Reserves and Production - As of December 31, 2021, Imperial Oil reported total net proved reserves of 2.717 billion barrels of oil-equivalent, with 14% (386 million barrels) classified as proved undeveloped reserves[27][37]. - The company achieved an average daily oil production of 408 thousand barrels in 2021, an increase from 372 thousand barrels in 2020, with total net production also rising to 364 thousand barrels from 359 thousand barrels[43][50]. - The company reported a total average daily production on an oil-equivalent basis of 428 thousand barrels in 2021, up from 398 thousand barrels in 2020[50]. - Proved undeveloped reserves increased by 248 million oil-equivalent barrels from 2020, primarily due to developments at Cold Lake and the Montney and Duvernay unconventional assets[37]. - In 2021, the company's share of Kearl's net bitumen production was approximately 178,000 barrels per day, with total gross production reaching about 263,000 barrels per day, marking an increase of 41,000 barrels per day compared to 2020[77][78]. - Cold Lake's net bitumen production in 2021 was about 114,000 barrels per day, with gross production increasing by 8,000 barrels per day compared to 2020, attributed to improved reliability and production optimizations[81]. - The company's share of Syncrude's net production of synthetic crude oil was about 62,000 barrels per day in 2021, with gross production at approximately 71,000 barrels per day[83]. - The company holds a 50% interest in XTO Energy Canada, with net production from Montney and Duvernay assets at about 140 million cubic feet of natural gas per day and approximately 9,000 barrels per day of crude, condensate, and natural gas liquids[72]. Financial Performance - Average unit sales price for bitumen in 2021 was CAD 57.91 per barrel, significantly up from CAD 25.69 in 2020, reflecting improved market conditions[53][54]. - The average unit production cost for bitumen increased to CAD 29.06 per barrel in 2021, driven primarily by higher energy costs[56]. - The company’s average unit sales price for natural gas rose to CAD 3.83 per thousand cubic feet in 2021, compared to CAD 1.90 in 2020[53]. - Total capital and exploration expenditures for the Upstream segment were reported at CAD 632 million, with approximately CAD 124 million (20%) allocated to the development of proved undeveloped reserves[39]. - The company’s crude oil production is subject to regulatory limitations, with curtailments previously imposed in Alberta being repealed by the end of 2021[134]. - The company’s financial results are affected by the strength of the Canadian dollar against the U.S. dollar, as most commodity prices are benchmarked in U.S. dollars[176]. Refining and Sales - The company's refining throughput in 2021 was 379,000 barrels per day, an increase from 340,000 barrels per day in 2020, reflecting improved operations post-COVID-19[103]. - The average utilization of refinery capacity in 2021 was 89%, up from 80% in 2020[103]. - Total net petroleum product sales in 2021 reached 456,000 barrels per day, compared to 421,000 barrels per day in 2020, indicating a recovery in demand[112]. - Petrochemical sales volumes increased to 831,000 tonnes in 2021, up from 749,000 tonnes in 2020, driven by higher sales of intermediates and aromatics[116]. Environmental and Regulatory Factors - The company invested approximately $1.1 billion in environmental capital and operating expenditures in 2021, with expectations of about $1.0 billion in 2022[131]. - The Government of Canada aims to reduce greenhouse gas emissions by 40 to 45 percent below 2005 levels by 2030, which may affect the company's operations[167]. - The Alberta Oil Sands Emissions Limit Act sets a cap of 100 megatonnes of CO2 emissions per year in the oil sands sector, with current emissions remaining below this limit[169]. - The implementation of carbon pricing under the Greenhouse Gas Pollution Pricing Act will increase from $50 per tonne in 2022 to $170 per tonne by 2030, potentially affecting financial results[167]. - The company is subject to environmental regulations that may increase compliance costs and impact operational performance[156]. - The company faces risks from government policies that may restrict oil and gas production or increase operational costs due to environmental regulations[152]. Technological and Market Developments - The company plans to implement innovative technology to recover waste heat from boiler exhaust, potentially reducing operating costs and emissions by up to 30,000 tonnes of CO2 equivalent per year[79]. - The company's future success in energy transition relies on the development and deployment of technologies like carbon capture and sequestration (CCS)[173]. - The ability to develop CCS and lower emission technologies at a commercial scale depends on supportive government policies and market conditions[175]. - The company is focused on achieving net-zero emissions from its upstream oil sands operations, which carries risks related to the pace of technological and market developments[166]. Shareholder Information - The company purchased a total of 2,846,704 shares in October 2021 at an average price of CAD 42.70 per share[211]. - In November 2021, the