2020 Large accelerated filer Non-accelerated filer Accelerated filer 734,076,755.SeptemberJune 30, 2017CANADA (I.R.S. Employer Calgary, Alberta, Canada T2C 5N1(Address of principal executive offices) (Postal Code) 9190 days. and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulationand post such files).1934).1934. Smaller reporting company Emerging growth company SeptemberJune 30, 20172020 was 837,581,329.
Nine Months to September 30 Revenues and other income Operating revenues(a) Investment and other income(note 3) Total revenues and other income Expenses Exploration Purchases of crude oil and products(b) Production and manufacturing(c) Selling and general(c) Federal excise tax Depreciation and depletion Financing costs(note 5) Total expenses Income (loss) before income taxes Income taxes Net income (loss) Per-share information(Canadian dollars) Net income (loss) per common share - basic(note 8) Net income (loss) per common share - diluted(note 8) Dividends per common share (a) Amounts from related parties included in operating revenues. (b) Amounts to related parties included in purchases of crude oil and products. (c) Nine Months to September 30 Net income (loss) Other comprehensive income (loss), net of income taxes Post-retirement benefits liability adjustment (excluding amortization) Amortization of post-retirement benefits liability adjustment included in net periodic benefit costs Total other comprehensive income (loss) Comprehensive income (loss) As at Sept 30 As at Dec 31 Assets Current assets Cash Accounts receivable, less estimated doubtful accounts(a) Inventories of crude oil and products Materials, supplies and prepaid expenses Total current assets Investments and long-term receivables Property, plant and equipment, less accumulated depreciation and depletion Property, plant and equipment, net Goodwill Other assets, including intangibles, net Total assets Liabilities Current liabilities Notes and loans payable(b) Accounts payable and accrued liabilities(a) (note 7) Income taxes payable Total current liabilities Long-term debt(c) (note 6) Other long-term obligations(d) (note 7) Deferred income tax liabilities Total liabilities Shareholders’ equity Common shares at stated value(e) (note 8) Earnings reinvested(note 9) Accumulated other comprehensive income (loss)(note 10) Total shareholders’ equity Total liabilities and shareholders’ equity Nine Months to September 30 Operating activities Net income (loss) Adjustments fornon-cash items: Depreciation and depletion (Gain) loss on asset sales(note 3) Deferred income taxes and other Changes in operating assets and liabilities: Accounts receivable Inventories, materials, supplies and prepaid expenses Income taxes payable Accounts payable and accrued liabilities All other items - net(a) Cash flows from (used in) operating activities Investing activities Additions to property, plant and equipment Proceeds from asset sales(note 3) Additional investments Cash flows from (used in) investing activities Financing activities Short-term debt - net Long-term debt - additions(note 6) Reduction in capitalized lease obligations(note 6) Dividends paid Common shares purchased(note 8) Cash flows from (used in) financing activities Increase (decrease) in cash Cash at beginning of period Cash at end of period(b) (a) Included contribution to registered pension plans. Revenues and other income Operating revenues(a) Intersegment sales Investment and other income(note 3) Expenses Exploration Purchases of crude oil and products Production and manufacturing Selling and general Federal excise tax Depreciation and depletion Financing costs(note 5) Total expenses Income (loss) before income taxes Income taxes Net income (loss) Cash flows from (used in) operating activities Capital and exploration expenditures(b) Revenues and other income Operating revenues(a) Intersegment sales Investment and other income(note 3) Expenses Exploration Purchases of crude oil and products Production and manufacturing Selling and general Federal excise tax Depreciation and depletion Financing costs(note 5) Total expenses Income (loss) before income taxes Income taxes Net income (loss) Cash flows from (used in) operating activities Capital and exploration expenditures(b) Revenues and other income Operating revenues(a) Intersegment sales Investment and other income(note 3) Expenses Exploration Purchases of crude oil and products Production and manufacturing Selling and general Federal excise tax Depreciation and depletion Financing costs(note 5) Total expenses Income (loss) before income taxes Income taxes Net income (loss) Cash flows from (used in) operating activities Capital and exploration expenditures(b) Total assets as at September 30 Revenues and other income Operating revenues(a) Intersegment sales Investment and other income(note 3) Expenses Exploration Purchases of crude oil and products Production and manufacturing Selling and general Federal excise tax Depreciation and depletion Financing costs(note 5) Total expenses Income (loss) before income taxes Income taxes Net income (loss) Cash flows from (used in) operating activities Capital and exploration expenditures(b) Total assets as at September 30 Nine Months to September 30 Proceeds from asset sales Book value of asset sales Gain (loss) on asset sales, before tax(a) (b) Gain (loss) on asset sales, after tax(a) (b) Pension benefits: Current service cost Interest cost Expected return on plan assets Amortization of prior service cost Amortization of actuarial loss (gain) Net periodic benefit cost Other post-retirement benefits: Current service cost Interest cost Amortization of actuarial loss (gain) Net periodic benefit cost Debt-related interest Capitalized interest Net interest expense Other interest Total financing costs Long-term debt Capital leases Total long-term debt Employee retirement benefits(a) Asset retirement obligations and other environmental liabilities(b) Share-based incentive compensation liabilities Other