What changed in this filing

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Item 1. Financial Statements

2024-04-29 compared with 2023-10-31 · 23 added, 163 removed, 346 unchanged (35% of the section changed)

2 unchanged sentences

GAAP, unaudited)

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

2 unchanged sentences

Investment and other income (note 3)

47 153 166 204

Total revenues and other income 12,283 12,121

1 unchanged sentence

Purchases of crude oil and products (b)

8,748 9,478 24,082 28,849

Production and manufacturing (c)

1,666 1,872 5,207 5,439

Selling and general (c)

237 209 629 625

Federal excise tax and fuel charge 591 529

8 unchanged sentences

Net income (loss) per common share - basic (note 9)

2.77 3.25 6.05 8.60

Net income (loss) per common share - diluted (note 9)

2.76 3.24 6.04 8.58

(a) Amounts from related parties included in revenues.

3,553 4,454 10,245 13,588

(b) Amounts to related parties included in purchases of crude oil and products.

1,228 1,086 3,270 2,865

121 120 381 354

(d) Amounts to related parties included in financing.

3 unchanged sentences

GAAP, unaudited)

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

40 unchanged sentences

Total liabilities and shareholders’ equity 42,513 41,199

(a) Accounts receivable - net included net amounts receivable from related parties of $ 1,139 million (2022 - $ 1,108 million).

(b) Investments and long-term receivables included amounts from related parties of $ 285 million (2022 - $ 288 million).

(d) Number of common shares authorized and outstanding were 1,100 million and 567 million, respectively (2022 - 1,100 million and 584 million, respectively).

(a) Accounts receivable - net included net amounts receivable from related parties.

(b) Investments and long-term receivables included amounts from related parties.

(d) Number of common shares authorized (millions).

Number of common shares outstanding (millions).

The information in the notes to consolidated financial statements is an integral part of these statements.

2 unchanged sentences

GAAP, unaudited)

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

18 unchanged sentences

GAAP, unaudited)

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

4 unchanged sentences

(Gain) loss on asset sales (note 3)

3 ( 131 ) ( 19 ) ( 155 )

Deferred income taxes and other ( 164 ) ( 56 )

5 unchanged sentences

All other items - net (b)

35 ( 34 ) ( 48 ) 13

Cash flows from (used in) operating activities 1,076 ( 821 )

2 unchanged sentences

Proceeds from asset sales (note 3)

Additional investments — ( 6 ) — ( 6 )

Loans to equity companies - net 12 1

1 unchanged sentence

Financing activities

Long-term debt - reduction (note 6)

— ( 1,000 ) — ( 1,000 )

Finance lease obligations - reduction (note 6)

( 5 ) ( 5 ) ( 16 ) ( 16 )

Dividends paid ( 278 ) ( 266 )

Common shares purchased (note 9)

( 1,342 ) ( 1,512 ) ( 1,342 ) ( 4,461 )

Cash flows from (used in) financing activities ( 283 ) ( 271 )

2 unchanged sentences

Cash and cash equivalents at end of period (a) 1,176 2,243

2,716 3,576 2,716 3,576

(a) Cash equivalents are all highly liquid securities with maturity of three months or less.

14 unchanged sentences

The company’s exploration and production activities are accounted for under the “successful efforts” method.

The results for the nine months ended September 30, 2023, are not necessarily indicative of the operations to be expected for the full year.

The results for the three months ended March 31, 2024, are not necessarily indicative of the operations to be expected for the full year.

All amounts are in Canadian dollars unless otherwise indicated.

1 unchanged sentence

Business segments

Third Quarter

millions of Canadian dollars 2023 2022 2023 2022 2023 2022

Revenues and other income

Revenues (a) (b)

43 156 13,540 14,537 290 378

Intersegment sales

4,768 4,665 1,560 1,693 92 142

Investment and other income (note 3)

( 4 ) 128 12 6 — —

4,807 4,949 15,112 16,236 382 520

Exploration 1 1 — — — —

Purchases of crude oil and products

1,852 1,937 13,061 13,686 254 354

Production and manufacturing 1,187 1,381 405 419 74 72

Selling and general — — 177 174 21 17

Federal excise tax and fuel charge — — 653 583 1 1

Depreciation and depletion 418 501 46 44 2 4

Non-service pension and postretirement benefit — — — — — —

Financing (note 5)

Total expenses 3,461 3,820 14,342 14,906 352 448

Income (loss) before income taxes 1,346 1,129 770 1,330 30 72

Income tax expense (benefit) 318 143 184 318 7 18

Net income (loss)

1,028 986 586 1,012 23 54

Cash flows from (used in) operating activities

1,771 1,280 378 1,532 74 109

Capital and exploration expenditures (c)

244 309 103 64 2 2

Third Quarter

Corporate and other

millions of Canadian dollars 2023 2022 2023 2022 2023 2022

Revenues and other income

Revenues (a) (b)

— — — — 13,873 15,071

Intersegment sales

— — ( 6,420 ) ( 6,500 ) — —

Investment and other income (note 3)

39 19 — — 47 153

39 19 ( 6,420 ) ( 6,500 ) 13,920 15,224

Exploration — — — — 1 1

Purchases of crude oil and products

— — ( 6,419 ) ( 6,499 ) 8,748 9,478

Production and manufacturing — — — — 1,666 1,872

Selling and general 40 19 ( 1 ) ( 1 ) 237 209

Federal excise tax and fuel charge — — — — 654 584

Depreciation and depletion 9 6 — — 475 555

Non-service pension and postretirement benefit 20 4 — — 20 4

Financing (note 5)

16 16 — — 19 16

Total expenses 85 45 ( 6,420 ) ( 6,500 ) 11,820 12,719

Income (loss) before income taxes ( 46 ) ( 26 ) — — 2,100 2,505

Income tax expense (benefit) ( 10 ) ( 5 ) — — 499 474

Net income (loss)

( 36 ) ( 21 ) — — 1,601 2,031

Cash flows from (used in) operating activities

136 168 — — 2,359 3,089

Capital and exploration expenditures (c)

38 17 — — 387 392

IMPERIAL OIL LIMITED

(a) Includes export sales to the United States of $ 2,180 million (2022 - $ 3,176 million).

(b) Revenues include both revenue within the scope of ASC 606 and outside the scope of ASC 606 .

Trade receivables in "Accounts receivable – net" reported on the Consolidated balance sheet include both receivables within the scope of ASC 606 and those outside the scope of ASC 606 .

Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives.

Contractual terms, credit quality, and type of customer are generally similar between those revenues and receivables within the scope of ASC 606 and those outside it.

Revenues Third Quarter

millions of Canadian dollars 2023 2022

Revenue from contracts with customers 12,271 13,223

Revenue outside the scope of ASC 606

Total 13,873 15,071

(c) Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions and the company’s share of similar costs for equity companies.

CAPEX excludes the purchase of carbon emission credits.

IMPERIAL OIL LIMITED

Nine Months to September 30

Three Months to March 31

millions of Canadian dollars 2024 2023 2024 2023 2024 2023

25 unchanged sentences

290 321 153 74 5 4

Total assets as at September 30

Total assets as at March 31

28,661 29,059 11,126 9,535 517 477

Nine Months to September 30

Three Months to March 31

Corporate and other

27 unchanged sentences

48 30 — — 496 429

Total assets as at September 30

Total assets as at March 31

2,699 3,815 ( 490 ) ( 771 ) 42,513 42,115

2 unchanged sentences

(b) Revenues include both revenue within the scope of ASC 606 and outside the scope of ASC 606 .

Trade receivables in "Accounts receivable – net" reported on the Consolidated balance sheet include both receivables within the scope of ASC 606 and those outside the scope of ASC 606 .

Trade receivables in "Accounts receivable – net" reported on the Consolidated balance sheet include both receivables within the scope of ASC 606 and outside the scope of ASC 606 .

Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives.

Contractual terms, credit quality, and type of customer are generally similar between those revenues and receivables within the scope of ASC 606 and those outside it.

Revenues Nine Months

to September 30

Contractual terms, credit quality and type of customer are generally similar between contracts within the scope of ASC 606 and those outside it.

Revenues Three Months

millions of Canadian dollars 2024 2023

7 unchanged sentences

Investment and other income included gains and losses on asset sales as follows:

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

1 unchanged sentence

Book value of asset sales 2 5

Gain (loss) on asset sales, before tax (a)

( 3 ) 131 19 155

Gain (loss) on asset sales, after tax (a)

( 2 ) 222 16 241

(a) The third quarter of 2022 included a gain of $ 116 million ($ 208 million, after tax) from the sale of interests in XTO Energy Canada, which included the removal of a deferred tax liability.

Gain (loss) on asset sales, before tax

Gain (loss) on asset sales, after tax

Employee retirement benefits

The components of net benefit cost were as follows:

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

12 unchanged sentences

Financing costs

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

28 unchanged sentences

There are no material differences between the fair value of the company’s financial instruments and the recorded carrying value.

At September 30, 2023 and December 31, 2022, the fair value of long-term debt ($ 3,447 million, excluding finance lease obligations) was primarily a level 2 measurement.

At March 31, 2024 and December 31, 2023, the fair value of long-term debt ($ 3,447 million, excluding finance lease obligations) was primarily a level 2 measurement.

Derivative instruments

The company’s size, strong capital structure and the complementary nature of its business segments reduce the company’s enterprise-wide risk from changes in commodity prices and currency exchange rates.

In addition, the company uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading.

Commodity contracts held for trading purposes are presented in the Consolidated statement of income on a net basis in the line “Revenues” and in the Consolidated statement of cash flows in "Cash flow from (used in) operating activities".

The company does not designate derivative instruments as a hedge for hedge accounting purposes.

Commodity contracts held for trading purposes are presented in the Consolidated statement of income on a net basis in the line "Revenues" and in the Consolidated statement of cash flows in "Cash flows from (used in) operating activities".

The company’s commodity derivatives are not accounted for under hedge accounting.

Credit risk associated with the company’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties.

5 unchanged sentences

Realized and unrealized gain/(loss) on derivative instruments recognized in the Consolidated statement of income is included in the following lines on a before-tax basis:

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

2 unchanged sentences

The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement were as follows:

At September 30, 2023

At March 31, 2024

millions of Canadian dollars

23 unchanged sentences

“Accounts payable and accrued liabilities” and “Other long-term obligations”.

At September 30, 2023 and December 31, 2022, the company had $ 21 million and $ 14 million, respectively, of collateral under a master netting arrangement not offset against the derivatives on the Consolidated balance sheet in “Accounts receivable - net”, primarily related to initial margin requirements.

At March 31, 2024 and December 31, 2023, the company had $ 33 million and $ 24 million, respectively, of collateral under a master netting arrangement not offset against the derivatives on the Consolidated balance sheet in “Accounts receivable - net”, primarily related to initial margin requirements.

IMPERIAL OIL LIMITED

3 unchanged sentences

Outstanding 535,837 535,837

The most recent 12-month normal course issuer bid program came into effect June 29, 2023 under which Imperial continued its existing share purchase program.

The program enabled the company to purchase up to a maximum of 29,207,635 common shares ( 5 percent of the total shares on June 15, 2023) which included shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of, the normal course issuer bid.

As in the past, Exxon Mobil Corporation advised the company that it intended to participate to maintain its ownership percentage at approximately 69.6 percent.

Imperial accelerated its share purchases under the normal course issuer bid program during the third quarter and, subsequent to the end of the third quarter, the program completed on October 19, 2023 as a result of the company purchasing the maximum allowable number of shares under the program.

The excess of the purchase cost over the stated value of shares purchased has been recorded as a distribution of earnings reinvested.

On October 27, 2023, the company announced its intention to launch a substantial issuer bid pursuant to which the company will offer to purchase for cancellation up to $ 1.5 billion of its common shares.

The substantial issuer bid will be made through a modified Dutch auction, with a tender price range to be determined by the company at the time of commencement of the offer.

Shares may also be tendered by way of a proportionate tender, which will result in a shareholder maintaining their proportionate share ownership.

ExxonMobil has advised Imperial that it intends to make a proportionate tender in connection with the offer in order to maintain its proportionate share ownership at approximately 69.6 percent following completion of the offer.

Nothing in this report shall constitute an offer to purchase or a solicitation of an offer to sell any shares.

The company’s common share activities are summarized below:

2 unchanged sentences

584,153 1,079

Issued under employee share-based awards — —

Purchases at stated value ( 48,316 ) ( 87 )

Balance as at December 31, 2023

584,153 1,079

Issued under employee share-based awards — —

Purchases at stated value — —

Balance as at September 30, 2023

566,667 1,047

IMPERIAL OIL LIMITED

Balance as at March 31, 2024

The following table provides the calculation of basic and diluted earnings per common share and the dividends declared by the company on its outstanding common shares:

Third Quarter

to September 30

2023 2022 2023 2022

Net income (loss) per common share – basic

Net income (loss) (millions of Canadian dollars)

1,601 2,031 3,524 5,613

Weighted-average number of common shares outstanding (millions of shares)

578.0 625.3 582.1 652.9

Net income (loss) per common share (dollars)

2.77 3.25 6.05 8.60

Net income (loss) per common share – diluted

Net income (loss) (millions of Canadian dollars)

1,601 2,031 3,524 5,613

Weighted-average number of common shares outstanding (millions of shares)

578.0 625.3 582.1 652.9

Effect of employee share-based awards (millions of shares)

1.3 1.6 1.2 1.5

Weighted-average number of common shares outstanding,

assuming dilution (millions of shares)

579.3 626.9 583.3 654.4

Net income (loss) per common share (dollars)

2.76 3.24 6.04 8.58

Dividends per common share – declared (dollars)

0.50 0.34 1.44 1.02

IMPERIAL OIL LIMITED

6 unchanged sentences

Amounts reclassified from accumulated other comprehensive income 12 10

Balance at September 30 ( 462 ) ( 1,090 )

Balance at March 31 ( 661 ) ( 481 )

Amounts reclassified out of accumulated other comprehensive income (loss) - before-tax income (expense):

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

4 unchanged sentences

Income tax expense (credit) for components of other comprehensive income (loss):

Third Quarter

to September 30

millions of Canadian dollars 2024 2023

2 unchanged sentences

Amortization of postretirement benefits liability adjustment included in net benefit cost

Total 4 7 17 28

IMPERIAL OIL LIMITED

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements