Imperial Oil(IMO) - 2024 Q3 - Quarterly Results

Q3 2024 Financial and Operating Highlights Q3 2024 Key Financial and Operational Metrics Imperial reported strong Q3 2024 operating performance with net income of $1,237 million, cash flows from operating activities of $1,487 million, and the highest third-quarter upstream production in over 30 years at 447,000 gross oil-equivalent barrels per day, returning $1,528 million to shareholders Q3 2024 Key Financial Metrics (YoY Change) | millions of Canadian dollars, unless noted | 2024 | Third quarter 2023 | ∆I | |:-----------------------------------------|:------|:-------------------|:------| | Net income (loss) (U.S. GAAP) | 1,237 | 1,601 | (364) | | Net income (loss) per common share, assuming dilution (dollars) | 2.33 | 2.76 | (0.43)| | Capital and exploration expenditures | 486 | 387 | +99 | - Cash flows from operating activities were $1,487 million, with cash flows from operating activities excluding working capital at $1,797 million[1] - Upstream production reached 447,000 gross oil-equivalent barrels per day, marking the highest third quarter in over 30 years[1] - Returned $1,528 million to shareholders, including $322 million in dividend payments and $1,206 million in accelerated share repurchases[1] CEO Commentary and Strategic Initiatives CEO Brad Corson highlighted strong operating performance driven by record upstream production and improved unit cash costs, alongside robust downstream utilization, with strategic initiatives including the successful ramp-up of the Grand Rapids project, construction of Canada's largest renewable diesel facility, and continued commitment to shareholder returns - Operating results were driven by the strongest third-quarter upstream production in over 30 years and continued improvement in upstream unit cash costs, as well as achieving strong downstream utilization[2] - The strong ramp up of Grand Rapids, industry's first commercial application of solvent-assisted SAGD, is a major milestone supporting long-term strategy to grow production, lower unit cash costs and reduce greenhouse gas intensity[4] - Construction continued on Canada's largest renewable diesel facility at the Strathcona refinery, expected to have a capacity of more than one billion litres annually[4] - Imperial remains committed to shareholder returns, demonstrated by 30 consecutive years of dividend growth and plans to complete the full NCIB by year end[5] Detailed Third Quarter Highlights Imperial's third-quarter highlights include a net income of $1,237 million, cash flows from operating activities of $1,487 million, and capital expenditures of $486 million, with $1,528 million returned to shareholders and record upstream production of 447,000 gross oil-equivalent barrels per day driven by Grand Rapids and Cold Lake, alongside 90% downstream refinery utilization and chemical net income increasing to $28 million - Net income of $1,237 million or $2.33 per share on a diluted basis, compared to $1,601 million or $2.76 per share in Q3 2023[7] - Cash flows from operating activities of $1,487 million, compared to $2,359 million in Q3 2023, with cash flows excluding working capital at $1,797 million, down from $1,946 million[7] - Production averaged 447,000 gross oil-equivalent barrels per day, the highest third quarter production in over 30 years, up from 423,000 gross oil-equivalent barrels per day in Q3 2023, primarily driven by Grand Rapids and Cold Lake[9] - Refinery throughput averaged 389,000 barrels per day (90% capacity utilization), compared to 416,000 barrels per day (96% utilization) in Q3 2023, reflecting planned turnaround activities[12] - Chemical net income of $28 million in the quarter, up from $23 million in Q3 2023[13] - Leming SAGD redevelopment project expected to start up in 2025 with peak production around 9,000 barrels per day[11] - Pathways Alliance continued to progress early technical work for the proposed carbon capture and storage project[14] Recent Business Environment Market Conditions During Q3, crude prices decreased due to uncertainty in China demand and OPEC+ supply, the Canadian WTI/WCS spread remained stable, while industry refining margins declined as increased supply outpaced global demand - Crude prices decreased versus the second quarter, reflecting uncertainty about future China demand and OPEC+ supply[15] - The Canadian WTI/WCS spread remained stable in the