IMPERIAL OIL LTD 10-K

Item 9A. Controls and procedures As indicated in the certifications in Exhibit 31 of this report, the company’s principal executive officer and principal financial officer have evaluated the company’s disclosure controls and procedures as of December 31, 2024. Based on that evaluation, these officers have concluded that the company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Reference is made to page 71 of this report for "Management’s report on internal control over financial reporting" and page 72 for the "Report of Independent Registered Public Accounting Firm" on the company’s internal control over financial reporting as of December 31, 2024. There has not been any change in the company’s internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting. Item 9B. Other information During the three months ended December 31, 2024, none of the company's directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure regarding foreign jurisdiction that prevents inspections Not applicable. 36 PART III Item 10. Directors, executive officers and corporate governance Sections of the company’s management proxy circular are contained in the "Proxy information section", starting on page 111 . The company’s management proxy circular is prepared in accordance with Canadian securities regulations. The company currently has seven directors. The articles of the company require that the board have between five and fifteen directors. Each director is elected to hold office until the close of the next annual meeting. Each of the seven individuals listed in the section entitled "Nominees for director" on pages 112 to 116 of this report have been nominated for election at the annual meeting of shareholders to be held May 8, 2025 (the "2025 Annual Meeting"). All of the nominees, with the exception of J.R. Whelan, are now directors and have been since the dates indicated. B.W. Corson, current chairman, president and chief executive officer, is a current director and has chosen not to stand for re-election. On February 12, 2025, Mr. Corson announced his intention to retire at the conclusion of the 2025 Annual Meeting. Mr. Corson has resigned from his position as president effective April 1, 2025, and he has resigned from the chairman and chief executive officer positions effective at the conclusion of the 2025 Annual Meeting. On February 12, 2025, the board of directors appointed Mr. Whelan (i) as president of the company effective April 1, 2025, (ii) as chief executive officer of the company effective at the conclusion of the 2025 Annual Meeting, and (iii) provided that he is elected as a director at the 2025 Annual Meeting, as chairman of the board effective at the conclusion of such meeting. Reference is made to the section under "Nominees for director": • "Director nominee tables", on pages 112 to 116 of this report. Reference is made to the sections under "Corporate governance disclosure": • "Skills and experience of our board members and nominees", on page 121 of this report; • "Other public company directorships of our board members and nominees", on page 126 of this report; • The table entitled "Audit committee" under "Board and committee structure", on page 136 of this report; • "Ethical business conduct", starting on page 148 of this report; • "Restrictions on insider trading", starting on page 149 of this report; and • "Largest shareholder", on page 152 of this report. Reference is made to the sections under "Company executives and executive compensation": • "Named executive officers of the company" and "Other executive officers of the company", on pages 153 to 154 of this report. Item 11. Executive compensation Sections of the company’s management proxy circular are contained in the "Proxy information section", starting on page 111 . The company’s management proxy circular is prepared in accordance with Canadian securities regulations. Reference is made to the sections under "Corporate governance disclosure": • "Director compensation", on pages 140 to 147 of this report; and • "Share ownership guidelines of independent directors and chairman, president and chief executive officer", on page 147 of this report. Reference is made to the following sections under "Company executives and executive compensation": • "Letter to shareholders", on page 156 of this report; and • "Compensation discussion and analysis", on pages 155 to 181 of this report. 37 Item 12. Security ownership of certain beneficial owners and management and related stockholder matters The following table sets forth, to the extent known by the company or ascertainable from public filings, each person, or group of affiliated persons, who is known by the company to beneficially own greater than 5.0% of the company's outstanding common shares as of December 31, 2024. Any fractional shares have been rounded to the nearest whole share. Title of Class Name and Address of Beneficial Owner Aggregate and Nature of Beneficial Ownership Percent of Class Common Shares Exxon Mobil Corporation 22777 Springwoods Village Parkway Spring, Texas 77389 (a) 354,294,928 69.6% Common Shares FMR LLC 245 Summer Street Boston, Massachusetts 02210 (b) (c) 43,014,477 (c) 8.5% (c) (a) As of February 14, 2025, Exxon Mobil Corporation has sole voting and dispositive power with respect to 354,294,928 shares of the company's common shares. (b) The company is permitted to rely on the information set forth in the referenced filings and has no reason to believe that the information is incomplete or inaccurate or that the beneficial owner should have filed an amended report and did not. (c) Share ownership information is based solely on the Schedule 13G/A filed jointly by FMR LLC and Abigail P. Johnson with the SEC on February 12, 2025. As of December 31, 2024, (i) FMR LLC and Abigail P. Johnson each have beneficial ownership of the same 43,014,477 of the company's common shares, which shares are owned by FMR LLC, certain of its subsidiaries and affiliates, and other companies, (ii) FMR LLC has sole voting power with respect to 31,051,356 shares of those shares, and (iii) FMR LLC and Abigail P. Johnson each have sole dispositive power with respect to all such shares. Sections of the company’s management proxy circular are contained in the "Proxy information section", starting on page 111 . The company’s management proxy circular is prepared in accordance with Canadian securities regulations. Reference is made to the section under "Company executives and executive compensation" entitled "Equity compensation plan information", within the "Compensation discussion and analysis" section, on page 177 of this report. Reference is also made to the security ownership information for directors and executive officers of the company under the preceding Items 10 and 11. The compensation of the directors and executive officers of the company for the year ended December 31, 2024 is described in the sections under "Nominees for director" starting on page 112 , "Director compensation" starting on page 140 and "Company executives and executive compensation" starting on page 153 . The following table shows the number of Imperial Oil Limited and Exxon Mobil Corporation common shares and restricted stock units beneficially owned by each named executive officer, and the incumbent directors and executive officers as a group, as of February 14, 2025. Imperial Oil Limited Exxon Mobil Corporation Named executive officer Common shares (a) Restricted stock units (b) Common shares (a) Restricted stock units (b) B.W. Corson 10,000 462,500 124,328 59,700 D.E. Lyons — 132,200 14,064 — C.L. Gomez-Smith — 20,900 17,606 33,300 J.E. Burgess 106 61,950 — — I.R. Laing 6,222 52,200 — — Incumbent directors and executive officers as a group (16 people) 33,600 884,400 161,644 283,060 (a) No common shares are beneficially owned by reason of exercisable options. None of these individuals owns 0.01 percent of the outstanding shares of Imperial Oil Limited or Exxon Mobil Corporation. The directors and officers as a group own 0.01 percent of the outstanding shares of Imperial Oil Limited, and 0.01 percent of the outstanding shares of Exxon Mobil Corporation. Information not being within the knowledge of the company has been provided by the directors and the executive officers individually. (b) Restricted stock units do not carry voting rights prior to the issuance of shares on settlement of the awards. 38 Item 13. Certain relationships and related transactions, and director independence Sections of the company’s management proxy circular are contained in the "Proxy information section", starting on page 111 . The company’s management proxy circular is prepared in accordance with Canadian securities regulations. Reference is made to the section under "Corporate governance disclosure" entitled "Independence of our board members and nominees", on page 122 of this report. Reference is made to the section under "Corporate governance disclosure" entitled "Transactions with Exxon Mobil Corporation", on page 152 of this report. N.A. Hansen is deemed a non-independent member of the board of directors and the executive resources committee, safety and sustainability committee, nominations and corporate governance committee and finance committee under the relevant standards. As an employee of Exxon Mobil Corporation, N.A. Hansen is independent of the company’s management and is able to assist these committees by reflecting the perspective of the company’s shareholders. 39 Item 14. Principal accountant fees and services Auditor information The audit committee of the board of directors recommends that PricewaterhouseCoopers LLP (PwC) be reappointed as the auditor of the company until the close of the next annual meeting. PwC has been the auditor of the company for more than five years and is located in Calgary, Alberta. PwC is a participating audit firm with the Canadian Public Accountability Board and the Public Company Accounting Oversight Board (United States) (PCAOB). Auditor fees The aggregate fees of PwC for professional services rendered for the audit of the company’s financial statements and other services for the fiscal years ended December 31, 2024 and December 31, 2023 were as follows: thousands of Canadian dollars 2024 2023 Audit fees 2,635 2,200 Audit-related fees 90 97 Tax fees — — All other fees — — Total fees 2,725 2,297 Audit fees included the audit of the company’s annual financial statements, internal control over financial reporting, and a review of the first three quarterly financial statements in 2024. Audit-related fees consisted of other assurance services including the audit of the company’s retirement plan and royalty statement audits for oil and gas producing entities. The company did not engage the auditor for any other services. The audit committee formally and annually evaluates the performance of the external auditor, recommends the external auditor to be appointed by the shareholders, recommends their remuneration and oversees their work. The audit committee also approves the proposed current year audit program of the external auditor, assesses the results of the program after the end of the program period and approves in advance any non-audit services to be performed by the external auditor after considering the effect of such services on their independence. All of the services rendered by the auditor to the company were approved by the audit committee. Auditor independence The audit committee periodically discusses with PwC their independence from the company and from management. PwC have confirmed that they are independent with respect to the company within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Alberta, the PCAOB and the rules of the SEC. The company has concluded that the auditor’s independence has been maintained. 40 PART IV Item 15. Exhibits, financial statement schedules Reference is made to the table of contents in the "Financial section" on page 44 of this report. The following exhibits, numbered in accordance with Item 601 of Regulation S-K, are filed as part of this report: (3) (i) Restated certificate and articles of incorporation of the company (Incorporated herein by reference to Exhibit (3.1) to the company’s Form 8-K filed on May 3, 2006 (File No. 0-12014)). (ii) Amended and Restated By-Law No. 1 of the company, dated September 17, 2024 (Incorporated herein by reference to Exhibit (3.1) to the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (File No. 0-12014)). (4) (vi) Description of capital stock. (Incorporated herein by reference to Exhibit (4)(vi) of the company’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 0-12014)). (10) (ii) (1) Alberta Cold Lake Transition Agreement, effective January 1, 2000, relating to the royalties payable in respect of the Cold Lake production project and terminating the Alberta Cold Lake Crown Agreement dated June 25, 1984. (Incorporated herein by reference to Exhibit (10)(ii)(20) of the company’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 0-12014)). (2) Syncrude Bitumen Royalty Option Agreement, dated November 18, 2008, setting out the terms of the exercise by the Syncrude Joint Venture owners of the option contained in the existing Crown Agreement to convert to a royalty payable on the value of bitumen, effective January 1, 2009 (Incorporated herein by reference to Exhibit 1.01(10)(ii)(2) of the company’s Form 8-K filed on November 19, 2008 (File No. 0-12014)). (iii)(A) (1) Form of Letter relating to Supplemental Retirement Income (Incorporated herein by reference to Exhibit (10)(c)(3) of the company’s Annual Report on Form 10-K for the year ended December 31, 1980 (File No. 2-9259)). (2) Deferred Share Unit Plan for Nonemployee Directors. (Incorporated herein by reference to Exhibit (10)(iii)(A)(6) of the company’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 0-12014)). (3) Amended Restricted Stock Unit Plan with respect to Restricted Stock Units granted in 2016 and subsequent years, as amended effective October 26, 2016 (Incorporated herein by reference to Exhibit 9.01(c)[10(iii)(A)(1)] of the company’s Form 8-K filed on October 31, 2016 (File No. 0-12014)). (4) Amended Restricted Stock Unit Plan with respect to Restricted Stock Units granted in 2020 and subsequent years, as amended effective November 24, 2020 (Incorporated herein by reference to Exhibit (10)(iii)(A)(6) of the company’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 0-12014)). (5) Amended Restricted Stock Unit Plan with respect to Restricted Stock Units granted in 2022 and subsequent years, as amended effective November 29, 2022 (Incorporated herein by reference to Exhibit (10)(iii)(A)(7) of the company's Annual Report on Form 10-K for the year ended December 31, 2022 (File No. 0-12014)). (6) Amended Short Term Incentive Program, as amended effective December 1, 2023 (Incorporated herein by reference to Exhibit (10)(iii)(A)(6) of the company's Annual Report on Form 10-K for the year ended December 31, 2023 (File No. 0-12014)). (19) Insider Trading and Blackout Guidelines 41 (21) Imperial Oil Resources Limited is incorporated in Alberta, Canada and Canada Imperial Oil Limited is incorporated in Canada, and both are wholly-owned subsidiaries of the company. The names of all other subsidiaries of the company are omitted because, considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary as of December 31, 2024. (31.1) Certification by principal executive officer of Periodic Financial Report pursuant to Rule 13a-14(a). (31.2) Certification by principal financial officer of Periodic Financial Report pursuant to Rule 13a-14(a). (32.1) Certification by chief executive officer of Periodic Financial Report pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350. (32.2) Certification by chief financial officer of Periodic Financial Report pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350. (97) SEC Rule 10D-1 Policy for the Recovery of Erroneously Awarded Compensation effective December 1, 2023 (Incorporated herein by reference to Exhibit (97) of the company's Annual Report on Form 10-K for the year ended December 31, 2023 (File No. 0-12014)). (101) Interactive Data Files (formatted as Inline XBRL). (104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). Copies of Exhibits may be acquired upon written request of any shareholder to the vice president, investor relations, Imperial Oil Limited, 505 Quarry Park Boulevard S.E., Calgary, Alberta T2C 5N1, and payment of processing and mailing costs. Item 16. Form 10-K summary Not applicable. 42 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf on February 19, 2025 by the undersigned, thereunto duly authorized. Imperial Oil Limited by _____ /s/ Bradley W. Corson (Bradley W. Corson) Chairman, president and chief executive officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 19, 2025 by the following persons on behalf of the registrant and in the capacities indicated. Signature Title /s/ Bradley W. Corson Chairman, president and chief executive officer and director (Principal executive officer) (Bradley W. Corson) /s/ Daniel E. Lyons Senior vice-president, finance and administration, and controller (Principal financial officer and principal accounting officer) (Daniel E. Lyons) /s/ David W. Cornhill Director (David W. Cornhill) /s/ Sharon R. Driscoll Director (Sharon R. Driscoll) /s/ John N. Floren Director (John N. Floren) /s/ Gary J. Goldberg Director (Gary J. Goldberg) /s/ Neil A. Hansen Director (Neil A. Hansen) /s/ Miranda C. Hubbs Director (Miranda C. Hubbs) 43 Financial section Table of contents Page Financial information (U.S. GAAP) 45 Frequently used terms 46 Management’s discussion and analysis of financial condition and results of operations 50 Overview 50 Business environment 51 Business results 54 Liquidity and capital resources 61 Capital and exploration expenditures 64 Market risks 65 Critical accounting estimates 67 Management’s report on internal control over financial reporting 71 Report of Independent Registered Public Accounting Firm 72 Consolidated statement of income (U.S. GAAP) 75 Consolidated statement of comprehensive income (U.S. GAAP) 76 Consolidated balance sheet (U.S. GAAP) 77 Consolidated statement of shareholders’ equity (U.S. GAAP) 78 Consolidated statement of cash flows (U.S. GAAP) 79 Notes to consolidated financial statements 80 1. Summary of significant accounting policies 80 2. Business segments 86 3. Income taxes 88 4. Employee retirement benefits 89 5. Other long-term obligations 94 6. Financial and derivative instruments 95 7. Share-based incentive compensation programs 97 8. Investment and other income 98 9. Litigation and other contingencies 98 10. Common shares 99 11. Miscellaneous financial information 100 12. Financing and additional notes and loans payable information 101 13. Leases 102 14. Long-term debt 104 15. Accounting for suspended exploratory well costs 104 16. Transactions with related parties 105 17. Other comprehensive income (loss) information 106 18. Divestment activities 106 Supplemental information on oil and gas exploration and production activities (unaudited) 107 44 Financial information (U.S. GAAP) millions of Canadian dollars 2024 2023 2022 Revenues 51,359 50,702 59,413 Net income (loss): Upstream 3,262 2,512 3,645 Downstream 1,486 2,301 3,622 Chemical 171 164 204 Corporate and other (129) (88) (131) Net income (loss) 4,790 4,889 7,340 Cash and cash equivalents at year-end 979 864 3,749 Total assets at year-end 42,938 41,199 43,524 Long-term debt at year-end 3,992 4,011 4,033 Total debt at year-end 4,011 4,132 4,155 Other long-term obligations at year-end 3,870 3,851 3,467 Shareholders’ equity at year-end 23,473 22,222 22,413 Cash flow from operating activities 5,981 3,734 10,482 Per share information (Canadian dollars) Net income (loss) per common share - basic 9.05 8.51 11.47 Net income (loss) per common share - diluted 9.03 8.49 11.44 Dividends per common share - declared 2.40 1.94 1.46 45 Frequently used terms Listed below are definitions of several of the company’s key business and financial performance measures. The definitions are provided to facilitate understanding of the terms and how they are calculated. Certain measures included in this document are not prescribed by U.S. Generally Accepted Accounting Principles (GAAP). These measures constitute "non-GAAP financial measures" under Securities and Exchange Commission Regulation G and Item 10(e) of Regulation S-K, and "specified financial measures" under National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure of the Canadian Securities Administrators. Reconciliation of these non-GAAP financial measures to the most comparable GAAP measure, and other information required by these regulations, have been provided. Non-GAAP financial measures and specified financial measures are not standardized financial measures under GAAP and do not have a standardized definition. As such, these measures may not be directly comparable to measures presented by other companies, and should not be considered a substitute for GAAP financial measures. Capital employed Capital employed is a non-GAAP financial measure that is a measurement of net investment. When viewed from the perspective of how capital is used by the business, it includes the company’s property, plant and equipment and other assets, less liabilities, excluding both short-term and long-term debt. When viewed from the perspective of the sources of capital employed in total for the company, it includes total debt and equity. The most directly comparable financial measure that is disclosed in the financial statements is total assets within the company’s Consolidated balance sheet. Both of these views include the company’s share of amounts applicable to equity companies, which the company believes should be included to provide a more comprehensive measurement of capital employed. Reconciliation of capital employed millions of Canadian dollars 2024 2023 2022 From the Consolidated balance sheet Business uses: asset and liability perspective Total assets 42,938 41,199 43,524 Less: Total current liabilities excluding notes and loans payable (6,988) (6,482) (8,776) Total long-term liabilities excluding long-term debt (8,466) (8,363) (8,180) Add: Imperial’s share of equity company debt 25 21 25 Total capital employed 27,509 26,375 26,593 Total company sources: Debt and equity perspective Notes and loans payable 19 121 122 Long-term debt 3,992 4,011 4,033 Shareholders’ equity 23,473 22,222 22,413 Add: Imperial’s share of equity company debt 25 21 25 Total capital employed 27,509 26,375 26,593 46 Return on average capital employed (ROCE) ROCE is a non-GAAP ratio. The company's total ROCE is net income excluding the after-tax cost of financing divided by total average capital employed (an average of the beginning and end-of-year amounts). Net income includes Imperial’s share of net income of equity companies, consistent with the definition used for capital employed, and excludes the cost of financing. Capital employed is a non-GAAP financial measure and is disclosed and reconciled above. The company has consistently applied its ROCE definition for many years and views it as one of the best measures of historical capital productivity in a capital-intensive, long-term industry. Additional measures, which are more cash flow based, are used to make investment decisions. Components of return on average capital employed millions of Canadian dollars 2024 2023 2022 From the Consolidated statement of income Net income (loss) 4,790 4,889 7,340 Financing (after-tax) including Imperial’s share of equity companies 43 66 55 Net income (loss) excluding financing 4,833 4,955 7,395 Average capital employed 26,942 26,484 26,762 Return on average capital employed (percent) – corporate total 17.9 18.7 27.6 Cash flows from (used in) operating activities and asset sales Cash flows from operating activities and asset sales is a non-GAAP financial measure that is the sum of the net cash provided by operating activities and proceeds from asset sales reported in the Consolidated statement of cash flows. This cash flow reflects the total sources of cash both from operating the company’s assets and from the divesting of assets. The most directly comparable financial measure that is disclosed in the financial statements is cash flows from (used in) operating activities within the company’s Consolidated statement of cash flows. The company employs a long-standing and regular disciplined review process to ensure that assets are contributing to the company’s strategic objectives. Assets are divested when they no longer meet these objectives or are worth considerably more to others. Because of the regular nature of this activity, the company believes it is useful for investors to consider sales proceeds together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions. Reconciliation of cash flows from (used in) operating activities and asset sales millions of Canadian dollars 2024 2023 2022 From the Consolidated statement of cash flows Cash flows from (used in) operating activities 5,981 3,734 10,482 Proceeds from asset sales 25 86 904 Total cash flows from (used in) operating activities and asset sales 6,006 3,820 11,386 47 Operating costs Operating costs is a non-GAAP financial measure that is the costs during the period to produce, manufacture, and otherwise prepare the company’s products for sale – including energy costs, staffing and maintenance costs. It excludes the cost of raw materials, taxes and interest expense and is presented on a before-tax basis. The most directly comparable financial measure that is disclosed in the financial statements is total expenses within the company’s Consolidated statement of income. While the company is responsible for all revenue and expense elements of net income, operating costs represent the expenses most directly under the company’s control and therefore, are useful in evaluating the company’s performance. Reconciliation of operating costs millions of Canadian dollars 2024 2023 2022 From the Consolidated statement of income Total expenses 45,293 44,600 50,186 Less: Purchases of crude oil and products 33,184 32,399 37,742 Federal excise tax and fuel charge 2,535 2,402 2,179 Financing 41 69 60 Subtotal 35,760 34,870 39,981 Imperial's share of equity company expenses 80 76 71 Total operating costs 9,613 9,806 10,276 Components of operating costs millions of Canadian dollars 2024 2023 2022 From the Consolidated statement of income Production and manufacturing 6,599 6,879 7,404 Selling and general 945 857 882 Depreciation and depletion 1,983 1,907 1,897 Non-service pension and postretirement benefit 3 82 17 Exploration 3 5 5 Subtotal 9,533 9,730 10,205 Imperial's share of equity company expenses 80 76 71 Total operating costs 9,613 9,806 10,276 48 Net income (loss) excluding identified items Net income (loss) excluding identified items is a non-GAAP financial measure that is total net income (loss) excluding individually significant non-operational events with an absolute corporate total earnings impact of at least $100 million in a given quarter. The net income (loss) impact of an identified item for an individual segment in a given quarter may be less than $100 million when the item impacts several segments or several periods. The most directly comparable financial measure that is disclosed in the financial statements is "Net income (loss)" within the company’s Consolidated statement of income. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The company believes this view provides investors increased transparency into business results and trends, and provides investors with a view of the business as seen through the eyes of management. Net income (loss) excluding identified items is not meant to be viewed in isolation or as a substitute for net income (loss) as prepared in accordance with U.S. GAAP. All identified items are presented on an after-tax basis. Reconciliation of net income (loss) excluding identified items millions of Canadian dollars 2024 2023 2022 From the Consolidated statement of income Net income (loss) (U.S. GAAP) 4,790 4,889 7,340 Less identified items included in Net income (loss) Gain/(loss) on sale of assets — — 208 Subtotal of identified items — — 208 Net income (loss) excluding identified items 4,790 4,889 7,132 49 Management’s discussion and analysis of financial condition and results of operations Overview The following discussion and analysis of the company’s financial results, as well as the accompanying financial statements and related notes to consolidated financial statements to which they refer, are the responsibility of the management of Imperial Oil Limited. The company’s accounting and financial reporting fairly reflect its integrated business model involving exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen, lower-emission fuels, and lithium. Imperial, with its resource base, financial strength, disciplined investment approach and technology portfolio, is well-positioned to participate in substantial investments to develop new Canadian energy supplies. The company’s reportable segments are Upstream, Downstream, and Chemicals. The company’s integrated business model generally reduces the company’s risk from changes in commodity prices. While commodity prices depend on supply and demand and may be volatile on a short-term basis, the company’s investment decisions are grounded on fundamentals reflected in its long-term business outlook, and use a disciplined approach in selecting and pursuing the most attractive investment opportunities. The annual company plan process establishes the economic assumptions used for evaluating investments and sets operating and capital objectives. ExxonMobil's Global Outlook (the Outlook), developed annually, is the foundation for the plan assumptions . Price ranges for crude oil, including price differentials, refinery and chemical margins, volumes, operating costs including greenhouse gas emissions pricing, and foreign currency exchange rates are part of the company plan assumptions developed annually. Company plan volume projections are based on individual field production profiles, which are also updated at least annually. Major investment opportunities are evaluated over a range of potential market conditions. All major investments are reappraised to ensure the company learns from its investment decisions, and the development and execution of the project. Lessons learned are incorporated into future projects. The term "project" as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. 50 Business environment Long-term business outlook The "Long-term business outlook" is based on Exxon Mobil Corporation’s Global Outlook (the Outlook), which combined with the near-term pathways, is used to help inform the company’s long-term business strategies and investment plans. The company’s business planning is underpinned by a deep understanding of long-term market fundamentals. These fundamentals include supply and demand trends; the scale and variety of energy needs worldwide; capability, practicality and affordability of energy alternatives, including lower-carbon solutions; greenhouse gas emission-reduction technologies; and relevant government policies. The Outlook considers these fundamentals to form the basis for the company’s long-term business planning, investment decisions, and research programs. The Outlook reflects the company’s view of global energy demand and supply through 2050. It is a projection based on current trends in technology, government policies, consumer preferences, geopolitics, and economic development. The Outlook uses projections and scenarios from reputable third parties such as the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC). Included in the range of these scenarios are: the IPCC likely below 2°C scenarios and three scenarios from the IEA; IEA Stated Policies Scenario (STEPS), which reflects a sector-by-sector assessment of current policy in place or announced by governments; IEA Announced Pledges Scenario (APS), which reflects aspirational government targets met on time and in full; and IEA Net Zero Emissions by 2050 Scenario (NZE), which the IEA describes as extremely challenging, acknowledging that society is not currently on the IEA NZE pathway. No single transition pathway can be reasonably predicted, given the wide range of uncertainties. Key unknowns include yet-to-be-developed or changes in developed government policies, market conditions, and advances in technology that may influence the cost, pace, and potential availability of certain pathways. Scenarios that employ a full complement of technology options are likely to provide the most economically efficient pathways. Using the company's own experts and third-party sources, the company monitors a variety of signposts that may indicate a potential shift in the energy transition. For example, the regional pace of the transition could be influenced by the cost of new technologies compared to existing or alternative energy sources. By 2050, the world’s population is projected to be around 9.7 billion people, or nearly 2 billion more than in 2023. Coincident with this population increase, the Outlook projects worldwide economic growth to average approximately 2.5 percent per year, with economic output nearly doubling by 2050 compared to 2023. As economies and populations grow, and as living standards improve for billions of people, the need for energy is expected to continue to rise. Even with significant efficiency gains, global energy demand is projected to rise by almost 15 percent from 2023 to 2050. This increase in energy demand is expected to be driven by developing countries (i.e., those that are not member nations of the Organization for Economic Co-operation and Development (OECD)). By contrast, energy use in developed nations is expected to decline by more than 10 percent as efficiency improves. As expanding prosperity drives global energy demand higher, increasing use of energy-efficient technologies and practices, as well as lower-emission products, will continue to help significantly reduce energy consumption and CO 2 emissions per unit of economic output over time. Substantial efficiency gains are likely in all key aspects of the world’s economy through 2050, affecting energy requirements for power generation, transportation, industrial applications, and residential and commercial needs. Under the Outlook, global electricity demand is expected to increase more than 75 percent from 2023 to 2050, with developing countries likely to account for approximately 80 percent of the increase. Consistent with this projection, power generation is expected to remain the largest and fastest growing major segment of global primary energy demand, supported by a wide variety of energy sources. The share of coal-fired generation is expected to decline substantially to approximately 15 percent of the world’s electricity in 2050, versus approximately 35 percent in 2023, in part due to policies to improve air quality as well as reduce greenhouse gas emissions to address risks related to climate change. From 2023 to 2050, the amount of electricity supplied using natural gas, nuclear power, and renewables is expected to more than double, accounting for the entire growth in electricity supplies and offsetting the reduction of coal. Electricity from wind and solar is expected to increase more than 450 percent, helping total renewables (including other sources, e.g., hydropower) to account for approximately 90 percent of the increase in electricity supplies through 2050. Total renewables are expected to reach over 50 percent of global electricity supplies by 2050. Natural gas and nuclear are expected 51 to be about 20 percent and 10 percent, respectively, of global electricity supplies by 2050. Supplies of electricity by energy type will reflect significant differences across regions reflecting a wide range of factors, including the cost and availability of various energy supplies and policy developments. Energy for transportation - including cars, trucks, ships, trains, and airplanes - is expected to increase by about 25 percent from 2023 to 2050. Transportation energy demand is expected to account for about 60 percent of the growth in liquid fuels demand worldwide over this period. Light-duty vehicle demand for liquid fuels is projected to peak by around 2025, and then decline to levels seen in the early-2000s by 2050, as the impact of better fuel economy and significant growth in electric cars, led by China, Europe, and the United States, work to offset growth in the worldwide car fleet of approximately 65 percent. By 2050, light-duty vehicles are expected to account for around 20 percent of global liquid fuels demand. During the same time period, nearly all the world’s commercial transportation fleets are expected to continue to run on liquid fuels, including biofuels, which are expected to be widely available and offer practical advantages in providing a large quantity of energy in small volumes. Almost half of the world’s energy use is dedicated to industrial activity. As the global middle class continues to grow, demand for durable products, appliances, and consumable goods will increase. Industry uses energy products both as a fuel and as a feedstock for chemicals, asphalt, lubricants, waxes, and other specialty products. The Outlook anticipates technology advances, as well as the increasing shift toward cleaner forms of energy, such as electricity and natural gas, with coal declining. Demand for oil will continue to grow as a feedstock for industry. As populations grow and prosperity rises, more energy will be needed to power homes, offices, schools, shopping centers, hospitals, etc. Combined residential and commercial energy demand is projected to rise by around 15 percent through 2050. Led by the growing economies of developing nations, average worldwide household electricity use is expected to rise more than 65 percent between 2023 and 2050. Liquid fuels provide the largest share of global energy supplies today reflecting broad-based availability, affordability, ease of transportation, and fitness as a practical solution to meet a wide variety of needs. By 2050, global demand for liquid fuels is projected to grow to approximately 110 million oil-equivalent barrels per day, an increase of about 10 percent from 2023. The non-OECD share of global liquid fuels demand is expected to increase to nearly 70 percent by 2050, as liquid fuels demand in the OECD is expected to decline by more than 25 percent. Much of the global liquid fuels demand today is met by crude production from conventional sources; these supplies will remain important, and significant development activity is expected to offset much of the natural declines from these fields. At the same time, a variety of supply sources - including tight oil, deepwater, oil sands, natural gas liquids, and biofuels - are expected to grow to help meet rising demand. Timely investments will remain critical to meeting global needs with reliable and affordable supplies. Natural gas is a lower-emission, versatile and practical fuel for a wide variety of applications. Global natural gas demand is expected to rise more than 20 percent from 2023 to 2050, with approximately 75 percent of that increase coming from the Asia Pacific region. Significant growth in supplies of unconventional gas - the natural gas found in shale and other tight rock formations - will help meet these needs. In total, about 35 percent of the growth in natural gas supplies is expected to come from unconventional sources. At the same time, conventionally-produced natural gas is likely to remain the cornerstone of global supply, meeting around two-thirds of worldwide demand in 2050. Liquefied natural gas (LNG) trade will expand significantly, meeting about 70 percent of the increase in global demand growth, with much of this supply expected to help meet rising demand in Asia Pacific. The world’s energy mix is highly diverse and will remain so through 2050. Oil is expected to continue as the largest source of energy with its share remaining close to 30 percent in 2050. Coal and natural gas are the next largest sources of energy today, with the share of natural gas growing to more than 25 percent by 2050, while the share of coal falls to about half that of natural gas. Nuclear power is projected to grow, as many nations are likely to expand nuclear capacity to address rising electricity needs as well as energy security and environmental issues. Total renewable energy is expected to exceed 20 percent of global energy by 2050, with other renewables (e.g., biomass, hydropower, geothermal) contributing a combined share of more than 10 percent. Total energy supplied from wind and solar is expected to increase rapidly, growing over 400 percent from 2023 to 2050, when they are projected to be nearly 12 percent of the world energy mix. Decarbonization of industrial activities will require a suite of nascent or future lower-carbon technologies and stable supporting policies. Lower-emission fuels, hydrogen-based fuels, and carbon capture and storage are 52 three key lower-carbon solutions needed to support a lower-emission future, in addition to wind and solar. Along with electrification, lower-emission fuels are expected to play an important role in decarbonization of the transportation sector, particularly in hard-to-decarbonize areas, such as aviation. Low-carbon hydrogen will be a key enabler replacing traditional furnace fuel to decarbonize the industrial sector. Hydrogen and hydrogen-based fuels like ammonia are also expected to make inroads into commercial transportation as technology improves to lower its cost and policy develops to support the needed infrastructure development. Carbon capture and storage on its own, or in combination with hydrogen production, is among the few proven technologies that could enable CO 2 emission reductions from high-emitting and hard-to-decarbonize sectors such as power generation and heavy industries, including manufacturing, refining, and petrochemicals. The Outlook projects that oil demand will remain above 100 million barrels per day to 2050. And even under the average of IPCC Likely Below 2°C scenarios, oil demand still comes to 66 million barrels per day in 2050 – about two thirds of current consumption. The Outlook shows oil production declines at a rate of about 15 percent per year. At that rate, in the absence of continued investment, by 2030 oil supplies would fall from 100 million barrels per day to less than 30 million barrels, more than 70 million barrels per day short of what is needed to meet demand. Limiting investment to only existing fields would slow the decline to about 4 percent, however, this would still be well below the oil demand in the IEA APS and average of IPCC Likely Below 2°C scenarios. To meet projected demand, the company anticipates that the world’s available oil and gas resource base will grow, not only from new discoveries, but also from increases in previously discovered fields. Technology will underpin these increases. The investments to develop and supply resources to meet global demand through 2050 will be significant and would be needed to meet even rapidly declining demand for oil and gas envisioned in aggressive decarbonization scenarios. International accords and underlying regional and national regulations covering greenhouse gas emissions continue to evolve with uncertain timing and outcome, making it difficult to predict their business impact. The company’s estimates of potential costs related to greenhouse gas emissions align with applicable provincial and federal regulations. Additionally, the company uses the Outlook as a foundation for estimating energy supply and demand requirements from various energy sources and uses, and the Outlook takes into account policies established to reduce energy related greenhouse gas emissions. The climate accord reached at the 2015 Conference of the Parties (COP 21) in Paris set many new goals, and many related policies are still emerging. The Outlook reflects an environment with increasingly stringent climate policies and seeks to identify potential impacts of these climate related government policies, which often target specific sectors. For purposes of the Outlook, a proxy cost on energy-related CO 2 emissions is assumed, based on regional considerations and relative levels of economic development, and by 2050, reaches up to $150 USD per metric ton for OECD nations and up to $100 USD per metric ton for non-OECD nations. As people and nations look for ways to reduce risks of global climate change, they will continue to need practical solutions that do not jeopardize the affordability or reliability of the energy they need. The company continues to monitor the updates to the Nationally Determined Contributions (NDCs) that are submitted by nations that are signatories to the Paris Agreement, as well as other policy developments in light of net-zero ambitions formulated by some nations, including Canada. The information provided in the Outlook includes ExxonMobil's internal estimates and projections based upon internal data and analyses, as well as publicly available information from external sources including the International Energy Agency. Progress reducing emissions Practical solutions to the world’s energy and climate challenges will benefit from market competition in addition to well-informed, well-designed and transparent policy approaches that carefully weigh costs and benefits. Such policies are likely to help manage the risks of climate change while also enabling societies to pursue other high priority goals around the world – including clean air and water, access to reliable and affordable energy, and economic progress for all people. The company encourages sound policy solutions that reduce climate-related risks across the economy at the lowest societal cost. All practical and economically viable energy sources will need to be pursued to continue meeting global energy demand, recognizing the scale and variety of worldwide energy needs, as well as the importance of expanding access to modern energy to promote better standards of living for billions of people. 