obligations Total other long-term obligations Authorized Common shares outstanding the following lines on a 1995 - 2015 2016 - Third quarter - Full year 2017 - Third quarter -Year-to-date Cumulative purchase to date Net income (loss) per common share - basic Net income (loss)(millions of Canadian dollars) Weighted average number of common shares outstanding(millions of shares) Net income (loss) per common share(dollars) Net income (loss) per common share - diluted Net income (loss)(millions of Canadian dollars) Weighted average number of common shares outstanding(millions of shares) Effect of employee share-based awards(millions of shares) Weighted average number of common shares outstanding, assuming dilution(millions of shares) Net income (loss) per common share(dollars) Earnings reinvested at beginning of period Net income (loss) for the period Share purchases in excess of stated value Dividends declared Earnings reinvested at end of period Balance at January 1 Post-retirement benefits liability adjustment: Current period change excluding amounts reclassified from accumulated other comprehensive Amounts reclassified from accumulated other comprehensive income Balance at September 30 Amortization of post-retirement benefits liability adjustment (a) This accumulated other comprehensive income component is included in the computation of net periodic benefit cost (note 4). Post-retirement benefits liability adjustments: Post-retirement benefits liability adjustment (excluding amortization) Amortization of post-retirement benefits liability adjustment included in Total Downstream segment. of 2020, the company entered into two additional committed short-term lines of credit totalling $800 million to supplement its existing lines of credit of $500 million. Both credit facilities will expire within one year and may be renewed or replaced according to the company’s financing needs and business environment. At the end of June 30, 2020, the company’s cash balance was $233 million, and Alberta corporate income tax rate decrease. 2019. 2019. 2019. management and maintenance. balancing of near-term production with demand and a revised turnaround schedule. the of 2019. Lower throughput was primarily due to reduced demand from the COVID-19 pandemic, partially offset by improved reliability mainly driven by the absence of the Sarnia fractionation tower incident. 2019. Lower petroleum product sales were mainly due to reduced demand from the COVID-19 pandemic. 2019. 2019 2019. 2019 results included a favourable impact, largely in 2019. 2020, adjusted for changes in exchange rates and transportation costs. Synthetic crude realizations averaged $48.10 per barrel, compared to $74.77 per barrel from the same period in 2019. 2019. with demand. demand from the COVID-19 pandemic, partially offset by improved reliability including the absence of the Sarnia fractionation tower incident. 2019, mainly due to lower share-based compensation charges. 2019, primarily reflecting lower realizations in the Upstream and lower margins in the Downstream. 2019. During the shares, or on June 28, 2021. 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 2019. The following table details those earnings sensitivities that have been updated from the fiscal year-end to reflect current market conditions. 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. increased production in key producing countries as well as demand reduction due to the COVID-19 pandemic that was characterized as a global pandemic in March, 2020, and have led to volatility in commodity prices. Total number of Average price Total number of Maximum number July 2017 (Jul 1 – Jul 31) August 2017 (Aug 1 – Aug 31) September 2017 (Sept 1 – Sept 30)2016.2019. Note that numbers may not add due to rounding. Third Quarter millions of Canadian dollars 2017 2016 2017 2016 7,134 6,568 21,077 17,967 24 874 270 945 7,158 7,442 21,347 18,912 7 16 29 75 4,251 3,857 13,226 10,884 1,338 1,261 4,238 3,842 219 275 626 812 438 434 1,253 1,237 391 398 1,135 1,229 18 19 49 52 6,662 6,260 20,556 18,131 496 1,182 791 781 125 179 164 60 371 1,003 627 721 0.44 1.18 0.74 0.85 0.44 1.18 0.74 0.85 0.16 0.15 0.47 0.44 756 448 2,801 1,457 604 623 1,919 1,540 Amounts to related parties included in production and manufacturing, and selling and general expenses. 127 133 415 394 Six Months Second Quarter to June 30 millions of Canadian dollars 2019 2019 9,228 17,193 33 50 9,261 17,243 5 38 5,662 10,557 1,715 3,310 236 449 463 857 392 782 36 72 23 51 8,532 16,116 729 1,127 (483 ) (378 ) 1,212 1,505 1.58 1.95 1.57 1.94 2,234 3,956 908 1,636 161 322 24 52 Third Quarter millions of Canadian dollars 2017 2016 2017 2016 371 1,003 627 721 - - 41 100 34 34 106 108 34 34 147 208 405 1,037 774 929 Six Months Second Quarter to June 30 millions of Canadian dollars 2019 2019 1,212 1,505 - 18 28 55 28 73 1,240 1,578 millions of Canadian dollars
2017
2016 833 391 1,896 2,023 989 949 441 468 4,159 3,831 931 1,030 53,844 53,515 (18,248 ) (17,182 ) 35,596 36,333 186 186 498 274 41,370 41,654 202 202 3,041 3,193 59 488 3,302 3,883 5,013 5,032 3,698 3,656 4,336 4,062 16,349 16,633 1,547 1,566 25,224 25,352 (1,750 ) (1,897 ) 25,021 25,021 41,370 41,654 millions of Canadian dollars 2019 1,718 2,699 1,296 616 6,329 891 54,868 (20,665 ) 34,203 186 578 42,187 229 4,260 106 4,595 4,961 3,637 4,718 17,911 1,375 24,812 (1,911 ) 24,276 42,187 (a) $87$317 million (2016(2019 - $172$1,007 million).(b) (c) $75$111 million (2016(2019 - $75$111 million).(c)(d)(2016(2019 - $4,447 million).(d)Other long-term obligations included amounts to related parties of $71 million (2016 - $104 million).(e) 838734 million, respectively (2016(2019 - 1,100 million and 848744 million, respectively).cash flowsshareholders’ equity (U.S. GAAP, unaudited)Inflow (outflow) Third Quarter millions of Canadian dollars 2017 2016 2017 2016 371 1,003 627 721 391 398 1,135 1,229 (6 ) (909 ) (219 ) (952 ) 131 215 294 35 (297 ) 275 127 (121 ) 104 (7 ) (13 ) 112 19 (13 ) (429 ) - 81 (241 ) (159 ) (59 ) 43 51 320 299 837 772 1,683 1,264 (241 ) (189 ) (683 ) (893 ) 8 1,194 230 1,244 (1 ) - (1 ) (1 ) (234 ) 1,005 (454 ) 350 - (1,591 ) - (1,679 ) - - - 495 (7 ) (6 ) (20 ) (21 ) (136 ) (127 ) (390 ) (364 ) (250 ) - (377 ) - (393 ) (1,724 ) (787 ) (1,569 ) 210 53 442 45 623 195 391 203 833 248 833 248 (78 ) (44 ) (176 ) (120 ) (b)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. Second Quarter Six Months
