FORM10-Q
[✓]
15(d)
2022
[]
15(d)
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) |
Thecode)
Title of each class | Trading symbol | Name of each exchange on which registered | ||
None | None |
The
The
Large accelerated r | ✓ | Smaller reporting company | ||||||||||||
Non-accelerated filer | ||||||||||||||
| Emerging growth company | |||||||||||||
Accelerated filer |
The��
636,676,182.
2016.2021. Note that numbers may not add due to rounding.
Third Quarter | Nine Months to September 30 | |||||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| ||||||||||||||||||
Revenues and other income | ||||||||||||||||||
Operating revenues(a) | 7,134 | 6,568 | 21,077 | 17,967 | ||||||||||||||
Investment and other income(note 3) | 24 | 874 | 270 | 945 | ||||||||||||||
| ||||||||||||||||||
Total revenues and other income | 7,158 | 7,442 | 21,347 | 18,912 | ||||||||||||||
| ||||||||||||||||||
Expenses | ||||||||||||||||||
Exploration | 7 | 16 | 29 | 75 | ||||||||||||||
Purchases of crude oil and products(b) | 4,251 | 3,857 | 13,226 | 10,884 | ||||||||||||||
Production and manufacturing(c) | 1,338 | 1,261 | 4,238 | 3,842 | ||||||||||||||
Selling and general(c) | 219 | 275 | 626 | 812 | ||||||||||||||
Federal excise tax | 438 | 434 | 1,253 | 1,237 | ||||||||||||||
Depreciation and depletion | 391 | 398 | 1,135 | 1,229 | ||||||||||||||
Financing costs(note 5) | 18 | 19 | 49 | 52 | ||||||||||||||
| ||||||||||||||||||
Total expenses | 6,662 | 6,260 | 20,556 | 18,131 | ||||||||||||||
| ||||||||||||||||||
Income (loss) before income taxes | 496 | 1,182 | 791 | 781 | ||||||||||||||
Income taxes | 125 | 179 | 164 | 60 | ||||||||||||||
| ||||||||||||||||||
Net income (loss) | 371 | 1,003 | 627 | 721 | ||||||||||||||
| ||||||||||||||||||
Per-share information(Canadian dollars) | ||||||||||||||||||
Net income (loss) per common share - basic(note 8) | 0.44 | 1.18 | 0.74 | 0.85 | ||||||||||||||
Net income (loss) per common share - diluted(note 8) | 0.44 | 1.18 | 0.74 | 0.85 | ||||||||||||||
Dividends per common share | 0.16 | 0.15 | 0.47 | 0.44 | ||||||||||||||
| ||||||||||||||||||
(a) | Amounts from related parties included in operating revenues. | 756 | 448 | 2,801 | 1,457 | |||||||||||||
(b) | Amounts to related parties included in purchases of crude oil and products. | 604 | 623 | 1,919 | 1,540 | |||||||||||||
(c) | 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 | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenues and other income | ||||||||||||||||
Revenues (a) | 17,285 | 8,007 | 29,942 | 14,999 | ||||||||||||
Investment and other income (note 3) | 22 | 40 | 51 | 46 | ||||||||||||
Total revenues and other income | 17,307 | 8,047 | 29,993 | 15,045 | ||||||||||||
Expenses | ||||||||||||||||
Exploration | 1 | 2 | 3 | 4 | ||||||||||||
Purchases of crude oil and products (b) | 11,021 | 4,867 | 19,371 | 8,754 | ||||||||||||
Production and manufacturing (c) | 1,908 | 1,569 | 3,567 | 3,054 | ||||||||||||
Selling and general (c) | 191 | 200 | 416 | 389 | ||||||||||||
Federal excise tax and fuel charge | 553 | 465 | 1,032 | 869 | ||||||||||||
Depreciation and depletion | 451 | 450 | 877 | 944 | ||||||||||||
Non-service pension and postretirement benefit | 5 | 10 | 9 | 21 | ||||||||||||
Financing (d) (note 5) | 11 | 13 | 18 | 27 | ||||||||||||
Total expenses | 14,141 | 7,576 | 25,293 | 14,062 | ||||||||||||
Income (loss) before income taxes | 3,166 | 471 | 4,700 | 983 | ||||||||||||
Income taxes | 757 | 105 | 1,118 | 225 | ||||||||||||
Net income (loss) | 2,409 | 366 | 3,582 | 758 | ||||||||||||
Per share information (Canadian dollars) | ||||||||||||||||
Net income (loss) per common share - basic (note 9) | 3.63 | 0.51 | 5.37 | 1.04 | ||||||||||||
Net income (loss) per common share - diluted (note 9) | 3.63 | 0.50 | 5.36 | 1.04 | ||||||||||||
(a) Amounts from related parties included in revenues. | 5,175 | 1,405 | 9,134 | 2,913 | ||||||||||||
(b) Amounts to related parties included in purchases of crude oil and products. | 1,129 | 666 | 1,779 | 1,181 | ||||||||||||
(c) Amounts to related parties included in production and manufacturing, and selling and general expenses. | 116 | 106 | 234 | 222 | ||||||||||||
(d) Amounts to related parties included in financing (note 5). | 13 | 10 | 17 | 21 |
Consolidated statement of comprehensive income (U.S. GAAP, unaudited)
Third Quarter | Nine Months to September 30 | |||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| ||||||||||||||||
Net income (loss) | 371 | 1,003 | 627 | 721 | ||||||||||||
Other comprehensive income (loss), net of income taxes | ||||||||||||||||
Post-retirement benefits liability adjustment (excluding amortization) | - | - | 41 | 100 | ||||||||||||
Amortization of post-retirement benefits liability adjustment included in net periodic benefit costs | 34 | 34 | 106 | 108 | ||||||||||||
| ||||||||||||||||
Total other comprehensive income (loss) | 34 | 34 | 147 | 208 | ||||||||||||
| ||||||||||||||||
| ||||||||||||||||
Comprehensive income (loss) | 405 | 1,037 | 774 | 929 | ||||||||||||
|
Consolidated statement of comprehensive income (U.S. GAAP, unaudited) | ||||||||||||||||
Six Months | ||||||||||||||||
Second Quarter | to June 30 | |||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Net income (loss) | 2,409 | 366 | 3,582 | 758 | ||||||||||||
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 | 42 | 66 | ||||||||||||
Total other comprehensive income (loss) | 21 | 33 | 66 | 120 | ||||||||||||
Comprehensive income (loss) | 2,430 | 399 | 3,648 | 878 |
millions of Canadian dollars | As at Sept 30 | As at Dec 31 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash | 833 | 391 | ||||||
Accounts receivable, less estimated doubtful accounts(a) | 1,896 | 2,023 | ||||||
Inventories of crude oil and products | 989 | 949 | ||||||
Materials, supplies and prepaid expenses | 441 | 468 | ||||||
Total current assets | 4,159 | 3,831 | ||||||
Investments and long-term receivables | 931 | 1,030 | ||||||
Property, plant and equipment, | 53,844 | 53,515 | ||||||
less accumulated depreciation and depletion | (18,248 | ) | (17,182 | ) | ||||
Property, plant and equipment, net | 35,596 | 36,333 | ||||||
Goodwill | 186 | 186 | ||||||
Other assets, including intangibles, net | 498 | 274 | ||||||
