The following excerpt is from the company's SEC filing.
Exhibit 99.1
Imperial announces third quarter 2022 financial and operating results
Quarterly net income of $2,031 million and cash flow from operating activities of $3,089 million
Upstream production of 430,000 gross
oil-equivalent
barrels per day driven by
strong production at Kearl and Cold Lake
Sustained strong Downstream operating performance with quarterly refinery capacity utilization of 100%, highest in over 40
years
Reduced debt by $1 billion using proceeds from the sale of interests in XTO Energy Canada
Quarterly dividend increased by 29 percent from 34 cents to 44 cents
per share
Completed accelerated normal course issuer bid program in October, returning over $1.9 billion to shareholders
Announced intention to initiate a substantial issuer bid to purchase up to $1.5 billion of its common shares
Released annual Corporate Sustainability Report, outlining the companys environmental, social and governance progress
and focus areas
Third quarter
Nine months
millions of Canadian dollars, unless noted
Net income (loss)
(U.S. GAAP)
+1,123
+3,947
Net income (loss) per common share, assuming dilution
(dollars)
Capital and exploration expenditures
Imperial reported estimated net income in the third quarter of $2,031 million, compared to $2,409 million in the second
quarter of 2022, as strong operating performance partly offset moderating commodity prices. Cash flow from operating activities was $3,089 million, up from $2,682 million in the second quarter of 2022.
Imperials business lines delivered another quarter of exceptional operating performance, increasing the supply of crude and fuel products to support
Canadian and global energy needs, said Brad Corson, chairman, president and chief executive officer. Our
on-going
focus on safe and reliable operations underpins our strong financial results and
positions us well to continue capturing value from the current commodity price environment.
Upstream production in the third quarter averaged 430,000 gross
barrels per day. At Kearl, quarterly total gross production increased substantially from the second quarter of 2022 to an average of 271,000 barrels per day following the completion of its annual
turnaround. Subsequent to the third quarter, Kearls October production continued to increase, achieving multiple
single-day
production records. At Cold Lake, quarterly production averaged 150,000 gross
barrels per day, representing the fourth consecutive quarter with production at or above 140,000 barrels per day. Given the success of the companys
optimization program and continued production
strength at Cold Lake, Imperial is increasing its full-year guidance at Cold Lake to between 140,000 to 145,000 gross barrels per day for 2022.
In the Downstream,
quarterly refining throughput averaged 426,000 barrels per day, with capacity utilization of 100 percent, the highest quarterly utilization in over 40 years, ensuring a stable supply of fuel products to meet Canadian demand. Petroleum product
sales remained strong in the quarter, averaging 484,000 barrels per day. In September, Imperial signed a long-term contract with Air Products to supply
low-carbon
hydrogen for the companys planned
renewable diesel complex at its Strathcona refinery. A final investment decision for the renewable diesel complex is expected in the coming months.
After more than a century, Imperial continues to be an industry leader in applying technology and innovation to responsibly
develop Canadas energy resources. As Canadas largest petroleum refiner, a major producer of crude oil, a key petrochemical producer and a leading fuels marketer from coast to coast, our company remains committed to high standards across
all areas of our business.
Q3 News Release
In August, Imperial successfully completed the previously announced sale of its XTO Energy Canada assets to Whitecap
Resources for a total cash consideration of approximately $0.9 billion (Imperials share), resulting in an
after-tax
gain of $208 million in the quarter. Proceeds from the sale were used to
reduce debt by $1 billion, bringing the companys outstanding debt to $4.2 billion and
debt-to-capital
ratio to 16 percent.
The sale of Imperials XTO assets positions the company well to not only continue focusing Upstream resources on our core oil sands assets but also enabled
us to further enhance our industry leading balance sheet and improve the companys financial flexibility, said Corson.
During the quarter, Imperial
returned to shareholders $227 million in dividends paid and $1,512 million through accelerated share repurchases under the companys normal course issuer bid (NCIB) program. The company completed its NCIB program in October with an
additional $434 million in share repurchases.
Paying a reliable and growing dividend and returning surplus cash to shareholders remain key priorities for
us said Corson. Imperial has generated substantial value for its shareholders this year and I am pleased to announce a 29 percent increase to our quarterly dividend as well as our plans to initiate a second substantial issuer bid this
year, returning up to $1.5 billion to shareholders in the fourth quarter said Corson.
