What changed in this filing

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Item 1. Financial Statements

2022-08-03 compared with 2022-05-04 · 114 added, 31 removed, 291 unchanged (33% of the section changed)

2 unchanged sentences

GAAP, unaudited)

Second Quarter

millions of Canadian dollars

24 unchanged sentences

GAAP, unaudited)

Second Quarter

millions of Canadian dollars

18 unchanged sentences

less accumulated depreciation and depletion

Property, plant and equipment, net

Property, plant and equipment, net (note 11)

Other assets, including intangibles - net

14 unchanged sentences

Total liabilities and shareholders’ equity

(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).

Accounts receivable - net included net amounts receivable from related parties of $ 1,888 million (2021 - $ 1,031 million).

Investments and long-term receivables included amounts from related parties of $ 296 million (2021 - $ 298 million).

Long-term debt included amounts to related parties of $ 4,447 million (2021 - $ 4,447 million).

Number of common shares authorized and outstanding were 1,100 million and 637 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.

2 unchanged sentences

GAAP, unaudited)

Second Quarter

millions of Canadian dollars

19 unchanged sentences

Inflow (outflow)

Second Quarter

millions of Canadian dollars

10 unchanged sentences

Accounts payable and accrued liabilities

All other items - net (b)

All other items - net (c)

Cash flows from (used in) operating activities

1 unchanged sentence

Additions to property, plant and equipment

Proceeds from asset sales (note 3)

Proceeds from asset sales (note 3) (b)

Loans to equity companies - net

8 unchanged sentences

Cash at beginning of period

Cash at end of period (a)

Cash at end of period

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

Cash equivalents are all highly liquid securities with maturity of three months or less when purchased.

(b) Included contributions to registered pension plans.

(b) Included $ 94 million deposit for the potential sale of XTO Energy Canada (note 11).

Income taxes (paid) refunded.

9 unchanged sentences

The company’s exploration and production activities are accounted for under the “successful efforts” method.

The results for the three months ended March 31, 2022, are not necessarily indicative of the operations to be expected for the full year.

The results for the six months ended June 30, 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

Three Months to March 31

Second Quarter

millions of Canadian dollars

Revenues and other income

Revenues (a) (b)

Intersegment sales

12 unchanged sentences

Cash flows from (used in) operating activities

Capital and exploration expenditures (b)

Total assets as at March 31

Three Months to March 31

Capital and exploration expenditures

Second Quarter

Corporate and other

1 unchanged sentence

Revenues and other income

Revenues (a) (b)

Intersegment sales

5 unchanged sentences

Depreciation and depletion

pension and postretirement benefit

Non-service pension and postretirement benefit

Financing (note 5)

4 unchanged sentences

Cash flows from (used in) operating activities

Capital and exploration expenditures (b)

Total assets as at March 31

Capital and exploration expenditures

IMPERIAL OIL LIMITED

Included export sales to the United States of $ 3,871 million (2021 - $ 1,544 million).

Includes approximately 13 % related to revenue outside the scope of ASC 606 “Revenue from Contracts with Customers” for the three months ended June 30, 2022.

Trade receivables in Accounts receivable – net reported on the Balance Sheet include both receivables within the scope of ASC 606 and those 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 .

quality and type of customer are generally similar between

those revenues and receivables within the scope of ASC 606 and those outside it

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.

1 unchanged sentence

IMPERIAL OIL LIMITED

Six Months to June 30

millions of Canadian dollars

Revenues and other income

Revenues (a) (b)

Intersegment sales

Investment and other income (note 3)

Purchases of crude oil and products

Production and manufacturing

Selling and general

Federal excise tax and fuel charge

Depreciation and depletion

Non-service pension and postretirement benefit

Financing (note 5)

Total expenses

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Cash flows from (used in) operating activities

Capital and exploration expenditures

Total assets as at June 30

Six Months to June 30

Corporate and other

millions of Canadian dollars

Revenues and other income

Revenues (a) (b)

Intersegment sales

Investment and other income (note 3)

Purchases of crude oil and products

Production and manufacturing

Selling and general

Federal excise tax and fuel charge

Depreciation and depletion

Non-service pension and postretirement benefit

Financing (note 5)

Total expenses

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Cash flows from (used in) operating activities

Capital and exploration expenditures

Total assets as at June 30

IMPERIAL OIL LIMITED

Included export sales to the United States of $ 6,375 million (2021 - $ 3,113 million).