Total assets | 41,370 | 41,654 | ||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Notes and loans payable(b) | 202 | 202 | ||||||
Accounts payable and accrued liabilities(a) (note 7) | 3,041 | 3,193 | ||||||
Income taxes payable | 59 | 488 | ||||||
Total current liabilities | 3,302 | 3,883 | ||||||
Long-term debt(c) (note 6) | 5,013 | 5,032 | ||||||
Other long-term obligations(d) (note 7) | 3,698 | 3,656 | ||||||
Deferred income tax liabilities | 4,336 | 4,062 | ||||||
Total liabilities | 16,349 | 16,633 | ||||||
Shareholders’ equity | ||||||||
Common shares at stated value(e) (note 8) | 1,547 | 1,566 | ||||||
Earnings reinvested(note 9) | 25,224 | 25,352 | ||||||
Accumulated other comprehensive income (loss)(note 10) | (1,750 | ) | (1,897 | ) | ||||
Total shareholders’ equity | 25,021 | 25,021 | ||||||
Total liabilities and shareholders’ equity | 41,370 | 41,654 | ||||||
As at | As at | |||||||
June 30 | Dec 31 | |||||||
millions of Canadian dollars | 2022 | 2021 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash | 2,867 | 2,153 | ||||||
Accounts receivable - net (a) | 6,839 | 3,869 | ||||||
Inventories of crude oil and products | 1,394 | 1,102 | ||||||
Materials, supplies and prepaid expenses | 789 | 689 | ||||||
Total current assets | 11,889 | 7,813 | ||||||
Investments and long-term receivables (b) | 754 | 757 | ||||||
Property, plant and equipment, | 57,222 | 56,762 | ||||||
less accumulated depreciation and depletion | (26,256 | ) | (25,522 | ) | ||||
Property, plant and equipment, net (note 11) | 30,966 | 31,240 | ||||||
Goodwill | 166 | 166 | ||||||
Other assets, including intangibles - net | 1,117 | 806 | ||||||
Total assets | 44,892 | 40,782 | ||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Notes and loans payable | 122 | 122 | ||||||
Accounts payable and accrued liabilities (a) (note 7) | 7,947 | 5,184 | ||||||
Income taxes payable | 2,018 | 248 | ||||||
Total current liabilities | 10,087 | 5,554 | ||||||
Long-term debt (c) (note 6) | 5,044 | 5,054 | ||||||
Other long-term obligations (note 7) | 3,453 | 3,897 | ||||||
Deferred income tax liabilities | 4,329 | 4,542 | ||||||
Total liabilities | 22,913 | 19,047 | ||||||
Shareholders’ equity | ||||||||
Common shares at stated value (d) (note 9) | 1,177 | 1,252 | ||||||
Earnings reinvested | 21,913 | 21,660 | ||||||
Accumulated other comprehensive income (loss) (note 10) | (1,111 | ) | (1,177 | ) | ||||
Total shareholders’ equity | 21,979 | 21,735 | ||||||
Total liabilities and shareholders’ equity | 44,892 | 40,782 |
(a) | Accounts receivable |
(b) |
(c) | Long-term debt included amounts to related parties of $4,447 million |
(d) |
Number of common shares authorized and outstanding were 1,100 million and |
Inflow (outflow) | Third Quarter | Nine Months to September 30 | ||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| ||||||||||||||||
Operating activities | ||||||||||||||||
Net income (loss) | 371 | 1,003 | 627 | 721 | ||||||||||||
Adjustments fornon-cash items: | ||||||||||||||||
Depreciation and depletion | 391 | 398 | 1,135 | 1,229 | ||||||||||||
(Gain) loss on asset sales(note 3) | (6 | ) | (909 | ) | (219 | ) | (952 | ) | ||||||||
Deferred income taxes and other | 131 | 215 | 294 | 35 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (297 | ) | 275 | 127 | (121 | ) | ||||||||||
Inventories, materials, supplies and prepaid expenses | 104 | (7 | ) | (13 | ) | 112 | ||||||||||
Income taxes payable | 19 | (13 | ) | (429 | ) | - | ||||||||||
Accounts payable and accrued liabilities | 81 | (241 | ) | (159 | ) | (59 | ) | |||||||||
All other items - net(a) | 43 | 51 | 320 | 299 | ||||||||||||
| ||||||||||||||||
Cash flows from (used in) operating activities | 837 | 772 | 1,683 | 1,264 | ||||||||||||
| ||||||||||||||||
Investing activities | ||||||||||||||||
Additions to property, plant and equipment | (241 | ) | (189 | ) | (683 | ) | (893 | ) | ||||||||
Proceeds from asset sales(note 3) | 8 | 1,194 | 230 | 1,244 | ||||||||||||
Additional investments | (1 | ) | - | (1 | ) | (1 | ) | |||||||||
| ||||||||||||||||
Cash flows from (used in) investing activities | (234 | ) | 1,005 | (454 | ) | 350 | ||||||||||
| ||||||||||||||||
Financing activities | ||||||||||||||||
Short-term debt - net | - | (1,591 | ) | - | (1,679 | ) | ||||||||||
Long-term debt - additions(note 6) | - | - | - | 495 | ||||||||||||
Reduction in capitalized lease obligations(note 6) | (7 | ) | (6 | ) | (20 | ) | (21 | ) | ||||||||
Dividends paid | (136 | ) | (127 | ) | (390 | ) | (364 | ) | ||||||||
Common shares purchased(note 8) | (250 | ) | - | (377 | ) | - | ||||||||||
| ||||||||||||||||
Cash flows from (used in) financing activities | (393 | ) | (1,724 | ) | (787 | ) | (1,569 | ) | ||||||||
| ||||||||||||||||
Increase (decrease) in cash | 210 | 53 | 442 | 45 | ||||||||||||
Cash at beginning of period | 623 | 195 | 391 | 203 | ||||||||||||
| ||||||||||||||||
Cash at end of period(b) | 833 | 248 | 833 | 248 | ||||||||||||
| ||||||||||||||||
(a) Included contribution to registered pension plans. | (78 | ) | (44 | ) | (176 | ) | (120 | ) |
Six Months | ||||||||||||||||
Second Quarter | to June 30 | |||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Common shares at stated value (note 9) | ||||||||||||||||
At beginning of period | 1,237 | 1,357 | 1,252 | 1,357 | ||||||||||||
Share purchases at stated value | (60 | ) | (55 | ) | (75 | ) | (55 | ) | ||||||||
At end of period | 1,177 | 1,302 | 1,177 | 1,302 | ||||||||||||
Earnings reinvested | ||||||||||||||||
At beginning of period | 22,171 | 22,281 | 21,660 | 22,050 | ||||||||||||
Net income (loss) for the period | 2,409 | 366 | 3,582 | 758 | ||||||||||||
Share purchases in excess of stated value | (2,440 | ) | (1,116 | ) | (2,874 | ) | (1,116 | ) | ||||||||
Dividends declared | (227 | ) | (195 | ) | (455 | ) | (356 | ) | ||||||||
At end of period | 21,913 | 21,336 | 21,913 | 21,336 | ||||||||||||
Accumulated other comprehensive income (loss) (note 10) | ||||||||||||||||
At beginning of period | (1,132 | ) | (1,902 | ) | (1,177 | ) | (1,989 | ) | ||||||||
Other comprehensive income (loss) | 21 | 33 | 66 | 120 | ||||||||||||
At end of period | (1,111 | ) | (1,869 | ) | (1,111 | ) | (1,869 | ) | ||||||||
Shareholders’ equity at end of period | 21,979 | 20,769 | 21,979 | 20,769 |
Six Months | ||||||||||||||||
Inflow (outflow) | Second Quarter | to June 30 | ||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Operating activities | ||||||||||||||||
Net income (loss) | 2,409 | 366 | 3,582 | 758 | ||||||||||||
Adjustments for non-cash items: | ||||||||||||||||
Depreciation and depletion | 451 | 450 | 877 | 944 | ||||||||||||
(Gain) loss on asset sales (note 3) | (4 | ) | (24 | ) | (24 | ) | (27 | ) | ||||||||
Deferred income taxes and other | (149 | ) | 76 | (480 | ) | 136 | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (1,426 | ) | (775 | ) | (2,970 | ) | (1,244 | ) | ||||||||
Inventories, materials, supplies and prepaid expenses | (27 | ) | 58 | (391 | ) | (101 | ) | |||||||||
Income taxes payable | 853 | 21 | 1,312 | 42 | ||||||||||||
Accounts payable and accrued liabilities | 499 | 655 | 2,643 | 1,239 | ||||||||||||
All other items - net (c) | 76 | 25 | 47 | 150 | ||||||||||||
Cash flows from (used in) operating activities | 2,682 | 852 | 4,596 | 1,897 | ||||||||||||
Investing activities | ||||||||||||||||
Additions to property, plant and equipment | (333 | ) | (241 | ) | (637 | ) | (408 | ) | ||||||||
Proceeds from asset sales (note 3) (b) | 102 | 35 | 126 | 42 | ||||||||||||
Loans to equity companies - net | 1 | (1 | ) | 2 | 12 | |||||||||||
Cash flows from (used in) investing activities | (230 | ) | (207 | ) | (509 | ) | (354 | ) | ||||||||
Financing activities | ||||||||||||||||
Short-term debt - net | - | - | - | (36 | ) | |||||||||||
Reduction in finance lease obligations (note 6) | (6 | ) | (4 | ) | (11 | ) | (8 | ) | ||||||||
Dividends paid | (228 | ) | (161 | ) | (413 | ) | (323 | ) | ||||||||
Common shares purchased (note 9) | (2,500 | ) | (1,171 | ) | (2,949 | ) | (1,171 | ) | ||||||||
Cash flows from (used in) financing activities | (2,734 | ) | (1,336 | ) | (3,373 | ) | (1,538 | ) | ||||||||
Increase (decrease) in cash | (282 | ) | (691 | ) | 714 | 5 | ||||||||||
Cash at beginning of period | 3,149 | 1,467 | 2,153 | 771 | ||||||||||||
Cash at end of period (a) | 2,867 | 776 | 2,867 | 776 | ||||||||||||
(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 $94 million deposit for the potential sale of XTO Energy Canada (note 11). | ||||||||||||||||
(c) Included contributions to registered pension plans. | (46 | ) | (42 | ) | (96 | ) | (70 | ) | ||||||||
Income taxes (paid) refunded. | (52 | ) | 27 | (275 | ) | 28 | ||||||||||
Interest (paid), net of capitalization. | (10 | ) | (14 | ) | (22 | ) | (27 | ) |
1. Basis of financial statement preparation
1. | Basis of financial statement preparation |
2. Business segments
Third Quarter | Upstream | Downstream | Chemical | |||||||||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
| ||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Operating revenues(a) | 1,668 | 1,316 | 5,204 | 4,971 | 262 | 281 | ||||||||||||||||||
Intersegment sales | 587 | 709 | 241 | 253 | 62 | 58 | ||||||||||||||||||
Investment and other income(note 3) | 7 | 1 | 15 | 870 | - | 1 | ||||||||||||||||||
| ||||||||||||||||||||||||
2,262 | 2,026 | 5,460 | 6,094 | 324 | 340 | |||||||||||||||||||
| ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | 7 | 16 | - | - | - | - | ||||||||||||||||||
Purchases of crude oil and products | 947 | 861 | 4,014 | 3,827 | 179 | 188 | ||||||||||||||||||
Production and manufacturing | 893 | 887 | 394 | 323 | 51 | 51 | ||||||||||||||||||
Selling and general | 5 | (1 | ) | 167 | 238 | 19 | 22 | |||||||||||||||||
Federal excise tax | - | - | 438 | 434 | - | - | ||||||||||||||||||
Depreciation and depletion | 330 | 346 | 53 | 46 | 3 | 2 | ||||||||||||||||||
Financing costs(note 5) | 1 | (2 | ) | - | - | - | - | |||||||||||||||||
| ||||||||||||||||||||||||
Total expenses | 2,183 | 2,107 | 5,066 | 4,868 | 252 | 263 | ||||||||||||||||||
| ||||||||||||||||||||||||
Income (loss) before income taxes | 79 | (81 | ) | 394 | 1,226 | 72 | 77 | |||||||||||||||||
Income taxes | 17 | (55 | ) | 102 | 224 | 20 | 21 | |||||||||||||||||
| ||||||||||||||||||||||||
Net income (loss) | 62 | (26 | ) | 292 | 1,002 | 52 | 56 | |||||||||||||||||
| ||||||||||||||||||||||||
Cash flows from (used in) operating activities | 479 | 432 | 268 | 264 | 99 | 73 | ||||||||||||||||||
Capital and exploration expenditures(b) | 92 | 149 | 55 | 38 | 5 | 7 | ||||||||||||||||||
| ||||||||||||||||||||||||
Third Quarter | Corporate and Other | Eliminations | Consolidated | |||||||||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
| ||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Operating revenues(a) | - | - | - | - | 7,134 | 6,568 | ||||||||||||||||||
Intersegment sales | - | - | (890 | ) | (1,020 | ) | - | - | ||||||||||||||||
Investment and other income(note 3) | 2 | 2 | - | - | 24 | 874 | ||||||||||||||||||
| ||||||||||||||||||||||||
2 | 2 | (890 | ) | (1,020 | ) | 7,158 | 7,442 | |||||||||||||||||
| ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | - | - | - | - | 7 | 16 | ||||||||||||||||||
Purchases of crude oil and products | - | - | (889 | ) | (1,019 | ) | 4,251 | 3,857 | ||||||||||||||||
Production and manufacturing | - | - | - | - | 1,338 | 1,261 | ||||||||||||||||||
Selling and general | 29 | 17 | (1 | ) | (1 | ) | 219 | 275 | ||||||||||||||||
Federal excise tax | - | - | - | - | 438 | 434 | ||||||||||||||||||
Depreciation and depletion | 5 | 4 | - | - | 391 | 398 | ||||||||||||||||||
Financing costs(note 5) | 17 | 21 | - | - | 18 | 19 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total expenses | 51 | 42 | (890 | ) | (1,020 | ) | 6,662 | 6,260 | ||||||||||||||||
| ||||||||||||||||||||||||
Income (loss) before income taxes | (49 | ) | (40 | ) | - | - | 496 | 1,182 | ||||||||||||||||
Income taxes | (14 | ) | (11 | ) | - | - | 125 | 179 | ||||||||||||||||
| ||||||||||||||||||||||||
Net income (loss) | (35 | ) | (29 | ) | - | - | 371 | 1,003 | ||||||||||||||||
| ||||||||||||||||||||||||
Cash flows from (used in) operating activities | (9 | ) | 3 | - | - | 837 | 772 | |||||||||||||||||
Capital and exploration expenditures(b) | 7 | 11 | - | - | 159 | 205 | ||||||||||||||||||
|
2. | Business segments |
Second Quarter | Upstream | Downstream | Chemical | |||||||||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Revenues (a) (b) | 119 | 2,616 | 16,752 | 5,015 | 414 | 376 | ||||||||||||||||||