to June 30 millions of Canadian dollars 2019 2019 1,427 1,446 (17 ) (36 ) 1,410 1,410 24,364 24,560 1,212 1,505 (351 ) (693 ) (169 ) (316 ) - - 25,056 25,056 (1,472 ) (1,517 ) 28 73 (1,444 ) (1,444 ) 25,022 25,022 Inflow (outflow) Second Quarter Six Months
to June 30 millions of Canadian dollars 2019 2019 1,212 1,505 392 782 - - (11 ) (6 ) - - (471 ) (475 ) 99 (605 ) (40 ) (21 ) (9 ) (37 ) (175 ) 728 29 158 1,026 2,029 (394 ) (825 ) 14 36 (49 ) (103 ) (429 ) (892 ) (6 ) (13 ) (147 ) (296 ) (368 ) (729 ) (521 ) (1,038 ) 76 99 1,011 988 1,087 1,087 (57 ) (98 ) 23 (152 ) 46 (23 ) (36 ) (51 ) of the United States of America (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 20162019 annual report on Form Prior data has been reclassified in certain cases to conform to the current presentation basis.ninesix months ended SeptemberJune 30, 2017,2020, are not necessarily indicative of the operations to be expected for the full year.2.Third Quarter Upstream Downstream Chemical millions of Canadian dollars 2017 2016 2017 2016 2017 2016 1,668 1,316 5,204 4,971 262 281 587 709 241 253 62 58 7 1 15 870 - 1 2,262 2,026 5,460 6,094 324 340 7 16 - - - - 947 861 4,014 3,827 179 188 893 887 394 323 51 51 5 (1 ) 167 238 19 22 - - 438 434 - - 330 346 53 46 3 2 1 (2 ) - - - - 2,183 2,107 5,066 4,868 252 263 79 (81 ) 394 1,226 72 77 17 (55 ) 102 224 20 21 62 (26 ) 292 1,002 52 56 479 432 268 264 99 73 92 149 55 38 5 7 Third Quarter Corporate and Other Eliminations Consolidated millions of Canadian dollars 2017 2016 2017 2016 2017 2016 - - - - 7,134 6,568 - - (890 ) (1,020 ) - - 2 2 - - 24 874 2 2 (890 ) (1,020 ) 7,158 7,442 - - - - 7 16 - - (889 ) (1,019 ) 4,251 3,857 - - - - 1,338 1,261 29 17 (1 ) (1 ) 219 275 - - - - 438 434 5 4 - - 391 398 17 21 - - 18 19 51 42 (890 ) (1,020 ) 6,662 6,260 (49 ) (40 ) - - 496 1,182 (14 ) (11 ) - - 125 179 (35 ) (29 ) - - 371 1,003 (9 ) 3 - - 837 772 7 11 - - 159 205 Second Quarter Upstream Downstream Chemical millions of Canadian dollars 2019 2019 2019 2,587 6,375 266 1,116 487 48 4 19 - 3,707 6,881 314 5 - - 1,802 5,338 171 1,171 474 70 - 201 23 - 463 - 338 46 3 - - - - - - 3,316 6,522 267 391 359 47 (594) 101 9 985 258 38 585 423 52 301 111 6 Second Quarter Corporate and other Eliminations Consolidated millions of Canadian dollars 2019 2019 2019 - - - 3,666 9,228 - (1,651) - 10 - 33 10 (1,651) 9,261 - - 5 - (1,649) 5,662 - - 1,715 14 (2) 236 - - 463 5 - 392 36 - 36 23 - 23 78 (1,651) 8,532 (68) - 729 1 - (483) (69) - 1,212 (34) - 1,026 11 - 429 (a) $1,080$739 million (2016(2019 - $941$2,152 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.(b) capitalfinance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.Nine Months to September 30 Upstream Downstream Chemical millions of Canadian dollars 2017 2016 2017 2016 2017 2016 5,166 3,699 15,087 13,470 824 798 1,494 1,516 792 689 191 156 17 22 248 919 (1 ) 1 6,677 5,237 16,127 15,078 1,014 955 29 75 - - - - 3,089 2,584 12,037 10,139 573 518 2,917 2,634 1,169 1,059 152 149 1 (3 ) 540 729 60 63 - - 1,253 1,237 - - 964 1,053 148 158 9 6 5 (6 ) - - - - 7,005 6,337 15,147 13,322 794 736 (328 ) (1,100 ) 980 1,756 220 219 (103 ) (336 ) 230 363 59 59 (225 ) (764 ) 750 1,393 161 160 904 32 626 1,028 176 205 286 745 128 145 12 21 35,387 36,975 4,671 4,403 365 379 Nine Months to September 30 Corporate and Other Eliminations Consolidated millions of Canadian dollars 2017 2016 2017 2016 2017 2016 - - - - 21,077 17,967 - - (2,477 ) (2,361 ) - - 6 3 - - 270 945 6 3 (2,477 ) (2,361 ) 21,347 18,912 - - - - 29 75 - - (2,473 ) (2,357 ) 13,226 10,884 - - - - 4,238 3,842 29 27 (4 ) (4 ) 626 812 - - - - 1,253 1,237 14 12 - - 1,135 1,229 44 58 - - 49 52 87 97 (2,477 ) (2,361 ) 20,556 18,131 (81 ) (94 ) - - 791 781 (22 ) (26 ) - - 164 60 (59 ) (68 ) - - 627 721 (23 ) (1 ) - - 1,683 1,264 29 37 - - 455 948 1,283 674 (336 ) (337 ) 41,370 42,094 Six Months to June 30 Upstream Downstream Chemical millions of Canadian dollars 2019 2019 2019 4,827 11,849 517 2,064 935 120 4 29 - 6,895 12,813 637 38 - - 3,388 9,920 364 2,327 855 128 - 380 44 - 857 - 672 92 7 - - - - - - 6,425 12,104 543 470 709 94 (573) 194 22 1,043 515 72 865 1,155 100 673 240 23 35,059 5,041 451 Six Months to June 30 Corporate and other Eliminations Consolidated millions of Canadian dollars 2019 2019 2019 - - 17,193 - (3,119) - 17 - 50 17 (3,119) 17,243 - - 38 - (3,115) 10,557 - - 3,310 29 (4) 449 - - 857 11 - 782 72 - 72 51 - 51 163 (3,119) 16,116 (146) - 1,127 (21) - (378) (125) - 1,505 (91) - 2,029 22 - 958 1,822 (444) 41,929 (a) $3,024$2,112 million (2016 - $2,704(2019—$3,816 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.(b) capitalfinance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.3.Investment and other income Third Quarter millions of Canadian dollars 2017 2016 2017 2016 8 1,194 230 1,244 2 285 12 292 6 909 219 952 5 774 191 808 (a)The nine months ended September 30, 2017 included a gain of $174 million ($151 million after tax) for the sale of a surplus property in Ontario.(b)Third quarter and nine months ended September 30, 2016, included gains of $0.8 billion ($0.7 billion, after tax) from the sale of company-owned Esso retail sites in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia and Newfoundland.4.Employee retirement benefits Second Quarter millions of Canadian dollars 2019 2019 14 36 3 30 11 6 10 6 Third Quarter Nine Months
to September 30 millions of Canadian dollars 2017 2016 2017 2016 54 50 163 152 77 82 235 240 (104 ) (101 ) (306 ) (300 ) 2 2 7 7 43 39 132 121 72 72 231 220 4 4 12 12 6 7 18 20 2 3 6 10 12 14 36 42 5.Financing costs and additional notes and loans payable information Third Quarter Nine Months
