FALSE2022Q3000004993812/31
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Amounts from related parties included in revenues. |
4,454 |
|
2,731 |
|
13,588 |
|
5,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Amounts to related parties included in purchases of crude oil
and products. |
1,086 |
|
828 |
|
2,865 |
|
2,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Amounts to related parties included in production and
manufacturing,
and selling and general
expenses.
|
120 |
|
95 |
|
354 |
|
317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) Amounts to related parties included in financing, (note
5). |
28 |
|
4 |
|
45 |
|
25 |
|
|
|
|
|
(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.
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|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
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|
(b) Included contributions to registered pension
plans. |
(41) |
|
(43) |
|
(137) |
|
(113) |
|
http://www.imperialoil.ca/20220930#LongTermDebtAndFinanceLeaseObligationshttp://www.imperialoil.ca/20220930#LongTermDebtAndFinanceLeaseObligations00000499382022-01-012022-09-3000000499382022-09-30xbrli:shares00000499382022-07-012022-09-30iso4217:CAD00000499382021-07-012021-09-3000000499382021-01-012021-09-30iso4217:CADxbrli:shares00000499382021-12-310000049938imo:InvestmentsAndLongTermReceivablesMember2022-09-300000049938imo:InvestmentsAndLongTermReceivablesMember2021-12-310000049938imo:NoncurrentLiabilitiesMember2022-09-300000049938imo:NoncurrentLiabilitiesMember2021-12-310000049938us-gaap:CommonStockMember2022-06-300000049938us-gaap:CommonStockMember2021-06-300000049938us-gaap:CommonStockMember2021-12-310000049938us-gaap:CommonStockMember2020-12-310000049938us-gaap:CommonStockMember2022-07-012022-09-300000049938us-gaap:CommonStockMember2021-07-012021-09-300000049938us-gaap:CommonStockMember2022-01-012022-09-300000049938us-gaap:CommonStockMember2021-01-012021-09-300000049938us-gaap:CommonStockMember2022-09-300000049938us-gaap:CommonStockMember2021-09-300000049938us-gaap:RetainedEarningsMember2022-06-300000049938us-gaap:RetainedEarningsMember2021-06-300000049938us-gaap:RetainedEarningsMember2021-12-310000049938us-gaap:RetainedEarningsMember2020-12-310000049938us-gaap:RetainedEarningsMember2022-07-012022-09-300000049938us-gaap:RetainedEarningsMember2021-07-012021-09-300000049938us-gaap:RetainedEarningsMember2022-01-012022-09-300000049938us-gaap:RetainedEarningsMember2021-01-012021-09-300000049938us-gaap:RetainedEarningsMember2022-09-300000049938us-gaap:RetainedEarningsMember2021-09-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300000049938us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-3000000499382021-09-3000000499382022-06-3000000499382021-06-3000000499382020-12-310000049938imo:UpstreamMember2022-07-012022-09-300000049938imo:UpstreamMember2021-07-012021-09-300000049938imo:DownstreamMember2022-07-012022-09-300000049938imo:DownstreamMember2021-07-012021-09-300000049938imo:ChemicalMember2022-07-012022-09-300000049938imo:ChemicalMember2021-07-012021-09-300000049938imo:UpstreamMemberus-gaap:IntersegmentEliminationMember2022-07-012022-09-300000049938imo:UpstreamMemberus-gaap:IntersegmentEliminationMember2021-07-012021-09-300000049938imo:DownstreamMemberus-gaap:IntersegmentEliminationMember2022-07-012022-09-300000049938imo:DownstreamMemberus-gaap:IntersegmentEliminationMember2021-07-012021-09-300000049938imo:ChemicalMemberus-gaap:IntersegmentEliminationMember2022-07-012022-09-300000049938imo:ChemicalMemberus-gaap:IntersegmentEliminationMember2021-07-012021-09-300000049938imo:UpstreamMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000049938imo:UpstreamMemberus-gaap:OperatingSegmentsMember2021-07-012021-09-300000049938us-gaap:OperatingSegmentsMemberimo:DownstreamMember2022-07-012022-09-300000049938us-gaap:OperatingSegmentsMemberimo:DownstreamMember2021-07-012021-09-300000049938imo:ChemicalMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000049938imo:ChemicalMemberus-gaap:OperatingSegmentsMember2021-07-012021-09-300000049938us-gaap:CorporateNonSegmentMember2022-07-012022-09-300000049938us-gaap:CorporateNonSegmentMember2021-07-012021-09-300000049938srt:ConsolidationEliminationsMember2022-07-012022-09-300000049938srt:ConsolidationEliminationsMember2021-07-012021-09-300000049938country:US2022-07-012022-09-300000049938country:US2021-07-012021-09-30xbrli:pure0000049938imo:DownstreamMember2021-09-300000049938imo:UpstreamMember2022-01-012022-09-300000049938imo:UpstreamMember2021-01-012021-09-300000049938imo:DownstreamMember2022-01-012022-09-300000049938imo:DownstreamMember2021-01-012021-09-300000049938imo:ChemicalMember2022-01-012022-09-300000049938imo:ChemicalMember2021-01-012021-09-300000049938imo:UpstreamMemberus-gaap:IntersegmentEliminationMember2022-01-012022-09-300000049938imo:UpstreamMemberus-gaap:IntersegmentEliminationMember2021-01-012021-09-300000049938imo:DownstreamMemberus-gaap:IntersegmentEliminationMember2022-01-012022-09-300000049938imo:DownstreamMemberus-gaap:IntersegmentEliminationMember2021-01-012021-09-300000049938imo:ChemicalMemberus-gaap:IntersegmentEliminationMember2022-01-012022-09-300000049938imo:ChemicalMemberus-gaap:IntersegmentEliminationMember2021-01-012021-09-300000049938imo:UpstreamMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000049938imo:UpstreamMem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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 0-12014
IMPERIAL OIL LIMITED
(Exact name of registrant as specified in its charter)
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Canada |
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98-0017682 |
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(State or other jurisdiction |
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(I.R.S. Employer |
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of incorporation or organization) |
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Identification No.) |
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505 Quarry Park Boulevard S.E. Calgary, Alberta,
Canada
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T2C 5N1 |
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(Address of principal executive offices) |
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(Postal Code) |
1-800-567-3776
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class |
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Trading symbol |
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Name of each exchange on
which registered
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None |
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None |
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the
definition of “large accelerated filer”, “accelerated filer”,
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act of 1934.
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Large accelerated filer |
✓
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Smaller reporting company |
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Non-accelerated filer |
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Emerging growth company |
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Accelerated filer |
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
___
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act of
1934).
The number of common shares outstanding, as of September 30,
2022 was 611,515,571.
Table of contents
In this report all dollar amounts are expressed in Canadian dollars
unless otherwise stated. This report should be read in conjunction
with the company’s annual report on Form 10-K for the year ended
December 31, 2021. Note that numbers may not add due to
rounding.
The term “project” as used in this report can refer to a variety of
different activities and does not necessarily have the same meaning
as in any government payment transparency reports.
In this report, unless the context otherwise indicates, reference
to “the company” or “Imperial” includes Imperial Oil Limited and
its subsidiaries.
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
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Consolidated statement of income (U.S. GAAP, unaudited) |
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Third
Quarter
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Nine Months
to September
30
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millions of Canadian dollars |
2022 |
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2021 |
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2022 |
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2021 |
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Revenues and other income |
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Revenues
(a)
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15,071 |
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10,214 |
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45,013 |
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25,213 |
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Investment and other income
(note 3, 11)
|
153 |
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19 |
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204 |
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65 |
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Total revenues and other income |
15,224 |
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10,233 |
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45,217 |
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25,278 |
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Expenses |
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Exploration |
1 |
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2 |
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4 |
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6 |
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Purchases of crude oil and products
(b)
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9,478 |
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6,298 |
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28,849 |
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15,052 |
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Production and manufacturing
(c)
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1,872 |
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1,525 |
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5,439 |
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4,579 |
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Selling and general
(c)
|
209 |
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180 |
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625 |
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569 |
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Federal excise tax and fuel charge |
584 |
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535 |
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1,616 |
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1,404 |
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Depreciation and depletion |
555 |
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488 |
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1,432 |
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1,432 |
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Non-service pension and postretirement benefit |
4 |
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11 |
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13 |
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32 |
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Financing
(d)
(note 5)
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16 |
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5 |
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34 |
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32 |
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Total expenses |
12,719 |
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9,044 |
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38,012 |
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23,106 |
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Income (loss) before income taxes |
2,505 |
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1,189 |
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7,205 |
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2,172 |
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Income taxes |
474 |
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281 |
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1,592 |
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506 |
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Net income (loss) |
2,031 |
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908 |
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5,613 |
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1,666 |
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Per share information
(Canadian dollars)
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Net income (loss) per common share - basic
(note 9)
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3.25 |
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1.30 |
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8.60 |
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2.32 |
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Net income (loss) per common share - diluted
(note 9)
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3.24 |
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1.29 |
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8.58 |
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2.31 |
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(a) Amounts from related parties included in revenues. |
4,454 |
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2,731 |
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13,588 |
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5,644 |
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(b) Amounts to related parties included in purchases of crude oil
and products. |
1,086 |
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828 |
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2,865 |
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2,009 |
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(c) Amounts to related parties included in production and
manufacturing,
and selling and general
expenses.
|
120 |
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95 |
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354 |
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317 |
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(d) Amounts to related parties included in financing, (note
5).
|
28 |
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4 |
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45 |
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25 |
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The information in the notes to consolidated financial statements
is an integral part of these statements. |
Consolidated statement of comprehensive income (U.S. GAAP,
unaudited)
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Third
Quarter
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Nine
Months
to September
30
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millions of Canadian dollars |
2022 |
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2021 |
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2022 |
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2021 |
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Net income (loss) |
2,031 |
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908 |
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5,613 |
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1,666 |
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Other comprehensive income (loss), net of income taxes |
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|
|
Postretirement benefits liability adjustment (excluding
amortization) |
— |
|
|
— |
|
|
24 |
|
|
54 |
|
|
|
|
|
|
|
|
|
|
Amortization of postretirement benefits liability adjustment
included in net benefit
costs
|
21 |
|
|
33 |
|
|
63 |
|
|
99 |
|
|
Total other comprehensive income (loss) |
21 |
|
|
33 |
|
|
87 |
|
|
153 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
2,052 |
|
|
941 |
|
|
5,700 |
|
|
1,819 |
|
|
|
|
|
|
|
|
|
|
|
The information in the notes to consolidated financial statements
is an integral part of these statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated balance sheet (U.S. GAAP, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions of Canadian dollars |
As at
Sept 30
2022
|
|
As at
Dec 31
2021
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
3,576 |
|
|
2,153 |
|
|
Accounts receivable - net
(a)
|
5,179 |
|
|
3,869 |
|
|
Inventories of crude oil and products |
1,495 |
|
|
1,102 |
|
|
Materials, supplies and prepaid expenses |
755 |
|
|
689 |
|
|
Total current assets |
11,005 |
|
|
7,813 |
|
|
Investments and long-term receivables
(b)
|
883 |
|
|
757 |
|
|
Property, plant and equipment, |
53,763 |
|
|
56,762 |
|
|
less accumulated depreciation and depletion |
(23,750) |
|
|
(25,522) |
|
|
Property, plant and equipment, net
(note 11)
|
30,013 |
|
|
31,240 |
|
|
Goodwill |
166 |
|
|
166 |
|
|
Other assets, including intangibles - net |
919 |
|
|
806 |
|
|
Total assets |
42,986 |
|
|
40,782 |
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Notes and loans payable |
122 |
|
|
122 |
|
|
