FALSE2022Q3000004993812/31
(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  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.
(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:UpstreamMemberus-gaap:OperatingSegmentsMember2021-01-012021-09-300000049938us-gaap:OperatingSegmentsMemberimo:DownstreamMember2022-01-012022-09-300000049938us-gaap:OperatingSegmentsMemberimo:DownstreamMember2021-01-012021-09-300000049938imo:ChemicalMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000049938imo:ChemicalMemberus-gaap:OperatingSegmentsMember2021-01-012021-09-300000049938imo:UpstreamMember2022-09-300000049938imo:UpstreamMember2021-09-300000049938imo:DownstreamMember2022-09-300000049938imo:ChemicalMember2022-09-300000049938imo:ChemicalMember2021-09-300000049938us-gaap:CorporateNonSegmentMember2022-01-012022-09-300000049938us-gaap:CorporateNonSegmentMember2021-01-012021-09-300000049938srt:ConsolidationEliminationsMember2022-01-012022-09-300000049938srt:ConsolidationEliminationsMember2021-01-012021-09-300000049938us-gaap:CorporateNonSegmentMember2022-09-300000049938us-gaap:CorporateNonSegmentMember2021-09-300000049938srt:ConsolidationEliminationsMember2022-09-300000049938srt:ConsolidationEliminationsMember2021-09-300000049938country:US2022-01-012022-09-300000049938country:US2021-01-012021-09-300000049938imo:XtoEnergyCanadaMember2022-07-012022-09-300000049938us-gaap:PensionPlansDefinedBenefitMember2022-07-012022-09-300000049938us-gaap:PensionPlansDefinedBenefitMember2021-07-012021-09-300000049938us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-09-300000049938us-gaap:PensionPlansDefinedBenefitMember2021-01-012021-09-300000049938us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-07-012022-09-300000049938us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-07-012021-09-300000049938us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-01-012022-09-300000049938us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-01-012021-09-300000049938imo:AmendmentToLongTermLinesOfCreditMemberimo:LineOfCreditFacilityDueJuneTwoThousandAndTwentyThreeMember2022-06-300000049938imo:AmendmentToLongTermLinesOfCreditMemberimo:AmendedLineOfCreditFacilityForTwoHundredAndFiftyMillionDollarsOneMemberimo:LineOfCreditFacilityDueJuneTwoThousandAndTwentyThreeMember2022-06-300000049938imo:AmendmentToLongTermLinesOfCreditMemberimo:AmendedLineOfCreditFacilityForTwoHundredAndFiftyMillionDollarsOneMemberimo:LineOfCreditFacilityDueJuneTwoThousandAndTwentyThreeMember2022-01-012022-06-300000049938imo:AmendmentToLongTermLinesOfCreditMemberimo:AmendedLineOfCreditFacilityForTwoHundredAndFiftyMillionDollarsTwoMemberimo:LineOfCreditFacilityDueJuneTwoThousandAndTwentyFourMember2022-06-300000049938imo:AmendmentToLongTermLinesOfCreditMemberimo:AmendedLineOfCreditFacilityForTwoHundredAndFiftyMillionDollarsTwoMemberimo:LineOfCreditFacilityDueJuneTwoThousandAndTwentyFourMember2022-01-012022-06-300000049938imo:AmendmentToLongTermLinesOfCreditMember2022-06-300000049938us-gaap:AccountsPayableAndAccruedLiabilitiesMember2022-09-300000049938us-gaap:AccountsPayableAndAccruedLiabilitiesMember2021-12-310000049938imo:CrudeBarrelsMember2022-01-012022-09-30utr:bbl0000049938imo:CrudeBarrelsMember2021-01-012021-12-310000049938imo:ProductsBarrelsMember2022-01-012022-09-300000049938imo:ProductsBarrelsMember2021-01-012021-12-310000049938us-gaap:FairValueInputsLevel1Member2022-09-300000049938us-gaap:FairValueInputsLevel2Member2022-09-300000049938us-gaap:FairValueInputsLevel3Member2022-09-300000049938imo:DerivativeFairValueOfDerivativeAmountEffectOfCounterPartyNettingMember2022-09-300000049938imo:DerivativeFairValueOfDerivativeAmountEffectOfCollateralNettingMember2022-09-300000049938imo:NetCarryingValueMember2022-09-300000049938us-gaap:FairValueInputsLevel1Member2021-12-310000049938us-gaap:FairValueInputsLevel2Member2021-12-310000049938us-gaap:FairValueInputsLevel3Member2021-12-310000049938imo:DerivativeFairValueOfDerivativeAmountEffectOfCounterPartyNettingMember2021-12-310000049938imo:DerivativeFairValueOfDerivativeAmountEffectOfCollateralNettingMember2021-12-310000049938imo:NetCarryingValueMember2021-12-310000049938imo:MasterNettingArrangementsMember2022-09-300000049938imo:MasterNettingArrangementsMember2021-12-3100000499382022-06-292022-06-290000049938imo:NormalCourseIssuerBidEffectiveFromJuneTwentyNinthTwoThousandAndTwentyTwoMember2022-06-290000049938imo:ExonnMobileCorporationMemberimo:NormalCourseIssuerBidEffectiveFromJuneTwentyNinthTwoThousandAndTwentyTwoMember2022-06-152022-06-150000049938imo:ExonnMobileCorporationMemberimo:NormalCourseIssuerBidEffectiveFromJuneTwentyNinthTwoThousandAndTwentyTwoMember2022-06-2900000499382022-05-062022-05-060000049938imo:NormalCourseIssuerBidEffectiveFromJuneTwentyNinthTwoThousandAndTwentyTwoMember2022-06-152022-06-150000049938imo:ExonnMobileCorporationMemberimo:NormalCourseIssuerBidEffectiveFromJuneTwentyNinthTwoThousandAndTwentyTwoMember2022-05-020000049938imo:ExonnMobileCorporationMemberimo:NormalCourseIssuerBidEffectiveFromJuneTwentyNinthTwoThousandAndTwentyTwoMember2022-06-150000049938us-gaap:SubsequentEventMember2022-10-282022-10-280000049938us-gaap:SubsequentEventMemberimo:ExonnMobileCorporationMember2022-10-280000049938us-gaap:CommonStockMember2021-01-012021-12-310000049938us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310000049938us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310000049938us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-09-300000049938us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-09-300000049938us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-09-300000049938us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-09-300000049938imo:AccumulatedDefinedBenefitPlansAdjustmentBeforeTaxMember2022-07-012022-09-300000049938imo:AccumulatedDefinedBenefitPlansAdjustmentBeforeTaxMember2021-07-012021-09-300000049938imo:AccumulatedDefinedBenefitPlansAdjustmentBeforeTaxMember2022-01-012022-09-300000049938imo:AccumulatedDefinedBenefitPlansAdjustmentBeforeTaxMember2021-01-012021-09-300000049938imo:WhiteCapIncMemberimo:XtoEnergyCanadaMemberimo:ExxonMobilCanadaMember2022-08-310000049938imo:WhiteCapIncMemberimo:CompaniesShareMemberimo:XtoEnergyCanadaMember2022-08-310000049938imo:WhiteCapIncMemberimo:CompaniesShareMemberimo:XtoEnergyCanadaMember2022-08-312022-08-310000049938imo:XtoEnergyCanadaMemberimo:ExxonMobilCanadaMember2022-08-31
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)
Canada   98-0017682
(State or other jurisdiction   (I.R.S. Employer
of incorporation or organization)   Identification No.)
505 Quarry Park Boulevard S.E. Calgary, Alberta, Canada
  T2C 5N1
(Address of principal executive offices)   (Postal Code)
1-800-567-3776
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol
Name of each exchange on
which registered
None 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.
Yes
 ✓
No
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).
Yes
 ✓
No
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.
 Large accelerated filer
 ✓
  Smaller reporting company
 Non-accelerated filer   Emerging growth company
 Accelerated filer    
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).
Yes
 