Imperial continues to advance solutions to lower emissions in its
operations. The company is a founding member of the Pathways Alliance, which continues to move forward with early work to support a major carbon capture and storage network in support of Canadas goals to achieve net zero emissions. In early
October, the Government of Alberta awarded the Pathways Alliance pore space to continue exploratory work on the development of a hub to safely and permanently store CO
from over 20 industry
oil sands facilities and other interested industries in northern Alberta.
In September, Imperial released its annual Sustainability report which highlights
progress and momentum in the companys key environmental, social and governance focus areas and complements the companys Advancing Climate Solutions report published earlier this year.
The challenges we are facing today require collaboration across industry, governments, indigenous communities and other stakeholders, said Corson.
Its why we became a founding member of the Pathways Alliance to reduce oil sands emissions and to further develop and deploy game changing technology to meaningfully contribute to Canadas energy future.
Debt, defined as Total debt (Attachment I, page 15), divided by capital, defined as the sum of Total debt and Shareholders equity (Attachment I, page 15).
IMPERIAL OIL LIMITED
Third quarter highlights
Net income of $2,031
million or $3.24 per share on a diluted basis,
up from $908 million or
$1.29 per share in the third quarter of 2021. Net income excluding identified items
of $1,823 million in the third quarter of 2022, up from $908 million in the same period of 2021.
Cash flows from operating activities of $3,089
up from $1,947 million in the same
period of 2021. Cash flows from operating activities excluding working capital
of $2,543 million, up from $1,504 million in the same period of 2021.
Capital and exploration expenditures totalled $392
up from $277 million in the
third quarter of 2021.
The company returned $1,739
million to shareholders in the third quarter of
2022,
including $227 million in dividends paid and $1,512 million in share repurchases. Subsequent to the end of the third quarter, the company completed its NCIB program with an additional $434 million in share repurchases.
Announced intention to initiate a substantial issuer bid to purchase for cancellation up to $1.5 billion of its common
shares
. The company anticipates terms and pricing will be determined and the offer will commence during the next two weeks.
Production averaged 430,000 gross
compared
to 435,000 barrels per day in the same period of 2021.
Total gross bitumen production at Kearl averaged 271,000 barrels per day
(193,000 barrels Imperials share),
compared to 274,000 barrels per day (194,000 barrels Imperials share) in the third quarter of 2021. Subsequent to the third quarter, Kearls October production continued to increase, achieving multiple
Gross bitumen production at Cold Lake averaged 150,000 barrels per day,
up from 135,000 barrels per day in the third
quarter of 2021, representing the fourth consecutive quarter with production at or above 140,000 barrels per day. Consistent with this sustained production performance, Imperial is increasing its 2022 production guidance at Cold Lake to between
140,000 - 145,000 barrels per day.
The companys share of gross production from Syncrude averaged 62,000 barrels per day,
compared to 78,000
barrels per day in the third quarter of 2021, primarily driven by the timing of planned turnaround activities.
Refinery throughput averaged 426,000 barrels per day,
up from 404,000 barrels per day in the third quarter of 2021.
Capacity utilization reached 100 percent, the highest quarterly utilization in over 40 years, up from 94 percent in the third quarter of 2021, as the company continues to maximize production to meet Canadian demand.
Petroleum product sales were 484,000 barrels per day,
compared to 485,000 barrels per day in the third quarter of
2021.
Chemical net income of $54
million in the quarter,
compared to $121 million in the third
quarter of 2021. Lower income was primarily driven by lower polyethylene margins.
Announced long-term contract with Air Products to supply
hydrogen for
Imperials proposed renewable diesel complex near Edmonton, Alberta.
The complex is expected to produce more than 1 billion litres of renewable diesel per year from locally sourced feedstock and
hydrogen. A final investment decision will be made in the coming months.
non-GAAP
financial measure - see attachment VI for definition and
reconciliation
Completed, together with ExxonMobil Canada, the previously announced sale of XTO Energy Canada to Whitecap Resources for
total cash consideration of approximately $1.9 billion ($0.9 billion Imperials share).
As a result of the sale, Imperial recorded an
gain of approximately $208 million in the
third quarter of 2022. Proceeds from the sale were used to reduce outstanding debt by $1 billion, further enhancing the companys industry leading balance sheet and improving financial flexibility.