Accounts payable and accrued liabilities
(a)
(note 7)
|
6,498 |
|
|
5,184 |
|
|
Income taxes payable |
2,314 |
|
|
248 |
|
|
Total current liabilities |
8,934 |
|
|
5,554 |
|
|
Long-term debt
(c)
(note 6)
|
4,038 |
|
|
5,054 |
|
|
Other long-term obligations
(note 7)
|
3,428 |
|
|
3,897 |
|
|
Deferred income tax liabilities |
4,278 |
|
|
4,542 |
|
|
Total liabilities |
20,678 |
|
|
19,047 |
|
|
|
Shareholders’ equity |
|
|
|
|
Common shares at stated value
(d)
(note 9)
|
1,129 |
|
|
1,252 |
|
|
Earnings reinvested |
22,269 |
|
|
21,660 |
|
|
Accumulated other comprehensive income (loss)
(note 10)
|
(1,090) |
|
|
(1,177) |
|
|
Total shareholders’ equity |
22,308 |
|
|
21,735 |
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
42,986 |
|
|
40,782 |
|
|
(a) Accounts receivable - net included net amounts receivable from
related parties of $1,534 million (2021 - $1,031
million).
|
|
(b) Investments and long-term receivables included amounts from
related parties of $289 million (2021 - $298 million).
|
|
(c) Long-term debt included amounts to related parties of $3,447
million (2021 - $4,447 million).
|
|
(d) Number of common shares authorized and outstanding were 1,100
million and 612 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of shareholders’ equity (U.S. GAAP,
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
Nine
Months
to September
30
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Common shares at stated value
(note 9)
|
|
|
|
|
|
|
|
|
At beginning of period |
1,177 |
|
|
1,302 |
|
|
1,252 |
|
|
1,357 |
|
|
Share purchases at stated value |
(48) |
|
|
(16) |
|
|
(123) |
|
|
(71) |
|
|
At end of period |
1,129 |
|
|
1,286 |
|
|
1,129 |
|
|
1,286 |
|
|
|
|
|
|
|
|
|
|
Earnings reinvested |
|
|
|
|
|
|
|
|
At beginning of period |
21,913 |
|
|
21,336 |
|
|
21,660 |
|
|
22,050 |
|
|
Net income (loss) for the period |
2,031 |
|
|
908 |
|
|
5,613 |
|
|
1,666 |
|
|
Share purchases in excess of stated value |
(1,464) |
|
|
(297) |
|
|
(4,338) |
|
|
(1,413) |
|
|
Dividends declared |
(211) |
|
|
(188) |
|
|
(666) |
|
|
(544) |
|
|
At end of period |
22,269 |
|
|
21,759 |
|
|
22,269 |
|
|
21,759 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive income (loss)
(note 10)
|
|
|
|
|
|
|
|
|
At beginning of period |
(1,111) |
|
|
(1,869) |
|
|
(1,177) |
|
|
(1,989) |
|
|
Other comprehensive income (loss) |
21 |
|
|
33 |
|
|
87 |
|
|
153 |
|
|
At end of period |
(1,090) |
|
|
(1,836) |
|
|
(1,090) |
|
|
(1,836) |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity at end of period |
22,308 |
|
|
21,209 |
|
|
22,308 |
|
|
21,209 |
|
|
|
|
|
|
|
|
|
|
|
The information in the notes to consolidated financial statements
is an integral part of these statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of cash flows (U.S. GAAP,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflow (outflow)
|
Third
Quarter
|
|
Nine
Months
to September
30
|
|
millions of Canadian dollars
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Operating activities |
|
|
|
|
|
|
|
|
Net income (loss) |
2,031 |
|
|
908 |
|
|
5,613 |
|
|
1,666 |
|
|
Adjustments for non-cash items: |
|
|
|
|
|
|
|
|
Depreciation and depletion |
555 |
|
|
488 |
|
|
1,432 |
|
|
1,432 |
|
|
(Gain) loss on asset sales
(note 3, 11)
|
(131) |
|
|
(12) |
|
|
(155) |
|
|
(39) |
|
|
Deferred income taxes and other |
122 |
|
|
(120) |
|
|
(358) |
|
|
16 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
1,648 |
|
|
(708) |
|
|
(1,322) |
|
|
(1,952) |
|
|
Inventories, materials, supplies and prepaid expenses |
(70) |
|
|
(199) |
|
|
(461) |
|
|
(300) |
|
|
Income taxes payable |
296 |
|
|
227 |
|
|
1,608 |
|
|
269 |
|
|
Accounts payable and accrued liabilities |
(1,328) |
|
|
1,123 |
|
|
1,315 |
|
|
2,362 |
|
|
All other items - net
(b)
|
(34) |
|
|
240 |
|
|
13 |
|
|
390 |
|
|
Cash flows from (used in) operating activities |
3,089 |
|
|
1,947 |
|
|
7,685 |
|
|
3,844 |
|
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
(397) |
|
|
(276) |
|
|
(1,034) |
|
|
(684) |
|
|
Proceeds from asset sales
(note 3, 11)
|
760 |
|
|
15 |
|
|
886 |
|
|
57 |
|
|
Additional investments |
(6) |
|
|
— |
|
|
(6) |
|
|
— |
|
|
Loans to equity companies - net |
7 |
|
|
2 |
|
|
9 |
|
|
14 |
|
|
Cash flows from (used in) investing activities |
364 |
|
|
(259) |
|
|
(145) |
|
|
(613) |
|
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
Short-term debt - net |
— |
|
|
(75) |
|
|
— |
|
|
(111) |
|
|
Long-term debt - reductions
(note 6)
|
(1,000) |
|
|
— |
|
|
(1,000) |
|
|
— |
|
|
Reduction in finance lease obligations
(note 6)
|
(5) |
|
|
(6) |
|
|
(16) |
|
|
(14) |
|
|
Dividends paid |
(227) |
|
|
(195) |
|
|
(640) |
|
|
(518) |
|
|
Common shares purchased
(note 9)
|
(1,512) |
|
|
(313) |
|
|
(4,461) |
|
|
(1,484) |
|
|
Cash flows from (used in) financing activities |
(2,744) |
|
|
(589) |
|
|
(6,117) |
|
|
(2,127) |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash |
709 |
|
|
1,099 |
|
|
1,423 |
|
|
1,104 |
|
|
Cash at beginning of period |
2,867 |
|
|
776 |
|
|
2,153 |
|
|
771 |
|
|
Cash at end of period
(a)
|
3,576 |
|
|
1,875 |
|
|
3,576 |
|
|
1,875 |
|
|
(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. |
(41) |
|
|
(43) |
|
|
(137) |
|
|
(113) |
|
|
|
|
|
|
|
|
|
|
|
Income taxes (paid) refunded. |
(64) |
|
|
32 |
|
|
(339) |
|
|
60 |
|
|
Interest (paid), net of capitalization. |
(19) |
|
|
(5) |
|
|
(41) |
|
|
(32) |
|
|
|
|
|
|
|
|
|
|
The information in the notes to consolidated financial statements
is an integral part of these statements. |
Notes to consolidated financial statements (unaudited)
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 2021 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.
The results for the nine months ended September 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.
2. Business segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
Upstream
|
|
Downstream
|
|
Chemical
|
|
millions of Canadian dollars |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Revenues and other income |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
(a) (b)
|
156 |
|
1,015 |
|
14,537 |
|
8,813 |
|
378 |
|
386 |
|
Intersegment sales
(c)
|
4,665 |
|
3,137 |
|
1,693 |
|
366 |
|
142 |
|
91 |
|
Investment and other income
(note 3, 11)
|
128 |
|
— |
|
6 |
|
18 |
|
— |
|
— |
|
|
4,949 |
|
4,152 |
|
16,236 |
|
9,197 |
|
520 |
|
477 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Exploration |
1 |
|
2 |
|
— |
|
— |
|
— |
|
— |
|
Purchases of crude oil and products
(c)
|
1,937 |
|
1,902 |
|
13,686 |
|
7,745 |
|
354 |
|
244 |
|
Production and manufacturing |
1,381 |
|
1,120 |
|
419 |
|
356 |
|
72 |
|
49 |
|
Selling and general |
— |
|
— |
|
174 |
|
141 |
|
17 |
|
21 |
|
Federal excise tax and fuel charge |
— |
|
— |
|
583 |
|
535 |
|
1 |
|
— |
|
Depreciation and depletion |
501 |
|
439 |
|
44 |
|
39 |
|
4 |
|
4 |
|
Non-service pension and postretirement benefit |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Financing
(note 5)
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Total expenses |
3,820 |
|
3,463 |
|
14,906 |
|
8,816 |
|
448 |
|
318 |
|
Income (loss) before income taxes |
1,129 |
|
689 |
|
1,330 |
|
381 |
|
72 |
|
159 |
|
Income tax expense (benefit) |
143 |
|
165 |
|
318 |
|
88 |
|
18 |
|
38 |
|
Net income (loss)
(c)
|
986 |
|
524 |
|
1,012 |
|
293 |
|
54 |
|
121 |
|
Cash flows from (used in) operating activities
(c)
|
1,280 |
|
2,508 |
|
1,532 |
|
(733) |
|
109 |
|
157 |
|
Capital and exploration expenditures
(d)
|
309 |
|
151 |
|
64 |
|
120 |
|
2 |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
Corporate and other |
|
Eliminations
|
|
Consolidated
|
|
millions of Canadian dollars |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Revenues and other income |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
(a) (b)
|
— |
|
— |
|
— |
|
— |
|
15,071 |
|
10,214 |
|
Intersegment sales
(c)
|
— |
|
— |
|
(6,500) |
|
(3,594) |
|
— |
|
— |
|
Investment and other income
(note 3, 11)
|
19 |
|
1 |
|
— |
|
— |
|
153 |
|
19 |
|
|
19 |
|
1 |
|
(6,500) |
|
(3,594) |
|
15,224 |
|
10,233 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Exploration |
— |
|
— |
|
— |
|
— |
|
1 |
|
2 |
|
Purchases of crude oil and products
(c)
|
— |
|
— |
|
(6,499) |
|
(3,593) |
|
9,478 |
|
6,298 |
|
Production and manufacturing |
— |
|
— |
|
— |
|
— |
|
1,872 |
|
1,525 |
|
Selling and general |
19 |
|
19 |
|
(1) |
|
(1) |
|
209 |
|
180 |
|
Federal excise tax and fuel charge |
— |
|
— |
|
— |
|
— |
|
584 |
|
535 |
|
Depreciation and depletion |
6 |
|
6 |
|
— |
|
— |
|
555 |
|
488 |
|
Non-service pension and postretirement benefit |
4 |
|
11 |
|
— |
|
— |
|
4 |
|
11 |
|
Financing
(note 5)
|
16 |
|
5 |
|
— |
|
— |
|
16 |
|
5 |
|
Total expenses |
45 |
|
41 |
|
(6,500) |
|
(3,594) |
|
12,719 |
|
9,044 |
|
Income (loss) before income taxes |
(26) |
|
(40) |
|
— |
|
— |
|
2,505 |
|
1,189 |
|
Income tax expense (benefit) |
(5) |
|
(10) |
|
— |
|
— |
|
474 |
|
281 |
|
Net income (loss)
(c)
|
(21) |
|
(30) |
|
— |
|
— |
|
2,031 |
|
908 |
|
Cash flows from (used in) operating activities
(c)
|
168 |
|
15 |
|
— |
|
— |
|
3,089 |
|
1,947 |
|
Capital and exploration expenditures
(d)
|
17 |
|
4 |
|
— |
|
— |
|
392 |
|
277 |
(a)Included
export sales to the United States of $3,176 million (2021 -
$1,803 million).
(b)Includes
approximately 13% and 10% related to revenue outside the scope of
ASC 606 “Revenue from Contracts with Customers” for the three
months ended September 30, 2022 and September 30, 2021,
respectively. 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. Credit quality and type of customer are generally
similar between those revenues and receivables within the scope of
ASC 606 and those outside it.
