FALSE2023Q3000004993812/31
(a) Amounts from related parties included in revenues.3,553 4,454 10,245 13,588 
(b) Amounts to related parties included in purchases of crude oil and products.1,228 1,086 3,270 2,865 
(c) Amounts to related parties included in production and manufacturing,
and selling and general expenses.
121 120 381 354 
(d) Amounts to related parties included in financing.44 28 124 45 
(b) Included contributions to registered pension plans.(43)(41)(129)(137)
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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, 2023
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 classTrading symbol
Name of each exchange on
which registered
NoneNone
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, 2023 was 566,667,118.



IMPERIAL OIL LIMITED
Table of contents
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
Consolidated statement of income
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of shareholders’ equity
Consolidated statement of cash flows
Notes to consolidated financial statements
Item 2. Management’s discussion and analysis of financial condition and results of operations
Item 3. Quantitative and qualitative disclosures about market risk
Item 4. Controls and procedures
PART II. OTHER INFORMATION
Item 1. Legal proceedings
Item 2. Unregistered sales of equity securities and use of proceeds
Item 5. Other information
Item 6. Exhibits
SIGNATURES
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, 2022. 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 dollars2023 2022 2023 2022 
Revenues and other income  
Revenues (a)
13,873 15,071 37,694 45,013 
Investment and other income (note 3)
47 153 166 204 
Total revenues and other income13,920 15,224 37,860 45,217 
 
Expenses  
Exploration1 1 3 4 
Purchases of crude oil and products (b)
8,748 9,478 24,082 28,849 
Production and manufacturing (c)
1,666 1,872 5,207 5,439 
Selling and general (c)
237 209 629 625 
Federal excise tax and fuel charge654 584 1,781 1,616 
Depreciation and depletion475 555 1,418 1,432 
Non-service pension and postretirement benefit20 4 60 13 
Financing (d) (note 5)
19 16 51 34 
Total expenses11,820 12,719 33,231 38,012 
 
Income (loss) before income taxes2,100 2,505 4,629 7,205 
Income taxes499 474 1,105 1,592 
Net income (loss)1,601 2,031 3,524 5,613 
Per share information (Canadian dollars)
 
Net income (loss) per common share - basic (note 9)
2.77 3.25 6.05 8.60 
Net income (loss) per common share - diluted (note 9)
2.76 3.24 6.04 8.58 
(a) Amounts from related parties included in revenues.3,553 4,454 10,245 13,588 
(b) Amounts to related parties included in purchases of crude oil and products.1,228 1,086 3,270 2,865 
(c) Amounts to related parties included in production and manufacturing,
       and selling and general expenses.
121 120 381 354 
(d) Amounts to related parties included in financing.44 28 124 45 
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 dollars2023 2022 2023 2022 
Net income (loss)1,601 2,031 3,524 5,613 
Other comprehensive income (loss), net of income taxes  
Postretirement benefits liability adjustment (excluding amortization)  21 24 
Amortization of postretirement benefits liability adjustment
       included in net benefit costs
9 21 29 63 
Total other comprehensive income (loss)9 21 50 87 
Comprehensive income (loss)1,610 2,052 3,574 5,700 
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)
As at
Sep 30
As at
Dec 31
millions of Canadian dollars
2023
2022
Assets  
Current assets  
Cash and cash equivalents2,716 3,749 
Accounts receivable - net (a)
5,390 4,719 
Inventories of crude oil and products1,744 1,514 
Materials, supplies and prepaid expenses910 754 
Total current assets10,760 10,736 
Investments and long-term receivables (b)
1,048 893 
Property, plant and equipment,55,780 54,568 
less accumulated depreciation and depletion(25,399)(24,062)
Property, plant and equipment, net
30,381 30,506 
Goodwill166 166 
Other assets, including intangibles - net1,231 1,223 
Total assets43,586 43,524 
Liabilities  
Current liabilities  
Notes and loans payable121 122 
Accounts payable and accrued liabilities (a) (note 7)
7,234 6,194 
Income taxes payable418 2,582 
Total current liabilities7,773 8,898 
Long-term debt (c) (note 6)
4,017 4,033 
Other long-term obligations (note 7)
3,462 3,467 
Deferred income tax liabilities4,526 4,713 
Total liabilities19,778 21,111 
Shareholders’ equity  
Common shares at stated value (d) (note 9)
1,047 1,079 
Earnings reinvested23,223 21,846 
Accumulated other comprehensive income (loss) (note 10)
(462)(512)
Total shareholders’ equity23,808 22,413 
 