third quarter and narrowed versus the 2023 full-year average[15] - Industry refining margins declined versus the second quarter as increased supply outpaced global demand[15] Operating Results: Third Quarter 2024 vs. Third Quarter 2023 Overall Financial Performance Imperial's net income for Q3 2024 was $1,237 million ($2.33 per share diluted), a decrease from $1,601 million ($2.76 per share diluted) in Q3 2023 Net Income (Loss) and EPS (Q3 2024 vs 2023) | millions of Canadian dollars, unless noted | Third Quarter 2024 | 2023 | |:-----------------------------------------|:-------------------|:------| | Net income (loss) (U.S. GAAP) | 1,237 | 1,601 | | Net income (loss) per common share, assuming dilution (dollars) | 2.33 | 2.76 | Upstream Segment Upstream net income was impacted by lower average bitumen and synthetic crude oil realizations due to decreased marker prices, partially offset by higher volumes from Grand Rapids and Cold Lake, and lower operating expenses - Average bitumen realizations decreased by $8.81 per barrel, primarily driven by lower marker prices, while synthetic crude oil realizations decreased by $8.57 per barrel[16] - Higher volumes were primarily driven by Grand Rapids, and by production and steam cycle timing at Cold Lake[17] - Lower operating expenses of about $80 million, primarily due to lower energy prices[17] Marker Prices and Average Realizations (Q3 2024 vs 2023) | Marker prices and average realizations Canadian dollars, unless noted | 2024 | Third Quarter 2023 | |:--------------------------------------------------------------------|:------|:-------------------| | West Texas Intermediate (US$ per barrel) | 75.27 | 82.32 | | Western Canada Select (US$ per barrel) | 61.76 | 69.39 | | WTI/WCS Spread (US$ per barrel) | 13.51 | 12.93 | | Bitumen (per barrel) | 77.24 | 86.05 | | Synthetic crude oil (per barrel) | 104.41| 112.98 | | Average foreign exchange rate (US$) | 0.73 | 0.75 | Production (Q3 2024 vs 2023) | thousands of barrels per day | 2024 | Third Quarter 2023 | |:-----------------------------|:-----|:-------------------| | Kearl (Imperial's share) | 209 | 209 | | Cold Lake | 147 | 128 | | Syncrude | 81 | 75 | | Kearl total gross production (thousands of barrels per day) | 295 | 295 | Downstream Segment Downstream net income was affected by lower margins due to weaker market conditions, with refinery throughput decreasing to 389,000 barrels per day (90% utilization) from 416,000 barrels per day (96% utilization) in Q3 2023 due to planned turnaround activities, while petroleum product sales increased slightly to 487,000 barrels per day - Lower margins primarily reflect weaker market conditions[20] Refinery Utilization and Petroleum Product Sales (Q3 2024 vs 2023) | thousands of barrels per day, | 2024 | Third Quarter 2023 | |:------------------------------|:-----|:-------------------| | Refinery throughput | 389 | 416 | | Refinery capacity utilization | 90 | 96 | | Petroleum product sales | 487 | 478 | - Refinery throughput in Q3 2024 reflects the impact of turnaround activities at the Nanticoke and Strathcona refineries[20] Chemicals Segment Chemical net income increased to $28 million in Q3 2024 from $23 million in Q3 2023 - Chemical net income of $28 million in the quarter, up from $23 million in the third quarter of 2023[13] Corporate and Other This segment's financial performance is presented without specific commentary, focusing on its contribution to overall net income Liquidity and Capital Resources: Third Quarter 2024 vs. Third Quarter 2023 Cash Flow Activities Cash flows from operating activities decreased to $1,487 million, primarily due to unfavorable working capital impacts, while cash flows used in investing activities increased to $484 million, reflecting higher additions to property, plant, and equipment, and financing activities used $1,533 million Cash Flows (Q3 2024 vs 2023) | millions of Canadian dollars | 2024 | Third Quarter 2023 | |:-----------------------------|:------|:-------------------| | Cash flows from (used in): | | | | Operating activities | 1,487 | 2,359 | | Investing activities | (484) | (380) | | Financing activities | (1,533)| (1,639) | | Increase (decrease) in cash and cash equivalents | (530) | 340 | | Cash and cash equivalents at period end | 1,490 | 2,716 | - Cash flows from operating activities primarily reflect unfavourable working capital