Intersegment sales | 5,827 | 1,312 | 2,024 | 788 | 149 | 79 | ||||||||||||||||||
Investment and other income (note 3) | 3 | 6 | 9 | 28 | 0- | 1 | ||||||||||||||||||
5,949 | 3,934 | 18,785 | 5,831 | 563 | 456 | |||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | 1 | 2 | 0- | 0- | 0- | 0- | ||||||||||||||||||
Purchases of crude oil and products | 2,357 | 2,044 | 16,261 | 4,760 | 401 | 240 | ||||||||||||||||||
Production and manufacturing | 1,423 | 1,166 | 418 | 357 | 67 | 46 | ||||||||||||||||||
Selling and general | 0- | 0- | 153 | 142 | 22 | 22 | ||||||||||||||||||
Federal excise tax and fuel charge | 0- | 0- | 553 | 465 | 0- | 0- | ||||||||||||||||||
Depreciation and depletion | 395 | 399 | 45 | 39 | 4 | 5 | ||||||||||||||||||
Non-service pension and postretirement benefit | - | 0- | 0- | 0- | 0- | 0- | ||||||||||||||||||
Financing (note 5) | 1 | 0- | 0- | 0- | 0- | 0- | ||||||||||||||||||
Total expenses | 4,177 | 3,611 | 17,430 | 5,763 | 494 | 313 | ||||||||||||||||||
Income (loss) before income taxes | 1,772 | 323 | 1,355 | 68 | 69 | 143 | ||||||||||||||||||
Income tax expense (benefit) | 426 | 76 | 322 | 8 | 16 | 34 | ||||||||||||||||||
Net income (loss) | 1,346 | 247 | 1,033 | 60 | 53 | 109 | ||||||||||||||||||
Cash flows from (used in) operating activities | 2,087 | 595 | 641 | 136 | 64 | 111 | ||||||||||||||||||
Capital and exploration expenditures (c) | 233 | 130 | 69 | 120 | 2 | 2 | ||||||||||||||||||
Second Quarter | Corporate and other | Eliminations | Consolidated | |||||||||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Revenues (a) (b) | 0- | 0- | 0- | 0- | 17,285 | 8,007 | ||||||||||||||||||
Intersegment sales | 0- | 0- | (8,000 | ) | (2,179 | ) | 0- | 0- | ||||||||||||||||
Investment and other income (note 3) | 10 | 5 | - | 0- | 22 | 40 | ||||||||||||||||||
10 | 5 | (8,000 | ) | (2,179 | ) | 17,307 | 8,047 | |||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | 0- | 0- | 0- | 0- | 1 | 2 | ||||||||||||||||||
Purchases of crude oil and products | 0- | 0- | (7,998 | ) | (2,177 | ) | 11,021 | 4,867 | ||||||||||||||||
Production and manufacturing | 0- | 0- | 0- | 0- | 1,908 | 1,569 | ||||||||||||||||||
Selling and general | 18 | 38 | (2 | ) | (2 | ) | 191 | 200 | ||||||||||||||||
Federal excise tax and fuel charge | 0- | 0- | 0- | 0- | 553 | 465 | ||||||||||||||||||
Depreciation and depletion | 7 | 7 | 0- | 0- | 451 | 450 | ||||||||||||||||||
Non-service pension and postretirement benefit | 5 | 10 | 0- | 0- | 5 | 10 | ||||||||||||||||||
Financing (note 5) | 10 | 13 | 0- | 0- | 11 | 13 | ||||||||||||||||||
Total expenses | 40 | 68 | (8,000 | ) | (2,179 | ) | 14,141 | 7,576 | ||||||||||||||||
Income (loss) before income taxes | (30 | ) | (63 | ) | 0- | 0- | 3,166 | 471 | ||||||||||||||||
Income tax expense (benefit) | (7 | ) | (13 | ) | 0- | 0- | 757 | 105 | ||||||||||||||||
Net income (loss) | (23 | ) | (50 | ) | 0- | 0- | 2,409 | 366 | ||||||||||||||||
Cash flows from (used in) operating activities | (110 | ) | 10 | 0- | 0- | 2,682 | 852 | |||||||||||||||||
Capital and exploration expenditures (c) | 10 | 7 | 0- | 0- | 314 | 259 |
(a) | Included export sales to the United States of |
(b) | Includes approximately 13% related to revenue outside the scope of ASC 606 “Revenue from Contracts with Customers” for the three months ended June 30, 2022. Trade receivables in Accounts receivable – net reported on the Balance Sheet include both receivables within the scope of ASC 606 and those outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives . Credit quality and type of customer are generally similarbetween those revenues and receivables within the scope of ASC 606 and those outside it . |
(c) | Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to |
Six Months to June 30 | Upstream | Downstream | Chemical | |||||||||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Revenues (a) (b) | 218 | 4,758 | 28,943 | 9,542 | 781 | 699 | ||||||||||||||||||
Intersegment sales | 10,258 | 2,663 | 3,857 | 1,561 | 253 | 132 | ||||||||||||||||||
Investment and other income (note 3) | 7 | 6 | 30 | 33 | 0- | 1 | ||||||||||||||||||
10,483 | 7,427 | 32,830 | 11,136 | 1,034 | 832 | |||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | 3 | 4 | 0- | 0- | 0- | 0- | ||||||||||||||||||
Purchases of crude oil and products | 4,247 | 3,878 | 28,773 | 8,780 | 716 | 449 | ||||||||||||||||||
Production and manufacturing | 2,672 | 2,275 | 774 | 683 | 121 | 96 | ||||||||||||||||||
Selling and general | 0- | 0- | 300 | 275 | 45 | 47 | ||||||||||||||||||
Federal excise tax and fuel charge | 0- | 0- | 1,032 | 869 | 0- | 0- | ||||||||||||||||||
Depreciation and depletion | 768 | 844 | 86 | 78 | 9 | 9 | ||||||||||||||||||
Non-service pension and postretirement benefit | 0- | 0- | 0- | 0- | 0- | 0- | ||||||||||||||||||
Financing (note 5) | 1 | 1 | 0- | 0- | 0- | 0- | ||||||||||||||||||
Total expenses | 7,691 | 7,002 | 30,965 | 10,685 | 891 | 601 | ||||||||||||||||||
Income (loss) before income taxes | 2,792 | 425 | 1,865 | 451 | 143 | 231 | ||||||||||||||||||
Income tax expense (benefit) | 664 | 99 | 443 | 99 | 34 | 55 | ||||||||||||||||||
Net income (loss) | 2,128 | 326 | 1,422 | 352 | 109 | 176 | ||||||||||||||||||
Cash flows from (used in) operating activities | 3,534 | 1,126 | 1,016 | 598 | 131 | 173 | ||||||||||||||||||
Capital and exploration expenditures (c) | 455 | 215 | 137 | 188 | 3 | 4 | ||||||||||||||||||
Total assets as at June 30 (note 11) | 28,961 | 31,931 | 11,649 | 5,352 | 505 | 481 | ||||||||||||||||||
Six Months to June 30 | Corporate and other | Eliminations | Consolidated | |||||||||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Revenues (a) (b) | 0- | 0- | 0- | 0- | 29,942 | 14,999 | ||||||||||||||||||
Intersegment sales | 0- | 0- | (14,368 | ) | (4,356 | ) | 0- | 0- | ||||||||||||||||
Investment and other income (note 3) | 14 | 6 | 0- | 0- | 51 | 46 | ||||||||||||||||||
14 | 6 | (14,368 | ) | (4,356 | ) | 29,993 | 15,045 | |||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | 0- | 0- | 0- | 0- | 3 | 4 | ||||||||||||||||||
Purchases of crude oil and products | 0- | 0- | (14,365 | ) | (4,353 | ) | 19,371 | 8,754 | ||||||||||||||||
Production and manufacturing | 0- | 0- | 0- | 0- | 3,567 | 3,054 | ||||||||||||||||||