company purchased 7,089,309 shares at an average price of CAD 43.49 per share[211]. - The company continued its share purchase program, with a maximum of 35,583,671 common shares allowed to be purchased by June 28, 2022[211]. - As of February 15, 2022, there were 9,826 holders of record of the company's common shares[205]. - The company has a 15% Canadian non-resident withholding tax on dividends for shareholders in countries with which Canada has an income tax convention[206]. - The withholding tax is reduced to 5% for U.S. corporations owning at least 10% of the voting shares[206]. - The company is a qualified foreign corporation for reduced U.S. capital gains tax rates applicable to dividends[207]. - The company will evaluate the renewal of its normal course issuer bid share purchase program in June 2022[212]. Operational Challenges - The company has implemented emergency response and business continuity plans in response to COVID-19, but ongoing disruptions could impact operations and demand[192]. - Future production and cash flows are highly dependent on the company's success in exploiting current reserves and replacing produced reserves[196]. - Estimates of recoverable oil and gas reserves involve uncertainties, including geological factors and regulatory changes that could impose significant compliance costs[197]. - The demand for energy and petrochemicals is closely linked to economic conditions, with recessions adversely impacting the company's results[148]. - The company’s operations may be affected by technological advancements in energy efficiency and shifts in consumer preferences towards alternative energy sources[148].

Imperial Oil Limited (NYSE:IMO) Q4 2021 Earnings Conference Call February 1, 2022 11:00 AM ET Company Participants Dave Hughes - Manager, Investor Relations Brad Corson - Chairman, President and Chief Executive Officer Daniel Lyons - Senior Vice-President, Finance and Administration Conference Call Participants Dennis Fong - CIBC Capital Markets Manav Gupta - Credit Suisse Doug Leggate - Bank of America Greg Pardy - RBC Capital Markets Neil Mehta - Goldman Sachs Group Menno Hulshof - TD Securities Phil Gres ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-12014 IMPERIAL OIL LIMITED (Exact name of registrant as specified in its charter) CANADA 98-0017682 (State or other jur ...

Imperial Oil Ltd (NYSE:IMO) Q3 2021 Earnings Conference Call October 29, 2021 11:00 AM ET Company Participants Dave Hughes - Manager, IR Bradley Corson - Chairman, President & CEO Daniel Lyons - SVP, Finance & Administration and Controller Conference Call Participants Neil Mehta - Goldman Sachs Group Dennis Fong - CIBC Capital Markets Greg Pardy - RBC Capital Markets Operator Good day, and thank you for standing by. Welcome to the Imperial Q3 2021 Earnings Call. [Operator Instructions]. I would now like to ...

PART I. FINANCIAL INFORMATION This section presents the company's consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the period [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20statements) The company reported a net income of $366 million for Q2 2021, a significant turnaround from a $526 million loss in Q2 2020, driven by higher revenues and commodity prices [Consolidated Statement of Income](index=3&type=section&id=Consolidated%20statement%20of%20income) The income statement highlights a substantial increase in revenues and a return to profitability in Q2 and H1 2021 compared to the prior year Q2 & H1 2021 vs 2020 Income Statement Highlights | Metric (millions of CAD) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | 8,007 | 3,666 | 14,999 | 10,330 | | **Total Expenses** | 7,576 | 4,403 | 14,062 | 11,348 | | **Net Income (Loss)** | 366 | (526) | 758 | (714) | | **Diluted EPS (CAD)** | 0.50 | (0.72) | 1.04 | (0.97) | - Revenues more than doubled in Q2 2021 compared to Q2 2020, increasing from **$3.7 billion to $8.0 billion**, leading to a significant profit recovery[12](index=12&type=chunk) [Consolidated Balance Sheet](index=5&type=section&id=Consolidated%20balance%20sheet) The balance sheet shows an increase in total assets and current assets, alongside a rise in total liabilities, while shareholders' equity slightly decreased Balance Sheet Summary | Metric (millions of CAD) | June 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | 5,874 | 4,524 | | **Total Assets** | 38,939 | 38,031 | | **Total Current Liabilities** | 4,650 | 3,380 | | **Total Liabilities** | 18,170 | 16,613 | | **Total Shareholders' Equity** | 20,769 | 21,418 | [Consolidated Statement of Cash Flows](index=7&type=section&id=Consolidated%20statement%20of%20cash%20flows) Cash flow from operating activities turned positive in H1 2021, significantly improving from a negative flow in H1 2020, despite increased cash used in financing activities H1 2021 vs 2020 Cash Flow Summary | Metric (millions of CAD) | H1 2021 | H1 2020 | | :--- | :--- | :--- | | **Cash from Operating Activities** | 1,897 | (393) | | **Cash used in Investing Activities** | (354) | (480) | | **Cash used in Financing Activities** | (1,538) | (612) | | **Increase (Decrease) in Cash** | 5 | (1,485) | | **Cash at End of Period** | 776 | 233 | - Financing activities in H1 2021 included **$1,171 million** for common share purchases, a significant increase from **$274 million** in H1 2020[23](index=23&type=chunk) [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20consolidated%20financial%20statements) Notes detail segment performance, share repurchase programs, and significant liability changes from a terminated pipeline project Net Income (Loss) by Business Segment (millions of CAD) | Segment | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | **Upstream** | 247 | (444) | 326 | (1,052) | | **Downstream** | 60 | (32) | 352 | 370 | | **Chemical** | 109 | 7 | 176 | 28 | - The company initiated a new normal course issuer bid effective June 29, 2021, to purchase up to **35.6 million** common shares (**5%** of total shares); Exxon Mobil intends to participate to maintain its **~69.6%** ownership[55](index=55&type=chunk) - Due to the termination of a third-party pipeline project's transportation services agreements, the company recognized a **$62 million** liability and decreased its long-term purchase agreement commitments by approximately **$2.9 billion**[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis (MD&A)](index=19&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management attributes the strong financial turnaround to recovering demand and stronger commodity prices, with all segments showing improved performance and robust liquidity [Operating Results](index=19&type=section&id=Operating%20Results) Operating results show a strong recovery driven by improved demand, higher commodity prices, and increased volumes across Upstream, Downstream, and Chemical segments - The recovery from the COVID-19 pandemic continued through 2021, improving demand and leading to stronger prices and margins across all business segments[67](index=67&type=chunk) Key Commodity Price Averages (USD per barrel) | Commodity | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | **WTI** | $66.17 | $27.83 | $62.22 | $36.66 | | **WCS** | $54.64 | $16.73 | $50.14 | $21.20 | Gross Production Volumes (thousands of barrels per day) | Asset | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | **Kearl (Imperial's Share)** | 181 | 135 | 180 | 147 | | **Cold Lake** | 142 | 123 | 141 | 131 | | **Syncrude (Imperial's Share)** | 47 | 50 | 63 | 61 | - The Upstream segment's Q2 2021 net income of **$247 million** was a major reversal from a **$444 million** loss in Q2 2020, driven by higher realizations of about **$1.1 billion** and higher volumes of about **$280 million**[69](index=69&type=chunk) - The Chemical segment's net income surged to **$109 million** in Q2 2021 from **$7 million** in Q2 2020, primarily due to higher polyethylene margins[79](index=79&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20capital%20resources) The company demonstrated strong liquidity with positive cash flow from operations, significant share repurchases, and ample available credit facilities - Cash flow from operations was **$852 million** in Q2 2021, a strong recovery from a use of cash of **$816 million** in Q2 2020, reflecting higher realizations and favorable working capital[96](index=96&type=chunk) - The company purchased approximately **29.5 million** shares for **$1,171 million** in Q2 2021 under its share purchase program; no shares were purchased in Q2 2020[98](index=98&type=chunk) - The company's cash balance stood at **$776 million** at June 30, 2021, compared to **$233 million** at the end of Q2 2020[99](index=99&type=chunk) - Imperial extended maturity dates on committed short-term credit lines totaling **$1.05 billion** and has not drawn on any of its **$1.3 billion** of available credit facilities[99](index=99&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) No material changes to market risk disclosures were reported, with updated sensitivities showing a **$100 million CAD** impact on net income for a **$1 USD** crude oil price or one-cent CAD/USD exchange rate change Updated Earnings Sensitivities (After-Tax) | Sensitivity Factor | Impact on Net Income (millions of CAD) | | :--- | :--- | | One dollar (U.S.) per barrel change in crude oil prices | +/- 100 | | One cent change in CAD vs. U.S. dollar value | +/- 100 | [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20procedures) The company's disclosure controls and procedures were deemed effective as of June 30, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2021[114](index=114&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[114](index=114&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, issuer purchases of equity securities, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20proceedings) The company has established a **$1 million** threshold for disclosing environmental legal proceedings - Imperial has elected to use a **$1 million** threshold for disclosing environmental proceedings[117](index=117&type=chunk) [Item 2. Issuer Purchases of Equity Securities](index=25&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) The company completed its prior share repurchase program and initiated a new, larger one to buy back up to **35.6 million** common shares through June 2022 Share Purchases in Q2 2021 | Period | Total Shares Purchased | Average Price Paid (CAD) | | :--- | :--- | :--- | | April 2021 | - | - | | May 2021 | 13,905,500 | $38.75 | | June 2021 (1-28) | 15,450,595 | $40.58 | | June 2021 (29-30) | 142,332 | $37.77 | - The normal course issuer bid program was amended on April 30, 2021, to increase the maximum purchasable shares to **29,363,070**, which was fully utilized by its expiration on June 28, 2021[119](index=119&type=chunk)[120](index=120&type=chunk) - A new normal course issuer bid was approved to purchase up to **35,583,671** common shares for the period of June 29, 2021, to June 28, 2022[121](index=121&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed, including required certifications by executive officers and Interactive Data Files (Inline XBRL) - Exhibits filed include certifications by the principal executive officer and principal financial officer pursuant to SEC rules, and Interactive Data Files (Inline XBRL)[125](index=125&type=chunk)

Financial Data and Key Metrics Changes - The company's net income for Q2 2021 was $366 million, an increase of $892 million from Q2 2020, and up almost $1.2 billion when excluding identified items [24] - Cash from operating activities was $852 million, slightly down from the first quarter, but higher than all four quarters of 2020 combined [12][13] - Free cash flow for the year reached just over $1.5 billion, up $2.4 billion from last year [27] Business Line Data and Key Metrics Changes - Upstream net income was $247 million, up about $170 million from the first quarter, driven by higher realizations [25] - Downstream net income was $60 million, down from $292 million in the first quarter due to a 55-day turnaround at Strathcona [26] - The chemicals business earned $109 million, the highest quarterly results in over 30 years, driven by higher margins [26][56] Market Data and Key Metrics Changes - Average upstream production was 401,000 oil equivalent barrels per day, up 54,000 barrels per day year-over-year, marking the highest second quarter production in over 25 years [31] - Petroleum product sales were 429,000 barrels per day, up 72,000 barrels per day versus Q2 2020, reflecting strengthening demand as pandemic restrictions eased [53] Company Strategy and Development Direction - The company is focused on maximizing the value of existing assets and has implemented a new strategy to extend intervals between turnarounds at Kearl, moving to a single annual turnaround [14][15] - The launch of the Oil Sands Pathways to Net Zero alliance aims to achieve net zero greenhouse gas emissions from oil sands operations by 2050, highlighting the company's commitment to sustainability [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in demand as pandemic-related restrictions are lifted and noted strong execution of plans leading into the second half of the year [9][10] - The company anticipates substantial free cash flow generation due to strong commodity prices and improving product demand [27] Other Important Information - The company returned over $1.3 billion to shareholders in Q2 2021 through share repurchases and dividends, compared to just over $900 million for all of 2020 [16][29] - Capital expenditures in Q2 totaled $259 million, with expectations to reach about $1.2 billion for the year as spending ramps up on key projects [28] Q&A Session Summary Question: Inflation risks on CapEx and OpEx - Management noted some pressure from inflation, particularly on steel prices, but it is not significantly impacting overall plans [61] - Higher energy costs driven by natural gas pricing are impacting some costs, but overall operating costs remain flat [63] Question: Temporary vs. permanent OPEC savings - About 50% of the $1 billion in cost savings achieved last year was structural, with efforts ongoing to maintain these savings [65][66] Question: Kearl production initiatives - Management highlighted ongoing projects focused on debottlenecking and resource optimization to achieve higher production levels [69] Question: Capital allocation and debt repayment - The company does not prioritize debt repayment, focusing instead on returning surplus cash to shareholders through dividends and buybacks [72][75] Question: Pathways to net zero milestones - The company is focused on defining technical solutions and collaborating with governments for support on the pathways to net zero project [80][82] Question: Special dividends and capital spending - Management is considering special dividends but emphasizes a commitment to reliable and growing dividends [92][93] - Capital spending is expected to ramp up in the second half of the year to meet the $1.2 billion guidance [96][98] Question: Impact of turnarounds on production - The turnaround at Strathcona had a significant impact, with a throughput reduction of about 70,000 barrels per day and a financial impact of around $90 million [105]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Imperial Oil Limited's unaudited consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2021 [Item 1. Financial statements](index=3&type=section&id=Item%201.%20Financial%20statements) This section presents Imperial Oil Limited's unaudited consolidated financial statements and detailed notes for Q1 2021 [Consolidated statement of income](index=3&type=section&id=Consolidated%20statement%20of%20income) This statement presents the company's revenues, expenses, and net income or loss for the reporting period | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Revenues and other income | 6,998 | 6,690 | | Total expenses | 6,486 | 6,945 | | Income (loss) before income taxes | 512 | (255) | | Net income (loss) | 392 | (188) | | Net income (loss) per common share - basic | 0.53 | (0.25) | | Net income (loss) per common share - diluted | 0.53 | (0.25) | [Consolidated statement of comprehensive income](index=4&type=section&id=Consolidated%20statement%20of%20comprehensive%20income) This statement details net income and other comprehensive income components, leading to total comprehensive income or loss | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Net income (loss) | 392 | (188) | | Other comprehensive income (loss), net of income taxes | 87 | (80) | | Comprehensive income (loss) | 479 | (268) | [Consolidated balance sheet](index=5&type=section&id=Consolidated%20balance%20sheet) This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity | millions of Canadian dollars | Mar 31, 2021 | Dec 31, 2020 | | :--------------------------- | :----------- | :----------- | | Total current assets | 5,848 | 4,524 | | Property, plant and equipment, net | 31,700 | 32,034 | | Total assets | 39,007 | 38,031 | | Total current liabilities | 3,933 | 3,380 | | Total liabilities | 17,271 | 16,613 | | Total shareholders' equity | 21,736 | 21,418 | - Cash increased significantly from **$771 million** at December 31, 2020, to **$1,467 million** at March 31, 2021[18](index=18&type=chunk) [Consolidated statement of shareholders' equity](index=6&type=section&id=Consolidated%20statement%20of%20shareholders'%20equity) This statement outlines changes in shareholders' equity over the reporting period, including net income and dividends | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Shareholders' equity at end of period | 21,736 | 23,570 | | Net income (loss) for the period | 392 | (188) | | Dividends declared | (161) | (162) | - Common shares at stated value remained constant at **$1,357 million** for both periods, with no share purchases in Q1 2021[22](index=22&type=chunk) [Consolidated statement of cash flows](index=7&type=section&id=Consolidated%20statement%20of%20cash%20flows) This statement summarizes the cash inflows and outflows from the company's operating, investing, and financing activities | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Cash flows from (used in) operating activities | 1,045 | 423 | | Cash flows from (used in) investing activities | (147) | (308) | | Cash flows from (used in) financing activities | (202) | (445) | | Increase (decrease) in cash | 696 | (330) | | Cash at end of period | 1,467 | 1,388 | - Operating cash flows significantly increased in Q1 2021, while cash used in investing and financing activities decreased compared to Q1 2020[24](index=24&type=chunk) [Notes to the consolidated financial statements](index=8&type=section&id=Notes%20to%20the%20consolidated%20financial%20statements) These notes provide detailed explanations and additional information for the consolidated financial statements [1. Basis of financial statement preparation](index=8&type=section&id=1.%20Basis%20of%20financial%20statement%20preparation) This section describes the accounting principles, policies, and methods used for financial statement preparation - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP and follow the same accounting policies as the 2020 annual report on Form 10-K[26](index=26&type=chunk) - Exploration and production activities are accounted for under the **'successful efforts' method**[27](index=27&type=chunk) [2. Business segments](index=9&type=section&id=2.%20Business%20segments) This section provides a breakdown of financial performance and capital expenditures by business segments | millions of Canadian dollars | Upstream (2021) | Upstream (2020) | Downstream (2021) | Downstream (2020) | Chemical (2021) | Chemical (2020) | | :--------------------------- | :-------------- | :-------------- | :---------------- | :---------------- | :-------------- | :-------------- | | Net income (loss) | 79 | (608) | 292 | 402 | 67 | 21 | | Cash flows from (used in) operating activities | 531 | 464 | 462 | 22 | 62 | (3) | | Capital and exploration expenditures | 85 | 231 | 68 | 76 | 2 | 9 | - Upstream segment significantly improved from a net loss to net income, while Downstream net income decreased; Chemical segment saw a substantial increase in net income[29](index=29&type=chunk) - Export sales to the United States totaled **$1,569 million** in 2021, primarily from the Upstream segment[30](index=30&type=chunk) [3. Investment and other income](index=11&type=section&id=3.%20Investment%20and%20other%20income) This section details the company's income derived from investments and other non-core operational activities | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Proceeds from asset sales | 7 | 9 | | Gain (loss) on asset sales, before tax | 3 | 7 | [4. Employee retirement benefits](index=11&type=section&id=4.