What changed in this filing

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Item 1. Financial Statements

2021-11-03 compared with 2021-08-04 · 102 added, 79 removed, 318 unchanged (36% of the section changed)

2 unchanged sentences

GAAP, unaudited)

Second Quarter

Third Quarter

to September 30

millions of Canadian dollars

2 unchanged sentences

Total revenues and other income

Purchases of crude oil and products (b) (note 11)

Production and manufacturing (c)

Purchases of crude oil and products (b)

Production and manufacturing (c) (note 11)

Selling and general (c)

1 unchanged sentence

Depreciation and depletion (note 11)

pension and postretirement benefit

Non-service pension and postretirement benefit

Financing (d) (note 5)

10 unchanged sentences

(d) Amounts to related parties included in financing, (note 5).

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

The information in the notes to consolidated financi a

l statements is an integral part of these statements.

IMPERIAL OIL LIMITED

1 unchanged sentence

GAAP, unaudited)

Second Quarter

Third Quarter

to September 30

millions of Canadian dollars

5 unchanged sentences

Comprehensive income (loss)

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

The information in the notes to cons o

lidated financial statements is an integral part of these statements.

IMPERIAL OIL LIMITED

32 unchanged sentences

Long-term debt included amounts to related parties of $ 4,447 million (2020 - $ 4,447 million).

Number of common shares authorized and outstanding were 1,100 million and 705 million, respectively (2020 - 1,100 million and 734 million, respectively).

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

Number of common shares authorized and outstanding were 1,100 million and 696

million, respectively (2020 - 1,100 million and 734 million, respectively).

The information in the notes to consolidated financial statements is an int e

gral part of these statements.

IMPERIAL OIL LIMITED

1 unchanged sentence

GAAP, unaudited)

Second Quarter

Third Quarter

to September 30

millions of Canadian dollars

Common shares at stated value

At beginning of period

At beginning of p e

Share purchases at stated value

16 unchanged sentences

GAAP, unaudited)

Second Quarter

Inflow (outflow)

Third Quarter

to September 30

millions of Canadian dollars

1 unchanged sentence

Net income (loss)

Adjustments for non-cash

Adjustments for non-cash items:

Depreciation and depletion

Impairment of intangible assets (note 11)

Impairment of int a

ngible assets (note 11)

(Gain) loss on asset sales (note 3)

Inventory write-down to current market value (note 11)

Deferred income taxes and other

31 unchanged sentences

Securities and Exchange Commission (SEC) in the company’s 2020 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.

pinion 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 six months ended June 30, 2021, are not necessarily indicative of the operations to be expected for the full year.

The results for the nine months ended September 30, 2021, are not necessarily indicative of the operations to be expected for the full year.

All amounts are in Canadian dollars unless otherwise indicated.

1 unchanged sentence

Business segments

Second Quarter

Third Quarter

millions of Canadian dollars

Revenues and other income

Intersegment sales

Intersegment sales (b)

Investment and other income (note 3)

Purchases of crude oil and products (note 11)

Production and manufacturing

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Selling and general

1 unchanged sentence

Depreciation and depletion (note 11)

pension and postretirement benefit

Non-service pension and postretirement benefit

Financing (note 5)

4 unchanged sentences

Capital and exploration expenditures

Second Quarter

Third Quarter

Corporate and other

1 unchanged sentence

Revenues and other income

Intersegment sales

Intersegment sales (b)

Investment and other income (note 3)

Purchases of crude oil and products (note 11)

Production and manufacturing

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Selling and general

1 unchanged sentence

Depreciation and depletion (note 11)

pension and postretirement benefit

Non-service pension and postretirement benefit

Financing (note 5)

7 unchanged sentences

Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

In the third quarter of 2021, the Downstream segment acquired

portion of Upstream crude inventory for

$ 444 million.

earnings impact and t

he effects of this transaction have been eliminated for consolidation purp o

Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions.