Includes approximately 11 % related to revenue outside the scope of ASC 606 “Revenue from Contracts with Customers” for the six months ended June 30, 2022.

Trade receivables in Accounts receivable – net reported on the Balance Sheet include both receivables within the scope of ASC 606 and those 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 .

quality and type of customer are generally similar between

those revenues and receivables within the scope of ASC 606 and those outside it

CAPEX excludes the purchase of carbon emission credits.

IMPERIAL OIL LIMITED

Investment and other income

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

Second Quarter

millions of Canadian dollars

5 unchanged sentences

The components of net benefit cost were as follows:

Second Quarter

millions of Canadian dollars

10 unchanged sentences

Financing costs

Second Quarter

millions of Canadian dollars

4 unchanged sentences

Total financing

In June 2022, the company reduced its existing $ 500 million committed long-term line of credit to $ 250 million and extended the maturity date to June 30, 2023 .

The company also extended one of its $ 250 million committed long-term lines of credit to June 30, 2024 .

The company has not drawn on any of its outstanding $ 750 million of available credit facilities.

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 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.

At June 30, 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

8 unchanged sentences

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

millions of Canadian dollars

2 unchanged sentences

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

At March 31, 2022

At June 30, 2022

millions of Canadian dollars

13 unchanged sentences

“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.

At June 30, 2022 and December 31, 2021, the company had $ 16 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 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 12 -month

normal course issuer bid program that was in place during the first quarter of 2022 came into effect June 29, 2021.

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.

As in the past, Exxon Mobil Corporation participated 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 current 12 -month

normal course issuer bid program came into effect June 29, 2022 under which Imperial will continue its existing share purchase program.

The program enables the company to purchase up to a maximum of 31,833,809 common shares ( 5 percent of the total shares on June 15, 2022) 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.

Imperial plans to accelerate its share purchases under the normal course issuer bid program and anticipates repurchasing all remaining allowable shares by the end of October 2022.

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

On May 6, 2022, the company commenced a substantial issuer bid pursuant to which it offered to purchase for cancellation up to $ 2.5 billion of its common shares through a modified Dutch auction and proportionate tender offer.

The substantial issuer bid was completed on June 15, 2022, with the company taking up and paying for 32,467,532 common shares at a price of $ 77.00 per share, for an aggregate purchase of $ 2.5 billion and 4.9 percent of Imperial’s issued and outstanding shares as the close of business on May 2, 2022.

This included 22,597,379 shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.

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 March 31, 2022

Balance as at June 30, 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:

Second Quarter

Net income (loss) per common share - basic

17 unchanged sentences

Amounts reclassified from accumulated other comprehensive income

Balance at March 31

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

Balance at June 30

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

income (expense):

Second Quarter

millions of Canadian dollars

2 unchanged sentences

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

Second Quarter

millions of Canadian dollars

2 unchanged sentences

Amortization of postretirement benefits liability adjustment included in net benefit cost

Divestment activities

Jointly with ExxonMobil Canada, Imperial signed an agreement in the second quarter with Whitecap Resources Inc.

for the sale of its interests in XTO Energy Canada which include assets in the Montney and Duvernay areas of central Alberta, for approximately $ 1.9 billion ($ 0.9 billion Imperial’s share), subject to working capital and other adjustments.

The transaction is expected to close prior to the end of the third quarter of 2022, subject to regulatory approvals.

Imperial’s net assets held for sale associated with this transaction include about $ 0.9 billion of total assets (about $ 0.8 billion of property, plant and equipment) and about $ 0.1 billion total liabilities in the Upstream segment.

The company estimates that total cash flow from the divestment will be approximately $ 0.9 billion, and expects to recognize a gain at closing of approximately $ 0.2 billion.

Estimated gain and net cash flow could change due to market factors, working capital adjustments, tax impacts and closing dates.

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