impacts[23] - Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment[24] Shareholder Returns Imperial returned $1,528 million to shareholders in Q3 2024, comprising $322 million in dividends paid ($0.60 per share) and $1,206 million in accelerated share repurchases (12.4 million shares) Shareholder Returns (Q3 2024 vs 2023) | millions of Canadian dollars, unless noted | 2024 | Third Quarter 2023 | |:-----------------------------------------|:------|:-------------------| | Dividends paid | 322 | 292 | | Per share dividend paid (dollars) | 0.60 | 0.50 | | Share repurchases (a) | 1,206 | 1,342 | | Number of shares purchased (millions) (a)| 12.4 | 17.5 | - The company returned $1,528 million to shareholders in the third quarter of 2024, including $322 million in dividends paid and $1,206 million in accelerated share repurchases[8] Operating Results: Nine Months 2024 vs. Nine Months 2023 Overall Financial Performance For the nine months ended 2024, net income was $3,565 million ($6.66 per share diluted), an increase from $3,524 million ($6.04 per share diluted) in the same period of 2023 Net Income (Loss) and EPS (9M 2024 vs 2023) | millions of Canadian dollars, unless noted | Nine Months 2024 | 2023 | |:-----------------------------------------|:-----------------|:------| | Net income (loss) (U.S. GAAP) | 3,565 | 3,524 | | Net income (loss) per common share, assuming dilution (dollars) | 6.66 | 6.04 | Upstream Segment Upstream net income benefited from increased average bitumen realizations due to a narrowing WTI/WCS spread and lower diluent costs, despite a decrease in synthetic crude oil realizations, with higher volumes from Kearl (improved mine fleet productivity) and Cold Lake (Grand Rapids) also contributing, along with lower operating expenses - Average bitumen realizations increased by $6.90 per barrel, primarily driven by the narrowing WTI/WCS spread, lower diluent costs, and higher marker prices[27] - Higher volumes were primarily driven by improved mine fleet productivity and optimized turnaround at Kearl, as well as Grand Rapids and production and steam cycle timing at Cold Lake[28] - Lower operating expenses of about $200 million, primarily from lower energy prices, and favourable foreign exchange impacts of about $70 million[28] Marker Prices and Average Realizations (9M 2024 vs 2023) | Marker prices and average realizations Canadian dollars, unless noted | 2024 | Nine Months 2023 | |:--------------------------------------------------------------------|:------|:-----------------| | West Texas Intermediate (US$ per barrel) | 77.59 | 77.29 | | Western Canada Select (US$ per barrel) | 62.15 | 59.67 | | WTI/WCS Spread (US$ per barrel) | 15.44 | 17.62 | | Bitumen (per barrel) | 75.60 | 68.70 | | Synthetic crude oil (per barrel) | 102.95| 105.65 | | Average foreign exchange rate (US$) | 0.74 | 0.74 | Production (9M 2024 vs 2023) | thousands of barrels per day | 2024 | Nine Months 2023 | |:-----------------------------|:-----|:-----------------| | Kearl (Imperial's share) | 195 | 182 | | Cold Lake | 145 | 134 | | Syncrude | 73 | 72 | | Kearl total gross production (thousands of barrels per day) | 275 | 257 | Downstream Segment Downstream net income was negatively impacted by lower margins due to weaker market conditions, but partially offset by lower turnaround impacts, with refinery throughput decreasing to 395,000 barrels per day (91% utilization) from 407,000 barrels per day (94% utilization) in the prior year, while petroleum product sales remained flat at 469,000 barrels per day - Lower margins primarily reflect weaker market conditions[33] - Other factors primarily due to lower turnaround impacts of about $110 million[33] Refinery Utilization and Petroleum Product Sales (9M 2024 vs 2023) | thousands of barrels per day, unless noted | 2024 | Nine Months 2023 | |:-------------------------------------------|:-----|:-----------------| | Refinery throughput | 395 | 407 | | Refinery capacity utilization (percent) | 91 | 94 | | Petroleum product sales | 469 | 469 | Chemicals Segment This segment's financial performance is presented without specific commentary, focusing on its contribution to overall net income Corporate and Other This segment's financial performance is presented without specific commentary, focusing on its contribution to overall net income Liquidity and Capital Resources: Nine Months 2024 vs. Nine Months 2023 Cash Flow Activities Cash flows from operating