to September 30 millions of Canadian dollars 2017 2016 2017 2016 24 32 73 95 (7) (11) (29) (37) 17 21 44 58 1 (2) 5 (6) 18 19 49 52 Second Quarter millions of Canadian dollars 2019 2019 57 114 81 162 (88 ) (175 ) - - 38 75 88 176 4 8 6 11 (1 ) (1 ) 9 18 2019 2019 34 73 (11 (22 23 51 23 51 As at
June 30 As at
Dec 31 millions of Canadian dollars 2019 4,447 514 4,961 6.Long-term debt As at
Sept 30 As at
Dec 31 millions of Canadian dollars 2017 2016 4,447 4,447 566 585 5,013 5,032 7.Other long-term obligations As at
Sept 30 As at
Dec 31 millions of Canadian dollars 2017 2016 1,410 1,645 1,577 1,544 138 139 573 328 3,698 3,656 As at
June 30 As at
Dec 31 millions of Canadian dollars 2019 1,822 1,388 65 143 219 3,637 (a) (2016(2019 - $58 million).(b) $108$124 million in current liabilities (2016(2019 - $108$124 million).8.(c)Common shares As of
Sept 30 As of
Dec 31 thousands of shares 2017 2016 1,100,000 1,100,000 837,581 847,599 From 1995 through September 2017,haduses commodity-based contracts, including derivative instruments to manage commodity price risk. The company does not designate derivative instruments as a serieshedge for hedge accounting purposes.12-month normal course issuer bid share purchase programs. Cumulatively, 916,563 thousand shares 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.purchased under these programs. Exxon Mobil Corporation’s participationgross assets of $27 million, gross liabilities of $74 million and collateral receivable of $70 million, with the net effects reflected in these programs, including concurrent programs outside“Accounts receivable, less estimated doubtful accounts” on the normal course issuer bids, maintained its ownership interestConsolidated balance sheet. At December 31, 2019 the carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $0 million, gross liabilities of $2 million and collateral receivable of $6 million.Imperial at approximately 69.6 percent. Second Quarter millions of Canadian dollars 2019 2019 - (2 ) - (6 ) - (8 ) As of
June 30 thousands of shares 2019 1,100,000 743,902 currentannouncedin place during the second quarter of 2020, came into effect on June 22, 2017,27, 2019. The program enabled the company to purchase up to a maximum of 38,211,086 common shares (5 percent of the total shares on June 13, 2019), which included shares purchased under which Imperial plansthe normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. Exxon Mobil Corporation participated to continuemaintain its share purchaseownership percentage at approximately 69.6 percent. The program ended on June 26, 2020, and purchases under this program were suspended on April 1, 2020. Upon expiration, the company had purchased 28,697,514 shares under the program.25,395,92750,000 common shares, (3 percent of the total shares on June 13, 2017), which includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. As in the past, Exxon Mobil Corporation has advised the company that it intends to participate to maintain its ownership percentage at approximately 69.6 percent. The results of these activities are as shown below:year Purchased shares
thousands Millions of
dollars 906,544 15,708 - - 1 - 6,732 250 10,018 377 916,563 16,085 IMPERIAL OIL LIMITED Thousands
of shares Millions
of dollars 782,565 1,446 1 - (38,664 ) (71 ) 743,902 1,375 - - (9,825 ) (18 ) 734,077 1,357 net incomebasic and diluted earnings per common share:share and the dividends declared by the company on its outstanding common shares: Nine Months Third Quarter to September 30 2017 2016 2017 2016 371 1,003 627 721 841.8 847.6 845.5 847.6 0.44 1.18 0.74 0.85 371 1,003 627 721 841.8 847.6 845.5 847.6 3.1 3.2 2.9 3.0 844.9 850.8 848.4 850.6 0.44 1.18 0.74 0.85 Six Months Second Quarter to June 30 2019 2019 1,212 1,505 767.4 772.5 1.58 1.95 1,212 1,505 767.4 772.5 2.5 2.4 769.9 774.9 1.57 1.94 0.22 0.41 9.Earnings reinvested Nine Months Third Quarter to September 30 millions of Canadian dollars 2017 2016 2017 2016 25,224 23,160 25,352 23,687 371 1,003 627 721 (237 ) - (358 ) - (134 ) (127 ) (397 ) (373 ) 25,224 24,036 25,224 24,036 10.Other comprehensive income (loss) informationmillions of Canadian dollars 2017 2016 (1,897 ) (1,828 )
income 41 100 106 108 (1,750 ) (1,620 ) millions of Canadian dollars 2019 (1,517 ) 18 55 (1,444 ) Third Quarter Nine Months
to September 30 millions of Canadian dollars 2017 2016 2017 2016
included in net periodic benefit cost (a) (47 ) (44 ) (145 ) (138 ) Second Quarter Six Months
to June 30 millions of Canadian dollars 2019 2019 (37 ) (74 ) Third Quarter Nine Months
to September 30 millions of Canadian dollars 2017 2016 2017 2016 - - 16 37
net periodic benefit cost 13 10 39 30 13 10 55 67 11.Recently issued accounting standards Second Quarter Six Months
to June 30 millions of Canadian dollars 2019 2019 - 7 9 19 9 26 May 2014, the Financial Accounting Standards Board (FASB) issuedfirst quarter of 2020, a new standard,Revenue from ContractsCustomers.the carrying value of crude oil inventory exceeding the current market value. In the second quarter of 2020, the first quarter’s temporarystandard establishes a single revenue recognition model for all contracts with customers, eliminates industry specific requirements and expands disclosure requirements. The standard is requiredinventory balance will continue to be adopted beginning January 1, 2018.company expects to adopt the standard using the modified retrospective method, under which prior years’ results are not restated, but supplemental informationgoodwill impairment is reflected in “Depreciation and depletion” on the impactConsolidated statement of the new standard will be included in the 2018 results. The impact from the standard is not expected to have a material effectincome and “Goodwill” on the company’s financial statements.In February 2016,Consolidated balance sheet. The remaining balance of goodwill is associated with the FASB issued a