As a member of the Pathways Alliance, advanced early work to support the foundational carbon capture and storage network
in northern Alberta
as part of Pathways goal to achieve net zero emissions. In early October, the Government of Alberta awarded the Pathways Alliance pore space to continue exploratory work on the development of a hub to safely and
permanently store CO
from over 20 industry oil sands facilities and other interested industries in northern Alberta.
Released annual Corporate Sustainability Report.
The report highlights key environmental, social and governance
focus areas and progress, complementing the companys previously released Advancing Climate Solutions report.
Announced unique collaboration with FLO that will support Canadas net zero emissions goals by expanding FLOs
charging network for electric vehicles.
This collaboration will jointly develop an electric vehicle charging service option for Imperials Esso and Mobil branded wholesalers and includes an agreement to transfer credits to Imperial under
Canadas Clean Fuel Regulations.
Current business environment
COVID-19
pandemic, industry investment to maintain and increase production capacity was restrained to preserve
capital, resulting in underinvestment and supply tightness as demand for petroleum and petrochemical products recovered. Across late 2021 and the first half of 2022, this dynamic, along with supply chain constraints and a continuation of demand
recovery, led to a steady increase in oil and natural gas prices and refining margins. In the first half of 2022, tightness in the oil and natural gas markets was further exacerbated by Russias invasion of Ukraine and subsequent sanctions
imposed upon business and other activities in Russia. The price of crude oil and certain regional natural gas indicators increased to levels not seen for several years. Across the third quarter of 2022, high prices and economic uncertainty led to a
tempering of demand for some products, causing crude oil prices and refining margins to soften relative to first half levels. Commodity and product prices are expected to remain volatile given the current global economic and geopolitical uncertainty
affecting supply and demand.
Operating results
Third quarter 2022 vs. third quarter 2021
Third Quarter
2021
Net income (loss) excluding identified items
Current quarter results include favourable identified items
of $208 million
related to the companys gain on the sale of interests in XTO Energy Canada.
Net income (loss) factor analysis
millions of Canadian dollars
Price Higher realizations were generally in line with increases in marker prices, driven primarily by increased demand and
supply chain constraints. Average bitumen realizations increased by $21.14 per barrel generally in line with WCS, and synthetic crude oil realizations increased by $38.86 per barrel generally in line with WTI.
Volumes Lower volumes were the result of timing of planned turnaround activities at Syncrude, partially offset by higher volumes at Cold Lake, primarily driven
by continued focus on sustained performance and production optimization.
Royalty Higher royalties primarily driven by improved commodity prices.
Identified Items
Current quarter results include favourable identified items
related to the companys gain on the sale of interests in XTO Energy Canada.
Other Includes higher
operating expenses of about $200 million, partially offset by favourable foreign exchange impacts of about $80 million.
financial measure - see Attachment VI for definition and reconciliation
Marker prices and average realizations
Third Quarter
Canadian dollars, unless noted
West Texas Intermediate
(US$ per
barrel)
Western Canada Select
WTI/WCS Spread
(US$ per barrel)
Bitumen
(per barrel)
Synthetic crude oil
124.80
Average foreign exchange rate
thousands of barrels per day
194
Syncrude
Kearl total gross production
(thousands of barrels per day)
In the third quarter of 2022, Syncrude gross production included about 7 thousand barrels per day of bitumen and
other products (2021 - 1 thousand barrels per day) that was exported to the operators facilities using an existing interconnect pipeline.
Higher production at Cold Lake was primarily driven by continued focus on sustained performance and production optimization.
Lower production at Syncrude was primarily a result of the timing of planned turnaround activities.
Margins Higher margins primarily reflect improved market conditions.
Refinery utilization and petroleum product sales
thousands of barrels per day, unless noted
404
Refinery capacity utilization
(percent)
Improved refinery throughput in the third quarter of 2022 was primarily driven by economic optimization across the downstream supply
chain.
Chemicals
Net income
(loss) factor analysis
Margins Lower margins primarily reflect weaker industry polyethylene margins.
Corporate and other
Net income (loss)
(21
Liquidity and capital resources
Cash flow generated from (used in):
Operating activities
Investing activities
Financing activities
(2,744
Increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at period
end
Cash flow generated from operating activities primarily reflects higher Upstream realizations, improved Downstream margins, and
favourable working capital impacts.
Cash flow generated from investing activities primarily reflects proceeds from the sale of interests in XTO Energy Canada,
partially offset by higher additions to property, plant and equipment.