1 unchanged sentence

IMPERIAL OIL LIMITED

Six Months to June 30

Nine Months to September 30

millions of Canadian dollars

Revenues and other income

Intersegment sales

Revenues and other inco m

Intersegment sales (b)

Investment and other income (note 3)

Purchases of crude oil and products (note 11)

Production and manufacturing

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Selling and general

1 unchanged sentence

Depreciation and depletion (note 11)

pension and postretirement benefit

Non-service pension and postretirement benefit

Financing (note 5)

5 unchanged sentences

Capital and exploration expenditures

Total assets as at June

Six Months to June 30

Total assets as at September 30

Nine Months to September 30

Corporate and other

1 unchanged sentence

Revenues and other income

Intersegment sales

Intersegment sales (b)

Investment and other income (note 3)

Purchases of crude oil and products (note 11)

Production and manufacturing

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Selling and general

1 unchanged sentence

Depreciation and depletion (note 11)

pension and postretirement benefit

Non-service pension and postretirement benefit

Financing (note 5)

5 unchanged sentences

Capital and exploration expenditures

Total assets as at June

Total assets as at September 30

(b) (note 11)

IMPERIAL OIL LIMITED

1 unchanged sentence

Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

In the third quarter of 2021, the Downstream segment acquired

a portion of Upstream crude inventory for

$ 444 million.

earnings impact and t

he effects of this transaction have been eliminated for consolidation purposes.

Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions.

3 unchanged sentences

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

Second Quarter

Third Quarter

to September 30

millions of Canadian dollars

5 unchanged sentences

The components of net benefit cost were as follows:

Second Quarter

Third Quarter

to September 30

millions of Canadian dollars

12 unchanged sentences

Financing costs

Second Quarter

Third Quarter

to September 30

millions of Canadian dollars

4 unchanged sentences

Total financing

In May 2021, the company extended the maturity date of two of its existing committed short-term lines of credit to May 2023 , totalling $ 750 million.

In June 2021, the company extended the maturity date of one of its existing $ 300 million committed short-term lines of credit to June 2022 .

During the second quarter of 2021, the company extended the maturity dates of two of its short-term lines of credit, totalling $ 750 million, to May 2023 and extended its $ 300 million committed short-term line of credit to June 2022 .

The company has not drawn on any of its $ 1,300 million of available credit facilities.

During the third quarter of 2021, the c o

mpany repaid the $ 75 million, non-interest bearing, revolving demand loan originally issued in 2016 under an arrangement with an affiliate company of ExxonMobil.

IMPERIAL OIL LIMITED

21 unchanged sentences

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

At June 30, 2021 and December 31, 2020, the fair value of long-term debt ($ 4,447 million, excluding finance lease obligations) was primarily a level 2 measurement.

At September 30, 2021 and December 31, 2020, the fair value of long-term debt ($ 4,447 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 the Upstream, Downstream and Chemical businesses reduce the company’s enterprise-wide risk from changes in commodity prices and currency exchange rates.

In addition, the company uses commodity-based contracts, including derivative instruments to manage commodity price risk.

In addition, the company uses commodity-based contracts, including derivative instruments to manage commodity price risk and for trading purposes.

Commodity contracts held for trading purposes are presented in the Consolidated statement of income on a net basis in the line “Revenues”.

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

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.

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 l i

mits placed on derivative counterparties.

The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.

1 unchanged sentence

(thousands of barrels)

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

Second Quarter

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

Third Quarter

to September 30

millions of Canadian dollars

1 unchanged sentence

IMPERIAL OIL LIMITED

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

The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement is a s

millions of Canadian dollars

At June 30, 2021

At September 30, 2021

Derivative assets (a)

1 unchanged sentence

Included in the Consolidated balance sheet line:

“Materials, supplies and prepaid expenses”.

“Materials, supplies and prepaid expenses” and “Accounts receivable - net”.

Included in the Consolidated balance sheet line:

5 unchanged sentences

Included in the Consolidated balance sheet line:

“Materials, supplies and prepaid expenses”.

