Imperial Oil : Third quarter interim report

Third Quarter 2024

Financial statements and management's discussion and analysis of financial condition and operating results

For the nine months ended September 30, 2024

Disclaimer: Due to changes to the Competition Act, this archived information is provided solely for historical information and reference purposes. This information does not constitute an active representation of Imperial. Imperial fully disclaims any liability for the use of such information, and undertakes no obligation to update such information except as required by applicable law.

1

IMPERIAL OIL LIMITED

Consolidated statement of income (U.S. GAAP, unaudited)

			Nine Months
	Third Quarter	to September 30
millions of Canadian dollars	2024	2023	2024	2023
Revenues and other income	13,215	13,873	38,812	37,694
Revenues (a)
Investment and other income (note 3)	44	47	113	166
Total revenues and other income	13,259	13,920	38,925	37,860
Expenses	1	1	3	3
Exploration
Purchases of crude oil and products (b)	8,734	8,748	25,296	24,082
Production and manufacturing (c)	1,517	1,666	4,870	5,207
Selling and general (c)	223	237	690	629
Federal excise tax 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 (d) (note 5)	11	19	37	51
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
Per share information (Canadian dollars)	2.33	2.77	6.67	6.05
Net income (loss) per common share - basic (note 9)
Net income (loss) per common share - diluted (note 9)	2.33	2.76	6.66	6.04
(a) Amounts from related parties included in revenues.	2,999	3,553	8,674	10,245
(b) Amounts to related parties included in purchases of crude oil and products.	1,199	1,228	3,022	3,270
(c) Amounts to related parties included in production and manufacturing, and selling	121	121	406	381
and general expenses.
(d) Amounts to related parties included in financing.	40	44	127	124

The information in the notes to consolidated financial statements is an integral part of these statements.

2

IMPERIAL OIL LIMITED

Consolidated statement of comprehensive income (U.S. GAAP, unaudited)

			Nine Months
	Third Quarter	to September 30
millions of Canadian dollars	2024	2023	2024	2023
Net income (loss)	1,237	1,601	3,565	3,524
Other comprehensive income (loss), net of income taxes	-	-	4	21
Postretirement benefits liability adjustment (excluding amortization)
Amortization of postretirement benefits liability adjustment	13	9	38	29
included in net benefit costs
Total other comprehensive income (loss)	13	9	42	50
Comprehensive income (loss)	1,250	1,610	3,607	3,574

The information in the notes to consolidated financial statements is an integral part of these statements.

3

IMPERIAL OIL LIMITED

Consolidated balance sheet (U.S. GAAP, unaudited)

	As at	As at
	Sep 30	Dec 31
millions of Canadian dollars	2024	2023
Assets
Current assets	1,490	864
Cash and cash equivalents
Accounts receivable - net (a)	5,524	4,482
Inventories of crude oil and products	1,415	1,944
Materials, supplies and prepaid expenses	978	1,008
Total current assets	9,407	8,298
Investments and long-term receivables (b)	1,072	1,062
Property, plant and equipment,	57,614	56,200
less accumulated depreciation and depletion	(26,789)	(25,365)
Property, plant and equipment - net	30,825	30,835
Goodwill	166	166
Other assets, including intangibles - net	1,059	838
Total assets	42,529	41,199
Liabilities
Current liabilities	118	121
Notes and loans payable
Accounts payable and accrued liabilities (a) (note 7)	6,353	6,231
Income taxes payable	45	251
Total current liabilities	6,516	6,603
Long-term debt (c) (note 6)	3,997	4,011
Other long-term obligations (note 7)	3,977	3,851
Deferred income tax liabilities	4,400	4,512
Total liabilities	18,890	18,977
Shareholders' equity	969	992
Common shares at stated value (d) (note 9)
Earnings reinvested	23,305	21,907
Accumulated other comprehensive income (loss) (note 10)	(635)	(677)
Total shareholders' equity	23,639	22,222
Total liabilities and shareholders' equity	42,529	41,199
(a) Accounts receivable - net included net amounts receivable from related parties.	820	1,048
(b) Investments and long-term receivables included amounts from related parties.	267	283
(c) Long-term debt included amounts to related parties.	3,447	3,447
(d) Number of common shares authorized (millions).	1,100	1,100
Number of common shares outstanding (millions).	523	536

The information in the notes to consolidated financial statements is an integral part of these statements.

Approved by the directors November 4, 2024
/s/ Bradley W. Corson	/s/ Daniel E. Lyons
Chairman, president and	Senior vice-president,
chief executive officer	finance and administration, and controller
	4

IMPERIAL OIL LIMITED

Consolidated statement of shareholders' equity (U.S. GAAP, unaudited)

			Nine Months
	Third Quarter	to September 30
millions of Canadian dollars	2024	2023	2024	2023
Common shares at stated value (note 9)	992	1,079	992	1,079
At beginning of period
Share purchases at stated value	(23)	(32)	(23)	(32)
At end of period	969	1,047	969	1,047
Earnings reinvested	23,592	23,220	21,907	21,846
At beginning of period
Net income (loss) for the period	1,237	1,601	3,565	3,524
Share purchases in excess of stated value	(1,207)	(1,310)	(1,207)	(1,310)
Dividends declared	(317)	(288)	(960)	(837)
At end of period	23,305	23,223	23,305	23,223
Accumulated other comprehensive income (loss) (note 10)	(648)	(471)	(677)	(512)
At beginning of period
Other comprehensive income (loss)	13	9	42	50
At end of period	(635)	(462)	(635)	(462)
Shareholders' equity at end of period	23,639	23,808	23,639	23,808

The information in the notes to consolidated financial statements is an integral part of these statements.

5

IMPERIAL OIL LIMITED

Consolidated statement of cash flows (U.S. GAAP, unaudited)

			Nine Months
	Third Quarter	to September 30
millions of Canadian dollars	2024	2023	2024	2023
Operating activities	1,237	1,601	3,565	3,524
Net income (loss)
Adjustments for non-cash items:	508	475	1,454	1,418
Depreciation and depletion
(Gain) loss on asset sales (note 3)	(2)	3	(5)	(19)
Deferred income taxes and other	53	(168)	(186)	(239)
Changes in operating assets and liabilities:	548	(805)	(1,040)	(671)
Accounts receivable
Inventories, materials, supplies and prepaid expenses	502	(330)	552	(389)
Income taxes payable	(47)	234	(208)	(2,164)
Accounts payable and accrued liabilities	(1,313)	1,314	62	1,011
All other items - net (b)	1	35	(2)	(48)
Cash flows from (used in) operating activities	1,487	2,359	4,192	2,423
Investing activities	(486)	(387)	(1,444)	(1,315)
Additions to property, plant and equipment
Proceeds from asset sales (note 3)	-	6	7	29
Loans to equity companies - net	2	1	16	3
Cash flows from (used in) investing activities	(484)	(380)	(1,421)	(1,283)
Financing activities	(5)	(5)	(18)	(16)
Finance lease obligations - reduction (note 6)
Dividends paid	(322)	(292)	(921)	(815)
Common shares purchased (note 9)	(1,206)	(1,342)	(1,206)	(1,342)
Cash flows from (used in) financing activities	(1,533)	(1,639)	(2,145)	(2,173)
Increase (decrease) in cash and cash equivalents	(530)	340	626	(1,033)
Cash and cash equivalents at beginning of period	2,020	2,376	864	3,749
Cash and cash equivalents at end of period (a)	1,490	2,716	1,490	2,716
(a) Cash equivalents are all highly liquid securities with maturity of three months or less.
(b) Includes contributions to registered pension plans.	(37)	(43)	(112)	(129)
Income taxes (paid) refunded.	(423)	(438)	(1,557)	(3,627)
Interest (paid), net of capitalization.	(11)	(15)	(37)	(52)

The information in the notes to consolidated financial statements is an integral part of these statements.

6

IMPERIAL OIL LIMITED

Notes to consolidated financial statements (unaudited)

1. Basis of financial statement preparation

These unaudited consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) and follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual consolidated financial statements filed with the U.S. Securities and Exchange Commission (SEC) in the company's 2023 annual report on Form 10-K. In the opinion of the company, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature.

The company's exploration and production activities are accounted for under the "successful efforts" method.

The results for the nine months ended September 30, 2024, are not necessarily indicative of the operations to be expected for the full year.

All amounts are in Canadian dollars unless otherwise indicated.

7

IMPERIAL OIL LIMITED

2. Business segments

Third Quarter	Upstream	Downstream (d)	Chemical (d)
millions of Canadian dollars	2024	2023	2024	2023	2024	2023
Revenues and other income	24	43	12,997	13,540	194	290
Revenues (a) (b)
Intersegment sales	4,583	4,768	1,562	1,560	60	92
Investment and other income (note 3)	2	(4)	11	12	1	-
	4,609	4,807	14,570	15,112	255	382
Expenses	1	1	-	-	-	-
Exploration
Purchases of crude oil and products	1,766	1,852	13,014	13,061	157	254
Production and manufacturing	1,050	1,187	423	405	36	74
Selling and general	-	-	170	177	22	21
Federal excise tax and fuel charge	-	-	660	653	1	1
Depreciation and depletion	447	418	48	46	3	2
Non-service pension and postretirement benefit	-	-	-	-	-	-
Financing (note 5)	2	3	-	-	-	-
Total expenses	3,266	3,461	14,315	14,342	219	352
Income (loss) before income taxes	1,343	1,346	255	770	36	30
Income tax expense (benefit)	316	318	50	184	8	7
Net income (loss)	1,027	1,028	205	586	28	23
Cash flows from (used in) operating activities	1,298	1,771	164	378	49	74
Capital and exploration expenditures (c)	300	244	133	103	3	2
Third Quarter	Corporate and other	Eliminations	Consolidated
millions of Canadian dollars	2024	2023	2024	2023	2024	2023
Revenues and other income	-	-	-	-	13,215	13,873
Revenues (a) (b)
Intersegment sales	-	-	(6,205)	(6,420)	-	-
Investment and other income (note 3)	30	39	-	-	44	47
	30	39	(6,205)	(6,420)	13,259	13,920
Expenses	-	-	-	-	1	1
Exploration
Purchases of crude oil and products	-	-	(6,203)	(6,419)	8,734	8,748
Production and manufacturing	8	-	-	-	1,517	1,666
Selling and general	33	40	(2)	(1)	223	237
Federal excise tax and fuel charge	-	-	-	-	661	654
Depreciation and depletion	10	9	-	-	508	475
Non-service pension and postretirement benefit	1	20	-	-	1	20
Financing (note 5)	9	16	-	-	11	19
Total expenses	61	85	(6,205)	(6,420)	11,656	11,820
Income (loss) before income taxes	(31)	(46)	-	-	1,603	2,100
Income tax expense (benefit)	(8)	(10)	-	-	366	499
Net income (loss)	(23)	(36)	-	-	1,237	1,601
Cash flows from (used in) operating activities	(24)	136	-	-	1,487	2,359
Capital and exploration expenditures (c)	50	38	-	-	486	387

8

IMPERIAL OIL LIMITED

1. Includes export sales to the United States of $2,631 million (2023 - $2,180 million).
2. Revenues include both revenue within the scope of ASC 606 and outside the scope of ASC 606. Trade receivables in "Accounts receivable - net" reported on the Consolidated balance sheet include both receivables within the scope of ASC 606 and outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives. Contractual terms, credit quality and type of customer are generally similar between contracts within the scope of ASC 606 and those outside it.

Revenues	Third Quarter
millions of Canadian dollars	2024	2023
Revenue from contracts with customers	10,404	12,271
Revenue outside the scope of ASC 606	2,811	1,602
Total	13,215	13,873

1. Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions and the company's share of similar costs for equity companies. CAPEX excludes the purchase of carbon emission credits.
2. In the third quarter of 2024, benzene and aromatic solvents are reported under the Downstream segment, whereas in the third quarter of 2023, they were reported under the Chemicals segment. The company has determined that the impact of this change is not material; therefore, the comparative period has not been recast.

9

IMPERIAL OIL LIMITED

Nine Months to September 30	Upstream	Downstream (d)	Chemical (d)
millions of Canadian dollars	2024	2023	2024	2023	2024	2023
Revenues and other income	95	180	37,862	36,534	855	980
Revenues (a) (b)
Intersegment sales	13,227	11,909	4,949	4,748	235	272
Investment and other income (note 3)	7	8	32	47	2	-
	13,329	12,097	42,843	41,329	1,092	1,252
Expenses	3	3	-	-	-	-
Exploration
Purchases of crude oil and products	5,479	4,827	37,549	35,390	673	791
Production and manufacturing	3,441	3,730	1,279	1,291	137	186
Selling and general	-	-	503	494	71	69
Federal excise tax and fuel charge	-	-	1,905	1,778	3	3
Depreciation and depletion	1,275	1,250	139	135	11	10
Non-service pension and postretirement benefit	-	-	-	-	-	-
Financing (note 5)	4	3	-	-	-	-
Total expenses	10,202	9,813	41,375	39,088	895	1,059
Income (loss) before income taxes	3,127	2,284	1,468	2,241	197	193
Income tax expense (benefit)	743	542	338	535	47	46
Net income (loss)	2,384	1,742	1,130	1,706	150	147
Cash flows from (used in) operating activities	3,351	1,946	555	187	120	97
Capital and exploration expenditures (c)	857	868	435	329	11	11
Total assets as at September 30	28,186	28,356	11,104	10,912	452	441
Nine Months to September 30	Corporate and other	Eliminations	Consolidated
millions of Canadian dollars	2024	2023	2024	2023	2024	2023
Revenues and other income	-	-	-	-	38,812	37,694
Revenues (a) (b)
Intersegment sales	-	-	(18,411)	(16,929)	-	-
Investment and other income (note 3)	72	111	-	-	113	166
	72	111	(18,411)	(16,929)	38,925	37,860
Expenses	-	-	-	-	3	3
Exploration
Purchases of crude oil and products	-	-	(18,405)	(16,926)	25,296	24,082
Production and manufacturing	13	-	-	-	4,870	5,207
Selling and general	122	69	(6)	(3)	690	629
Federal excise tax and fuel charge	-	-	-	-	1,908	1,781
Depreciation and depletion	29	23	-	-	1,454	1,418
Non-service pension and postretirement benefit	3	60	-	-	3	60
Financing (note 5)	33	48	-	-	37	51
Total expenses	200	200	(18,411)	(16,929)	34,261	33,231
Income (loss) before income taxes	(128)	(89)	-	-	4,664	4,629
Income tax expense (benefit)	(29)	(18)	-	-	1,099	1,105
Net income (loss)	(99)	(71)	-	-	3,565	3,524
Cash flows from (used in) operating activities	166	193	-	-	4,192	2,423
Capital and exploration expenditures (c)	141	101	-	-	1,444	1,309
Total assets as at September 30	2,942	4,346	(155)	(469)	42,529	43,586

10