Selling and general | 74 | 70 | (3 | ) | (3 | ) | 416 | 389 | ||||||||||||||||
Federal excise tax and fuel charge | 0- | 0- | 0- | 0- | 1,032 | 869 | ||||||||||||||||||
Depreciation and depletion | 14 | 13 | 0- | 0- | 877 | 944 | ||||||||||||||||||
Non-service pension and postretirement benefit | 9 | 21 | 0- | 0- | 9 | 21 | ||||||||||||||||||
Financing (note 5) | 17 | 26 | 0- | 0- | 18 | 27 | ||||||||||||||||||
Total expenses | 114 | 130 | (14,368 | ) | (4,356 | ) | 25,293 | 14,062 | ||||||||||||||||
Income (loss) before income taxes | (100 | ) | (124 | ) | 0- | 0- | 4,700 | 983 | ||||||||||||||||
Income tax expense (benefit) | (23 | ) | (28 | ) | 0- | 0- | 1,118 | 225 | ||||||||||||||||
Net income (loss) | (77 | ) | (96 | ) | 0- | 0- | 3,582 | 758 | ||||||||||||||||
Cash flows from (used in) operating activities | (85 | ) | 0- | 0- | 0- | 4,596 | 1,897 | |||||||||||||||||
Capital and exploration expenditures (c) | 15 | 15 | 0- | 0- | 610 | 422 | ||||||||||||||||||
Total assets as at June 30 (note 11) | 4,016 | 1,606 | (239 | ) | (431 | ) | 44,892 | 38,939 |
Nine Months to September 30 | Upstream | Downstream | Chemical | |||||||||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
| ||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Operating revenues(a) | 5,166 | 3,699 | 15,087 | 13,470 | 824 | 798 | ||||||||||||||||||
Intersegment sales | 1,494 | 1,516 | 792 | 689 | 191 | 156 | ||||||||||||||||||
Investment and other income(note 3) | 17 | 22 | 248 | 919 | (1 | ) | 1 | |||||||||||||||||
| ||||||||||||||||||||||||
6,677 | 5,237 | 16,127 | 15,078 | 1,014 | 955 | |||||||||||||||||||
| ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | 29 | 75 | - | - | - | - | ||||||||||||||||||
Purchases of crude oil and products | 3,089 | 2,584 | 12,037 | 10,139 | 573 | 518 | ||||||||||||||||||
Production and manufacturing | 2,917 | 2,634 | 1,169 | 1,059 | 152 | 149 | ||||||||||||||||||
Selling and general | 1 | (3 | ) | 540 | 729 | 60 | 63 | |||||||||||||||||
Federal excise tax | - | - | 1,253 | 1,237 | - | - | ||||||||||||||||||
Depreciation and depletion | 964 | 1,053 | 148 | 158 | 9 | 6 | ||||||||||||||||||
Financing costs(note 5) | 5 | (6 | ) | - | - | - | - | |||||||||||||||||
| ||||||||||||||||||||||||
Total expenses | 7,005 | 6,337 | 15,147 | 13,322 | 794 | 736 | ||||||||||||||||||
| ||||||||||||||||||||||||
Income (loss) before income taxes | (328 | ) | (1,100 | ) | 980 | 1,756 | 220 | 219 | ||||||||||||||||
Income taxes | (103 | ) | (336 | ) | 230 | 363 | 59 | 59 | ||||||||||||||||
| ||||||||||||||||||||||||
Net income (loss) | (225 | ) | (764 | ) | 750 | 1,393 | 161 | 160 | ||||||||||||||||
| ||||||||||||||||||||||||
Cash flows from (used in) operating activities | 904 | 32 | 626 | 1,028 | 176 | 205 | ||||||||||||||||||
Capital and exploration expenditures(b) | 286 | 745 | 128 | 145 | 12 | 21 | ||||||||||||||||||
Total assets as at September 30 | 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 | ||||||||||||||||||
| ||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||
Operating revenues(a) | - | - | - | - | 21,077 | 17,967 | ||||||||||||||||||
Intersegment sales | - | - | (2,477 | ) | (2,361 | ) | - | - | ||||||||||||||||
Investment and other income(note 3) | 6 | 3 | - | - | 270 | 945 | ||||||||||||||||||
| ||||||||||||||||||||||||
6 | 3 | (2,477 | ) | (2,361 | ) | 21,347 | 18,912 | |||||||||||||||||
| ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Exploration | - | - | - | - | 29 | 75 | ||||||||||||||||||
Purchases of crude oil and products | - | - | (2,473 | ) | (2,357 | ) | 13,226 | 10,884 | ||||||||||||||||
Production and manufacturing | - | - | - | - | 4,238 | 3,842 | ||||||||||||||||||
Selling and general | 29 | 27 | (4 | ) | (4 | ) | 626 | 812 | ||||||||||||||||
Federal excise tax | - | - | - | - | 1,253 | 1,237 | ||||||||||||||||||
Depreciation and depletion | 14 | 12 | - | - | 1,135 | 1,229 | ||||||||||||||||||
Financing costs(note 5) | 44 | 58 | - | - | 49 | 52 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total expenses | 87 | 97 | (2,477 | ) | (2,361 | ) | 20,556 | 18,131 | ||||||||||||||||
| ||||||||||||||||||||||||
Income (loss) before income taxes | (81 | ) | (94 | ) | - | - | 791 | 781 | ||||||||||||||||
Income taxes | (22 | ) | (26 | ) | - | - | 164 | 60 | ||||||||||||||||
| ||||||||||||||||||||||||
Net income (loss) | (59 | ) | (68 | ) | - | - | 627 | 721 | ||||||||||||||||
| ||||||||||||||||||||||||
Cash flows from (used in) operating activities | (23 | ) | (1 | ) | - | - | 1,683 | 1,264 | ||||||||||||||||
Capital and exploration expenditures(b) | 29 | 37 | - | - | 455 | 948 | ||||||||||||||||||
Total assets as at September 30 | 1,283 | 674 | (336 | ) | (337 | ) | 41,370 | 42,094 | ||||||||||||||||
|
(a) | Included export sales to the United States of |
(b) | Includes approximately 11% related to revenue outside the scope of ASC 606 “Revenue from Contracts with Customers” for the six months ended June 30, 2022. Trade receivables in Accounts receivable – net reported on the Balance Sheet include both receivables within the scope of ASC 606 and those outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives . Credit quality and type of customer are generally similarbetween those revenues and receivables within the scope of ASC 606 and those outside it . |
(c) | Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to |
3. | Investment and other income |
Third Quarter | Nine Months to September 30 | |||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Proceeds from asset sales | 8 | 1,194 | 230 | 1,244 | ||||||||||||
Book value of asset sales | 2 | 285 | 12 | 292 | ||||||||||||
Gain (loss) on asset sales, before tax(a) (b) | 6 | 909 | 219 | 952 | ||||||||||||
Gain (loss) on asset sales, after tax(a) (b) | 5 | 774 | 191 | 808 | ||||||||||||
Second Quarter | Six Months to June 30 | |||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Proceeds from asset sales | 8 | 35 | 32 | 42 | ||||||||||||
Book value of asset sales | 4 | 11 | 8 | 15 | ||||||||||||
Gain (loss) on asset sales, before tax | 4 | 24 | 24 | 27 | ||||||||||||
Gain (loss) on asset sales, after tax | 3 | 22 | 19 | 24 |
4. |
Employee retirement benefits |
Third Quarter | Nine Months to September 30 | |||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Pension benefits: | ||||||||||||||||