new standard, Leases. The standard requires all leases with an initial term greater than one year be recorded on the balance sheet as a lease asset and lease liability. The standard is required to be adopted beginning January 1, 2019. Imperial is evaluating the standard and its effect on the company’s financial statements and plans to adopt it in 2019.In March 2017, the FASB issued an Accounting Standards Update2017-07, Compensation – Retirement Benefits (Topic 715):Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The update requires that the service cost component of net benefit costs be reported in the same line in the income statement as other compensation costs and that the other components of net benefit costs be presented separately from the service cost component. Additionally, only the service cost component of net benefit costs will be eligible for capitalization. Imperial will adopt the update beginning January 1, 2018. As a result of Imperial’s adoption of the update, the company expects to add a new lineNon-service pension and other postretirement benefit expense to its consolidated statement of income. This line would reflect the other components of net benefit costs as described in the Accounting Standards Update and would include amounts that were previously included in Production and manufacturing expenses, and Selling and general expenses. As of January 1, 2018, these costs will no longer be considered for capitalization. The impact from this change on the company’s net income is not expected to be material. Furthermore, as part of the adoption of the update, the company expects it will include all of these costs in its Corporate and Other expenses.IMPERIAL OIL LIMITEDOperating resultsThird2017 vs. thirdthe effects of COVID-19 continued to affect the world’s major economies, and market conditions reflected considerable uncertainty. In Canada, consumer and business activity exhibited some signs of recovery, but relative to prior periods continues to be negatively affected by the pandemic. Key2016net incometotal debt did not increase during the second quarter.2017 was $371other maintenance activities across its operations. These activities will be managed to ensure the health and safety of site personnel. Refinery utilization rates and petroleum product sales were reduced through the second quarter of 2020, driven by the significant decline in demand for petroleum products in Canada, but are expected to improve in the third quarter. However, the length and severity of decreased demand due to COVID-19 and the current business environment are highly uncertain, with the future supply and demand patterns inherently difficult to predict.$0.44per-share$0.72 per share on a diluted basis in the second quarter of 2020, compared to the net income of $1,003$1,212 million or $1.18per-share for$1.57 per share in the same period last year. Thirdof 2019. Second quarter 20162020 results include a reversal of the$716favourable impact, largelygain fromassociated with the sale of retail sites. net income in the third quarter of $62 million, compared to a net loss of $26$444 million in the second quarter of 2020, compared to net income of $985 million in the same period of 2016.2019. Results in the third quarter of 2017 reflected the impact of higher Canadian crude oilwere negatively impacted by lower realizations of about $190$1,210 million, the absence of a favourable impact of $689 million associated with the Alberta corporate income tax rate decrease in 2019, and higher Kearllower volumes of about $50$200 million. These impactsitems were partially offset by lower Syncrude and conventional volumesa reversal of about $80theincludingrecorded in the absencefirst quarter of production at Norman Wells, and higher2020, lower royalties of about $50$200 million, lower operating expenses of about $170 million, and favourable foreign exchange effects of about $60 million.48.2327.83 per barrel in the thirdsecond quarter of 2017, up2020, down from US$44.9459.91 per barrel in the same quarter of 2016.2019. Western Canada Select (WCS) averaged US$38.2916.73 per barrel and US$31.4349.31 per barrel respectively for the same periods. The WTI / WCS differential narrowed to 21 percent inaveraged approximately US$11 per barrel for the thirdsecond quarter of 2017,2020, essentially unchanged from 30 percent in the same period of 2016.0.800.72 in the thirdsecond quarter of 2017, an increase2020, a decrease of US$0.03 from the thirdsecond quarter of 2016.anddecreased in the quarter, primarily due to a decrease in WCS. Bitumen realizations averaged $12.82 per barrel in the second quarter of 2020, compared to $57.19 per barrel in the second quarter of 2019. The company’s average Canadian dollar realizations for synthetic crudes increasedcrude decreased generally in line with the North American benchmarks,WTI, adjusted for changes in exchange rates and transportation costs. Bitumen realizations averaged $39.02 per barrel for the third quarter of 2017, an increase of $8.86 per barrel versus the third quarter of 2016. Synthetic crude realizations averaged $61.14$32.20 per barrel an increasein the second quarter of $2.172020, compared to $79.96 per barrel forin the same period of 2016.163,000123,000 barrels per day in the thirdsecond quarter, up from 157,000compared to 135,000 barrels per day in the same period last year. The higherof 2019. Lower production was mainly due to theproduction timing of theassociated with steam cycles.Gross production of Kearl bitumen averaged 182,000 barrels per day in the third quarter (129,000 barrels Imperial’s share) up from 159,000 barrels per day (113,000 barrels Imperial’s share) during the third quarter of 2016. Higher production was mainly the result of improved reliability.74,00050,000 barrels per day, compared to 85,00080,000 barrels per day in the thirdsecond quarter of 2016. Repairs associated with the Syncrude Mildred Lake upgrader fire were completed in late July.2019. Lower third