Total liabilities and shareholders’ equity43,586 43,524 
(a) Accounts receivable - net included net amounts receivable from related parties of $1,139 million (2022 - $1,108 million).
(b) Investments and long-term receivables included amounts from related parties of $285 million (2022 - $288 million).
(c) Long-term debt included amounts to related parties of $3,447 million (2022 - $3,447 million).
(d) Number of common shares authorized and outstanding were 1,100 million and 567 million, respectively (2022 - 1,100 million and 584 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 dollars2023 2022 2023 2022 
Common shares at stated value (note 9)
  
At beginning of period1,079 1,177 1,079 1,252 
Share purchases at stated value(32)(48)(32)(123)
At end of period1,047 1,129 1,047 1,129 
Earnings reinvested
At beginning of period23,220 21,913 21,846 21,660 
Net income (loss) for the period1,601 2,031 3,524 5,613 
Share purchases in excess of stated value(1,310)(1,464)(1,310)(4,338)
Dividends declared(288)(211)(837)(666)
At end of period23,223 22,269 23,223 22,269 
 
Accumulated other comprehensive income (loss) (note 10)
  
At beginning of period(471)(1,111)(512)(1,177)
Other comprehensive income (loss)9 21 50 87 
At end of period(462)(1,090)(462)(1,090)
Shareholders’ equity at end of period23,808 22,308 23,808 22,308 
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)
       Third Quarter
       Nine Months
       to September 30
millions of Canadian dollars2023 2022 2023 2022 
Operating activities  
Net income (loss)1,601 2,031 3,524 5,613 
Adjustments for non-cash items:
Depreciation and depletion475 555 1,418 1,432 
(Gain) loss on asset sales (note 3)
3 (131)(19)(155)
Deferred income taxes and other(168)122 (239)(358)
Changes in operating assets and liabilities:  
Accounts receivable(805)1,648 (671)(1,322)
Inventories, materials, supplies and prepaid expenses(330)(70)(389)(461)
Income taxes payable234 296 (2,164)1,608 
Accounts payable and accrued liabilities1,314 (1,328)1,011 1,315 
All other items - net (b)
35 (34)(48)13 
Cash flows from (used in) operating activities2,359 3,089 2,423 7,685 
 
Investing activities  
Additions to property, plant and equipment(387)(397)(1,315)(1,034)
Proceeds from asset sales (note 3)
6 760 29 886 
Additional investments (6) (6)
Loans to equity companies - net1 7 3 9 
Cash flows from (used in) investing activities(380)364 (1,283)(145)
Financing activities  
Long-term debt - reduction (note 6)
 (1,000) (1,000)
Finance lease obligations - reduction (note 6)
(5)(5)(16)(16)
Dividends paid(292)(227)(815)(640)
Common shares purchased (note 9)
(1,342)(1,512)(1,342)(4,461)
Cash flows from (used in) financing activities(1,639)(2,744)(2,173)(6,117)
 
Increase (decrease) in cash and cash equivalents340 709 (1,033)1,423 
Cash and cash equivalents at beginning of period2,376 2,867 3,749 2,153 
Cash and cash equivalents at end of period (a)
2,716 3,576 2,716 3,576 
(a) Cash equivalents are all highly liquid securities with maturity of three months or less.
(b) Included contributions to registered pension plans.(43)(41)(129)(137)
 
Income taxes (paid) refunded.(438)(64)(3,627)(339)
Interest (paid), net of capitalization.(15)(19)(52)(41)
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 2022 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, 2023, 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 dollars202320222023202220232022
Revenues and other income
Revenues (a) (b)
43 156 13,540 14,537 290 378 
Intersegment sales
4,768 4,665 1,560 1,693 92 142 
Investment and other income (note 3)
(4)128 12 6   
 4,807 4,949 15,112 16,236 382 520 
Expenses      
Exploration1 1     
Purchases of crude oil and products
1,852 1,937 13,061 13,686 254 354 
Production and manufacturing1,187 1,381 405 419 74 72 
Selling and general  177 174 21 17 
Federal excise tax and fuel charge  653 583 1 1 
Depreciation and depletion418 501 46 44 2 4 
Non-service pension and postretirement benefit      
Financing (note 5)
3      
Total expenses3,461 3,820 14,342 14,906 352 448 
Income (loss) before income taxes1,346 1,129 770 1,330 30 72 
Income tax expense (benefit)318 143 184 318 7 18 
Net income (loss)
1,028 986 586 1,012 23 54 
Cash flows from (used in) operating activities
1,771 1,280 378 1,532 74 109 
Capital and exploration expenditures (c)
244 309 103 64 2 2 
Third Quarter
Corporate and other
      Eliminations
       Consolidated
millions of Canadian dollars202320222023202220232022
Revenues and other income
Revenues (a) (b)
   — 13,873 15,071 
Intersegment sales
 — (6,420)(6,500) — 
Investment and other income (note 3)
39 19  — 47 153 
 39 19 (6,420)(6,500)13,920 15,224 
Expenses      
Exploration    1 1 
Purchases of crude oil and products
  (6,419)(6,499)8,748 9,478 
Production and manufacturing    1,666 1,872 
Selling and general40 19 (1)(1)237 209 
Federal excise tax and fuel charge    654 584 
Depreciation and depletion9 6   475 555 
Non-service pension and postretirement benefit20 4   20 4 
Financing (note 5)
16 16   19 16 
Total expenses85 45 (6,420)(6,500)11,820 12,719 
Income (loss) before income taxes(46)(26)  2,100 2,505 
Income tax expense (benefit)(10)(5)  499 474 
Net income (loss)
(36)(21)  1,601 2,031 
Cash flows from (used in) operating activities
136 168   2,359 3,089 
Capital and exploration expenditures (c)
38 17   387 392 

9


IMPERIAL OIL LIMITED
(a)Includes export sales to the United States of $2,180 million (2022 - $3,176 million).
(b)Revenues include both revenue within the scope of ASC 606 and outside the scope of ASC 606. Trade receivables in "Accounts receivable – net" reported on the Consolidated 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. Contractual terms, credit quality, and type of customer are generally similar between those revenues and receivables within the scope of ASC 606 and those outside it.
Revenues
        Third Quarter
millions of Canadian dollars2023 2022 
Revenue from contracts with customers12,271 13,223 
Revenue outside the scope of ASC 606
1,602 1,848 
Total13,873 15,071 
(c)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 dollars202320222023202220232022
Revenues and other income
Revenues (a) (b)
180 374 36,534 43,480 980 1,159 
Intersegment sales
11,909 14,923 4,748 5,550 272 395 
Investment and other income (note 3)
8 135 47 36   
12,097 15,432 41,329 49,066 1,252 1,554 
Expenses
Exploration3 4     
Purchases of crude oil and products
4,827 6,184 35,390 42,459 791 1,070 
Production and manufacturing3,730 4,053 1,291 1,193 186 193 
Selling and general  494 474 69 62 
Federal excise tax and fuel charge  1,778 1,615 3 1 
Depreciation and depletion1,250 1,269 135 130 10 13 
Non-service pension and postretirement benefit      
Financing (note 5)
3 1     
Total expenses9,813 11,511 39,088 45,871 1,059 1,339 
Income (loss) before income taxes2,284 3,921 2,241 3,195 193 215 
Income tax expense (benefit)542 807 535 761 46 52 
Net income (loss)
1,742 3,114 1,706 2,434 147 163 
Cash flows from (used in) operating activities
1,946 4,814 187 2,548 97 240 
Capital and exploration expenditures (c)
868 764 329 201 11 5 
Total assets as at September 30
28,356 28,099 10,912 9,972 441 482 
Nine Months to September 30
Corporate and other
      Eliminations
       Consolidated
millions of Canadian dollars202320222023202220232022
Revenues and other income
Revenues (a) (b)
   — 37,694 45,013 
Intersegment sales
 — (16,929)(20,868) — 
Investment and other income (note 3)
111 33  — 166 204 
111 33 (16,929)(20,868)37,860 45,217 
Expenses
Exploration    3 4 
Purchases of crude oil and products
  (16,926)(20,864)24,082 28,849 
Production and manufacturing    5,207 5,439 
Selling and general69 93 (3)(4)629 625 
Federal excise tax and fuel charge    1,781 1,616 
Depreciation and depletion23 20   1,418 1,432 
Non-service pension and postretirement benefit60 13   60 13 
Financing (note 5)
48 33   51 34 
Total expenses200 159 (16,929)(20,868)33,231 38,012 
Income (loss) before income taxes(89)(126)  4,629 7,205 
Income tax expense (benefit)(18)(28)  1,105 1,592 
Net income (loss)
(71)(98)  3,524 5,613 
Cash flows from (used in) operating activities
193 83   2,423 7,685 
Capital and exploration expenditures (c)
101 32   1,309 1,002 
Total assets as at September 30
4,346 4,704 (469)(271)43,586 42,986 
11


