended December 31, 2012 are as follows:
Consolidated Statement of Financial Position |
As at December 31, 2012 |
|
As Previously Stated |
Restatement of Atlas to Equity Method |
As Adjusted |
ASSETS |
|
|
|
Current assets: |
|
|
|
|
Cash
and cash equivalents |
$
745,610 |
$
(18,225) |
$
727,385 |
|
Trade
and other receivables |
429,203 |
(12,047) |
417,156 |
|
Inventories |
253,023 |
3,317 |
256,340 |
|
Prepaid expenses |
28,314 |
(2,726) |
25,588 |
|
1,456,150 |
(29,681) |
1,426,469 |
Non-current assets: |
|
|
|
|
Property, plant and equipment |
2,014,748 |
(251,875) |
1,762,873 |
|
Investment in associate |
- |
184,665 |
184,665 |
|
Other assets |
73,724 |
(5,170) |
68,554 |
|
2,088,472 |
(72,380) |
2,016,092 |
|
$ 3,544,622 |
$ (102,061) |
$ 3,442,561 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
|
Trade, other payables and accrued liabilities |
$
353,744 |
$
23,922 |
$
377,666 |
|
Current maturities on long-term debt |
53,334 |
(15,044) |
38,290 |
|
Current maturities on other long-term liabilities |
33,903 |
(3,581) |
30,322 |
|
440,981 |
5,297 |
446,278 |
Non-current liabilities: |
|
|
|
|
Long-term debt |
1,191,891 |
(35,810) |
1,156,081 |
|
Other
long-term liabilities |
242,435 |
(42,223) |
200,212 |
|
Deferred income tax liabilities |
191,578 |
(29,325) |
162,253 |
|
1,625,904 |
(107,358) |
1,518,546 |
Equity: |
|
|
|
|
Capital stock |
481,779 |
- |
481,779 |
|
Contributed surplus |
15,481 |
- |
15,481 |
|
Retained earnings |
805,661 |
- |
805,661 |
|
Accumulated other comprehensive loss |
(13,045) |
- |
(13,045) |
|
Shareholders' equity |
1,289,876 |
- |
1,289,876 |
|
Non-controlling interests |
187,861 |
- |
187,861 |
|
Total equity |
1,477,737 |
- |
1,477,737 |
|
$ 3,544,622 |
$ (102,061) |
$ 3,442,561 |
|
|
|
|
|
|
|
|
Consolidated Statement of Income and Comprehensive
Income |
Three months ended December 31, 2012 |
|
As Previously Stated |
Restatement of Atlas to Equity Method |
As Adjusted |
Revenue |
$
695,654 |
$
(28,247) |
$
667,407 |
Cost of sales and operating expenses |
(572,968) |
17,538 |
(555,430) |
Depreciation and amortization |
(41,543) |
6,907 |
(34,636) |
Asset impairment charge |
(296,976) |
- |
(296,976) |
Operating loss |
(215,833) |
(3,802) |
(219,635) |
Loss of associate |
- |
(1) |
(1) |
Finance costs |
(14,880) |
2,385 |
(12,495) |
Finance income and other expenses |
2,521 |
441 |
2,962 |
Loss before income taxes |
(228,192) |
(977) |
(229,169) |
Income tax recovery (expense): |
|
|
|
|
Current |
(8,301) |
(188) |
(8,489) |
|
Deferred |
101,517 |
1,165 |
102,682 |
|
93,216 |
977 |
94,193 |
Net loss |
$ (134,976) |
$ - |
$ (134,976) |
Change in fair value of forward exchange contracts, net
of tax |
23 |
- |
23 |