Cash flow used in financing activities primarily reflects:
Dividends paid
195
Per share dividend paid
Share repurchases
1,512
Number of shares purchased
(millions) (a)
Share repurchases were made under the companys normal course issuer bid program, and include shares purchased from
Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid.
During the third quarter of 2022, the company decreased its
long-term debt by $1 billion by partially repaying an existing facility with an affiliated company of ExxonMobil.
Nine months 2022 vs. nine months 2021
Nine Months
2021
Current year results include favourable identified items
Price Higher realizations were generally in line with increases in marker prices, driven primarily by increased demand and
supply chain constraints. Average bitumen realizations increased by $38.71 per barrel generally in line with WCS, and synthetic crude oil realizations increased by $51.90 per barrel generally in line with WTI.
Volumes Lower volumes were primarily the result of downtime at Kearl in the first half of the year.
Current year results include favourable identified items
Other Includes higher
operating expenses of about $430 million, primarily higher energy prices, partially offset by favourable foreign exchange impacts of about $130 million.
129.52
Nine Months
In 2022, Syncrude gross production included about 4 thousand barrels per day of bitumen and other products (2021 -
1 thousand barrels per day) that was exported to the operators facilities using an existing interconnect pipeline.
Lower production at
Kearl was primarily a result of downtime in the first half of the year.
Other Includes lower turnaround impacts of about $140 million, reflecting the absence of turnaround activities at Strathcona refinery and favourable foreign
exchange impacts of about $70 million, partially offset by higher operating expenses of about $130 million, primarily from higher energy costs.
Improved refinery throughput in 2022 was primarily driven by reduced turnaround activity and increased demand.
Improved petroleum product sales in 2022 primarily reflects increased demand.
(98
(6,117
(2,127
Cash flow used in investing activities primarily reflects proceeds from the sale of interests in XTO Energy Canada, partially
offset by higher additions to property, plant and equipment.
Share repurchases were made under the companys normal course issuer bid program and substantial issuer bid that
commenced on May 6, 2022 and expired on June 10, 2022. Includes shares purchased from Exxon Mobil Corporation concurrent with, but outside of, the normal course issuer bid, and by way of a proportionate tender under the companys
substantial issuer bid.
During the third quarter of 2022, the company decreased its long-term debt by $1 billion by partially repaying an
existing facility with an affiliated company of ExxonMobil.
On May 6, 2022, the company commenced a substantial issuer bid pursuant to which it offered to
purchase for cancellation up to $2.5 billion of its common shares through a modified Dutch auction and proportionate tender offer. The substantial issuer bid was completed on June 15, 2022, with the company taking up and paying for
32,467,532 common shares at a price of $77.00 per share, for an aggregate purchase of $2.5 billion and 4.9 percent of Imperials issued and outstanding shares at the close of business on May 2, 2022. This included 22,597,379
shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.
Subsequent
to the end of the third quarter, the company completed all share repurchases under its normal course issuer bid on October 21, 2022.
On October 28, 2022
the company announced its intention to launch a substantial issuer bid pursuant to which the company will offer to purchase for cancellation up to $1.5 billion of its common shares. The substantial issuer bid will be made through a modified Dutch
auction, with a tender price range to be determined by the company at the time of commencement of the offer. Shares may also be tendered by way of a proportionate tender, which will result in a shareholder maintaining their proportionate share
ownership. ExxonMobil has advised Imperial that it intends to make a proportionate tender in connection with the offer in order to maintain its proportionate share ownership at approximately 69.6 percent following completion of the offer.
Nothing in this report shall constitute an offer to purchase or a solicitation of an offer to sell any shares.
Key financial and operating data follow.
Additional information regarding the tender offer
The tender offer described in this communication (the Offer) has not yet commenced. This communication is for informational purposes only. This
communication is not a recommendation to buy or sell Imperial Oil Limited shares or any other securities, and it is neither an offer to purchase nor a solicitation of an offer to sell Imperial Oil Limited Shares or any other securities.
