IMPERIAL OIL LTD 10-Q

Item 1. Financial statements Consolidated statement of income (U.S. GAAP, unaudited) Three Months to March 31 millions of Canadian dollars 2025 2024 Revenues and other income Revenues (a) 12,466 12,249 Investment and other income (note 3) 51 34 Total revenues and other income 12,517 12,283 Expenses Exploration 2 1 Purchases of crude oil and products (b) 7,756 7,706 Production and manufacturing (c) 1,686 1,664 Selling and general (c) 259 246 Federal excise tax and fuel charge 592 591 Depreciation and depletion 531 490 Non-service pension and postretirement benefit 5 1 Financing (d) (note 5) ( 2 ) 12 Total expenses 10,829 10,711 Income (loss) before income taxes 1,688 1,572 Income taxes 400 377 Net income (loss) 1,288 1,195 Per share information (Canadian dollars) Net income (loss) per common share - basic (note 9) 2.53 2.23 Net income (loss) per common share - diluted (note 9) 2.52 2.23 (a) Amounts from related parties included in revenues. 2,874 2,729 (b) Amounts to related parties included in purchases of crude oil and products. 427 985 (c) Amounts to related parties included in production and manufacturing, and selling and general expenses. 164 150 (d) Amounts to related parties included in financing. 26 44 The information in the notes to consolidated financial statements is an integral part of these statements. 3 IMPERIAL OIL LIMITED Consolidated statement of comprehensive income (U.S. GAAP, unaudited) Three Months to March 31 millions of Canadian dollars 2025 2024 Net income (loss) 1,288 1,195 Other comprehensive income (loss), net of income taxes Postretirement benefits liability adjustment (excluding amortization) 12 4 Amortization of postretirement benefits liability adjustment included in net benefit costs 5 12 Total other comprehensive income (loss) 17 16 Comprehensive income (loss) 1,305 1,211 The information in the notes to consolidated financial statements is an integral part of these statements. 4 IMPERIAL OIL LIMITED Consolidated balance sheet (U.S. GAAP, unaudited) As at Mar 31 As at Dec 31 millions of Canadian dollars 2025 2024 Assets Current assets Cash and cash equivalents 1,764 979 Accounts receivable - net (a) 5,770 5,758 Inventories of crude oil and products 1,844 1,642 Materials, supplies and prepaid expenses 1,027 975 Total current assets 10,405 9,354 Investments and long-term receivables (b) 1,080 1,084 Property, plant and equipment, 58,404 58,048 less accumulated depreciation and depletion ( 27,733 ) ( 27,241 ) Property, plant and equipment - net 30,671 30,807 Goodwill 166 166 Other assets, including intangibles - net 1,567 1,527 Total assets 43,889 42,938 Liabilities Current liabilities Notes and loans payable 18 19 Accounts payable and accrued liabilities (a) (note 7) 7,023 6,907 Income taxes payable — 81 Total current liabilities 7,041 7,007 Long-term debt (c) (note 6) 3,988 3,992 Other long-term obligations (note 7) 3,884 3,870 Deferred income tax liabilities 4,565 4,596 Total liabilities 19,478 19,465 Shareholders’ equity Common shares at stated value (d) (note 9) 942 942 Earnings reinvested 23,666 22,745 Accumulated other comprehensive income (loss) (note 10) ( 197 ) ( 214 ) Total shareholders’ equity 24,411 23,473 Total liabilities and shareholders’ equity 43,889 42,938 (a) Accounts receivable - net included net amounts receivable from related parties. 1,015 756 (b) Investments and long-term receivables included amounts from related parties. 256 266 (c) Long-term debt included amounts to related parties. 3,447 3,447 (d) Number of common shares authorized (millions). 1,100 1,100 Number of common shares outstanding (millions). 509 509 The information in the notes to consolidated financial statements is an integral part of these statements. 5 IMPERIAL OIL LIMITED Consolidated statement of shareholders’ equity (U.S. GAAP, unaudited) Three Months to March 31 millions of Canadian dollars 2025 2024 Common shares at stated value (note 9) At beginning of period 942 992 Share purchases at stated value — — At end of period 942 992 Earnings reinvested At beginning of period 22,745 21,907 Net income (loss) for the period 1,288 1,195 Share purchases in excess of stated value — — Dividends declared ( 367 ) ( 321 ) At end of period 23,666 22,781 Accumulated other comprehensive income (loss) (note 10) At beginning of period ( 214 ) ( 677 ) Other comprehensive income (loss) 17 16 At end of period ( 197 ) ( 661 ) Shareholders’ equity at end of period 24,411 23,112 The information in the notes to consolidated financial statements is an integral part of these statements. 6 IMPERIAL OIL LIMITED Consolidated statement of cash flows (U.S. GAAP, unaudited) Three Months to March 31 millions of Canadian dollars 2025 2024 Operating activities Net income (loss) 1,288 1,195 Adjustments for non-cash items: Depreciation and depletion 531 490 (Gain) loss on asset sales (note 3) ( 10 ) ( 2 ) Deferred income taxes and other ( 31 ) ( 164 ) Changes in operating assets and liabilities: Accounts receivable ( 12 ) ( 722 ) Inventories, materials, supplies and prepaid expenses ( 254 ) ( 196 ) Income taxes payable ( 81 ) ( 234 ) Accounts payable and accrued liabilities 114 707 All other items - net (c) ( 18 ) 2 Cash flows from (used in) operating activities 1,527 1,076 Investing activities Additions to property, plant and equipment ( 398 ) ( 497 ) Proceeds from asset sales (note 3) 11 4 Loans to equity companies - net 10 12 Cash flows from (used in) investing activities ( 377 ) ( 481 ) Financing activities Finance lease obligations - reduction (note 6) ( 4 ) ( 5 ) Dividends paid ( 307 ) ( 278 ) Common shares purchased (b) (note 9) ( 54 ) — Cash flows from (used in) financing activities ( 365 ) ( 283 ) Increase (decrease) in cash and cash equivalents 785 312 Cash and cash equivalents at beginning of period 979 864 Cash and cash equivalents at end of period (a) 1,764 1,176 (a) Cash equivalents are all highly liquid securities with maturity of three months or less. (b) Includes 2 percent tax paid on repurchases of equity. (c) Includes contributions to registered pension plans. ( 37 ) ( 37 ) Income taxes (paid) refunded. ( 569 ) ( 700 ) Interest (paid), net of capitalization. ( 7 ) ( 11 ) The information in the notes to consolidated financial statements is an integral part of these statements. 7 IMPERIAL OIL LIMITED Notes to consolidated financial statements (unaudited) Note 1. Basis of financial statement preparation These unaudited consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) and follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual consolidated financial statements filed with the U.S. Securities and Exchange Commission (SEC) in the company’s 2024 annual report on Form 10-K. In the opinion of the company, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. The company’s exploration and production activities are accounted for under the “successful efforts” method. The results for the three months ended March 31, 2025, are not necessarily indicative of the operations to be expected for the full year. All amounts are in Canadian dollars unless otherwise indicated. 8 IMPERIAL OIL LIMITED Note 2. Business segments Three Months to March 31 Upstream Downstream (d) Chemical (d) millions of Canadian dollars 2025 2024 2025 2024 2025 2024 Revenues and other income Revenues (a) (b) 39 42 12,161 11,879 266 328 Intersegment sales 4,405 4,122 1,837 1,748 106 90 Investment and other income (note 3) 14 4 21 12 — 1 4,458 4,168 14,019 13,639 372 419 Expenses Exploration 2 1 — — — — Purchases of crude oil and products 1,862 1,813 11,987 11,591 253 260 Production and manufacturing 1,176 1,188 457 421 51 53 Selling and general — — 174 162 22 26 Federal excise tax and fuel charge — — 591 590 1 1 Depreciation and depletion 470 432 45 45 4 4 Non-service pension and postretirement benefit — — — — — — Financing (note 5) ( 12 ) 1 — — — — Total expenses 3,498 3,435 13,254 12,809 331 344 Income (loss) before income taxes 960 733 765 830 41 75 Income tax expense (benefit) 229 175 181 199 10 18 Net income (loss) 731 558 584 631 31 57 Cash flows from (used in) operating activities 201 891 1,356 7 59 ( 3 ) Capital and exploration expenditures (c) 266 290 88 153 3 5 Total assets as at March 31 29,382 28,661 12,327 11,126 473 517 Three Months to March 31 Corporate and other Eliminations Consolidated millions of Canadian dollars 2025 2024 2025 2024 2025 2024 Revenues and other income Revenues (a) (b) — — — — 12,466 12,249 Intersegment sales — — ( 6,348 ) ( 5,960 ) — — Investment and other income (note 3) 16 17 — — 51 34 16 17 ( 6,348 ) ( 5,960 ) 12,517 12,283 Expenses Exploration — — — — 2 1 Purchases of crude oil and products — — ( 6,346 ) ( 5,958 ) 7,756 7,706 Production and manufacturing 2 2 — — 1,686 1,664 Selling and general 65 60 ( 2 ) ( 2 ) 259 246 Federal excise tax and fuel charge — — — — 592 591 Depreciation and depletion 12 9 — — 531 490 Non-service pension and postretirement benefit 5 1 — — 5 1 Financing (note 5) 10 11 — — ( 2 ) 12 Total expenses 94 83 ( 6,348 ) ( 5,960 ) 10,829 10,711 Income (loss) before income taxes ( 78 ) ( 66 ) — — 1,688 1,572 Income tax expense (benefit) ( 20 ) ( 15 ) — — 400 377 Net income (loss) ( 58 ) ( 51 ) — — 1,288 1,195 Cash flows from (used in) operating activities ( 74 ) 181 ( 15 ) — 1,527 1,076 Capital and exploration expenditures (c) 41 48 — — 398 496 Total assets as at March 31 3,830 2,699 ( 2,123 ) ( 490 ) 43,889 42,513 9 IMPERIAL OIL LIMITED (a) Includes export sales to the United States of $ 2,791 million (2024 - $ 2,378 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 Three Months to March 31 millions of Canadian dollars 2025 2024 Revenue from contracts with customers 10,135 9,729 Revenue outside the scope of ASC 606 2,331 2,520 Total 12,466 12,249 (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) In 2025, benzene and aromatic solvents are reported under the Downstream segment, whereas in 2024, they were reported under the Chemicals segment. The company has determined that the impact of this change is not material; therefore, the comparative period has not been recast. 10 IMPERIAL OIL LIMITED Note 3. Investment and other income Investment and other income included gains and losses on asset sales as follows: Three Months to March 31 millions of Canadian dollars 2025 2024 Proceeds from asset sales 11 4 Book value of asset sales 1 2 Gain (loss) on asset sales, before tax 10 2 Gain (loss) on asset sales, after tax 9 2 Note 4. Employee retirement benefits The components of net benefit cost were as follows: Three Months to March 31 millions of Canadian dollars 2025 2024 Pension benefits: Service cost 47 46 Interest cost 93 91 Expected return on plan assets ( 99 ) ( 113 ) Amortization of prior service cost 6 7 Amortization of actuarial loss (gain) 3 12 Net benefit cost 50 43 Other postretirement benefits: Service cost 1 4 Interest cost 5 6 Amortization of prior service cost (credit) ( 1 ) — Amortization of actuarial loss (gain) ( 2 ) ( 2 ) Net benefit cost 3 8 Note 5. Financing costs Three Months to March 31 millions of Canadian dollars 2025 2024 Debt-related interest 37 52 Capitalized interest ( 27 ) ( 41 ) Net interest expense 10 11 Other interest ( 12 ) 1 Total financing ( 2 ) 12 11 IMPERIAL OIL LIMITED Note 6. Long-term debt As at Mar 31 As at Dec 31 millions of Canadian dollars 2025 2024 Long-term debt 3,447 3,447 Finance leases 541 545 Total long-term debt 3,988 3,992 Note 7. Other long-term obligations As at Mar 31 As at Dec 31 millions of Canadian dollars 2025 2024 Employee retirement benefits (a) 842 846 Asset retirement obligations and other environmental liabilities (b) 2,620 2,641 Share-based incentive compensation liabilities 160 119 Operating lease liability (c) 145 144 Other obligations 117 120 Total other long-term obligations 3,884 3,870 (a) Total recorded employee retirement benefits obligations also included $ 61 million in current liabilities (2024 - $ 61 million). (b) Total asset retirement obligations and other environmental liabilities also included $ 291 million in current liabilities (2024 - $ 291 million). (c) Total operating lease liability also included $ 98 million in current liabilities (2024 - $ 100 million). In addition to the total operating lease liability, undiscounted commitments for leases not yet commenced totalled $ 51 million (2024 - $ 56 million). 