10-Q

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer Identification No.)

505 Quarry Park Boulevard S.E. Calgary, Alberta, Canada

(Address of principal executive offices)

(Postal Code)

Table of Contents

FORM

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[

✓

]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

[

]

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)

Registrant’s telephone number, including area code:

1-800-567-3776

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
None		None

The registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES

✓

The registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES

✓

The registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule

12b-2

of the Exchange Act of 1934.


Large accelerated filer	✓	Smaller reporting company
Non-accelerated filer		Emerging growth company
Accelerated filer

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

The registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act of 1934).

YES

✓

The number of common shares outstanding, as of June 30, 2021 was 704,578,328.

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IMPERIAL OIL LIMITED

Table of contents

Page


PART I. FINANCIAL INFORMATION			3
Item 1. Financial statements			3
Consolidated statement of income			3
Consolidated statement of comprehensive income			4
Consolidated balance sheet			5
Consolidated statement of shareholders’ equity			6
Consolidated statement of cash flows			7
Notes to the consolidated financial statements			8
Item 2. Management’s discussion and analysis of financial condition and results of operations			19
Item 3. Quantitative and qualitative disclosures about market risk			24
Item 4. Controls and procedures			24

PART II. OTHER INFORMATION			25
Item 1. Legal proceedings			25
Item 2. Unregistered sales of equity securities and use of proceeds			25
Item 6. Exhibits			26

SIGNATURES			27

In this report all dollar amounts are expressed in Canadian dollars unless otherwise stated. This report should be read in conjunction with the company’s annual report on Form

10-K

for the year ended December 31, 2020. Note that numbers may not add due to rounding.

The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.

In this report, unless the context otherwise indicates, reference to “the company” or “Imperial” includes Imperial Oil Limited and its subsidiaries.

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IMPERIAL OIL LIMITED

PART I. FINANCIAL INFORMATION

Item 1.

Financial statements

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


	Second Quarter					Six Months to June 30
millions of Canadian dollars	2021		2020			2021		2020
Revenues and other income
Revenues (a)		8,007		3,666			14,999		10,330
Investment and other income (note 3)		40		44			46		70
Total revenues and other income		8,047		3,710			15,045		10,400

Expenses
Exploration		2		3			4		4
Purchases of crude oil and products (b) (note 11)		4,867		2,115			8,754		6,341
Production and manufacturing (c)		1,569		1,273			3,054		2,852
Selling and general (c)		200		183			389		349
Federal excise tax and fuel charge		465		369			869		820
Depreciation and depletion (note 11)		450		413			944		886
Non-service pension and postretirement benefit		10		30			21		60
Financing (d) (note 5)		13		17			27		36
Total expenses		7,576		4,403			14,062		11,348

Income (loss) before income taxes		471		(693	)		983		(948	)

Income taxes		105		(167	)		225		(234	)

Net income (loss)		366		(526	)		758		(714	)

Per share information (Canadian dollars)

Net income (loss) per common share - basic (note 9)		0.51		(0.72	)		1.04		(0.97	)
Net income (loss) per common share - diluted (note 9)		0.50		(0.72	)		1.04		(0.97	)
(a) Amounts from related parties included in revenues.		1,405		747			2,913		2,483

(b) Amounts to related parties included in purchases of crude oil and products.		666		396			1,181		1,135

(c) Amounts to related parties included in production and manufacturing, and selling and general expenses.		106		138			222		321

(d) Amounts to related parties included in financing, (note 5).		10		14			21		38

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

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IMPERIAL OIL LIMITED

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


	Second Quarter					Six Months to June 30
millions of Canadian dollars	2021		2020			2021		2020
Net income (loss)		366		(526	)		758		(714	)

Other comprehensive income (loss), net of income taxes
Postretirement benefits liability adjustment (excluding amortization)		-		-			54		(114	)
Amortization of postretirement benefits liability adjustment included in net periodic benefit costs		33		34			66		68
Total other comprehensive income (loss)		33		34			120		(46	)

Comprehensive income (loss)		399		(492	)		878		(760	)

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

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IMPERIAL OIL LIMITED

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


	As at June 30			As at Dec 31
millions of Canadian dollars	2021			2020
Assets
Current assets
Cash		776			771
Accounts receivable - net (a)		3,163			1,919
Inventories of crude oil and products		1,213			1,161
Materials, supplies and prepaid expenses		722			673
Total current assets		5,874			4,524
Investments and long-term receivables (b)		748			781
Property, plant and equipment,		56,257			55,771
less accumulated depreciation and depletion		(24,664	)		(23,737	)
Property, plant and equipment, net		31,593			32,034
Goodwill (note 11)		166			166
Other assets, including intangibles - net		558			526
Total assets		38,939			38,031

Liabilities
Current liabilities
Notes and loans payable (c)		197			227
Accounts payable and accrued liabilities (a) (note 7)		4,411			3,153
Income taxes payable		42			-
Total current liabilities		4,650			3,380
Long-term debt (d) (note 6)		5,065			4,957
Other long-term obligations (note 7)		4,061			4,100
Deferred income tax liabilities		4,394			4,176
Total liabilities		18,170			16,613

Shareholders’ equity
Common shares at stated value (e) (note 9)		1,302			1,357
Earnings reinvested		21,336			22,050
Accumulated other comprehensive income (loss) (note 10)		(1,869	)		(1,989	)
Total shareholders’ equity		20,769			21,418

Total liabilities and shareholders’ equity		38,939			38,031

(a)	Accounts receivable - net included net amounts receivable from related parties of $582 million (2020 - $384 million).

(b)	Investments and long-term receivables included amounts from related parties of $301 million (2020 - $313 million).

(c)	Notes and loans payable included amounts to related parties of $75 million (2020 - $111 million).

(d)	Long-term debt included amounts to related parties of $4,447 million (2020 - $4,447 million).

(e)	Number of common shares authorized and outstanding were 1,100 million and 705 million, respectively (2020 - 1,100 million and 734 million, respectively).

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

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IMPERIAL OIL LIMITED

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


	Second Quarter						Six Months to June 30
millions of Canadian dollars	2021			2020			2021			2020
Common shares at stated value (note 9)
At beginning of period		1,357			1,357			1,357			1,375
Share purchases at stated value		(55	)		-			(55	)		(18	)
At end of period		1,302			1,357			1,302			1,357

Earnings reinvested
At beginning of period		22,281			24,204			22,050			24,812
Net income (loss) for the period		366			(526	)		758			(714	)
Share purchases in excess of stated value		(1,116	)		-			(1,116	)		(256	)
Dividends declared		(195	)		(162	)		(356	)		(324	)
Cumulative effect of accounting change		-			-			-			(2	)
At end of period		21,336			23,516			21,336			23,516

Accumulated other comprehensive income (loss) (note 10)
At beginning of period		(1,902	)		(1,991	)		(1,989	)		(1,911	)
Other comprehensive income (loss)		33			34			120			(46	)
At end of period		(1,869	)		(1,957	)		(1,869	)		(1,957	)

Shareholders’ equity at end of period		20,769			22,916			20,769			22,916

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

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IMPERIAL OIL LIMITED

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


Inflow ( o utflow)	Second Quarter						Six Months to June 30
millions of Canadian dollars	2021			2020			2021			2020
Operating activities
Net income (loss)		366			(526	)		758			(714	)
Adjustments for non-cash items:
Depreciation and depletion		450			413			944			866
Impairment of intangible assets (note 11)		-			-			-			20
(Gain) loss on asset sales (note 3)		(24	)		(10	)		(27	)		(17	)
Inventory write-down to current market value (note 11)		-			(281	)		-			-
Deferred income taxes and other		76			(242	)		136			(199	)
Changes in operating assets and liabilities:
Accounts receivable		(775	)		(310	)		(1,244	)		833
Inventories, materials, supplies and prepaid expenses		58			117			(101	)		(82	)
Income taxes payable		21			(2	)		42			(106	)
Accounts payable and accrued liabilities		655			(46	)		1,239			(1,074	)
All other items - net (b)		25			71			150			80
Cash flows from (used in) operating activities		852			(816	)		1,897			(393	)

Investing activities
Additions to property, plant and equipment		(241	)		(205	)		(408	)		(515	)
Proceeds from asset sales (note 3)		35			40			42			49
Loans to equity companies - net		(1	)		(7	)		12			(14	)
Cash flows from (used in) investing activities		(207	)		(172	)		(354	)		(480	)

Financing activities
Short-term debt - net		-			-			(36	)		-
Reduction in finance lease obligations (note 6)		(4	)		(5	)		(8	)		(12	)
Dividends paid		(161	)		(162	)		(323	)		(326	)
Common shares purchased (note 9)		(1,171	)		-			(1,171	)		(274	)
Cash flows from (used in) financing activities		(1,336	)		(167	)		(1,538	)		(612	)

Increase (decrease) in cash		(691	)		(1,155	)		5			(1,485	)
Cash at beginning of period		1,467			1,388			771			1,718
Cash at end of period (a)		776			233			776			233

(a) Cash is composed of cash in bank and cash equivalents at cost. Cash equivalents are all highly liquid securities with maturity of three months or less when purchased.


(b) Included contributions to registered pension plans.			(42	)			(41	)			(

SEC Form 10-Q filed by Imperial Oil Limited