What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-04 compared with 2025-05-05 · 98 added, 24 removed, 91 unchanged (57% of the section changed)

1 unchanged sentence

Recent business environment

During the first quarter of 2025, the price of crude oil and the Canadian WTI/WCS spread remained relatively flat with the fourth quarter of 2024.

Industry refining margins improved versus the fourth quarter of 2024, reflecting changes in supply and demand balances.

During the second quarter of 2025, the price of crude oil decreased relative to first quarter of 2025, while the Canadian WTI/WCS spread narrowed due to low inventory levels.

Industry refining margins improved in the second quarter of 2025, driven by strong seasonal demand.

During 2025, the United States announced a variety of trade-related actions, including the imposition of tariffs on imports from Canada and several other countries.

In response, Canada announced its own retaliatory tariffs.

Certain tariffs were paused for a period of time but have not been withdrawn.

Certain tariffs were paused for a period of time but have not been withdrawn, while others have been revised.

The global trade environment continues to be volatile.

The likelihood of the United States, Canada or their trading partners resuming tariffs, imposing new or reciprocal tariffs, export restrictions, or other forms of trade-related sanctions is highly uncertain.

The likelihood of the United States, Canada or their trading partners resuming tariffs, imposing new or revised reciprocal tariffs, export restrictions, or other forms of trade-related sanctions is highly uncertain.

Additionally, significant uncertainty exists as to what effects these actions will ultimately have on Imperial, its suppliers and its customers.

1 unchanged sentence

Operating results

First quarter 2025 vs.

first quarter 2024

First Quarter

Second quarter 2025 vs.

second quarter 2024

Second Quarter

millions of Canadian dollars, unless noted 2025 2024

3 unchanged sentences

millions of Canadian dollars

Price – Average bitumen realizations increased by $8.75 per barrel, primarily driven by the narrowing WTI/WCS spread.

Synthetic crude oil realizations increased by $5.28 per barrel, primarily driven by an improved Synthetic/WTI spread.

Other – Primarily due to favourable foreign exchange impacts of about $130 million.

Price – Average bitumen realizations decreased by $17.20 per barrel, primarily driven by lower marker prices.

Synthetic crude oil realizations decreased by $23.71 per barrel, primarily driven by lower WTI and a weaker Synthetic/WTI spread.

Volumes – Higher volumes were primarily driven by the timing of the annual coker turnaround at Syncrude and mine productivity and improved reliability at Kearl.

Royalty – Lower royalties were primarily driven by lower commodity prices.

IMPERIAL OIL LIMITED

Marker prices and average realizations

First Quarter

Second Quarter

Canadian dollars, unless noted 2025 2024

5 unchanged sentences

Average foreign exchange rate (US$)

First Quarter

Second Quarter

thousands of barrels per day 2025 2024

1 unchanged sentence

Kearl total gross production (thousands of barrels per day)

(a) In the first quarter of 2025, Syncrude gross production included about 2 thousand barrels per day of bitumen and other products (2024 - 0 thousand barrels per day) that were exported to the operator's facilities using an existing interconnect pipeline.

Lower production at Kearl was primarily driven by extreme cold weather and unplanned downtime, mitigated by enhanced winter operating procedures.

Higher production at Cold Lake was primarily driven by Grand Rapids solvent-assisted SAGD, partially offset by production and steam cycle timing.

(a) In the second quarter of 2025, Syncrude gross production included about 4 thousand barrels per day of bitumen and other products (2024 - 2 thousand barrels per day) that were exported to the operator's facilities using an existing interconnect pipeline.

Higher production at Kearl was primarily driven by mine productivity and improved reliability.

Lower production at Cold Lake was primarily driven by production and steam cycle timing, and turnaround impacts partially offset by Grand Rapids solvent-assisted SAGD.

Higher production at Syncrude was primarily driven by the timing of the annual coker turnaround.

Net income (loss) factor analysis

millions of Canadian dollars

Margins - Higher margins primarily reflect improved market conditions.

Refinery utilization and petroleum product sales

First Quarter

Second Quarter

thousands of barrels per day, unless noted 2025 2024

2 unchanged sentences

Petroleum product sales

Lower refinery throughput was primarily due to additional maintenance in the company's eastern manufacturing hub.

Lower refinery throughput was primarily due to unplanned downtime partially offset by lower turnaround impacts.

Higher petroleum product sales were enabled by the Trans Mountain pipeline expansion.

IMPERIAL OIL LIMITED

2 unchanged sentences

Corporate and other

First Quarter

Second Quarter

millions of Canadian dollars 2025 2024

1 unchanged sentence

Liquidity and capital resources

First Quarter

Second Quarter

millions of Canadian dollars 2025 2024

5 unchanged sentences

Cash and cash equivalents at period end 2,386 2,020

Cash flows from operating activities primarily reflect higher Upstream realizations and lower unfavourable working capital impacts.

Cash flows from operating activities primarily reflect lower earnings and lower favourable working capital impacts.

Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment.

Cash flows used in financing activities primarily reflect:

Second Quarter

millions of Canadian dollars, unless noted 2025 2024

Dividends paid

Per share dividend paid (dollars)

Share repurchases (a)

Number of shares purchased (millions) (a)

(a) The company did not purchase any shares during the second quarter of 2025 and 2024.

On June 23, 2025, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid and will continue its existing share purchase program.

Shareholders may obtain a copy of the Notice of Intention to Make a Normal Course Issuer Bid approved by the TSX without charge by contacting the company.

The program enables the company to purchase up to a maximum of 25,452,248 common shares during the period June 29, 2025 to June 28, 2026.

This maximum includes shares purchased under the normal course issuer bid from Exxon Mobil Corporation.

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

The program will end should the company purchase the maximum allowable number of shares or otherwise on June 28, 2026.

Imperial plans to accelerate its share purchases under the normal course issuer bid program, and anticipates repurchasing all remaining allowable shares prior to year end.

Purchase plans may be modified at any time without prior notice.

IMPERIAL OIL LIMITED

Six months 2025 vs.

six months 2024

millions of Canadian dollars, unless noted 2025 2024

Net income (loss) (U.S.

Net income (loss) per common share, assuming dilution (dollars)

Net income (loss) factor analysis

millions of Canadian dollars

Price – Average bitumen realizations decreased by $4.20 per barrel, primarily driven by lower marker prices partially offset by narrowing WTI/WCS spread and lower diluent costs.

Synthetic crude oil realizations decreased by $8.96 per barrel, primarily driven by lower WTI partially offset by an improved Synthetic/WTI spread.

Volume – Higher volumes were primarily driven by Grand Rapids solvent-assisted SAGD and the timing of the annual coker turnaround at Syncrude.

Royalty – Lower royalties were primarily driven by lower commodity prices.

Other – Primarily due to favourable foreign exchange impacts of about $170 million.

Marker prices and average realizations

Canadian dollars, unless noted 2025 2024

West Texas Intermediate (US$ per barrel)

Western Canada Select (US$ per barrel)

WTI/WCS Spread (US$ per barrel)

Bitumen (per barrel)

Synthetic crude oil (per barrel)

Average foreign exchange rate (US$)

IMPERIAL OIL LIMITED

thousands of barrels per day 2025 2024

Kearl (Imperial's share)

Kearl total gross production (thousands of barrels per day)

(a) In 2025, Syncrude gross production included about 3 thousand barrels per day of bitumen and other products (2024 - 1 thousand barrels per day) that were exported to the operator's facilities using an existing interconnect pipeline.

Higher production at Cold Lake was primarily driven by Grand Rapids solvent-assisted SAGD, partially offset by production and steam cycle timing.

Net income (loss) factor analysis

millions of Canadian dollars

Margins – Higher margins primarily reflect improved market conditions.

Other – Primarily due to unfavourable wholesale volume impacts of about $70 million.

Refinery utilization and petroleum product sales

thousands of barrels per day, unless noted 2025 2024

Refinery throughput 387 397

Refinery capacity utilization (percent)

Petroleum product sales

Lower refinery throughput was primarily due to unplanned downtime partially offset by lower turnaround impacts.

Net income (loss) factor analysis

millions of Canadian dollars

Margins - Lower margins primarily reflect weaker industry polyethylene margins.

IMPERIAL OIL LIMITED

Corporate and other

millions of Canadian dollars 2025 2024

Net income (loss) (U.S.

Liquidity and capital resources

millions of Canadian dollars 2025 2024

Cash flows from (used in):

Operating activities 2,992 2,705

Investing activities (849) (937)

Financing activities (736) (612)

Increase (decrease) in cash and cash equivalents 1,407 1,156

Cash flows from operating activities primarily reflect lower unfavourable deferred tax and working capital impacts.

Cash flows used in investing activities primarily reflect lower additions to property, plant and equipment.

Cash flows used in financing activities primarily reflect:

First Quarter

millions of Canadian dollars, unless noted 2025 2024

3 unchanged sentences

Number of shares purchased (millions) (a)

(a) The company did not purchase any shares in the first quarter of 2025 and 2024.

(a) The company did not purchase any shares during the six months ended June 30, 2025 and 2024.

IMPERIAL OIL LIMITED

2 unchanged sentences

Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, seek, project, predict, target, estimate, expect, strategy, outlook, schedule, future, continue, likely, may, should, will and similar references to future periods.

Forward-looking statements in this release include, but are not limited to, references to the use of derivative instruments and effectiveness of risk mitigation.

Forward-looking statements in this release include, but are not limited to, references to the company’s purchases under the normal course issuer bid and plans to accelerate completion prior to year end;

the use of derivative instruments and effectiveness of risk mitigation;

and the continued evaluation of the company’s share purchase program in the context of overall capital activities.

Forward-looking statements are based on the company's current expectations, estimates, projections and assumptions at the time the statements are made.

32 unchanged sentences

Quantitative and qualitative disclosures about market risk

Information about market risks for the three months ended March 31, 2025, does not differ materially from that discussed on page 35 of the company’s annual report on Form 10-K for the year ended December 31, 2024.

Information about market risks for the six months ended June 30, 2025, does not differ materially from that discussed on page 35 of the company’s annual report on Form 10-K for the year ended December 31, 2024.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis