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 2026 2025 Revenues and other income Revenues (a) 12,416 12,466 Investment and other income (note 3) 30 51 Total revenues and other income 12,446 12,517 Expenses Exploration 3 2 Purchases of crude oil and products (b) 8,178 7,756 Production and manufacturing (c) 1,754 1,686 Selling and general (c) (note 11) 397 259 Federal excise tax and fuel charge 348 592 Depreciation and depletion (includes impairments) 520 531 Non-service pension and postretirement benefit 3 5 Financing (d) (note 5) 11 ( 2 ) Total expenses 11,214 10,829 Income (loss) before income taxes 1,232 1,688 Income taxes 292 400 Net income (loss) 940 1,288 Per share information (Canadian dollars) Net income (loss) per common share - basic (note 9) 1.94 2.53 Net income (loss) per common share - diluted (note 9) 1.94 2.52 (a) Amounts from related parties included in revenues (note 1) 3,660 3,653 (b) Amounts to related parties included in purchases of crude oil and products (note 1) 1,250 1,206 (c) Amounts to related parties included in production and manufacturing, and selling and general expenses. 155 164 (d) Amounts to related parties included in financing. 21 26 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 2026 2025 Net income (loss) 940 1,288 Other comprehensive income (loss), net of income taxes Postretirement benefits liability adjustment (excluding amortization) ( 28 ) 12 Amortization of postretirement benefits liability adjustment included in net benefit costs 3 5 Total other comprehensive income (loss) ( 25 ) 17 Comprehensive income (loss) 915 1,305 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 2026 2025 Assets Current assets Cash and cash equivalents 1,029 1,142 Accounts receivable - net (a) 7,649 4,371 Inventories of crude oil and products 1,975 2,211 Materials, supplies and prepaid expenses 866 693 Total current assets 11,519 8,417 Investments and long-term receivables (b) 1,054 1,103 Property, plant and equipment, 60,465 60,031 less accumulated depreciation and depletion ( 29,642 ) ( 29,168 ) Property, plant and equipment - net 30,823 30,863 Goodwill 166 166 Other assets, including intangibles - net 1,891 1,760 Total assets 45,453 42,309 Liabilities Current liabilities Notes and loans payable 19 19 Accounts payable and accrued liabilities (a) (note 7, 11) 9,203 6,595 Income taxes payable 126 2 Total current liabilities 9,348 6,616 Long-term debt (c) (note 6) 3,974 3,978 Other long-term obligations (note 7, 11) 5,124 4,959 Deferred income tax liabilities 4,259 4,502 Total liabilities 22,705 20,055 Shareholders’ equity Common shares at stated value (d) (note 9) 895 895 Earnings reinvested 21,892 21,373 Accumulated other comprehensive income (loss) (note 10) ( 39 ) ( 14 ) Total shareholders’ equity 22,748 22,254 Total liabilities and shareholders’ equity 45,453 42,309 (a) Accounts receivable - net included net amounts receivable from related parties. 1,326 399 (b) Investments and long-term receivables included amounts from related parties. 235 251 (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). 484 484 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 2026 2025 Common shares at stated value (note 9) At beginning of period 895 942 Share purchases at stated value — — At end of period 895 942 Earnings reinvested At beginning of period 21,373 22,745 Net income (loss) for the period 940 1,288 Share purchases in excess of stated value — — Dividends declared ( 421 ) ( 367 ) At end of period 21,892 23,666 Accumulated other comprehensive income (loss) (note 10) At beginning of period ( 14 ) ( 214 ) Other comprehensive income (loss) ( 25 ) 17 At end of period ( 39 ) ( 197 ) Shareholders’ equity at end of period 22,748 24,411 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 2026 2025 Operating activities Net income (loss) 940 1,288 Adjustments for non-cash items: Depreciation and depletion (includes impairments) 520 531 (Gain) loss on asset sales (note 3) ( 8 ) ( 10 ) Deferred income taxes and other ( 346 ) ( 31 ) Changes in operating assets and liabilities: Accounts receivable ( 3,278 ) ( 12 ) Inventories, materials, supplies and prepaid expenses 63 ( 254 ) Income taxes payable 124 ( 81 ) Accounts payable and accrued liabilities 2,608 114 All other items - net (c) 133 ( 18 ) Cash flows from (used in) operating activities 756 1,527 Investing activities Additions to property, plant and equipment ( 475 ) ( 398 ) Proceeds from asset sales (note 3) 9 11 Loans to equity companies - net 16 10 Cash flows from (used in) investing activities ( 450 ) ( 377 ) Financing activities Finance lease obligations - reduction (note 6) ( 5 ) ( 4 ) Dividends paid ( 350 ) ( 307 ) Common shares purchased (b) (note 9) ( 64 ) ( 54 ) Cash flows from (used in) financing activities ( 419 ) ( 365 ) Increase (decrease) in cash and cash equivalents ( 113 ) 785 Cash and cash equivalents at beginning of period 1,142 979 Cash and cash equivalents at end of period (a) 1,029 1,764 (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 ) Interest (paid), net of capitalization. ( 10 ) ( 7 ) 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 2025 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. Amounts for related party revenues and purchases for the three months ended March 31, 2025 have been revised from $ 2,874 million to $ 3,653 million and from $ 427 million to $ 1,206 million, respectively. Impacts of the revision offset to zero. The results for the three months ended March 31, 2026, 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 Chemical millions of Canadian dollars 2026 2025 2026 2025 2026 2025 Revenues and other income Revenues (a) (b) 125 39 12,051 12,161 240 266 Intersegment sales 3,895 4,405 1,840 1,837 96 106 Investment and other income (note 3) 1 14 19 21 — — Total revenues and other income 4,021 4,458 13,910 14,019 336 372 Expenses Exploration 3 2 — — — — Purchases of crude oil and products 1,719 1,862 12,062 11,987 226 253 Production and manufacturing 1,236 1,176 463 457 52 51 Selling and general (note 11) — — 180 174 22 22 Federal excise tax and fuel charge — — 347 591 1 1 Depreciation and depletion 447 470 56 45 4 4 Non-service pension and postretirement benefit — — — — — — Financing (note 5) — ( 12 ) — — — — Total expenses 3,405 3,498 13,108 13,254 305 331 Income (loss) before income taxes 616 960 802 765 31 41 Income tax expense (benefit) 146 229 191 181 7 10 Net income (loss) 470 731 611 584 24 31 Cash flows from (used in) operating activities 121 201 604 1,356 25 59 Capital and exploration expenditures (c) 362 266 91 88 3 3 Total assets as at March 31 29,935 29,382 14,104 12,327 527 473 Three Months to March 31 Corporate and other Eliminations Consolidated millions of Canadian dollars 2026 2025 2026 2025 2026 2025 Revenues and other income Revenues (a) (b) — — — — 12,416 12,466 Intersegment sales — — ( 5,831 ) ( 6,348 ) — — Investment and other income (note 3) 10 16 — — 30 51 Total revenues and other income 10 16 ( 5,831 ) ( 6,348 ) 12,446 12,517 Expenses Exploration — — — — 3 2 Purchases of crude oil and products — — ( 5,829 ) ( 6,346 ) 8,178 7,756 Production and manufacturing 3 2 — — 1,754 1,686 Selling and general (note 11) 197 65 ( 2 ) ( 2 ) 397 259 Federal excise tax and fuel charge — — — — 348 592 Depreciation and depletion 13 12 — — 520 531 Non-service pension and postretirement benefit 3 5 — — 3 5 Financing (note 5) 11 10 — — 11 ( 2 ) Total expenses 227 94 ( 5,831 ) ( 6,348 ) 11,214 10,829 Income (loss) before income taxes ( 217 ) ( 78 ) — — 1,232 1,688 Income tax expense (benefit) ( 52 ) ( 20 ) — — 292 400 Net income (loss) ( 165 ) ( 58 ) — — 940 1,288 Cash flows from (used in) operating activities 6 ( 74 ) — ( 15 ) 756 1,527 Capital and exploration expenditures (c) 22 41 — — 478 398 Total assets as at March 31 3,459 3,830 ( 2,572 ) ( 2,123 ) 45,453 43,889 9 IMPERIAL OIL LIMITED (a) Includes export sales to the United States of $ 2,201 million (2025 - $ 2,791 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 2026 2025 Revenue from contracts with customers 9,832 10,135 Revenue outside the scope of ASC 606 2,584 2,331 Total 12,416 12,466 (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. 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 2026 2025 Proceeds from asset sales 9 11 Book value of asset sales 1 1 Gain (loss) on asset sales, before-tax 8 10 Gain (loss) on asset sales, after-tax 7 9 Note 4. Employee retirement benefits The components of net benefit cost were as follows: Three Months to March 31 millions of Canadian dollars 2026 2025 Pension benefits: Service cost 43 47 Interest cost 95 93 Expected return on plan assets ( 101 ) ( 99 ) Amortization of prior service cost 7 6 Amortization of actuarial loss (gain) — 3 Net benefit cost 44 50 Other postretirement benefits: Service cost 1 1 Interest cost 6 5 Amortization of prior service cost (credit) ( 1 ) ( 1 ) Amortization of actuarial loss (gain) ( 3 ) ( 2 ) Net benefit cost 3 3 Note 5. Financing costs Three Months to March 31 millions of Canadian dollars 2026 2025 Debt-related interest 31 37 Capitalized interest ( 21 ) ( 27 ) Net interest expense 10 10 Other interest 1 ( 12 ) Total financing 11 ( 2 ) 11 IMPERIAL OIL LIMITED Note 6. Long-term debt As at Mar 31 As at Dec 31 millions of Canadian dollars 2026 2025 Long-term debt 3,447 3,447 Finance leases 527 531 Total long-term debt 3,974 3,978 Note 7. Other long-term obligations As at Mar 31 As at Dec 31 millions of Canadian dollars 2026 2025 Employee retirement benefits (a) 845 811 Asset retirement obligations and other environmental liabilities (b) 3,352 3,348 Share-based incentive compensation liabilities 333 198 Operating lease liability (c) 146 149 Restructuring liability (note 11) 164 173 Other obligations 284 280 Total other long-term obligations 5,124 4,959 (a) Total recorded employee retirement benefits obligations also included $ 63 million in current liabilities (2025 - $ 63 million). (b) Total asset retirement obligations and other environmental liabilities also included $ 318 million in current liabilities (2025 - $ 318 million). (c) Total operating lease liability also included $ 77 million in current liabilities (2025 - $ 87 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, 2026 and December 31, 2025, 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 2026 2025 Crude 1,776 954 Products 946 ( 702 ) 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 2026 2025 Revenues 65 15 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, 2026 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) 143 122 — 265 ( 143 ) — 122 Liabilities Derivative liabilities (b) 158 81 — 239 ( 143 ) ( 15 ) 81 (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, 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) 20 39 — 59 ( 18 ) ( 2 ) 39 Liabilities Derivative liabilities (b) 18 14 — 32 ( 18 ) — 14 (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, 2026 and December 31, 2025, the company had $ 22 million and $ 6 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. 14 IMPERIAL OIL LIMITED Note 9. Common shares As at Mar 31 As at Dec 31 thousands of shares 2026 2025 Authorized 1,100,000 1,100,000 Outstanding 483,593 483,593 The company’s common share activities are summarized below: Thousands of shares Millions of dollars Balance as at December 31, 2024 509,045 942 Purchases at stated value ( 25,452 ) ( 47 ) Balance as at December 31, 2025 483,593 895 Purchases at stated value — — Balance as at March 31, 2026 483,593 895 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 2026 2025 Net income (loss) per common share – basic Net income (loss) (millions of Canadian dollars) 940 1,288 Weighted-average number of common shares outstanding (millions of shares) 483.6 509.0 Net income (loss) per common share (dollars) 1.94 2.53 Net income (loss) per common share – diluted Net income (loss) (millions of Canadian dollars) 940 1,288 Weighted-average number of common shares outstanding (millions of shares) 483.6 509.0 Effect of employee share-based awards (millions of shares) 1.2 1.2 Weighted-average number of common shares outstanding, assuming dilution (millions of shares) 484.8 510.2 Net income (loss) per common share (dollars) 1.94 2.52 Dividends per common share – declared (dollars) 0.87 0.72 15 IMPERIAL OIL LIMITED Note 10. Other comprehensive income (loss) information Changes in accumulated other comprehensive income (loss): millions of Canadian dollars 2026 2025 Balance at January 1 ( 14 ) ( 214 ) Postretirement benefits liability adjustment: Current period change excluding amounts reclassified from accumulated other comprehensive income ( 28 ) 12 Amounts reclassified from accumulated other comprehensive income 3 5 Balance at March 31 ( 39 ) ( 197 ) Amounts reclassified out of accumulated other comprehensive income (loss) – before-tax income (expense): Three Months to March 31 millions of Canadian dollars 2026 2025 Amortization of postretirement benefits liability adjustment included in net benefit cost (a) ( 3 ) ( 6 ) (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 2026 2025 Postretirement benefits liability adjustments: Postretirement benefits liability adjustment (excluding amortization) ( 9 ) 4 Amortization of postretirement benefits liability adjustment included in net benefit cost — 1 Total ( 9 ) 5 16 IMPERIAL OIL LIMITED Note 11. Miscellaneous financial information Restructuring charges On September 29, 2025, the company announced restructuring plans to improve its performance by centralizing additional corporate and technical activities in global business and technology centres. The restructuring plans include a program of targeted workforce reductions. The program, which is expected to be substantially completed by the end of 2027, involves involuntary employee separations. In the third quarter of 2025, the company recorded charges of $ 330 million, before-tax, consisting primarily of restructuring costs associated with announced workforce reduction programs. These costs were captured in "Selling and general" on the Consolidated statement of income and reported in the Corporate and other segment. The following table summarizes the reserves and charges related to the workforce reduction program, which are recorded in "Accounts payable and accrued liabilities" and "Other long-term obligations" on the Consolidated balance sheet. millions of Canadian dollars 2026 Balance at January 1 330 Additions/adjustments — Payments made ( 1 ) Balance at March 31 329 17 IMPERIAL OIL LIMITED