What changed in this filing

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Item 1. Financial Statements

2022-05-04 compared with 2021-11-03 · 69 added, 167 removed, 253 unchanged (48% of the section changed)

2 unchanged sentences

GAAP, unaudited)

Third Quarter

to September 30

millions of Canadian dollars

3 unchanged sentences

Purchases of crude oil and products (b)

Production and manufacturing (c) (note 11)

Production and manufacturing (c)

Selling and general (c)

Federal excise tax and fuel charge

Depreciation and depletion (note 11)

Non-service pension and postretirement benefit

Depreciation and depletion

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 financi a

l statements is an integral part of these statements.

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

IMPERIAL OIL LIMITED

1 unchanged sentence

GAAP, unaudited)

Third Quarter

to September 30

millions of Canadian dollars

2 unchanged sentences

Postretirement benefits liability adjustment (excluding amortization)

Amortization of postretirement benefits liability adjustment included in net periodic benefit costs

Amortization of postretirement benefits liability adjustment included in net benefit costs

Total other comprehensive income (loss)

Comprehensive income (loss)

The information in the notes to cons o

lidated financial statements is an integral part of these statements.

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

IMPERIAL OIL LIMITED

11 unchanged sentences

Property, plant and equipment, net

Goodwill (note 11)

Other assets, including intangibles - net

Current liabilities

Notes and loans payable (c)

Notes and loans payable

Accounts payable and accrued liabilities (a) (note 7)

1 unchanged sentence

Total current liabilities

Long-term debt (d) (note 6)

Long-term debt (c) (note 6)

Other long-term obligations (note 7)

2 unchanged sentences

Shareholders’ equity

Common shares at stated value (e) (note 9)

Common shares at stated value (d) (note 9)

Earnings reinvested

2 unchanged sentences

Total liabilities and shareholders’ equity

Accounts receivable - net included net amounts receivable from related parties of $ 1,064 million (2020 - $ 384 million).

Investments and long-term receivables included amounts from related parties of $ 299 million (2020 - $ 313 million).

Notes and loans payable included amounts to related parties of $ 0 million (2020 - $ 111 million).

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 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.

(a) Accounts receivable - net included net amounts receivable from related parties of $ 1,632 million (2021 - $ 1,031 million).

(b) Investments and long-term receivables included amounts from related parties of $ 297 million (2021 - $ 298 million).

(d) Number of common shares authorized and outstanding were 1,100 million and 669 million, respectively (2021 - 1,100 million and 678 million, respectively).

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

IMPERIAL OIL LIMITED

1 unchanged sentence

GAAP, unaudited)

Third Quarter

to September 30

millions of Canadian dollars

Common shares at stated value

At beginning of p e

At beginning of period

Share purchases at stated value

5 unchanged sentences

Dividends declared

Cumulative effect of accounting change

At end of period

9 unchanged sentences

Inflow (outflow)

Third Quarter

to September 30

millions of Canadian dollars

1 unchanged sentence

Net income (loss)

Adjustments for non-cash items:

Adjustments for non-cash

Depreciation and depletion

Impairment of int a

ngible assets (note 11)

(Gain) loss on asset sales (note 3)

20 unchanged sentences

Cash at beginning of period

Cash at end of period

Cash at end of period (a)

(a) Cash is composed of cash in bank and cash equivalents at cost.

9 unchanged sentences

Securities and Exchange Commission (SEC) in the company’s 2021 annual report on Form 10-K.

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.

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

The results for the three months ended March 31, 2022, 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

Third Quarter

millions of Canadian dollars

Revenues and other income

Intersegment sales (b)

Investment and other income (note 3)

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Selling and general

Federal excise tax and fuel charge

Depreciation and depletion (note 11)

Non-service pension and postretirement benefit

Financing (note 5)

Total expenses

Income (loss) before income taxes

Net income (loss)

Cash flows from (used in) operating activities

Capital and exploration expenditures

Third Quarter

Corporate and other

Three Months to March 31

millions of Canadian dollars

Revenues and other income

Intersegment sales (b)

Investment and other income (note 3)

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Selling and general

Federal excise tax and fuel charge

Depreciation and depletion (note 11)

Non-service pension and postretirement benefit

Financing (note 5)

Total expenses

Income (loss) before income taxes

Net income (loss)

Cash flows from (used in) operating activities

Capital and exploration expenditures

IMPERIAL OIL LIMITED

Included export sales to the United States of $ 1,803 million (2020 - $ 1,227 million).

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.

CAPEX excludes the purchase of carbon emission credits.