Current service cost | 54 | 50 | 163 | 152 | ||||||||||||
Interest cost | 77 | 82 | 235 | 240 | ||||||||||||
Expected return on plan assets | (104 | ) | (101 | ) | (306 | ) | (300 | ) | ||||||||
Amortization of prior service cost | 2 | 2 | 7 | 7 | ||||||||||||
Amortization of actuarial loss (gain) | 43 | 39 | 132 | 121 | ||||||||||||
Net periodic benefit cost | 72 | 72 | 231 | 220 | ||||||||||||
Other post-retirement benefits: | ||||||||||||||||
Current service cost | 4 | 4 | 12 | 12 | ||||||||||||
Interest cost | 6 | 7 | 18 | 20 | ||||||||||||
Amortization of actuarial loss (gain) | 2 | 3 | 6 | 10 | ||||||||||||
Net periodic benefit cost | 12 | 14 | 36 | 42 | ||||||||||||
Second Quarter | Six Months to June 30 | |||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Pension benefits: | ||||||||||||||||
Service cost | 70 | 81 | 140 | 162 | ||||||||||||
Interest cost | 74 | 68 | 147 | 136 | ||||||||||||
Expected return on plan assets | (103) | (107) | (206) | (214) | ||||||||||||
Amortization of prior service cost | 4 | 4 | 8 | 8 | ||||||||||||
Amortization of actuarial loss (gain) | 21 | 36 | 43 | 72 | ||||||||||||
Net benefit cost | 66 | 82 | 132 | 164 | ||||||||||||
Other postretirement benefits: | ||||||||||||||||
Service cost | 5 | 7 | 11 | 14 | ||||||||||||
Interest cost | 6 | 5 | 12 | 11 | ||||||||||||
Amortization of actuarial loss (gain) | 3 | 4 | 5 | 8 | ||||||||||||
Net benefit cost | 14 | 16 | 28 | 33 |
5. | Financing costs |
Third Quarter | Nine Months to September 30 | |||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Debt-related interest | 24 | 32 | 73 | 95 | ||||||||||||
Capitalized interest | (7) | (11) | (29) | (37) | ||||||||||||
Net interest expense | 17 | 21 | 44 | 58 | ||||||||||||
Other interest | 1 | (2) | 5 | (6) | ||||||||||||
Total financing costs | 18 | 19 | 49 | 52 | ||||||||||||
Second Quarter | Six Months to June 30 | |||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Debt-related interest | 20 | 20 | 32 | 41 | ||||||||||||
Capitalized interest | (10) | (7) | (15) | (15) | ||||||||||||
Net interest expense | 10 | 13 | 17 | 26 | ||||||||||||
Other interest | 1 | - | 1 | 1 | ||||||||||||
Total financing | 11 | 13 | 18 | 27 |
6. | Long-term debt |
As at Sept 30 | As at Dec 31 | |||||||||
millions of Canadian dollars | 2017 | 2016 | ||||||||
Long-term debt | 4,447 | 4,447 | ||||||||
Capital leases | 566 | 585 | ||||||||
Total long-term debt | 5,013 | 5,032 | ||||||||
As at June 30 | As at Dec 31 | |||||||
millions of Canadian dollars | 2022 | 2021 | ||||||
Long-term debt | 4,447 | 4,447 | ||||||
Finance leases | 597 | 607 | ||||||
Total long-term debt | 5,044 | 5,054 |
7. | Other long-term obligations |
As at Sept 30 | As at Dec 31 | As at June 30 | As at Dec 31 | |||||||||||||||
millions of Canadian dollars | millions of Canadian dollars | 2017 | 2016 | 2022 | 2021 | |||||||||||||
Employee retirement benefits(a) | Employee retirement benefits(a) | 1,410 | 1,645 | 1,323 | 1,362 | |||||||||||||
Asset retirement obligations and other environmental liabilities(b) | Asset retirement obligations and other environmental liabilities(b) | 1,577 | 1,544 | 1,733 | 1,713 | |||||||||||||
Share-based incentive compensation liabilities | Share-based incentive compensation liabilities | 138 | 139 | 119 | 79 | |||||||||||||
Operating lease liability (c) | 122 | 147 | ||||||||||||||||
Other obligations | Other obligations | 573 | 328 | 156 | 596 | |||||||||||||
Total other long-term obligations | Total other long-term obligations | 3,698 | 3,656 | 3,453 | 3,897 | |||||||||||||
|
(a) | Total recorded employee retirement benefits obligations also included |
(b) | Total asset retirement obligations and other environmental liabilities also included |
As of Sept 30 | As of Dec 31 | |||||||||
thousands of shares | 2017 | 2016 | ||||||||
| ||||||||||
Authorized | 1,100,000 | 1,100,000 | ||||||||
Common shares outstanding | 837,581 | 847,599 | ||||||||
|
From 1995 through September 2017,
8. | Financial and derivative instruments |
As at June 30 | As at Dec 31 | |||||||
thousands of barrels | 2022 | 2021 | ||||||
Crude | 8,680 | 7,390 | ||||||
Products | (930 | ) | (560 | ) |
Second Quarter | Six Months to June 30 | |||||||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
Revenues | (51 | ) | (9 | ) | (14 | ) | (9 | ) | ||||||||||||
Purchases of crude oil and products | - | (19 | ) | - | (33 | ) | ||||||||||||||
Total | (51 | ) | (28 | ) | (14 | ) | (42 | ) |
At June 30, 2022 | ||||||||||||||||||||||||||||
millions of Canadian dollars | ||||||||||||||||||||||||||||
Fair value | Effect of | Effect of | Net | |||||||||||||||||||||||||
counterparty | collateral | carrying | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | netting | netting | value | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Derivative assets (a) | 35 | 25 | - | 60 | (44 | ) | (3 | ) | 13 | |||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Derivative liabilities (b) | 32 | 47 | - | 79 | (44 | ) | - | 35 |
(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 | Effect of | Net | |||||||||||||||||||||||||
counterparty | collateral | carrying | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | netting | netting | value | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Derivative assets (a) | 24 | 17 | - | 41 | (31 | ) | - | 10 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Derivative liabilities (b) | 31 | 12 | - | 43 | (31 | ) | (7 | ) | 5 |
(a) | Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”. |
(b) | Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities” and “Other long-term obligations”. |
9. | Common shares |
As of | As of | |||||||
June 30 | Dec 31 | |||||||
thousands of shares | 2022 | 2021 | ||||||
Authorized | 1,100,000 | 1,100,000 | ||||||
Common shares outstanding | 636,676 | 678,080 |
The current12-month
year | Purchased shares thousands | Millions of dollars | ||||||
| ||||||||
1995 - 2015 | 906,544 | 15,708 | ||||||
2016 - Third quarter | - | - | ||||||
- Full year | 1 | - | ||||||
2017 - Third quarter | 6,732 | 250 | ||||||
-Year-to-date | 10,018 | 377 | ||||||
| ||||||||
Cumulative purchase to date | 916,563 | 16,085 | ||||||
|
IMPERIAL OIL LIMITED
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.