(c)In
the third quarter of 2021, the Downstream segment acquired a
portion of Upstream crude inventory for $444 million. There
was no earnings impact and the effects of this transaction have
been eliminated for consolidation purposes.
(d)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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months to September 30 |
Upstream
|
|
Downstream
|
|
Chemical
|
|
millions of Canadian dollars |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Revenues and other income |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
(a) (b)
|
374 |
|
|
5,773 |
|
|
43,480 |
|
|
18,355 |
|
|
1,159 |
|
|
1,085 |
|
|
Intersegment sales
(c)
|
14,923 |
|
|
5,800 |
|
|
5,550 |
|
|
1,927 |
|
|
395 |
|
|
223 |
|
|
Investment and other income
(note 3, 11)
|
135 |
|
|
6 |
|
|
36 |
|
|
51 |
|
|
— |
|
|
1 |
|
|
|
15,432 |
|
|
11,579 |
|
|
49,066 |
|
|
20,333 |
|
|
1,554 |
|
|
1,309 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Exploration |
4 |
|
|
6 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Purchases of crude oil and products
(c)
|
6,184 |
|
|
5,780 |
|
|
42,459 |
|
|
16,525 |
|
|
1,070 |
|
|
693 |
|
|
Production and manufacturing |
4,053 |
|
|
3,395 |
|
|
1,193 |
|
|
1,039 |
|
|
193 |
|
|
145 |
|
|
Selling and general |
— |
|
|
— |
|
|
474 |
|
|
416 |
|
|
62 |
|
|
68 |
|
|
Federal excise tax and fuel charge |
— |
|
|
— |
|
|
1,615 |
|
|
1,404 |
|
|
1 |
|
|
— |
|
|
Depreciation and depletion |
1,269 |
|
|
1,283 |
|
|
130 |
|
|
117 |
|
|
13 |
|
|
13 |
|
|
Non-service pension and postretirement benefit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Financing
(note 5)
|
1 |
|
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Total expenses |
11,511 |
|
|
10,465 |
|
|
45,871 |
|
|
19,501 |
|
|
1,339 |
|
|
919 |
|
|
Income (loss) before income taxes |
3,921 |
|
|
1,114 |
|
|
3,195 |
|
|
832 |
|
|
215 |
|
|
390 |
|
|
Income tax expense (benefit) |
807 |
|
|
264 |
|
|
761 |
|
|
187 |
|
|
52 |
|
|
93 |
|
|
Net income (loss)
(c)
|
3,114 |
|
|
850 |
|
|
2,434 |
|
|
645 |
|
|
163 |
|
|
297 |
|
|
Cash flows from (used in) operating activities
(c)
|
4,814 |
|
|
3,634 |
|
|
2,548 |
|
|
(135) |
|
|
240 |
|
|
330 |
|
|
Capital and exploration expenditures
(d)
|
764 |
|
|
366 |
|
|
201 |
|
|
308 |
|
|
5 |
|
|
6 |
|
|
Total assets as at September 30
(c) (note 11)
|
28,099 |
|
|
29,540 |
|
|
9,972 |
|
|
8,239 |
|
|
482 |
|
|
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months to September 30
|
Corporate and other |
|
Eliminations
|
|
Consolidated
|
|
millions of Canadian dollars |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Revenues and other income |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
(a) (b)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
45,013 |
|
|
25,213 |
|
|
Intersegment sales
(c)
|
— |
|
|
— |
|
|
(20,868) |
|
|
(7,950) |
|
|
— |
|
|
— |
|
|
Investment and other income
(note 3, 11)
|
33 |
|
|
7 |
|
|
— |
|
|
— |
|
|
204 |
|
|
65 |
|
|
|
33 |
|
|
7 |
|
|
(20,868) |
|
|
(7,950) |
|
|
45,217 |
|
|
25,278 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Exploration |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4 |
|
|
6 |
|
|
Purchases of crude oil and products
(c)
|
— |
|
|
— |
|
|
(20,864) |
|
|
(7,946) |
|
|
28,849 |
|
|
15,052 |
|
|
Production and manufacturing |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,439 |
|
|
4,579 |
|
|
Selling and general |
93 |
|
|
89 |
|
|
(4) |
|
|
(4) |
|
|
625 |
|
|
569 |
|
|
Federal excise tax and fuel charge |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,616 |
|
|
1,404 |
|
|
Depreciation and depletion |
20 |
|
|
19 |
|
|
— |
|
|
— |
|
|
1,432 |
|
|
1,432 |
|
|
Non-service pension and postretirement benefit |
13 |
|
|
32 |
|
|
— |
|
|
— |
|
|
13 |
|
|
32 |
|
|
Financing
(note 5)
|
33 |
|
|
31 |
|
|
— |
|
|
— |
|
|
34 |
|
|
32 |
|
|
Total expenses |
159 |
|
|
171 |
|
|
(20,868) |
|
|
(7,950) |
|
|
38,012 |
|
|
23,106 |
|
|
Income (loss) before income taxes |
(126) |
|
|
(164) |
|
|
— |
|
|
— |
|
|
7,205 |
|
|
2,172 |
|
|
Income tax expense (benefit) |
(28) |
|
|
(38) |
|
|
— |
|
|
— |
|
|
1,592 |
|
|
506 |
|
|
Net income (loss)
(c)
|
(98) |
|
|
(126) |
|
|
— |
|
|
— |
|
|
5,613 |
|
|
1,666 |
|
|
Cash flows from (used in) operating activities
(c)
|
83 |
|
|
15 |
|
|
— |
|
|
— |
|
|
7,685 |
|
|
3,844 |
|
|
Capital and exploration expenditures
(d)
|
32 |
|
|
19 |
|
|
— |
|
|
— |
|
|
1,002 |
|
|
699 |
|
|
Total assets as at September 30
(c) (note 11)
|
4,704 |
|
|
2,778 |
|
|
(271) |
|
|
(170) |
|
|
42,986 |
|
|
40,875 |
|
(a)Included
export sales to the United States of $9,551 million (2021 -
$4,916 million).
(b)Includes
approximately 12% and 5% related to revenue outside the scope of
ASC 606 “Revenue from Contracts with Customers” for the nine months
ended September 30, 2022 and September 30, 2021, respectively.
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. Credit quality
and type of customer are generally similar between those revenues
and receivables within the scope of ASC 606 and those outside
it.
(c)In
the third quarter of 2021, the Downstream segment acquired a
portion of Upstream crude inventory for $444 million. There
was no earnings impact and the effects of this transaction have
been eliminated for consolidation purposes.
(d)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.
3. Investment and other income
Investment and other income included gains and losses on asset
sales as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
Nine
Months
to
September 30
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Proceeds from asset sales |
854 |
|
|
15 |
|
|
886 |
|
|
57 |
|
|
Book value of asset sales |
723 |
|
|
3 |
|
|
731 |
|
|
18 |
|
|
Gain (loss) on asset sales, before tax
(a)
|
131 |
|
|
12 |
|
|
155 |
|
|
39 |
|
|
Gain (loss) on asset sales, after tax
(a)
|
222 |
|
|
10 |
|
|
241 |
|
|
34 |
|
|
(a)The
third quarter of 2022 included a gain of $116 million ($208
million, after tax) from the sale of interests in XTO Energy
Canada, which included the removal of a deferred tax
liability.