activities significantly increased to $4,192 million, primarily due to the absence of a $2.1 billion income tax catch-up payment made in the prior year, while cash flows used in investing activities increased to $1,421 million, reflecting higher additions to property, plant, and equipment, and financing activities used $2,145 million Cash Flows (9M 2024 vs 2023) | millions of Canadian dollars | 2024 | Nine Months 2023 | |:-----------------------------|:------|:-----------------| | Cash flows from (used in): | | | | Operating activities | 4,192 | 2,423 | | Investing activities | (1,421)| (1,283) | | Financing activities | (2,145)| (2,173) | | Increase (decrease) in cash and cash equivalents | 626 | (1,033) | - Cash flows from operating activities primarily reflect the absence of unfavourable working capital impacts mainly related to an income tax catch-up payment of $2.1 billion in the prior year[37] - Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment[38] Shareholder Returns and NCIB Program For the nine months, dividends paid totaled $921 million ($1.70 per share), and share repurchases amounted to $1,206 million (12.4 million shares), with Imperial receiving approval for a new normal course issuer bid (NCIB) to purchase up to 26,791,840 common shares by June 28, 2025, and plans to accelerate repurchases to complete the program before year-end Shareholder Returns (9M 2024 vs 2023) | millions of Canadian dollars, unless noted | 2024 | Nine Months 2023 | |:-----------------------------------------|:------|:-----------------| | Dividends paid | 921 | 815 | | Per share dividend paid (dollars) | 1.70 | 1.38 | | Share repurchases | 1,206 | 1,342 | | Number of shares purchased (millions) | 12.4 | 17.5 | - The company received final approval from the Toronto Stock Exchange for a new normal course issuer bid (NCIB) to purchase up to a maximum of 26,791,840 common shares during the period June 29, 2024 to June 28, 2025[39] - Imperial plans to accelerate its share purchases under the NCIB program, and anticipates repurchasing all remaining allowable shares prior to year end[39] Forward-Looking Statements Definition and Scope This section defines forward-looking statements as projections, targets, expectations, estimates, and business plans, including discussions of future plans related to carbon capture, biofuels, hydrogen, and emission reduction initiatives, identifiable by words such as 'believe,' 'anticipate,' 'intend,' and 'plan' - Statements of future events or conditions, including projections, targets, expectations, estimates, and business plans, are forward-looking statements[42] - Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, seek, estimate, expect, future, continue, likely, may, should, will and similar references to future periods[42] - Examples include shareholder returns programs, the impact of the Cold Lake Grand Rapids project, the Strathcona renewable diesel project, the Leming SAGD redevelopment project, and the Pathways Alliance carbon capture and storage project[42] Risks and Uncertainties Forward-looking statements are based on current expectations and assumptions, but actual future financial and operating results could differ materially, with various factors including global supply and demand, political and regulatory events, capital availability, technical difficulties, and economic conditions posing risks and uncertainties - Forward-looking statements are based on the company's current expectations, estimates, projections and assumptions at the time the statements are made[43] - Actual future financial and operating results could differ materially depending on a number of factors, including future energy demand, supply and mix; production rates; project plans, timing, costs, and capacities; and the company's ability to effectively execute on these plans[43] - Key factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and petrochemical products; political or regulatory events; availability and allocation of capital; unanticipated technical or operational difficulties; and general economic conditions[44][46] - Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and readers are cautioned not to place undue reliance on them[47] Attachments / Key Financial and Operating Data Attachment I: Consolidated Statement of Income This attachment provides the consolidated statement of income for Q3 and nine months of 2024 and 2023, detailing total revenues, expenses, net income, and earnings per share Consolidated Statement of Income (Q3 & 9M 2024 vs 2023) | millions of Canadian dollars, unless noted | 2024 | Third Quarter
2023 | 2024 | Attachment I
Nine Months
2023 | |:-----------------------------------------|:-------|:---------------------|:-------|:------------------------------------| | Net income (loss) (U.S. GAAP) | | | | | | Total revenues and other income | 13,259 | 13,920 | 38,925 | 37,860 | | Total expenses | 11,656 | 11,820 | 34,261 | 33,231 | | Income (loss) before income taxes | 1,603 | 2,100 | 4,664 | 4,629 | | Income taxes | 366 | 499 | 1,099 | 1,105 | | Net income (loss) | 1,237 | 1,601 | 3,565 | 3,524 | | Net income (loss) per common share (dollars) | 2.33 | 2.77 | 6.67 | 6.05 | | Net income (loss) per common share - assuming dilution (dollars) | 2.33 | 2.76 | 6.66 | 6.04 | | Other financial data | | | | | | Gain (loss) on asset sales, after tax | 2 | (2) | 5 | 16 | | Total assets at September 30 | | | 42,529 | 43,586 | | Total debt at September 30 | | | 4,115 | 4,138 | | Shareholders' equity at September 30 | | | 23,639 | 23,808 | | Dividends declared on common stock | | | | | | Total | 317 | 288 | 960 | 837 | | Per common share (dollars) | 0.60 | 0.50 | 1.80 | 1.44 | | Millions of common shares outstanding | | | | | | At September 30 | | | 523.4 | 566.7 | | Average - assuming dilution | 531.9 | 579.3 | 535.3 | 583.3 | Attachment II: Consolidated Statement of Cash Flows This attachment presents the consolidated statement of cash flows for Q3 and nine months of 2024 and 2023, breaking down cash flows from operating, investing, and financing activities Consolidated Statement of Cash Flows (Q3 & 9M 2024 vs 2023) | millions of Canadian dollars | 2024 | Third Quarter
2023 | 2024 | Attachment II
Nine Months
2023 | |:-----------------------------------------|:------|:---------------------|:------|:------------------------------------| | Total cash and cash equivalents at period end | 1,490 | 2,716 | 1,490 | 2,716 | | Operating activities | | | | | | Net income (loss) | 1,237 | 1,601 | 3,565 | 3,524 | | Adjustments for non-cash items: | | | | | | Depreciation and depletion | 508 | 475 | 1,454 | 1,418 | | (Gain) loss on asset sales | (2) | 3 | (5) | (19) | | Deferred income taxes and other | 53 | (168) | (186) | (239) | | Changes in operating assets and liabilities | (310) | 413 | (634) | (2,213) | | All other items - net | 1 | 35 | (2) | (48) | | Cash flows from (used in) operating activities | 1,487 | 2,359 | 4,192 | 2,423 | | Additions to property, plant and equipment
Proceeds from asset sales
Loans to equity companies - net | (486)
—
2 | (387)
6
1 | (1,444)
7
16 | (1,315)
29
3 | | Cash flows from (used in) investing activities | (484) | (380) | (1,421)| (1,283) | | Cash flows from (used in) financing activities | (1,533)| (1,639) | (2,145)| (2,173) | Attachment III: Segmented Financial Data This attachment provides a detailed breakdown of net income, revenues, purchases of crude oil and products, production and manufacturing costs, selling and general expenses, and capital and exploration expenditures by segment (Upstream, Downstream, Chemical, Corporate and other) for Q3 and nine months of 2024 and 2023 Segmented Financial Data (Q3 & 9M 2024 vs 2023) | millions of Canadian dollars | Third Quarter
2024 |
2023 | Attachment
Nine Months
2024 | III
2023 | |:-----------------------------------------|:---------------------|:--------|:---------------------------------|:-----------| | Net income (loss) (U.S. GAAP) | | | | | | Upstream | 1,027 | 1,028 | 2,384 | 1,742 | | Downstream | 205 | 586 | 1,130 | 1,706 | | Chemical | 28 | 23 | 150 | 147 | | Corporate and other | (23) | (36) | (99) | (71) | | Net income (loss) | 1,237 | 1,601 | 3,565 | 3,524 | | Revenues and other income | | | | | | Upstream | 4,609 | 4,807 | 13,329 | 12,097 | | Downstream | 14,570 | 15,112 | 42,843 | 41,329 | | Chemical | 255 | 382 | 1,092 | 1,252 | | Eliminations / Corporate and other | (6,175) | (6,381) | (18,339) | (16,818) | | Revenues and other income | 13,259 | 13,920 | 38,925 | 37,860 | | Purchases of crude oil and products | | | | | | Upstream | 1,766 | 1,852 | 5,479 | 4,827 | | Downstream | 13,014 | 13,061 | 37,549 | 35,390 | | Chemical | 157 | 254 | 673 | 791 | | Eliminations / Corporate and other | (6,203) | (6,419) | (18,405) | (16,926) | | Purchases of crude oil and products | 8,734 | 8,748 | 25,296 | 24,082 | | Production and manufacturing | | | | | | Upstream | 1,050 | 1,187 | 3,441 | 3,730 | | Downstream | 423 | 405 | 1,279 | 1,291 | | Chemical | 36 | 74 | 137 | 186 | | Eliminations / Corporate and other | 8 | — | 13 | — | | Production and manufacturing | 1,517 | 1,666 | 4,870 | 5,207 | | Selling and general | | | | | | Upstream | — | — | — | — | | Downstream | 170 | 177 | 503 | 494 | | Chemical | 22 | 21 | 71 | 69 | | Eliminations / Corporate and other | 31 | 39 | 116 | 66 | | Selling and general | 223 | 237 | 690 | 629 | | Capital and exploration expenditures | | | | | | Upstream | 300 | 244 | 857 | 868 | | Downstream | 133 | 103 | 435 | 329 | | Chemical | 3 | 2 | 11 | 11 | | Corporate and other | 50 | 38 | 141 | 101 | | Capital and exploration expenditures | 486 | 387 | 1,444 | 1,309 | | Exploration expenses charged to Upstream income included above | 1 | 1 | 3 | 3 | Attachment IV: Operating Statistics This attachment details key operating statistics, including gross and net crude oil and natural gas production, oil-equivalent production, blend sales, average realizations for various crude types and natural gas, refinery throughput and utilization, and petroleum product and petrochemical sales for Q3 and nine months of 2024 and 2023 Operating Statistics (Q3 & 9M 2024 vs 2023) | Operating statistics | 2024 | Third Quarter 2023 | Attachment
Nine Months 2024 | IV
2023 | |:---------------------------------------------------------------------------------------------------------------------------------|:--------------|:-------------------|:-------------------------------|:--------------| | Gross crude oil production (thousands of barrels per day) | | | | | | Kearl | 209 | 209 | 195 | 182 | | Cold Lake | 147 | 128 | 145 | 134 | | Syncrude (a) | 81 | 75 | 73 | 72 | | Conventional | 5 | 6 | 6 | 6 | | Total crude oil production | 442 | 418 | 419 | 394 | | Gross natural gas production (millions of cubic feet per day) | 31 | 30 | 30 | 32 | | Gross oil-equivalent production (b) | 447 | 423 | 424 | 399 | | (thousands of oil-equivalent barrels per day) | | | | | | Net crude oil production (thousands of barrels per day) | | | | | | Kearl | 194 | 195 | 181 | 170 | | Cold Lake | 114 | 91 | 110 | 105 | | Syncrude (a) | 68 | 59 | 61 | 63 | | Conventional | 5 | 5 | 6 | 5 | | Total crude oil production | 381 | 350 | 358 | 343 | | Net natural gas production (millions of cubic feet per day) | 30 | 30 | 30 | 32 | | Net oil-equivalent production (b) | 386 | 355 | 363 | 348 | | (thousands of oil-equivalent barrels per day) | | | | | | Kearl blend sales (thousands of barrels per day) | 281 | 279 | 269 | 250 | | Cold Lake blend sales (thousands of barrels per day) | 189 | 166 | 192 | 176 | | Average realizations (Canadian dollars) | | | | | | Bitumen (per barrel) | 77.24 | 86.05 | 75.60 | 68.70 | | Synthetic crude oil (per barrel) | 104.41 | 112.98 | 102.95 | 105.65 | | Conventional crude oil (per barrel) | 60.91 | 76.53 | 59.42 | 68.61 | | Natural gas (per thousand cubic feet) | 0.07 | 2.69 | 0.40 | 2.72 | | Refinery throughput (thousands of barrels per day) | 389 | 416 | 395 | 407 | | Refinery capacity utilization (percent) | 90 | 96 | 91 | 94 | | Petroleum product sales (thousands of barrels per day) | | | | | | Gasolines | 227 | 239 | 223 | 227 | | Heating, diesel and jet fuels | 185 | 170 | 177 | 176 | | Lube oils and other products (c) | 55 | 43 | 47 | 43 | | Heavy fuel oils | 20 | 26 | 22 | 23 | | Net petroleum products sales | 487 | 478 | 469 | 469 | | Petrochemical sales (thousands of tonnes) (c) | 76 | 212 | 510 | 650 | | (a) Syncrude gross and net production included bitumen and other products that were interconnect pipeline. | exported to | the operator's | facilities using | an existing | | Gross bitumen and other products production (thousands of barrels per day) | — | — | 1 | 1 | | Net bitumen and other products production (thousands of barrels per day) | — | — | 1 | 1 | Attachment V: Quarterly and Annual Net Income and EPS This attachment provides a historical overview of quarterly and annual net income and diluted earnings per share from 2020 to Q3 2024 Quarterly and Annual Net Income and EPS (2020-2024) | Net income (loss) (U.S. GAAP) millions of Canadian dollars | Attachment V
Net income (loss) per common share - diluted (a) Canadian dollars | |:-----------------------------------------------------------|:------------------------------------------------------------------------------| | 2020 | | | First Quarter | (0.25) | | Second Quarter | (0.72) | | Third Quarter | — | | Fourth Quarter | (1.56) | | Year | (2.53) | | 2021 | | | First Quarter | 0.53 | | Second Quarter | 0.50 | | Third Quarter | 1.29 | | Fourth Quarter | 1.18 | | Year | 3.48 | | 2022 | | | First Quarter | 1.75 | | Second Quarter | 3.63 | | Third Quarter | 3.24 | | Fourth Quarter | 2.86 | | Year | 11.44 | | 2023 | | | First Quarter | 2.13 | | Second Quarter | 1.15 | | Third Quarter | 2.76 | | Fourth Quarter | 2.47 | | Year | 8.49 | | 2024 | | | First Quarter | 2.23 | | Second Quarter | 2.11 | | Third Quarter | 2.33 | | Year | 6.66 | Non-GAAP Financial Measures Reconciliation Introduction to Non-GAAP Measures This section defines non-GAAP financial measures used in the report, clarifies their non-standardized nature, and explains that they are provided to enhance comparability of underlying business performance across periods by isolating significant non-operational events - Certain measures included in this document are not prescribed by U.S. Generally Accepted Accounting Principles (GAAP) and constitute 'non-GAAP financial measures'[59] - Non-GAAP financial measures are not standardized financial measures under GAAP and do not have a standardized definition, thus may not be directly comparable to measures presented by other companies[60] - Management believes it is useful for investors to consider these numbers in comparing the underlying performance of the company's business across periods when there are significant period-to-period differences in the amount of changes in working capital[61] Cash Flows from Operating Activities Excluding Working Capital This non-GAAP measure, calculated by subtracting changes in operating assets and liabilities from total cash flows from operating activities, helps investors compare underlying business performance by removing working capital impacts, showing $1,797 million for Q3 2024 (down from $1,946 million in Q3 2023) and $4,826 million for the nine months (up from $4,636 million) Cash Flows from Operating Activities Excluding Working Capital (Q3 & 9M 2024 vs 2023) | millions of Canadian dollars | 2024 | Third Quarter
2023 | 2024 | Nine Months
2023 | |:---------------------------------------------------------------|:------|:---------------------|:------|:-------------------| | From Imperial's Consolidated statement of cash flows | | | | | | Cash flows from (used in) operating activities | 1,487 | 2,359 | 4,192 | 2,423 | | Less changes in working capital | | | | | | Changes in operating assets and liabilities | (310) | 413 | (634) | (2,213) | | Cash flows from (used in) operating activities excl. working capital | 1,797 | 1,946 | 4,826 | 4,636 | - This measure assesses the cash flows at an operating level, and as such, does not include proceeds from asset sales[61] Free Cash Flow Free cash flow, defined as cash flows from operating activities less additions to property, plant, and equipment and equity company investments plus proceeds from asset sales, is used to evaluate cash available for financing activities, showing $1,003 million for Q3 2024 (a decrease from $1,979 million in Q3 2023) and significantly increasing to $2,771 million for the nine months (from $1,140 million) Free Cash Flow Reconciliation (Q3 & 9M 2024 vs 2023) | millions of Canadian dollars | 2024 | Third Quarter 2023 | 2024 | Nine Months 2023 | |:------------------------------------------------------------|:------|:-------------------|:------|:-----------------| | From Imperial's Consolidated statement of cash flows | | | | | | Cash flows from (used in) operating activities | 1,487 | 2,359 | 4,192 | 2,423 | | Cash flows from (used in) investing activities | | | | | | Additions to property, plant and equipment | (486) | (387) | (1,444)| (1,315) | | Proceeds from asset sales | — | 6 | 7 | 29 | | Loans to equity companies - net | 2 | 1 | 16 | 3 | | Free cash flow | 1,003 | 1,979 | 2,771 | 1,140 | - Free cash flow is used to evaluate cash available for financing activities (including but not limited to dividends and share purchases) after investment in the business[64] Net Income (Loss) Excluding Identified Items This non-GAAP measure adjusts net income for individually significant non-operational events, with no identified items in Q3 or year-to-date 2024 and 2023 periods - There were no identified items in the third quarter or year-to-date 2024 and 2023 periods[67] - This measure is used to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results[66] Cash Operating Costs (Cash Costs) Cash operating costs, which exclude non-cash items and certain purchases, decreased to $1,741 million in Q3 2024 from $1,904 million in Q3 2023, and for the nine months, decreased to $5,563 million from $5,839 million, with the Upstream segment contributing the largest portion of these costs Cash Operating Costs Reconciliation (Q3 & 9M 2024 vs 2023) | millions of Canadian dollars | 2024 | Third Quarter
2023 | 2024 | Nine Months
2023 | |:------------------------------------------------------------|:-------|:---------------------|:-------|:-------------------| | From Imperial's Consolidated statement of income | | | | | | Total expenses | 11,656 | 11,820 | 34,261 | 33,231 | | Less: | | | | | | Purchases of crude oil and products | 8,734 | 8,748 | 25,296 | 24,082 | | Federal excise taxes and fuel charge | 661 | 654 | 1,908 | 1,781 | | Depreciation and depletion | 508 | 475 | 1,454 | 1,418 | | Non-service pension and postretirement benefit | 1 | 20 | 3 | 60 | | Financing | 11 | 19 | 37 | 51 | | Cash operating costs | 1,741 | 1,904 | 5,563 | 5,839 | Segment Contributions to Cash Operating Costs (Q3 & 9M 2024 vs 2023) | millions of Canadian dollars | 2024 | Third Quarter
2023 | 2024 | Nine Months
2023 | |:------------------------------------------------------------|:------|:---------------------|:------|:-------------------| | Segment contributions to total cash operating costs | | | | | | Upstream | 1,051 | 1,188 | 3,444 | 3,733 | | Downstream | 593 | 582 | 1,782 | 1,785 | | Chemicals | 58 | 95 | 208 | 255 | | Eliminations / Corporate and other | 39 | 39 | 129 | 66 | | Cash operating costs | 1,741 | 1,904 | 5,563 | 5,839 | - This measure is useful for investors to understand the company's efforts to optimize cash through disciplined expense management[69] Unit Cash Operating Cost (Unit Cash Costs) Unit cash operating costs for the Upstream segment decreased to $25.56/oeb in Q3 2024 from $30.53/oeb in Q3 2023, and for the nine months, decreased to $29.64/oeb from $34.27/oeb, reflecting improved expense management across major assets Unit Cash Operating Cost (Q3 2024 vs 2023) | Components of unit cash operating cost | Upstream (a) | 2024 Kearl | Cold Lake | Third Quarter
Syncrude | Upstream (a) | 2023 Kearl | Cold Lake | Syncrude | |:---------------------------------------|:-------------|:-----------|:----------|:-------------------------|:-------------|:-----------|:----------|:---------| | Production and manufacturing | 1,050 | 461 | 238 | 313 | 1,187 | 520 | 284 | 345 | | Selling and general Exploration | — 1 | — — | — — | — — | — 1 | — — | — — | — — | | Cash operating costs | 1,051 | 461 | 238 | 313 | 1,188 | 520 | 284 | 345 | | Gross oil-equivalent production (thousands of barrels per day) | 447 | 209 | 147 | 81 | 423 | 209 | 128 | 75 | | Unit cash operating cost ($/oeb) | 25.56 | 23.98 | 17.60 | 42.00 | 30.53 | 27.04 | 24.12 | 50.00 | | USD converted at the quarterly average forex | 18.66 | 17.51 | 12.85 | 30.66 | 22.90 | 20.28 | 18.09 | 37.50 | Unit Cash Operating Cost (Nine Months 2024 vs 2023) | Components of unit cash operating cost millions of Canadian dollars | Upstream (a) | 2024
Kearl |
Cold Lake | Nine Months
Syncrude | Upstream (a) | 2023
Kearl | Cold Lake | Syncrude | |:--------------------------------------------------------------------|:-------------|:-------------|:------------|:-----------------------|:-------------|:-------------|:----------|:---------| | Production and manufacturing | 3,441 | 1,459 | 809 | 1,055 | 3,730 | 1,604 | 868 | 1,156 | | Selling and general | — | — | — | — | — | — | — | — | | Exploration | 3 | — | — | — | 3 | — | — | — | | Cash operating costs | 3,444 | 1,459 | 809 | 1,055 | 3,733 | 1,604 | 868 | 1,156 | | Gross oil-equivalent production (thousands of barrels per day) | 424 | 195 | 145 | 73 | 399 | 182 | 134 | 72 | | Unit cash operating cost ($/oeb) | 29.64 | 27.31 | 20.36 | 52.74 | 34.27 | 32.28 | 23.73 | 58.81 | | USD converted at the YTD average forex | 21.93 | 20.21 | 15.07 | 39.03 | 25.36 | 23.89 | 17.56 | 43.52 | | 2024 US$0.74; 2023 US$0.74 | | | | | | | | | - This measure is useful for investors to understand the expense management efforts of the company's major assets as a component of the overall Upstream segment[73]