IMPERIAL OIL LIMITED
(a)Includes export sales to the United States of $6,589 million (2022 - $9,551 million).
(b)Revenues include both revenue within the scope of ASC 606 and outside the scope of ASC 606. Trade receivables in "Accounts receivable – net" reported on the Consolidated 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. Contractual terms, credit quality, and type of customer are generally similar between those revenues and receivables within the scope of ASC 606 and those outside it.
Revenues
       Nine Months
       to September 30
millions of Canadian dollars2023 2022 
Revenue from contracts with customers33,713 39,958 
Revenue outside the scope of ASC 606
3,981 5,055 
Total37,694 45,013 
(c)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 dollars2023 2022 2023 2022 
Proceeds from asset sales6 854 29 886 
Book value of asset sales9 723 10 731 
Gain (loss) on asset sales, before tax (a)
(3)131 19 155 
Gain (loss) on asset sales, after tax (a)
(2)222 16 241 
(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 dollars2023 2022 2023 2022 
Pension benefits:
Service cost41 70 122 210 
Interest cost94 74 280 221 
Expected return on plan assets(94)(103)(280)(309)
Amortization of prior service cost5 4 13 12 
Amortization of actuarial loss (gain)10 21 32 64 
Net benefit cost56 66 167 198 
Other postretirement benefits:   
Service cost3 6 9 17 
Interest cost7 6 21 18 
Amortization of actuarial loss (gain)(2)2 (6)7 
Net benefit cost8 14 24 42 
5.    Financing costs
       Third Quarter
      Nine Months
      to September 30
millions of Canadian dollars2023 2022 2023 2022 
Debt-related interest
53 34 148 66 
Capitalized interest
(37)(18)(100)(33)
Net interest expense
16 16 48 33 
Other interest
3  3 1 
Total financing
19 16 51 34 


13


IMPERIAL OIL LIMITED
6.    Long-term debt
As at
Sep 30
As at
Dec 31
millions of Canadian dollars2023 2022 
Long-term debt
3,447 3,447 
Finance leases
570 586 
Total long-term debt4,017 4,033 
7.    Other long-term obligations
 
As at
Sep 30
As at
Dec 31
millions of Canadian dollars2023 2022 
Employee retirement benefits (a)
876 902 
Asset retirement obligations and other environmental liabilities (b)
2,189 2,150 
Share-based incentive compensation liabilities
130 101 
Operating lease liability (c)
122 151 
Other obligations
145 163 
Total other long-term obligations3,462 3,467 
(a)Total recorded employee retirement benefits obligations also included $63 million in current liabilities (2022 - $63 million).
(b)Total asset retirement obligations and other environmental liabilities also included $116 million in current liabilities (2022 - $116 million).
(c)Total operating lease liability also included $107 million in current liabilities (2022 - $100 million). In addition to the total operating lease liability, undiscounted commitments for leases not yet commenced totalled $55 million (2022 - $14 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, 2023 and December 31, 2022, the fair value of long-term debt ($3,447 million, excluding finance lease obligations) was primarily a level 2 measurement.
Derivative instruments
The company’s size, strong capital structure and the complementary nature of its business segments 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 derivatives, 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” and in the Consolidated statement of cash flows in "Cash flow from (used in) operating activities". 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
Sep 30
As at Dec 31
thousands of barrels20232022
Crude3,280 1,800 
Products(850)(350)
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 dollars2023 2022 2023 2022 
Revenues6 105 (7)91 