quarter volumes reflect the impact of the fire on operations, when comparedproduction was mainly due to the same quarter in 2016.income was $292loss of $32 million in the thirdsecond quarter of 2020, compared to $1,002net income of $258 million in the same period of 2016. Earnings decreased mainly2019. Results were negatively impacted by lower margins of about $400 million including the effects of reduced demand from the COVID-19 pandemic, and lower sales volumes of about $120 million. These items were partially offset by improved reliability of about $100 million, primarily due to the absence of a $716 million gain from the sale of company-owned retail sites and higher refining turnaround activitySarnia fractionation tower incident which occurred in April 2019, lower operating expenses of about $100 million. These factors were partly offset by higher refining margins$90 million, and a reversal of about $140 million.385,000278,000 barrels per day, compared to 407,000344,000 barrels per day in the thirdsecond quarter of 2016. Reduced throughput reflects increased turnaround activity associated with the Nanticoke refinery2019. Capacity utilization was 66 percent, compared to 81 percent in the thirdsecond quarter 2017.500,000357,000 barrels per day, compared to 505,000477,000 barrels per day in the thirdsecond quarter of 2016.IMPERIAL OIL LIMITED$52$7 million in the thirdsecond quarter, compared to $56$38 million infrom the same quarter of 2016.Net income effects from 2019.Otherother expenses were negative $35$57 million in the thirdsecond quarter, compared to negative $29$69 million in the same period of 2016.Nine20172020 vs. ninesix months 2016incomeloss in the first ninesix months of 20172020 was $627$714 million, or $0.74per-share$0.97 per share on a diluted basis, versuscompared to net income of $721$1,505 million or $0.85 per-share$1.94 per share in the first ninesix months of 2016.$225$1,052 million infor the first ninesix months of 2017,the year, compared to a net lossincome of $764$1,043 million fromin the same period of 2016.2019. Results reflected the impact of higher Canadian crude oilwere negatively impacted by lower realizations of about $940$1,800 million, the absence of a favourable impact of $689 million associated with the Alberta corporate income tax rate decrease in 2019, and higher Kearllower volumes of about $50$210 million. These impactsitems were partially offset by higherlower royalties of about $150$310 million, lower Syncrude and conventional volumesoperating expenses of about $130$190 million, including the absence of production at Norman Wells, higher energy costsand favourable foreign exchange effects of about $90 million, and higher operating expenses at Syncrude of about $90$110 million.49.4036.66 per barrel in the first ninesix months of 2017, up2020, down from US$41.5457.45 per barrel in the same period of 2016.2019. Western Canada Select averaged US$37.5721.20 per barrel and US$27.7445.88 per barrel respectively for the same periods. The WTI / WCS differential narrowedwidened to 24 percentaverage approximately US$15 per barrel in the first ninesix months of 2017,2020, from 33 percentaround US$12 per barrel in the same period of 2016.During the first nine months of 2017, the Canadian dollar strengthened relative to the US dollar versus the same period of 2016. 2019.0.770.73 in the first ninesix months of 2017, an increase2020, a decrease of about US$0.010.02 from the same period of 2016.and synthetic crudes increased generally in line with the North American benchmarks, adjusted for changesdecreased in the exchange rate and transportation costs.first six months of 2020, primarily due to a decrease in WCS. Bitumen realizations averaged $37.82$15.54 per barrel, for the first nine months of 2017, an increase of $14.05 per barrel versus the same period of 2016. Synthetic crude realizations averaged $64.37 per barrel, an increase of $10.92compared to $53.20 per barrel from the same period in 2019. The company’s average Canadian dollar realizations for synthetic crude decreased generally in line with WTI in the first six months of 2016.161,000131,000 barrels per day in the first ninesix months of 2017,2020, compared to 162,000 barrels per day from the same period of 2016.Gross production of Kearl bitumen averaged 179,000140,000 barrels per day in the first nine months of 2017 (127,000 barrels Imperial’s share) up from 169,000 barrels per day (120,000 barrels Imperial’s share) from the same period of 2016. Increased 2017 production reflects improved reliability associated with the mining and ore preparation operations.ninesix months of 2017,2020, the company’s share of gross production from Syncrude averaged 56,00061,000 barrels per day, compared to 61,00079,000 barrels per day fromin the same period of 2016. Syncrude year to date2019. Lower production was impacted bymainly due to the March 2017 fire at the Syncrude Mildred Lake upgrader and planned maintenance. In 2016,balancing of near-term production was impacted by the Alberta wildfires and planned maintenance.$750$370 million, compared to $1,393$515 million fromin the same period of 2016. Earnings decreased mainly due to2019. Results were negatively impacted by lower margins of about $250 million including the absenceeffects of a $719 million gainreduced demand from the sale of company-owned retail sitesCOVID-19 pandemic, and lower marketing marginssales volumes of approximately $170 million associated with the impact of the retail divestment.about $150 million. These factorsitems were partially offset by a gain of $151 million from the sale of a surplus property and higher industry refining marginsimproved reliability of about $90$160 million, including the absence of the Sarnia fractionation tower incident which occurred in April 2019, and lower operating expenses of about $80 million.381,000330,000 barrels per day in the first ninesix months of 2017, up from 351,0002020, compared to 364,000 barrels per day fromin the same period of 2016.2019. Capacity utilization increasedwas 78 percent, compared to 90 percent from 8386 percent in the same period of 2016, reflecting2019. Lower throughput was primarily due to reduced turnaround maintenance activity.492,000409,000 barrels per day in the first ninesix months of 2017, up from 481,0002020, compared to 477,000 barrels per day fromin the same period of 2016. Sales growth continues2019. Lower petroleum product sales were mainly due to be driven by strong collaboration across our downstream value chain andreduced demand from the expansionCOVID-19 pandemic.$161$28 million up from $160in the first six months of 2020, compared to $72 million fromin the same period of 2016.IMPERIAL OIL LIMITEDFor2019.ninesix months of 2017, net income effects from Corporate and Other were negative $592020, compared to $125 million versus negative $68 million fromin the same period of 2016.was $837 million in the third quarter, compared with $772of $1,026 million in the corresponding period in 2016.$234$172 million in the thirdsecond quarter, compared with $1,005$429 million cash generated from investing activitiesused in the same period of 2016,2019, primarily reflecting lower proceeds from asset sales.Cash used in financing activities was $393 million in the third quarter, compared with $1,724 million in the third quarter of 2016, reflecting the absence of debt repayments. Dividends paid in the third quarter of 2017 were $136 million. Theper-share dividend paid in the third quarter was $0.16, up from $0.15 in the same period of 2016. In the second quarter of 2017, Imperial resumed share purchases under its share buyback program. During the third quarter, the company purchased about 6.7 million shares for approximately $250 million.The company’s cash balance was $833 million at September 30, 2017, versus $248 million at the end of the third quarter of 2016.Cash flow generated from operating activities was $1,683 million in the first nine months of 2017, compared with $1,264 million in 2016, reflecting higher earnings, excluding the impact of asset sales, partially offset by unfavourable working capital effects.Investing activities used net cash of $454 million in the first nine months of 2017, compared with cash generated from investing activities of $350 million from the same period of 2016, reflecting lower proceeds from asset sales partially offset by lower additions to property, plant and equipment.$787$167 million in the first nine months of 2017,second quarter, compared with $1,569$521 million used in the second quarter of 2019. Dividends paid in the second quarter of 2020 were $162 million. The per share dividend paid in the second quarter was $0.22, up from $0.19 in the same period of 2016, reflecting the absence of debt repayments. Dividends paid in the first nine months of 2017 were $390 million. Theper-share dividend paid in the first nine months of 2017 was $0.46, up from $0.43 for the same period of 2016.first nine monthssecond quarter, the company did not purchase shares consistent with the suspension of 2017its share purchase program effective April 1, 2020. In the second quarter of 2019, the company purchased about 109.8 million shares for $377$368 million, including shares purchased from Exxon Mobil Corporation.Recently issued accounting standardsIn2014, the Financial Accounting Standards Board (FASB) issued2021, and a new standard,Revenue from Contracts with Customers. The standard establishes a single revenue recognition model for all contracts with customers, eliminates industry specific requirements and expands disclosure requirements. The standard is required$300 million committed short-term line of credit to be adopted beginning January 1, 2018.June 2021. The company expects to adopt the standard using the modified retrospective method, under which prior years’ results arehas not restated, but supplemental informationdrawn on the impactany of the new standard will be includedits credit facilities.2018 results. The impactfirst six months of 2020, compared with cash flow generated from the standard is not expected to have a material effect on the company’s financial statements.In February 2016, the FASB issued a new standard, Leases. The standard requires all leases with an initial term greater than one year be recorded on the balance sheet as a lease asset and lease liability. The standard is required to be adopted beginning January 1, 2019. Imperial is evaluating the standard and its effect on the company’s financial statements and plans to adopt it in 2019.IMPERIAL OIL LIMITEDIn March 2017, the FASB issued an Accounting Standards Update2017-07, Compensation – Retirement Benefits (Topic 715):Improving the Presentationoperating activities of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The update requires that the service cost component of net benefit costs be reported$2,029 million in the same lineperiod of 2019, primarily reflecting lower realizations in the income statement as other compensation costsUpstream and unfavourable working capital impacts.the other components of net benefit costs be presented separatelyit had received final approval from the service cost component. Additionally, onlyToronto Stock Exchange for a limited normal course issuer bid. The program is used primarily to eliminate dilution from shares issued in conjunction with Imperial’s restricted stock unit plan, and enables the service cost componentcompany to purchase up to a maximum of net benefit costs will be eligible for capitalization. Imperial will adopt50,000 common shares during the update beginning January 1, 2018. As a result of Imperial’s adoptionperiod June 29, 2020 to June 28, 2021. This maximum includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the update,normal course issuer bid. As in the past, Exxon Mobil Corporation has advised the company expectsthat it intends to add a new lineNon-service pension and other postretirement benefit expenseparticipate to maintain its