53 As part of the company’s efforts to provide solutions that lower the greenhouse gas emissions intensity of its operations and provide lower life-cycle emissions products to customers, the company will continue to evaluate and deploy technologies such as oil sands technologies that use less steam, carbon capture and storage, energy efficiency projects, and low-emissions fuels. Decisions to deploy these technologies will be informed by market conditions and government policies. Recent business environment During 2024, the price of crude oil remained relatively consistent with the 2023 full-year average, as markets remained balanced. In addition, the Canadian WTI/WCS spread narrowed versus the 2023 full-year average. Refining margins declined in 2024 from 2023 levels as increased supply from industry capacity additions outpaced global demand. The general rate of inflation in Canada and across many other major countries peaked in 2022, rising from already elevated levels in 2021, due to additional impacts on energy and other commodities from the Russia-Ukraine conflict. Inflation has trended down since 2023 as a result of aggressive monetary tightening by major central banks and slowing global economic growth. In Canada, inflation has declined towards the Bank of Canada's target. The company closely monitors market trends and works to mitigate both operating and capital cost impacts in all price environments. Business results Consolidated millions of Canadian dollars 2024 2023 2022 Net income (loss) (U.S. GAAP) 4,790 4,889 7,340 Identified items 1 included in Net income (loss) Gain/(loss) on sale of assets — — 208 Subtotal of identified items 1 — — 208 Net income (loss) excluding identified items 1 4,790 4,889 7,132 2024 Net income in 2024 was $4,790 million, or $9.03 per share on a diluted basis, compared to $4,889 million, or $8.49 per share in 2023. 2023 Net income in 2023 was $4,889 million, or $8.49 per share on a diluted basis, compared to $7,340 million, or$11.44 per share in 2022. 1 Non-GAAP financial measure - see "Frequently used terms" section for definition and reconciliation. 54 Upstream Overview The company produces crude oil and natural gas for sale predominantly into North American markets. The company’s Upstream business strategies guide the company’s exploration, development, production, research and gas marketing activities. These strategies include improving asset reliability, accelerating development and application of high impact technologies, maximizing value by capturing new business opportunities and managing the existing portfolio, as well as pursuing sustainable improvements in organizational efficiency and effectiveness. These strategies are underpinned by a relentless focus on operations integrity, commitment to innovative technologies, disciplined approach to investing and cost management, development of employees and investment in the communities within which the company operates. The company has a significant oil and gas resource base and a large inventory of potential projects. The company’s current investment strategy is to invest for value and select volume growth, with focus on optimization within existing assets, cost reduction opportunities and productivity enhancements that aim to deliver robust returns at a wide range of prices. The company also continues to evaluate opportunities to support long-term growth. Although actual volumes will vary from year to year, the focus is on value-add, long-term growth opportunities within the context of the factors described in "Item 1A. Risk factors". The company continually evaluates opportunities, including the pace of development for the Aspen project. Prices for most of the company's crude oil sold are referenced to Western Canada Select (WCS) and West Texas Intermediate (WTI) oil markets. Additionally, the market price for WCS is typically lower than light and medium grades of oil, and price differentials between WCS and WTI can fluctuate. The company believes prices over the long term will be driven by market supply and demand, with the demand side largely being a function of general economic activity, alternative energy sources, levels of prosperity, technology advancements, consumer preference and government policies. On the supply side, prices may be significantly impacted by political events, logistics constraints, the actions of OPEC or OPEC+, governments, alternative energy sources, and other factors. To manage the risks associated with price, the company tests the resiliency of its annual plans and all major investments across a range of price scenarios. Key events Upstream assets demonstrated strong operational performance in 2024. The company continued to benefit from its actions implemented in prior years to manage the cost structure and improve the reliability of its assets, enabling the Upstream to capture significant value. Upstream full-year production averaged 433,000 gross oil-equivalent barrels per day. At Kearl, gross production was about 281,000 barrels per day (200,000 barrels Imperial’s share), which is an increase of about 11,000 barrels per day (9,000 barrels Imperial's share) compared to 2023 , as a result of improved mine fleet productivity and optimized turnaround. At Cold Lake, annual production averaged 148,000 barrels per day, which is an increase of about 13,000 barrels per day compared to 2023, primarily driven by Grand Rapids. At Syncrude, annual production averaged 75,000 barrels per day, which is a decrease of about 1,000 barrels per day compared to 2023. As described in more detail in "Item 1A. Risk factors", environmental risks and climate related regulations could have negative impacts on the upstream business. 55 Results of operations 2024 Net income (loss) factor analysis millions of Canadian dollars Price – Average bitumen realizations increased by $7.11 per barrel, primarily driven by the narrowing WTI/WCS spread and lower diluent costs, partially offset by lower marker prices. Synthetic crude oil realizations decreased by $3.66 per barrel, primarily driven by a weaker Synthetic/WTI spread and lower WTI. Volume – Higher volumes were primarily driven by Grand Rapids production at Cold Lake, as well as improved mine fleet productivity and optimized turnaround at Kearl. Royalty – Higher royalties were primarily driven by higher volumes and prices. Other – Primarily due to lower operating expenses of about $210 million, mainly driven by lower energy prices, and favourable foreign exchange impacts of about $120 million, partially offset by lower electricity sales at Cold Lake due to lower prices. 2023 Net income (loss) factor analysis millions of Canadian dollars Price – Lower bitumen realizations were primarily driven by lower marker prices. Average bitumen realizations decreased by $17.25 per barrel, generally in line with WCS, and synthetic crude oil realizations decreased by $19.89 per barrel, generally in line with WTI. Volume – Lower volumes were primarily driven by steam cycle timing at Cold Lake, and the absence of XTO Energy Canada production, partially offset by improved reliability, plant capacity utilization, and mine equipment productivity at Kearl. Royalty – Lower royalties were primarily driven by weakened commodity prices. Identified Items 1 – Prior year results included favourable identified items 1 related to the company's gain on the sale of interests in XTO Energy Canada. Other – Includes favourable foreign exchange impacts of about $380 million, and lower operating expenses of about $380 million, primarily due to lower energy prices. 1 Non-GAAP financial measure - see "Frequently used terms" section for definition and reconciliation. 56 Marker prices and average realizations Canadian dollars, unless otherwise noted 2024 2023 2022 West Texas Intermediate (US$ per barrel) 75.78 77.60 94.36 Western Canada Select (US$ per barrel) 61.04 58.97 76.28 WTI/WCS Spread (US$ per barrel) 14.74 18.63 18.08 Bitumen (per barrel) 74.53 67.42 84.67 Synthetic crude oil (per barrel) 101.91 105.57 125.46 Conventional crude oil (per barrel) 55.63 59.30 97.45 Natural gas liquids (per barrel) — — 64.92 Natural gas (per thousand cubic feet) 0.69 2.58 5.69 Average foreign exchange rate (US$) 0.73 0.74 0.77 Crude oil and natural gas liquids (NGL) - production and sales (a) thousands of barrels per day 2024 2023 2022 gross net gross net gross net Bitumen 348 299 326 283 316 263 Synthetic crude oil (b) 75 62 76 67 77 63 Conventional crude oil 5 5 5 5 8 8 Total crude oil production 428 366 407 355 401 334 NGLs available for sale — — — — 1 1 Total crude oil and NGL production 428 366 407 355 402 335 Bitumen sales, including diluent (c) 471 442 424 NGL sales — — 1 Natural gas - production and production available for sale (a) millions of cubic feet per day 2024 2023 2022 gross net gross net gross net Production (d) (e) 30 30 33 32 85 83 Production available for sale (f) 9 11 50 (a) Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period. Gross production is the company’s share of production (excluding purchases) before deduction of the mineral owners’ or governments’ share or both. (b) The company’s synthetic crude oil production volumes were from the company’s share of production volumes in the Syncrude joint venture and include immaterial amounts of bitumen and other products exported to the operator's facilities using an existing interconnect pipeline. (c) Diluent is natural gas condensate or other light hydrocarbons added to crude bitumen to facilitate transportation. (d) Gross production of natural gas includes amounts used for internal consumption with the exception of the amounts reinjected. (e) Net production is gross production less the mineral owners’ or governments’ share or both. Net production reported in the above table is consistent with production quantities in the net proved reserves disclosure. (f) Includes sales of the company’s share of net production and excludes amounts used for internal consumption. 2024 Higher bitumen production was mainly attributable to Grands Rapids production at Cold Lake, as well as improved mine fleet productivity and optimized turnaround at Kearl. 2023 Higher bitumen production was mainly attributable to Kearl, and primarily driven by improved reliability, plant capacity utilization, and mine equipment productivity. 57 Downstream Overview The company’s Downstream serves predominantly Canadian markets with refining, trading, logistics and marketing activities. The company's Downstream business strategies competitively position the company across a range of market conditions. These strategies include targeting industry-leading performance in reliability, safety and operations integrity, as well as maximizing value from advanced technologies, capitalizing on integration across the company’s businesses, selectively investing for resilient and advantaged returns, operating efficiently and effectively, and providing quality, valued and differentiated products and services to customers. The company owns and operates three refineries in Canada with aggregate distillation capacity of 434,000 barrels per day. Refining margins are largely driven by differences in commodity prices and are a function of the difference between what a refinery pays for its raw materials (primarily crude oil) and the market prices for the range of products produced (primarily gasoline, heating oil, diesel oil, jet fuel, fuel oil and asphalt). Crude oil and many products are widely traded with published prices, including those quoted on the New York Mercantile Exchange. Prices for these commodities are determined by the global and regional marketplaces and are influenced by many factors, including global and regional supply/demand balances, inventory levels, industry refinery operations, import/export balances, currency fluctuations, seasonal demand, weather and political considerations. While industry refining margins significantly impact earnings, strong operational performance, product mix optimization, and disciplined cost control are also critical to the company's strong financial performance. The company's integration across the value chain, from refining to marketing, enhances overall value across the fuels business. Key events Refining margins declined in 2024 from 2023 levels as supply from industry capacity additions outpaced global demand growth. The company continues to closely monitor industry and global economic conditions. In January 2023, the company fully funded the Strathcona renewable diesel project, the largest such facility in Canada, located at Strathcona refinery. The facility will use hydrogen, locally sourced and grown feedstocks and the company's proprietary catalyst to produce renewable diesel. Facility construction commenced in 2023 and the project is expected to start up in the middle of 2025. As described in more detail in "Item 1A. Risk factors", proposed carbon policy and other climate related regulations, as well as continued biofuels mandates, could have negative impacts on the Downstream business. The company supplies petroleum products through Esso and Mobil-branded sites and independent marketers. At the end of 2024, there were about 2,600 sites operating under a branded wholesaler model, in alignment with Esso and Mobil brand standards, whereby the company supplies fuel to independent third parties. Results of operations 2024 Net income (loss) factor analysis millions of Canadian dollars Margins – Lower margins primarily reflect weaker market conditions. Other – Primarily due to lower turnaround impacts of about $120 million and favourable foreign exchange impacts of about $110 million, partially offset by lower volumes of about $60 million. 58 2023 Net income (loss) factor analysis millions of Canadian dollars Margins – Lower margins primarily reflect weaker market conditions. Other – Higher turnaround impacts of about $340 million, associated with the planned turnaround activities at the Strathcona and Sarnia refineries, partially offset by favourable foreign exchange impacts of about $210 million, improved volumes of about $50 million, and lower operating expenses of about $50 million, primarily due to lower energy prices. Refinery utilization thousands of barrels per day (a) 2024 2023 2022 Total refinery throughput (b) 399 407 418 Rated capacity at December 31 (c) 434 433 433 Utilization of total refinery capacity (percent) 92 94 98 (a) Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period. (b) Refinery throughput is the volume of crude oil and feedstocks that is processed in the refinery atmospheric distillation units. (c) Refining capacity data is based on 100 percent of rated refinery process unit stream-day capacities to process inputs to atmospheric distillation units under normal operating conditions, less the impact of shutdowns for regular repair and maintenance activities, averaged over an extended period of time. 2024 Lower refinery throughput in 2024 reflected the impact of planned turnaround activities at Nanticoke, Sarnia and Strathcona refineries. 2023 Lower refinery throughput in 2023 reflected the impact of planned turnaround activities at Strathcona and Sarnia refineries. Petroleum product sales thousands of barrels per day (a) 2024 2023 2022 Gasolines 223 228 229 Heating, diesel and jet fuels 175 176 176 Lube oils and other products (b) 46 43 47 Heavy fuel oils 22 24 23 Net petroleum product sales 466 471 475 (a) Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period. (b) In 2024, benzene and aromatic solvent sales are reported under Petroleum product sales - Lube oils and other products, whereas in 2023, they were reported under Petrochemical sales. The company has determined that the impact of this change is not material; therefore, the comparative periods have not been recast. 59 Chemical Overview North America continued to benefit from abundant supplies of natural gas and gas liquids, providing both low cost energy and feedstock for steam crackers. Key events In 2024, the Chemicals business had strong operating performance following 2023 planned maintenance activities. The company maintains a competitive advantage through continued operational excellence, consistent product quality, investment and cost discipline, and integration of its chemical plant in Sarnia with the refinery. The company also benefits from its relationship with ExxonMobil’s North American chemical businesses, enabling Imperial to maintain a leadership position in its key market segments. Results of operations 2024 Net income (loss) factor analysis millions of Canadian dollars 2023 Net income (loss) factor analysis millions of Canadian dollars Sales thousands of tonnes 2024 2023 2022 Total petrochemical sales (a) 684 820 842 (a) In 2024, benzene and aromatic solvent sales are reported under Petroleum product sales - Lube oils and other products, whereas in 2023, they were reported under Petrochemical sales. The company has determined that the impact of this change is not material; therefore, the comparative periods have not been recast. Corporate and other millions of Canadian dollars 2024 2023 2022 Net income (loss) (129) (88) (131) 60 Liquidity and capital resources Sources and uses of cash The company issues long-term debt from time to time and maintains a commercial paper program. However, internally generated funds cover the majority of its financial requirements. Cash that may be temporarily surplus to the company’s immediate needs is carefully managed through counterparty quality and investment guidelines to ensure that it is secure and readily available to meet the company’s cash requirements and to optimize returns. Cash flows from operating activities are highly dependent on crude oil and natural gas prices, as well as petroleum and chemical product margins. In addition, to provide for cash flow in future periods, the company needs to continually find and develop new resources, and continue to develop and apply new technologies to existing fields in order to maintain or increase production. The company’s financial strength enables it to make large, long-term capital expenditures. The company’s portfolio of development opportunities and the complementary nature of its business segments help mitigate the overall risks for the company and its cash flows. Further, due to its financial strength, debt capacity and portfolio of opportunities, the risk associated with delay of any single project would not have a significant impact on the company’s liquidity or ability to generate sufficient cash flows for its operations and fixed commitments. Funding of registered retirement plans complies with federal and provincial pension regulations, and the company makes contributions to the plans based on an independent actuarial valuation completed at least once every three years depending on funding status. The most recent valuation of the company’s registered retirement plans was completed as at December 31, 2022. The company contributed $150 million to the registered retirement plans in 2024. Future funding requirements are not expected to affect the company’s existing capital investment plans or its ability to pursue new investment opportunities. millions of Canadian dollars 2024 2023 2022 Cash flows from (used in): Operating activities 5,981 3,734 10,482 Investing activities (1,825) (1,694) (618) Financing activities (4,041) (4,925) (8,268) Increase (decrease) in cash and cash equivalents 115 (2,885) 1,596 Cash and cash equivalents at end of year 979 864 3,749 Cash flows from operating activities 2024 Cash flows from operating activities primarily reflect lower unfavourable working capital impacts mainly related to an income tax catch-up payment of $2.1 billion in the prior year. 2023 Cash flows from operating activities primarily reflect unfavourable working capital impacts, including an income tax catch-up payment of $2.1 billion, as well as lower Upstream realizations and Downstream margins. Cash flows used in investing activities 2024 Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment. 2023 Cash flows used in investing activities primarily reflect the absence of proceeds from the sale of interests in XTO Energy Canada, and higher additions to property, plant and equipment. 61 Cash flows used in financing activities 2024 At the end of 2024, total debt outstanding was $4,011 million, compared with $4,132 million at the end of 2023. In June 2024, the company extended the maturity date of its existing long-term, variable-rate, Canadian dollar loan from ExxonMobil to June 30, 2035. All other terms and conditions remain unchanged. During the fourth quarter of 2024, the company extended the maturity dates of its two existing $250 million committed lines of credit to November 2025 and November 2026, respectively. The company has not drawn on any of its outstanding $500 million of available credit facilities. 2023 At the end of 2023, total debt outstanding was $4,132 million, compared with $4,155 million at the end of 2022. During the fourth quarter of 2023, the company extended the maturity dates of its two existing $250 million committed lines of credit to November 2024 and November 2025, respectively. The company has not drawn on any of its outstanding $500 million of available credit facilities. Share repurchases millions of Canadian dollars, unless noted 2024 2023 2022 Share repurchases (a) 2,681 3,800 6,395 Number of shares purchased (millions) (a) 26.8 48.3 93.9 (a) Share repurchases were made under the company's normal course issuer bid program for the periods disclosed. Substantial issuer bids were undertaken and commenced on May 6, 2022 (expired on June 10, 2022), November 4, 2022 (expired on December 9, 2022), and November 3, 2023 (expired on December 8, 2023). Includes shares purchased from Exxon Mobil Corporation under and in connection with the normal course issuer bid and by way of a proportionate tender under the company's substantial issuer bids. 2024 On June 24, 2024, the company announced that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid to continue its then-existing share purchase program. The program enabled the company to purchase up to a maximum of 26,791,840 common shares during the period June 29, 2024 to June 28, 2025. The program completed on December 19, 2024 as a result of the company purchasing the maximum allowable number of shares under the program. 2023 On June 27, 2023, the company announced that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid to continue its then-existing share purchase program. The program enabled the company to purchase up to a maximum of 29,207,635 common shares during the period June 29, 2023 to June 28, 2024. The program completed on October 19, 2023 as a result of the company purchasing the maximum allowable number of shares under the program. On November 3, 2023, the company commenced a substantial issuer bid pursuant to which it offered to purchase for cancellation up to $1.5 billion of its common shares through a modified Dutch auction and proportionate tender offer. The substantial issuer bid was completed on December 13, 2023, with the company taking up and paying for 19,108,280 common shares at a price of $78.50 per share, for an aggregate purchase of $1.5 billion and 3.4 percent of Imperial's issued and outstanding shares at the close of business on October 30, 2023. This included 13,299,349 shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent. 62 Dividends millions of Canadian dollars, unless noted 2024 2023 2022 Dividends paid 1,238 1,103 851 Per share dividend paid (dollars) 2.30 1.88 1.29 Financial strength The table below shows the company’s consolidated debt-to-capital ratio at December 31. The data demonstrates the company’s creditworthiness: percent 2024 2023 2022 Debt to capital (a) 15 16 16 (a) Debt, defined as the sum of “Notes and loans payable” and “Long-term debt” on the Consolidated balance sheet, divided by capital, defined as the sum of debt and “Total shareholders’ equity” on the Consolidated balance sheet. Debt-related interest incurred in 2024, before capitalization of interest, was $192 million, compared with $203 million in 2023. The weighted-average interest rate on the company’s debt was 4.7 percent in 2024, compared with 4.9 percent in 2023. The company’s financial strength represents a competitive advantage of strategic importance providing it the opportunity to readily access capital markets across a range of market conditions and enables the company to take on large, long-term capital commitments in the pursuit of maximizing shareholder value. Contractual obligations The company has contractual obligations involving commitments to third parties that impact its liquidity and capital resource needs. These contractual obligations are primarily for leases, debt, asset retirement obligations, pension and other postretirement benefits, other long-term obligations, and firm capital commitments. Further information on this topic can be found in notes 4, 5, 13 and 14 to the consolidated financial statements. Other long-term purchase agreements are commitments that are non-cancellable, or cancellable only under certain conditions, as well as long-term commitments, other than unconditional purchase obligations. They include primarily transportation services agreements, raw material supply and community benefits agreements. The total obligation at year-end 2024 was $14.7 billion, of which $1.1 billion is due in 2025, and $2.0 billion is due in 2026. Litigation and other contingencies As discuss ed in note 9 to t he consolidated financial statements, a variety of claims have been made against Imperial and its subsidiaries. Based on a consideration of all relevant facts and circumstances, the company does not believe the ultimate outcome of any currently pending lawsuits against the company will have a material adverse effect on the company’s operations, financial condition, or financial statements taken as a whole. Additionally, as discussed in note 9, Imperial was contingently liable at December 31, 2024, for guarantees relating to performance under contracts. These guarantees do not have a material effect on the company’s operations, financial condition, or financial statements taken as a whole. There are no events or uncertainties beyond those already included in reported financial information that would indicate a material change in future operating results or financial condition. 63 Capital and exploration expenditures Capital and exploration expenditures represent the combined total of additions at cost to property, plant and equipment, additions to finance leases, additional investments and acquisitions; exploration expenses on a before-tax basis from the Consolidated statement of income; and the company’s share of similar costs for equity companies. Capital and exploration expenditures exclude the purchase of carbon emission credits. While the company’s management is responsible for all investments and elements of net income, particular focus is placed on managing the controllable aspects of this group of expenditures. millions of Canadian dollars 2024 2023 Upstream (a) 1,078 1,108 Downstream 572 472 Chemical 30 23 Corporate and other 187 175 Total 1,867 1,778 (a) Exploration expenses included. For the Upstream segment, capital and exploration expenditures were primarily related to sustaining activity in support of the company’s oil sands and in-situ assets. For the Downstream segment, capital expenditures were primarily for progressing the Strathcona renewable diesel facility as well as other refinery and distribution projects to improve environmental performance, reliability, and energy efficiency. Total capital and exploration expenditures are expected to range between $1.9 billion to $2.1 billion in 2025. Expected capital and exploration expenditures for 2025 includes firm capital commitments of $227 million for the construction and purchase of fixed assets and other permanent investments. An additional $38 million of firm capital commitments have been made for years 2026 and beyond. Actual spending could vary depending on the progress of individual projects. 64 Market risks Crude oil, natural gas, petroleum product and chemical prices have fluctuated in response to changing market forces. The impacts of these price fluctuations on earnings from Upstream, Downstream and Chemical operations have varied. The company’s earnings are influenced by North American crude oil benchmark prices as well as changes in the differentials between these benchmarks and western Canadian prices for light and heavy crude oil. The company’s integrated business model reduces its risk from changes in commodity prices. For instance, when differentials between North American crude benchmarks and western Canadian prices widen, the company is able to mitigate the impact of widening differentials on the Upstream through integration with Downstream investments in refineries and pipeline commitments. In the competitive downstream and chemical environments, earnings are primarily determined by margin capture rather than absolute price levels on products sold. Refining margins are a function of the difference between what a refiner pays for its raw materials (primarily crude oil) and the market prices for the range of products produced. These prices, in turn, depend on global and regional supply/demand balances, inventory levels, refinery operations, import/export balances and weather. Industry crude oil commodity prices and petroleum and chemical product prices are commonly benchmarked in U.S. dollars. The majority of the company’s sales and purchases are related to these industry U.S. dollar benchmarks. As the company records and reports its financial results in Canadian dollars, to the extent that the Canadian/U.S. dollar exchange rate fluctuates, the company’s earnings will be affected. The company is exposed to changes in interest rates, primarily on its debt which carries floating interest rates. The impact of a quarter percent change in interest rates affecting the company’s debt would not be material to earnings or cash flow. The company has access to significant sources of long-term and short-term liquidity. Internally generated funds are expected to cover the majority of financial requirements, supplemented by long-term and short-term debt as needed. The company’s potential exposure to commodity price and margin, and Canadian/U.S. dollar exchange rate fluctuations, is summarized in the earnings sensitivities table, which shows the estimated annual effect, under current conditions, on the company’s after-tax net income. For any given period, the extent of actual benefit or detriment will be dependent on the price movements of individual types of crude oil and products, production and sales volumes, transportation capacity, costs and egress methods, and other factors. Accordingly, changes in benchmark prices for crude oil and crude oil differentials, and other factors listed in the table following, only provide broad indicators of changes in the earnings experienced in any particular period. Earnings sensitivities (a) millions of Canadian dollars, after-tax One dollar (U.S.) per barrel increase (decrease) in crude oil prices + (-) 110 One dollar (U.S.) per barrel increase (decrease) in refining 2-1-1 margins (b) + (-) 145 One cent decrease (increase) in the value of the Canadian dollar versus the U.S. dollar + (-) 140 (a) Each sensitivity calculation shows the annual impact on net income resulting from a change in one factor, after tax and royalties, and holding all other factors constant. These sensitivities have been updated to reflect current market conditions. They may not apply proportionately to larger fluctuations. (b) The 2-1-1 crack spread is an indicator of the refining margin generated by converting two barrels of crude oil into one barrel of gasoline and one barrel of diesel. The demand for crude oil, petroleum products and petrochemical products are generally linked closely with economic growth. The occurrence of recessions or other periods of low or negative economic growth will typically have a direct adverse impact on the company’s financial results. Although price levels of crude oil may rise and fall significantly over the short to medium-term due to global economic conditions, political events, decisions by OPEC or OPEC+, governments and other factors, industry economics over the long-term will continue to be driven by market supply and demand. The company evaluates investments over a range of prices, including estimated greenhouse gas emission costs. The global energy markets can give rise to extended periods in which market conditions are adverse to one or more of the company’s businesses. Such conditions, along with the capital-intensive nature of the industry and 65 very long lead times associated with many of the company’s projects, underscore the importance of maintaining a strong financial position. Management views the company’s financial strength as a competitive advantage. In general, segment results are not dependent on the ability to sell and/or purchase products to/from other segments. Where such intersegment sales take place, they are the result of efficiencies and competitive advantages from integrated business segments and refinery and chemical complexes. The company’s intersegment sales include crude oil produced by the Upstream and sold to the Downstream, as well as sales between refineries and the chemical plant related to raw materials, feedstocks and finished products. All intersegment sales are at market based prices. Refer to note 2 for additional information on intersegment revenue. The company has an active asset management program in which nonstrategic assets are considered for divestment. The asset management program includes a disciplined, regular review to ensure that assets are contributing to the company’s strategic objectives. Risk management The company’s size, strong capital structure and the complementary nature of its business segments reduces the company’s enterprise-wide risk from changes in commodity prices and currency exchange rates. In addition, the company may use commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. The company’s 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. No material market or credit risks to the company’s financial position, results of operations or liquidity exist as a result of the derivatives described in n ote 6 . The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity. 66 Critical accounting estimates The company’s financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP). U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The company’s accounting and financial reporting fairly reflect its business model involving exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a variety of specialty products; and pursuit of lower-emission business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, and lithium. The company does not use financing structures for the purpose of altering accounting outcomes or removing debt from the balance sheet. The company’s significant accounting policies are summarized in note 1 to th e consolidated financial statements. Oil and natural gas reserves Evaluations of oil and natural gas reserves are important to the effective management of upstream assets. They are an integral part of investment decisions about oil and gas properties such as whether development should proceed. The estimation of proved reserve volumes, which is based on the requirement of reasonable certainty, is an ongoing process based on rigorous technical evaluations, commercial and market assessments, detailed analysis of reservoir and well performance, development and production costs, and other factors. The estimation of proved reserves is controlled by the company through long-standing approval guidelines. Reserves changes are made within a well-established, disciplined process driven by qualified geoscience and engineering professionals, assisted by the reserves management group which has significant technical experience, culminating in reviews with and approval by senior management and the company’s board of directors. Notably, the company does not use specific quantitative reserves targets to determine compensation. Key features of the reserves estimation process are covered in "Disclosure of reserves" in Item 1. Oil and natural gas reserves include both proved and unproved reserves. • Proved oil and natural gas reserves are determined in accordance with U.S. Securities and Exchange Commission (SEC) requirements. Proved reserves are those quantities of oil and natural gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible under existing economic and operating conditions and government regulations. Proved reserves are determined using the average of first-day-of-the-month oil and natural gas prices during the reporting year. Proved reserves can be further subdivided into developed and undeveloped reserves. Proved developed reserves include amounts which are expected to be recovered through existing wells, facilities, or mining activities with existing equipment and operating methods. Proved undeveloped reserves include amounts expected to be recovered from new wells, existing wells, facilities, or mining activities, where a relatively major capital expenditure is required. Proved undeveloped reserves are recognized when a development plan has been adopted indicating that the reserves are scheduled to be developed within five years, unless specific circumstances support a longer period of time. The company is reasonably certain that proved reserves will be produced. However, the timing and amount recovered can be affected by a number of factors including completion and optimization of development projects, reservoir performance, regulatory approvals, government policies, consumer preferences, royalty frameworks and significant changes in oil and natural gas price levels. • Unproved reserves are quantities of oil and natural gas with less than reasonable certainty of recoverability and include probable reserves. Probable reserves are reserves that, together with proved reserves, are as likely as not to be recovered. Revisions in previously estimated volumes of proved reserves for existing fields can occur due to the evaluation or re-evaluation of already available geologic, reservoir or production data; new geologic, reservoir or production data; or changes in the average of first-day-of-the-month oil and natural gas prices and/or costs that are used in the estimation of reserves. Revisions can also result from significant changes in either development strategy or production equipment and facility capacity. 67 In 2022, downward revisions of proved bitumen reserves were driven by a decrease of 0.2 billion barrels at Kearl as a result of higher royalty obligations associated with pricing, and a decrease of 0.2 billion barrels at Cold Lake due to an updated development plan. An increase to the bitumen reserves of 0.1 billion barrels is associated with extensions at Cold Lake for the Grand Rapids Phase 1 SA-SAGD and Leming SAGD projects. Downward revisions to proved synthetic crude oil reserves were a result of mine development plan updates and higher royalty obligations at Syncrude associated with pricing. Changes to the liquids and natural gas proved reserves were primarily a result of the sale of the company’s interest in the Montney and Duvernay unconventional assets. In 2023, upward revisions of proved bitumen of 0.1 billion barrels were driven by lower royalty obligations associated with lower pricing and minor technical revisions at Cold Lake and Kearl. A slight increase in proved reserves for synthetic crude oil is associated with lower royalty obligations associated with pricing. Conventional proved liquids reserves decreased to zero under existing pricing and operating conditions. In 2024, upward revisions of proved bitumen of 0.1 billion barrels were primarily driven by updates to the Kearl geological model, Kearl well density, and Cold Lake infill drilling, partially offset by reductions associated with higher royalty obligations and Kearl pit limit updates. A decrease to synthetic oil proved reserves is associated with regulatory approval for ore sterilization at Syncrude. Under the terms of certain contractual arrangements or government royalty regimes, lower prices can also increase proved reserves attributable to the company. The company’s operating decisions and its outlook for future production volumes are not impacted by proved reserves as disclosed under the SEC definition. Unit-of-production depreciation Oil and natural gas reserve volumes are used as the basis to calculate unit-of-production depreciation rates for most upstream assets. Depreciation is calculated by taking the ratio of asset cost to total proved reserves or proved developed reserves applied to actual production. The volumes produced and asset cost are known, while proved reserves are based on estimates that are subject to some variability. In the event that the unit-of-production method does not result in an equitable allocation of cost over the economic life of an upstream asset, an alternative method is used. The straight-line method is used in limited situations where the expected life of the asset does not reasonably correlate with that of the underlying reserves. For example, certain assets used in the production of oil and natural gas have a shorter life than the reserves, and as such, the company uses straight-line depreciation to ensure the asset is fully depreciated by the end of its useful life. To the extent that proved reserves for a property are substantially de-booked and that property continues to produce such that the resulting depreciation charge does not result in an equitable allocation of cost over the expected life, assets will be depreciated using a unit-of-production method based on reserves determined at the most recent SEC price which results in a more meaningful quantity of proved reserves, appropriately adjusted for production and technical changes. Impact of oil and gas reserves and prices and margins on testing for impairment The company tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The company has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 and ASC 932 and relies, in part, on the company’s planning and budgeting cycle. Because the lifespans of the vast majority of the company’s major assets are measured in decades, the future cash flows of these assets are predominantly based on long-term oil and natural gas commodity prices, industry margins, and development and production costs. Significant reductions in the company’s view of oil or natural gas commodity prices or margin ranges, especially the longer-term prices and margins, and changes in the development plans, including decisions to defer, reduce or eliminate planned capital spending, can be an indicator of potential impairment. Other events or changes in circumstances, including indicators outlined in ASC 360 can be indicators of potential impairment as well. In general, the company does not view temporarily low prices or margins as an indication of impairment. Management believes that prices over the long term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long 68 term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments, and technology and efficiency advancements. OPEC+ investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities, alternative energy sources and levels of prosperity. During the lifespan of its major assets, the company expects that oil and gas prices and industry margins will experience significant volatility. Consequently, these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the company considers recent periods of operating losses in the context of its longer-term view of prices and margins. Global Outlook and cash flow assessment The annual planning and budgeting process, known as the company plan, is the mechanism by which resources (capital, operating expenses and people) are allocated across the company. The foundation for the energy supply and demand assumptions supporting the company plan begins with Exxon Mobil Corporation's Global Outlook (the Outlook), which contains demand and supply projections based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, economic development, and other factors. Reflective of the existing global policy environment, the Outlook does not attempt to project the degree of required future policy and technology advancement and deployment for the world to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and consequently, the company’s business plans will be updated accordingly. If events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, the company estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. In performing this assessment, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Cash flows used in recoverability assessments are based on the assumptions developed in the company plan, which is reviewed and approved by the board of directors, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the company’s assumptions of future capital allocations, crude oil and natural gas commodity prices including price differentials, refining and chemical margins, volumes, development and operating costs, including greenhouse gas emissions prices, and foreign currency exchange rates. Volumes are based on projected field and facility production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. The greenhouse gas emission prices reflect existing or anticipated policy actions of applicable provincial and federal governments. While third-party scenarios may be used to test the resiliency of company’s businesses or strategies, they are not used as a basis for developing future cash flows for impairment assessments. Fair value of impaired assets An asset group is impaired if its estimated future undiscounted cash flows are less than the asset group’s carrying value. Impairments are measured by the excess of the carrying value over fair value. The assessment of fair value is based on the views of a likely market participant. The principal parameters used to establish fair value include estimates of acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, throughput and product sales volumes, commodity prices (which are consistent with the average of third-party industry experts and government agencies), refining and chemical margins, drilling and development costs, operating costs, and discount rates which are reflective of the characteristics of the asset group. Other impairment estimates Unproved properties are assessed periodically to determine whether they have been impaired. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the company’s future development plans, the estimated economic chance of success and the length of time that the company expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period. Long-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, 69 the assets are considered impaired and adjusted to the lower value. Judgment is required to determine if assets are held for sale, and to determine the fair value less cost to sell. Investments accounted for by the equity method are assessed for possible impairment when events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Examples of key indicators include a history of operating losses, negative earnings and cash flow outlook, significant downward revisions to oil and gas reserves, and the financial condition and prospects for the investee’s business segment or geographic region. If the decline in value of the investment is other than temporary, the carrying value of the investment is written down to fair value. In the absence of market prices for the investment, discounted cash flows are used to assess fair value, which requires significant judgment. Recent impairments Factors which could put further assets at risk of impairment in the future include reductions in the company’s price or margin outlooks, changes in the allocation of capital or development plans, reduced long-term demand for the company’s products and operating cost increases which exceed the pace of efficiencies or the pace of oil and natural gas price increases or margins. However, due to the inherent difficulty in predicting future commodity prices or margins, and the relationship between industry prices and costs, it is not practicable to reasonably estimate the existence or range of any potential future impairment charges related to the company’s long-lived assets. Supplemental information regarding oil and gas results of operations, capitalized costs and reserves is provided following the notes to consolidated financial statements. Pension benefits The company’s pension plan is managed in compliance with the requirements of governmental authorities and meets funding levels as determined by independent third-party actuaries. Pension accounting requires explicit assumptions regarding, among others, the discount rate for the benefit obligations, the expected rate of return on plan assets and the long-term rate of future compensation increases. All pension assumptions are reviewed annually by senior management. These assumptions are adjusted only as appropriate to reflect long-term changes in market rates and outlook. The long-term expected rate of return on plan assets of 5.6 percent used in 2024 compares to actual returns of 5.1 percent and 6.0 percent achieved over the last 10- and 20-year periods respectively, ending December 31, 2024. If different assumptions are used, the obligation and expense could increase or decrease as a result. As an indication of the company’s potential exposure to changes in the critical assumptions, such as the expected rate of return on plan assets, a reduction of 1 percent in the long-term rate of return on plan assets would increase the annual pension expense by approximately $80 million before tax. At the company, differences between actual returns on plan assets and the long-term expected returns are not recorded in pension expense in the year the differences occur. Such differences are deferred, along with other actuarial gains and losses, and are amortized into pension expense over the expected average remaining service life of employees. Employee benefits expense represented about 1 percent of total expenses in 2024. Asset retirement obligations The company is subject to retirement obligations for certain assets. The fair values of these obligations are recorded as liabilities on a discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the company uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, discount rates, and inflation rates. Note 5 to the consolidated financial statements provides a three-year continuity table detailing the changes in asset retirement obligations. Tax contingencies The operations of the company are complex, and related tax interpretations, regulations and legislation are continually changing. The benefits of uncertain tax positions that the company has taken or expects to take in its income tax returns are recognized in the financial statements if management concludes that it is more likely than not that the position will be sustained with the tax authorities. For a position that is likely to be sustained, the benefit recognized in the financial statements is measured at the largest amount that is greater than 50 percent likely of being realized. Significant management judgment is required in the accounting for income tax contingencies and tax disputes because the outcomes are often difficult to predict. The company’s unrecognized tax benefits and a description of open tax years are summarized in note 3 to the consolidated financial statements. 70 Management’s report on internal control over financial reporting Management, including the company’s chief executive officer and principal accounting officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over the company’s financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that Imperial Oil Limited’s internal control over financial reporting was effective as of December 31, 2024. PricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of the company’s internal control over financial reporting as of December 31, 2024, as stated in their report which is included herein. /s/ Bradley W. Corson Bradley W. Corson Chairman, president and chief executive officer (Principal executive officer) /s/ Daniel E. Lyons Daniel E. Lyons Senior vice-president, finance and administration, and controller (Principal accounting officer and principal financial officer) February 19, 2025 71 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Imperial Oil Limited Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Imperial Oil Limited and its subsidiaries (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of income, of comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 72 Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. The Impact of Proved Developed Oil and Natural Gas Reserves on Upstream Property, Plant and Equipment, Net As described in Notes 1 and 2 to the consolidated financial statements, the Company’s consolidated upstream property, plant and equipment (PP&E), net balance was $26,262 million as of December 31, 2024, and the related depreciation and depletion expense for the year ended December 31, 2024 was $1,747 million. Management uses the successful efforts method to account for its exploration and production activities. Costs incurred to purchase, lease or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. As disclosed by management, proved oil and natural gas reserve volumes are used as the basis to calculate unit-of-production depreciation rates for most upstream assets. The estimation of proved oil and natural gas reserve volumes is an ongoing process based on technical evaluations, commercial and market assessments, detailed analysis of reservoir and well performance, development and production costs, among other factors. As further disclosed by management, reserves changes are made within a well-established, disciplined process driven by qualified geoscience and engineering professionals, assisted by the reserves management group (together, management’s specialists). The principal considerations for our determination that performing procedures relating to the impact of proved developed oil and natural gas reserves on upstream PP&E, net is a critical audit matter are (i) the significant judgment by management, including the use of management’s specialists, when developing the estimates of proved developed oil and natural gas reserve volumes, and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the audit evidence related to the data, methods, and assumptions used by management and its specialists in developing the estimates of proved developed oil and natural gas reserve volumes. 73 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's estimates of proved developed oil and natural gas reserve volumes. The work of management's specialists was used in performing the procedures to evaluate the reasonableness of the proved developed oil and natural gas reserve volumes. As a basis for using this work, management's specialists' qualifications were understood and the Company's relationship with management's specialists was assessed. The procedures performed, also included i) evaluating the methods and assumptions used by management's specialists, ii) testing the completeness and accuracy of the data used by management's specialists related to historical production volumes, and iii) evaluating management's specialists' findings related to estimated future production volumes by comparing the future production volumes to relevant historical and current period production volumes, as applicable. /s/PricewaterhouseCoopers LLP Chartered Professional Accountants Calgary, Canada February 19, 2025 We have served as the Company’s auditor since 1934. 74 Consolidated statement of income (U.S. GAAP) millions of Canadian dollars For the years ended December 31 2024 2023 2022 Revenues and other income Revenues (a) 51,359 50,702 59,413 Investment and other income (note 8, 18) 173 267 257 Total revenues and other income 51,532 50,969 59,670 Expenses Exploration (note 15) 3 5 5 Purchases of crude oil and products (b) 33,184 32,399 37,742 Production and manufacturing (c) 6,599 6,879 7,404 Selling and general (c) 945 857 882 Federal excise tax and fuel charge 2,535 2,402 2,179 Depreciation and depletion 1,983 1,907 1,897 Non-service pension and postretirement benefit 3 82 17 Financing (d) (note 12) 41 69 60 Total expenses 45,293 44,600 50,186 Income (loss) before income taxes 6,239 6,369 9,484 Income taxes (note 3) 1,449 1,480 2,144 Net income (loss) 4,790 4,889 7,340 Per share information (Canadian dollars) Net income (loss) per common share - basic (note 10) 9.05 8.51 11.47 Net income (loss) per common share - diluted (note 10) 9.03 8.49 11.44 (a) Amounts from related parties included in revenues (note 16). 11,725 13,544 17,042 (b) Amounts to related parties included in purchases of crude oil and products (note 16). 3,722 4,125 3,795 (c) Amounts to related parties included in production and manufacturing, and selling and general expenses (note 16). 541 473 460 (d) Amounts to related parties included in financing (note 16). 161 169 78 The information in the notes to consolidated financial statements is an integral part of these statements. 75 Consolidated statement of comprehensive income (U.S. GAAP) millions of Canadian dollars For the years ended December 31 2024 2023 2022 Net income (loss) 4,790 4,889 7,340 Other comprehensive income (loss), net of income taxes Postretirement benefits liability adjustment (excluding amortization) 412 ( 206 ) 582 Amortization of postretirement benefits liability adjustment included in net benefit costs 51 41 83 Total other comprehensive income (loss) 463 ( 165 ) 665 Comprehensive income (loss) 5,253 4,724 8,005 The information in the notes to consolidated financial statements is an integral part of these statements. 76 Consolidated balance sheet (U.S. GAAP) millions of Canadian dollars At December 31 2024 2023 Assets Current assets Cash and cash equivalents 979 864 Accounts receivable - net (a) 5,758 4,482 Inventories of crude oil and products (note 11) 1,642 1,944 Materials, supplies and prepaid expenses 975 1,008 Total current assets 9,354 8,298 Investments and long-term receivables (b) 1,084 1,062 Property, plant and equipment, less accumulated depreciation and depletion 30,807 30,835 Goodwill 166 166 Other assets, including intangibles - net 1,527 838 Total assets 42,938 41,199 Liabilities Current liabilities Notes and loans payable (note 12) 19 121 Accounts payable and accrued liabilities (a) (note 11) 6,907 6,231 Income taxes payable 81 251 Total current liabilities 7,007 6,603 Long-term debt (c) (note 14) 3,992 4,011 Other long-term obligations (note 5) 3,870 3,851 Deferred income tax liabilities (note 3) 4,596 4,512 Total liabilities 19,465 18,977 Commitments and contingent liabilities (note 9) Shareholders’ equity Common shares at stated value (d) (note 10) 942 992 Earnings reinvested 22,745 21,907 Accumulated other comprehensive income (loss) (note 17) ( 214 ) ( 677 ) Total shareholders’ equity 23,473 22,222 Total liabilities and shareholders’ equity 42,938 41,199 (a) Accounts receivable - net included net amounts receivable from related parties (note 16). 756 1,048 (b) Investments and long-term receivables included amounts from related parties (note 16). 266 283 (c) Long-term debt included amounts to related parties (note 16). 3,447 3,447 (d) Number of common shares authorized (millions) (note 10). 1,100 1,100 Number of common shares outstanding (millions) (note 10). 509 536 The information in the notes to consolidated financial statements is an integral part of these statements. Approved by the directors. /s/ Bradley W. Corson /s/ Daniel E. Lyons Bradley W. Corson Daniel E. Lyons Chairman, president and Senior vice-president chief executive officer finance and administration, and controller 77 Consolidated statement of shareholders’ equity (U.S. GAAP) millions of Canadian dollars At December 31 2024 2023 2022 Common shares at stated value (note 10) At beginning of year 992 1,079 1,252 Share purchases at stated value ( 50 ) ( 87 ) ( 173 ) At end of year 942 992 1,079 Earnings reinvested At beginning of year 21,907 21,846 21,660 Net income (loss) for the year 4,790 4,889 7,340 Share purchases in excess of stated value ( 2,685 ) ( 3,713 ) ( 6,222 ) Dividends declared ( 1,267 ) ( 1,115 ) ( 932 ) At end of year 22,745 21,907 21,846 Accumulated other comprehensive income (loss) (note 17) At beginning of year ( 677 ) ( 512 ) ( 1,177 ) Other comprehensive income (loss) 463 ( 165 ) 665 At end of year ( 214 ) ( 677 ) ( 512 ) Shareholders’ equity at end of year 23,473 22,222 22,413 The information in the notes to consolidated financial statements is an integral part of these statements. 78 Consolidated statement of cash flows (U.S. GAAP) millions of Canadian dollars For the years ended December 31 2024 2023 2022 Operating activities Net income (loss) 4,790 4,889 7,340 Adjustments for non-cash items: Depreciation and depletion 1,983 1,907 1,897 (Gain) loss on asset sales (note 8, 18) ( 18 ) ( 73 ) ( 158 ) Deferred income taxes and other ( 142 ) ( 85 ) ( 77 ) Changes in operating assets and liabilities: Accounts receivable ( 1,276 ) 237 ( 862 ) Inventories, materials, supplies and prepaid expenses 335 ( 688 ) ( 477 ) Income taxes payable ( 170 ) ( 2,331 ) 1,876 Accounts payable and accrued liabilities 616 81 948 All other items - net (b) ( 137 ) ( 203 ) ( 5 ) Cash flows from (used in) operating activities 5,981 3,734 10,482 Investing activities Additions to property, plant and equipment ( 1,867 ) ( 1,785 ) ( 1,526 ) Proceeds from asset sales (note 8, 18) 25 86 904 Additional investments — — ( 6 ) Loans to equity companies - net 17 5 10 Cash flows from (used in) investing activities ( 1,825 ) ( 1,694 ) ( 618 ) Financing activities Short-term debt - net (note 12) ( 100 ) — — Long-term debt - reduction (note 14) — — ( 1,000 ) Finance lease obligations - reduction (note 14) ( 22 ) ( 22 ) ( 22 ) Dividends paid ( 1,238 ) ( 1,103 ) ( 851 ) Common shares purchased (note 10) ( 2,681 ) ( 3,800 ) ( 6,395 ) Cash flows from (used in) financing activities ( 4,041 ) ( 4,925 ) ( 8,268 ) Increase (decrease) in cash and cash equivalents 115 ( 2,885 ) 1,596 Cash and cash equivalents at beginning of year 864 3,749 2,153 Cash and cash equivalents at end of year (a) 979 864 3,749 (a)  Cash is composed of cash in bank and cash equivalents at cost. Cash equivalents are all highly liquid securities with maturity of three months or less. (b)  Included contributions to registered pension plans. ( 150 ) ( 148 ) ( 174 ) Income taxes (paid) refunded. ( 1,771 ) ( 4,153 ) ( 374 ) Interest (paid), net of capitalization. ( 42 ) ( 69 ) ( 60 ) The information in the notes to consolidated financial statements is an integral part of these statements. 79 Notes to consolidated financial statements The accompanying consolidated financial statements and the supporting and supplemental material are the responsibility of the management of Imperial Oil Limited. The company’s principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen, lower-emission fuels, and lithium. The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP), which requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. All amounts are in Canadian dollars unless otherwise indicated. Note 1. Summary of significant accounting policies Principles of consolidation The consolidated financial statements include the accounts of subsidiaries the company controls. Intercompany accounts and transactions are eliminated. Subsidiaries include those companies in which Imperial has both an equity interest and the continuing ability to unilaterally determine strategic, operating, investing and financing policies. Imperial Oil Resources Limited and Canada Imperial Oil Limited are significant subsidiaries included in the consolidated financial statements and are wholly owned by Imperial Oil Limited. The consolidated financial statements also include the company’s share of the undivided interest in certain upstream assets, liabilities, revenues and expenses, including its 70.96 percent interest in the Kearl joint venture and its 25 percent interest in the Syncrude joint venture. Revenues The company generally sells crude oil, natural gas and petroleum and chemical products under short-term agreements at prevailing market prices. In some cases, products may be sold under long-term agreements, with periodic price adjustments to reflect market conditions. Revenue is recognized at the amount the company expects to receive when the customer has taken control, which is typically when title transfers and the customer has assumed the risks and rewards of ownership. The prices of certain sales are based on price indices that are sometimes not available until the next period. In such cases, estimated realizations are accrued when the sale is recognized, and are finalized when final information is available. Such adjustments to revenue from performance obligations satisfied in previous periods are not significant. Payment for revenue transactions is typically due within 30 days. Revenues include amounts billed to customers for shipping and handling. Shipping and handling costs incurred up to the point of final storage prior to delivery to a customer are included in “Purchases of crude oil and products” in the Consolidated statement of income. Delivery costs from final storage to customer are recorded as a marketing expense in “Selling and general” expenses. The company does not enter into ongoing arrangements whereby it is required to repurchase its products, nor does the company provide the customer with a right of return. Future volume delivery obligations that are unsatisfied at the end of the period are expected to be fulfilled through ordinary production or purchases. These performance obligations are based on market prices at the time of the transaction and are fully constrained due to market price volatility. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and recorded as exchanges measured at the book value of the item sold. 80 "Revenues" and "Accounts receivable - net" include revenue and receivables both within the scope of ASC 606 Revenue from Contracts with Customers , and those outside the scope of ASC 606 . Long-term receivables are primarily from receivables outside the scope of ASC 606 . Contract assets are mainly from marketing assistance programs and are not significant. Contract liabilities are mainly customer prepayments and accruals of expected volume discounts, and are not significant. Consumer taxes Taxes levied on the consumer and collected by the company are excluded from the Consolidated statement of income. These are primarily provincial taxes on motor fuels, the federal goods and services tax and the federal/provincial harmonized sales tax. Derivative instruments The company may use derivative instruments for trading purposes and to offset exposures associated with commodity prices, currency exchange rates and interest rates that arise from existing assets, liabilities, firm commitments and forecasted transactions. All derivative instruments, except those designated as normal purchase and normal sale, are recorded at fair value. Derivative assets and liabilities with the same counterparty are netted if the right of offset exists and certain other criteria are met. Collateral payables or receivables are netted against derivative assets and derivative liabilities, respectively. Recognition and classification of the gain or loss that results from adjusting a derivative to fair value depends on the purpose for the derivative. The gains and losses resulting from changes in the fair value of derivatives are recorded under "Revenues" in the Consolidated statement of income. Fair value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Hierarchy levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy level 1 inputs are quoted prices in active markets for identical assets or liabilities. Hierarchy level 2 inputs are inputs other than quoted prices included within level 1 that are directly or indirectly observable for the asset or liability. Hierarchy level 3 inputs are inputs that are not observable in the market. Inventories Inventories are recorded at the lower of current market value or cost. The cost of crude oil and products is determined primarily using the last-in, first-out (LIFO) method. LIFO was selected over the alternative first-in, first-out and average cost methods because it provides a better matching of current costs with the revenues generated in the period. Inventory costs include expenditures and other charges (including depreciation), directly and indirectly incurred in bringing the inventory to its existing condition and location. Selling and general expenses are reported as period costs and excluded from inventory costs. Inventories of materials and supplies are valued at cost or less. Investments The company’s interests in the underlying net assets of affiliates it does not control, but over which it exercises significant influence, are accounted for using the equity method. They are recorded at the original cost of the investment plus the company’s share of earnings since the investment was made, less dividends received. The company’s share of the after-tax earnings of these investments is included in “Investment and other income” in the Consolidated statement of income. Investments in equity securities, other than consolidated subsidiaries and equity method investments, are measured at fair value, with changes in the fair value recognized in net income. The company uses a modified approach for equity securities that do not have a readily determinable fair value. This modified approach measures investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions in similar investments of the same issuer. Dividends from these investments are included in “Investment and other income”. These investments represent interests in non-publicly traded pipeline companies that facilitate the sale and purchase of liquids in the conduct of company operations. Other parties who also have an equity interest in these investments share in the risks and rewards according to their percentage of ownership. The company does not invest in these investments in order to remove liabilities from its balance sheet. 81 Property, plant and equipment Cost basis The company uses the "successful efforts" method to account for its exploration and production activities. Under this method, costs are accumulated on a field-by-field basis. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. Exploratory well costs are carried as an asset when the well has found a sufficient quantity of reserves to justify its completion as a producing well and where the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. Development costs, including costs of productive wells and development dry holes, are capitalized. Interest costs incurred to finance expenditures during the construction phase of projects are capitalized as part of the historical cost of acquiring the constructed assets. The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use. Capitalized interest costs are included in property, plant and equipment and are depreciated over the service life of the related assets. Maintenance and repair costs, including planned major maintenance, are expensed as incurred. Improvements that increase or prolong the service life or capacity of an asset are capitalized. Depreciation, depletion and amortization Depreciation, depletion and amortization are primarily determined under either the unit-of-production method or the straight-line method, which is based on estimated asset service life taking obsolescence into consideration. Depreciation and depletion for assets associated with producing properties begin at the time when production commences on a regular basis. Depreciation for other assets begins when the asset is in place and ready for its intended use. Assets under construction are not depreciated or depleted. Acquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and natural gas reserve volumes. Capitalized exploratory drilling and development costs associated with productive depletable extractive properties are amortized using the unit-of-production rates based on the amount of proved developed reserves of oil and gas that are estimated to be recoverable from existing facilities using current operating methods. Under the unit-of-production method, oil and natural gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction points at the outlet valve on the lease or field storage tank. In the event that the unit-of-production method does not result in an equitable allocation of cost over the economic life of an upstream asset, an alternative method is used. The straight-line method is used in limited situations where the expected life of the asset does not reasonably correlate with that of the underlying reserves. For example, certain assets used in the production of oil and natural gas have a shorter life than the reserves, and as such, the company uses straight-line depreciation to ensure the asset is fully depreciated by the end of its useful life. Investments in mining heavy equipment and certain ore processing plant assets at oil sands mining properties are depreciated on a straight-line basis over a maximum of 15 years and 50 years respectively. Depreciation of other plant and equipment is calculated using the straight-line method, based on the estimated service life of the asset. To the extent that proved reserves for a property are substantially de-booked and that property continues to produce such that the resulting depreciation charge does not result in an equitable allocation of cost over the expected life, assets will be depreciated using a unit-of-production method based on reserves determined at the most recent SEC price which results in a more meaningful quantity of proved reserves, appropriately adjusted for production and technical changes. Investments in refinery and chemical process manufacturing equipment are generally depreciated on a straight-line basis over a 25 -year life. Maintenance and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized and the assets replaced are retired. 82 Impairment assessment The company tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Among the events or changes in circumstances which could indicate that the carrying value of an asset or asset group may not be recoverable are the following: • a significant decrease in the market price of a long-lived asset; • a significant adverse change in the extent or manner in which an asset is being used or in its physical condition including a significant decrease in current and projected reserve volumes; • a significant adverse change in legal factors or in the business climate that could affect the value, including an adverse action or assessment by a regulator; • an accumulation of project costs significantly in excess of the amount originally expected; • a current-period operating loss combined with a history and forecast of operating or cash flow losses; and • a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The company has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 and ASC 932 and relies, in part, on the company’s planning and budgeting cycle. Asset valuation analysis, profitability reviews and other periodic control processes assist the company in assessing whether events or changes in circumstances indicate the carrying amounts of any of its assets may not be recoverable. Because the lifespans of the vast majority of the company’s major assets are measured in decades, the future cash flows of these assets are predominantly based on long-term oil and natural gas commodity prices, industry margins, and development and production costs. Significant reductions in the company’s view of oil or natural gas commodity prices or margin ranges, especially the longer-term prices and margins, and changes in the development plans, including decisions to defer, reduce or eliminate planned capital spending, can be an indicator of potential impairment. Other events or changes in circumstances, including indicators outlined in ASC 360 can be indicators of potential impairment as well. In general, the company does not view temporarily low prices or margins as an indication of impairment. Management believes that prices over the long term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments, and technology and efficiency advancements. OPEC+ investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities, alternative energy sources and levels of prosperity. During the lifespan of its major assets, the company expects that oil and gas prices and industry margins will experience significant volatility. Consequently, these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the company considers recent periods of operating losses in the context of its longer-term view of prices and margins. In the Upstream, the standardized measure of discounted cash flows included in the “Supplemental information on oil and gas exploration and production activities” is required to use prices based on the average of first-day-of-month prices in the year. These prices represent discrete points in time and could be higher or lower than the company’s price assumptions which are used for impairment assessments. The company believes the standardized measure does not provide a reliable estimate of the expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its oil and gas reserves and therefore does not consider it relevant in determining whether events or changes in circumstances indicate the need for an impairment assessment. 83 Global Outlook and cash flow assessment The annual planning and budgeting process, known as the company plan, is the mechanism by which resources (capital, operating expenses and people) are allocated across the company. The foundation for the energy supply and demand assumptions supporting the company plan begins with Exxon Mobil Corporation's Global Outlook (the Outlook), which contains demand and supply projections based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, economic development, and other factors. Reflective of the existing global policy environment, the Outlook does not attempt to project the degree of required future policy and technology advancement and deployment for the world to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and consequently, the company’s business plans will be updated accordingly. If events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, the company estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. In performing this assessment, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Cash flows used in recoverability assessments are based on the assumptions developed in the company plan, which is reviewed and approved by the board of directors, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the company’s assumptions of future capital allocations, crude oil and natural gas commodity prices including price differentials, refining and chemical margins, volumes, development and operating costs, including greenhouse gas emissions prices, and foreign currency exchange rates. Volumes are based on projected field and facility production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. The greenhouse gas emission prices reflect existing or anticipated policy actions of applicable provincial and federal governments. Fair value of impaired assets An asset group is impaired if its estimated future undiscounted cash flows are less than the asset group’s carrying value. Impairments are measured by the excess of the carrying value over fair value. The assessment of fair value is based on the views of a likely market participant. The principal parameters used to establish fair value include estimates of acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, throughput and product sales volumes, commodity prices (which are consistent with the average of third-party industry experts and government agencies), refining and chemical margins, drilling and development costs, operating costs, and discount rates which are reflective of the characteristics of the asset group. Other impairment estimates Unproved properties are assessed periodically to determine whether they have been impaired. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the company’s future development plans, the estimated economic chance of success and the length of time that the company expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period. Long-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the assets are considered impaired and adjusted to the lower value. Gains on sales of proved and unproved properties are only recognized when there is neither uncertainty about the recovery of costs applicable to any interest retained nor any substantial obligation for future performance by the company. 84 Asset retirement obligations and other environmental liabilities The company incurs retirement obligations for certain assets. The fair values of these obligations are recorded as liabilities on a discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the company uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, discount rates and inflation rates. Asset retirement obligations incurred in the current period were level 3 fair value measurements. The costs associated with these liabilities are capitalized as part of the related assets and depreciated as the reserves are produced. Over time, the liabilities are accreted for the change in their present value. Asset retirement obligations for downstream and chemical facilities generally become firm at the time the facilities are permanently shut down and dismantled. These obligations may include the costs of asset disposal and additional soil remediation. However, these sites generally have indeterminate lives based on plans for continued operations, and as such, the fair value of the conditional legal obligations cannot be measured, since it is impossible to estimate the future settlement dates of such obligations. Note 5 to the consolidated financial statements provides a three-year continuity table detailing the changes in asset retirement obligations. The company accrues environmental liabilities when it is probable that obligations have been incurred and the amount can be reasonably estimated. Provisions for environmental liabilities are determined based on engineering estimated costs, taking into account the anticipated method and extent of remediation consistent with legal requirements, current technology and the possible use of the location. These provisions are not reduced by possible recoveries from third parties and projected cash expenditures are not discounted. Foreign-currency translation Monetary assets and liabilities in foreign currencies have been translated at the rates of exchange prevailing on December 31. Any exchange gains or losses are recognized in income. 85 Note 2. Business segments The company operates its business in Canada, and its reportable segments are Upstream, Downstream and Chemical. The factors used to identify these reportable segments are based on the nature of the operations that are undertaken by each segment, the structure of the company’s internal organization, and reflect the nature of internal reviews by the company's Management Committee (MC). The MC is considered collectively, and not in their individual capacity, to be the company's Chief Operating Decision Maker (CODM), and includes the company's CEO, CFO, and senior Vice Presidents overseeing the Upstream, Downstream and Chemical businesses. The Upstream segment is organized and operates to explore for and ultimately produce crude oil and its equivalent, and natural gas. The Downstream segment is organized and operates to refine crude oil into petroleum products and to distribute and market these products. The Chemical segment is organized and operates to manufacture and market hydrocarbon-based chemicals and chemical products. The above segmentation has been the long-standing practice of the company and is broadly understood across the petroleum and petrochemical industries. Corporate and other includes assets and liabilities that do not specifically relate to business segments – primarily cash, capitalized interest costs, short-term borrowings, long-term debt and liabilities associated with incentive compensation, pension and other postretirement benefit liabilities. Net earnings effects under Corporate and other activities primarily include debt-related financing, corporate governance costs, non-service pension and postretirement benefit costs, share-based incentive compensation expenses and interest income. The CODM generally allocates resources through an annual planning process. They also allocate capital based on detailed project economics and long-term strategic objectives across reportable segments. The CODM primarily uses changes in Net Income (loss) to assess segment financial performance. Segment accounting policies are the same as those described in note 1, "Summary of significant accounting policies". Upstream, Downstream and Chemical expenses include amounts allocated from Corporate and other activities. The allocation is based on proportional segment expenses. Transfers of assets between segments are recorded at book amounts. Intersegment sales are made essentially at prevailing market prices. Assets and liabilities that are not identifiable by segment are allocated. 86 Upstream Downstream (e) Chemical (e) millions of Canadian dollars 2024 2023 2022 2024 2023 2022 2024 2023 2022 Revenues and other income Revenues (a) (b) 121 222 494 50,114 49,241 57,466 1,124 1,239 1,453 Intersegment sales 17,868 16,274 19,135 6,771 6,509 7,476 323 342 523 Investment and other income (note 8, 18) 26 16 135 59 108 43 2 — — 18,015 16,512 19,764 56,944 55,858 64,985 1,449 1,581 1,976 Expenses Exploration (note 15) 3 5 5 — — — — — — Purchases of crude oil and products 7,367 6,636 7,971 49,856 47,886 55,569 916 997 1,330 Production and manufacturing 4,644 4,917 5,491 1,741 1,702 1,640 197 260 273 Selling and general — — — 706 693 653 92 89 85 Federal excise tax and fuel charge — — — 2,531 2,399 2,177 4 3 2 Depreciation and depletion 1,747 1,680 1,673 181 183 179 15 15 18 Non-service pension and postretirement benefit — — — — — — — — — Financing (note 12) 4 7 5 — — 1 — — — Total expenses 13,765 13,245 15,145 55,015 52,863 60,219 1,224 1,364 1,708 Income (loss) before income taxes 4,250 3,267 4,619 1,929 2,995 4,766 225 217 268 Income tax expense (benefit) (note 3 ) 988 755 974 443 694 1,144 54 53 64 Net income (loss) 3,262 2,512 3,645 1,486 2,301 3,622 171 164 204 Cash flows from (used in) operating activities 4,664 3,100 5,834 1,049 608 4,415 211 53 276 Capital and exploration expenditures (c) 1,078 1,108 1,128 572 472 295 30 23 10 Property, plant and equipment Cost 47,920 46,776 45,784 7,887 7,368 6,926 1,015 1,018 995 Accumulated depreciation and depletion ( 21,658 ) ( 19,936 ) ( 18,835 ) ( 4,430 ) ( 4,301 ) ( 4,143 ) ( 743 ) ( 757 ) ( 741 ) Net property, plant and equipment (d) 26,262 26,840 26,949 3,457 3,067 2,783 272 261 254 Total assets 28,042 28,718 28,830 11,624 10,114 9,277 474 475 491 Corporate and other Eliminations Consolidated millions of Canadian dollars 2024 2023 2022 2024 2023 2022 2024 2023 2022 Revenues and other income Revenues (a) (b) — — — — — — 51,359 50,702 59,413 Intersegment sales — — — ( 24,962 ) ( 23,125 ) ( 27,134 ) — — — Investment and other income (note 8, 18) 86 143 79 — — — 173 267 257 86 143 79 ( 24,962 ) ( 23,125 ) ( 27,134 ) 51,532 50,969 59,670 Expenses Exploration (note 15) — — — — — — 3 5 5 Purchases of crude oil and products — — — ( 24,955 ) ( 23,120 ) ( 27,128 ) 33,184 32,399 37,742 Production and manufacturing 17 — — — — — 6,599 6,879 7,404 Selling and general 154 80 150 ( 7 ) ( 5 ) ( 6 ) 945 857 882 Federal excise tax and fuel charge — — — — — — 2,535 2,402 2,179 Depreciation and depletion 40 29 27 — — — 1,983 1,907 1,897 Non-service pension and postretirement benefit 3 82 17 — — — 3 82 17 Financing (note 12) 37 62 54 — — — 41 69 60 Total expenses 251 253 248 ( 24,962 ) ( 23,125 ) ( 27,134 ) 45,293 44,600 50,186 Income (loss) before income taxes ( 165 ) ( 110 ) ( 169 ) — — — 6,239 6,369 9,484 Income tax expense (benefit) (note 3) ( 36 ) ( 22 ) ( 38 ) — — — 1,449 1,480 2,144 Net income (loss) ( 129 ) ( 88 ) ( 131 ) — — — 4,790 4,889 7,340 Cash flows from (used in) operating activities 69 ( 37 ) ( 59 ) ( 12 ) 10 16 5,981 3,734 10,482 Capital and exploration expenditures (c) 187 175 57 — — — 1,867 1,778 1,490 Property, plant and equipment Cost 1,226 1,038 863 — — — 58,048 56,200 54,568 Accumulated depreciation and depletion ( 410 ) ( 371 ) ( 343 ) — — — ( 27,241 ) ( 25,365 ) ( 24,062 ) Net property, plant and equipment (d) 816 667 520 — — — 30,807 30,835 30,506 Total assets 2,962 2,366 5,312 ( 164 ) ( 474 ) ( 386 ) 42,938 41,199 43,524 87 (a) Includes export sales to the United States of $ 10,300 million (2023 - $ 8,982 million, 2022 - $ 12,394 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 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 contracts within the scope of ASC 606 and those outside it. Revenues millions of Canadian dollars 2024 2023 2022 Revenue from contracts with customers 40,901 44,465 52,265 Revenue outside the scope of ASC 606 10,458 6,237 7,148 Total 51,359 50,702 59,413 (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. (d) Includes property, plant and equipment under construction of $ 3,632 million (2023 - $ 3,251 million, 2022 - $ 2,676 million). (e) In 2024, benzene and aromatic solvents are reported under the Downstream segment, whereas in 2023, they were reported under the Chemicals segment. The company has determined that the impact of this change is not material; therefore, the comparative periods have not been recast. Note 3. Income taxes millions of Canadian dollars 2024 2023 2022 Current income tax expense (benefit) 1,586 1,556 2,228 Deferred income tax expense (benefit) ( 137 ) ( 76 ) ( 84 ) Total income tax expense (benefit) 1,449 1,480 2,144 Statutory corporate tax rate (percent) (a) 24.1 24.1 24.1 Increase (decrease) resulting from: Other (b) ( 0.9 ) ( 0.9 ) ( 1.5 ) Effective income tax rate (percent) 23.2 23.2 22.6 (a) Includes federal tax rate of 15 percent and combined provincial tax rate of 9.1 percent. (b) Other primarily relates to prior year adjustments, disposals, investment tax credits and re-assessments. In 2022, the company's sale of its interests in XTO Energy Canada decreased the effective income tax rate by 1.3 percent. Deferred income taxes are based on differences between the accounting and tax values of assets and liabilities. These differences in value are re-measured at each year-end using the tax rates and tax laws expected to apply when those differences are realized or settled in the future. Components of deferred income tax liabilities and assets as at December 31 were: millions of Canadian dollars 2024 2023 2022 Depreciation and amortization 5,267 5,366 5,388 Successful drilling and land acquisitions 236 237 236 Pension and benefits ( 15 ) ( 168 ) ( 105 ) Asset retirement obligation ( 686 ) ( 655 ) ( 529 ) Capitalized interest 185 155 127 LIFO inventory valuation ( 468 ) ( 406 ) ( 454 ) Tax loss carryforwards ( 66 ) ( 69 ) ( 84 ) Valuation allowance 66 69 73 Other ( 35 ) ( 60 ) ( 53 ) Net deferred income tax liabilities 4,484 4,469 4,599 88 Unrecognized tax benefits Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts recognized in the financial statements. The following table summarizes the movement in unrecognized tax benefits: millions of Canadian dollars 2024 2023 2022 Balance as of January 1 47 60 47 Additions based on current year’s tax position 2 7 12 Additions for prior years’ tax positions — — 10 Settlements with tax authorities ( 15 ) ( 20 ) ( 9 ) Balance as of December 31 34 47 60 The unrecognized tax benefit balances shown above predominantly relate to tax positions that would reduce the company’s effective tax rate if the positions are favourably resolved. Unfavourable resolution of these tax positions generally would not increase the effective tax rate. The 2024, 2023 and 2022 changes in unrecognized tax benefits did not have a material effect on the company’s net income or cash flow. The company’s tax filings from 2018 to 2024 are subject to examination by the tax authorities. Tax filings fro m 2009 to 2018 have open objections and therefore are also subject to examination by the tax authorities. The Canada Revenu e Agency has made certain adjustments to the company’s filings. Management has evaluated these adjustments and is formally disputing those matters to which the company disagrees. Many of these outstanding matters will not be resolved until after 2025. The impact on unrecognized tax benefits and the company’s effective income tax rate from these matters is not expected to be material. Resolution of the related tax positions could take many years to complete. It is difficult to predict the timing of resolution for tax positions since such timing is not entirely within the control of the company. The company classifies interest on income tax related balances as interest expense or interest income and classifies tax related penalties as operating expense. Unrecognized tax benefits are not classified as future commitments because the company does not expect there will be any cash impact from the final settlements as sufficient funds have been deposited with the Canada Revenue Agency. Note 4. Employee retirement benefits Retirement benefits, which cover almost all retired employees and their surviving spouses, include pension income and certain health care and life insurance benefits. They are met through funded registered retirement plans and through unfunded supplementary benefits that are paid directly to recipients. Pension income benefits consist mainly of company-paid defined benefit plans that are based on years of service and final average earnings. The company shares in the cost of health care and life insurance benefits. The company’s benefit obligations are based on the projected benefit method of valuation that includes employee service to date and present compensation levels, as well as a projection of salaries to retirement. The expense and obligations for both funded and unfunded benefits are determined in accordance with accepted actuarial practices and U.S. GAAP. The process for determining retirement-income expense and related obligations includes making certain long-term assumptions regarding the discount rate, rate of return on plan assets and rate of compensation increases. The obligation and pension expense can vary significantly with changes in the assumptions used to estimate the obligation and the expected return on plan assets. 