IMPERIAL OIL LIMITED

Nine Months to September 30

millions of Canadian dollars

Revenues and other inco m

Intersegment sales (b)

Intersegment sales

Investment and other income (note 3)

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Purchases of crude oil and products

Production and manufacturing

Selling and general

Federal excise tax and fuel charge

Depreciation and depletion (note 11)

Non-service pension and postretirement benefit

Depreciation and depletion

pension and postretirement benefit

Financing (note 5)

4 unchanged sentences

Cash flows from (used in) operating activities

Capital and exploration expenditures

Total assets as at September 30

Nine Months to September 30

Capital and exploration expenditures (b)

Total assets as at March 31

Three Months to March 31

Corporate and other

1 unchanged sentence

Revenues and other income

Intersegment sales (b)

Intersegment sales

Investment and other income (note 3)

Purchases of crude oil and products (b)

Production and manufacturing (note 11)

Purchases of crude oil and products

Production and manufacturing

Selling and general

Federal excise tax and fuel charge

Depreciation and depletion (note 11)

Non-service pension and postretirement benefit

Depreciation and depletion

pension and postretirement benefit

Financing (note 5)

4 unchanged sentences

Cash flows from (used in) operating activities

Capital and exploration expenditures

Total assets as at September 30

(b) (note 11)

Capital and exploration expenditures (b)

Total assets as at March 31

IMPERIAL OIL LIMITED

Included export sales to the United States of $ 2,504 million (2021 - $ 1,569 million).

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.

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.

2 unchanged sentences

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

Third Quarter

to September 30

millions of Canadian dollars

5 unchanged sentences

The components of net benefit cost were as follows:

Third Quarter

to September 30

millions of Canadian dollars

Pension benefits:

Current service cost

Interest cost

2 unchanged sentences

Amortization of actuarial loss (gain)

Net periodic benefit cost

Net benefit cost

Other postretirement benefits:

Current service cost

Interest cost

Amortization of actuarial loss (gain)

Net periodic benefit cost

Net benefit cost

Financing costs

Third Quarter

to September 30

millions of Canadian dollars

4 unchanged sentences

Total financing

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 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.

At March 31, 2022 and December 31, 2021, 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 and for trading purposes.

In addition, the company uses commodity-based contracts, including derivative instruments 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”.

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 l i

mits 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 limits 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 basis:

Third Quarter

to September 30

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

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 a s

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

At March 31, 2022

millions of Canadian dollars

At September 30, 2021

Derivative assets (a)

1 unchanged sentence

Included in the Consolidated balance sheet line:

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

“Materials, supplies and prepaid expenses”, “Accounts receivable—net” and “Other assets, including intangibles - net”.

Included in the Consolidated balance sheet line:

“Accounts payable and accrued liabilities”.

millions of Canadian dollars

“Accounts payable and accrued liabilities” and “Other long-term obligations”.

At December 31, 2021

millions of Canadian dollars

Derivative assets (a)

1 unchanged sentence

Included in the Consolidated balance sheet line:

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

“Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”.

Included in the Consolidated balance sheet line:

“Accounts payable and accrued liabilities”.

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.

“Accounts payable and accrued liabilities” and “Other long-term obligations”.

At March 31, 2022 and December 31, 2021, the company had $ 47 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.

IMPERIAL OIL LIMITED

2 unchanged sentences

Common shares outstanding

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.

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 most recent 12 -month

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

The program enabled 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 included shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid.

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 January 31, 2022 as a result of the company purchasing the maximum allowable number of shares under the program.

On April 29, 2022 the company announced its intention to launch a substantial issuer bid pursuant to which the company will offer to purchase for cancellation up to $ 2,500 ,000,000 of its common shares.

The substantial issuer bid will be made through a modified Dutch auction, with a tender price range to be determined by the company at the time of commencement of the offer.

Shares may also be tendered by way of a proportionate tender, which will result in a shareholder maintaining their proportionate share ownership.

ExxonMobil has advised Imperial that it intends to make a proportionate tender in connection with the offer in order to maintain its proportionate share ownership at approximately 69.6 percent following completion of the offer.

Nothing in this report shall constitute an offer to purchase or a solicitation of an offer to sell any shares.

The excess of the purchase cost over the stated value of shares purchased has been recorded as a distribution of earnings reinvested.

6 unchanged sentences

Purchases at stated value

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

Balance as at March 31, 2022

IMPERIAL OIL LIMITED

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:

Net income (loss) per common share - basic

5 unchanged sentences

Weighted average number of common shares outstanding (millions of shares)

Effect of employee share-based awards (millions of shares) (a)

Effect of employee share-based awards (millions of shares)

Weighted average number of common shares outstanding, assuming dilution (millions of shares)

Net income (loss) per common share (dollars)

Dividends per common share - declared

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.

Dividends per common share - declared (dollars)

IMPERIAL OIL LIMITED

6 unchanged sentences

Amounts reclassified from accumulated other comprehensive income

Balance at September 30

Balance at March 31

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

Third Quarter

to September 30

millions of Canadian dollars

Amortization of postretirement benefits liability adjustment included in net periodic benefit cost (a)

This accumulated other comprehensive income component is included in the computation of net periodic benefit cost, (note 4).

Amortization of postretirement benefits liability adjustment included in net benefit cost (a)

(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):

Third Quarter

to September 30

millions of Canadian dollars

1 unchanged sentence

Postretirement benefits liability adjustment (excluding amortization)

Amortization of postretirement benefits liability adjustment included in net periodic benefit cost

Miscellaneous financial information

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 “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.

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).

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 recogniz e

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.

The remaining balance of goodwill is associated with the Downstream segment.

Amortization of postretirement benefits liability adjustment included in net benefit cost

IMPERIAL OIL LIMITED

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