|
4. Employee retirement benefits
The components of net benefit cost were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
Nine
Months
to September
30
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Pension benefits: |
|
|
|
|
|
|
|
|
Service cost |
70 |
|
|
81 |
|
|
210 |
|
|
243 |
|
|
Interest cost |
74 |
|
|
68 |
|
|
221 |
|
|
204 |
|
|
Expected return on plan assets |
(103) |
|
|
(107) |
|
|
(309) |
|
|
(321) |
|
|
Amortization of prior service cost |
4 |
|
|
4 |
|
|
12 |
|
|
12 |
|
|
Amortization of actuarial loss (gain) |
21 |
|
|
36 |
|
|
64 |
|
|
108 |
|
|
Net benefit cost |
66 |
|
|
82 |
|
|
198 |
|
|
246 |
|
|
|
|
|
|
|
|
|
|
|
Other postretirement benefits: |
|
|
|
|
|
|
|
|
Service cost |
6 |
|
|
7 |
|
|
17 |
|
|
21 |
|
|
Interest cost |
6 |
|
|
6 |
|
|
18 |
|
|
17 |
|
|
Amortization of actuarial loss (gain) |
2 |
|
|
4 |
|
|
7 |
|
|
12 |
|
|
Net benefit cost |
14 |
|
|
17 |
|
|
42 |
|
|
50 |
|
|
|
|
|
|
|
|
|
|
5. Financing costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
Nine
Months
to September
30
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Debt-related interest
|
34 |
|
|
9 |
|
|
66 |
|
|
50 |
|
|
Capitalized interest
|
(18) |
|
|
(4) |
|
|
(33) |
|
|
(19) |
|
|
Net interest expense
|
16 |
|
|
5 |
|
|
33 |
|
|
31 |
|
|
Other interest
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
|
Total financing
|
16 |
|
|
5 |
|
|
34 |
|
|
32 |
|
During the second quarter of 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.
6. Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
millions of Canadian dollars |
As at
Sept 30 |
|
As at
Dec 31 |
|
2022 |
|
2021 |
|
Long-term debt
(a)
|
3,447 |
|
|
4,447 |
|
|
Finance leases
|
591 |
|
|
607 |
|
|
Total long-term debt |
4,038 |
|
|
5,054 |
|
|
(a)During
the third quarter of 2022, the company decreased its long-term debt
by $1 billion by partially repaying an existing facility with an
affiliated company of ExxonMobil.
|
7. Other long-term obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
Sept 30
|
|
As at
Dec 31
|
|
millions of Canadian dollars |
2022 |
|
2021 |
|
Employee retirement benefits
(a)
|
1,328 |
|
|
1,362 |
|
|
Asset retirement obligations and other environmental
liabilities
(b)
|
1,677 |
|
|
1,713 |
|
|
Share-based incentive compensation liabilities
|
121 |
|
|
79 |
|
|
Operating lease liability
(c)
|
121 |
|
|
147 |
|
|
Other obligations
|
181 |
|
|
596 |
|
|
Total other long-term obligations |
3,428 |
|
|
3,897 |
|
|
(a)Total
recorded employee retirement benefits obligations also included $56
million in current liabilities (2021 -
$56 million).
(b)Total
asset retirement obligations and other environmental liabilities
also included $101 million in current liabilities (2021 -
$102 million).
(c)Total
operating lease liability also included $92 million in current
liabilities (2021 - $102 million). In addition to the total
operating lease liability, additional undiscounted commitments for
leases not yet commenced totalled $49 million (2021 -
$5 million).
|
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 September 30, 2022 and December 31,
2021, the fair value of long-term debt ($3,447 million and $4,447
million respectively, 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 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 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
Sept 30
|
|
As at
Dec 31
|
|
thousands of barrels |
2022 |
|
2021 |
|
Crude |
2,690 |
|
|
7,390 |
|
|
Products |
(1,210) |
|
|
(560) |
|
Realized and unrealized gain/(loss) on derivative instruments
recognized in the Consolidated statement of income is included in
the following lines on a before-tax basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Nine Months
to September 30
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Revenues |
105 |
|
|
(21) |
|
|
91 |
|
|
(30) |
|
|
Purchases of crude oil and products |
— |
|
|
— |
|
|
— |
|
|
(33) |
|
|
Total |
105 |
|
|
(21) |
|
|
91 |
|
|
(63) |
|
The estimated fair value of derivative instruments, and the related
hierarchy level for the fair value measurement is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2022
|
|
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)
|
55 |
|
|
35 |
|
|
— |
|
|
90 |
|
|
(27) |
|
|
(38) |
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
(b)
|
17 |
|
|
16 |
|
|
— |
|
|
33 |
|
|
(27) |
|
|
— |
|
|
6 |
|
|
(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, 2021 |
|
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)
|
24 |
|
|
17 |
|
|
— |
|
|
41 |
|
|
(31) |
|
|
— |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
(b)
|
31 |
|
|
12 |
|
|
— |
|
|
43 |
|
|
(31) |
|
|
(7) |
|
|
5 |
|
|
(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 September 30, 2022 and December 31, 2021, the company
had $36 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.
9. Common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
thousands of shares
|
As of
Sept 30
2022
|
|
As of
Dec 31
2021
|
|
Authorized |
1,100,000 |
|
|
1,100,000 |
|
|
Common shares outstanding |
611,516 |
|
|
678,080 |
|
The most recent 12-month normal course issuer bid program came into
effect June 29, 2022 under which Imperial continued its existing
share purchase program. The program enabled 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 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. Imperial accelerated share purchases
under the normal course issuer bid program during the third quarter
and, subsequent to the end of the third quarter, the program
completed on October 21, 2022 as a result of the company purchasing
the maximum allowable number of shares under the
program.
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 at 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.
On October 28, 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 $1.5 billion 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 company’s common share activities are summarized
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of
shares |
|
Millions of
dollars |
|
Balance as at December 31, 2020 |
734,077 |
|
|
1,357 |
|
|
Issued under employee share-based awards |
7 |
|
|
— |
|
|
Purchases at stated value |
(56,004) |
|
|
(105) |
|
|
Balance as at December 31, 2021 |
678,080 |
|
|
1,252 |
|
|
Issued under employee share-based awards |
— |
|
|
— |
|
|
Purchases at stated value |
(66,564) |
|
|
(123) |
|
|
Balance as at September 30, 2022 |
611,516 |
|
|
1,129 |
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Nine Months
to September 30
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net income (loss) per common share – basic |
|
|
|
|
|
|
|
|
Net income (loss)
(millions of Canadian dollars)
|
2,031 |
|
908 |
|
5,613 |
|
1,666 |
|
Weighted average number of common shares outstanding
(millions of shares)
|
625.3 |
|
700.0 |
|
652.9 |
|
719.4 |
|
Net income (loss) per common share
(dollars)
|
3.25 |
|
1.30 |
|
8.60 |
|
2.32 |
|
Net income (loss) per common share – diluted |
|
|
|
|
|
|
|
|
Net income (loss)
(millions of Canadian dollars)
|
2,031 |
|
908 |
|
5,613 |
|
1,666 |
|
Weighted average number of common shares outstanding
(millions of shares)
|
625.3 |
|
700.0 |
|
652.9 |
|
719.4 |
|
Effect of employee share-based awards
(millions of shares)
|
1.6 |
|
1.9 |
|
1.5 |
|
1.7 |
|
Weighted average number of common shares outstanding,
assuming
dilution
(millions of shares)
|
626.9 |
|
701.9 |
|
654.4 |
|
721.1 |
|
Net income (loss) per common share
(dollars)
|
3.24 |
|
1.29 |
|
8.58 |
|
2.31 |
|
Dividends per common share – declared
(dollars)
|
0.34 |
|
0.27 |
|
1.02 |
|
0.76 |
10. Other comprehensive income (loss) information
Changes in accumulated other comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
Balance at January 1 |
(1,177) |
|
|
(1,989) |
|
|
Postretirement benefits liability adjustment: |
|
|
|
|
Current period change excluding amounts reclassified
from accumulated other
comprehensive income
|
24 |
|
|
54 |
|
|
Amounts reclassified from accumulated other comprehensive
income |
63 |
|
|
99 |
|
|
Balance at September 30 |
(1,090) |
|
|
(1,836) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reclassified out of accumulated other comprehensive income
(loss) - before-tax income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Third
Quarter
|
|
Nine
Months
to September
30
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Amortization of postretirement benefits liability
adjustment
included in net benefit
cost
(a)
|
(28) |
|
|
(44) |
|
|
(83) |
|
|
(132) |
|
|
(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
|
|
Nine Months
to September 30
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Postretirement benefits liability adjustments: |
|
|
|
|
|
|
|
|
Postretirement benefits liability adjustment (excluding
amortization) |
— |
|
|
— |
|
|
8 |
|
|
17 |
|
|
Amortization of postretirement benefits liability adjustment
included in net benefit
cost
|
7 |
|
|
11 |
|
|
20 |
|
|
33 |
|
|
Total |
7 |
|
|
11 |
|
|
28 |
|
|
50 |
|
11. 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 included
assets in the Montney and Duvernay areas of central Alberta,
for total cash consideration of approximately $1.9 billion
($0.9 billion Imperial's share). The transaction closed on
August 31, 2022 and the company recognized a gain of approximately
$0.2 billion. Imperial’s total assets associated with this
transaction include about $0.9 billion (about
$0.8 billion of property, plant and equipment) and
about
$0.2 billion total liabilities in the Upstream
segment.