15


IMPERIAL OIL LIMITED
The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement were as follows:
At September 30, 2023
millions of Canadian dollars
Fair valueEffect of
counterparty
netting
Effect of
collateral
netting
Net
carrying
value
Level 1Level 2Level 3Total
Assets
Derivative assets (a)
24 33  57 (23)(1)33 
Liabilities
Derivative liabilities (b)
24 39  63 (23) 40 
(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, 2022
millions of Canadian dollars
Fair valueEffect of
counterparty
netting
Effect of
collateral
netting
Net
carrying
value
Level 1Level 2Level 3Total
Assets
Derivative assets (a)
17 32  49 (27) 22 
Liabilities
Derivative liabilities (b)
21 20  41 (27)(4)10 
(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, 2023 and December 31, 2022, the company had $21 million and $14 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 at
Sep 30
2023
As at
Dec 31
2022
Authorized1,100,000 1,100,000 
Outstanding566,667 584,153 
The most recent 12-month normal course issuer bid program came into effect June 29, 2023 under which Imperial continued its existing share purchase program. The program enabled the company to purchase up to a maximum of 29,207,635 common shares (5 percent of the total shares on June 15, 2023) 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 its 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 19, 2023 as a result of the company purchasing the maximum allowable number of shares under the program.
The excess of the purchase cost over the stated value of shares purchased has been recorded as a distribution of earnings reinvested.
On October 27, 2023, 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, 2021
678,080 1,252 
Issued under employee share-based awards  
Purchases at stated value(93,927)(173)
Balance as at December 31, 2022
584,153 1,079 
Issued under employee share-based awards  
Purchases at stated value(17,486)(32)
Balance as at September 30, 2023
566,667 1,047 
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
2023202220232022
Net income (loss) per common share – basic
Net income (loss) (millions of Canadian dollars)
1,6012,0313,5245,613
Weighted-average number of common shares outstanding (millions of shares)
578.0625.3582.1652.9
Net income (loss) per common share (dollars)
2.773.256.058.60
Net income (loss) per common share – diluted
Net income (loss) (millions of Canadian dollars)
1,6012,0313,5245,613
Weighted-average number of common shares outstanding (millions of shares)
578.0625.3582.1652.9
Effect of employee share-based awards (millions of shares)
1.31.61.21.5
Weighted-average number of common shares outstanding,
        assuming dilution (millions of shares)
579.3626.9583.3654.4
Net income (loss) per common share (dollars)
2.763.246.048.58
Dividends per common share – declared (dollars)
0.500.341.441.02
18


IMPERIAL OIL LIMITED
10. Other comprehensive income (loss) information

Changes in accumulated other comprehensive income (loss):

millions of Canadian dollars2023 2022 
Balance at January 1(512)(1,177)
Postretirement benefits liability adjustment:
Current period change excluding amounts reclassified
       from accumulated other comprehensive income
21 24 
Amounts reclassified from accumulated other comprehensive income29 63 
Balance at September 30(462)(1,090)

Amounts reclassified out of accumulated other comprehensive income (loss) - before-tax income (expense):
 
      Third Quarter
      Nine Months
       to September 30
millions of Canadian dollars2023 2022 2023 2022 
Amortization of postretirement benefits liability adjustment
       included in net benefit cost (a)
(13)(28)(39)(83)
(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 dollars2023 2022 2023 2022 
Postretirement benefits liability adjustments:
Postretirement benefits liability adjustment (excluding amortization)  7 8 
Amortization of postretirement benefits liability adjustment
       included in net benefit cost
4 7 10 20 
Total4 7 17 28 

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 Item 10(e) of Regulation S-K, 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 dollars2023 2022 2023 2022 
From Imperial's Consolidated statement of income
Net income (loss) (U.S. GAAP)1,601 2,031 3,524 5,613 
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 items1,601 1,823 3,524 5,405 
20