%20Employee%20retirement%20benefits) This section outlines net periodic benefit costs for pension and other postretirement benefit plans | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Pension benefits: Net periodic benefit cost | 82 | 97 | | Other postretirement benefits: Net periodic benefit cost | 17 | 15 | [5. Financing costs](index=11&type=section&id=5.%20Financing%20costs) This section presents the company's net interest expense and total financing costs incurred during the period | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Net interest expense | 13 | 19 | | Total financing | 14 | 19 | [6. Long-term debt](index=11&type=section&id=6.%20Long-term%20debt) This section details the company's long-term debt obligations, including finance leases, at the balance sheet dates | millions of Canadian dollars | Mar 31, 2021 | Dec 31, 2020 | | :--------------------------- | :----------- | :----------- | | Long-term debt | 4,447 | 4,447 | | Finance leases | 506 | 510 | | Total long-term debt | 4,953 | 4,957 | [7. Other long-term obligations](index=12&type=section&id=7.%20Other%20long-term%20obligations) This section lists other long-term liabilities, such as employee retirement benefits and environmental obligations | millions of Canadian dollars | Mar 31, 2021 | Dec 31, 2020 | | :--------------------------- | :----------- | :----------- | | Employee retirement benefits | 2,036 | 2,105 | | Asset retirement obligations and other environmental liabilities | 1,680 | 1,676 | | Total other long-term obligations | 4,094 | 4,100 | [8. Financial and derivative instruments](index=13&type=section&id=8.%20Financial%20and%20derivative%20instruments) This section describes the company's use of financial and derivative instruments to manage commodity price risk - The company uses commodity-based contracts, including derivative instruments, to manage commodity price risk but does not designate them for hedge accounting purposes[42](index=42&type=chunk) | thousands of barrels | Mar 31, 2021 | Dec 31, 2020 | | :------------------- | :----------- | :----------- | | Crude (net notional long/(short) position) | 220 | (800) | | Products (net notional long/(short) position) | (560) | (390) | | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Realized and unrealized gain or (loss) on derivative instruments | (14) | 35 | [9. Common shares](index=15&type=section&id=9.%20Common%20shares) This section provides information on common shares outstanding, repurchase programs, and dividends declared | thousands of shares | Mar 31, 2021 | Dec 31, 2020 | | :------------------ | :----------- | :----------- | | Common shares outstanding | 734,077 | 734,077 | - The company announced an amendment to its normal course issuer bid on April 30, 2021, to increase the maximum number of common shares that may be purchased to **29,363,070** (**4%** of total shares on June 15, 2020) for the period June 29, 2020 to June 28, 2021[51](index=51&type=chunk) - Dividends declared per common share remained consistent at **$0.22** for both Q1 2021 and Q1 2020[52](index=52&type=chunk) [10. Other comprehensive income (loss) information](index=16&type=section&id=10.%20Other%20comprehensive%20income%20(loss)%20information) This section details the components and changes in the company's accumulated other comprehensive income or loss | millions of Canadian dollars | 2021 | 2020 | | :--------------------------- | :--- | :--- | | Balance of accumulated other comprehensive income (loss) at March 31 | (1,902) | (1,991) | | Current period change excluding reclassified amounts | 54 | (114) | [11. Miscellaneous financial information](index=16&type=section&id=11.%20Miscellaneous%20financial%20information) This section covers various other financial disclosures, including significant liabilities and non-cash charges - A **$62 million** liability was recognized in Q1 2021 due to the termination of transportation services agreements for a third-party pipeline project, leading to a decrease of approximately **$2.9 billion** in long-term purchase commitments[56](index=56&type=chunk) - In Q1 2020, the company recorded a non-cash charge of **$281 million** after tax for crude oil inventory write-down and a **$20 million** goodwill impairment charge in the Upstream segment[57](index=57&type=chunk)[58](index=58&type=chunk) [Item 2. Management's discussion and analysis of financial condition and results of operations](index=17&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) This section provides an in-depth analysis of Imperial Oil Limited's financial performance and operational results for the first quarter of 2021 compared to 2020, highlighting the impact of market conditions, segment-specific contributions, liquidity, and capital resources - Net income for Q1 2021 was **$392 million** (**$0.53 per share diluted**), a significant improvement from a net loss of **$188 million** (**$0.25 per share**) in Q1 2020, partly due to the absence of a **$281 million** non-cash inventory revaluation charge in the prior year[62](index=62&type=chunk) - Upstream net income improved to **$79 million** from a **$608 million** net loss in Q1 2020, driven by higher realizations (+$700 million) and the absence of the prior year's inventory revaluation charge (+$229 million), partially offset by higher royalties, unfavorable foreign exchange, and