12 IMPERIAL OIL LIMITED Note 8. 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 March 31, 2025 and December 31, 2024, 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. The net notional long/(short) position of derivative instruments was: As at Mar 31 As at Dec 31 thousands of barrels 2025 2024 Crude 5,699 4,260 Products ( 1,281 ) ( 371 ) Realized and unrealized gain/(loss) on derivative instruments recognized in the Consolidated statement of income is included in the following line on a before-tax basis: Three Months to March 31 millions of Canadian dollars 2025 2024 Revenues 15 ( 24 ) 13 IMPERIAL OIL LIMITED The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement, were as follows: At March 31, 2025 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) 50 54 — 104 ( 50 ) — 54 Liabilities Derivative liabilities (b) 57 27 — 84 ( 50 ) ( 7 ) 27 (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 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 Liabilities 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”. At March 31, 2025 and December 31, 2024, the company had $ 22 million 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. 14 IMPERIAL OIL LIMITED Note 9. Common shares As at Mar 31 As at Dec 31 thousands of shares 2025 2024 Authorized 1,100,000 1,100,000 Outstanding 509,045 509,045 The company’s common share activities are summarized below: Thousands of shares Millions of dollars 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 Purchases at stated value — — Balance as at March 31, 2025 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: Three Months to March 31 2025 2024 Net income (loss) per common share – basic Net income (loss) (millions of Canadian dollars) 1,288 1,195 Weighted-average number of common shares outstanding (millions of shares) 509.0 535.8 Net income (loss) per common share (dollars) 2.53 2.23 Net income (loss) per common share – diluted Net income (loss) (millions of Canadian dollars) 1,288 1,195 Weighted-average number of common shares outstanding (millions of shares) 509.0 535.8 Effect of employee share-based awards (millions of shares) 1.2 1.1 Weighted-average number of common shares outstanding, assuming dilution (millions of shares) 510.2 536.9 Net income (loss) per common share (dollars) 2.52 2.23 Dividends per common share – declared (dollars) 0.72 0.60 15 IMPERIAL OIL LIMITED Note 10. Other comprehensive income (loss) information Changes in accumulated other comprehensive income (loss): millions of Canadian dollars 2025 2024 Balance at January 1 ( 214 ) ( 677 ) Postretirement benefits liability adjustment: Current period change excluding amounts reclassified from accumulated other comprehensive income 12 4 Amounts reclassified from accumulated other comprehensive income 5 12 Balance at March 31 ( 197 ) ( 661 ) Amounts reclassified out of accumulated other comprehensive income (loss) – before-tax income (expense): Three Months to March 31 millions of Canadian dollars 2025 2024 Amortization of postretirement benefits liability adjustment included in net benefit cost (a) ( 6 ) ( 17 ) (a) This accumulated other comprehensive income component is included in the computation of net benefit cost (note 4). Income tax expense (credit) for components of other comprehensive income (loss): Three Months to March 31 millions of Canadian dollars 2025 2024 Postretirement benefits liability adjustments: Postretirement benefits liability adjustment (excluding amortization) 4 1 Amortization of postretirement benefits liability adjustment included in net benefit cost 1 5 Total 5 6 16 IMPERIAL OIL LIMITED