89 The benefit obligations and plan assets associated with the company’s defined benefit plans are measured on December 31. Pension benefits Other postretirement benefits 2024 2023 2024 2023 Assumptions used to determine benefit obligations at December 31 (percent) Discount rate 4.70 4.60 4.70 4.60 Long-term rate of compensation increase 4.00 4.00 4.00 4.00 millions of Canadian dollars Change in benefit obligation Benefit obligation at January 1 8,154 7,374 581 589 Service cost 186 162 13 12 Interest cost 365 373 25 28 Actuarial loss (gain) (a) ( 88 ) 514 ( 29 ) ( 14 ) Amendments — 184 ( 78 ) — Benefits paid (b) ( 486 ) ( 453 ) ( 36 ) ( 34 ) Benefit obligation at December 31 8,131 8,154 476 581 Accumulated benefit obligation at December 31 7,385 7,449 (a) Actuarial loss (gain) primarily driven by changes in the year-end discount rate. (b) Benefit payments for funded and unfunded plans. The discount rate for the purpose of calculating year-end postretirement benefits plan obligation is determined by using the Canadian Institute of Actuaries recommended spot yield curve for high-quality, long-term Canadian corporate bonds with an average maturity (or duration) approximating that of the liabilities. For the measurement of the accumulated postretirement benefit obligation, the assumed health care cost trend rates start with 6.08 percent in 2025 and gradually decline to 3.57 percent by 2040 and beyond. Pension benefits Other postretirement benefits millions of Canadian dollars 2024 2023 2024 2023 Change in plan assets Fair value at January 1 8,054 7,541 Actual return (loss) gain 805 785 Company contributions 150 148 Benefits paid (a) ( 452 ) ( 420 ) Other ( 4 ) — Fair value at December 31 8,553 8,054 Plan assets in excess of (less than) projected benefit obligation at December 31 Funded plans 853 335 Unfunded plans ( 431 ) ( 435 ) ( 476 ) ( 581 ) Total (b) 422 ( 100 ) ( 476 ) ( 581 ) (a) Benefit payments for funded plans only. (b) Fair value of assets less projected benefit obligation shown above. Funding of registered retirement plans complies with federal and provincial pension regulations, and the company makes contributions to the plans based on an independent actuarial valuation. In accordance with authoritative guidance relating to the accounting for defined pension and other postretirement benefits plans, the overfunded or underfunded status of the company’s defined benefit postretirement plans was recorded as an asset or liability in the Consolidated balance sheet, and the changes in that funded status in the year in which the changes occurred was recognized through other comprehensive income. 90 Pension benefits Other postretirement benefits millions of Canadian dollars 2024 2023 2024 2023 Amounts recorded in the Consolidated balance sheet consist of: Other assets, including intangibles - net 853 335 — — Current liabilities ( 33 ) ( 34 ) ( 28 ) ( 28 ) Other long-term obligations ( 398 ) ( 401 ) ( 448 ) ( 553 ) Total recorded 422 ( 100 ) ( 476 ) ( 581 ) Amounts recorded in accumulated other comprehensive income consist of: Net actuarial loss (gain) 237 724 ( 110 ) ( 89 ) Prior service cost 373 400 ( 78 ) — Total recorded in accumulated other comprehensive income, before-tax 610 1,124 ( 188 ) ( 89 ) The company establishes the long-term expected rate of return on plan assets by developing a forward-looking long-term return assumption for each asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-term return assumption for each asset class. The 2024 long-term expected return of 5.6 percent used in the calculations of pension expense compares to an actual rate of return of 5.1 percent and 6.0 percent over the last 10- and 20-year periods respectively, ending December 31, 2024. Pension benefits Other postretirement benefits 2024 2023 2022 2024 2023 2022 Assumptions used to determine net periodic benefit cost for years ended December 31 (percent) Discount rate 4.60 5.10 3.00 4.60 5.10 3.00 Long-term rate of return on funded assets 5.60 4.80 4.30 — — — Long-term rate of compensation increase 4.00 4.00 4.00 4.00 4.00 4.00 millions of Canadian dollars Components of net periodic benefit cost Service cost 186 162 280 13 12 23 Interest cost 365 373 295 25 28 24 Expected return on plan assets ( 454 ) ( 373 ) ( 412 ) — — — Amortization of prior service cost 27 19 17 — — — Amortization of actuarial loss (gain) 48 44 84 ( 8 ) ( 9 ) 9 Net periodic benefit cost 172 225 264 30 31 56 Changes in amounts recorded in accumulated other comprehensive income Net actuarial loss (gain) ( 439 ) 102 ( 522 ) ( 29 ) ( 14 ) ( 248 ) Amortization of net actuarial (loss) gain included in net periodic benefit cost ( 48 ) ( 44 ) ( 84 ) 8 9 ( 9 ) Prior service cost — 184 — ( 78 ) — — Amortization of prior service cost included in net periodic benefit cost ( 27 ) ( 19 ) ( 17 ) — — — Total recorded in other comprehensive income ( 514 ) 223 ( 623 ) ( 99 ) ( 5 ) ( 257 ) Total recorded in net periodic benefit cost and other comprehensive income, before-tax ( 342 ) 448 ( 359 ) ( 69 ) 26 ( 201 ) 91 Costs for defined contribution plans, primarily the employee savings plan, were $ 47 million in 2024 (2023 - $ 44 million, 2022 - $ 43 million). A summary of the change in accumulated other comprehensive income is shown in the table below: Total pension and other postretirement benefits millions of Canadian dollars 2024 2023 2022 (Charge) credit to other comprehensive income, before-tax 613 ( 218 ) 880 Deferred income tax (charge) credit (note 17) ( 150 ) 53 ( 215 ) (Charge) credit to other comprehensive income, after-tax 463 ( 165 ) 665 The company’s investment strategy for pension plan assets reflects a long-term view, a careful assessment of the risks inherent in plan assets and liabilities and broad diversification to reduce the risk of the portfolio. The pension plan assets are primarily invested in passive global equity and domestic fixed income index funds to diversify risk while minimizing costs. The fixed income funds are largely invested in investment-grade corporate and government debt securities with interest rate sensitivity designed to approximate the interest rate sensitivity of plan liabilities. The target asset allocation for the pension plan is reviewed periodically and set based on considerations such as risk, diversification, liquidity, and funding level. The target asset allocation for equity securities is 30 percent with the remainder in fixed-income securities. The fair value measurement levels are accounting terms that refer to different methods of valuing assets. The terms do not represent the relative risk or credit quality of an investment. The 2024 fair value of the pension plan assets, including the level within the fair value hierarchy, is shown in the table below: Fair value measurements at December 31, 2024, using: millions of Canadian dollars Total Level 1 Level 2 Level 3 Net Asset Value Asset class Equity securities Canadian — — Non-Canadian 2,584 2,584 Debt securities - Canadian Corporate 1,220 1,220 Government 4,400 4,400 Asset backed 4 4 Other 18 18 Equities – Venture capital 134 134 Real Estate 154 154 Cash 39 3 36 Total plan assets at fair value 8,553 3 8,550 92 The 2023 fair value of the pension plan assets, including the level within the fair value hierarchy, is shown in the table below: Fair value measurements at December 31, 2023, using: millions of Canadian dollars Total Level 1 Level 2 Level 3 Net Asset Value Asset class Equity securities Canadian — — Non-Canadian 2,347 2,347 Debt securities - Canadian Corporate 1,193 1,193 Government 4,251 4,251 Asset backed — — Other 5 5 Equities – Venture capital 124 124 Real Estate 93 93 Cash 41 7 34 Total plan assets at fair value 8,054 7 8,047 A summary of pension plans with accumulated benefit obligation and projected benefit obligation in excess of plan assets is shown in the table below: Pension benefits millions of Canadian dollars 2024 2023 For funded pension plans with projected benefit obligation in excess of plan assets: (a) Projected benefit obligation — — Fair value of plan assets — — Projected benefit obligation less fair value of plan assets — — For unfunded pension plans covered by book reserves: Projected benefit obligation 431 435 Accumulated benefit obligation 386 395 (a) In 2024 and 2023, the fair value of plan assets exceeded the projected benefit obligation for both the company sponsored plan and its proportionate share of a joint venture sponsored plan. Cash flows Benefit payments expected in: millions of Canadian dollars Pension benefits Other postretirement benefits 2025 490 29 2026 490 29 2027 490 32 2028 490 31 2029 490 31 2030 - 2034 2,450 154 In 2025, the company expects to make cash contributions of about $ 160 million to its pension plans. 93 Note 5. Other long-term obligations millions of Canadian dollars 2024 2023 Employee retirement benefits (a) (note 4) 846 954 Asset retirement obligations and other environmental liabilities (b) (c) 2,641 2,564 Share-based incentive compensation liabilities (note 7) 119 90 Operating lease liability (note 13) 144 111 Other obligations 120 132 Total other long-term obligations 3,870 3,851 (a) Total recorded employee retirement benefits obligations also included $ 61 million in current liabilities (2023 - $ 62 million). (b) Total asset retirement obligations and other environmental liabilities also included $ 291 million in current liabilities (2023 - $ 235 million). (c) For 2024, the asset retirement obligations were discounted at 6 percent (2023 - 6 percent). Asset retirement obligations incurred in the current period were level 3 fair value measurements. The following table summarizes the activity in the liability for asset retirement obligations: millions of Canadian dollars 2024 2023 2022 Balance as at January 1 2,703 2,178 1,721 Additions (deductions) 96 471 415 Accretion 163 132 101 Settlement ( 129 ) ( 78 ) ( 59 ) Balance as at December 31 2,833 2,703 2,178 Estimated cash payments for asset retirement obligations are $ 231 million in 2025 and $ 246 million in 2026. 94 Note 6. Financial and derivative instruments Financial instruments The fair value of the company’s financial instruments is determined by reference to various market data and other appropriate valuation techniques. There are no material differences between the fair value of the company’s financial instruments and the recorded carrying value. At December 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, currency rates and interest 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 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. The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity. At December 31, the net notional long/(short) position of derivative instruments was: thousands of barrels 2024 2023 Crude 4,260 ( 4,450 ) Products ( 371 ) ( 490 ) Realized and unrealized gain or (loss) on derivative instruments recognized in the Consolidated statement of income is included in the following line on a before-tax basis: millions of Canadian dollars 2024 2023 2022 Revenues ( 69 ) ( 5 ) 148 The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement were as follows: At December 31, 2024 millions of Canadian dollars Fair value Effect of counterparty netting Effect of collateral netting Net carrying value Level 1 Level 2 Level 3 Total Assets Derivative assets (a) 38 21 — 59 ( 38 ) — 21 L iabilities Derivative liabilities (b) 52 30 — 82 ( 38 ) ( 14 ) 30 (a) Included in the Consolidated balance sheet line: "Materials, supplies and prepaid expenses", "Accounts receivable - net" and "Other assets, including intangibles - net". (b) Included in the Consolidated balance sheet line: "Accounts payable and accrued liabilities" and "Other long-term obligations". 95 At December 31, 2023 millions of Canadian dollars Fair value Effect of counterparty netting Effect of collateral netting Net carrying value Level 1 Level 2 Level 3 Total Assets Derivative assets (a) 28 18 — 46 ( 16 ) ( 12 ) 18 L iabilities Derivative liabilities (b) 16 31 — 47 ( 16 ) — 31 (a) Included in the Consolidated balance sheet line: "Materials, supplies and prepaid expenses", "Accounts receivable - net" and "Other assets, including intangibles - net". (b) Included in the Consolidated balance sheet line: "Accounts payable and accrued liabilities" and "Other long-term obligations". At December 31, 2024, and December 31, 2023, the company had $ 22 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. 96 Note 7. Share-based incentive compensation programs Share-based incentive compensation programs are designed to retain selected employees, reward them for high performance and promote individual contribution to sustained improvement in the company’s future business performance and shareholder value over the long-term. The nonemployee directors also participate in share-based incentive compensation programs. Restricted stock units and deferred share units Under the restricted stock unit plan, each unit entitles the recipient to the conditional right to receive from the company, upon vesting, an amount equal to the value of one common share of the company, based on the five-day average of the closing price of the company’s common shares on the Toronto Stock Exchange on and immediately prior to the vesting dates. For the majority of the units, 50 percent of the units vest on the third anniversary of the grant date, and the remainder vest on the seventh anniversary of the grant date. Some management, professional, and technical participants will receive awards granted that vest 100 percent after three years . The company may also issue units to the chairman, president and chief executive officer where 50 percent of the units vest on the fifth anniversary of the grant date and the remainder vest on the tenth anniversary of the grant date, except that for awards granted prior to 2020, the vesting of the tenth anniversary portion is delayed until retirement if later than 10 years. The deferred share unit plan is made available to nonemployee directors. The nonemployee directors can elect to receive all or part of their eligible directors’ fees in units. The number of units granted is determined at the end of each calendar quarter by dividing the dollar amount of the nonemployee director’s fees for that calendar quarter elected to be received as deferred share units by the average closing price of the company’s shares for the five consecutive trading days ("average closing price") immediately prior to the last day of the calendar quarter. Additional units are granted to represent dividends on unexercised units, and are calculated by dividing the cash dividend payable on the company’s shares by the average closing price immediately prior to the payment date for that dividend and multiplying the resulting number by the number of deferred share units held by the recipient, as adjusted for any share splits. Deferred share units cannot be exercised until after termination of service as a director, including termination due to death, and must be exercised in their entirety in one election no later than December 31 of the year following the year of termination of service. On the exercise date, the cash value to be received for the units is determined based on the company’s average closing price immediately prior to the date of exercise, as adjusted for any share splits. All units require settlement by cash payments with the following exceptions. The restricted stock unit program provides that, for units granted to Canadian residents, the recipient may receive one common share of the company per unit or elect to receive the cash payment for the units that vest on the seventh year anniversary of the grant date. For units where 50 percent vest on the fifth anniversary of the grant date and the remainder vest on the tenth anniversary of grant, the recipient may receive one common share of the company per unit or elect to receive cash payment for all that vest. The company accounts for all units by using the fair-value-based method. The fair value of awards in the form of restricted stock and deferred share units is the market price of the company’s stock. Under this method, compensation expense related to the units of these programs is measured each reporting period based on the company’s current stock price and is recorded in the Consolidated statement of income over the requisite service period of each award. The following table summarizes information about these units for the year ended December 31, 2024: Restricted stock units Deferred share units Outstanding at January 1, 2024 3,913,310 37,322 Granted 968,720 7,384 Vested/Exercised ( 636,010 ) — Forfeited and cancelled ( 22,950 ) — Outstanding at December 31, 2024 4,223,070 44,706 97 In 2024, the before-tax compensation expense charged against income for the restricted stock units and deferred share units was $ 116 million (2023 - $ 52 million, 2022 - $ 103 million). Income tax benefit recognized in income related to this compensation expense for the year was $ 28 million (2023 - $ 13 million, 2022 - $ 25 million). Cash payments of $ 74 million were made related to this compensation expense in 2024 (2023 - $ 68 million, 2022 - $ 65 million). As of December 31, 2024, there was $ 208 million of total before-tax unrecognized compensation expense related to non-vested restricted stock units based on the company’s share price at the end of the current reporting period. The weighted-average vesting period of non-vested restricted stock units is 4.1 years. All units under the deferred share programs have vested as of December 31, 2024. Note 8. Investment and other income Investment and other income includes gains and losses on asset sales as follows: millions of Canadian dollars 2024 2023 2022 Proceeds from asset sales 25 86 904 Book value of asset sales 7 13 746 Gain (loss) on asset sales, before tax (a) 18 73 158 Gain (loss) on asset sales, after tax (a) 16 63 241 (a) 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. Note 9. Litigation and other contingencies A variety of claims have been made against the company and its subsidiaries in a number of lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel to assess the need for accounting recognition or disclosure of these contingencies. The company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavourable outcome is reasonably possible and which are significant, the company discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of the company’s contingency disclosures, "significant" includes material matters, as well as other matters which management believes should be disclosed. Based on a consideration of all relevant facts and circumstances, the company does not believe the ultimate outcome of any currently pending lawsuits against the company will have a material adverse effect on the company’s operations, financial condition, or financial statements taken as a whole. Additionally, the company has other commitments arising in the normal course of business for operating and capital needs, all of which are expected to be fulfilled with no adverse consequences material to the company’s operations, financial condition, or financial statements taken as a whole. Unconditional purchase obligations, as defined by accounting standards, are long-term commitments that are non-cancellable or cancellable only under certain conditions and that third parties have used to secure financing for the facilities that will provide the contracted goods and services. The company has not entered into any unconditional purchase obligations. As a result of the completed sale of the remaining company-owned Esso retail sites, the company was contingently liable at December 31, 2024, for guarantees relating to performance under contracts of other third-party obligations totalling $ 10 million (2023 - $ 13 million). 98 Note 10. Common shares At December 31 thousands of shares 2024 2023 Authorized 1,100,000 1,100,000 Outstanding 509,045 535,837 The most recent 12-month normal course issuer bid program came into effect June 29, 2024, under which Imperial continued its existing share purchase program. The program enabled the company to purchase up to a maximum of 26,791,840 common shares ( 5 percent of the total shares on June 15, 2024) which included shares purchased under the normal course issuer bid from Exxon Mobil Corporation. 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. The program completed on December 19, 2024 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. The company’s common share activities are summarized below: Thousands of shares Millions of dollars Balance as at January 1, 2022 678,080 1,252 Purchases at stated value ( 93,927 ) ( 173 ) Balance as at December 31, 2022 584,153 1,079 Purchases at stated value ( 48,316 ) ( 87 ) Balance as at December 31, 2023 535,837 992 Purchases at stated value ( 26,792 ) ( 50 ) Balance as at December 31, 2024 509,045 942 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: 2024 2023 2022 Net income (loss) per common share – basic Net income (loss) (millions of Canadian dollars) 4,790 4,889 7,340 Weighted-average number of common shares outstanding (millions of shares) 529.4 574.8 640.2 Net income (loss) per common share (dollars) 9.05 8.51 11.47 Net income (loss) per common share – diluted Net income (loss) (millions of Canadian dollars) 4,790 4,889 7,340 Weighted-average number of common shares outstanding (millions of shares) 529.4 574.8 640.2 Effect of employee share-based awards (millions of shares) 1.2 1.1 1.3 Weighted-average number of common shares outstanding, assuming dilution (millions of shares) 530.6 575.9 641.5 Net income (loss) per common share (dollars) 9.03 8.49 11.44 Dividends per common share – declared (dollars) 2.40 1.94 1.46 99 Note 11. Miscellaneous financial information LIFO inventory In 2024, net income included an after-tax gain of $ 61 million (2023 - $ 5 million gain, 2022 - $ 62 million gain) attributable to the effect of changes in last-in, first-out (LIFO) inventories. The replacement cost of inventories was estimated to exceed their LIFO carrying values at December 31, 2024 by about $ 2.0 billion (2023 - $ 2.2 billion). Inventories of crude oil and products at year-end consisted of the following: millions of Canadian dollars 2024 2023 Crude oil 701 979 Petroleum products 513 579 Chemical products 57 66 Other 371 320 Total 1,642 1,944 Research and development Research expenditures are mainly spent on developing technologies to improve bitumen recovery, reduce costs and reduce the environmental impact of upstream operations, including technologies to reduce greenhouse gas emissions intensity, supporting environmental and process improvements in the refineries, as well as accessing ExxonMobil’s research worldwide. The company has scientific research agreements with affiliates of ExxonMobil, which provide for technical and engineering work to be performed by all parties, the exchange of technical information and the assignment and licensing of patents, and patent rights. These agreements provide mutual access to scientific and operating data related to nearly every phase of the petroleum and petrochemical operations of the parties. Net research and development costs charged to expenses in 2024 were $ 118 million (2023 - $ 84 million, 2022 - $ 74 million). These costs are included in expenses due to the uncertainty of future benefits. Accounts payable and accrued liabilities “Accounts payable and accrued liabilities” included accrued taxes other than income taxes of $ 524 million at December 31, 2024 (2023 - $ 455 million) and other miscellaneous current liabilities of $ 739 million at December 31, 2024 (2023 - $ 726 million). Government assistance In 2022, the company prospectively adopted the Financial Accounting Standards Board’s standard, Government Assistance (Topic 832) . The standard requires the annual disclosure of certain types of government assistance not otherwise covered by authoritative accounting guidance. The company receives allowances from governments in the form of emission credits as a result of performing better than facility level expectations for emission targets and records these at a nominal amount, generally in "Inventories of crude oil and products" on the Consolidated balance sheet. During 2023 and 2024, government assistance was immaterial to the company’s financial results. 100 Note 12. Financing and additional notes and loans payable information millions of Canadian dollars 2024 2023 2022 Debt-related interest (a) 192 203 111 Capitalized interest ( 155 ) ( 141 ) ( 57 ) Net interest expense 37 62 54 Other interest 4 7 6 Total financing 41 69 60 (a) Includes related party interest with ExxonMobil. During the fourth quarter of 2024, the company extended the maturity dates of its two existing $ 250 million committed lines of credit to November 2025 and November 2026, respectively. The company has not drawn on any of its outstanding $ 500 million of available credit facilities. At December 31, 2024, the company had no short-term borrowings outstanding. At December 31, 2023, the weighted-average interest rate on short-term borrowings outstanding was 4.9 percent. 101 Note 13. Leases The company generally purchases the property, plant and equipment used in operations, but there are situations where assets are leased, primarily storage tanks, rail cars, marine vessels and transportation facilities. Right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year, by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for tankers and finance leases is excluded from the calculation of right of use assets and lease liabilities. Usually, assets are leased only for a portion of their useful lives and are accounted for as operating leases. In limited situations, assets are leased for nearly all of their useful lives and are accounted for as finance leases. In general, leases are capitalized using the company’s incremental borrowing rate. Variable payments under these lease agreements are not significant. Residual value guarantees, restrictions, or covenants related to leases, and transactions with related parties are also not significant. The company’s activities as a lessor are not material. The table below summarizes the total lease cost incurred: 2024 2023 2022 millions of Canadian dollars Operating leases Finance leases Operating leases Finance leases Operating leases Finance leases Operating lease cost 111 114 119 Short-term and other (net of sublease rental income) 50 30 40 Amortization of right of use assets 16 19 19 Interest on lease liabilities 28 29 30 Total lease cost 161 44 144 48 159 49 The following table summarizes the amounts related to operating leases and finance leases recorded on the Consolidated balance sheet, weighted-average remaining lease term and weighted-average discount rates applied at December 31: 2024 2023 millions of Canadian dollars Operating leases Finance leases Operating leases Finance leases Right of use assets Included in Other assets, including intangibles - net 240 196 Included in Property, plant and equipment, less 579 599 accumulated depreciation and depletion Total right of use assets 240 579 196 599 Lease liability due within one year Included in Accounts payable and accrued liabilities 100 — 87 — Included in Notes and loans payable 18 21 L ong-term lease liability Included in Other long-term obligations 144 — 111 — Included in Long-term debt 545 564 Total lease liability 244 563 198 585 Weighted-average remaining lease term (years) 5 35 6 36 Weighted-average discount rate (percent) 4.1 4.8 1.9 4.7 102 The maturity analysis of the company’s lease liabilities as at December 31 are summarized below: 2024 millions of Canadian dollars Operating leases Finance leases Maturity analysis of lease liabilities 2025 108 46 2026 61 44 2027 20 43 2028 19 41 2029 16 40 2030 and beyond 39 817 Total lease payments 263 1,031 Discount to present value ( 19 ) ( 468 ) Total lease liability 244 563 In addition to the operating lease liabilities in the table immediately above, at December 31, 2024, additional undiscounted commitments for leases not yet commenced totalled $ 56 million (2023 - $ 54 million). Estimated cash payments for operating and finance leases not yet commenced are $ 52 million in 2025 and $ 1 million in 2026. The table below summarizes the cash paid for amounts included in the measurement of lease liabilities and the right of use assets obtained in exchange for new lease liabilities: 2024 2023 2022 millions of Canadian dollars Operating leases Finance leases Operating leases Finance leases Operating leases Finance leases Cash paid for amounts included in the measurement of lease liabilities Cash flows from operating activities 118 — 56 — 121 — Cash flows from financing activities 22 22 22 Non-cash right of use assets recorded for lease liabilities In exchange for lease liabilities during the year 152 — 61 — 117 — 103 Note 14. Long-term debt At December 31 millions of Canadian dollars 2024 2023 Long-term debt (a) (b) 3,447 3,447 Finance leases (c) 545 564 Total long-term debt 3,992 4,011 (a) Borrowed under an existing agreement with an affiliated company of ExxonMobil that provides for a long-term, variable-rate, Canadian dollar loan from ExxonMobil to the company of up to $ 7.75 billion at interest equivalent to Canadian market rates. The agreement is effective until June 30, 2035, cancellable if ExxonMobil provides at least 370 days advance written notice. (b) The weighted-average interest rate on long-term borrowings outstanding, with ExxonMobil, at December 31, 2024 was 3.9 percent (2023 - 4.9 percent). (c) Finance leases are primarily associated with transportation facilities and services agreements. The average imputed interest rate was 4.8 percent in 2024 (2023 - 4.7 percent). Total finance lease obligations also include $ 18 million in current liabilities (2023 - $ 21 million). Principal payments on finance leases of approximately $ 18 million on average per year are due in each of the next four years after December 31, 2025. In June 2024, the company extended the maturity date of its existing long-term, variable-rate, Canadian dollar loan from ExxonMobil to June 30, 2035. All other terms and conditions remain unchanged. Note 15. Accounting for suspended exploratory well costs The company continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. The company had no capitalized suspended exploratory well costs as at December 31, 2024, 2023 and 2022. Exploration activity involves drilling multiple wells, over a number of years, to fully evaluate a project. The company had no projects with exploratory wells costs capitalized as at December 31, 2024, 2023 and 2022. 104 Note 16. Transactions with related parties Revenues and expenses of the company also include the results of transactions with affiliated companies of ExxonMobil in the normal course of operations. These were conducted on terms comparable to those which would have been conducted with unrelated parties and primarily consisted of the purchase and sale of crude oil, natural gas, petroleum and chemical products, as well as technical, engineering and research and development costs. Transactions with ExxonMobil also included amounts paid and received in connection with the company’s participation in a number of upstream activities conducted jointly in Canada. In addition, the company has existing agreements with ExxonMobil: a) To provide computer and customer support services to the company and to share common business and operational support services that allow the companies to consolidate duplicate work and systems; b) To operate certain western Canada production properties owned by ExxonMobil, as well as provide for the delivery of management, business and technical services to ExxonMobil in Canada. These agreements are designed to provide organizational efficiencies and to reduce costs. No separate legal entities were created from these arrangements. Separate books of account continue to be maintained for the company and ExxonMobil. The company and ExxonMobil retain ownership of their respective assets, and there is no impact on operations or reserves; c) To provide for the option of equal participation in new upstream opportunities; and d) To enter into derivative agreements on each other’s behalf. Certain charges from ExxonMobil have been capitalized; they are not material in the aggregate. The amounts of purchases and revenues by Imperial in 2024, with ExxonMobil, were $ 3,617 million and $ 11,725 million respectively (2023 - $ 4,026 million and $ 13,544 million respectively). As at December 31, 2024, the company had an outstanding long-term loan of $ 3,447 million (2023 - $ 3,447 million) from ExxonMobil (see note 14, "Long-term debt", and note 12, "Financing and additional notes and loans payable information" for further details). The amount of financing costs with ExxonMobil were $ 161 million (2023 - $ 169 million). Imperial has other related party transactions not detailed above in note 16, as they are not significant. 105 Note 17. Other comprehensive income (loss) information Changes in accumulated other comprehensive income (loss): millions of Canadian dollars 2024 2023 2022 Balance at January 1 ( 677 ) ( 512 ) ( 1,177 ) Postretirement benefits liability adjustment: Current period change excluding amounts reclassified from accumulated other comprehensive income 412 ( 206 ) 582 Amounts reclassified from accumulated other comprehensive income 51 41 83 Balance at December 31 ( 214 ) ( 677 ) ( 512 ) Amounts reclassified out of accumulated other comprehensive income (loss) - before-tax income (expense): millions of Canadian dollars 2024 2023 2022 Amortization of postretirement benefits liability adjustment included in net benefit cost (a) ( 67 ) ( 54 ) ( 110 ) (a)  This accumulated other comprehensive income component is included in the computation of net periodic benefit cost (note 4). Income tax expense (credit) for components of other comprehensive income (loss): millions of Canadian dollars 2024 2023 2022 Postretirement benefits liability adjustments: Postretirement benefits liability adjustment (excluding amortization) 134 ( 66 ) 188 Amortization of postretirement benefits liability adjustment included in net benefit cost 16 13 27 Total 150 ( 53 ) 215 Note 18. Divestment activities Jointly with ExxonMobil Canada, Imperial signed an agreement in the second quarter of 2022 with Whitecap Resources Inc. for the sale of its interests in XTO Energy Canada which included assets in the Montney and Duvernay areas of central Alberta, for total cash consideration of approximately $ 1.9 billion ($ 0.9 billion Imperial's share). The transaction closed on August 31, 2022 and the company recognized a gain of approximately $ 0.2 billion , after tax. Imperial’s total assets associated with this transaction included about $ 0.9 billion (about $ 0.8 billion of property, plant and equipment) and about $ 0.2 billion total liabilities in the Upstream segment. 106 Supplemental information on oil and gas exploration and production activities (unaudited) The information on pages 107 to 108 excludes items not related to oil and natural gas extraction, such as administrative and general expenses, pipeline operations, gas plant processing fees and gains or losses on asset sales. The company’s 25 percent interest in proved synthetic crude oil reserves in the Syncrude joint venture is included as part of the company’s total proved oil and gas reserves and in the calculation of the standardized measure of discounted future cash flows, in accordance with U.S. Securities and Exchange Commission (SEC) and U.S. Financial Accounting Standards Board rules. Results of operations, costs incurred in property acquisitions, exploration and development activities, and capitalized costs include the company’s share of Kearl, Syncrude and other unproved mineable acreages in the following tables. Results of operations millions of Canadian dollars 2024 2023 2022 Revenue Sales to third parties (a) 7,171 6,420 7,154 Transfers (a) (b) 3,337 3,220 4,182 10,508 9,640 11,336 Production expenses 4,769 5,015 5,521 Exploration expenses 3 5 5 Depreciation and depletion 1,539 1,475 1,467 Income taxes 974 733 1,030 Results of operations 3,223 2,412 3,313 (a) Sales to third parties or transfers do not include the sale of natural gas and natural gas liquids purchased for resale, as well as royalty payments or diluent costs. These items are reported gross in note 2 in "Revenues", "Intersegment sales" and in "Purchases of crude oil and products". (b) Sales of crude oil to consolidated affiliates are at market value, using posted field prices. Sales of natural gas liquids to consolidated affiliates are at prices estimated to be obtainable in a competitive, arm’s-length transaction. The amounts reported as costs incurred in property acquisitions, exploration and development activities include both capitalized costs and costs charged to expense during the year. Costs incurred also include new asset retirement obligations established in the current year, as well as increases or decreases to the asset retirement obligation resulting from changes in cost estimates or abandonment date. Costs incurred in property acquisitions, exploration and development activities millions of Canadian dollars 2024 2023 2022 Property costs (a) Proved — — — Unproved — — — Exploration costs 3 5 5 Development costs 1,171 1,580 1,602 Total costs incurred in property acquisitions, exploration and development activities 1,174 1,585 1,607 (a) "Property costs" are payments for rights to explore for petroleum and natural gas and for purchased reserves (acquired tangible and intangible assets such as gas plants, production facilities and producing-well costs are included under "producing assets"). "Proved" represents areas where successful drilling has delineated a field capable of production. "Unproved" represents all other areas. 107 Capitalized costs millions of Canadian dollars 2024 2023 Property costs (a) Proved 1,840 1,840 Unproved 492 493 Producing assets 41,034 39,759 Incomplete construction 2,555 2,683 Total capitalized cost 45,921 44,775 Accumulated depreciation and depletion (21,247) (19,568) Net capitalized costs 24,674 25,207 (a) "Property costs" are payments for rights to explore for petroleum and natural gas and for purchased reserves (acquired tangible and intangible assets such as gas plants, production facilities and producing-well costs are included under "producing assets"). "Proved" represents areas where successful drilling has delineated a field capable of production. "Unproved" represents all other areas. Standardized measure of discounted future cash flows As required by the U.S. Financial Accounting Standards Board, the standardized measure of discounted future net cash flows is computed by applying first-day-of-the-month average prices, year-end costs and legislated tax rates, and a discount factor of 10 percent to net proved reserves. The standardized measure includes costs for future dismantlement, abandonment and remediation obligations. The company believes the standardized measure does not provide a reliable estimate of the company’s expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its proved oil and gas reserves. The standardized measure is prepared on the basis of certain prescribed assumptions, including first-day-of-the-month average prices, which represent discrete points in time and therefore may cause significant variability in cash flows from year to year as prices change. Standardized measure of discounted future net cash flows related to proved oil and gas reserves millions of Canadian dollars 2024 2023 2022 Future cash flows 158,677 158,347 198,923 Future production costs (88,061) (101,640) (104,765) Future development costs (24,792) (24,074) (23,392) Future income taxes (10,196) (7,016) (16,872) Future net cash flows 35,628 25,617 53,894 Annual discount of 10 percent for estimated timing of cash flows (17,461) (11,615) (28,340) Discounted future cash flows 18,167 14,002 25,554 Changes in standardized measure of discounted future net cash flows related to proved oil and gas reserves millions of Canadian dollars 2024 2023 2022 Balance at beginning of year 14,002 25,554 14,170 Changes resulting from: Sales and transfers of oil and gas produced, net of production costs (6,041) (4,918) (6,113) Net changes in prices, development costs and production costs (a) 7,134 (16,908) 23,215 Extensions, discoveries, additions and improved recovery, less related costs — 58 664 Development costs incurred during the year 1,191 1,182 1,160 Revisions of previous quantity estimates 1,788 2,146 (4,431) Accretion of discount 1,485 2,535 1,439 Net change in income taxes (1,392) 4,353 (4,550) Net change 4,165 (11,552) 11,384 Balance at end of year 18,167 14,002 25,554 (a) SEC rules require the company’s reserves to be calculated on the basis of average first-day-of-the-month oil and natural gas prices during the reporting year. Future net cash flows are determined based on the net proved reserves as outlined in the "Net proved reserves table". 108 Net proved reserves (a) Liquids (b) Natural gas Synthetic crude oil Bitumen Total oil-equivalent basis (c) millions of barrels billions of cubic feet millions of barrels millions of barrels millions of barrels Beginning of year 2022 16 281 438 2,216 2,717 Revisions — (41) (62) (363) (432) Improved recovery — — — — — (Sale) purchase of reserves in place (9) (141) — — (32) Discoveries and extensions — 2 — 67 67 Production (3) (29) (23) (96) (127) End of year 2022 4 72 353 1,824 2,193 Revisions (2) 2 26 90 114 Improved recovery — — — — — (Sale) purchase of reserves in place — (1) — — — Discoveries and extensions — — — — — Production (2) (12) (25) (103) (132) End of year 2023 — 61 354 1,811 2,175 Revisions 2 3 (35) 114 82 Improved recovery — — — — — (Sale) purchase of reserves in place — — — — — Discoveries and extensions — — — — — Production (2) (11) (23) (109) (136) End of year 2024 — 53 296 1,816 2,121 Net proved developed reserves included above, as of January 1, 2022 14 205 326 1,957 2,331 December 31, 2022 4 60 248 1,691 1,953 December 31, 2023 — 53 242 1,706 1,957 December 31, 2024 — 41 190 1,697 1,894 Net proved undeveloped reserves included above, as of January 1, 2022 2 76 112 259 386 December 31, 2022 — 12 105 133 240 December 31, 2023 — 8 112 105 218 December 31, 2024 — 12 106 119 227 (a) Net reserves are the company’s share of reserves after deducting the shares of mineral owners or governments or both. All reported reserves are located in Canada. Reserves of natural gas are calculated at a pressure of 14.73 pounds per square inch at 60°F. (b) Liquids include crude, condensate and natural gas liquids (NGLs). NGL proved reserves are not material and are therefore included under liquids. (c) Gas converted to oil-equivalent at six million cubic feet per one thousand barrels. The information above describes changes during the years and balances of proved oil and gas reserves at year-end 2022, 2023 and 2024. The definitions used are in accordance with the SEC Rule 4-10 (a) of Regulation S-X. Proved oil and natural gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations – prior to the time at which contracts providing the right to operate expire. In some cases, substantial new investments in additional wells and other facilities will be required to recover these proved reserves. 109 In accordance with SEC rules, the year-end reserves volumes, as well as the reserves change categories shown in the proved reserves tables are required to be calculated on the basis of average prices during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period. These reserves quantities were also used in calculating unit-of-production depreciation rates and in calculating the standardized measure of discounted net cash flow. Revisions in previously estimated volumes of proved reserves for existing fields can occur due to the evaluation or re-evaluation of already available geologic, reservoir or production data; new geologic, reservoir or production data; or changes in the average of first-day-of-the-month oil and natural gas prices and/or costs that are used in the estimation of reserves. Revisions can also result from significant changes in either development strategy or production equipment and facility capacity. In 2022, downward revisions of proved bitumen reserves were driven by a decrease of 0.2 billion barrels at Kearl as a result of higher royalty obligations associated with pricing, and a decrease of 0.2 billion barrels at Cold Lake due to an updated development plan. An increase to the bitumen reserves of 0.1 billion barrels is associated with extensions at Cold Lake for the Grand Rapids Phase 1 SA-SAGD and Leming SAGD projects. Downward revisions to proved synthetic crude oil reserves were a result of mine development plan updates and higher royalty obligations at Syncrude associated with pricing. Changes to the liquids and natural gas proved reserves were primarily a result of the sale of the company’s interest in the Montney and Duvernay unconventional assets. In 2023, upward revisions of proved bitumen of 0.1 billion barrels were driven by lower royalty obligations associated with lower pricing and minor technical revisions at Cold Lake and Kearl. A slight increase in proved reserves for synthetic crude oil is associated with lower royalty obligations associated with pricing. Conventional proved liquids reserves decreased to zero under existing pricing and operating conditions. In 2024, upward revisions of proved bitumen of 0.1 billion barrels were primarily driven by updates to the Kearl geological model, Kearl well density, and Cold Lake infill drilling, partially offset by reductions associated with higher royalty obligations and Kearl pit limit updates. A decrease to synthetic oil proved reserves is associated with regulatory approval for ore sterilization at Syncrude. Under the terms of certain contractual arrangements or government royalty regimes, lower prices can also increase proved reserves attributable to the company. The company’s operating decisions and its outlook for future production volumes are not impacted by proved reserves as disclosed under the SEC definition. Net proved reserves are determined by deducting the estimated future share of mineral owners or governments or both. For liquids and natural gas, net proved reserves are based on estimated future royalty rates as of the date the estimate is made incorporating the applicable governments’ oil and gas royalty regimes. For bitumen, net proved reserves are based on the company’s best estimate of average royalty rates over the remaining life of each of the Cold Lake and Kearl fields, and they incorporate the Alberta government’s oil sands royalty regime. For synthetic crude oil, net proved reserves are based on the company’s best estimate of average royalty rates over the remaining life of the project, and they incorporate the Alberta government’s oil sands royalty regime. In all cases, actual future royalty rates may vary with production, price and costs. Net proved developed reserves are those volumes that are expected to be recovered through existing wells, facilities, or mining activities with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well or facility. Net proved undeveloped reserves are those volumes that are expected to be recovered as a result of future investments to drill new wells, to recomplete existing wells and/or to install facilities to collect and deliver the production from existing and future wells, facilities, or mining activities. 110 Proxy information section Table of contents Page Nominees for director 112 Director nominee tables 112 Majority voting policy 116 Corporate governance disclosure 117 Corporate governance at a glance 118 Statement of corporate governance practice 119 Composition of our board nominees 119 Tenure of our board nominees 120 Skills and experience of our board members and nominees 121 Independence of our board members and nominees 122 Committee membership of our board 123 Number of meetings 124 Attendance of our board members in 2024 125 Other public company directorships of our board members and nominees 126 Interlocking directorships of our board nominees 126 Director qualification and selection process 127 Director orientation, education and development 128 Board performance assessment 129 Board and committee structure 130 Director compensation 140 Share ownership guidelines of independent directors and chairman, president and chief executive officer 147 Ethical business conduct 148 Restrictions on insider trading 149 Diversity 149 Shareholder engagement 151 Largest shareholder 152 Transactions with Exxon Mobil Corporation 152 Company executives and executive compensation 153 Named executive officers of the company 153 Other executive officers of the company 154 Compensation discussion and analysis 155 Executive summary 156 Compensation design 157 Determining compensation 164 Other compensation elements 168 Risk and governance 170 Executive compensation tables 173 Appendix 182 Appendix A – Board of director and committee charters 182 111 Nominees for director The director nominee tables on the following pages provide information on the seven nominees proposed for election to the board of directors of the company. All of the nominees, with the exception of J.R. Whelan, are now directors and have been since the dates indicated. B.W. Corson is a current director, and in connection with his upcoming retirement from the company, he has chosen not to stand for re-election. Mr. Whelan is not currently a director and is being nominated for election as a director for the first time. Included in these tables is information relating to the director nominees’ biographies, independence status, expertise, standing committee memberships, attendance, public board memberships and shareholdings in the company. The information is as of February 14, 2025, the effective date of this circular, unless otherwise indicated. For more information on our director nominees, please see the Statement of corporate governance practice section. Director nominee tables DAVID W. CORNHILL Mr. Cornhill is a director of AltaGas Ltd., and is the chairman of the board of directors of TriSummit Utilities Inc. (formerly AltaGas Canada Inc.), a privately owned corporation. Mr. Cornhill is a founding shareholder of AltaGas (and its predecessors). He was chief executive officer of AltaGas from 1994 to 2016 and served as interim co-chief executive officer from July to December 2018. Prior to forming AltaGas, Mr. Cornhill served in various capacities with Alberta and Southern Gas Co. Ltd, including vice-president, finance and administration, treasurer and president and chief operating officer. Mr. Cornhill is an experienced leader in the business community and is a strong supporter of communities and community collaboration, investment and enhancement. He is a member of the Ivey Advisory Board at Western University. Mr. Cornhill holds a BSc (Hons.) degree and a MBA degree from Western University, and he was awarded an honorary Doctor of Laws degree by the University in 2015. Calgary, Alberta, Canada Age: 71 Lead Director Nonemployee director (independent) Director since: November 29, 2017 Skills and experience: Leadership of large organizations, Operations/technical, Project management, Strategy development, Environment and sustainability, Audit committee financial expert, Financial expertise, Executive compensation, Risk management Board and Standing Committee Membership Attendance in 2024 Voting Results of Last Annual Meeting Board 8 of 8 (100%) Audit 6 of 6 (100%) Votes For: 475,383,574 (98.17%) Executive resources 7 of 7 (100%) Votes Against: 8,875,828 (1.83%) Safety and sustainability 4 of 4 (100%) Total Votes: 484,259,402 Nominations and corporate governance 6 of 6 (100%) Finance (Chair) 6 of 6 (100%) Imperial Oil Limited Ownership and Value of Equity (a) (b) (c) (d) IMO Common Shares (% of class) IMO Deferred Share Units (DSU) Total Vested Equity Holdings (Common + DSU) Restricted Stock Units (RSU) Total Holdings* (Common + DSU + RSU) Holdings as at February 14, 2025 (#) 12,500 17,226 29,726 20,500 50,226 (<0.01%) Total market value as at February 14, 2025 ($) 1,228,125 1,692,455 2,920,580 2,014,125 4,934,705 Year over year change (#) 0 2,009 2,009 1,800 3,809 *Meets the necessary share ownership requirements Public Company Directorships in the Past Five Years* Other Positions in the Past Five Years (position, date office held and status of employer) – AltaGas Ltd. (2010 – present) – AltaGas Canada Inc. (2018 – 2020) *no public board interlocks – None 112 SHARON R. DRISCOLL Ms. Driscoll is currently an independent director of Empire Company Limited and a director of Elswood Investment Corporation, a privately owned corporation. Prior to her retirement in 2023, Ms. Driscoll held executive positions at RB Global Incorporated, including chief financial officer, co-chief executive officer and executive vice-president and advisor to the chief executive officer. Prior to joining RB Global, Ms. Driscoll served as the executive vice-president and chief financial officer for Katz Group Canada Ltd. from 2013 to 2015 and was the senior vice-president and chief financial officer at Sears Canada Inc. from 2008 to 2013. Ms. Driscoll is a Chartered Professional Accountant and has a Bachelor of Commerce (Honours) degree from Queen’s University. Vancouver, British Columbia, Canada Age: 63 Nonemployee director (independent) Director since: May 2, 2023 Skills and experience: Leadership of large organizations, Project management, Global experience, Strategy development, Environment and sustainability, Audit committee financial expert, Financial expertise, Executive compensation, Risk management Board and Standing Committee Membership Attendance in 2024 Voting Results of Last Annual Meeting Board 8 of 8 (100%) Audit (Chair) 6 of 6 (100%) Votes For: 482,409,887 (99.62%) Executive resources 7 of 7 (100%) Votes Against: 1,848,523 (0.38%) Safety and sustainability 4 of 4 (100%) Total Votes: 484,258,410 Nominations and corporate governance 6 of 6 (100%) Finance 6 of 6 (100%) Imperial Oil Limited Ownership and Value of Equity (a) (b) (c) (d) IMO Common Shares (% of class) IMO Deferred Share Units (DSU) Total Vested Equity Holdings (Common + DSU) Restricted Stock Units (RSU) Total Holdings* (Common + DSU + RSU) Holdings as at February 14, 2025 (#) 0 2,351 2,351 6,600 8,951 Total market value as at February 14, 2025 ($) 0 230,986 230,986 648,450 879,436 Year over year change (#) 0 1,229 1,229 3,300 4,529 *Has 5 years from date of appointment to meet the necessary share ownership requirements Public Company Directorships in the Past Five Years* Other Positions in the Past Five Years (position, date office held and status of employer) – Gildan Activewear Ltd (2023 – 2024) – Empire Company Limited (2018 – Present) *no public board interlocks – RB Global (formerly Ritchie Bros. Auctioneers Incorporated) Executive vice-president and advisor to CEO (2022 – 2023) – RB Global (formerly Ritchie Bros. Auctioneers Incorporated), Chief financial officer (2015 – 2022) JOHN N. FLOREN Mr. Floren is the former president and chief executive officer of Methanex Corporation, and prior to that appointment held the positions of senior vice-president, global marketing and logistics and regional director, marketing and logistics, North America. Mr. Floren was an employee of Methanex for approximately 22 years and worked in the chemical industry for over 37 years. He currently serves as a director of West Fraser Timber Co. Ltd. Mr. Floren holds a Bachelor of Arts in Economics from the University of Manitoba and attended the Harvard Business School’s Program for Management Development, the International Executive Program at INSEAD and completed the Directors Education Program at the Institute of Corporate Directors. Oakville, Ontario, Canada Age: 66 Nonemployee director (independent) Director since: May 2, 2023 Skills and experience: Leadership of large organizations, Operations/technical Project management, Global experience, Strategy development, Environment and sustainability, Financial expertise, Government relations Information technology/Cybersecurity oversight Executive compensation, Risk management Board and Standing Committee Membership Attendance in 2024 Voting Results of Last Annual Meeting Board 8 of 8 (100%) Audit 6 of 6 (100%) Votes For: 478,911,169 (98.90%) Executive resources 7 of 7 (100%) Votes Against: 5,348,239 (1.10%) Safety and sustainability (Chair) 4 of 4 (100%) Total Votes: 484,259,408 Nominations and corporate governance 6 of 6 (100%) Finance 6 of 6 (100%) Imperial Oil Limited Ownership and Value of Equity (a) (b) (c) (d) IMO Common Shares (% of class) IMO Deferred Share Units (DSU) Total Vested Equity Holdings (Common + DSU) Restricted Stock Units (RSU) Total Holdings* (Common + DSU + RSU) Holdings as at February 14, 2025 (#) 0 2,351 2,351 6,600 8,951 Total market value as at February 14, 2025 ($) 0 230,986 230,986 648,450 879,436 Year over year change (#) 0 1,229 1,229 3,300 4,529 *Has 5 years from date of appointment to meet the necessary share ownership requirements Public Company Directorships in the Past Five Years* Other Positions in the Past Five Years (position, date office held and status of employer) – West Fraser Timber Co. Ltd. (2016 – present) – Methanex Corporation (2013 – 2022) *no public board interlocks – Methanex Corporation, President and chief executive officer (2013 – 2022) 113 GARY J. GOLDBERG Mr. Goldberg has more than 40 years of global experience in the mining industry, including in executive, operational and strategic roles, and currently serves as a non-executive director of BHP Group Limited. Mr. Goldberg served as the chief executive officer of Newmont Corporation from 2013 to 2019, and prior to that, was president and chief executive officer of Rio Tinto Minerals. Mr. Goldberg was also a non-executive director of Port Waratah Coal Services Limited and Rio Tinto Zimbabwe, and served as vice-chair of the World Gold Council, treasurer of the International Council on Mining and Metals, and chair of the National Mining Association in the United States. Breckenridge, Colorado, United States of America Age: 66 Nonemployee director (independent) Director since: May 2, 2023 Skills and experience: Leadership of large organizations, Operations/technical, Project management, Global experience, Strategy development, Environment and sustainability, Financial expertise, Government relations, Executive compensation, Risk management Board and Standing Committee Membership Attendance in 2024 Voting Results of Last Annual Meeting Board 8 of 8 (100%) Audit 6 of 6 (100%) Votes For: 482,277,187 (99.59%) Executive resources (Chair) 7 of 7 (100%) Votes Against: 1,982,223 (0.41%) Safety and sustainability 4 of 4 (100%) Total Votes: 484,259,410 Nominations and corporate governance 6 of 6 (100%) Finance 6 of 6 (100%) Imperial Oil Limited Ownership and Value of Equity (a) (b) (c) (d) IMO Common Shares (% of class) IMO Deferred Share Units (DSU) Total Vested Equity Holdings (Common + DSU) Restricted Stock Units (RSU) Total Holdings* (Common + DSU + RSU) Holdings as at February 14, 2025 (#) 0 2,351 2,351 6,600 8,951 Total market value as at February 14, 2025 ($) 0 230,986 230,986 648,450 879,436 Year over year change (#) 0 1,229 1,229 3,300 4,529 *Has 5 years from date of appointment to meet the necessary share ownership requirements Public Company Directorships in the Past Five Years* Other Positions in the Past Five Years (position, date office held and status of employer) – BHP Group Limited (2020 – present) *no public board interlocks – Newmont Corporation, Executive advisor (2019 – 2020) NEIL A. HANSEN Mr. Hansen is currently senior vice-president, energy products, for ExxonMobil Product Solutions Company and has held that position since April, 2022. He is responsible for the global fuels and aromatics value chains. Mr. Hansen has 25 years of financial and commercial experience across ExxonMobil's Upstream and Downstream businesses in the Americas, Europe, and Asia Pacific regions. Prior to his current position, Mr. Hansen was vice-president, fuels for Europe, Africa and Middle East based in Belgium and prior to that was vice-president investor relations and corporate secretary at ExxonMobil. The Woodlands, Texas, United States of America Age: 50 Non-independent director Director since: April 30, 2024 Skills and experience: Leadership of large organizations, Project management, Global experience, Strategy development, Environment and sustainability, Financial expertise, Government relations, Executive compensation, Risk management Board and Standing Committee Membership Attendance in 2024 Voting Results of Last Annual Meeting Board 5 of 5 (100%) Votes For: 482,509,264 (99.64%) Executive resources 4 of 4 (100%) Votes Against: 1,750,146 (0.36%) Safety and sustainability 2 of 2 (100%) Total Votes: 484,259,410 Nominations and corporate governance 3 of 3 (100%) Finance 4 of 4 (100%) Imperial Oil Limited Ownership and Value of Equity (a) (b) (c) (d) IMO Common Shares (% of class) IMO Deferred Share Units (DSU) Total Vested Equity Holdings (Common + DSU) Restricted Stock Units (RSU) Total Holdings* (Common + DSU + RSU) Holdings as at February 14, 2025 (#) 0 0 0 0 0 Total market value as at February 14, 2025 ($) 0 0 0 0 0 Year over year change (#) 0 0 0 0 0 * No share ownership guidelines apply Public Company Directorships in the Past Five Years* Other Positions in the Past Five Years (position, date office held and status of employer) – None *no public board interlocks – Senior vice-president, energy products, ExxonMobil Product Solutions Company, (2022 – present) (Affiliate) – Vice-president, fuels, ExxonMobil Fuels & Lubricants Company, (2020 – 2022) (Affiliate) – Vice-president, investor relations and corporate secretary, Exxon Mobil Corporation (2018 – 2020) (Affiliate) 114 MIRANDA C. HUBBS Ms. Hubbs is currently an independent director of Nutrien Ltd. and also serves as a director of PSP Investments (Public Sector Pension Investment Board), Canadian Investment Regulatory Organization (CIRO) and serves as Chair of the board of the Canadian Red Cross. Prior to retirement in 2011, Ms. Hubbs was executive vice- president and managing director of McLean Budden, one of Canada’s leading investment managers. Ms. Hubbs holds a BSc from Western University and an MBA from Schulich School of Business at York University and is a CFA charterholder. Ms. Hubbs serves on the ICD Climate Strategy Advisory Board and the Global Risk Institute Sustainable Finance Advisory Committee, holds the Fundamentals of Sustainability Accounting credential from the Sustainability Accounting Standards Board, and has received her CERT Certificate in Cybersecurity Oversight issued by the Software Engineering Institute at Carnegie Mellon University. During her investment career, Ms. Hubbs was recognized by Brendan Wood International as one of the Top 50 Portfolio Managers in Canada and a TopGun Investment Mind in Oil and Gas (Canada). Ms. Hubbs is a recipient of the King Charles III Coronation Medal. Toronto, Ontario, Canada Age: 58 Nonemployee director (independent) Director since: July 26, 2018 Skills and experience: Global experience, Strategy development, Environment and sustainability, Audit committee financial expert, Financial expertise, Information technology/Cybersecurity oversight Executive compensation, Risk management Board and Standing Committee Membership Attendance in 2024 Voting Results of Last Annual Meeting Board 8 of 8 (100%) Audit 6 of 6 (100%) Votes For: 445,297,194 (91.95%) Executive resources 7 of 7 (100%) Votes Against: 38,962,215 (8.05%) Safety and sustainability 4 of 4 (100%) Total Votes: 484,259,409 Nominations and corporate governance (Chair) 6 of 6 (100%) Finance 6 of 6 (100%) Imperial Oil Limited Ownership and Value of Equity (a) (b) (c) (d) IMO Common Shares (% of class) IMO Deferred Share Units (DSU) Total Vested Equity Holdings (Common + DSU) Restricted Stock Units (RSU) Total Holdings* (Common + DSU + RSU) Holdings as at February 14, 2025 (#) 0 20,426 20,426 19,200 39,626 Total market value as at February 14, 2025 ($) 0 2,006,855 2,006,855 1,886,400 3,893,255 Year over year change (#) 0 1,690 1,690 1,800 3,490 *Meets the necessary share ownership requirements Public Company Directorships in the Past Five Years* Other Positions in the Past Five Years (position, date office held and status of employer) – Nutrien Ltd. (2018 – present) *no public board interlocks – None JOHN R. WHELAN Mr. Whelan is currently senior vice-president, conventional and heavy oil, ExxonMobil Upstream Company, a division of Exxon Mobil Corporation, and has held that position since 2022. Throughout his career, he has held many engineering, project, operations, commercial and leadership roles located in Canada, Norway, and the U.S. with oversight roles spanning the globe. Prior to his current position, Mr. Whelan was ExxonMobil's vice president of global heavy oil, and prior to that was Imperial's senior vice president, upstream. Mr. Whelan is originally from Newfoundland and Labrador, and he holds a bachelor's degree in mechanical engineering from Memorial University in Newfoundland. Calgary, Alberta, Canada Age: 59 Non-independent director Director since: Not currently a member of the board; first nomination for election as director Skills and experience: Leadership of large organizations, Operations/technical, Project management, Global experience, Strategy development, Environment and sustainability, Financial expertise, Government relations, Executive compensation, Risk management Board and Standing Committee Membership Attendance in 2024 Voting Results of Last Annual Meeting Not currently a member of the board or any of its committees n/a Votes For: n/a Votes Against: n/a Total Votes: n/a Imperial Oil Limited Ownership and Value of Equity (a) (b) (c) (d) IMO Common Shares (% of class) IMO Deferred Share Units (DSU) Total Vested Equity Holdings (Common + DSU) Restricted Stock Units (RSU) Total Holdings* (Common + DSU + RSU) Holdings as at February 14, 2025 (#) 0 0 0 22,000 22,000 Total market value as at February 14, 2025 ($) 0 0 0 2,161,500 2,161,500 Year over year change (#) n/a n/a n/a n/a n/a *Has 3 years from appointment as chairman and chief executive officer to meet the necessary share ownership requirements Public Company Directorships in the Past Five Years* Other Positions in the Past Five Years (position, date office held and status of employer) – None *no public board interlocks – Senior vice-president, conventional and heavy oil, ExxonMobil Upstream Company (2022 – present) (Affiliate) – Vice-president, heavy oil, Exxon Mobil Corporation (2020 – 2022) (Affiliate) – Senior vice-president, upstream, Imperial Oil Limited (2017 – 2020) 115 Footnotes to director nominee tables on pages 112 through 115 : (a) The information includes the beneficial ownership of common shares of Imperial Oil Limited, which information not being within the knowledge of the company has been provided by the nominees individually. (b) The company’s plan for restricted stock units for nonemployee directors is described on page 143 . The company’s plan for deferred share units for nonemployee directors is described on page 142 . The company’s plan for restricted stock units for selected employees is described on page 161 . (c) The numbers for the company’s restricted stock units represent the total of the outstanding restricted stock units received in 2017 through 2024 and deferred share units received since directors’ appointment. (d) The value for Imperial Oil Limited common shares, deferred share units and restricted stock units is based on the closing price for Imperial Oil Limited common shares on the Toronto Stock Exchange of $98.25 on February 14, 2025. Director and nominee holdings in Exxon Mobil Corporation (a) Director XOM Common Shares (#) XOM Restricted Stock (#) (b) Total Common Shares and Restricted Stock (#) Total Market Value of Common Shares and Restricted Stock ($) (c) B.W. Corson (d) 124,328 59,700 184,028 28,217,526 N.A. Hansen 0 181,600 181,600 27,845,234 J.R. Whelan 39,926 83,450 123,376 18,917,586 (a) Holdings as at February 14, 2025. The information includes the beneficial ownership of common shares of Exxon Mobil Corporation, which information not being within the knowledge of the company has been provided by the nominees and directors individually. None of these individuals own more than 0.01 percent of the outstanding shares of Exxon Mobil Corporation. D.W. Cornhill, S.R. Driscoll, J.N. Floren, G.J. Goldberg and M.C. Hubbs do not own common shares or hold restricted stock of Exxon Mobil Corporation. (b) The numbers for Exxon Mobil Corporation restricted stock include outstanding restricted stock and restricted stock units granted under its restricted stock plan which is similar to the company’s restricted stock unit plan. (c) The value for Exxon Mobil Corporation common shares and restricted stock is based on the closing price for Exxon Mobil Corporation common shares on the New York Stock Exchange of $108.24 U.S., which is converted to Canadian dollars at the daily rate of exchange of 1.4166 provided by the Bank of Canada for February 14, 2025. (d) B.W. Corson is a current director and has chosen not to stand for re-election. Majority voting policy In 2022, amendments to the Canada Business Corporations Act came into force implementing majority voting requirements for uncontested director elections. These amendments provide for the election of a director only if the number of “for” votes represents a majority of the votes cast both “for” and “against” the director. Following the implementation of these amendments, the company’s existing majority voting policy was rendered redundant and was revoked by the board. 116 Corporate governance disclosure Table of contents Corporate governance disclosure 117 2024 Corporate governance highlights 117 Corporate governance at a glance 118 Statement of corporate governance practice 119 Composition of our board nominees 119 Tenure of our board nominees 120 Skills and experience of our board members and nominees 121 Independence of our board members and nominees 122 Committee membership of our board 123 Number of meetings 124 Attendance of our board members in 2024 125 Other public company directorships of our board members and nominees 126 Interlocking directorships of our board nominees 126 Director qualification and selection process 127 Director orientation, education and development 128 Board performance assessment 129 Board and committee structure 130 Director compensation 140 Director compensation table 145 Outstanding share-based awards and option-based awards for directors 146 Incentive plan awards for directors - Value vested or earned during the year 146 Share ownership guidelines of independent directors and chairman, president and chief executive officer 147 Ethical business conduct 148 Restrictions on insider trading 149 Diversity 149 Shareholder engagement 151 Largest shareholder 152 Transactions with Exxon Mobil Corporation 152 2024 Corporate governance highlights • Five of seven of our directors, and five of seven of our director nominees are independent and meet the criteria for independence set by Canadian securities regulators, the SEC and the NYSE American LLC. • The company delivered an extensive orientation program to N.A. Hansen upon his election to the board for the first time in 2024. • The directors are highly qualified with diversity of gender, background, experience and skill. • The company’s independent directors have significant stock ownership requirements, all of which have been met (S.R. Driscoll, J.N. Floren and G.J. Goldberg were each elected to the board on May 2, 2023 and are expected to meet the share ownership g uidelines within five years from the date of their appointment). The independent directors collectively have nearly $11.5 million in shareholdings in the company. • The independent directors regularly meet in executive se ssions without management present. • Shares of the company are listed on the TSX and trade on the NYSE American LLC, and our corporate governance practices comply with applicable policies and practices of each exchange. • 98% average vote in favour for the election of our directors at the 2024 annual meeting. • Two of seven or 29% of the director nominees, and 10 of 23 or 43% of the executive officers of the company and its major subsidiaries, are women. 117 Corporate governance at a glance Controlled company Yes Size of board 7 Number of independent directors 5 Women on board (board and nominees) 2 Average attendance of directors at board and committee meetings 100% Lead director Yes In camera sessions of independent directors at every board meeting Yes Independent status of audit committee 100% Audit committee members financially literate All Independent status of executive resources committee 83% Independent status of nominations and corporate governance committee 83% Majority of independent directors on all committees Yes Individual director elections Yes Average tenure of director nominees (approximate) 3 years Average age of director nominees (approximate) 62 years Mandatory retirement age 72 years Separate board chair and CEO No Number of board interlocks None No director serves on more than two boards of another reporting issuer Yes Share ownership requirements for independent directors Yes Share ownership requirements for chairman and chief executive officer Yes Board orientation and education program Yes Code of business conduct and ethics Yes Board and committee charters Yes Position descriptions for the chairman and chief executive officer, lead director and the chair of each committee Yes Skills matrix for directors Yes Annual board evaluation process Yes Annual advisory vote on executive compensation No Dual-class shares No Change of control agreements No 118 Statement of corporate governance practice The company continually reviews its governance practices and monitors regulatory changes. This section provides information pertaining to our board, the committees of the board, ethics, diversity and shareholder engagement. The company is committed to high corporate governance standards and best practices. The company’s corporate governance policies and practices comply with and in most cases exceed the requirements of National Instrument 52-110 Audit Committees (NI 52-110), National Policy 58-201 Corporate Governance Guidelines (NP 58-201) and National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101). The company’s common shares trade on the Toronto Stock Exchange and the NYSE American LLC, and our corporate governance practices reflect the standards of these exchanges. In accordance with NYSE American LLC requirements for non-U.S. companies, the company is in compliance with NYSE American standards in all significant respects except as described on the company’s website at www.imperialoil.ca. Composition of our board nominees More information on diversity, including on the board and among executive officers of the company, can be found at page 149 . 119 Tenure of our board nominees Our board nominees have varying lengths of tenure providing a blend of continuity and renewal that supports effective governance. The board charter provides that incumbent directors will not be re-nominated if they have attained the age of 72, except under exceptional circumstances and at the request of the chairman. The company does not have term limits for independent directors because it values the comprehensive knowledge of the company that long serving directors possess and independent directors are expected to remain qualified to serve for a minimum of five years. The following chart shows the current years of service of the nominees for the board of directors and the year they would normally be expected to retire from the board. Name of director nominee Years of service on the board Year of expected retirement from the board for independent directors D.W. Cornhill 7 years 2026 S.R. Driscoll 2 years 2034 J.N. Floren 2 years 2031 G.J. Goldberg 2 years 2031 N.A. Hansen 1 year — M.C. Hubbs 6 years 2039 J.R. Whelan (a) n/a — (a) J.R. Whelan is being nominated for election as a director at the annual meeting of shareholders and is not currently a director. 120 Skills and experience of our board members and nominees Our directors and nominees bring a wide range of skills, diversity and experience. The current directors and director nominees have the experience and expertise required to ensure effective oversight, stewardship and governance of the company. The key areas of experience and skills for each of the nominees for election as directors can also be found in each of the director nominee tables on pages 112 through 116 of this circular. The table below sets out the diverse skill set required of the board and identifies the particular experience, qualifications, attributes, and skills of each director and nominee that led the board to conclude that such person should serve as a director of the company. D.W. Cornhill B.W. Corson (a) S.R. Driscoll J.N. Floren G.J. Goldberg N.A. Hansen M.C. Hubbs J.R. Whelan (b) Leadership of large organizations ü ü ü ü ü ü ü Operations / technical ü ü ü ü ü Project management ü ü ü ü ü ü ü Global experience ü ü ü ü ü ü ü Strategy development ü ü ü ü ü ü ü ü Environment and sustainability ü ü ü ü ü ü ü ü Audit committee financial expert ü ü ü Financial expertise ü ü ü ü ü ü ü ü Government relations ü ü ü ü ü Information technology / cybersecurity oversight ü ü Executive compensation ü ü ü ü ü ü ü ü Risk management ü ü ü ü ü ü ü ü (a) B.W. Corson is a current director and has chosen not to stand for re-election at the annual meeting of shareholders. (b) J.R. Whelan is not currently a director and is being nominated for election as a director at the annual meeting of shareholders. 121 Independence of our board members and nominees Five out of seven of the director nominees are independent. The board is currently composed of seven directors, six of whom will be standing for re-election at the annual meeting of shareholders on May 8, 2025. B.W. Corson is a current director and has chosen not to stand for re-election. J.R. Whelan is not currently a director and is being nominated for election as a director. The majority of the nominees (five out of seven) are independent. The independent directors and nominees are not employees of the company. The board determines independence on the basis of the standards specified by National Instrument 52-110 Audit Committees (NI 52-110) , the U.S. Securities and Exchange Commission rules and the listing standards of the NYSE American LLC. The board has reviewed relevant relationships between the company and each nonemployee director and director nominee to determine compliance with these standards. Based on the directors’ responses to an annual questionnaire, the board determined that none of the independent directors has any interest, business or other relationship that could or could reasonably be perceived to constitute a material relationship with the company. B.W. Corson is a director and chairman, president and chief executive officer of the company and is not considered to be independent. In connection with his upcoming retirement from the company, Mr. Corson has chosen not to stand for re-election at the annual meeting of shareholders on May 8, 2025 and J.R. Whelan is being nominated for election as a director for the first time. Mr. Whelan has been appointed as president of the company effective April 1, 2025, as chief executive officer effective at the conclusion of the annual meeting, and, provided that Mr. Whelan is elected as a director at the meeting, as chairman effective at the conclusion of the meeting. If elected, Mr. Whelan will also be a non-independent director. The board believes that both Mr. Corson and Mr. Whelan's extensive knowledge of the business of the company and Exxon Mobil Corporation has been and will be beneficial to the other directors and their participation enhances the effectiveness of the board. N.A. Hansen is also a non-independent director as he is an employee of Exxon Mobil Corporation. Mr. Hansen holds the position of senior vice-president, energy products at ExxonMobil Product Solutions Company, a division of Exxon Mobil Corporation. The company believes that Mr. Hansen, although deemed non-independent under the relevant standards by virtue of his employment, can be viewed as independent of the company’s management and that his ability to reflect the perspective of the company’s shareholders enhances the effectiveness of the board. Name of director and/or nominee Management Independent Not independent Reason for non-independent status D.W. Cornhill ü B.W. Corson (a) ü ü B.W. Corson is a director and chairman, president and chief executive officer of Imperial Oil Limited. S.R. Driscoll ü J.N. Floren ü G.J. Goldberg ü N.A. Hansen ü N.A. Hansen is an employee of Exxon Mobil Corporation. M.C. Hubbs ü J.R. Whelan (b) ü ü If elected, J.R. Whelan will be chairman, president and chief executive officer of Imperial Oil Limited. (a) B.W. Corson is a current director and has chosen not to stand for re-election at the annual meeting of shareholders. (b) J.R. Whelan is not currently a director and is being nominated for election as a director at the annual meeting of shareholders. 122 Committee membership of our board Each standing committee is chaired by a different independent director and all of the independent directors are members of each committee. The chart below shows the company’s current standing committee memberships and the chair of each committee. Director Nominations and corporate governance committee Audit committee (b) Safety and sustainability committee Executive resources committee Finance committee D.W. Cornhill (c) ü ü ü ü ü Chair B.W. Corson (a) — — — — — S.R. Driscoll (c) ü ü Chair ü ü ü J.N. Floren ü ü ü Chair ü ü G.J. Goldberg ü ü ü ü Chair ü N.A. Hansen (a) ü — ü ü ü M.C. Hubbs (c) ü Chair ü ü ü ü (a) Not independent directors. Mr. Corson is a current director and has chosen not to stand for re-election. (b) All members of the audit committee are independent and financially literate within the meaning of National Instrument 52-110 Audit Committees and the listing standards of the NYSE American LLC. (c) Audit committee financial experts under U.S. regulatory requirements. In addition to its standing committees, the board may establish ad hoc committees or special committees from time to time. One special committee, chaired by D.W. Cornhill and consisting of the five independent directors, was established in September, 2022 and remained active f or the purposes of considering certain matters until it was dissolved in February, 2024. 123 Number of meetings The board meets at least seven times each year to ensure regular oversight and timely decision-making. The chart below shows the number of board and standing committee meetings held in 2024. This includes seven regular meetings and one additional special meeting of the board. Meetings of the board and standing committees in 2024: 124 Attendance of our board members in 2024 100% board and standing committee meeting attendance from all members. The following chart provides a summary of the attendance record of each of the directors and nominees in 2024. The attendance record of each director nominee is also set out in their biographical information within the nominee section. The attendance chart also provides an overall view of the attendance per standing committee. Senior management directors and other members of management periodically attend standing committee meetings at the request of the committee chair. Director Board Audit committee Executive resources committee Safety and sustainability committee Nominations and corporate governance committee Finance committee Annual meeting Total Percentage by director D.W. Cornhill 8 of 8 6 of 6 7 of 7 4 of 4 6 of 6 6 of 6 (chair) 1 of 1 38 of 38 100% B.W. Corson 8 of 8 (chair) — — — — — 1 of 1 9 of 9 100% M.R. Crocker (a) 3 of 3 — 3 of 3 2 of 2 3 of 3 2 of 2 1 of 1 14 of 14 100% S.R. Driscoll 8 of 8 6 of 6 (chair) 7 of 7 4 of 4 6 of 6 6 of 6 1 of 1 38 of 38 100% J.N. Floren 8 of 8 6 of 6 7 of 7 4 of 4 (chair) 6 of 6 6 of 6 1 of 1 38 of 38 100% G.J. Goldberg 8 of 8 6 of 6 7 of 7 (chair) 4 of 4 6 of 6 6 of 6 1 of 1 38 of 38 100% N.A. Hansen (b) 5 of 5 — 4 of 4 2 of 2 3 of 3 4 of 4 1 of 1 19 of 19 100% M.C. Hubbs 8 of 8 6 of 6 7 of 7 4 of 4 6 of 6 (chair) 6 of 6 1 of 1 38 of 38 100% Percentage by committee 100% 100% 100% 100% 100% 100% 100% 232 of 232 Overall attendance 100% (a) M.R. Crocker did not stand for reelection in 2024 and resigned from the board and its committees on April 30, 2024. (b) N.A. Hansen was elected to the board and its committees on April 30, 2024. 125 Other public company directorships of our board members and nominees No director or nominee serves on more than two boards of another reporting issuer. The following table shows which directors and nominees serve on the boards of other reporting issuers and the committee memberships in those companies. Name of director or nominee Other reporting issuers of which director or nominee is also a director Type of company Stock symbol: Exchange Committee appointments D.W. Cornhill AltaGas Ltd. Diversified energy company ALA:TSX Environment, health and safety committee B.W. Corson (a) — — — — S.R. Driscoll Empire Company Limited Food retailing EMP.A:TSX Audit committee (chair), Nominating committee, and Corporate governance and social responsibility committee J.N. Floren West Fraser Timber Co. Ltd Basic Materials- Forest Products WFG:TSX Health, safety and environment committee (chair), Human resources and compensation committee, and Governance and nominating committee G.J. Goldberg BHP Group Limited Basic Materials- Other industrial Metals and mining BHP:ASX Sustainability committee and Nomination and governance committee N.A. Hansen — — — — M.C. Hubbs Nutrien Ltd. Fertilizer manufacturing NTR:TSX, NYSE Human resources and compensation committee and Safety and sustainability committee (chair) J.R. Whelan (b) — — — — (a) B.W. Corson is a current director and has chosen not to stand for re-election at the annual meeting of shareholders. (b) J.R. Whelan is not currently a director and is being nominated for election as a director at the annual meeting of shareholders. Interlocking directorships of our board nominees As of the date of this proxy circular, there are no interlocking public company directorships among the nominees. 