Change in fair value of interest rate swap contracts,
net of tax |
(690) |
- |
(690) |
Realized loss on interest rate swap contracts
reclassified to finance costs, net of tax |
2,777 |
- |
2,777 |
Actuarial losses on defined benefit pension plans, net
of tax |
(1,135) |
$ - |
(1,135) |
Comprehensive loss |
$ (134,001) |
$ - |
$ (134,001) |
Attributable to: |
|
|
|
|
Methanex Corporation shareholders |
(139,712) |
- |
(139,712) |
|
Non-controlling interests |
5,711 |
- |
5,711 |
|
$ (134,001) |
$ - |
$ (134,001) |
|
|
|
|
|
|
|
|
Consolidated Statement of Income and Comprehensive
Income |
Year ended December 31, 2012 |
|
As Previously Stated |
Restatement of Atlas to Equity Method |
As Adjusted |
Revenue |
$
2,672,954 |
$
(130,290) |
$
2,542,664 |
Cost of sales and operating expenses |
(2,187,288) |
96,319 |
(2,090,969) |
Depreciation and amortization |
(171,635) |
22,224 |
(149,411) |
Geismar project relocation expenses and changes |
(64,543) |
- |
(64,543) |
Asset impairment charge |
(296,976) |
- |
(296,976) |
Operating loss |
(47,488) |
(11,747) |
(59,235) |
Loss of associate |
- |
(214) |
(214) |
Finance costs |
(71,314) |
9,850 |
(61,464) |
Finance income and other expenses |
509 |
559 |
1,068 |
Loss before income taxes |
(118,293) |
(1,552) |
(119,845) |
Income tax recovery (expense): |
|
|
|
|
Current |
(30,302) |
532 |
(29,770) |
|
Deferred |
114,020 |
1,020 |
115,040 |
|
83,718 |
1,552 |
85,270 |
Net loss |
$ (34,575) |
$ - |
$ (34,575) |
Change in fair value of forward exchange contracts, net
of tax |
(320) |
- |
(320) |
Change in fair value of interest rate swap contracts,
net of tax |
(5,794) |
- |
(5,794) |
Realized loss on interest rate swap contracts
reclassified to finance costs, net of tax |
11,198 |
- |
11,198 |
Actuarial losses on defined benefit pension plans, net
of tax |
(1,135) |
$ - |
(1,135) |
Comprehensive loss |
$ (30,626) |
$ - |
$ (30,626) |
Attributable to: |
|
|
|
|
Methanex Corporation shareholders |
(66,317) |
- |
(66,317) |
|
Non-controlling interests |
35,691 |
- |
35,691 |
|
$ (30,626) |
$ - |
$ (30,626) |
b) Effective January 1, 2013, the Company adopted IFRS 13,
Fair Value Measurements. As a result of this new standard,
incremental disclosures have been provided in note 12 to these
condensed consolidated interim financial statements.
c) Effective January 1, 2013, the Company adopted the revised
IFRS 19, Employee Benefits. The adoption of this standard
has not had a significant impact on the Company.
d) Effective January 1, 2013, the Company adopted the revised
IAS, Presentation of Financial Statements. The adoption of
this standard has resulted in a change to the presentation of the
Company's Consolidated Statements of Comprehensive Income.