increased operating expenses[63](index=63&type=chunk) - Downstream net income decreased to **$292 million** from **$402 million**, primarily due to lower margins (approx. **$150 million**) and sales volumes (approx. **$60 million**), partially offset by the absence of the prior year's **$52 million** inventory charge and lower operating expenses[69](index=69&type=chunk) - Chemical net income increased to **$67 million** in Q1 2021 from **$21 million** in Q1 2020[73](index=73&type=chunk) - Cash flow from operating activities increased to **$1,045 million** in Q1 2021 from **$423 million** in Q1 2020, mainly reflecting higher Upstream realizations[74](index=74&type=chunk) - The company's cash balance at March 31, 2021, was **$1,467 million**, up from **$1,388 million** at the end of Q1 2020[76](index=76&type=chunk) - An amendment to the normal course issuer bid was announced on April 30, 2021, increasing the maximum number of common shares that may be purchased to **29,363,070**, and the company anticipates maximizing these purchases[78](index=78&type=chunk) [Item 3. Quantitative and qualitative disclosures about market risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) This section states that the company's market risk disclosures for Q1 2021 do not materially differ from those in its 2020 annual report on Form 10-K - Information about market risks for Q1 2021 does not materially differ from the disclosures in the company's 2020 annual report on Form 10-K[85](index=85&type=chunk) [Item 4. Controls and procedures](index=20&type=section&id=Item%204.%20Controls%20and%20procedures) This section confirms effective disclosure controls and no material changes to internal control over financial reporting as of March 31, 2021 - The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of March 31, 2021[86](index=86&type=chunk) - No material changes in the company's internal control over financial reporting occurred during the last fiscal quarter[86](index=86&type=chunk) [PART II. OTHER INFORMATION](index=21&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional disclosures, including legal proceedings, equity security sales, and exhibits [Item 1. Legal proceedings](index=21&type=section&id=Item%201.%20Legal%20proceedings) This section outlines Imperial Oil Limited's policy for disclosing environmental legal proceedings, setting a $1 million threshold for reporting - Imperial has elected to use a **$1 million** threshold for disclosing environmental proceedings[89](index=89&type=chunk) [Item 2. Unregistered sales of equity securities and use of proceeds](index=21&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) This section details the company's issuer purchases of equity securities under its normal course issuer bid, including an amendment to increase share repurchase limits - No shares were purchased under the issuer bid program in January, February, or March 2021[90](index=90&type=chunk) - On April 30, 2021, the company amended its normal course issuer bid to increase the maximum number of common shares that may be purchased to **29,363,070** (**4%** of total shares on June 15, 2020) for the period June 29, 2020 to June 28, 2021[91](index=91&type=chunk) - Exxon Mobil Corporation intends to participate in the share purchase program to maintain its ownership percentage at approximately **69.6 percent**[90](index=90&type=chunk) [Item 6. Exhibits](index=22&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the 10-Q report, including various certifications by the company's principal officers and interactive data files - Exhibits include certifications by the principal executive officer (**31.1**, **32.1**) and principal financial officer (**31.2**, **32.2**) of the company[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - Interactive Data Files (**101**) and the Cover Page Interactive Data File (**104**) are included in Inline XBRL format[96](index=96&type=chunk) [SIGNATURES](index=23&type=section&id=SIGNATURES) This section contains the official signatures of the authorized representatives, confirming the due submission of the quarterly report [Signatures](index=23&type=section&id=SIGNATURES_details) This section contains the official signatures of the authorized representatives of Imperial Oil Limited, confirming the due submission of the quarterly report - The report was signed on May 5, 2021, by Daniel E. Lyons, Senior Vice-President, Finance and Administration, and Controller, and Cathryn Walker, Assistant Corporate Secretary[98](index=98&type=chunk)

Imperial Oil Limited (NYSE:IMO) Q1 2021 Earnings Conference Call April 30, 2021 11:00 AM ET Company Participants Dave Hughes - Vice President of Investor Relations Bradley Corson - Chairman, President and Chief Executive Officer Daniel Lyons - Senior Vice President of Finance and Administration Conference Call Participants Greg Pardy - RBC Capital Markets Carly Davenport - Goldman Sachs Group, Inc. Menno Hulshof - TD Securities Christopher Tillett - Barclays Investment Bank Operator Ladies and gentlemen, th ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-12014 IMPERIAL OIL LIMITED (Exact name of registrant as specified in its charter) CANADA (State or other jurisdiction of incorpo ...