Item 2. Management’s discussion and analysis of financial condition
and results of operations
Non-GAAP financial measures and other specified financial
measures
Certain measures included in this document are not prescribed by
U.S. Generally Accepted Accounting Principles (GAAP). These
measures constitute “non-GAAP financial measures” under Securities
and Exchange Commission Regulation G, and “specified financial
measures” under National Instrument 52-112 Non-GAAP and Other
Financial Measures Disclosure
of the Canadian Securities Administrators.
Reconciliation of these non-GAAP financial measures to the most
comparable GAAP measure, and other information required by these
regulations, have been provided. Non-GAAP financial measures and
specified financial measures are not standardized financial
measures under GAAP and do not have a standardized definition. As
such, these measures may not be directly comparable to measures
presented by other companies, and should not be considered a
substitute for GAAP financial measures.
Net income (loss) excluding identified items
Net income (loss) excluding identified items is a non-GAAP
financial measure that is total net income (loss) excluding
individually significant non-operational events with an absolute
corporate total earnings impact of at least $100 million in a given
quarter. The net income (loss) impact of an identified item for an
individual segment in a given quarter may be less than $100 million
when the item impacts several segments or several periods. The most
directly comparable financial measure that is disclosed in the
financial statements is net income (loss) within the company’s
Consolidated statement of income. Management uses these figures to
improve comparability of the underlying business across multiple
periods by isolating and removing significant non-operational
events from business results. The company believes this view
provides investors increased transparency into business results and
trends, and provides investors with a view of the business as seen
through the eyes of management. Net income (loss) excluding
identified items is not meant to be viewed in isolation or as a
substitute for net income (loss) as prepared in accordance with
U.S. GAAP. All identified items are presented on an after-tax
basis.
Reconciliation of net income (loss) excluding identified
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Nine Months
|
|
millions of Canadian dollars |
2022
|
|
2021 |
|
|
2022
|
|
2021 |
|
|
From Imperial's Consolidated statement of income |
|
|
|
|
|
|
|
|
Net income (loss) (U.S. GAAP) |
2,031 |
|
|
908 |
|
|
5,613 |
|
|
1,666 |
|
|
|
|
|
|
|
|
|
|
|
Less identified items included in Net income (loss) |
|
|
|
|
|
|
|
|
Gain/(loss) on sale of assets |
208 |
|
|
— |
|
|
208 |
|
|
— |
|
|
Subtotal of identified items |
208 |
|
|
— |
|
|
208 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) excluding identified items |
1,823 |
|
|
908 |
|
|
5,405 |
|
|
1,666 |
|
Current business environment
During the COVID-19 pandemic, industry investment to maintain and
increase production capacity was restrained to preserve capital,
resulting in underinvestment and supply tightness as demand for
petroleum and petrochemical products recovered. Across late 2021
and the first half of 2022, this dynamic, along with supply chain
constraints and a continuation of demand recovery, led to a steady
increase in oil and natural gas prices and refining margins. In the
first half of 2022, tightness in the oil and natural gas markets
was further exacerbated by Russia’s invasion of Ukraine and
subsequent sanctions imposed upon business and other activities in
Russia. The price of crude oil and certain regional natural gas
indicators increased to levels not seen for several years. Across
the third quarter of 2022, high prices and economic uncertainty led
to a tempering of demand for some products, causing crude oil
prices and refining margins to soften relative to first half
levels. Commodity and product prices are expected to remain
volatile given the current global economic and geopolitical
uncertainty affecting supply and demand.
Operating results
Third quarter 2022 vs. third quarter 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
millions of Canadian dollars, unless noted |
2022
|
|
2021 |
|
Net income (loss) (U.S. GAAP) |
2,031 |
|
908 |
|
Net income (loss) per common share, assuming dilution
(dollars) |
3.24 |
|
1.29 |
|
Net income (loss) excluding identified items¹ |
1,823 |
|
908 |
Current quarter results include favourable identified items¹ of
$208 million related to the company's gain on the sale of interests
in XTO Energy Canada.
Upstream
Net income (loss) factor analysis
millions of Canadian dollars
Price – Higher realizations were generally in line with increases
in marker prices, driven primarily by increased demand and supply
chain constraints. Average bitumen realizations increased by $21.14
per barrel generally in line with WCS, and synthetic crude oil
realizations increased by $38.86 per barrel generally in line with
WTI.
Volumes – Lower volumes were the result of timing of planned
turnaround activities at Syncrude, partially offset by higher
volumes at Cold Lake, primarily driven by continued focus on
sustained performance and production optimization.
Royalty – Higher royalties primarily driven by improved commodity
prices.
Identified Items¹ – Current quarter results include favourable
identified items¹ related to the company's gain on the sale of
interests in XTO Energy Canada.
Other – Includes higher operating expenses of about
$200 million, partially offset by favourable foreign exchange
impacts of about $80 million.
¹
non-GAAP financial measure - see non-GAAP financial measures and
other specified financial measures for definition and
reconciliation
Marker prices and average realizations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
Canadian dollars, unless noted |
2022 |
|
|
2021 |
|
|
West Texas Intermediate
(US$ per barrel)
|
91.43 |
|
|
70.52 |
|
|
Western Canada Select
(US$ per barrel)
|
71.53 |
|
|
57.08 |
|
|
WTI/WCS Spread
(US$ per barrel)
|
19.90 |
|
|
13.44 |
|
|
Bitumen (per barrel)
|
81.58 |
|
|
60.44 |
|
|
Synthetic crude oil (per barrel)
|
124.80 |
|
|
85.94 |
|
|
Average foreign exchange rate
(US$)
|
0.77 |
|
|
0.79 |
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
thousands of barrels per day |
2022 |
|
|
2021 |
|
|
Kearl
(Imperial's share)
|
193 |
|
|
194 |
|
|
Cold Lake
|
150 |
|
|
135 |
|
|
Syncrude
(a)
|
62 |
|
|
78 |
|
|
|
|
|
|
|
Kearl total gross production
(thousands of barrels per day)
|
271 |
|
|
274 |
|
|
(a) In the third quarter of 2022, Syncrude gross production
included about 7 thousand barrels per day of bitumen and other
products (2021 - 1 thousand barrels per day) that was exported to
the operator's facilities using an existing interconnect
pipeline.
|
Higher production at Cold Lake was primarily driven by continued
focus on sustained performance and production
optimization.
Lower production at Syncrude was primarily a result of the timing
of planned turnaround activities.
Downstream
Net income (loss) factor analysis
millions of Canadian dollars
Margins – Higher margins primarily reflect improved market
conditions.
Refinery utilization and petroleum product sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
thousands of barrels per day, unless noted |
2022 |
|
|
2021 |
|
|
Refinery throughput |
426 |
|
|
404 |
|
|
Refinery capacity utilization
(percent)
|
100 |
|
|
94 |
|
|
Petroleum product sales |
484 |
|
|
485 |
|
|
|
|
|
|
Improved refinery throughput in the third quarter of 2022 was
primarily driven by economic optimization across the downstream
supply chain.