Methanex Corporation |
Quarterly History (unaudited) |
|
|
2013 |
Q4 2013 |
Q3 2013 |
Q2 2013 |
Q1 2013 |
2012 |
Q4 |
Q3 |
Q2 |
Q1 |
2011 |
Q4 |
Q3 |
Q2 |
Q1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
METHANOL SALES VOLUMES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of tonnes) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Methanex-produced |
4,304 |
1,190 |
1,045 |
1,039 |
1,030 |
4,039 |
|
1,059 |
|
1,053 |
|
1,001 |
926 |
3,853 |
1,052 |
983 |
970 |
848 |
Purchased methanol |
2,715 |
663 |
715 |
749 |
588 |
2,565 |
|
664 |
|
641 |
|
569 |
691 |
2,815 |
644 |
672 |
664 |
835 |
Commission sales1 |
972 |
274 |
237 |
242 |
219 |
855 |
|
176 |
|
205 |
|
276 |
198 |
846 |
208 |
235 |
231 |
172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,991 |
2,127 |
1,997 |
2,030 |
1,837 |
7,459 |
|
1,899 |
|
1,899 |
|
1,846 |
1,815 |
7,514 |
1,904 |
1,890 |
1,865 |
1,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
METHANOL PRODUCTION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of tonnes) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Zealand |
1,419 |
400 |
349 |
361 |
309 |
1,108 |
|
378 |
|
346 |
|
210 |
174 |
830 |
211 |
209 |
207 |
203 |
Atlas, Trinidad (63.1%) |
971 |
268 |
254 |
201 |
248 |
826 |
|
180 |
|
255 |
|
264 |
127 |
891 |
195 |
170 |
263 |
263 |
Titan, Trinidad |
651 |
173 |
128 |
169 |
181 |
786 |
|
189 |
|
186 |
|
196 |
215 |
711 |
180 |
224 |
186 |
121 |
Egypt (60%) |
623 |
159 |
168 |
163 |
133 |
557 |
|
129 |
|
62 |
|
164 |
202 |
532 |
132 |
191 |
178 |
31 |
Medicine Hat |
476 |
86 |
130 |
129 |
131 |
481 |
|
132 |
|
117 |
|
118 |
114 |
329 |
130 |
125 |
74 |
- |
Chile |
204 |
108 |
6 |
29 |
61 |
313 |
|
59 |
|
59 |
|
82 |
113 |
554 |
113 |
116 |
142 |
183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,344 |
1,194 |
1,035 |
1,052 |
1,063 |
4,071 |
|
1,067 |
|
1,025 |
|
1,034 |
945 |
3,847 |
961 |
1,035 |
1,050 |
801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE REALIZED METHANOL PRICE2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($/tonne) |
441 |
493 |
438 |
425 |
412 |
382 |
|
389 |
|
373 |
|
384 |
382 |
374 |
388 |
377 |
363 |
367 |
($/gallon) |
1.33 |
1.48 |
1.32 |
1.28 |
1.24 |
1.15 |
|
1.17 |
|
1.12 |
|
1.15 |
1.15 |
1.12 |
1.17 |
1.13 |
1.09 |
1.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE INFORMATION ($ per share)3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) |
3.46 |
1.33 |
0.91 |
0.57 |
0.64 |
(0.73 |
) |
(1.49 |
) |
(0.03 |
) |
0.56 |
0.24 |
2.16 |
0.69 |
0.67 |
0.44 |
0.37 |
Diluted net income (loss) |
3.41 |
1.32 |
0.90 |
0.56 |
0.63 |
(0.73 |
) |
(1.49 |
) |
(0.03 |
) |
0.50 |
0.23 |
2.06 |
0.68 |
0.59 |
0.43 |
0.37 |
Adjusted net income4 |
4.88 |
1.72 |
1.22 |
1.02 |
0.92 |
1.90 |
|
0.64 |
|
0.38 |
|
0.47 |
0.41 |
1.93 |
0.69 |
0.43 |
0.41 |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Methanex-produced methanol includes volumes produced by Chile
using natural gas supplied from Argentina under a tolling
arrangement. Commission sales represent volumes marketed on a
commission basis related to the 36.9% of the Atlas methanol
facility and the portion of the Egypt methanol facility that we do
not own. |
2 |
|
Average realized price is calculated as revenue, excluding
commissions earned and the Egypt non-controlling interest share of
revenue but including an amount representing our share of Atlas
revenue, divided by the total sales volumes of Methanex-produced
(attributable to Methanex shareholders) and purchased
methanol. |
3 |
|
Per share information calculated using amounts attributable to
Methanex shareholders. |
4 |
|
This item is a non-GAAP measure that does not have any
standardized meaning prescribed by GAAP and therefore is unlikely
to be comparable to similar measures presented by other companies.
Refer to Additional Information - Supplemental Non-GAAP Measures
section for a description of the non-GAAP measure and
reconciliation to the most comparable GAAP measure. |
Sandra DaycockDirector, Investor RelationsMethanex
Corporation604-661-2600www.methanex.com
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