IMPERIAL OIL LIMITED
Recent business environment

During the first quarter of 2023, the price of crude oil declined, impacted by higher inventory levels, and the price of crude oil remained relatively flat during the second quarter. In the third quarter, crude oil prices increased as demand exceeded supply after OPEC+ oil producers further reduced oil output. In addition, the Canadian WTI/WCS spread continued to recover in the third quarter, but remains weaker than 2022 on an annual basis. Similarly, 2023 refining margins remain strong but fall short of 2022 levels on an annual basis.
Operating results
Third quarter 2023 vs. third quarter 2022
 
        Third Quarter
millions of Canadian dollars, unless noted20232022
Net income (loss) (U.S. GAAP)
1,6012,031
Net income (loss) per common share, assuming dilution (dollars)
2.763.24
Net income (loss) excluding identified items¹1,6011,823

Prior year third quarter results included 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
78
Price – Synthetic crude oil realizations decreased by $11.82 per barrel, generally in line with WTI. Average bitumen realizations increased by $4.47 per barrel. Higher bitumen realizations were primarily driven by the narrowing of the WTI/WCS spread, partially offset by lower marker prices.

Volumes – Higher volumes were primarily driven by increased plant capacity utilization and mine equipment productivity at Kearl, and annual turnaround timing and duration at Syncrude, partially offset by steam cycle timing and planned turnaround activity at Cold Lake.

Identified Items1 Prior year third quarter results included favourable identified items1 related to the company's gain on the sale of interests in XTO Energy Canada.

Other – Includes lower operating expenses of about $160 million, and 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 noted2023 2022 
West Texas Intermediate (US$ per barrel)
82.32 91.43 
Western Canada Select (US$ per barrel)
69.39 71.53 
WTI/WCS Spread (US$ per barrel)
12.93 19.90 
Bitumen (per barrel)
86.05 81.58 
Synthetic crude oil (per barrel)
112.98 124.80 
Average foreign exchange rate (US$)
0.75 0.77 
Production
 
      Third Quarter
thousands of barrels per day2023 2022 
Kearl (Imperial's share)
209 193 
Cold Lake
128 150 
Syncrude (a)
75 62 
Kearl total gross production (thousands of barrels per day)
295 271 
(a)In the third quarter of 2023, Syncrude gross production included about 0 thousand barrels per day of bitumen and other products (2022 - 7 thousand barrels per day) that were exported to the operator's facilities using an existing interconnect pipeline.

Higher production at Kearl was primarily driven by increased plant capacity utilization and mine equipment productivity.

Lower production at Cold Lake was primarily driven by steam cycle timing and planned turnaround activity.

Higher production at Syncrude was primarily driven by annual turnaround timing and duration.
Downstream
Net income (loss) factor analysis
millions of Canadian dollars
81

Margins – Lower margins primarily reflect weaker market conditions.

Other – Includes favourable foreign exchange impacts of about $50 million, partially offset by higher turnaround impacts of about $50 million reflecting the planned turnaround activities at Sarnia refinery.
22


IMPERIAL OIL LIMITED
Refinery utilization and petroleum product sales
 
       Third Quarter
thousands of barrels per day, unless noted2023 2022 
Refinery throughput416 426 
Refinery capacity utilization (percent)
96 100 
Petroleum product sales478 484 

Lower refinery throughput in the third quarter of 2023 reflects the impact of planned turnaround activities at Sarnia refinery.
Chemicals
Net income (loss) factor analysis
millions of Canadian dollars
80
Corporate and other
 
       Third Quarter
millions of Canadian dollars2023 2022 
Net income (loss) (U.S. GAAP)
(36)(21)
Liquidity and capital resources
 
        Third Quarter
millions of Canadian dollars2023 2022 
Cash flows from (used in):  
Operating activities2,359 3,089 
Investing activities(380)364 
Financing activities(1,639)(2,744)
Increase (decrease) in cash and cash equivalents340 709 
Cash and cash equivalents at period end2,716 3,576 

Cash flows from operating activities primarily reflect lower Downstream margins.

Cash flows used in investing activities primarily reflect the absence of proceeds from the sale of interests in XTO Energy Canada.

Cash flows used in financing activities primarily reflect:
 
       Third Quarter
millions of Canadian dollars, unless noted2023 2022