Thousands of shares | Millions of dollars | |||||||
Balance as at December 31, 2020 | 734,077 | 1,357 | ||||||
Issued under employee share-based awards | 7 | - | ||||||
Purchases at stated value | (56,004 | ) | (105 | ) | ||||
Balance as at December 31, 2021 | 678,080 | 1,252 | ||||||
Issued under employee share-based awards | - | - | ||||||
Purchases at stated value | (41,404 | ) | (75 | ) | ||||
Balance as at June 30, 2022 | 636,676 | 1,177 |
Nine Months | ||||||||||||||||
Third Quarter | to September 30 | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income (loss) per common share - basic | ||||||||||||||||
Net income (loss)(millions of Canadian dollars) | 371 | 1,003 | 627 | 721 | ||||||||||||
Weighted average number of common shares outstanding(millions of shares) | 841.8 | 847.6 | 845.5 | 847.6 | ||||||||||||
Net income (loss) per common share(dollars) | 0.44 | 1.18 | 0.74 | 0.85 | ||||||||||||
Net income (loss) per common share - diluted | ||||||||||||||||
Net income (loss)(millions of Canadian dollars) | 371 | 1,003 | 627 | 721 | ||||||||||||
Weighted average number of common shares outstanding(millions of shares) | 841.8 | 847.6 | 845.5 | 847.6 | ||||||||||||
Effect of employee share-based awards(millions of shares) | 3.1 | 3.2 | 2.9 | 3.0 | ||||||||||||
Weighted average number of common shares outstanding, assuming dilution(millions of shares) | 844.9 | 850.8 | 848.4 | 850.6 | ||||||||||||
Net income (loss) per common share(dollars) | 0.44 | 1.18 | 0.74 | 0.85 | ||||||||||||
Nine Months | ||||||||||||||||
Third Quarter | to September 30 | |||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Earnings reinvested at beginning of period | 25,224 | 23,160 | 25,352 | 23,687 | ||||||||||||
Net income (loss) for the period | 371 | 1,003 | 627 | 721 | ||||||||||||
Share purchases in excess of stated value | (237 | ) | - | (358 | ) | - | ||||||||||
Dividends declared | (134 | ) | (127 | ) | (397 | ) | (373 | ) | ||||||||
Earnings reinvested at end of period | 25,224 | 24,036 | 25,224 | 24,036 | ||||||||||||
share and the dividends declared by the company on its outstanding common shares:
Six Months | ||||||||||||||||
Second Quarter | to June 30 | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income (loss) per common share - basic | ||||||||||||||||
Net income (loss) (millions of Canadian dollars) | 2,409 | 366 | 3,582 | 758 | ||||||||||||
Weighted average number of common shares outstanding (millions of shares) | 663.0 | 724.1 | 666.7 | 729.1 | ||||||||||||
Net income (loss) per common share (dollars) | 3.63 | 0.51 | 5.37 | 1.04 | ||||||||||||
Net income (loss) per common share - diluted | ||||||||||||||||
Net income (loss) (millions of Canadian dollars) | 2,409 | 366 | 3,582 | 758 | ||||||||||||
Weighted average number of common shares outstanding (millions of shares) | 663.0 | 724.1 | 666.7 | 729.1 | ||||||||||||
Effect of employee share-based awards (millions of shares) | 1.4 | 1.7 | 1.4 | 1.7 | ||||||||||||
Weighted average number of common shares outstanding, assuming dilution (millions of shares) | 664.4 | 725.8 | 668.1 | 730.8 | ||||||||||||
Net income (loss) per common share (dollars) | 3.63 | 0.50 | 5.36 | 1.04 | ||||||||||||
Dividends per common share - declared (dollars) | 0.34 | 0.27 | 0.68 | 0.49 |
millions of Canadian dollars | 2017 | 2016 | ||||||
| ||||||||
Balance at January 1 | (1,897 | ) | (1,828 | ) | ||||
Post-retirement benefits liability adjustment: | ||||||||
Current period change excluding amounts reclassified from accumulated other comprehensive | 41 | 100 | ||||||
Amounts reclassified from accumulated other comprehensive income | 106 | 108 | ||||||
| ||||||||
Balance at September 30 | (1,750 | ) | (1,620 | ) | ||||
|
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 | 42 | 66 | ||||||
Balance at June 30 | (1,111 | ) | (1,869 | ) |
Third Quarter | Nine Months to September 30 | |||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Amortization of post-retirement benefits liability adjustment | (47 | ) | (44 | ) | (145 | ) | (138 | ) | ||||||||
(a) This accumulated other comprehensive income component is included in the computation of net periodic benefit cost (note 4). |
|
Six Months | ||||||||||||||||
Second Quarter | to June 30 | |||||||||||||||
millions of Canadian dollars | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Amortization of postretirement benefits liability adjustment included in net benefit cost (a) | (27 | ) | (44) | (55) | (88) |
Third Quarter | Nine Months to September 30 | |||||||||||||||
millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Post-retirement benefits liability adjustments: | ||||||||||||||||
Post-retirement benefits liability adjustment (excluding amortization) | - | - | 16 | 37 | ||||||||||||
Amortization of post-retirement benefits liability adjustment included in | 13 | 10 | 39 | 30 | ||||||||||||
Total | 13 | 10 | 55 | 67 | ||||||||||||
In May 2014,
Six Months | ||||||||||||||||
Second Quarter | to June 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 | 6 | 11 | 13 | 22 | ||||||||||||
Total | 6 | 11 | 21 | 39 |
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 assetmarket factors, working capital adjustments, tax impacts 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.
closing dates.
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 LIMITED
Item 2. | Management’s discussion and analysis of financial condition and results of operations |
Operating results
Third quarter 2017 vs. third quarter 2016
The company’s
Upstream recordedfinancial 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
Second Quarter | ||||||||
millions of Canadian dollars, unless noted | 2022 | 2021 | ||||||
Net income (loss) (U.S. GAAP) | 2,409 | 366 | ||||||
Net income (loss) per common share, assuming dilution (dollars) | 3.63 | 0.50 |
West Texas Intermediate (WTI) averaged US$48.23 per barrel in the third quarter of 2017, up from US$44.94 per barrel in the same quarter of 2016. Western Canada Select (WCS) averaged US$38.29 per barrel and US$31.43 per barrel respectively for the same periods. The WTI / WCS differential narrowed to 21 percent in the third quarter of 2017, from 30 percent in the same period of 2016.
The Canadian dollar averaged US$0.80 in the third quarter of 2017, an increase of US$0.03 from the third quarter of 2016.
Imperial’s average Canadian dollar realizations for bitumen and synthetic crudes increased generally in line with the North American benchmarks, adjusted for changesincreases in exchange ratesmarker prices, driven primarily by increased demand and transportation costs. Bitumensupply chain constraints. Average bitumen realizations averaged $39.02increased by $55.01 per barrel forgenerally in line with WCS, and synthetic crude oil realizations increased by $63.87 per barrel generally in line with WTI.
Second Quarter | ||||||||
Canadian dollars, unless noted | 2022 | 2021 | ||||||
West Texas Intermediate (US$ per barrel) | 108.52 | 66.17 | ||||||
Western Canada Select (US$ per barrel) | 95.80 | 54.64 | ||||||
WTI/WCS Spread (US$ per barrel) | 12.72 | 11.53 | ||||||
Bitumen (per barrel) | 112.27 | 57.26 | ||||||
Synthetic crude oil (per barrel) | 144.67 | 80.80 | ||||||
Average foreign exchange rate (US$) | 0.78 | 0.81 |
Second Quarter | ||||||||
thousands of barrels per day | 2022 | 2021 | ||||||
Kearl (Imperial’s share) | 159 | 181 | ||||||
Cold Lake | 144 | 142 | ||||||
Syncrude (a) | 81 | 47 | ||||||
Kearl total gross production (thousands of barrels per day) | 224 | 255 |
Gross2022, Syncrude gross production of Cold Lake bitumen averaged 163,000included about 2 thousand barrels per day in the third quarter, up from 157,000of bitumen (2021 - rounded to 0 thousand barrels per day inday) that was exported to the same period last year. The higheroperator’s facilities using an existing interconnect pipeline.
Gross productionturnaround activities.
The company’s share of gross production from Syncrude averaged 74,000 barrels per day, compared to 85,000 barrels per day in the third quarter of 2016. Repairs associated with the Syncrude Mildred Lake upgrader fire were completed in late July. Lower third quarter volumes reflect the impact of the fire on operations, when compared to the same quarter in 2016.
Downstream net income was $292about $130 million, in the third quarter, compared to $1,002 million in the same period of 2016. Earnings decreased mainly due toreflecting the absence of a $716 million gain from the sale of company-owned retail sites and higher refining turnaround activity of about $100 million. These factors were partly offset by higher refining margins of about $140 million.
Refinery throughput averaged 385,000 barrels per day, compared to 407,000 barrels per day in the third quarter of 2016. Reduced throughput reflects increased turnaround activity associated with the Nanticokeactivities at Strathcona refinery, in the third quarter 2017.
Petroleum product sales were 500,000 barrels per day, compared to 505,000 barrels per day in the third quarter of 2016.
IMPERIAL OIL LIMITED
Chemical net income was $52 million in the third quarter, compared to $56 million in the same quarter of 2016.
Net income effects from Corporate and Other were negative $35 million in the third quarter, compared to negative $29 million in the same period of 2016.