On the commencement date of the Offer, Imperial Oil Limited will file an offer to purchase, accompanying issuer bid circular and related letter of transmittal and
notice of guaranteed delivery (the Offering Documents) with Canadian securities regulatory authorities and mail these to the companys shareholders. The company will also file a tender offer statement on Schedule TO, including the
Offering Documents, with the United States Securities and Exchange Commission (the SEC). The Offer will only be made pursuant to the Offering Documents filed with Canadian securities regulatory authorities and as a part of the Schedule
TO. Shareholders should read carefully the Offering Documents because they contain important information, including the various terms of, and conditions to, the Offer. Once the Offer is commenced, shareholders will be able to obtain a free copy of
the tender offer statement on Schedule TO, the Offering Documents and other documents that Imperial Oil Limited will be filing with the SEC at the SECs website at
, with Canadian securities regulatory authorities at
www.sedar.com
, or from Imperial Oil Limiteds website at
www.imperialoil.ca
Forward-looking statements
Statements of
future events or conditions in this report, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Forward-looking statements can be identified by words such as believe, anticipate, intend,
propose, plan, goal, seek, project, predict, target, estimate, expect, strategy, outlook, schedule, future, continue, likely, may, should, will and similar references to future periods. Forward-looking statements in this report include, but are not
limited to, references to the companys intention to initiate a substantial issuer bid, including the size, structure, timing for determining the terms, pricing and commencement, and ExxonMobils intent to make a proportionate tender;
being well positioned to capture value from current commodity price environment and focus on core upstream oil sands assets; Cold Lake updated production guidance for 2022; the companys planned renewable diesel complex at Strathcona, including
impact and timing of a final investment decision; the companys financial flexibility; priorities to pay a reliable and growing dividend and return surplus cash to shareholders; continuing to advance solutions to lower emissions, including
Pathways Alliance carbon capture and storage network and developing and deploying technology; the collaboration with FLO to jointly develop an electric charging service option and transfer of credits under the Clean Fuel Regulations; and the
expectation of commodity and product price volatility.
Forward-looking statements are based on the companys current expectations, estimates, projections and
assumptions at the time the statements are made. Actual future financial and operating results, including expectations and assumptions concerning demand growth and energy source, supply and mix; production rates, growth and mix across various
assets; project plans, timing, costs, technical evaluations and capacities and the companys ability to effectively execute on these plans and operate its assets, including factors influencing a final investment decision for the renewable
diesel complex at Strathcona; the adoption and impact of new facilities or technologies on reductions to GHG emissions intensity, including but not limited to Strathcona renewable diesel and support for and advancement of carbon capture and storage,
and any changes in the scope, terms, or costs of such projects; the amount and timing of emissions reductions; support from policymakers and other stakeholders for various new technologies such as carbon capture and storage; receipt of regulatory
approvals; for shareholder returns, assumptions such as cash flow forecasts, financing sources and capital structure, that the necessary exemptive relief to proceed with the substantial issuer bid under applicable securities laws will be received on
the timeline anticipated, and ExxonMobil making a proportionate tender in connection with the substantial issuer bid; applicable laws and government policies, including with respect to climate change and GHG emissions reductions; capital and
environmental expenditures; progression of
and its impacts on Imperials ability to operate its assets; and commodity prices, foreign exchange rates and general market conditions could differ
materially depending on a number of factors.
These factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and
petrochemical products and resulting price, differential and margin impacts, including foreign government action with respect to supply levels and prices, the impact of
on demand and the occurrence of
wars; availability and allocation of capital; the receipt, in a timely manner, of regulatory and third-party approvals, including for the companys substantial issuer bid; the results of research programs and new technologies, the ability to
bring new technologies to commercial scale on a cost-competitive basis, and the competitiveness of alternative energy and other emission reduction technologies; lack of required support from governments and policymakers for adoption of new
technologies for emissions reductions; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; availability and performance of third-party service providers, including in light of
restrictions related to
COVID-19;
environmental risks inherent in oil and gas exploration and production activities; political or regulatory events, including changes in law or government policy, environmental
regulation including climate change and greenhouse gas regulation, and actions in response to
management effectiveness and disaster response preparedness, including business continuity plans in
response to
operational hazards and risks; cybersecurity incidents, including increased reliance on remote working arrangements; currency exchange rates; general economic conditions; and other
factors discussed in Item 1A risk factors and Item 7 managements discussion and analysis of financial condition and results of operations of Imperial Oil Limiteds most recent annual report on Form
and subsequent interim reports.
Forward-looking statements are not guarantees of future performance and involve a
number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to Imperial Oil Limited. Imperials actual results may differ materially from those expressed or implied by its forward-looking
statements and readers are cautioned not to place undue reliance on them. Imperial undertakes no obligation to update any forward-looking statements contained herein, except as required by applicable law.
In this release all dollar amounts are expressed in Canadian dollars unless otherwise stated. This release should be read in conjunction with Imperials most
recent Form
Note that numbers may not add due to rounding.
The term project as used in this release can
refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.
Attachment I
Nine Months
2022
Net Income (loss) (U.S. GAAP)
Total revenues and other income
15,224
10,233
45,217
25,278
Total expenses
12,719
38,012
23,106
Income (loss) before income taxes
Income taxes
Net income (loss) per common share
Net income (loss) per common share - assuming dilution
Other Financial Data
Gain (loss) on asset sales, after tax
Total assets at September 30
42,986
40,875
Total debt at September 30
Shareholders equity at September 30
22,308
21,209
Capital employed at September 30
26,491
26,412
Dividends declared on common stock
Per common share
Millions of common shares outstanding
At September 30
Average - assuming dilution
Attachment II
Nine Months
Total cash and cash equivalents at period end
Operating Activities
Adjustments for
non-cash
items:
Depreciation and depletion
(Gain) loss on asset sales
Deferred income taxes and other
Changes in operating assets and liabilities
All other items - net
Cash flows from (used in) operating activities
1,947
7,685
3,844
Investing Activities
Additions to property, plant and equipment
(1,034
Proceeds from asset sales
Additional investments
Loans to equity companies - net
Cash flows from (used in) investing activities
Cash flows from (used in) financing
activities
Attachment III
Net income (loss) (U.S. GAAP)
Revenues and other income
15,432
11,579
16,236
49,066
20,333
Eliminations / Corporate and other
(6,481
(3,593
(20,835
(7,943
Purchases of crude oil and products
13,686
42,459
16,525
(6,499
(20,864
(7,946
28,849
15,052
Production and manufacturing
Selling and general
Capital and exploration expenditures
Exploration expenses charged to Upstream income
included above
Attachment IV
Operating statistics
Third Quarter
Nine Months
2022
2021
Gross crude oil and natural gas liquids (NGL) production
(thousands of barrels per day)
193
150
62
Conventional
9
Total crude oil production
414
NGLs available for sale
1
Total crude oil and NGL production
415
Gross natural gas production
(millions of cubic feet per
day)
92
430
Net crude oil and NGL production
(thousands of barrels per
day)
175
111
51
8
345
346
Net natural gas production
87
361
barrels per day)
Kearl blend sales
257
Cold Lake blend sales
190
NGL sales
(thousands of barrels per day) (c)
Average realizations
(Canadian dollars)
81.58
55.30
124.80
77.62
Conventional crude oil
94.87
103.28
55.49
61.61
45.10
Natural gas
(per thousand cubic feet)
5.10
3.50
Refinery throughput
426
Refinery capacity utilization
100
Petroleum product sales
Gasolines
237
Heating, diesel and jet fuels
172
Lube oils and other products
49
Heavy fuel oils
Net petroleum products sales
484
Petrochemical sales
(thousands of tonnes)
217
(a) Syncrude gross and net production included bitumen and other products that were
exported to the operators facilities using an existing interconnect pipeline.
Gross bitumen and other products production
7
Net bitumen and other products production
6
(b) Gas converted to
at six
million cubic feet per one thousand barrels.
(c) NGL sales round to 0 in 2021.
Attachment V
Net income (loss) (U.S. GAAP)
Net income (loss) per
common share - diluted (a)
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2,314
1,212
2,200
(188)
(0.25)
(526)
(0.72)
(1,146)
(1.56)
(1,857)
(2.53)
2,479
2022
First Quarter
1,173
Second Quarter
Third Quarter
5,613
Computed using the average number of shares outstanding during each period. The sum of the quarters presented may not add
to the year total.
Non-GAAP
financial measures and other specified financial measures
Certain measures included in this document are not prescribed by U.S. Generally Accepted Accounting Principles (GAAP). These measures constitute
non-GAAP
financial measures under Securities and Exchange Commission Regulation G, and specified financial measures under National Instrument
52-112
and Other Financial Measures Disclosure
of the Canadian Securities Administrators.
Reconciliation of these
financial measures to the most comparable GAAP measure, and other information required by these regulations, have been provided.
financial measures and
specified financial measures are not standardized financial measures under GAAP and do not have a standardized definition. As such, these measures may not be directly comparable to measures presented by other companies, and should not be considered
a substitute for GAAP financial measures.