consolidated statement of income. This line would reflect the other components of net benefit costs as described in the Accounting Standards Update and would include amounts that were previously included in Production and manufacturing expenses, and Selling and general expenses. As of January 1, 2018, these costsownership percentage at approximately 69.6 percent. The program will no longer be considered for capitalization. The impact from this change on the company’s net income is not expected to be material. Furthermore, as part of the adoption of the update,end should the company expects it will include allpurchase the maximum allowable number of these costs in its Corporate and Other expenses.in this report regardingof 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; credit market stability and liquidity; the capital outlook of $1.1 billion to $1.2 billion for 2020, and reduction of operating expenses by $500 million compared to 2019 levels; impacts from COVID-19 and an extended period of current industry conditions, including lower earnings, cash from operations and operating assets at reduced rates; changes to the timing and duration of Kearl and Syncrude turnaround activities; anticipated Kearl and Cold Lake production for the full-year 2020; timing and scope of other planned turnaround activities across operations; expected improvement in refinery utilization rates and petroleum products sales in the third quarter; the company’s view of long-term supply and demand fundamentals; the impacts of future reductions in long-term price outlooks, including impairment of long-lived assets; the impact of extended low oil and natural gas prices on proved reserves under SEC rules, including the possible downward revision of proved bitumen reserves; the intention to continue applying for the Canada Emergency Wage Subsidy; the cumulative effect of the Government of Alberta acceleration of corporate income tax rate decrease; the impact of measures implemented in response to COVID-19; and earnings sensitivities.duedepending 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 and the ongoing impact of market conditions,COVID-19 on demand; general economic conditions; availability and allocation of capital; currency exchange rates; transportation for accessing markets; political or regulatory events, including changes in law or governmentalgovernment policy changessuch as tax laws, production curtailment and actions in operating conditionsresponse to the progression or recurrence of COVID-19; availability and costs, changesperformance of third party service providers, including in project schedules, operating performance, demand forlight of restrictions related to COVID-19; management effectiveness and disaster response preparedness, including business continuity plans in response to COVID-19; environmental risks inherent in oil and gas commercial negotiationsexploration and production activities; environmental regulation, including climate change and greenhouse gas regulation and changes to such regulation; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; operational hazards and risks; cybersecurity incidents; and other technicalfactors discussed in Item 1A risk factors and economic factors.ninesix months ended SeptemberJune 30, 2017,2020, does not differ materially from that discussed on page 2255 of the company’s annual report on Form2016.Item 4. Controls and proceduresmillions of Canadian dollars after tax 120 (a) SeptemberJune 30, 2017.2020. 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.2. Unregistered sales1A of equity securitiesthe company’s annual report on Formusedemand, and public health. These risk factors encompass, among other things, production oversupply, as a result of proceeds
shares purchased
paid per share
(dollars)
shares purchased
as part of publicly
announced plans
or programs
of shares that may
yet be purchased
under the plans or
programs(a) - - - 25,395,927 3,876,648 36.42 3,876,648 21,519,279 2,855,022 38.10 2,855,022 18,664,257 (b) Total number of
shares purchased
per share
as part of publicly
announced plans
or programsMaximum number
of shares that may
yet be purchased
under the plans or
programs- (a) (b) 22, 2017,23, 2020, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a newlimited normal course issuer bid and will continue its existing share purchase program.bid. The program is used primarily to eliminate dilution from shares issued in conjunction with Imperial’s restricted stock unit plan, and enables the company to purchase up to a maximum of 25,395,92750,000 common shares during the period June 27, 201729, 2020 to June 26, 2018, which28, 2021. This maximum includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. As in the past, Exxon Mobil Corporation has advised the company that it intends to participate to maintain its ownership percentage at approximately 69.6 percent. The program will end should the company purchase the maximum allowable number of shares, or on June 26, 2018.28, 2021.(b)In its most recent quarterly earnings release, the company stated that fourth quarter 2017 share purchases are anticipated to equal approximately $250 million. Purchase plans may be modified at any time without prior notice.the company pursuant to Rule13a-14(a).(31.2)Contents Certification by the principal financial officer of the company pursuant to Rule13a-14(a).(32.1) Certification by the chief executive officer of the company pursuant to Rule13a-14(b) and 18 U.S.C. Section 1350.(32.2) Certification by the chief financial officer of the company pursuant to Rule13a-14(b) and 18 U.S.C. Section 1350. Date: October 31, 2017August 5, 2020 /s/ Beverley A. Babcock (Signature) (Signature) Beverley A. Babcock Daniel E. Lyons Senior Vice-President, Finance and Administration and Controller
(Principal Accounting Officer)accounting officer) Date: October 31, 2017August 5, 2020 (Signature) (Signature) Cathryn Walker Assistant Corporate Secretary Assistant corporate secretary 24