Chemicals
Net income (loss) factor analysis
millions of Canadian dollars
Margins – Lower margins primarily reflect weaker industry
polyethylene margins.
Corporate and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
Net income (loss)
(U.S. GAAP)
|
(21) |
|
|
(30) |
|
Liquidity and capital resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
Cash flow generated from (used in): |
|
|
|
|
Operating activities |
3,089 |
|
|
1,947 |
|
|
Investing activities |
364 |
|
|
(259) |
|
|
Financing activities |
(2,744) |
|
|
(589) |
|
|
Increase (decrease) in cash and cash equivalents |
709 |
|
|
1,099 |
|
|
|
|
|
|
|
Cash and cash equivalents at period end |
3,576 |
|
|
1,875 |
|
Cash flow generated from operating activities primarily reflects
higher Upstream realizations, improved Downstream margins, and
favourable working capital impacts.
Cash flow generated from investing activities primarily reflects
proceeds from the sale of interests in XTO Energy Canada, partially
offset by higher additions to property, plant and
equipment.
Cash flow used in financing activities primarily
reflects:
|
|
|
|
|
|
|
|
|
|
|
|
| |
Third
Quarter
|
|
millions of Canadian dollars, unless noted |
2022 |
|
|
2021 |
|
|
Dividends paid
|
227 |
|
|
195 |
|
|
Per share dividend paid
(dollars)
|
0.34 |
|
|
0.27 |
|
|
Share repurchases
(a)
|
1,512 |
|
|
313 |
|
|
Number of shares purchased
(millions) (a)
|
25.2 |
|
|
9.0 |
|
|
(a)Share
repurchases were made under the company's normal course issuer bid
program, and include shares purchased from Exxon Mobil Corporation
concurrent with, but outside of the normal course issuer
bid.
|
During the third quarter of 2022, the company decreased its
long-term debt by $1 billion by partially repaying an existing
facility with an affiliated company of ExxonMobil.
Nine months 2022 vs. nine months 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months
|
|
millions of Canadian dollars, unless noted |
2022
|
|
2021 |
|
Net income (loss)
(U.S. GAAP)
|
5,613 |
|
1,666 |
|
Net income (loss) per common share, assuming dilution
(dollars)
|
8.58 |
|
2.31 |
|
Net income (loss) excluding identified items¹ |
5,405 |
|
1,666 |
Current year results include favourable identified items¹ of $208
million related to the company's gain on the sale of interests in
XTO Energy Canada.
Upstream
Net income (loss) factor analysis
millions of Canadian dollars
Price – Higher realizations were generally in line with increases
in marker prices, driven primarily by increased demand and supply
chain constraints. Average bitumen realizations increased by $38.71
per barrel generally in line with WCS, and synthetic crude oil
realizations increased by $51.90 per barrel generally in line with
WTI.
Volumes – Lower volumes were primarily the result of downtime at
Kearl in the first half of the year.
Royalty – Higher royalties primarily driven by improved commodity
prices.
Identified Items¹ – Current year results include favourable
identified items¹ related to the company's gain on the sale of
interests in XTO Energy Canada.
Other – Includes higher operating expenses of about $430 million,
primarily higher energy prices, partially offset by favourable
foreign exchange impacts of about $130 million.
Marker prices and average realizations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
Canadian dollars, unless noted |
2022 |
|
|
2021 |
|
|
West Texas Intermediate
(US$ per barrel)
|
98.25 |
|
|
65.04 |
|
|
Western Canada Select
(US$ per barrel)
|
82.60 |
|
|
52.45 |
|
|
WTI/WCS Spread
(US$ per barrel)
|
15.65 |
|
|
12.59 |
|
|
Bitumen
(per barrel)
|
94.01 |
|
|
55.30 |
|
|
Synthetic crude oil
(per barrel)
|
129.52 |
|
|
77.62 |
|
|
Average foreign exchange rate
(US$)
|
0.78 |
|
|
0.80 |
|
¹
non-GAAP financial measure - see non-GAAP financial measures and
other specified financial measures for definition and
reconciliation
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
thousands of barrels per day |
2022 |
|
|
2021 |
|
|
Kearl
(Imperial's share)
|
162 |
|
|
185 |
|
|
Cold Lake
|
145 |
|
|
139 |
|
|
Syncrude
(a)
|
74 |
|
|
68 |
|
|
|
|
|
|
|
Kearl total gross production
(thousands of barrels per day)
|
228 |
|
|
260 |
|
|
(a) In 2022, Syncrude gross production included about 4 thousand
barrels per day of bitumen and other products (2021 - 1 thousand
barrels per day) that was exported to the operator's facilities
using an existing interconnect pipeline.
|
|
|
|
|
Lower production at Kearl was primarily a result of downtime in the
first half of the year. |
|
|
|
|
|
Downstream
Net income (loss) factor analysis
millions of Canadian dollars
Margins – Higher margins primarily reflect improved market
conditions.
Other – Includes lower turnaround impacts of about $140 million,
reflecting the absence of turnaround activities at Strathcona
refinery and favourable foreign exchange impacts of about $70
million, partially offset by higher operating expenses of about
$130 million, primarily from higher energy costs.
Refinery utilization and petroleum product sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months
|
|
thousands of barrels per day, unless noted |
2022 |
|
|
2021 |
|
|
Refinery throughput |
413 |
|
|
367 |
|
|
Refinery capacity utilization
(percent)
|
96 |
|
|
86 |
|
|
Petroleum product sales |
471 |
|
|
442 |
|
Improved refinery throughput in 2022 was primarily driven by
reduced turnaround activity and increased demand.
Improved petroleum product sales in 2022 primarily reflects
increased demand.
Chemicals
Net income (loss) factor analysis
millions of Canadian dollars
Margins – Lower margins primarily reflect weaker industry
polyethylene margins.
Corporate and other
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
Net income (loss)
(U.S. GAAP)
|
(98) |
|
|
(126) |
|
Liquidity and capital resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months
|
|
millions of Canadian dollars |
2022 |
|
|
2021 |
|
|
Cash flow generated from (used in): |
|
|
|
|
Operating activities |
7,685 |
|
3,844 |
|
Investing activities |
(145) |
|
|
(613) |
|
|
Financing activities |
(6,117) |
|
|
(2,127) |
|
|
Increase (decrease) in cash and cash equivalents |
1,423 |
|
1,104 |
|
Cash flow generated from operating activities primarily reflects
higher Upstream realizations, improved Downstream margins, and
favourable working capital impacts.
Cash flow used in investing activities primarily reflects proceeds
from the sale of interests in XTO Energy Canada, partially offset
by higher additions to property, plant and equipment.
Cash flow used in financing activities primarily
reflects:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months
|
|
millions of Canadian dollars, unless noted |
2022 |
|
|
2021 |
|
|
Dividends paid
|
640 |
|
|
518 |
|
|
Per share dividend paid
(dollars)
|
0.95 |
|
|
0.71 |
|
|
Share repurchases
(a)
|
4,461 |
|
|
1,484 |
|
|
Number of shares purchased
(millions) (a)
|
66.6 |
|
|
38.5 |
|
|
(a)Share
repurchases were made under the company’s normal course issuer bid
program and substantial issuer bid that commenced on May 6, 2022
and expired on June 10, 2022. Includes shares purchased from Exxon
Mobil Corporation concurrent with, but outside of, the normal
course issuer bid, and by way of a proportionate tender under the
company’s substantial issuer bid.
|
During the third quarter of 2022, the company decreased its
long-term debt by $1 billion by partially repaying an existing
facility with an affiliated company of ExxonMobil.
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 at 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.
Subsequent to the end of the third quarter, the company completed
all share repurchases under its normal course issuer bid on October
21, 2022.