126 Director qualification and selection process Our board of directors is composed of individuals with diverse qualifications ensuring the skills needed to oversee the company's operations and drive long-term success. The nominations and corporate governance committee is responsible for identifying and recommending new candidates for board nomination. The committee identifies candidates from a number of sources, including executive search firms and referrals from existing directors. The process for selection is described in paragraph 11(a) of the Board of Directors Charter found in Appendix A of this circular. The committee will consider potential future candidates as required. In considering the qualifications of potential nominees for election as directors, the nominations and corporate governance committee considers the work experience and other areas of expertise of the potential nominees, with the objective of providing for diversity among the nonemployee directors. The following key criteria are considered to be relevant to the work of the board of directors and its committees: Work experience • Experience in leadership of businesses or other large organizations (Leadership of large organizations) • Operations/technical experience (Operations / technical) • Project management experience (Project management) • Experience in working in a global work environment (Global experience) • Experience in development of business strategy (Strategy development) • Experience with environmental, health, community relations and/or safety policy, practices and management (Environment and sustainability) Other expertise • Audit committee financial expert (also see the financial expert section in the audit committee table starting on page 136 ) • Expertise in financial matters (Financial expertise) • Expertise in managing relations with government (Government relations) • Expertise in information technology and cybersecurity oversight (Information technology / cybersecurity oversight) • Expertise in executive compensation policies and practices (Executive compensation) • Expertise in oversight of risk management policies and practices (Risk management) The nominations and corporate governance committee may consider the following additional factors in assessing potential nominees: • possessing expertise in any of the following areas: law, science, marketing, administration, social/political environment or community and civic affairs; • individual competencies in business and other areas of endeavour in contributing to the collective experience of the directors; and • providing diversity of age, regional association, gender and other diversity elements (including Aboriginal peoples, persons with disabilities and members of visible minorities). The nominations and corporate governance committee assesses the work experience and other expertise each existing director possesses and whether the candidate is able to fill any gaps in such experience, expertise and diversity of age, regional association, gender and other diversity elements. More detailed information on diversity of the board can be found at page 149 . Consideration is also given to whether candidates possess the ability to contribute to the broad range of issues with which the board and its committees must deal, are able to devote the necessary amount of time to prepare for and attend board and committee meetings and are free of any potential legal impediment or conflict of interest. Candidates are expected to remain qualified to serve for a minimum of five years and independent directors are expected to achieve ownership of no less than 16,500 common shares, deferred share units and restricted stock units within five years of becoming an independent director. When the committee is recommending candidates for re-nomination, it assesses such candidates against the criteria for re-nomination as set out in paragraph 11(b) of the Board of Directors Charter found in Appendix A of this circular. Candidates for re-nomination are expected not to change their principal position, the thrust of their involvement or their regional association in a way that would significantly detract from their value as a director of the corporation. They are also expected to continue to be compatible with the criteria that led to their selection 127 as nominees. Under exceptional circumstances, the nominations and corporate governance committee, on the request of the chairman, may continue to support the nomination of a director who has attained the mandatory retirement age. In 2024 and 2025, the nominations and corporate governance committee, together with the executive resources committee, carried out a succession process that led to the nomination and appointment of J.R. Whelan as the successor to B.W. Corson. The chief executive officer succession process was led jointly by the chair of the nominations and corporate governance committee, the chair of the executive resources committee, the lead director and the chairman, president and chief executive officer, Mr. Corson. A shortlist of potential candidates was developed and Mr. Whelan was selected as the preferred candidate to succeed Mr. Corson. The board and separately, the five independent directors, interviewed Mr. Whelan. The independent directors unanimously agreed to convey their support to the board regarding Mr. Whelan's nomination and appointments. In February 2025, the board approved the nomination of Mr. Whelan for director at the annual meeting of shareholders on May 8, 2025, the appointment of Mr. Whelan as president effective April 1, 2025 and as chief executive officer effective at the conclusion of such meeting and (provided that Mr. Whelan is elected as a director) as chairman effective at the conclusion of such meeting. Director orientation, education and development The company regularly provides in-depth presentations to the directors on relevant and emerging issues and encourages continuing education opportunities. The corporate secretary organizes an orientation program for all new directors. In a series of meetings over several days, new directors are briefed by staff and functional managers on all significant areas of the company’s operations, industry specific topics, risk oversight and regulatory issues. New directors are also briefed on significant company policies, organizational structure, security, information technology management and on critical planning and reserves processes. They also receive key governance and disclosure documents and a comprehensive board manual which contains a record of historical information about the company, by-laws, company policies, the charters of the board and its committees, other relevant company business information, information on directors’ duties and additional board related activities and calendars. Shortly after his election to the board, N.A. Hansen completed an extensive orientation program with the company’s corporate secretary and senior managers of various departments. Mr. Hansen participated in comprehensive onboarding sessions, including in-depth reviews of the company’s history, culture, practices, businesses and operations, risk framework, and ethics and other foundational policies, and in-depth reviews of legal and regulatory requirements, the Canadian climate framework, the company's emissions profile, emissions-related targets and plans for achieving such targets, and energy industry dynamics in general. With J.R. Whelan being nominated for election for the first time this year, the corporate secretary will coordinate an orientation shortly after his election to the board. Board and committee members participate in continuing education and maintain oversight over company operations through regular presentations by management, which focus on providing and discussing more in-depth information about key aspects of the business. Subject to exceptional circumstances, each year the board has an extended meeting that focuses on a particular area of the company’s operations and includes a visit to one or more of the company’s operating sites or a site of relevance. These site visits help directors better understand the strengths and business opportunities unique to various operations and markets across the country, and enhanc e the board’s perspective of the integrated nature of the company’s business. In 2024, the board visited the Cold Lake upstream facility in Cold Lake, Alberta, Canada, for a tour of the oil sands facilities and presentations specific to the operations. One way in which the board and its committees exercise oversight is through regularly receiving and discussing presentations and updates that focus on performance, strategy and opportunities for the business. In 2024, director oversight included regular reviews of upstream and downstream operations, performance, plans and strategies, risk management and business controls, safety, environmental performance and sustainability, climate strategy, and board engagement relating to the Kearl environmental protection order. 128 Recognizing the importance of oversight relating to cybersecurity and artificial intelligence, the board also reviewed and considered presentations relating to information technology and cybersecurity strategies to assess the security and integrity of the company's information, systems and assets, including risks relating to the use of artificial intelligence technologies by the company and others. The board also reviewed presentations on the company’s risk assessment processes for forced labour and child labour in its supply chain. With strong market conditions and business performance throughout the year, the board focused on strategic direction, operational priorities, capital allocation and prioritizing shareholder returns. This included reviews and approval of renewal and acceleration of the company's normal course issuer bid. The board also maintai ned oversight over the company’s various environmental, social and governance initiatives throughout the year. There was a continued focus by the board on the company’s progress with emissions reduction initiatives, including the company’s continued participation in the Pathways Alliance and setting and tracking emissions reduction goals. The board also undertook reviews of disclosure and emissions performance, safety performance, Canada climate policy updates and a review of the company's regulatory compliance framework and management system. Please see the Risk oversight section for more information on the board’s role in relation to the environment. Mem bers of ExxonMobil’s management also provide reviews of various aspects of ExxonMobil’s global business. In 2024, the directors considered presentations on ExxonMobil’s global internal audit process and strategy, cybersecurity, ExxonMobil’s corporate strategy, and its Global Outlook. Prior to each board meeting, members of the board receive and review an extensive package of materials that provides a comprehensive summary on each agenda item to be discussed. Similarly, the committee members also receive and review a comprehensive summary on each agenda item to be discussed by that particular committee. Informational communications and other written publications or reports of interest to the directors are also forwarded routinely. The board members are canvassed as to whether there are any additional topics relevant to the board or to a specific committee that they would like to see addressed, and management schedules presentations covering these areas for discussion. In addition, at every meeting the board receives an extensive update from the chairman, president and chief executive officer on business environment trends, relevant geopolitical activities, federal government priorities, key provincial issues and competitor activities, as appropriate. Directors are encouraged to participate in other continuing education programs and events to ensure their skills and knowledge remain current. In 2024, one or more directors participated in continuing education provided by third parties pertaining to, among other things, board oversight of climate governance and the energy transition, cybersecurity, board strategy, and accounting and financial courses. Furthermore, the board recognizes the importance of the company's relationships with Indigenous communities and acknowledges the calls to action of the Truth and Reconciliation Commission of Canada, and all of the independent directors have completed the "4 Seasons of Reconciliation" course provided by the Indigenous Continuing Education Centre of the First Nations University of Canada. Board performance assessment Our board conducts regular performance assessments to ensure effective governance and continuous improvement. The board and its committees, as well as the performance of the directors, are assessed on an annual basis. For 2024, the directors engaged in a performance assessment with the lead director and with the chairman, president and chief executive officer, which includes discussion and evaluation of the board and each committee’s effectiveness in various areas. The lead director and the chairman, president and chief executive officer also each meet regularly with directors individually to discuss any outstanding issues. The nominations and corporate governance committee discuss a summary of these assessment outcomes in the first quarter of each year. 129 Board and committee structure The structure of the company’s board and its committees helps the directors to effectively oversee the company’s operations and make informed decisions. Leadership structure The company has chosen to combine the positions of chairman, president and chief executive officer. The board believes the interests of all shareholders are best served at the present time through a leadership model with a combined chairman and chief executive officer position and an independent lead director selected by and from the independent directors. Through more than 41 years of experience with ExxonMobil and Imperial, the current chief executive officer possesses an in-depth knowledge of the evolving energy industry supply and demand fundamentals and the array of challenges to be faced by the company. The board believes that the extensive experience and other insights put the chief executive officer in the best position to provide broad leadership for the board as it considers strategy and exercises its fiduciary responsibilities. Further, the board has demonstrated its commitment and ability to provide independent oversight of management. The position description of the chief executive officer is fully described in paragraph 14(a) of the Board of Directors Charter attached as Appendix A. In February 2024, the board established a lead director position to further enhance independent board leadership. D.W. Cornhill was appointed lead director. Prior to the formation of the lead director position, D.W. Cornhill provided leadership for the independent directors in his capacity as chair of the executive sessions of the board. It is normally expected that the same director will serve as lead director for a minimum of two years. The duties and responsibilities of the lead director include: • act as liaison with the chairman, in consultation with the other directors, (provided however that each director will also be afforded direct and complete access to the chairman at any time as such director deems necessary or appropriate); • calls, chairs and sets agendas for executive sessions of the independent directors; • provides feedback to the chairman; • chairs meetings of the board in the absence of the chairman; • reviews and approves the schedule and agenda for all board and committee meetings and reviews associated materials distributed to the directors; • advises the chairman as to the quality, quantity and timeliness of information flows; • working together with the chairman, oversees the annual performance evaluation of the board; and • working together with the chair of the executive resources committee, oversees the annual performance review of the chief executive officer. Compensation for the lead director is determined by the board on the recommendation of the nominations and corporate governance committee and will be reviewed annually. Presently, the board has established the compensation for acting as lead director at $45,000 per year. The position description of the lead director is fully described in paragraph 8 of the Board of Directors Charter attached as Appendix A. Independent director executive sessions The executive sessions of the board are in camera meetings of the independent directors and are held in conjunction with every board meeting. These meetings are held in the absence of management. The independent directors held eight executive sessions in 2024, chaired by the lead director. The pur poses of the executive sessions of the board include the following and are more fully described in paragraph 10 of the Board of Directors Charter attached as Appendix A: • raising substantive issues that are more appropriately discussed in the absence of management; • discussing the need to communicate to the chairman of the board any matter of concern raised by any committee or director; • addressing issues raised but not resolved at meetings of the board and assessing any follow-up needs with the chairman of the board; • discussing the quality, quantity, and timeliness of the flow of information from management that is necessary for the independent directors to effectively and responsibly perform their duties, and advising the chairman of the board of any changes required; and • seeking feedback about board processes. 130 In camera sessions of the board committees Various committees also regularly hold in camera sessions without management present. The audit committee regularly holds private sessions of the committee members as well as private meetings of the committee with each of the external auditor, the internal auditor and senior management as part of every regularly scheduled committee meeting. Committee structure The board has created five standing committees to help carry out its duties. Each committee is chaired by a different independent director and all of the independent directors are members of each committee. N.A. Hansen is also a member of each committee, with the exception of the audit committee, which is composed entirely of independent directors. Board committees work on key issues in greater detail than would be possible at full board meetings, allowing directors to more effectively discharge their stewardship responsibilities. The independent chairs of the five committees are able to take a leadership role in executing the board’s responsibility with respect to a specific area of the company’s operations falling within the responsibility of the committee he or she chairs. The board and each committee have a written charter that can be found in Appendix A of this circular. The charters set out the purpose, structure, position description for the chair, and the responsibility and authority of that committee, and are reviewed and approved by the board annually. In addition to its standing committees, the board may establish ad hoc committees or special committees from time to time. 131 Risk oversight The board and its committees are responsible for overseeing the company’s risk management framework, crucial for ensuring the organization’s stability and long-term success. The company is governed by a comprehensive and well-established risk management system, and the company’s success in managing risk over time has been achieved through emphasis on execution of this disciplined management framework. The company’s risk management system includes a process for identifying, prioritizing, measuring, and managing the principal risks across the company, as well as assessing the company’s response to these risks. The system is implemented at multiple levels of the business through various policies, guidelines, processes and systems, including: • energy outlook scenarios; • strategic planning; • risk management guidelines; • code of ethics and standards of business conduct; • delegation of authority guidelines; • credit risk assessment guidelines; • controls and operations integrity management systems; • capital project management systems; • IT risk management (including information technology, systems and cybersecurity including in respect of artificial intelligence); • guidelines for the management and protection of information; and • business continuity plans. For a discussion on the company’s risk management in relation to executive compensation, see the Compensation discussion and analysis section. 132 The chairman, president and chief executive officer is charged with identifying the company’s principal risks and ensuring appropriate systems are in place to manage these risks. The company incorporates external input in the identification and assessment of risks, including engaging directly with a variety of external stakeholders and communities, including policy makers, investors, customers, regulators, academics, Indigenous peoples, non-governmental organizations and industry associations on issues and opportunities of relevance to the company. These risks included energy transition risks, operational risks, environmental and sustainability risks, and policy risks. The board of directors is responsible for reviewing the principal risks and overseeing the implementation of the risk management system, with the various committees assisting in risk oversight for issues that fall under their responsibility. This integrated risk management approach facilitates recognition and oversight of risk. For example, the audit committee oversees the company’s system of internal accounting and financial controls, the executive resources committee oversees the compensation programs and practices in relation to risk management, and the finance committee oversees risk management in connection with capital allocation and expenditures. The safety and sustainability committee oversees the policies and practices that manage environment, health, safety and security risk. The committee regularly engages with senior management on climate matters and our environmental practices and performance, including reviews of, and briefings from subject-matter experts on, compliance with legislation and the assessment of public policy impacts on corporate performance, health and safety systems and performance, new technology develo pments, and the risks, actions and disclosure associated with climate change and the energy transition. In 2024, this included an in-depth review of the company’s regulatory compliance framework and management processes through its operations integrity management system and of the company's environmental performance and focus areas including in respect of progressive reclamation, decommissioning and remediation, water conservation and use, air quality improvement, waste management and land use and biodiversity. Additionally, the committee and board provide oversight over the company's emission reduction goals and performance. The board of directors evaluates climate change risk in the context of overall enterprise risk, including other operational, strategic, and financial risks. Imperial's board is actively engaged and committed to overseeing the company's efforts as it pursues a strategy that is resilient to a wide range of potential pathways for society’s energy transition while continuing to grow shareholder value. 133 The board and its committees carry out their risk oversight responsibility through regular reviews and assessments. Topic-specific assessments, such as for compliance programs, controls, stewardship of business performance, regulatory changes, the company’s energy outlook, and climate risk and sustainability are conducted regularly and as necessary. The board carefully considers various factors and risks in connection with specific proposals for capital expenditures, budget additions and strategic initiatives, as well as in evaluating strategic plans. Members of the board ask questions of management to ensure risks are identified, assessed, mitigated, and monitored. Each typical year, the board also visits one or more of the company’s operating sites or locations of importance for the company to better understand issues associated with the company’s business. In the annual planning process, consideration is given to a diverse set of risks and other factors that may influence future energy supply and demand trends, including technological advancements, regulation and government policies, climate change, greenhouse gas restrictions, and other general economic conditions. It also takes into account emerging industry and economic conditions and market and government policy uncertainties in developing its strategic plans and longer-term price views. Further, the board is responsible for ensuring the company’s strategic planning process is effective, and in doing so regularly reviews the process, key issues and various alternatives for future strategy development to inform updates. Business plans and strategies are reviewed on an annual basis and approved by the board. The tables on the following pages provides additional oversight and other information about the board and its five standing committees: 134 Board of directors The board of directors is responsible for the stewardship of the corporation. The stewardship process is carried out by the board directly or through one or more of the committees of the board. The formal mandate of the board can be found within the Board of Directors Charter in Appendix A of this circular. The board is satisfied that its activities over the year have fulfilled its mandate. Directors (as shown in photo from left to right) ●   M.C. Hubbs ●   N.A. Hansen ●   G.J. Goldberg ●   B.W. Corson (chair) ●   S.R. Driscoll ●   J.N. Floren ●   D.W. Cornhill Number of meetings Eight meetings of the board of directors were held in 2024, which included one special meeting of the board. The independent directors hold executive sessions of the board in conjunction with every board meeting. These meetings are held in the absence of management. The independent directors held eight executive sessions in 2024. Board highlights in 2024 ●   Regularly discussed industry activity, market updates and company initiatives. ●   Regularly discussed operational and project updates, including active oversight of the company’s response to the Kearl environmental protection order. ●   Regularly discussed risk management and business controls environment. ●   Regularly reviewed information technology, systems and cybersecurity strategies (including trends, risks, preparedness, mitigation, response, system improvements and business continuity strategies) to assess the security and integrity of the company’s information, systems and assets. ●   Discussed comprehensive company strategy for all business lines, including a focus on capital allocation and discipline. ●   Implemented various mechanisms for enhancing shareholder returns, such as increasing the dividend, and renewing and accelerating the company’s normal course issuer bid program. ●   Provided oversight in support of safety, environmental performance and sustainability. ●   Regularly discussed climate change policies, risks, opportunities and the company’s climate strategy, including the company’s continued membership in the Pathways Alliance. ●   Carried out a site visit to the company’s Cold Lake facilities. ●   Reviewed various stages of company projects such as Strathcona renewable diesel, Cold Lake Grand Rapids, Leming SAGD redevelopment, and Enhanced Bitumen Recovery Technology (EBRT) pilot. Role in risk oversight The company’s financial, execution and operational risk rests with management and the company is governed by well-established risk management systems. The board of directors are responsible for reviewing the company’s principal risks and overseeing the implementation of the appropriate systems to manage these risks. The board carefully considers these risks in evaluating the company’s strategic plans and specific proposals for capital expenditures and budget additions. It also approves and monitors compliance with the code of ethics and business conduct, and ensures that executive officers create a culture of integrity throughout the company. The board reviews the company’s information technology, systems and cybersecurity to ensure they adequately protect corporate information and assets. Disclosure policy The company is committed to full, true and plain public disclosure of all material information in a timely manner, in order to keep security holders and the investing public informed about the company’s operations. The full details of the corporate disclosure policy can be found on the company’s internet site at www.imperialoil.ca . Independence The current board of directors is composed of seven directors, the majority of whom (five of seven) are independent. The five independent directors are not employees of the company. 135 Audit committee The role of the audit committee includes selecting and overseeing the independent auditor, reviewing the scope and results of the audit conducted by the independent auditor, and assisting the board in overseeing the integrity of the company’s financial statements. In addition, the committee’s role includes overseeing the company’s compliance with legal and regulatory requirements and the quality and effectiveness of internal controls, approving any changes in accounting principles and practices, and reviewing the results of monitoring activity under the company’s business ethics compliance program. The formal mandate of the committee can be found within the Audit Committee Charter in Appendix A of this circular. The committee is satisfied that its activities over the year have fulfilled its mandate. Committee members ●    S.R. Driscoll (chair) ●    J.N. Floren ●    M.C. Hubbs (vice-chair) ●    G.J. Goldberg ●    D.W. Cornhill Number of meetings Six meetings of the audit committee were held in 2024. The committee members met in camera without management present at all regularly scheduled meetings and separately with the internal auditor and the external auditor at all regularly scheduled meetings. A pre-audit meeting also occurs prior to every regularly scheduled audit committee meeting with the chair of the audit committee and the chief financial officer and both the internal and external auditors. Committee highlights in 2024 ●    Reviewed and recommended for approval the interim and full year financial and operating results. ●    Reviewed and assessed the company’s system of internal controls and auditing procedures, and the results of the internal auditor’s audit program. ●    Reviewed and assessed the external auditor plan, performance and fees. ●    Reviewed evolving regulations and reporting obligations. ●    Reviewed the committee’s mandate and completed the committee self-assessment. ●    Performed external auditor performance evaluation. ●    Ensured the effectiveness of controls and procedures and integrity of financial statements was maintained. ●    Oversaw update of financial system of record, leveraging best-in-class financial consolidation and reporting tools. Financial expertise The company’s board of directors has determined that D.W. Cornhill, S.R. Driscoll and M.C. Hubbs meet the definition of “audit committee financial expert”. The U.S. Securities and Exchange Commission has indicated that the designation of an audit committee financial expert does not make that person an expert for any purpose, or impose any duties, obligations or liability on that person that are greater than those imposed on members of the audit committee and board of directors in the absence of such designation or identification. All members of the audit committee are financially literate within the meaning of National Instrument 52-110 Audit Committees and the listing standards of the NYSE American LLC. Role in risk oversight The audit committee also has an important role in risk oversight. The audit committee oversees risks associated with financial and accounting matters, including compliance with legal and regulatory requirements, and the company’s financial reporting and internal controls systems. In addition, it reviews the scope of PricewaterhouseCoopers’ audit in light of risks associated with the energy industry, the regulatory environment and company-specific financial audit risks. The committee also reviews financial statements and internal and external audit results, and any changes proposed to accounting principles and practices. Independence The audit committee is composed entirely of independent directors. All members met board approved independence standards, as that term is defined in National Instrument 52-110 Audit Committees , the U.S. Securities and Exchange Commission rules and the listing standards of the NYSE American LLC. 136 Executive resources committee The executive resources committee is responsible for corporate policy on compensation and for specific decisions on the compensation of the chief executive officer and key senior executives and officers reporting directly to that position. In addition to compensation matters, the committee is also responsible for succession plans and appointments to senior executive and officer positions, including the chief executive officer. The formal mandate of the committee can be found within the Executive Resources Committee Charter in Appendix A of this circular. The committee is satisfied that its activities over the year have fulfilled its mandate. Committee members ●    G.J. Goldberg (chair) ●    J.N. Floren ●    D.W. Cornhill (vice-chair) ●    N.A. Hansen ●    S.R. Driscoll ●    M.C. Hubbs None of the members of the executive resources committee currently serves as a chief executive officer of another company. Number of meetings Seven meetings of the executive resources committee were held in 2024. Committee highlights in 2024 ●    Evaluated performance and approved compensation for CEO and other executive officers. ●    Approved overall compensation budget and incentive program for the company. ●    Reviewed a number of workforce and organizational changes. ●    Continued focus on succession planning for senior management positions. Committee members relevant skills and experience All committee members had extensive and lengthy experience in managing and implementing their respective companies’ compensation policies and practices in their past role as chief executive officers or members of senior management. D.W. Cornhill, S.R. Driscoll, J.N. Floren G.J. Goldberg and M.C. Hubbs serve or have served on compensation committees of one or more public companies. Accordingly, committee members are able to use this experience and knowledge derived from their roles with other companies in judging the suitability of the company’s compensation policies and practices. Role in risk oversight The executive resources committee oversees the compensation programs and practices that are designed to encourage appropriate risk assessment and risk management. Independence The members of the executive resources committee are independent, with the exception of N.A. Hansen, who is not considered to be independent under the rules of the U.S. Securities and Exchange Commission, Canadian securities rules and the rules of the NYSE American LLC due to his employment with Exxon Mobil Corporation. However, the Canadian Coalition for Good Governance’s policy, “Governance Differences of Equity Controlled Corporations”, views Mr. Hansen as a related director and independent of management and who may participate as a member of the company’s executive resources committee. Mr. Hansen’s participation helps to ensure an objective process for determining compensation of the company’s officers and directors and assists the deliberations of this committee by bringing the views and perspectives of the majority shareholder. 137 Safety and sustainability committee The role of the safety and sustainability committee is to oversee and monitor the company’s policies and practices in matters of the environment, health, safety, security and sustainability. The committee monitors the company’s compliance with legislative, regulatory and corporate standards in these areas, and reviews trends and current and emerging public policy. It also assesses the potential impacts of public policy, climate change, and stakeholder and Indigenous relations on corporate performance, and oversees the company's community investment activities including charitable donations. The committee evaluates safety and environmental performance, incidents and trends on a regular basis to ensure the company’s focus on the safety of its employees, contractors and stakeholders and on operating in an environmentally responsible manner. It also provides oversight over sustainability and climate risk, including regular reviews and assessment of sustainability performance and initiatives, as well as climate risk within the company’s risk management system and the strategies to address these risks. The formal mandate of the committee can be found within the Safety and Sustainability Committee Charter in Appendix A of this circular. The committee is satisfied that its activities over the year have fulfilled its mandate. Committee members ●    J.N. Floren (chair) ●    S.R. Driscoll ●    G.J. Goldberg (vice-chair) ●    N.A. Hansen ●    D.W. Cornhill ●    M.C. Hubbs Number of meetings Four meetings of the safety and sustainability committee were held in 2024. Committee highlights in 2024 ●   Personnel and process safety systems performance and incident review. ●   Environmental performance review (emissions, wildlife, waste, water) including ongoing oversight and guidance related to the Kearl environmental protection order. ●   Emergency preparedness and security incident review. ●   Updates on material Canadian policy developments. ●   In 2024, the company committed $19.2M through community benefits agreements to Indigenous communities across Canada. ●   The company surpassed $6 billion in spending with Indigenous businesses since 2008, and achieved the highest annual business spend in 2024 ($925M). ●   In 2024, Imperial hosted the first ever National Gathering in Cold Lake, Alberta which brought together Indigenous employees and allies from across the company to come together, share experiences, mentor and support each other. Role in risk oversight The safety and sustainability committee reviews and monitors the company’s policies and practices in matters of environment, health, personnel and process safety and security, which policies and practices are intended to mitigate and manage risk in these areas. This includes specific reviews with respect to climate risk and the company’s strategies to address these risks. It also includes pandemic and emergency response and continuity planning, in relation to health pandemics and epidemics. The committee receives regular reports from management on these matters. Independence The members of the safety and sustainability committee are independent, with the exception of N.A. Hansen. 138 Nominations and corporate governance committee The role of the nominations and corporate governance committee is to oversee issues of corporate governance as they apply to the company, including the overall performance of the board, review potential nominees for directorship and review the charters of the board and any of its committees. The formal mandate of the committee can be found within the Nominations and Corporate Governance Committee Charter in Appendix A of this circular. The committee is satisfied that its activities over the year have fulfilled its mandate. Committee members ●    M.C. Hubbs (chair) ●    S.R. Driscoll ●    J.N. Floren (vice-chair) ●    G.J. Goldberg ●  D.W. Cornhill ●    N.A. Hansen Number of meetings Six meetings of the nominations and corporate governance committee were held in 2024. Committee highlights in 2024 ●   Approval of the statement of corporate governance practices. ●   Engagement in board and committee self-assessment. ●   Review of director compensation principles. ●   Recommendation to establish the lead director position. ●   Recommendation for changes to board and committee charters to reflect mandates of those committees. Role in risk oversight The nominations and corporate governance committee oversees risk by implementing an effective program for corporate governance, including board composition and succession planning. Independence The members of the nominations and corporate governance committee are independent, with the exception of N.A. Hansen, who is not considered to be independent under the rules of the U.S. Securities and Exchange Commission, Canadian securities rules and the rules of the NYSE American LLC due to his employment with Exxon Mobil Corporation. However, the Canadian Coalition for Good Governance’s policy, “Governance Differences of Equity Controlled Corporations”, views Mr. Hansen as a related director and independent of management and who may participate as a member of the company’s nominations and corporate governance committee. Mr. Hansen’s participation helps to ensure an objective nominations process and assists the deliberations of this committee by bringing the views and perspectives of the majority shareholder. Finance committee The role of the finance committee is to provide oversight and guidance regarding the corporation’s capital structure/capital allocation, financial policies, practices and strategies. The formal mandate of the committee can be found within the Finance Committee Charter in Appendix A of this circular. The committee is satisfied that its activities over the year have fulfilled its mandate. Committee members ● D.W. Cornhill (chair) ● G.J. Goldberg ● S.R. Driscoll (vice-chair) ● N.A. Hansen ● J.N. Floren ● M.C. Hubbs Number of meetings Six meetings of the finance committee were held in 2024. Committee highlights in 2024 ●   Review and recommendation of the company’s corporate and finance plans. ●   Review and recommendation of dividend declarations. ●   Review and recommendation of share buyback program. ●   Review and recommendation of the company's pension plan asset allocation. Role in risk oversight The finance committee oversees risk by implementing and overseeing effective policies, practices and procedures, and by carefully considering various risk and other factors in connection with specific proposals for capital expenditures, budget additions and strategic initiatives and plans. Independence The members of the finance committee are independent, with the exception of N.A. Hansen. 139 Director compensation Director compensation discussion and analysis The compensation offered to our nonemployee directors has both a cash and an equity component with long vesting periods to attract and retain qualified directors while aligning their interests with those of the shareholders. Nonemployee director compensation levels are reviewed by the nominations and corporate governance committee each year, and resulting recommendations are presented to the full board for approval. The committee relied on an internally-led assessment to provide competitive compensation and market data for directors’ compensation, which assisted the committee in making a compensation recommendation for the company’s directors. The internally-led assessment included a review of data from benchmark companies, with this data being provided by an independent external consultant. The internal assessment maintained the compensation design philosophy, objectives and principles, and was consistent with previous methodology used in this analysis. Nonemployee directors receive compensation consisting of cash and restricted stock units. Since 1999, the nonemployee directors have been able to receive all or part of their cash directors’ fees (including compensation for acting as lead director) in the form of deferred share units. The purpose of the deferred share unit plan for nonemployee directors is to provide them with additional motivation to promote sustained improvement in the company’s business performance and shareholder value by allowing them to have all or part of their directors’ fees tied to the future growth in value of the company’s common shares. The deferred share unit plan is described in more detail on page 142 . Employees of the company or Exxon Mobil Corporation receive no extra pay for serving as directors. 