Cash flows from (used in) operating activities excluding working capital
Cash flows from (used in) operating activities excluding working capital is a
financial measure that is the total cash
flows from operating activities less the changes in operating assets and liabilities in the period. The most directly comparable financial measure that is disclosed in the financial statements is cash flows from (used in) operating activities within
the companys Consolidated statement of cash flows. Management believes it is useful for investors to consider these numbers in comparing the underlying performance of the companys business across periods when there are significant
period-to-period
differences in the amount of changes in working capital. Changes in working capital is equal to Changes in operating assets and liabilities as
disclosed in the companys Consolidated statement of cash flows and in Attachment II of this document. This measure assesses the cash flows at an operating level, and as such, does not include proceeds from asset sales as defined in Cash flows
from operating activities and asset sales in the Frequently Used Terms section of the companys annual Form
Reconciliation of cash flows from (used in) operating activities excluding working capital
2022
From Imperials Consolidated statement of cash flows
3,089
7,685
Less changes in working capital
546
1,140
Cash flows from (used in) operating activities excl. working
capital
2,543
6,545
Free cash flow
Free cash
flow is a
financial measure that is cash flows from operating activities less additions to property, plant and equipment and equity company investments plus proceeds from asset sales. The most
directly comparable financial measure that is disclosed in the financial statements is cash flows from (used in) operating activities within the companys Consolidated statement of cash flows. This measure is used to evaluate cash available for
financing activities (including but not limited to dividends and share purchases) after investment in the business.
Reconciliation of free cash flow
Net income (loss) excluding identified items
Net income (loss) excluding identified items is a
financial measure that is total net income (loss) excluding
individually significant
non-operational
events with an absolute corporate total earnings impact of at least $100 million in a given quarter. The net income (loss) impact of an identified item for an
individual segment in a given quarter may be less than $100 million when the item impacts several segments or several periods. The most directly comparable financial measure that is disclosed in the financial statements is net income (loss)
within the companys Consolidated statement of income. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant
events from business results. The company believes this view provides investors increased transparency into business results and trends, and provides investors with a view of the business as
seen through the eyes of management. Net income (loss) excluding identified items is not meant to be viewed in isolation or as a substitute for net income (loss) as prepared in accordance with U.S. GAAP. All identified items are presented on an
basis.
Reconciliation of net income (loss) excluding identified items
From Imperials Consolidated statement of income
908
5,613
Less identified items included in Net income (loss)
Gain/(loss) on sale of assets
Subtotal of identified items
Net income (loss) excluding identified
items
Cash operating costs (cash costs)
Cash operating costs is a
financial measure that consists of total expenses, less costs that are
in nature, including, Purchases of crude oil and products, Federal excise taxes and fuel charge, Depreciation and depletion,
Non-service
pension and postretirement
benefit, and Financing. The components of cash operating costs include (1) Production and manufacturing, (2) Selling and general and (3) Exploration, from the companys Consolidated statement of income, and as disclosed in
Attachment III of this document. The sum of these income statement lines serve as an indication of cash operating costs and does not reflect the total cash expenditures of the company. The most directly comparable financial measure that is disclosed
in the financial statements is total expenses within the companys Consolidated statement of income. This measure is useful for investors to understand the companys efforts to optimize cash through disciplined expense management.
Reconciliation of cash operating costs
Third Quarter
From Imperials Consolidated statement of Income
12,719
9,478
pension and postretirement benefit
Total cash operating costs
2,082
Components of cash operating costs
1,872
Segment contributions to total cash operating costs
Third Quarter
1,382
Corporate / Eliminations
Unit cash operating cost (unit cash costs)
Unit cash operating costs is a
ratio. Unit cash operating costs (unit cash costs) is calculated by dividing cash
operating costs by total gross
production, and is calculated for the Upstream segment, as well as the major Upstream assets. Cash operating costs is a
financial measure and is disclosed and reconciled above. This measure is useful for investors to understand the expense management efforts of the companys major assets as a component of the
overall Upstream segment. Unit cash operating cost, as used by management, does not directly align with the definition of Average unit production costs as set out by the U.S. Securities and Exchange Commission (SEC), and disclosed in the
companys SEC Form
Components of unit cash operating cost
Unit cash operating cost
($/oeb)
USD converted at the quarterly average forex
2022 US$0.77; 2021 US$0.79
USD converted at the YTD average forex
2022 US$0.78; 2021 US$0.80
(a) Upstream includes Imperials share of Kearl, Cold Lake, Syncrude and other.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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