On October 28, 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 $1.5 billion 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.
Contractual obligations
During the third quarter of 2022, the company entered into a
long-term raw material purchase agreement with a third-party,
commencing in 2024, which includes a take-or-pay commitment of
about $700 million. The company does not believe that this increase
in obligation, including prior obligations discussed in Imperial's
2021 annual report on Form 10-K, will have a material adverse
effect on the company’s operations, financial conditions, or
financial statements taken as a whole.
Forward-looking statements
Statements of future events or conditions in this report, including
projections, targets, expectations, estimates, and business plans
are forward-looking statements. 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; the company’s intention to initiate a
substantial issuer bid, including the size, timing for determining
the terms and pricing, commencement, structure and ExxonMobil’s
intent to make a proportionate tender; the continued evaluation of
the share purchase program in context of overall capital
activities; the company’s belief that the commitment related to the
long-term raw material purchase agreement will not have a material
adverse effect on the company; and the expectation of commodity and
product price volatility.
Forward-looking statements are based on the company's current
expectations, estimates, projections and assumptions at the time
the statements are made. Actual future financial and operating
results, including expectations and assumptions concerning demand
growth and energy source, supply and mix; production rates, growth
and mix; for shareholder returns, assumptions such as cash flow
forecasts, financing sources and capital structure, that the
necessary exemptive relief to proceed with the substantial issuer
bid under applicable securities laws will be received on the
timeline anticipated, and ExxonMobil making a proportionate tender
in connection with the substantial issuer bid; project plans,
timing, costs, technical evaluations and capacities and the
company’s ability to effectively execute on these plans and operate
its assets; capital and environmental expenditures; the adoption
and impact of new facilities or technologies on reductions to GHG
emissions intensity, and any changes in the scope, terms, or costs
of such projects; applicable laws and government policies,
including with respect to climate change and GHG emissions
reductions; progression of COVID-19 and its impacts on Imperial’s
ability to operate its assets; and commodity prices, foreign
exchange rates and general market conditions could differ
materially depending on a number of factors.
These factors include global, regional or local changes in supply
and demand for oil, natural gas, and petroleum and petrochemical
products and resulting price, differential and margin impacts,
including foreign government action with respect to supply levels
and prices, the impact of COVID-19 on demand and the occurrence of
wars; availability and allocation of capital; the receipt, in a
timely manner, of regulatory and third-party approvals, including
for the company’s substantial issuer bid; the results of research
programs and new technologies, the ability to bring new
technologies to commercial scale on a cost-competitive basis, and
the competitiveness of alternative energy and other emission
reduction technologies; project management and schedules and timely
completion of projects; unanticipated technical or operational
difficulties; lack of required support from governments and
policymakers for adoption of new technologies for emissions
reductions; availability and performance of third-party service
providers, including in light of restrictions related to COVID-19;
environmental risks inherent in oil and gas exploration and
production activities; political or regulatory events, including
changes in law or government policy, environmental regulation
including climate change and greenhouse gas regulation, and actions
in response to COVID-19; management effectiveness and disaster
response preparedness, including business continuity plans in
response to COVID-19; operational hazards and risks; cybersecurity
incidents, including increased reliance on remote working
arrangements; currency exchange rates; general economic conditions;
and other factors discussed in Item 1A risk factors and Item 7
management’s discussion and analysis of financial condition and
results of operations of Imperial Oil Limited’s most recent annual
report on Form 10-K and subsequent interim reports.
Forward-looking statements are not guarantees of future performance
and involve a number of risks and uncertainties, some that are
similar to other oil and gas companies and some that are unique to
Imperial. Imperial’s actual results may differ materially from
those expressed or implied by its forward-looking statements and
readers are cautioned not to place undue reliance on them. Imperial
undertakes no obligation to update any forward-looking statements
contained herein, except as required by applicable
law.
The term "project" as used in this report can refer to a variety of
different activities and does not necessarily have the same meaning
as in any government payment transparency reports.
Item 3. Quantitative and qualitative disclosures about market
risk
Information about market risks for the nine months ended
September 30, 2022, does not differ materially from that
discussed on page 33 of the company’s annual report on Form 10-K
for the year ended December 31, 2021 and on page 23 of the
Form 10-Q for the quarter ended March 31, 2022.
Item 4. Controls and procedures
As indicated in the certifications in Exhibit 31 of this report,
the company’s principal executive officer and principal financial
officer have evaluated the company’s disclosure controls and
procedures as of September 30, 2022. Based on that evaluation,
these officers have concluded that the company’s disclosure
controls and procedures are effective in ensuring that information
required to be disclosed by the company in the reports that it
files or submits under the Securities Exchange Act of 1934, as
amended, is accumulated and communicated to them in a manner that
allows for timely decisions regarding required disclosures and are
effective in ensuring that such information is recorded, processed,
summarized and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms. There has not
been any change in the company’s internal control over financial
reporting during the last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal proceedings
Imperial has elected to use a $1 million threshold for disclosing
environmental proceedings.
Item 2. Unregistered sales of equity securities and use of
proceeds
Issuer purchases of equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of
shares purchased
|
|
Average price paid
per share
(Canadian dollars)
|
|
Total number of
shares purchased
as part of publicly
announced plans
or programs
|
|
Maximum number
of shares that may
yet be purchased
under the plans or
programs (a) |
|
July 2022
|
|
|
|
|
|
|
|
|
(July 1 - July 31)
|
5,082,675
|
|
56.85
|
|
5,082,675
|
|
26,751,134
|
|
August 2022
|
|
|
|
|
|
|
|
|
(August 1 - August 31)
|
10,068,144
|
|
60.53
|
|
10,068,144
|
|
16,682,990
|
|
September 2022
|
|
|
|
|
|
|
|
|
(September 1 - September 30)
|
10,009,792
|
|
61.22
|
|
10,009,792
|
|
6,673,198
|
|
|
|
|
|
|
|
|
(a)On
June 27, 2022, 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 to continue its existing share
purchase program. The program enabled the company to purchase up to
a maximum of 31,833,809 common shares during the period June 29,
2022 to June 28, 2023. This maximum 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. Imperial accelerated share purchases
under the normal course issuer bid program during the third quarter
and, subsequent to the end of the third quarter, the program
completed on October 21, 2022 as a result of the company purchasing
the maximum allowable number of shares under the
program
On October 28, 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 $1.5 billion 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 company will continue to evaluate its share purchase program in
the context of its overall capital activities. Purchase plans may
be modified at any time without prior notice.
Item 6. Exhibits
(31.1)
Certification by the principal executive officer of the company
pursuant to Rule 13a-14(a).
(31.2)
Certification by the principal financial officer of the company
pursuant to Rule 13a-14(a).
(32.1)
Certification by the chief executive officer of the company
pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.
(32.2)
Certification by the chief financial officer of the company
pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.
(101) Interactive Data Files (formatted as Inline
XBRL).
(104) Cover Page Interactive Data File (formatted as Inline XBRL
and contained in Exhibit 101).
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly
authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imperial Oil Limited |
|
|
|
|
(Registrant) |
|
|
|
|
|
|
Date: |
|
November 2, 2022 |
|
/s/ Daniel E. Lyons
|
|
|
|
|
|
|
(Signature) |
|
|
|
|
Daniel E. Lyons
|
|
|
|
|
Senior vice-president, finance and
administration, and controller |
|
|
|
|
|
|
|
|
(Principal accounting officer) |
|
|
|
|
|
|
Date: |
|
November 2, 2022 |
|
/s/ Cathryn Walker
|
|
|
|
|
|
|
(Signature) |
|
|
|
|
Cathryn Walker
|
|
|
|
|
Assistant corporate secretary |
Imperial Oil (AMEX:IMO)
Graphique Historique de l'Action
De Jan 2023 à Fév 2023
Imperial Oil (AMEX:IMO)
Graphique Historique de l'Action
De Fév 2022 à Fév 2023