IMPERIAL OIL LIMITED
Nine months 2017 vs. nine months 2016
Net income in the first nine months of 2017 was $627 million, or $0.74per-share on a diluted basis versus net income of $721 million or $0.85 per-share in the first nine months of 2016.
Upstream recorded a net loss of $225 million in the first nine months of 2017, compared to a net loss of $764 million from the same period of 2016. Results reflected the impact of higher Canadian crude oil realizations of about $940 million and higher Kearl volumes of about $50 million. These impacts were partially offset by higher royaltiesoperating expenses of about $150$70 million, lower Syncrude and conventional volumes of about $130 million, including the absence of production at Norman Wells,primarily higher energy costs of about $90 million, and higher operating expenses at Syncrude of about $90 million.
West Texas Intermediate averaged US$49.40 per barrelcosts.
Refinery utilization and petroleum product sales | ||||||||
Second Quarter | ||||||||
thousands of barrels per day, unless noted | 2022 | 2021 | ||||||
Refinery throughput | 412 | 332 | ||||||
Refinery capacity utilization (percent) | 96 | 78 | ||||||
Petroleum product sales | 480 | 429 |
During the first nine months of 2017, the Canadian dollar strengthened relative to the US dollar versus the same period of 2016. The Canadian dollar averaged US$0.77 in the first nine months of 2017, an increase of about US$0.01 from the same period of 2016.
Imperial’s average Canadian dollar realizations for bitumen and synthetic crudes increased generally in line with the North American benchmarks, adjusted for changes in the exchange rate and transportation costs. Bitumen realizations averaged $37.82 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 $10.92 per barrel from the same period of 2016.
Gross production of Cold Lake bitumen averaged 161,000 barrels per day in the first nine months of 2017, compared to 162,000 barrels per day from the same period of 2016.
Gross production of Kearl bitumen averaged 179,000 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.
During the first nine months of 2017, the company’s share of gross production from Syncrude averaged 56,000 barrels per day, compared to 61,000 barrels per day from the same period of 2016. Syncrude year to date production was impacted by the March 2017 fire at the Syncrude Mildred Lake upgrader and planned maintenance. In 2016, production was impacted by the Alberta wildfires and planned maintenance.
Downstream net income was $750 million, compared to $1,393 million from the same period of 2016. Earnings decreased2022 were mainly due to the absenceincreased demand.
For the first nine months of 2017, net income effects from
IMPERIAL OIL LIMITED
other
Second Quarter | ||||||||
millions of Canadian dollars | 2022 | 2021 | ||||||
Net income (loss) (U.S. GAAP) | (23) | (50) |
Second Quarter | ||||||||
millions of Canadian dollars | 2022 | 2021 | ||||||
Cash flow generated from (used in): | ||||||||
Operating activities | 2,682 | 852 | ||||||
Investing activities | (230 | ) | (207 | ) | ||||
Financing activities | (2,734 | ) | (1,336 | ) | ||||
Increase (decrease) in cash and cash equivalents | (282 | ) | (691 | ) | ||||
Cash and cash equivalents at period end | 2,867 | 776 |
Investing activities used net cash of $234 million in the third quarter, compared with $1,005 million cash generated from investing activities in the same period of 2016, reflecting lower proceeds from asset sales.
primarily reflects higher additions to property, plant and equipment.
Second Quarter | ||||||||
millions of Canadian dollars, unless noted | 2022 | 2021 | ||||||
Dividends paid | 228 | 161 | ||||||
Per share dividend paid (dollars) | 0.34 | 0.22 | ||||||
Share repurchases (a) | 2,500 | 1,171 | ||||||
Number of shares purchased (millions) (a) | 32.5 | 29.5 | ||||||
(a) Share repurchases were made under the company’s substantial issuer bid that commenced on May 6, 2022 and expired on June 10, 2022. Includes shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent. |
Six Months | ||||||||
millions of Canadian dollars, unless noted | 2022 | 2021 | ||||||
Net income (loss) (U.S. GAAP) | 3,582 | 758 | ||||||
Net income (loss) per common share, assuming dilution (dollars) | 5.36 | 1.04 |
Six Months | ||||||||
Canadian dollars, unless noted | 2022 | 2021 | ||||||
West Texas Intermediate (US$ per barrel) | 101.77 | 62.22 | ||||||
Western Canada Select (US$ per barrel) | 88.13 | 50.14 | ||||||
WTI/WCS Spread (US$ per barrel) | 13.64 | 12.08 | ||||||
Bitumen (per barrel) | 101.53 | 52.45 | ||||||
Synthetic crude oil (per barrel) | 131.41 | 72.42 | ||||||
Average foreign exchange rate (US$) | 0.79 | 0.80 |
Six Months | ||||||||
thousands of barrels per day | 2022 | 2021 | ||||||
Kearl (Imperial’s share) | 146 | 180 | ||||||
Cold Lake | 142 | 141 | ||||||
Syncrude (a) | 79 | 63 | ||||||
Kearl total gross production (thousands of barrels per day) | 205 | 253 |
Refinery utilization and petroleum product sales | ||||||||
Six Months | ||||||||
thousands of barrels per day, unless noted | 2022 | 2021 | ||||||
Refinery throughput | 406 | 348 | ||||||
Refinery capacity utilization (percent) | 95 | 81 | ||||||
Petroleum product sales | 464 | 421 |
Six Months | ||||||||
millions of Canadian dollars | 2022 | 2021 | ||||||
Net income (loss) (U.S. GAAP) | (77) | (96 | ) |
Six Months | ||||||||
millions of Canadian dollars | 2022 | 2021 | ||||||
Cash flow generated from (used in): | ||||||||
Operating activities | 4,596 | 1,897 | ||||||
Investing activities | (509 | ) | (354 | ) | ||||
Financing activities | (3,373 | ) | (1,538 | ) | ||||
Increase (decrease) in cash and cash equivalents | 714 | 5 |
Investing activitiesimpacts.
Six Months | ||||||||
millions of Canadian dollars, unless noted | 2022 | 2021 | ||||||
Dividends paid | 413 | 323 | ||||||
Per share dividend paid (dollars) | 0.61 | 0.44 | ||||||
Share repurchases (a) | 2,949 | 1,171 | ||||||
Number of shares purchased (millions) (a) | 41.4 | 29.5 | ||||||
(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. |
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.
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.
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.
Total number of | Average price | Total number of | Maximum number | |||||
July 2017 (Jul 1 – Jul 31) | - | - | - | 25,395,927 | ||||
August 2017 (Aug 1 – Aug 31) | 3,876,648 | 36.42 | 3,876,648 | 21,519,279 | ||||
September 2017 (Sept 1 – Sept 30) | 2,855,022 | 38.10 | 2,855,022 | 18,664,257 (b) |
| 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) (b) (c) | | |||||
April 2022 | - | - | - | - | ||||||||||||
(April 1 - April 30) | ||||||||||||||||
May 2022 | - | - | - | - | ||||||||||||
(May 1 - May 31) | ||||||||||||||||
June 2022 | 32,467,532 | 77.00 | 32,467,532 | - | ||||||||||||
(June 1 - June 28) | ||||||||||||||||
(June 29 - June 30) | - | - | - | 31,833,809 |
(a) | On June |
(b) | 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 will continue its existing share purchase program. The program enables the company to purchase up to a maximum of |
On May 6, 2022, the company |
Purchase plans may be modified at any time without prior notice.
Item 6. | Exhibits |
Imperial Oil Limited
| ||||||
(Registrant) | ||||||
Date: | August 3, 2022 | /s/ | ||||
(Signature) | ||||||
Daniel E. Lyons | ||||||
Senior vice-president, finance and | ||||||
administration, and controller | ||||||
(Principal accounting officer) | ||||||
Date: | August 3, 2022 | /s/ Cathryn Walker | ||||
(Signature) | ||||||
Cathryn Walker | ||||||
Assistant corporate secretary |
24