140 Compensation decision making process and considerations The nominations and corporate governance committee relies on market comparisons with a group of major Canadian companies with national and international scope and complexity. The company draws its nonemployee directors from a wide variety of industrial sectors and, as such, a broad sample is appropriate for this purpose. The nominations and corporate governance committee does not target any specific percentile among comparator companies at which to align compensation for this group. The comparator companies included in the benchmark sample are: – Energy: Canadian Natural Resources Limited, Cenovus Energy Inc., Enbridge Inc., Ovintiv Inc., Parkland Fuel Corporation, Suncor Energy Inc., and TC Energy Corporation – Non-energy: Air Canada, BCE Inc., Canadian National Railway Company, Nutrien Ltd., Royal Bank of Canada, Teck Resources Limited, and TELUS Corporation Hedging policy Company policy prohibits all employees, including executives, and directors, from being a party to derivative or similar financial instruments, including puts, calls, or other options, future or forward contracts, or equity swaps or collars, with respect to the company or Exxon Mobil Corporation stock. For a discussion on the process by which the compensation of the company’s executive officers is determined, see the Compensation discussion and analysis section starting on page 155 . Compensation details Board retainer The compensation of the nonemployee directors consists of a cash retainer and a grant of restricted stock units, and is assessed annually. The last adjustment to director compensation was in 2021, when the nominations and corporate governance committee proposed, and the board approved, an increase to the annual grant of restricted stock units from 3,000 to 3,300 while maintaining the annual retainer for board membership at $110,000. In February 2024, the role of lead director was created and additional compensation for the director serving in this position was set at $45,000 annually. In October 2024, the committee recommended and the board approved maintaining the current compensation for non-employee directors. This includes an annual cash retainer of $110,000 and a grant of 3,300 restricted stock units. The additional annual cash retainer for the lead director remains at $45,000. 141 The following table summarizes the compensation terms for the nonemployee directors in 2024: Director compensation Annual retainer terms: Cash compensation for all non-employee directors: (a) Board membership $110,000 Committee chair None Cash compensation for lead director: (b) Lead director $45,000 Equity based compensation: Restricted stock units 3,300 units (50% vests on each of the 5 th and 10 th anniversary dates of the grant) (a) The nonemployee directors may elect to take all or a portion of the cash compensation in the form of deferred share units. Nonemployee directors who are elected or appointed to the board during the year receive the full restricted stock unit grant and a pro-rated cash retainer based on the appointment or election date. (b) The lead director may elect to take all or a portion of the lead director cash compensation in the form of deferred share units. In addition to compensation for board membership, the board determines the compensation for special committee membership when the committee is established. There was no cash retainer in connection with the special committee that was in place until February 2024. Equity based compensation Deferred share units In 1999, an additional form of long-term incentive compensation (“deferred share units”) was made available to nonemployee directors. Nonemployee directors may elect to receive all or a portion of their cash compensation in the form of deferred share units. The following table shows the portion of the retainer each nonemployee director elected to receive in cash and deferred share units in 2024. Director Election for 2024 director compensation in cash (%) Election for 2024 director compensation in deferred share units (%) D.W. Cornhill (a) 0 100 S.R. Driscoll 0 100 J.N. Floren 0 100 G.J. Goldberg 0 100 M.C. Hubbs 0 100 (a) D.W. Cornhill was appointed as lead director in 2024 and has elected to receive his director fees and lead director fees in deferred share units. 142 The number of deferred share units granted to a nonemployee director is determined at the end of each calendar quarter for that year, according to the following calculation: (i) the dollar amount of the nonemployee director’s fees for that calendar quarter that the director elected to receive as deferred share units; divided by (ii) the average of the closing price of the company’s shares on the Toronto Stock Exchange for the five consecutive trading days (“average closing price”) immediately prior to the last day of that calendar quarter. Those deferred share units are granted effective the last day of that calendar quarter. A nonemployee director is also granted additional deferred share units to represent dividends on unexercised deferred share units. These additional units are granted on the dividend payment dates for the company’s common shares, according to the following calculation: (i) the cash dividend payable for a common share of the company divided by the average closing price immediately prior to the payment date for that dividend; multiplied by (ii) the number of unexercised deferred share units held by the nonemployee directors on the dividend record date. Deferred share units cannot be exercised until after termination of service as a director, including termination due to death, and must be exercised in their entirety in one election no later than December 31 of the year following the year of termination of service. On the exercise date, the cash value to be received for the units is determined based on the company’s average closing price immediately prior to the date of exercise. Restricted stock units In addition to the cash fees described above, the company pays a significant portion of director compensation in restricted stock units to align director compensation with the long-term interests of shareholders. The restricted stock unit plan is described in more detail beginning on page 161 . The number of restricted stock units granted annually was increased in 2016 from 2,000 units to 2,600 units, in 2018 to 3,000 units, and in 2021 to 3,300 units. Up until 2015, the vesting period for restricted stock units was 50 percent vesting on the third anniversary of the grant date (received in cash) and the remaining 50 percent vesting on the seventh anniversary of the grant date (with an option to receive in cash or common shares). In 2016, in order to better align the long-term financial interests of the directors with those of the shareholders, the vesting period was increased such that 50 percent vests on the fifth anniversary of the grant date and the remaining 50 percent vests on the tenth anniversary of the grant date. For all the units to be vested, directors may elect to receive one common share for each unit or a cash payment for the units. The vesting periods are not accelerated upon separation or retirement from the board, except in the event of death. In contrast to the forfeiture provisions for restricted stock units held by employees of the company, the restricted stock units awarded to nonemployee directors are not subject to risk of forfeiture at the time a director leaves the company’s board. This provision is designed to reinforce the independence of these board members. However, while on the board and for a 24-month period after leaving the company’s board, restricted stock units may be forfeited if the nonemployee director engages in direct competition with the company or otherwise engages in any activity detrimental to the company. The board agreed that the word “detrimental” shall not include any actions taken by a nonemployee director or former nonemployee director who acted in good faith and in the best interest of the company. Prior to vesting of the restricted stock units, the nonemployee directors receive amounts equivalent to the cash dividends paid to holders of common shares. The amount is determined for each cash dividend payment date by the following calculation: (i) the cash dividend payable for a common share; multiplied by (ii) the number of unvested restricted stock units held by the nonemployee directors on the dividend record date. Other reimbursement Nonemployee directors are also reimbursed for travel and other expenses incurred for attendance at board and committee meetings. 143 Components of director compensation The following table sets out the details of compensation paid to the nonemployee directors in 2024. Director (a) Annual retainer for board membership ($) (b) Restricted stock units (RSU) (#) Total fees paid in cash ($) (c) Total value of deferred share units (DSU) ($) (d) Total value of restricted stock units (RSU) ($) (e) All other compen- sation ($) (f) Total compensation ($) D.W. Cornhill 155,000 3,300 — 155,000 330,957 80,474 566,431 S.R Driscoll 110,000 3,300 — 110,000 330,957 9,855 450,812 J.N. Floren 110,000 3,300 — 110,000 330,957 9,855 450,812 G.J. Goldberg 110,000 3,300 — 110,000 330,957 9,855 450,812 M.C. Hubbs 110,000 3,300 — 110,000 330,957 85,717 526,674 (a) As directors employed by the company or Exxon Mobil Corporation in 2024, B.W. Corson and N.A. Hansen did not receive compensation for acting as directors. (b) "Annual retainer for board membership" includes the cash compensation for both board membership and lead director for D.W. Cornhill. (c) “Total fees paid in cash” is the portion of the “Annual retainer for board membership” that the director elected to receive as cash. This amount is reported as “Fees earned” in the Director compensation table on page 145 . (d) “Total value of deferred share units” is the portion of the “Annual retainer for board membership” that the director elected to receive as deferred share units, as set out in the previous table on page 142 . This amount plus the “Total value of restricted stock units” amount is shown as “Share-based awards” in the Director compensation table on page 145 . (e) The values of the restricted stock units shown are the number of units multiplied by the closing price of the company’s shares on the date of gran t, December 4, 2024 ($100.29). (f) Amounts under “All other compensation” consist of dividend equivalent payments on unvested restricted stock units, the value of additional deferred share units granted in lieu of dividends on unvested deferred share units, and the value of premiums paid by the company for accidental death and dismemberment (AD&D) insurance. In 2024, D.W. Cornhill received $42,110 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $38,232 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, S.R Driscoll received $5,940 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $3,783 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, J.N. Floren received $5,940 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $3,783 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, G.J. Goldberg received $5,940 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $3,783 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, M.C. Hubbs received $39,120 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $46,465 in lieu of dividends on deferred share units, and insurance premiums of $132. 144 Director compensation table The following table summarizes the compensation paid, payable, awarded or granted for 2024 to each of the nonemployee directors of the company. Name (a) Fees earned ($)(b) Share- based awards ($) (c) Option- based awards ($) Non-equity incentive plan compensation ($) Pension value ($) All other compensation ($) (d) Total ($) D.W. Cornhill — 485,957 — — — 80,474 566,431 S.R. Driscoll — 440,957 — — — 9,855 450,812 J.N. Floren — 440,957 — — — 9,855 450,812 G.J. Goldberg — 440,957 — — — 9,855 450,812 M.C. Hubbs — 440,957 — — — 85,717 526,674 (a) As directors employed by the company or Exxon Mobil Corporation in 2024, B.W. Corson and N.A. Hansen did not receive compensation for acting as directors. (b) Represents all fees awarded, earned, paid or payable in cash for services as a director. The nonemployee directors are able to receive all or part of their directors’ fees in the form of deferred share units. (c) Represents the value of the restricted stock units (calculated by multiplying the number of units by the closing price of the company’s shares on the date of grant), plus the value of deferred share units (calculated by the portion of the “Annual retainer for board membership” that the director elected to receive as deferred share units as noted on page 142 ). (d) Amounts under “All other compensation” consist of dividend equivalent payments on unvested restricted stock units, the value of additional deferred share units granted in lieu of dividends on unvested deferred share units, and the value of premiums paid by the company for accidental death and dismemberment (AD&D) insurance. In 2024, D.W. Cornhill received $42,110 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $38,232 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, S.R Driscoll received $5,940 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $3,783 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, J.N. Floren received $5,940 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $3,783 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, G.J. Goldberg received $5,940 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $3,783 in lieu of dividends on deferred share units and insurance premiums of $132. In 2024, M.C. Hubbs received $39,120 in dividend equivalent payments on restricted stock units, additional deferred share units valued at $46,465 in lieu of dividends on deferred share units, and insurance premiums of $132. Five-year look back at total compensation paid to nonemployee directors Year Amount ($) 2020 1,073,527 2021 1,557,202 2022 2,153,807 2023 2,294,893 2024 2,445,541 145 Outstanding share-based awards and option-based awards for directors The following table sets forth all outstanding awards held by nonemployee directors of the company as at December 31, 2024 and does not include common shares owned by the director. Option-based awards Share-based awards Name (a) Number of securities underlying unexercised options (#) Option exercise price ($) Option expiration date Value of unexercised in-the- money options ($) Number of shares or units of shares that have not vested (#) (b) Market or payout value of share-based awards that have not vested ($) (c) D.W. Cornhill — — — — 37,726 3,342,146 S.R. Driscoll — — — — 8,951 792,969 J.N. Floren — — — — 8,951 792,969 G.J. Goldberg — — — — 8,951 792,969 M.C. Hubbs — — — — 39,626 3,510,467 (a) As directors employed by the company or Exxon Mobil Corporation in 2024, B.W. Corson and N.A. Hansen did not receive compensation for acting as directors. (b) Represents restricted stock units and deferred share units held as of December 31, 2024. (c) Value is based on the closing price of the company’s shares on December 31, 2024 ($88.59). Incentive plan awards for directors - Value vested or earned during the year The following table sets forth the value of the awards that vested or were earned by each nonemployee director of the company in 2024. Name (a) Option-based awards –Value vested during the year ($) Share-based awards – Value vested during the year ($) (b) Non-equity incentive plan compensation – Value earned during the year ($) D.W. Cornhill — 154,164 — S.R. Driscoll — — — J.N. Floren — — — G.J. Goldberg — — — M.C. Hubbs — 154,164 — (a) As directors employed by the company or Exxon Mobil Corporation in 2024, B.W. Corson and N.A. Hansen did not receive compensation for acting as directors. (b) Represents restricted stock units granted in 2019, which vested in 2024. Value is based on the average of the weighted-average price (as determined by the Toronto Stock Exchange) of common shares of the company on the vesting date and the four consecutive trading days immediately prior to the vesting date. 146 Share ownership guidelines of independent directors and chairman, president and chief executive officer Share ownership guidelines are established to align interests with those of shareholders, thereby promoting the creation of long-term value. Independent directors are required to hold the equivalent of at least 16,500 shares of Imperial Oil Limited, including common shares, deferred share units and restricted stock units, within five years from the date of joining the board. The chairman, president and chief executive officer has separate share ownership requirements and must, within three years of his appointment, acquire shares of the company, including common shares and restricted stock units, of a value of no less than five times his base salary. The board of directors believes that these share ownership guidelines result in an alignment of the interests of board members with the interests of all other shareholders. As of the date of this circular, the independent directors currently have holdings of 116,705 shares which meets the required guideline. Minimum share ownership requirement Time to fulfill Chairman, president and chief executive officer 5 x base salary Within 3 years of appointment Independent directors 16,500 shares Within 5 years of initial appointment The chart below shows the shareholdings of the independent directors and the chairman, president and chief executive officer of the company as of February 14, 2025, the record date of the management proxy circular. Director Director since Amount acquired since last report (February 16, 2024 to February 14, 2025) (#) Total holdings (includes common shares, deferred share units and restricted stock units) (#) Market value of total holdings (a) ($) Minimum shareholding requirement Minimum requirement met D.W. Cornhill November 29, 2017 3,809 50,226 4,934,705 16,500 Yes B.W. Corson September 17, 2019 62,100 472,500 46,423,125 Five times base salary Yes S.R. Driscoll May 2, 2023 4,529 8,951 879,436 16,500 Yes (b) J.N. Floren May 2, 2023 4,529 8,951 879,436 16,500 Yes (b) G.J. Goldberg May 2, 2023 4,529 8,951 879,436 16,500 Yes (b) M.C. Hubbs July 26, 2018 3,490 39,626 3,893,255 16,500 Yes Total accumulated holdings (#) and value of directors’ holdings ($) 589,205 57,889,393 (a) The amount shown in the column “Market value of total holdings” is equal to the “Total holdings” multiplied by the closing price of the company’s shares on the proxy circular record date February 14, 2025 ($98.25). (b) S.R. Driscoll, J.N. Floren and G.J. Goldberg were elected to the board on May 2, 2023 and are expected to meet the share ownership guidelines for independent directors of 16,500 shares within the required five years from such date. For information relating to compensation of the company’s named executive officers, see the Compensation discussion and analysis section starting on page 155 . 147 Ethical business conduct The company is committed to high ethical standards through its policies and practices. The company’s directors, officers and employees are responsible for developing, approving and implementing plans and actions designed to achieve corporate objectives. In doing so, they are expected to observe the highest standards of integrity in the conduct of the company’s business, with the methods employed to attain results being as important as the results themselves. The board has adopted a written code of ethics and business conduct (the “Code”) which can be found on the company’s website at https://www.imperialoil.ca/investors/corporate-governance/ethics-and-standards-of-business-conduct and on SEDAR+ at www.sedarplus.ca , including any applicable amendments. The Code applies to each of the company’s directors, officers and employees, and consists of the ethics policy, the conflicts of interest policy, the corporate assets policy, the directorships policy and the procedures and open door communication. No person in the company has the authority to make exceptions or grant waivers with respect to its foundational policies. There have been no material change reports filed in the past 12 months pertaining to conduct of a director or executive officer that constitute a departure from the Code. In addition, the directors of the company must comply with the conflict of interest provisions of the Canada Business Corporations Act, as well as the relevant securities regulatory instruments, in order to ensure that the directors exercise independent judgment in considering transactions and agreements in respect of which such director has a material interest. Under the company’s procedures and open door communication, employees are encouraged and expected to refer suspected violations of the law, company policy or internal controls and procedures by various means, including to their supervisors or the company’s ethics advisor, controller or internal auditor. Imperial also has an ethics “hotline” that is operated by a third-party service provider and offers confidential, anonymous reporting 24 hours a day, seven days a week. Suspected violations involving a director or executive officer, as well as any concern regarding questionable accounting or auditing matters are to be referred directly to the internal auditor. The audit committee initially reviews all issues involving directors or executive officers, and then refers all issues to the board of directors. In the alternative, employees may also address concerns to individual nonemployee directors or to nonemployee directors as a group. No action may be taken or threatened against employees for asking questions, voicing concerns, or making complaints or suggestions in good faith. Management provides the board of directors with a review of corporate ethics and conflicts of interest on an annual basis. The company’s internal auditors audit each business line’s compliance with the program and report to the audit committee. Directors, officers and employees review the company’s standards of business conduct (which includes the Code) on an annual basis, with independent directors and employees being required to sign a declaration confirming that they have read and are familiar with the standards of business condu ct. In addition, every two years a business practices review is conducted in which managers review the standards of business conduct with all employees in their respective work units. The board, through its audit committee, examines the effectiveness of the company’s internal control processes and management information systems. The board consults with the external auditor, the internal auditor and the management of the company to ensure the integrity of the systems. There are a number of structures and processes in place to facilitate the functioning of the board independently of management. The board has a majority of independent directors. Each committee is chaired by a different independent director and all of the independent directors are members of each committee. The audit committee is composed entirely of independent directors. Each other committee is composed entirely of the independent directors and N.A. Hansen, who is an employee of Exxon Mobil Corporation and although deemed non-independent under the relevant standards by virtue of his employment, is viewed as independent of the company’s management. The agendas of each of the board and its committees are not set by management alone, but by the board as a whole and by each committee. A significant number of agenda items are mandatory and recurring. Board meetings are scheduled at least one full year in advance. Any director may call a meeting of the board or a meeting of a committee of which the director is a member. There is a board-prescribed flow of financial, operating and other corporate information to all directors. The board may also utilize ad hoc or special committees when considering various matters. 148 The independent directors conduct executive sessions in the absence of members of management, which are held in conjunction with every board meeting. Eight e xecutive sessions were held in 2024. The executive sessions of the board are chaired by the lead director. The company’s delegation of authority guide provides that certain matters of the company are reviewed by functional contacts within ExxonMobil. The company’s employees are regularly reminded that they are expected to act in the best interests of the company, and are reminded of their obligation to identify any instances where the company’s general interest may not be consistent with ExxonMobil’s priorities. If such situations occur, employees are expected to escalate such issues with successive levels of the company’s management. Final resolution of any such issues is made by the company’s chairman, president and chief executive officer. Restrictions on insider trading Commitment to stringent safeguards with trading restrictions and reporting for company insiders. Structures and processes are in place to caution, track and monitor reporting insiders, nonemployee directors and key employees with access to sensitive information with respect to personal trading in the company’s shares. The company's Code of Ethics and its Insider Trading and Blackout Guidelines prohibit all directors, officers and employees of the company, as well as the company itself, from securities transactions (including transactions involving the purchase, sale and/or other disposition of the company's shares or securities of other issuers) based on material, non-public information learned through their positions with the company. The company believes that this policy is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations. The company also has guidelines regarding processes and procedures relating to corporate disclosure, insider trading, and trading bans that are applicable to all directors, officers and employees. Nonemployee directors are required to pre-clear any trad es in the company’s shares. Reporting insiders are required to give advance notice to the company of any sale of the company’s shares and advise the company within five days of any purchase of the company’s shares. Reporting insiders are required, under securities regulations, to publicly disclose all transactions in the company’s shares on the System for Electronic Disclosure by Insiders (SEDI). From time to time, the company advises its directors and officers, and those of Exxon Mobil Corporation, and employees in certain positions, not to trade in the company’s shares. Trading bans occur in connection with the directors’ pending consideration of the financial statements of the company, including the unaudited financial statements for each quarter, and in connection with undisclosed pending events that constitute material information about the business affairs of the company. Diversity The company has a long history of valuing diversity on the board and in its executive management. Board diversity The company has a longstanding commitment to diversity amongst its directors. Imperial has had at least one woman on its board continuously since 1977, and 40 percent of the board's independent directors are women. The company does not have a formal written policy relating to the identification and nomination of directors who are women, Aboriginal peoples, persons with disabilities or members of visible minorities (the “designated groups”, as defined under the Employment Equity Act (Canada)) , and has not adopted a target regarding members of the designated groups on its board. With the objective of fostering a diversity of expertise, viewpoint and competencies, the board charter provides that the nominations and corporate governance committee may consider a number of factors, including gender and membership in other designated groups, in assessing potential nominees. 149 The nominations and corporate governance committee assesses the work experience, other expertise, individual competencies and diversity of age, regional association and the designated groups that each existing director possesses and whether each nominee is able to fill any gaps amongst the existing directors. Additionally, the committee may consider any other factors that it believes to be relevant. The company does not believe that any one of these dimensions should be considered in isolation and without due regard to all of the other factors, in determining the ability of potential directors to contribute to the work of the board of directors. The board considers diversity through the annual nomination process, board assessment and other discussions. The board and the nominations and corporate governance committee also specifically consider diversity through targeted director recruitment processes. As of the date of this proxy circular, the number and percentage of directors and nominees who are members of the designated groups are: Designated group (a) Number Percent (%) Women 2 of 7 (board and nominees) 29 2 of 5 (independent directors) 40 Aboriginal peoples 0 of 7 0 Persons with disabilities 0 of 7 0 Members of visible minorities 0 of 7 0 (a) Defined under the Employment Equity Act (Canada) The above diversity disclosure relies on voluntary self-identification by directors and nominees, and therefore only represents the information of individuals who have chosen to self-identify. The information has not been independently verified by the company. The board nominee composition charts on page 119 show the diversity of our board nominees with respect to gender, experience and regional association, but do not reflect membership in other designated groups. Executive officer diversity The company believes inclusion and diversity are key competitive strengths that are critical to maintaining the company’s position as an industry leader. To ensure commitment at all levels of the company, inclusion and diversity, anti-harassment and equal employment opportunity performance is stewarded annually to the company’s senior management. There is an in-depth succession planning process, which includes the consideration of various aspects of diversity, as well as plans to address gaps, if any, for key positions. The company’s internal training programs emphasize the value of collaboration, appreciating differences and sustaining an inclusive work environment, keeping inclusion and diversity top-of-mind with all employees. Imperial also values external perspective and expertise. The company supports educational development and recruiting practices that facilitate the employment of Indigenous peoples, and in 2021 achieved Silver Certification in the Progressive Aboriginal Relations (PAR) program managed by the Canadian Council for Aboriginal Business. Imperial maintains a supportive work environment through a range of development and networking programs, including employee-led diversity networks that are focused on common interests. These programs are conducted in both virtual and in-person formats to reach a broad range of employees. In considering potential nominees for executive officer appointments, the executive resources committee considers diversity of gender and the other designated groups, work experience, other expertise, individual competencies and other dimensions of diversity. The company has not adopted a target regarding members of the designated groups in executive officer positions. The company does not believe that any one of these dimensions should be considered, without due regard to all of these other factors, in determining the ability of potential nominees to fill executive officers positions. 150 As of the date of this proxy circular, the number and percentage of executive officers of the company and its major subsidiaries who are members of the designated groups are: Designated group (a) Number Percent (%) Women 10 of 23 43 Aboriginal peoples 0 of 23 0 Persons with disabilities 0 of 23 0 Members of visible minorities 3 of 23 13 (a) Defined under the Employment Equity Act (Canada) The above diversity disclosure relies on voluntary self-identification by executive officers, and therefore only represents the information of individuals who have chosen to self-identify. The information has not been independently verified by the company. Shareholder engagement Shareholder engagement strategy focuses on wide-ranging dialogue between shareholders and management. Understanding investor interests and concerns and obtaining their feedback is central to the company's shareholder engagement program. This critical input not only informs how the company interacts and communicates, but also helps identify what areas require additional focus to demonstrate ongoing progress and performance. The company’s senior management regularly meet with institutional investors and shareholders through industry conferences, roadshows and company hosted investor events. In 2024, these events were largely held as in-person engagements. Pertinent materials from these hosted events are available on the company’s website. The company also hosts regular quarterly earnings calls in connection with earnings releases, and archives of these calls (including transcripts) are available on the company’s website for one year after each call. These calls allow the company to provide more insight and context regarding the company’s performance, as well as directly address questions from the investment community. The company took a number of steps to ensure active engagement through the annual meeting that was held in a virtual only format. Shareholders had the opportunity to attend and ask questions in real time (either personally or by appointing a proxyholder), and the company encouraged engagement from shareholders prior to the event. This format allowed shareholders to attend the meeting, ask questions and provide direct feedback to management, when they may not otherwise have been able to attend in person. The webcast and presentation materials from the annual general meeting, along with the outcome of the voting on each resolution, are available on the company’s website for one year. The company annually solicits questions and comments from shareholders through the annual meeting of shareholders. The comments received are reviewed by senior management providing them with an indication of areas of interest to our shareholders, and those requiring a response are answered individually. In addition, the company’s Investor Relations team responds to shareholder queries throughout the year, and proactively reaches out to shareholders to obtain their views on matters identified broadly by shareholders, including with respect to environment, social and governance topics, as well as optimal engagement approaches. In 2024, shareholder engagement and discussion involved a broad range of topics including capital allocation strategy, corporate guidance and operational performance, company growth plans, emission reduction plans and the Pathways Alliance, and corporate strategy including with respect to the energy transition. Investor perspectives were a factor considered in decision making, and investor feedback was incorporated into company disclosure improvement efforts. 151 Communicating with the board Shareholders, employees and others can contact the board directly by writing to: Chair of the Board of Directors c/o Corporate Secretary Imperial Oil Limited 505 Quarry Park Blvd SE Calgary, AB, Canada T2C 5N1 Largest shareholder Exxon Mobil Corporation is the majority shareholder of the company, holding 69.6% of the company’s shares. To the knowledge of the directors and executive officers of the company, the only shareholder who, as of February 14, 2025, owned beneficially, or exercised control or direction over, directly or indirectly, more than ten percent of the outstanding common shares of the company, is Exxon Mobil Corporation, 22777 Springwoods Village Parkway, Spring, Texas, 77389-1425, which owns beneficiall y 354,294,928 c ommon shares, representing approximately 69.6 percent of the outstanding voting shares of the company. As a consequence, the company is a “controlled company” for purposes of the listing standards of the NYSE American LLC and a “majority controlled company” for purposes of the TSX Company Manual. Transactions with Exxon Mobil Corporation The company has written procedures and controls that require any transactions between the company and ExxonMobil and its subsidiaries to be reviewed by controllers, tax, treasurers and legal to ensure that each agreement meets the company’s policies and procedures, is fair, and complies with legal and tax requirements. These agreements may also be subject to review by the chairman, president, and chief executive officer. Annual training is provided for key individuals to ensure awareness of the requirements for identifying related party transactions, and procedures are in place to ensure reporting of these transactions is complete and accurate. Related party transactions with ExxonMobil and its subsidiaries are analyzed and reviewed by management on a quarterly basis to understand any significant variances from period to period, and reviewed with the board of directors on an annual basis. On June 24, 2024, the company implemented a new 12-month “normal course issuer bid” share purchase program, allowing the company to purchase up to a maximum of 26,791,840 shares during the period June 29, 2024 to June 28, 2025. The program ended on December 19, 2024 upon the company purchasing the maximum allowable number of shares, with 8,144,739 common shares purchased on the open market and a corresponding 18,647,101 c ommon shares purchased from ExxonMobil to maintain its shareholding at approximately 69.6 percent. The amounts of purchases and revenues by the company and its subsidiaries for other transactions in 2024 with ExxonMobil and its affiliates were $3,617 million and $11,725 million, respectively. These transactions were conducted on terms as favourable as they would have been with unrelated parties, and primarily consisted of the purchase and sale of crude oil, natural gas, petroleum and chemical products, as well as technical, engineering and research and development costs. Transactions with ExxonMobil also included amounts paid and received in connection with the company’s participation in a number of upstream activities conducted jointly in Canada. In addition, the company has existing agreements with affiliates of ExxonMobil to provide information technology and customer support services to the company and to share common business and operational support services to allow the companies to consolidate duplicate work and systems. The company has a contractual agreement with an affiliate of ExxonMobil in Canada to operate certain western Canada production properties owned by ExxonMobil. There are no asset ownership changes. The company and that affiliate also have a contractual agreement to provide for equal participation in new upstream opportunities. As at December 31, 2024, the company had an outstanding loan of $3,447 million under an existing agreement with an affiliated company of ExxonMobil that provides for a long term, variable rate loan from ExxonMobil to the company of up to $7.75 billion (Canadian) at market interest rates. The agreement is effective until June 30, 2035, cancellable if ExxonMobil provides at least 370 days advance written notice. 152 Company executives and executive compensation Named executive officers of the company The named executive officers of the company at year end 2024 are listed below, all of whom remain in their positions as of February 14, 2025. In connection with his upcoming retirement from the company, B.W. Corson has resigned as president effective April 1, 2025, and has resigned as chairman and chief executive officer effective at the conclusion of the annual meeting of shareholders on May 8, 2025. The board has appointed J.R. Whelan as president of the company effective April 1, 2025, as chief executive officer effective at the conclusion of the annual meeting of shareholders on May 8, 2025, and, provided that Mr. Whelan is elected as a director at such meeting, as chairman effective at the conclusion of such meeting. Bradley W. Corson, 63 Position held (date office held): Chairman, president and chief executive officer (2020 – Present) Other positions in the past five years (position, date office held and status of employer): President (2019 – 2020) Calgary, Alberta, Canada Daniel E. Lyons, 62 Position held (date office held): Senior vice-president, finance and administration, and controller (2018 – Present) Other positions in the past five years (position, date office held and status of employer): No other positions in the last five years Calgary, Alberta, Canada Cheryl L. Gomez-Smith , 56 Calgary, Alberta, Canada Position held (date office held): Senior vice-president, upstream (2024 – Present) Other positions in the past five years (position, date office held and status of employer): Director, safety and risk, global operations and sustainability, Exxon Mobil Corporation (2019 – 2024) (affiliate) Jim E. Burgess, 50 Position held (date office held): Treasurer (2024 – Present) Other positions in the past five years (position, date office held and status of employer): Global process manager, Financial close, consolidation and external reporting, ExxonMobil Global Business Solutions (2023 – 2024) (affiliate) Enterprise consolidation and external reporting manager, ExxonMobil Global Business Solutions (2023 – 2023) (affiliate) Business services manager and controller, North Asia, ExxonMobil (China) Investment Co. Ltd. (2019 – 2023) (affiliate) Calgary, Alberta, Canada Ian R. Laing, 51 Position held (date office held): Vice-president, general counsel and corporate secretary (2020 – Present) Other positions in the past five years (position, date office held and status of employer): Assistant general counsel, downstream and corporate departments and corporate secretary (2019 – 2020) Calgary, Alberta, Canada 153 Other executive officers of the company In addition to the named executive officers listed on the previous page, the following individuals are executive officers of the company as of February 14, 2025. Sherri L. Evers, 48 Position held (date office held): Senior vice-president, sustainability, commercial development and product solutions (2023 – Present) Other positions in the past five years (position, date office held and status of employer): Vice-president, commercial and corporate development (2021 – 2023) Fuels manager, Central and Eastern Canada, fuels and lubricants (2018 – 2020) Calgary, Alberta, Canada Constance D. Gemmell, 58 Calgary, Alberta, Canada Position held (date office held): Director, corporate tax (2018 – Present) Other positions in the past five years (position, date office held and status of employer): No other positions in the past five years Christopher S. Leyerzapf, 49 Calgary, Alberta, Canada Position held (date office held): Assistant controller (2023 – Present) Other positions in the past five years (position, date office held and status of employer): Upstream controller (2021 – 2023) Upstream business analysis and reporting manager (2019 – 2021) Jonathan D. Morgan, 43 Position held (date office held): Vice-president, chemicals and Sarnia site complex manager (2025 – Present) Other positions in the past five years (position, date office held and status of employer): Baton Rouge polyolefins plant manager, product solutions, Baton Rouge chemical plant, Exxon Mobil Corporation (2022 – 2024) (affiliate) Mont Belvieu plastics plant process manger, Mont Belvieu chemical plant, Exxon Mobil Corporation (2019 – 2022) (affiliate) Sarnia, Ontario, Canada Rhonda G. Porter, 50 Calgary, Alberta, Canada Position held (date office held): Vice-president, human resources (2024 – Present) Other positions in the past five years (position, date office held and status of employer): Human resources manager, upstream and ExxonMobil Canada (2020 – 2024) 154 Executive compensation Compensation discussion and analysis Executive Summary 156 Letter to shareholders 156 Compensation design 157 Approach to executive compensation 157 Strong governance practices 157 Overview 158 Accountability and performance 159 Long-term award program 161 Bonus program 163 Salary program 163 Determining compensation 164 Annual benchmarking 164 2024 business performance 165 Performance graph 166 2024 compensation actions 167 Other compensation elements 168 Retirement plans 168 Award vesting and share utilization 169 Granting practices 169 Amendments 169 Risk and governance 170 Executive stock ownership 170 Forfeiture provisions 170 Clawback policies 170 Anti-hedging policy 170 Severance agreements 171 Change-in-control 171 Definitions and frequently used terms 172 Executive compensation tables 173 Summary compensation table 173 Outstanding equity awards 175 Incentive plan awards – Value vested or earned 176 Equity compensation plan information 177 RSUs as a percentage of outstanding shares 177 Annual burn rate 178 Status of prior long-term incentive plans 178 Pension plan benefits 179 Other compensation elements 181 The compensation and discussion analysis and executive compensation tables outline Imperial's executive compensation program and process for determining pay as it applies to the named executive officers (NEOs). For 2024, named executive officers were: Brad W. Corson Chairman, president, and chief executive officer Daniel E. Lyons Senior vice-president, finance and administration, and controller Cheryl L. Gomez-Smith Senior vice-president, upstream Jim E. Burgess Treasurer Ian R. Laing Vice-president, general counsel and corporate secretary 155 Executive summary Letter to shareholders Fellow shareholders: The executive resources committee (“committee”) supports the design and resulting pay outcomes of Imperial's executive compensation program; we believe that it aligns well with the company’s business model and considers the complexity of the business environment in which the company operates. Executive performance is evaluated across multiple performance dimensions within the context of the company’s long-term strategy. The design of the executive compensation program rewards performance and ensures the goal of maximizing long-term shareholder value is achieved and the company is positioned for long-term success. Business Perspective Imperial's business involves investments that create shareholder value over long periods of time, requiring executives to maintain a long-term view when making decisions. The executive compensation program design reflects this and has proven to be adaptable to evolving strategic priorities. In 2024, Imperial delivered strong business results across a wide range of performance dimensions. Imperial demonstrated its commitment to growing shareholder value while delivering affordable and reliable energy for societal needs and taking meaningful steps to support the energy transition. The company's disciplined approach and focus on cost management allows it to realize the full benefit of market conditions and deliver strong financial performance. For more information on the 2024 key business results see page 165 . Compensation Decisions The committee exercises oversight of a compensation program that aligns executives' pay with the results of their decisions and the returns of our shareholders over the long term. The program design is aligned with the core elements of the majority shareholder's compensation program, and is designed to drive long-term accountability, reward the highest standard of performance, and promote retention. The compensation discussion and analysis ("CD&A") section that follows describes the compensation program for the company's named executive officers and how the program supports the business goals of the company. The evolution of pay during 2022-2024 demonstrates the strength of our compensation program design: highly performance based, share-denominated, tied to business and individual performance, resulting in greater degree of volatility versus benchmark company programs and better aligned with the experience of our long-term shareholders. The committee has reviewed and discussed the CD&A with management of the company. Based on that review and discussion, the committee has recommended to the board that the CD&A be included in the company’s management proxy circular for the 2025 annual meeting of shareholders and annual report on Form 10-K. On behalf of the committee, I encourage you to read the comprehensive disclosure in the CD&A that follows. We are committed to overseeing all aspects of the executive compensation program in the best interests of the company and all shareholders. G.J. Goldberg, Chair, executive resources committee Members, executive resources committee D.W. Cornhill S.R. Driscoll J.N. Floren N.A. Hansen M.C. Hubbs 156 Compensation design Approach to executive compensation The decisions that our executives make and the risks they manage play out over multi-year time horizons. Executives are required to carefully consider current and future risks, such as those related to the energy transition, and to make decisions across a broad range of business environments that generate sustainable shareholder value over the long term. The company's executive compensation program design aligns executives' pay with the results of their decisions and shareholder returns over the long term. The program is designed to drive long-term accountability, reward the highest standard of performance, and promote retention. Drive long-term accountability The company's strategic objectives have been established to drive sustainable value while positioning the company for long-term success in a lower-emissions future. These objectives are translated into annual plan goals through a comprehensive process which incorporates corporate and functional plans. Goals are incorporated in the corporate plan, which is reviewed and approved by the board and provides the framework for the company's commitments. Reward outstanding performance Highly differentiated pay-for-performance is foundational to the company's compensation program design. The extent to which executives achieve pre-established goals and deliver on the organization's commitments, assessed over near- and long-term horizons, is a key differentiating factor in executives' pay deliberations. Performance evaluation directly impacts level of base salary, bonus, and long-term incentive awards. Promote retention Long-term orientation also underpins how the company develops talent. It begins with recruiting exceptional people, and continues with individually planned experiences and training, which leads to broad development and a deep understanding of our business across the business cycle. The compensation program is designed to attract and retain talent for a career through compensation that is market competitive, highly differentiated by individual performance, and promotes retention through long restriction periods. Supported by strong governance practices Key design features that discourage executives from taking inappropriate risk include: ✓ Extensive stock ownership ✗ No severance agreements ✓ Significant pay at risk ✗ No change-in-control arrangements ✓ Strong forfeiture provisions ✗ No guaranteed bonuses ✓ Clawback policy ✗ No additional stock grants to balance losses in value ✓ Anti-hedging policy ✗ No accelerated vesting at retirement ✓ Annual assessment of compensation design 157 Overview Accountability and performance | Pages 159 - 160 • The board reviews and approves corporate goals and objectives annually; integrated into company's plan cycle. • Goals are cascaded at each level of leadership, tailored for area of responsibility; annual assessment versus planned goals results in differentiated pay outcomes. Compensation design | Pages 161 - 163 • Named executive officers participate in the same broad-based programs as all other executives. • Restricted stock units for senior executives represent a higher percentage of total direct compensation 1 , reflective of the impact of their decisions, and resulting in increased pay-at-risk. Restricted stock units Annual bonus Base salary Percent of NEO total direct compensation 1 • Over 50 percent • 10 to 20 percent • 10 to 30 percent Intent • Link pay to returns of long-term shareholders • Encourage long-term view through the commodity price cycle • Link pay to annual company earnings performance • Align incentives across all functions • Provide competitive base pay Key design features • Granted in the form of stock units • CEO: 50 percent vests in 5 years from grant date; 50 percent in 10 years • All other executives: 50 percent vests in 3 years from grant date; 50 percent in 7 years • Long restriction periods coupled with performance metrics applied at grant • Significant portion of pay at risk of forfeiture for extended period of time • Paid in year of grant • Bonus award pool reflective of business performance • Individual award further determined by individual performance and pay grade • Full award subject to clawback • Increase determined by individual performance, experience, and pay grade • Ties directly to long-term benefits Determining compensation Annual compensation benchmarking | Page 164 • Focus on a range around the median of compensation benchmark peers, considering scale and complexity, tenure in position, individual and business performance. Business performance | Page 165 Performance Dimension Measurement • Progress toward strategic objectives – Operations performance – Financial performance – Energy transition – Business portfolio • Demonstrated leadership and accomplishments relative to established goals and objectives Pay deliberations and decisions | Page 167 • Balances progress toward strategic objectives, business results, individual performance, and competitiveness of pay, taking into account experience in position 1 Refer to definitions and frequently used terms on page 172 158 Accountability and performance The executive compensation program design is aligned with our business model and approach to talent development - long-term career oriented, performance differentiated, and adaptable to evolving strategic priorities through goal setting. Strategic objectives The company's long-term strategic objectives center around four key interdependent performance dimensions, reflective of the company's priority focus areas. These objectives are fully integrated into the company's plan and provide the framework for the organization to deliver on its commitments. The strategic objectives have been established to drive sustainable growth in shareholder value while also positioning the company for long-term success in a lower-emissions future. Long-term strategic objectives Operations performance Deliver industry-leading performance in safety, environmental performance, and reliability Financial performance Deliver industry-leading earnings and cash flow growth Energy transition Reduce GHG emissions intensity at our operated assets and in hard-to-decarbonize sectors Business portfolio Optimize existing business portfolio, resilient to a transitioning energy system Plan goals The company's long-term strategic objectives are translated into annual plan goals through a comprehensive process that incorporates corporate and functional plans. Plan goals are endorsed by the board. A disciplined approach to establishing goals aligns executives to deliver on the company's strategic objectives. The CEO is primarily responsible for executing the company's long-term strategic objectives, as translated into annual plan goals. CEO goals and objectives are inclusive of enterprise-wide initiatives. These include risk management, corporate reputation, talent management, research and technology, and management of major projects. Plan goals and objectives are cascaded throughout the organization, tailored to each executive's area of responsibility. Goals and objectives are reviewed with senior management annually and reinforced through periodic stewardship reviews and the performance assessment process. Leaders are held accountable to deliver on plan goals and objectives across all performance dimensions within the context of the company's strategic objectives. This sets a high performance threshold. Where faced with trade-offs across different priorities, these are discussed with senior management. Long-term strategic objectives integrated to annual company plan process, corporate goals and objectives approved by the board 159 Performance evaluation Chief executive officer The committee evaluates the CEO's performance across all performance dimensions within the context of the company's long-term strategy and evaluates progress against plan goals and objectives, which are reflective of the company's strategic objectives. Financial and operating metrics available at time of review further support the committee's assessment. Results of the annual performance evaluation inform level of pay, including salary, bonus, and restricted stock unit award. Details on pay deliberations can be found on page 167 . The company's strategic objectives are interdependent, with long-term success determined by delivery in each of the strategic objectives. As such, the committee assigns equal weight to each of the four strategic objectives. Recognizing the complexity and significant uncertainty inherent in a transitioning energy system, the committee maintains its focus on balancing the energy transition objectives and meeting society's need for affordable products that support modern life. Relevant business performance measures include: • Safety, health, and environmental performance; • Risk management; • Total shareholder return; • Net income; • Return on average capital employed 1 ; • Cash flow from operations and asset sales 1 ; • Operating performance of the upstream, downstream, and chemical businesses; and • Progress on advancing long-term strategic interests. 1 Non-GAAP financial measure – see definitions and frequently used terms on page 172 Progress towards delivering the company's business results and driving the strategic objectives is discussed throughout the year in various board and committee reviews. Financial and operating metrics are assessed over near- and long-term time horizons, taking into account the broader business environment. See page 165 for 2024 business performance results. Executive officers The CEO reviews the performance of all other executive officers, who are responsible to deliver the company's business results and drive the strategic objectives, with the board during the annual executive development review. Performance is evaluated based on accomplishments versus plan goals and objectives. In addition to this formal annual assessment, the board evaluates the performance of all senior executives throughout the year during specific reviews and board meetings. The committee also takes into account demonstrated leadership in sustaining sound business controls and a strong ethical and corporate governance environment. The committee does not use quantitative targets or formulas to assess individual performance or determine compensation. Formula-based performance assessments and compensation typically require emphasis on two or three business metrics. For the company to be an industry leader and effectively manage the technical complexity and integrated scope of its operations, senior executives must advance multiple strategies and objectives in parallel, versus emphasizing one or two at the expense of others that require equal attention. Leaders are held accountable to deliver and are assessed across all performance dimensions, balancing short- and long-term priorities 160 Long-term award program Through long restriction periods, Imperial executives are incentivized to take a long-term view in decision making Restricted stock units represent over 50 percent of total direct compensation 1 , and are intended to link executive pay to the returns of long-term shareholders and encourage a long-term view through the commodity price cycle. Restricted stock units granted to the CEO vest 50 percent in 5 years and 50 percent in 10 years. Restricted stock units granted to all other executives vest 50 percent in 3 years and 50 percent in 7 years. Program design Business model alignment Long investment lead times and complex risk management landscape require long-term view Shareholder alignment Majority of executive pay delivered in restricted stock units, aligning realized pay level with returns of long-term shareholders Accountability Restriction periods and risk of forfeiture drive focus on long-term shareholder value creation while managing risk Longest restriction periods in any industry Applying performance measures at grant enables restriction periods of up to 10 years Highest standards of performance Performance assessed against pre-established goals and objectives, results tie directly to award level Ability to retain key talent Executives unable to monetize significant portion of pay, creating large “buyout" hurdle Long restriction periods in line with investment lead times and risk profile • Investment decisions in a capital-intensive industry and management of risk play out over time horizons often decades in length, through volatile commodity price cycles, requiring executives to maintain a long-term view when making decisions. • Long restriction periods ensure that a significant portion of pay reflects the outcome of these decisions and aligns with the experience of long-term shareholders. • A formula-based program would require a shorter time horizon to set meaningful, credible targets. A shorter-term program could encourage short-term decision making, which is not aligned with the long investment lead times and capital-intensive nature of the business. • Example below shows net cash flow of a typical Imperial project aligning with the restricted stock program design for the Imperial CEO. It illustrates that short-term vesting occurs prior to determination of project financial success or failure and that longer-term vesting better aligns with shareholder returns resulting from investment decisions. 1 Refer to definitions and frequently used terms on page 172 161 Share-denominated basis aligns award values with shareholder outcomes • Uniquely long restriction periods result in a need to apply performance metrics at grant, versus at vest. • Restricted stock award grant levels are established based on pay grade and individual performance. • The executive resources committee does not adjust share grants to offset changes in share price, which results in executives seeing a one-for-one change in compensation through share price. • A share-denominated approach 1 coupled with long restriction periods defines the risk/reward profile of stock-based performance awards and results in a greater degree of volatility versus alternate programs with a dollar-denominated approach. 1 2024 decisions • As in prior years, and as a matter of principle, the committee did not adjust share grants to offset changes in the share price, thus maintaining strong alignment in the experience of our executives and our long-term shareholders. • Award grants for named executive officers reflect individual performance. • Long-term award value up, reflective of strong stock price, $100.29 at 2024 grant versus $77.12 in 2023, and $72.62 in 2022. Stock ownership 1 • It is Imperial's policy that executives maintain significant stock ownership, with no accelerated vesting at retirement. • The chairman, president and chief executive officer must, within three years of appointment, acquire shares of the company, including common shares and restricted stock units, of a value no less than five times base salary. B.W. Corson’s 2024 stock ownership, as shown on page 147 , exceeds the minimum requirement. • Long restriction periods result in stock ownership far exceeding ownership guidelines typical among other companies across industries. This aligns the interests of our executives with those of long-term shareholders and ensures focus on actions that create sustainable shareholder value over the long term. • At retirement, outstanding shares will continue to vest over a 7 to 10 year period. Exxon Mobil Corporation has a plan similar to the company’s restricted stock unit plan, under which grantees may receive restricted stock units, referred to herein as Exxon Mobil Corporation restricted stock. B.W. Corson holds Exxon Mobil Corporation restricted stock granted in 2018 and previous years, as well as Imperial Oil restricted stock units granted since 2019. D.E. Lyons holds Imperial Oil restricted stock units granted since 2018, and Exxon Mobil Corporation restricted stock granted in 2017 and previous years is fully vested. C.L. Gomez-Smith holds Exxon Mobil Corporation restricted stock granted in 2023 and previous years, as well as Imperial Oil restricted stock units granted in 2024. 1 Refer to definitions and frequently used terms on page 172 162 Bonus program Annual bonus program represents 10 to 20 percent of total direct compensation 1 , and is intended to link executive pay to annual company earnings performance. Program design • The committee establishes the overall size of the bonus program. In establishing the annual bonus program, the committee: • considers input from the chairman, president and chief executive officer on performance of the company and from the company’s internal compensation advisors regarding compensation trends as obtained from external consultants; • considers the linkage to the majority shareholder’s bonus program given the company’s working interest is included in Exxon Mobil Corporation earnings; • considers annual net income of the company; and • uses judgment to manage the overall size of the annual bonus program taking into consideration the cyclical nature and long-term orientation of the business. • A bonus award matrix is used to determine individual award levels based on pay grade and individual performance. • Tie to year-over-year change in earnings coupled with individual performance defines the risk/reward profile of the bonus program and results in greater degree of volatility versus market practice, aligned with our approach to executive compensation as discussed on page 157 . • Bonus delivered in cash in year of grant. • Full bonus award subject to clawback, see page 170 . 2024 decisions • 2024 bonus program was approved at a lower level than 2023, reflective of year-over-year change in earnings performance. • Individual awards for named executive officers further reflect individual performance. Salary program Base salary represents 10 to 30 percent of total direct compensation 1 , and is intended to provide competitive base pay and directly affect the level of retirement benefits, as salary is included in benefit formulas. The overall size of the program is determined by annual benchmarking. Individual salary increases are the result of individual performance, experience, and pay grade. 2024 decisions • The committee approved 2025 salary increases for named executive officers consistent with the salary program for all executives. • Individual salary treatments take into account individual performance, level of responsibility and experience, and reflect market analysis and competitiveness at the time of the decision in 2024. 1 Refer to definitions and frequently used terms on page 172 163 Determining Compensation Annual benchmarking The executive resources committee conducts annual benchmarking to assess market competitiveness of executive pay and program design Compensation benchmarking In addition to the assessment of business and individual performance, the committee benchmarks against a select group of major Canadian companies on an annual basis. Criteria for selecting benchmark companies 1 include: • Canadian companies or Canadian affiliates; • large operating scope and complexity; • capital intensive; and • proven sustainability over time. Pay orientation In assessing the appropriateness of pay levels, the committee considers scale and complexity, and tenure in position as relevant factors. The committee focuses on a range around the median of compensation benchmark companies. This provides the ability to: • differentiate compensation based on experience and performance levels among executives; • minimize the potential for automatic ratcheting-up of compensation that could occur within a narrow target among benchmark companies; and • respond to changing business conditions. The elements of Exxon Mobil Corporation compensation program for B.W. Corson, D.E. Lyons, and C.L. Gomez-Smith, including salary, annual bonus, and restricted stock units are generally similar to those of the company. 1 Refer to definitions and frequently used terms on page 172 164 2024 business performance In 2024, Imperial delivered strong business results across a wide range of performance dimensions. • Delivered strong safety performance and effective enterprise risk management across the organization. • Received TSX Top 30 recognition based on the company's three-year average dividend-adjusted share price performance of 167 percent. • Recognized as one of Alberta's top employers by Mediacorp Canada Inc. and designated as a 2024 top employer for Canadians over 40 and for young people. Financial performance • Exceptional operational performance and reliability drove strong financial results. • Achieved nearly $4.8 billion of net income and the second highest ever earnings per share of over $9. • Generated substantial cash with nearly $6.0 billion in cash flow from operating activities. • Increased quarterly dividend to $0.60 per share in the first quarter, increasing the annual dividend paid for the 30 th consecutive year. The annual dividend paid per share represents a 22 percent increase year over year. • Total shareholder returns of $3.9 billion; including dividends of $1.2 billion and accelerated share repurchases of $2.7 billion as part of the company’s normal course issuer bid. Commitment to sustainability • Pathways Alliance continued to progress early technical work and issued the request for proposals to pipeline manufacturers for the proposed transportation pipeline. • Committed $19.2 million through community benefits agreements to Indigenous communities across Canada. • Surpassed $6 billion in spending with Indigenous businesses since 2008, and achieved the highest annual business spend in 2024. • Hosted its first-ever National Indigenous Gathering in Cold Lake, an event that brought together Indigenous leaders and allies from all areas of the company. • The Low Carbon Solutions organization continued to evaluate and progress emission-reduction opportunities in carbon capture and storage, hydrogen, and lower-emission fuels, as well as lithium to supply the global battery and electric vehicle markets. Upstream operations performance • Delivered robust production growth at Kearl and Cold Lake. Achieved Upstream production of 433,000 gross oil-equivalent barrels per day representing the highest full year production in over 30 years. • Delivered significantly lower operating costs 1 across major Upstream assets. • Achieved full-year production record at Kearl of 281,000 gross oil-equivalent barrels per day (200,000 barrels Imperial’s share). • Successfully completed first sub 20-day turnaround at Kearl in the second quarter of 2024. • Expanded market through TMX, secured first sale of Kearl cargo off TMX to Rongsheng China. • Increased Cold Lake full-year production by nearly 10 percent from 2023 to 148,000 gross oil-equivalent barrels per day. • Achieved a major milestone in the transformation of Cold Lake with industry's first solvent-assisted SAGD project at Grand Rapids, starting ahead of schedule in May 2024 and producing 22,000 barrels per day in the fourth quarter. • Completed tie-ins for modules for the Leming SAGD redevelopment project. The project is expected to start up in late 2025 with peak production anticipated to be around 9,000 barrels per day. • Produced 75,000 gross oil-equivalent barrels per day of full-year production at Syncrude. • Commenced construction of the Enhanced Bitumen Recovery Technology (EBRT) pilot on Imperial's Aspen lease with pilot start-up anticipated by 2027. Downstream and Chemical operations performance • Achieved average throughput of 399,000 barrels per day with refinery capacity utilization of 92 percent while completing significant turnaround activity. • Executed turnaround activities at all three refineries ahead of plan and below budget, including Nanticoke's most successful large turnaround event in decades. • Added additional operational flexibility to co-process plant based feedstocks at the Strathcona refinery. • Construction continued on Canada’s largest renewable diesel facility at the Strathcona refinery. • Successfully completed proactive replacement of a section from the Winnipeg Products Pipeline, restoring pipeline fuel supply in the region. • Further developed network of renewable diesel blending and offloading distribution terminals, expanding our capability to supply lower emission fuel options to our customers. • Grew branded retail network to 2,600 sites. • Sustained number one retail market share in Canada 2 . • Reliable operational performance supported Chemicals net income of $171 million. 1 Non-GAAP financial measure – see definitions and frequently used terms on page 172 . 2 Based on Kalibrate survey data for Q4 2024. 165 Performance graph The following graph shows changes over the past 5 years in the value of $100 invested in (i) Imperial Oil Limited common shares, (ii) the S&P/TSX Composite Index, and (iii) the S&P/TSX Composite Energy Index. The S&P/TSX Composite Energy Index is currently comprised of share performance data for 43 oil and gas companies including integrated oil companies, oil and gas producers, and oil and gas service companies. The year-end values in the graph represent appreciation in share price and the value of dividends executed and reinvested. The calculations exclude trading commissions and taxes. Total shareholder returns 1 from each investment, whether measured in dollars or percent, can be calculated from the year-end investment values shown beneath the graph. During the past 5 years, the company’s cumulative total shareholder return 1 was 197 percent, for an average annual return of 24 percent. Total direct compensation 1 for named executive officers generally reflects the trend in total shareholder returns as the largest single component of executive compensation is awarded in the form of restricted stock units with long holding periods. This design reinforces the long-term linkage between executive compensation and the shareholding net worth of executives to the return on the company’s stock realized by shareholders. Five-Year Cumulative Total Shareholder Returns (Value of $100 invested on December 21, 2019) (a) Effective December 21, 2012, S&P has discontinued the S&P/TSX Equity Energy Index. This has been replaced with the S&P/TSX Composite Energy Index (STENRSR). 1 Refer to definitions and frequently used terms on page 172 166 2024 compensation actions Chief executive officer Mr. Corson is responsible for executing the company's long-term strategic objectives while progressing plan goals in support of these objectives. In 2024, the company delivered strong business results across a wide range of performance dimensions as outlined on pages 160 , 165 and 166 . Under Mr. Corson’s leadership, the company maintained its commitment to advantaged long-term investments and actively progressed cost savings. This continues to position the company well to capture upside opportunities and provides flexibility to consider further investments as the opportunity pipeline matures, technology advances, and markets and policies evolve. In acknowledgement of these achievements, the committee awarded total direct compensation of $12.1 million CAD. Consistent with our pay philosophy, a significant portion was delivered through restricted stock units with 5- and 10-year vesting periods, longer than those applied by most companies. The purpose of these long vesting periods is to reinforce the long investment lead times in the business and to link a substantial portion of Mr. Corson’s shareholding net worth to the performance of the company. As such, the realized value of the long-term incentive grants may differ from the amounts shown in the summary compensation table, depending on company performance at time of future vesting. During these vesting periods, the awards remain at risk of forfeiture even after retirement. For 2024, the committee approved a salary 2 increase of $35,400 USD ($48,491 CAD) to $919,400 USD ($1.26 million CAD) and an annual bonus 2 of $1.26 million USD ($1.73 million CAD), based on his individual performance, experience and pay grade. Mr. Corson’s 2024 long-term incentive award of 91,200 restricted stock units was granted in the form of Imperial restricted stock units, not Exxon Mobil Corporation restricted stock, to reinforce alignment of his interests with that of the company’s shareholders. • 2024 total direct compensation 1 up 26.5 percent versus 2023 reflective of strong share price and increase in exchange rate. • 75 percent of CEO total direct compensation 1 delivered in the form of restricted stock units with long restriction periods. Other named executive officers Within the context of the compensation program structure and performance assessment processes previously described, the value of 2024 incentive awards and salary adjustments align with: • Performance of the company; • Individual performance and pay grade; • Long-term strategic plan of the business; and • Annual compensation of comparator companies. Taking all factors into consideration, the committee’s decisions on pay awarded to other named executive officers reflect judgment, rather than the application of formulas or targets. The committee approved the individual elements of compensation and the total compensation as shown in the summary compensation table. 1 Refer to definitions and frequently used terms on page 172 . Amounts are shown in Canadian dollars. 2 Refer to footnotes on page 174 for information on compensation paid in U.S. dollars. 167 Other compensation elements Retirement plans The company's approach to talent development stems from the need to develop future leaders broadly and deeply given the complexity and long-term nature of the business. Retirement plans support the company's talent management approach and are designed to attract and retain talent for a career. Retirement plans include: • A company savings plan that is attractive to new hires who can begin building an account balance immediately upon achieving eligibility; and • Defined benefit plans, such as the company's pension plan, that help retain mid- and late-career employees until retirement eligibility. These are viewed as the primary vehicle for retirement planning. Named executive officers participate in the same savings and pension plan, including supplemental pension arrangements outside the registered plan, as other employees. B.W. Corson, D.E. Lyons and C.L. Gomez-Smith participate in Exxon Mobil Corporation plans. Below are brief descriptions of the company's plans. See the Pension Benefits section on page 179 for more details. Plan Description Savings plan • Employees with more than one year of service may contribute between 1 and 30 percent of normal earnings via payroll deductions. • The company provides matching contributions up to 6% which vary depending on the amount of employee contributions and which defined benefit pension arrangement the employee participates. • Employee and company contributions can be allocated in any combination to a non-registered (tax-paid) account, or a registered (tax-deferred) group retirement savings plan (RRSP), subject to contribution limits under the Income Tax Act. Registered pension plan • The company provides a registered defined pension benefit when leaving the company if age, service, and other provisions under the plan are met. • Benefit available in various annuity forms upon retirement. • Subject to income tax regulations that impose limits on the amounts that can be paid from a registered plan. • Provides for pension benefits accrual only until December 1st in the year the employee reaches the age of 71. • The company does not grant additional pension service credit. Supplemental pension arrangement • Addresses any portions of the defined benefit that cannot be paid from the registered plan due to income tax regulations. • Executive officers who receive an annual bonus, can also receive an annual supplemental pension benefit resulting from the annual bonus. • May be taken as a lump sum or an annuity. • Not payable if an employee resigns or is terminated with cause before reaching retirement eligibility. 168 Award vesting and share utilization The number of common shares of the company issuable under the plan to any insiders (as defined by the Toronto Stock Exchange) cannot exceed 10 percent of the issued and outstanding common shares, whether at any time, or as issued in any one year. The company’s directors and officers as a group hold approximately 21 percent of the unvested restricted stock units that give the recipient the right to receive common shares that represent about 0.05 percent of the company’s outstanding common shares. Currently, the maximum number of common shares that any one person may receive from the vesting of restricted stock units is 88,000 common shares, which is about 0.02 percent of the outstanding common shares. Upon vesting, each restricted stock unit entitles the recipient the right to receive an amount equal to the value of one common share of the company, based on the five-day average closing price of the company’s shares on the vesting date and the four preceding trading days. Units that vest on the third anniversary of the grant date vest as a cash payment. Units that vest on the fifth, seventh, or tenth anniversary of the grant date vest as a cash payment, except that for units granted to Canadian residents, the recipient may receive one common share per unit or elect to receive a cash payment for the units. During the restricted period, the recipient will also receive cash payments equivalent to the cash dividends paid to holders of regular common stock. Consistent with the program documentation, the board of directors may amend the plan without shareholder approval for RSUs previously issued or to be issued in the future, unless the amendment is with respect to: • Increasing the shares served for issuance; • Increasing the vesting price; • Extending eligibility to participate in the plan to persons not included in the plan; • Extending the right of a grantee to transfer or assign RSUs; or • Adjusting the vesting date for any RSUs previously granted. In the case of any subdivision, consolidation, or reclassification of the shares of the company or other relevant change in the capitalization of the company, the company, at its discretion, may make appropriate adjustments in the number of common shares to be issued and the calculation of the cash amount payable per restricted stock unit. Granting practices The executive resources committee ("committee") grants annual incentive awards to the company’s executive officers at its regular November meeting. Incentive awards are granted to other eligible employees within the parameters of the bonus and restricted stock award ceilings approved by the committee. The company’s compensation program does not include granting stock options. No stock options have been granted since 2002 and there are no plans to make such grants in the future. Amendments In 2020, the restricted stock unit plan was amended to update provisions regarding the vesting periods for the units granted in 2020 and onwards to the chairman, president and chief executive officer such that 50 percent of restricted stock units vest on the fifth anniversary and remaining 50 percent on the tenth anniversary. For awards granted prior to 2020, the vesting of the tenth anniversary portion of the award is the later of 10 years or retirement. As a result of an employee stock program expansion implemented in 2022, the restricted stock unit plan was amended to include an additional vesting schedule, in which some non-executive participants will be eligible for awards granted that vest 100 percent after 3 years. 169 Risk and governance Compensation program underpinned by strong governance practices that discourage inappropriate risk taking Executive stock ownership • Long holding periods on restricted stock units (RSUs) results in executives maintaining significant stock ownership during employment and for 7 years into retirement, with a longer holding period for the chairman, president and chief executive officer up to 10 years into retirement. Significant pay at risk • Uniquely long restriction periods on RSUs substantially increase the percentage of career compensation at risk well into retirement. • Unvested RSUs cannot be used as collateral for any purpose and cannot be assigned. Strong forfeiture provisions • Unvested RSUs are at risk of forfeiture in the event of resignation, termination of employment, early retirement and/or detrimental activity, even if such detrimental activity occurs or is discovered after retirement. • In the event of retirement prior to age 65 but after eligibility for early retirement (i.e., at least 55 years of age with at least 10 years of service), the executive resources committee, in the case of an executive officer, must approve the retention of awards. Forfeiture provisions remain in place until an award has vested, including those that vest post retirement. Clawback policies • In the event of a material negative restatement of the company's reported financial or operating results, the Board is authorized to take actions it deems necessary and appropriate, including the recoupment (clawback) of any bonus paid to an executive officer. • Policies reflect the company's high ethical standards and strict compliance with accounting and other regulations applicable to public companies, including compliance with Rule 10D-1 of the US Securities Exchange Act of 1934 . Anti-hedging/derivative policy • Company policy prohibits all employees, including executives, and directors, from being a party to a derivative or similar financial instrument, including puts, calls, or other options, future or forward contracts, or equity swaps or collars, with respect to the company or Exxon Mobil Corporation stock. Annual assessment of compensation design • The executive resources committee ("committee") reviews the effectiveness and competitiveness of the compensation program design annually, and approves annual compensation recommendations for each named executive officer prior to implementation. • The committee is responsible for overseeing the compensation program and practices that are designed to encourage appropriate risk assessment and risk management. For further discussion on the company's risk management system and oversight, see "Risk oversight" on page 132 . Independent compensation consultant • In 2024, the committee did not retain an independent consultant or advisor in determining compensation for any of the company’s officers or any other senior executives. • The company’s management retained an independent consultant to provide an assessment of competitive compensation and market data for all salaried levels of employees in the company. While providing this data, they did not provide individual compensation recommendations or advice for the compensation of the chairman, president, and chief executive officer or other senior executives. 170 No severance agreements • The company does not have written employment contracts or any other agreement with its named executive officers providing for payments on change in control or termination of employment. • Eliminates any real or perceived "safety net" with respect to job security and increases the risk and consequences to the individual for performance that does not meet the highest standards. No change in control arrangements No guaranteed bonuses • Bonus remains at risk, subject to year-on-year change in performance. • Demonstrated by bonus program suspension in 2020; no award granted. No additional stock grants to balance losses in value • The committee sets the size of the restricted stock unit program and does not offset a loss or gain in the value of prior restricted stock units by the value of current-year grants. • Such a practice would minimize the risk/reward profile of stock-based awards and undermine the long-term view that executives are expected to adopt. No accelerated vesting at retirement • Restricted stock units (RSUs) are not subject to acceleration, not even at retirement, except in the case of death. • Unvested RSUs cannot be used as collateral for any purpose. 171 Definitions and frequently used terms Please also refer to the "Frequently used terms" section of the company's Annual Report on Form 10-K for additional definitions and reconciliation of Non-GAAP financial measures. Compensation benchmark companies consist of BCE Inc., Canadian Natural Resources Limited, Canadian Pacific Kansas City Limited, Canadian Tire Corporation, Cenovus Energy Inc., CNOOC Petroleum North America ULC, ConocoPhillips Canada Limited, Enbridge Inc., General Electric Canada Inc., Gibson Energy ULC, Irving Oil Ltd., Johnson & Johnson (Canada) Inc, MEG Energy Corp., Microsoft Canada Inc., NOVA Chemicals Corporation, Nutrien Ltd., Ovintiv Inc., Parkland Corporation, Pembina Pipeline Corporation, Pfizer Canada ULC, Shell Canada Limited, Suncor Energy Inc., TC Energy Corporation, Teck Resources Limited Inc., Valero Energy Inc. and Veren Inc. Dollar-denominated approach: annual equity grant is based on target dollar value with underlying units adjusted to achieve target value. Market common approach; results in less volatility than a share-denominated award. Non-GAAP financial measures The following definitions are used in the compensation discussion and analysis as several of Imperial’s business and financial performance measures. These measures are not prescribed by U.S. Generally Accepted Accounting Principles (GAAP). These measures constitute "non-GAAP financial measures" under Securities and Exchange Commission Regulation G and Item 10(e) of Regulation S-K, and "specified financial measures" under National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure of the Canadian Securities Administrators. Reconciliation of these Non-GAAP financial measures to the most comparable GAAP measure, and other information required by these regulations, have been provided below or is available in the "Frequently used terms" section of the company’s most recent Annual Report on Form 10-K. Non-GAAP financial measures and specified financial measures are not standardized financial measures under GAAP and do not have standardized definitions. As such, these measures may not be directly comparable to measures presented by other companies, and should not be considered a substitute for GAAP financial measures. • Cash flows from (used in) operating activities and asset sales (CFOAS) is the sum of the net cash provided by operating activities and proceeds from asset sales reported in the Consolidated statement of cash flows. • Return on average capital employed (ROCE) is a measure of capital productivity, and equals net income excluding the after-tax cost of financing divided by total average capital employed. Capital employed is property, plant and equipment, and other assets, less liabilities, excluding both short-term and long-term debt, including the company’s share of equity company debt. • Operating costs is a non-GAAP financial measure that is the costs during the period to produce, manufacture, and otherwise prepare the company’s products for sale – including energy costs, staffing