No  ✓

The number of common shares outstanding, as of September 30, 2022 was 611,515,571.



IMPERIAL OIL LIMITED
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.
2


IMPERIAL OIL LIMITED
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
Consolidated statement of income (U.S. GAAP, unaudited)
 
        Third Quarter
       Nine Months
       to September 30
millions of Canadian dollars 2022  2021  2022  2021 
Revenues and other income    
Revenues (a)
15,071  10,214  45,013  25,213 
Investment and other income (note 3, 11)
153  19  204  65 
Total revenues and other income 15,224  10,233  45,217  25,278 
 
Expenses    
Exploration 1  4 
Purchases of crude oil and products (b)
9,478  6,298  28,849  15,052 
Production and manufacturing (c)
1,872  1,525  5,439  4,579 
Selling and general (c)
209  180  625  569 
Federal excise tax and fuel charge 584  535  1,616  1,404 
Depreciation and depletion 555  488  1,432  1,432 
Non-service pension and postretirement benefit 4  11  13  32 
Financing (d) (note 5)
16  34  32 
Total expenses 12,719  9,044  38,012  23,106 
 
Income (loss) before income taxes 2,505  1,189  7,205  2,172 
Income taxes 474  281  1,592  506 
Net income (loss) 2,031  908  5,613  1,666 
Per share information (Canadian dollars)
 
Net income (loss) per common share - basic (note 9)
3.25  1.30  8.60  2.32 
Net income (loss) per common share - diluted (note 9)
3.24  1.29  8.58  2.31 
(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  45  25 
The information in the notes to consolidated financial statements is an integral part of these statements.

3


IMPERIAL OIL LIMITED
Consolidated statement of comprehensive income (U.S. GAAP, unaudited)
 
        Third Quarter
        Nine Months
        to September 30
millions of Canadian dollars 2022  2021  2022  2021 
Net income (loss) 2,031  908  5,613  1,666 
Other comprehensive income (loss), net of income taxes    
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.
4


IMPERIAL OIL LIMITED
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.
   
5


IMPERIAL OIL LIMITED
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.

6


IMPERIAL OIL LIMITED
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  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.
7


IMPERIAL OIL LIMITED
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.
8


IMPERIAL OIL LIMITED

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




9


IMPERIAL OIL LIMITED

(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.
10


IMPERIAL OIL LIMITED

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  36  51   
15,432  11,579  49,066  20,333  1,554  1,309 
Expenses
Exploration 4    —    — 
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    —    — 
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 
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    —  204  65 
33  (20,868) (7,950) 45,217  25,278 
Expenses
Exploration   —    —  4 
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 

11


IMPERIAL OIL LIMITED

(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.
12


IMPERIAL OIL LIMITED

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  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  12  12 
Amortization of actuarial loss (gain) 21  36  64  108 
Net benefit cost 66  82  198  246 
Other postretirement benefits:    
Service cost 6  17  21 
Interest cost 6  18  17 
Amortization of actuarial loss (gain) 2  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  66  50 
Capitalized interest
(18) (4) (33) (19)
Net interest expense
16  33  31 
Other interest
—    1 
Total financing
16  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.
13


IMPERIAL OIL LIMITED

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).

14


IMPERIAL OIL LIMITED

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)















15


IMPERIAL OIL LIMITED

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)
(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.
16


IMPERIAL OIL LIMITED

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 — 
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 
17


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:
 
     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
18


IMPERIAL OIL LIMITED

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.

19


IMPERIAL OIL LIMITED

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 
20


IMPERIAL OIL LIMITED

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
imo-20220930_g1.jpg

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
21


IMPERIAL OIL LIMITED

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
imo-20220930_g2.jpg

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.
22


IMPERIAL OIL LIMITED

Chemicals
Net income (loss) factor analysis
millions of Canadian dollars
imo-20220930_g3.jpg

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.

23


IMPERIAL OIL LIMITED

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
imo-20220930_g4.jpg

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
24


IMPERIAL OIL LIMITED

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

imo-20220930_g5.jpg

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
imo-20220930_g6.jpg

Margins – Lower margins primarily reflect weaker industry polyethylene margins.
25


IMPERIAL OIL LIMITED

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.


26


IMPERIAL OIL LIMITED

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.
27


IMPERIAL OIL LIMITED

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.
28


IMPERIAL OIL LIMITED

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.
29


IMPERIAL OIL LIMITED

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.
30


IMPERIAL OIL LIMITED

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).
31


IMPERIAL OIL LIMITED

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
32
Imperial Oil (AMEX:IMO)
Graphique Historique de l'Action
De Jan 2023 à Fév 2023 Plus de graphiques de la Bourse Imperial Oil
Imperial Oil (AMEX:IMO)
Graphique Historique de l'Action
De Fév 2022 à Fév 2023 Plus de graphiques de la Bourse Imperial Oil