Financial Data and Key Metrics Changes - The company reported a net loss of $1.1 billion for Q4 2020, which included a non-cash impairment charge of $1.2 billion related to unconventional assets [14][22] - Full-year 2020 cash generated from operating activities was $798 million, despite unfavorable working capital impacts [27] - Cash generated from operating activities in Q4 2020 was $316 million, down from $875 million in Q3 2020, impacted by unfavorable working capital effects [28][29] Business Line Data and Key Metrics Changes - Upstream recorded a net loss of $1,192 million in Q4 2020, compared to a net loss of $74 million in Q3 2020, with improved results driven by higher production at Kearl [25] - Downstream net income was $106 million in Q4 2020, up from $77 million in Q3 2020, mainly due to higher margins [26] - The chemicals business earned $23 million in Q4 2020, down from $27 million in Q3 2020, but up $21 million compared to Q4 2019 [60] Market Data and Key Metrics Changes - Global demand for crude oil and products remained lower than normal, impacting prices and recovery pace in Q4 2020 [13] - Petroleum product sales in Q4 2020 were 416,000 barrels per day, down 41,000 barrels per day compared to Q4 2019 [54] Company Strategy and Development Direction - The company aims to focus resources and capital spending on high-return projects in existing oil sands assets while developing only the most attractive portions of its unconventional portfolio [14] - A commitment to cost reduction resulted in nearly $2 billion in reductions compared to 2019 levels [17] - The company plans to maintain a capital expenditure guidance of approximately $1.2 billion for 2021, reflecting a moderate increase from 2020 [77] Management's Comments on Operating Environment and Future Outlook - Management expressed pride in the company's response to the challenges of 2020, emphasizing operational strength and financial resilience [9][70] - The ongoing pandemic and new community lockdowns create uncertainty in forecasting refinery utilization [53] - The company remains committed to returning cash to shareholders through dividends and share buybacks, while also focusing on maintaining financial flexibility [101][112] Other Important Information - The company was recognized as one of Canada's Top 100 Employers for 2021, highlighting its commitment to employee training and community involvement [12] - The construction of bi-directional pipelines at Syncrude was completed, enhancing operational flexibility and reliability [48][121] Q&A Session Summary Question: What do you estimate your sustaining capital requirements look like going forward? - The company expects a moderate increase in sustaining capital in the coming years, with a total capital guidance of $1.2 billion for 2021 [77][78] Question: What synergies do you expect from Exxon Mobil's CO2 initiatives? - The company views Exxon Mobil's announcement as an opportunity to access their systems and technology, particularly in carbon capture and sequestration [80][82] Question: What is the game plan at Syncrude from a cost perspective in 2021 and beyond? - The company anticipates significant operational and cost benefits from Suncor taking over operations at Syncrude, estimating synergies of around $300 million per year [97][99] Question: What is the appetite for buybacks versus a conservative strategy? - The company prioritizes returning cash to shareholders through dividends and buybacks, while also focusing on generating cash from existing assets [100][102] Question: How should we think about the performance at Kearl and cost savings initiatives? - The company has reduced unit costs by about 25% and is focused on continuing to achieve lower costs while increasing production [115][117]