“Materials, supplies and prepaid expenses” and “Accounts receivable - net”.

Included in the Consolidated balance sheet line:

“Accounts payable and accrued liabilities”.

At June 30, 2021 and December 31, 2020, respectively, the company had $ 8 million and $ 5 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.

At September 30, 2021 and December 31, 2020, respectively, the company had $ 14 million and $ 5 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.

IMPERIAL OIL LIMITED

2 unchanged sentences

Common shares outstanding

The 12 -month

limited normal course issuer bid program that was in place throughout the second quarter of 2021 came into effect on June 29, 2020 and was amended on April 30, 2021.

The program enabled the company to purchase up to a maximum of 29,363,070 common shares ( 4 percent of the total shares on June 15, 2020), which included shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid.

Exxon Mobil Corporation participated to maintain its ownership percentage at approximately 69.6 percent.

The current 12 -month

normal course issuer bid program came into effect June 29, 2021, under which Imperial will continue its existing share purchase program.

The current 12 -month normal course issuer bid program came into effect June 29, 2021, under which Imperial will continue its existing share purchase program.

The program enables the company to purchase up to a maximum of 35,583,671 common shares ( 5 percent of the total shares on June 15, 2021) which includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid.

8 unchanged sentences

Purchases at stated value

Balance as at June 30, 2021

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:

Second Quarter

Balance as at September 30, 2021

The following table provides the calculation of b a

sic and diluted earnings per common share and the dividends declared by the company on its outstanding common shares:

Third Quarter

to September 30

Net income (loss) per common share - basic

9 unchanged sentences

Dividends per common share - declared

For Second Quarter 2020 and Six Months to June 30, 2020, the Net income (loss) per common share – diluted excludes the effect of 2.0 million employee share-based awards.

For nine months to September 30, 2020, the Net income (loss) per common share – diluted excludes the effect of 2.1 million employee share-based awards.

Share-based awards have the potential to dilute basic earnings per share in the future.

7 unchanged sentences

Amounts reclassified from accumulated other comprehensive income

Balance at June 30

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

income (expense):

Second Quarter

Balance at September 30

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

Third Quarter

to September 30

millions of Canadian dollars

2 unchanged sentences

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

Second Quarter

Third Quarter

to September 30

millions of Canadian dollars

4 unchanged sentences

At March 31, 2021, due to the termination of transportation services agreements related to a third-party pipeline project, the company recognized a liability of $ 62 million, previously reported as a contingent liability in Note 10 of Imperial’s Form 10-K.

In connection with the same project, commitments under “Other long-term purchase agreements” as reported in Imperial’s Form 10-K

decreased by approximately $ 2.9 billion.

In connection with the same project, commitments under “Oth e

r long-term purchase agreements” as reported in Imperial’s Form 10-K decreased by approximately $ 2.9 billion.

The majority of these commitments related to years 2026 and beyond.

In the first quarter of 2020, a non-cash

charge of $ 281 million after tax (Upstream - $ 229 million;

Downstream - $ 52 million) was recorded associated with the carrying value of crude oil inventory exceeding the current market value.

In the second quarter of 2020, the first quarter’s temporary non-cash

inventory charge was reversed.

In the first quarter of 2020, with the change in economic conditions and the reduction in the company’s market capitalization, the company assessed its goodwill balances for impairment and recognized a non-cash

goodwill impairment charge of $ 20 million in the company’s Upstream segment.

The company has received subsidies as part of the Government of Canada’s COVID-19 Economic Response Plan.

It was recognized as a reduction to expense and was included in the Consolidated statement of income, primarily as part of “Production and manufacturing” (2020 –

million before tax, year-to-date).

d a non-cash goodwill impairment charge of $ 20 million in the company’s Upstream segment.

The goodwill impairment is reflected in “Depreciation and depletion” on the Consolidated statement of income and “Goodwill” on the Consolidated balance sheet.

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements