~~FORM~~

~~10-Q~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[FORM 10-Q

✓

]

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR ~~15(D)~~15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2020~~2021

[☐

]

TRANSITION REPORT PURSUANT TO SECTION 13 OR ~~15(D)~~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)

1-800

-567-3776

(Registrant’s telephone number, including area ~~code:~~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~~Indicate by check mark whether 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~~

✓


YES		✓		NO

~~The~~

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

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

~~YES~~

✓


YES		✓		NO

~~The~~

Indicate by check mark whether 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~~

Indicate by check mark whether the registrant is a shell company ~~(as~~(

s defined in Rule

12b-2

of the Exchange Act of 1934)

~~YES~~


YES				NO		✓

The number of common shares outstanding, as of September 30, ~~2020~~2021 was ~~734,076,755.~~

695,611,336.

Table of Contents

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			18 19
Item 3. Quantitative and qualitative disclosures about market risk			25 24
Item 4. Controls and procedures			25
24

PART II. OTHER INFORMATION			26 25
Item 1. Legal proceedings			26 25
~~Item 1A. Risk factors~~			26
Item 2. Unregistered sales of equity securities and use of proceeds			27 25
Item 6. Exhibits			28
26

SIGNATURES			29 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, ~~2019.~~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.

Table of Contents

IMPERIAL OIL LIMITED

PART I. FINANCIAL INFORMATION

Item 1.

Financial statements

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

Third Quarter

Nine Months


to September 30
millions of Canadian dollars
2020
   2019
2020
2019
Revenues and other income

Revenues
(a)


5,937

   8,687

16,267

25,880
Investment and other income
(note 4)


18

   49

88

99
Total revenues and other income


5,955

   8,736

16,355

25,979
Expenses

Exploration


2

   4

6

42
Purchases of crude oil and products
(b)


3,634

   5,399

9,975

15,956
Production and manufacturing
(c)
(note 13)


1,246

   1,601

4,098

   4,911
Selling and general
(c)


150

   217

499

   666
Federal excise tax and fuel charge


470

   486

1,290

   1,343
Depreciation and depletion
(note 13)


409

   419

1,295

   1,201
Non-service
pension and postretirement benefit


31

   36

91

   108
Financing
(d) (note 7)


10

   20

46

   71
Total expenses


5,952

   8,182

17,300

   24,298
Income (loss) before income taxes


3

   554

(945
)

   1,681
Income taxes


0

   130

(234
)

   (248 )
Net income (loss)


3

   424

(711
)

   1,929
Per share information
(Canadian dollars)

Net income (loss) per common share - basic
(note 11)


0

   0.56

(0.97
)

   2.51
Net income (loss) per common share - diluted
(note 11)


0

   0.56

(0.97
)

   2.51
(a) Amounts from related parties included in revenues.


1,216

   2,313

3,699

   6,269
(b) Amounts to related parties included in purchases of crude oil and products.


627

   717

1,762

   2,353
(c) Amounts to related parties included in production and manufacturing, and selling and general expenses.


107

   157

428

   479
(d) Amounts to related parties included in financing, (note 7).


12

   23

50

   75


	Third Quarter				Nine Months to September 30
millions of Canadian dollars	2021		2020		2021		2020
Revenues and other income
Revenues (a)		10,214		5,937		25,213		16,267
Investment and other income (note 3)		19		18		65		88
Total revenues and other income		10,233		5,955		25,278		16,355

Expenses
Exploration		2		2		6		6
Purchases of crude oil and products (b)		6,298		3,634		15,052		9,975
Production and manufacturing (c) (note 11)		1,525		1,246		4,579		4,098
Selling and general (c)		180		150		569		499
Federal excise tax and fuel charge		535		470		1,404		1,290
Depreciation and depletion (note 11)		488		409		1,432		1,295
Non-service pension and postretirement benefit		11		31		32		91
Financing (d) (note 5)		5		10		32		46
Total expenses		9,044		5,952		23,106		17,300

Income (loss) before income taxes		1,189		3		2,172		(945	)

Income taxes		281		0-		506		(234	)

Net income (loss)		908		3		1,666		(711	)

Per share information (Canadian dollars)

Net income (loss) per common share - basic (note 9)		1.30		0-		2.32		(0.97	)
Net income (loss) per common share - diluted (note 9)		1.29		0-		2.31		(0.97	)

(a) Amounts from related parties included in revenues.		2,731		1,216		5,644		3,699

(b) Amounts to related parties included in purchases of crude oil and products.		828		627		2,009		1,762

(c) Amounts to related parties included in production and manufacturing, and selling and general expenses.		95		107		317		428

(d) Amounts to related parties included in financing, (note 5).		4		12		25		50

The information in the notes to consolidated financi

l statements is an integral part of these statements.

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IMPERIAL OIL LIMITED

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


	Third Quarter				Nine Months to September 30
millions of Canadian dollars	2021		2020		2021		2020
Net income (loss)		908		3		1,666		(711	)

Other comprehensive income (loss), net of income taxes
Postretirement benefits liability adjustment (excluding amortization)		0-		0-		54		(114	)
Amortization of postretirement benefits liability adjustment included in net periodic benefit costs		33		34		99		102
Total other comprehensive income (loss)		33		34		153		(12	)

Comprehensive income (loss)		941		37		1,819		(723	)

The information in the notes to cons

lidated 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 Sept 30			As at Dec 31
millions of Canadian dollars	2021			2020
Assets
Current assets

Cash		1,875			771
Accounts receivable - net (a)		3,871			1,919
Inventories of crude oil and products		1,405			1,161
Materials, supplies and prepaid expenses		729			673
Total current assets		7,880			4,524
Investments and long-term receivables (b)		753			781
Property, plant and equipment,		56,512			55,771
less accumulated depreciation and depletion		(25,134	)		(23,737	)
Property, plant and equipment, net		31,378			32,034
Goodwill (note 11)		166			166
Other assets, including intangibles - net		698			526
Total assets		40,875			38,031

Liabilities
Current liabilities
Notes and loans payable (c)		122			227
Accounts payable and accrued liabilities (a) (note 7)		5,558			3,153
Income taxes payable		269			0-
Total current liabilities		5,949			3,380
Long-term debt (d) (note 6)		5,060			4,957
Other long-term obligations (note 7)		4,352			4,100
Deferred income tax liabilities		4,305			4,176
Total liabilities		19,666			16,613

Shareholders’ equity
Common shares at stated value (e) (note 9)		1,286			1,357
Earnings reinvested		21,759			22,050
Accumulated other comprehensive income (loss) (note 10)		(1,836	)		(1,989	)
Total shareholders’ equity		21,209			21,418

Total liabilities and shareholders’ equity		40,875			38,031

(a)	Accounts receivable - net included net amounts receivable from related parties of $1,064 million (2020 - $384 million).

(b)	Investments and long-term receivables included amounts from related parties of $299 million (2020 - $313 million).

(c)	Notes and loans payable included amounts to related parties of $0 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 696 million, respectively (2020 - 1,100 million and 734 million, respectively).

The information in the notes to consolidated financial statements is an int

gral part of these statements.

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IMPERIAL OIL LIMITED

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


	Third Quarter						Nine Months to September 30
millions of Canadian dollars	2021			2020			2021			2020
Common shares at stated value (note 9)
At beginning of p e riod		1,302			1,357			1,357			1,375
Share purchases at stated value		(16	)		0-			(71	)		(18	)
At end of period		1,286			1,357			1,286			1,357

Earnings reinvested
At beginning of period		21,336			23,516			22,050			24,812
Net income (loss) for the period		908			3			1,666			(711	)
Share purchases in excess of stated value		(297	)		0-			(1,413	)		(256	)
Dividends declared		(188	)		(161	)		(544	)		(485	)
Cumulative effect of accounting change		0-			-			0-			(2	)
At end of period		21,759			23,358			21,759			23,358

Accumulated other comprehensive income (loss) (note 10)
At beginning of period		(1,869	)		(1,957	)		(1,989	)		(1,911	)
Other comprehensive income (loss)		33			34			153			(12	)
At end of period		(1,836	)		(1,923	)		(1,836	)		(1,923	)

Shareholders’ equity at end of period		21,209			22,792			21,209			22,792

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

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

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

       Third Quarter    Nine Months
    to September 30
millions of Canadian dollars
2020
   2019
2020
2019
Net income (loss)


3

   424

(711
)
1,929
Other comprehensive income (loss), net of income taxes

Postretirement benefits liability adjustment (excluding amortization)


0

   0

(114
)
18
Amortization of postretirement benefits liability adjustment included in net periodic benefit costs


34

   28

102

83
Total other comprehensive income (loss)


34

   28

(12
)
101

Comprehensive income (loss)


37

   452    (723
)
2,030

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

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

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

   As at
Sept 30 As at
Dec 31
millions of Canadian dollars
2020
2019
Assets

Current assets

Cash


817

   1,718
Accounts receivable, less estimated doubtful accounts
(a) (note 5)


1,732

   2,699
Inventories of crude oil and products


1,088

   1,296
Materials, supplies and prepaid expenses


764

   616
Total current assets


4,401

   6,329
Investments and long-term receivables
(b) (note 5)


771

   891
Property, plant and equipment,


55,463

   54,868
less accumulated depreciation and depletion


(21,881
)

   (20,665 )
Property, plant and equipment, net


33,582

   34,203
Goodwill
(note 13)


166

   186
Other assets, including intangibles, net


462

   578
Total assets


39,382

   42,187
Liabilities

Current liabilities

Notes and loans payable
(c)


227

   229
Accounts payable and accrued liabilities
(a) (note 9)


3,229

   4,260
Income taxes payable


0

   106
Total current liabilities


3,456

   4,595
Long-term debt
(d) (note 8)


4,962

   4,961
Other long-term obligations
(note 9)


3,713

   3,637
Deferred income tax liabilities


4,459

   4,718
Total liabilities


16,590

   17,911
Shareholders’ equity

Common shares at stated value
(e) (note 11)


1,357

   1,375
Earnings reinvested


23,358

   24,812
Accumulated other comprehensive income (loss)
(note 12)


(1,923
)

   (1,911 )
Total shareholders’ equity


22,792

   24,276
Total liabilities and shareholders’ equity


39,382

   42,187

~~(a)~~

~~Accounts receivable, less estimated doubtful accounts included net amounts receivable from related parties of $240 million (2019 - $1,007 million).~~

~~(b)~~

~~Investments and long-term receivables included amounts from related parties of $313 million (2019 - $296 million).~~

~~(c)~~

~~Notes and loans payable included amounts to related parties of $111 million (2019 - $111 million).~~

~~(d)~~

~~Long-term debt included amounts to related parties of $4,447 million (2019 - $4,447 million).~~

~~(e)~~

~~Number of common shares authorized and outstanding were 1,100 million and 734 million, respectively (2019 - 1,100 million and 744 million, respectively).~~

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

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

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

Third Quarter


Nine Months


to September 30

millions of Canadian dollars
2020
2019
2020
2019
Common shares at stated value
(note 11)

At beginning of period


1,357

   1,410

1,375

   1,446
Share purchases at stated value


0

   (19 )

(18
)

   (55 )
At end of period


1,357

   1,391

1,357

   1,391
Earnings reinvested

At beginning of period


23,516

   25,056

24,812

   24,560
Net income (loss) for the period


3

   424

(711
)

   1,929
Share purchases in excess of stated value


0

   (324 )

(256
)

   (1,017 )
Dividends declared


(161
)

   (166 )

(485
)

   (482 )
Cumulative effect of accounting change
(note 5)


-

   -

(2
)

   -
At end of period


23,358

   24,990

23,358

   24,990
Accumulated other comprehensive income (loss)
(note 12)

At beginning of period


(1,957
)

   (1,444 )

(1,911
)

   (1,517 )
Other comprehensive income (loss)


34

   28

(12
)

   101
At end of period


(1,923
)

   (1,416 )

(1,923
)

   (1,416 )
Shareholders’ equity at end of period


22,792

   24,965

22,792

   24,965

~~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 (outflow)		Third Quarter						Nine Months to September 30							Third Quarter						Nine Months to September 30
millions of Canadian dollars		2020			2019			2020			2019				2021			2020			2021			2020
Operating activities

Net income (loss)			3			424			(711	)		1,929				908			3			1,666			(711	)
Adjustments for non-cash items:
Depreciation and depletion			409			419			1,275			1,201				488			409			1,432			1,275
Impairment of intangible assets (note 13)			0			0			20			0
(Gain) loss on asset sales (note 4)			(11	)		(28	)		(28	)		(34	)
Impairment of int a ngible assets (note 11)																0-			0-			0-			20
(Gain) loss on asset sales (note 3)																(12	)		(11	)		(39	)		(28	)
Deferred income taxes and other			(11	)		116			(210	)		(359	)			(120	)		(11	)		16			(210	)
Changes in operating assets and liabilities:
Accounts receivable			134			250			967			(355	)			(708	)		134			(1,952	)		967
Inventories, materials, supplies and prepaid expenses			142			264			60			243				(199	)		142			(300	)		60
Income taxes payable			0			8			(106	)		(29	)			227			0-			269			(106	)
Accounts payable and accrued liabilities			66			(82	)		(1,008	)		646				1,123			66			2,362			(1,008	)
All other items - net (b)			143			5			223			163				240			143			390			223
Cash flows from (used in) operating activities			875			1,376			482			3,405				1,947			875			3,844			482

Investing activities
Additions to property, plant and equipment			(142	)		(417	)		(657	)		(1,242	)			(276	)		(142	)		(684	)		(657	)
Proceeds from asset sales (note 4)			19			30			68			66
Proceeds from asset sales (note 3)																15			19			57			68
Loans to equity companies - net			(2	)		(26	)		(16	)		(129	)			2			(2	)		14			(16	)
Cash flows from (used in) investing activities			(125	)		(413	)		(605	)		(1,305	)			(259	)		(125	)		(613	)		(605	)

Financing activities
Reduction in finance lease obligations (note 8)			(4	)		(7	)		(16	)		(20	)
Short-term debt - net																(75	)		0-			(111	)		0-
Reduction in finance lease obligations (note 6)																(6	)		(4	)		(14	)		(16	)
Dividends paid			(162	)		(169	)		(488	)		(465	)			(195	)		(162	)		(518	)		(488	)
Common shares purchased (note 11)			0			(343	)		(274	)		(1,072	)
Common shares purchased (note 9)																(313	)		0-			(1,484	)		(274	)
Cash flows from (used in) financing activities			(166	)		(519	)		(778	)		(1,557	)			(589	)		(166	)		(2,127	)		(778	)

Increase (decrease) in cash			584			444			(901	)		543				1,099			584			1,104			(901	)
Cash at beginning of period			233			1,087			1,718			988				776			233			771			1,718
Cash at end of period (a)			817			1,531			817			1,531				1,875			817			1,875			817
(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.	(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.													(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.			(59	)		(57	)		(159	)		(155	)			(43	)		(59	)		(113	)		(159	)

Income taxes (paid) refunded.			107			35			(45	)		84				32			107			60			(45	)
Interest (paid), net of capitalization.*			(10	)		(20	)		(46	)		(71	)
Interest (paid), net of capitalization.																(5	)		(10	)		(32	)		(46	)

*Note: restated 2019

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

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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 ~~2019~~2020 annual report on Form

10-K.

In the ~~opinion~~

pinion 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, ~~2020,~~2021, are not necessarily indicative of the operations to be expected for the full year.

All amounts are in Canadian dollars unless otherwise indicated.

~~2. Accounting changes~~

~~Effective January 1, 2020, Imperial adopted the Financial Accounting Standards Board’s update,~~

~~Financial Instruments - Credit Losses (Topic 326)~~

, as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote and considers past events, current conditions and expectations of the future. The standard did not have a material impact on the company’s financial statements.

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IMPERIAL OIL LIMITED

3.2. Business segments

Third Quarter
Upstream

Downstream

Chemical
millions of Canadian dollars
2020

   2019


2020
   2019
2020
   2019
Revenues and other income

Revenues
(a)

1,651
   2,185
4,061
   6,266
225
   236
Intersegment sales

658
   913
321
   314
43
   61
Investment and other income
(note 4)

(6)
   7
24
   32
0
   1

2,303
   3,105
4,406
   6,612
268
   298
Expenses

Exploration

2
   4
-
   -
-
   -
Purchases of crude oil and products

1,176
   1,376
3,322
   5,142
157
   167
Production and manufacturing
(note 13)

863
   1,087
335
   460
48
   54
Selling and general

-
   -
140
   191
23
   23
Federal excise tax and fuel charge

-
   -
470
   486
-
   -
Depreciation and depletion
(note 13)

361
   364
37
   45
5
   4
Non-service pension and postretirement benefit

-
   -
-
   -
-
   -
Financing
(note 7)

-
   -
-
   -
-
   -
Total expenses

2,402
   2,831
4,304
   6,324
233
   248
Income (loss) before income taxes

(99)
   274
102
   288
35
   50
Income taxes

(25)
   65
25
   67
8
   12
Net income (loss)

(74)
   209
77
   221
27
   38
Cash flows from (used in) operating activities

526
   392
333
   900
32
   75
Capital and exploration expenditures
(b)

78
   302
50
   124
4
   4


Third Quarter	Upstream		Downstream		Chemical
millions of Canadian dollars	2021	2020	2021	2020	2021	2020
Revenues and other income

Revenues (a)	1,015	1,651	8,813	4,061	386	225
Intersegment sales (b)	3,137	658	366	321	91	43
Investment and other income (note 3)	0-	(6)	18	24	0-	0-
	4,152	2,303	9,197	4,406	477	268
Expenses
Exploration	2	2	0-	0-	0-	0-
Purchases of crude oil and products (b)	1,902	1,176	7,745	3,322	244	157
Production and manufacturing (note 11)	1,120	863	356	335	49	48
Selling and general	0-	0-	141	140	21	23
Federal excise tax and fuel charge	0-	0-	535	470	0-	0-
Depreciation and depletion (note 11)	439	361	39	37	4	5
Non-service pension and postretirement benefit	0-	0-	0-	0-	0-	0-
Financing (note 5)	0-	0-	0-	0-	0-	0-
Total expenses	3,463	2,402	8,816	4,304	318	233
Income (loss) before income taxes	689	(99)	381	102	159	35
Income taxes	165	(25)	88	25	38	8
Net income (loss) (b)	524	(74)	293	77	121	27
Cash flows from (used in) operating activities (b)	2,508	526	(733)	333	157	32
Capital and exploration expenditures (c)	151	78	120	50	2	4


Third Quarter	Corporate and other		Eliminations		Consolidated
millions of Canadian dollars	2021	2020	2021	2020	2021	2020
Revenues and other income


Revenues (a)	0-	0-	0-	0-	10,214	5,937
Intersegment sales (b)	0-	0-	(3,594)	(1,022)	0-	0-
Investment and other income (note 3)	1	0-	0	0-	19	18
	1	0-	(3,594)	(1,022)	10,233	5,955
Expenses
Exploration	0-	0-	0-	0-	2	2
Purchases of crude oil and products (b)	0-	0-	(3,593)	(1,021)	6,298	3,634
Production and manufacturing (note 11)	0-	0-	0-	0-	1,525	1,246
Selling and general	19	(12)	(1)	(1)	180	150
Federal excise tax and fuel charge	0-	0-	0-	0-	535	470
Depreciation and depletion (note 11)	6	6	0-	0-	488	409
Non-service pension and postretirement benefit	11	31	0-	0-	11	31
Financing (note 5)	5	10	0-	0-	5	10
Total expenses	41	35	(3,594)	(1,022)	9,044	5,952
Income (loss) before income taxes	(40)	(35)	0-	0-	1,189	3
Income taxes	(10)	(8)	0-	0-	281	0-
Net income (loss) (b)	(30)	(27)	0-	0-	908	3
Cash flows from (used in) operating activities (b)	15	(16)	0-	0-	1,947	875
Capital and exploration expenditures (c)	4	9	0-	0-	277	141

Third Quarter
Corporate and other

Eliminations

Consolidated
millions of Canadian dollars
2020

   2019
2020
   2019
2020
   2019
Revenues and other income

Revenues
(a)

-
   -
-
   -
5,937
   8,687
Intersegment sales

-
   -
(1,022)
   (1,288)
-
   -
Investment and other income
(note 4)

0
   9
-
   -
18
   49

0
   9
(1,022)
   (1,288)
5,955
   8,736
Expenses

Exploration

-
   -
-
   -
2
   4
Purchases of crude oil and products

-
   -
(1,021)
   (1,286)
3,634
   5,399
Production and manufacturing
(note 13)

-
   -
-
   -
1,246
   1,601
Selling and general

(12)
   5
(1)
   (2)
150
   217
Federal excise tax and fuel charge

-
   -
-
   -
470
   486
Depreciation and depletion
(note 13)

6
   6
-
   -
409
   419
Non-service pension and postretirement benefit

31
   36
-
   -
31
   36
Financing
(note 7)

10
   20
-
   -
10
   20
Total expenses

35
   67
(1,022)
   (1,288)
5,952
   8,182
Income (loss) before income taxes

(35)
   (58)
-
   -
3
   554
Income taxes

(8)
(14)
-
   -
-
   130
Net income (loss)

(27)
   (44)
-
   -
3
   424
Cash flows from (used in) operating activities

(16)
   9
0
   0
875
   1,376
Capital and exploration expenditures
(b)

9
   12
0
   0
141
   442

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IMPERIAL OIL LIMITED

(a)	Included export sales to the United States of ~~$1,227~~$1,803 million ~~(2019~~(2020 - ~~$1,807~~$1,227 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

(b)	In the third quarter of 2021, the Downstream segment acquired a portion of Upstream crude inventory for $444 million. There was no earnings impact and t he effects of this transaction have been eliminated for consolidation purp o ses.

~~(b)~~(c)

Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.

Table of ~~Content~~sContents

IMPERIAL OIL LIMITED


Nine Months to September 30	Upstream		Downstream			Chemical
millions of Canadian dollars	2021	2020	2021	2020		2021	2020
Revenues and other inco m e
Revenues (a)	5,773	4,211	18,355	11,444		1,085	612
Intersegment sales (b)	5,800	1,642	1,927	1,013		223	114
Investment and other income (note 3)	6	4	51	66		1	1
	11,579	5,857	20,333	12,523		1,309	727
Expenses
Exploration	6	6	0-	0-		0-	0-
Purchases of crude oil and products (b)	5,780	3,338	16,525	8,987	��	693	416
Production and manufacturing (note 11)	3,395	2,855	1,039	1,086		145	157
Selling and general	0-	0-	416	456		68	69
Federal excise tax and fuel charge	0-	0-	1,404	1,290		0-	0-
Depreciation and depletion (note 11)	1,283	1,141	117	123		13	13
Non-service pension and postretirement benefit	0-	0-	0-	0-		0-	0-
Financing (note 5)	1	0-	0-	0-		0-	0-
Total expenses	10,465	7,340	19,501	11,942		919	655
Income (loss) before income taxes	1,114	(1,483)	832	581		390	72
Income tax expense (benefit)	264	(357)	187	134		93	17
Net income (loss) (b)	850	(1,126)	645	447		297	55
Cash flows from (used in) operating activities (b)	3,634	22	(135)	443		330	75
Capital and exploration expenditures (c)	366	454	308	177		6	15
Total assets as at September 30 (b) (note 11)	29,540	32,941	8,239	4,590		488	417


Nine Months to September 30	Corporate and other		Eliminations		Consolidated
millions of Canadian dollars	2021	2020	2021	2020	2021	2020
Revenues and other income

Revenues (a)	0-	0-	0-	0-	25,213	16,267
Intersegment sales (b)	0-	0-	(7,950)	(2,769)	0-	0-
Investment and other income (note 3)	7	17	0-	0-	65	88
	7	17	(7,950)	(2,769)	25,278	16,355
Expenses
Exploration	0-	0-	0-	0-	6	6
Purchases of crude oil and products (b)	0-	0-	(7,946)	(2,766)	15 , 052	9,975
Production and manufacturing (note 11)	0-	0-	0-	0-	4,579	4,098
Selling and general	89	(23)	(4)	(3)	569	499
Federal excise tax and fuel charge	0-	0-	0-	0-	1,404	1,290
Depreciation and depletion (note 11)	19	18	0-	0-	1,432	1,295
Non-service pension and postretirement benefit	32	91	0-	0-	32	91
Financing (note 5)	31	46	0-	0-	32	46
Total expenses	171	132	(7,950)	(2,769)	23,106	17,300
Income (loss) before income taxes	(164)	(115)	0-	0-	2,172	(945)
Income tax expense (benefit)	(38)	(28)	0-	0-	506	(234)
Net income (loss) (b)	(126)	(87)	0-	0-	1,666	(711)
Cash flows from (used in) operating activities (b)	15	(58)	0-	0-	3,844	482
Capital and exploration expenditures (c)	19	33	0-	0-	699	679
Total assets as at September 30 (b) (note 11)	2,778	1,679	(170)	(245)	40,875	39,382

Nine Months to September 30    Upstream            Downstream           Chemical
millions of Canadian dollars
2020
   2019
2020
   2019
2020
   2019
Revenues and other income

Revenues
(a)

4,211
   7,012
11,444
   18,115
612
   753
Intersegment sales

1,642
   2,977
1,013
   1,249
114
   181
Investment and other income
(note 4)

4
   11
66
   61
1
   1

5,857
   10,000
12,523
   19,425
727
   935
Expenses

Exploration

6
   42
-
   -
-
   -
Purchases of crude oil and products

3,338
   4,764
8,987
   15,062
416
   531
Production and manufacturing
(note 13)

2,855
   3,414
1,086
   1,315
157
   182
Selling and general

-
   -
456
   571
69
   67
Federal excise tax and fuel charge

-
   -
1,290
   1,343
-
   -
Depreciation and depletion
(note 13)

1,141
   1,036
123
   137
13
   11
Non-service
pension and postretirement benefit

-
   -
-
   -
-
   -
Financing
(note 7)

-
   -
-
   -
-
   -
Total expenses

7,340
   9,256
11,942
   18,428
655
   791
Income (loss) before income taxes

(1,483)
   744
581
   997
72
   144
Income tax expense (benefit)

(357)
   (508)
134
   261
17
   34
Net income (loss)

(1,126)
   1,252
447
   736
55
   110
Cash flows from (used in) operating activities

22
   1,257
443
   2,055
75
   175
Capital and exploration expenditures
(b)

454
   975
177
   364
15
   27
Total assets as at September
30
(note 13)

32,941
   35,066
4,590
   4,433
417
   423

Nine Months to September 30    Corporate and other    Eliminations           Consolidated
millions of Canadian dollars
2020
   2019
2020
   2019
2020
   2019
Revenues and other income

Revenues
(a)

-
   -
-
   -
16,267
   25,880
Intersegment sales

-
   -
(2,769)
   (4,407)
-
   -
Investment and other income
(note 4)

17
   26
-
   -
88
   99

17
   26
(2,769)
   (4,407)
16,355
   25,979
Expenses

Exploration

-
   -
-
   -
6
   42
Purchases of crude oil and products

-
   -
(2,766)
   (4,401)
9,975
   15,956
Production and manufacturing
(note 13)

-
   -
-
   -
4,098
   4,911
Selling and general

(23)
   34
(3)
   (6)
499
   666
Federal excise tax and fuel charge

-
   -
-
   -
1,290
   1,343
Depreciation and depletion
(note 13)

18
   17
-
   -
1,295
   1,201
Non-service
pension and postretirement benefit

91
   108
-
   -
91
   108
Financing
(note 7)

46
   71
-
   -
46
   71
Total expenses

132
   230
(2,769)
   (4,407)
17,300
   24,298
Income (loss) before income taxes

(115)
   (204)
-
   -
(945)
   1,681
Income tax expense (benefit)

(28)
   (35)
-
   -
(234)
   (248)

Net income (loss)

(87)
   (169)
-
   -
(711)
   1,929
Cash flows from (used in) operating activities

(58)
   (82
)

0
   0
482
   3,405
Capital and exploration expenditures
(b)

33
   34
0
   0
679
   1,400
Total assets as at September
30
(note 13)

1,679
   2,298
(245)
   (313)
39,382
   41,907

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IMPERIAL OIL LIMITED

(a)	Included export sales to the United States of ~~$3,339~~$4,916 million ~~(2019~~(2020 - ~~$5,623~~$3,339 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

(b)	In the third quarter of 2021, the Downstream segment acquired a portion of Upstream crude inventory for $444 million. There was no earnings impact and t he effects of this transaction have been eliminated for consolidation purposes.

~~(b)~~(c)

121

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

~~4. Investment and other income~~

~~Investment and other income included gains and losses on asset sales as follows:~~

       Third Quarter        Nine Months
    to September 30
millions of Canadian dollars
2020
   2019
2020
   2019
Proceeds from asset sales


19

   30

68

   66
Book value of asset sales


8

   2

40

   32
Gain (loss) on asset sales, before tax


11

   28

28

   34
Gain (loss) on asset sales, after tax


10

   25

25

   31

~~5. Allowance for current expected credit loss (CECL)~~

~~Effective January 1, 2020, the company adopted the Financial Accounting Standards Board’s update,~~

~~Financial Instruments – Credit Losses (Topic 326),~~

as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and reasonable and supportable forecasts. The standard requires this expected loss methodology for trade receivables, certain other financial assets and

~~off-balance-sheet~~

~~credit exposures. The cumulative effect adjustment related to the adoption of this standard reduced “Earnings reinvested” in Shareholders’ equity by $2 million.~~

The company is exposed to credit losses primarily through sales of petroleum products, crude oil, natural gas liquids and natural gas, as well as loans to equity companies and joint venture receivables. A counterparty’s ability to pay is assessed through a credit review process that considers payment terms, the counterparty’s established credit rating or the company’s assessment of the counterparty’s credit worthiness, contract terms, and other risks. The company can require prepayment or collateral to mitigate certain credit risks.

The company groups financial assets into portfolios that share similar risk characteristics for purposes of determining the allowance for credit losses. Each reporting period, the company assesses whether a significant change in credit loss or risk has occurred. Among the quantitative and qualitative factors considered are historical financial data, current conditions, industry and country risk, current credit ratings and the quality of third-party guarantees secured from the counterparty. Financial assets are written off in whole, or in part, when practical recovery efforts have been exhausted and no reasonable expectation of recovery exists. Subsequent recoveries of amounts previously written off are recognized in earnings. The company manages receivable portfolios using past due balances as a key credit quality indicator.

~~The company recognizes a credit allowance for~~

~~off-balance-sheet~~

credit exposures as a liability on the balance sheet, separate from the allowance for credit losses related to recognized financial assets. These exposures could include unfunded loans to equity companies and financial guarantees that cannot be cancelled unilaterally by the company.

~~In 2020, the~~

~~COVID-19~~

pandemic spread rapidly through most areas of the world resulting in economic uncertainty, global financial market volatility, and negative effects in the credit markets. The company has considered these effects, along with the significantly lower balances of trade receivables at the end of the quarter, in its estimate of credit losses and concluded no material adjustment to credit allowances in the quarter was required. At September 30, 2020, the company’s evaluation of financial assets under

~~Financial Instruments – Credit Losses (Topic 326)~~

, as amended included $1,400 million of accounts receivable, net of allowances of $4 million, and investments and long-term receivables of $327 million. The company has determined that, at this time, 0 credit allowance is required for investments and long-term receivables, and for

~~off-balance-sheet~~

~~credit exposures.~~

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

~~6. Employee retirement benefits~~

~~The components of net benefit cost were as follows:~~

    Third Quarter

    Nine Months
     to September 30

millions of Canadian dollars
2020
   2019
2020
   2019
Pension benefits:

Current service cost


76

   57

229

   171
Interest cost


77

   81

231

   243
Expected return on plan assets


(97
)

   (87 )

(293
)

   (262 )
Amortization of prior service cost


4

   0

11

   0
Amortization of actuarial loss (gain)


38

   37

115

   112
Net periodic benefit cost


98

   88

293

   264
Other postretirement benefits:

Current service cost


6

   4

18

   12
Interest cost


6

   5

18

   16
Amortization of actuarial loss (gain)


3

   0

9

   (1 )
Net periodic benefit cost


15

   9

45

   27

~~7. Financing costs~~

       Third Quarter

    Nine Months
     to September 30

millions of Canadian dollars
2020
   2019
2020
   2019
Debt-related interest


19

   32

79

   105
Capitalized interest


(9
)

   (12 )

(33
)

   (34 )
Net interest expense


10

   20

46

   71
Other interest


0

   0

0

   0
Total financing


10

   20

46

   71

During the second quarter of 2020, in addition to existing credit facilities of $500 million, the company entered into a $500 million committed short-term line of credit to May 2021, and a $300 million committed short-term line of credit to June 2021. The company has not drawn on any of its credit facilities.

~~8. Long-term debt~~

   As at
Sept 30    As at
Dec 31
millions of Canadian dollars
2020
   2019
Long-term debt


4,447

   4,447
Finance leases


515

   514
Total long-term debt


4,962

   4,961

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IMPERIAL OIL LIMITED

~~9. Other long-term obligation~~

3. Investment and other income

Investment and other income included gains and losses on asset sales as follows:

   As at    As at
   Sept 30    Dec 31
millions of Canadian dollars
2020
   2019
Employee retirement benefits
(a)


1,965

   1,822
Asset retirement obligations and other environmental liabilities
(b)


1,388

   1,388
Share-based incentive compensation liabilities


33

   65
Operating lease liability
(c)


95

   143
Other obligations


232

   219
Total other long-term obligations


3,713

   3,637


					Nine Months
	Third Quarter				to September 30
millions of Canadian dollars	2021		2020		2021		2020
Proceeds from asset sales		15		19		57		68
Book value of asset sales		3		8		18		40
Gain (loss) on asset sales, before tax		12		11		39		28
Gain (loss) on asset sales, after tax		10		10		34		25

4. Employee retirement benefits

The components of net benefit cost were as follows:


							Nine Months
	Third Quarter						to September 30
millions of Canadian dollars	2021			2020			2021			2020
Pension benefits:
Current service cost		81			76			243			229
Interest cost		68			77			204			231
Expected return on plan assets		(107	)		(97	)		(321	)		(293	)
Amortization of prior service cost		4			4			12			11
Amortization of actuarial loss (gain)		36			38			108			115
Net periodic benefit cost		82			98			246			293

Other postretirement benefits:
Current service cost		7			6			21			18
Interest cost		6			6			17			18
Amortization of actuarial loss (gain)		4			3			12			9
Net periodic benefit cost		17			15			50			45

5. Financing costs


							Nine Months
	Third Quarter						to September 30
millions of Canadian dollars	2021			2020			2021			2020
Debt-related interest		9			19			50			79
Capitalized interest		(4	)		(9	)		(19	)		(33	)
Net interest expense		5			10			31			46
Other interest		0			0			1			0
Total financing		5			10			32			46

During the second quarter of 2021, the company extended the maturity dates of two of its short-term lines of credit, totalling $750 million, to May 2023 and extended its $300 million committed short-term line of credit to June 2022. The company has not drawn on any of its $1,300 million of available credit facilities.

During the third quarter of 2021, the c

mpany repaid the $75 million, non-interest bearing, revolving demand loan originally issued in 2016 under an arrangement with an affiliate company of ExxonMobil.

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IMPERIAL OIL LIMITED

6. Long-term debt


	As at Sept 30		As at Dec 31
millions of Canadian dollars	2021		2020
Long-term debt		4,447		4,447
Finance leases		613		510
Total long-term debt		5,060		4,957

7. Other long-term obligations


	As at Sept 30		As at Dec 31
millions of Canadian dollars	2021		2020
Employee retirement benefits (a)		2,013		2,105
Asset retirement obligations and other environmental liabilities (b)		1,711		1,676
Share-based incentive compensation liabilities		94		45
Operating lease liability (c)		164		95
Other obligations		370		179
Total other long-term obligations		4,352		4,100

(a)	Total recorded employee retirement benefits obligations also included $58 million in current liabilities ~~(2019~~(2020 - $58 million).

(b)	Total asset retirement obligations and other environmental liabilities also included ~~$124~~$100 million in current liabilities ~~(2019~~(2020 - ~~$124~~$100 million).

(c)

Total operating lease liability also included ~~$95~~$114 million in current liabilities ~~(2019~~(2020 - ~~$115~~$97 million). In addition to the total operating lease liability, additional undiscounted commitments for leases not yet commenced totalled ~~$27~~$1 million ~~(2019~~(2020 - $6$27 million).

~~10.~~

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IMPERIAL OIL LIMITED

8. Financial and derivative instruments

Financial instruments

The fair value of the company’s financial instruments is determined by reference to various market data and other appropriate valuation techniques. There are no material differences between the fair value of the company’s financial instruments and the recorded carrying value. At September 30, ~~2020~~2021 and December 31, ~~2019~~2020, the fair value of long-term debt ($4,447 million, excluding finance lease obligations) was primarily a level 2 measurement.

Derivative instruments

The company’s size, strong capital structure and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the company’s enterprise-wide risk from changes in commodity prices and currency exchange rates. In addition, the company uses commodity-based contracts, including derivative instruments to manage commodity price ~~risk.~~risk and for trading purposes. Commodity contracts held for trading purposes are presented in the Consolidated statement of income on a net basis in the line “Revenues”. The company does not designate derivative instruments as a hedge for hedge accounting purposes.

Credit risk associated with the company’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial ~~limits~~l

mits placed on derivative counterparties. The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.

At September 30, 2020, the carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $2 million, gross liabilities of $3 million and collateral receivable of $6 million, with the net effects reflected in “Accounts receivable, less estimated doubtful accounts” on the Consolidated balance sheet. At December 31, 2019 the carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $0 million, gross liabilities of $2 million and collateral receivable of $6 million.

~~At September 30, 2020, the~~The net notional ~~forward long /~~ long/(short) position of derivative instruments ~~was 200,000 barrels for crude and~~

(

~~780,000~~

)

~~barrels for products. At December 31, 2019, the net notional forward long / (short) position of derivative instruments was~~

(

~~590,000~~

)

~~barrels for crude and 0 barrels for products.~~was:


(thousands of barrels)	As at Sept 30 2021			As at Dec 31 2020

Crude		(6,410	)		(800	)
Products		(1,070	)		(390	)

Realized and unrealized gain or (loss) on

derivative

instruments

recognized onin the Consolidated statement of income is included in the following lines on a before-tax basis:

~~before-tax~~

~~basis:~~

       Third Quarter
    Nine Months
    to September 30

millions of Canadian dollars
2020
   2019
2020
   2019
Revenues


1

   0

(7
)

   (2 )

Purchases of crude oil and products


0

   1

(18
)

   (5 )

Total


1

   1

(25
)

   (7 )


	Third Quarter					Nine Months to September 30
millions of Canadian dollars	2021			2020		2021			2020
Revenues		(21	)		1		(30	)		(7	)
Purchases of crude oil and products		0-			0-		(33	)		(18	)
Total		(21	)		1		(63	)		(25	)

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IMPERIAL OIL LIMITED

The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement is a

follows:


millions of Canadian dollars At September 30, 2021
	Fair value								Effect of counterparty netting			Effect of collateral netting			Net carrying value
	Level 1		Level 2		Level 3		Total		Effect of counterparty netting			Effect of collateral netting			Net carrying value
Assets


Derivative assets (a)		8		16		0-		24		(14	)		0			10

Liabilities
Derivative liabilities (b)		29		7		0-		36		(14	)		(21	)		1

(a)	Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses” and “Accounts receivable - net”.

(b)	Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities”.


millions of Canadian dollars At December 31, 2020
	Fair value								Effect of counterparty netting			Effect of collateral netting			Net carrying value
	Level 1		Level 2		Level 3		Total		Effect of counterparty netting			Effect of collateral netting			Net carrying value
Assets
Derivative assets (a)		2		0-		0-		2		(2	)		0-			0-

Liabilities
Derivative liabilities (b)		12		0-		0-		12		(2	)		(10	)		0-

(a)	Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses” and “Accounts receivable - net”.

(b)	Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities”.

At September 30, 2021 and December 31, 2020, respectively, the company had $14 million and $5 million of collateral under a master netting arrangement not offset against the derivatives on the Consolidated balance sheet in “Accounts receivable - net”, primarily related to initial margin requirements.

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IMPERIAL OIL LIMITED

~~11.~~9. Common shares

thousands of shares
As of
Sept 30
2020

As of
Dec 31
2019

Authorized


1,100,000

   1,100,000
Common shares outstanding


734,077

   743,902


thousands of shares	As of Sept 30 2021		As of Dec 31 2020

Authorized		1,100,000		1,100,000
Common shares outstanding		695,611		734,077

The current

12-month

~~limited~~ normal course issuer bid program came into effect on June 29, ~~2020 and is used primarily to eliminate dilution from shares issued in conjunction with Imperial’s restricted stock unit plan.~~2021, under which Imperial will continue its existing share purchase program. The program enables the company to purchase up to a maximum of ~~50,000~~35,583,671 common shares (5 percent of the total shares on June 15, 2021) which includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. As in the past, Exxon Mobil Corporation has advised the company that it intends to participate to maintain its ownership percentage at approximately 69.6 percent.

The excess of the purchase cost over the stated value of shares purchased has been recorded as a distribution of earnings reinvested.

The company’s common share activities are

summarized

below:


	Thousands of shares			Millions of dollars			Thousands of shares			Millions of dollars
Balance as at December 31, 2018		782,565			1,446
Issued under employee share-based awards		1			0
Purchases at stated value		(38,664	)		(71	)
Balance as at December 31, 2019		743,902			1,375			743,902			1,375
Issued under employee share-based awards		0			0			7			0-
Purchases at stated value		(9,825	)		(18	)		(9,832	)		(18	)
Balance as at September 30, 2020		734,077			1,357
Balance as at December 31, 2020								734,077			1,357
Issued under employee share-based awards								0-			0-
Purchases at stated value								(38,466	)		(71	)
Balance as at September 30, 2021								695,611			1,286

The following table provides the calculation of ~~basic~~b

sic and diluted

earnings

per common share and the dividends declared by the company on its outstanding common shares:

       Third Quarter        Nine Months
    to September 30


    2020
       2019
    2020
       2019
Net income (loss) per common share - basic

Net income (loss)
(millions of Canadian dollars)


3
   424

(711
)

   1,929
Weighted average number of common shares outstanding
(millions of shares)


734.1
   757.8

735.7

   767.6
Net income (loss) per common share
(dollars)


0
   0.56

(0.97
)

   2.51
Net income (loss) per common share - diluted

Net income (loss)
(millions of Canadian dollars)


3
   424

(711
)

   1,929
Weighted average number of common shares outstanding
(millions of shares)


734.1
   757.8

735.7

   767.6
Effect of employee share-based awards
(millions of shares) (a)


2.2
   2.5

0

   2.4
Weighted average number of common shares outstanding, assuming dilution
(millions of shares)


736.3
   760.3

735.7

   770.0
Net income (loss) per common share
(dollars)


0
   0.56

(0.97
)

   2.51
Dividends per common share - declared
(dollars)


0.22
   0.22

0.66

   0.63


	Third Quarter				Nine Months to September 30
	2021		2020		2021		2020
Net income (loss) per common share - basic
Net income (loss) (millions of Canadian dollars)		908		3		1,666		(711	)
Weighted average number of common shares outstanding (millions of shares)		700.0		734.1		719.4		735.7
Net income (loss) per common share (dollars)		1.30		0-		2.32		(0.97	)

Net income (loss) per common share - diluted
Net income (loss) (millions of Canadian dollars)		908		3		1,666		(711	)
Weighted average number of common shares outstanding (millions of shares)		700.0		734.1		719.4		735.7
Effect of employee share-based awards (millions of shares) (a)		1.9		2.2		1.7		0-
Weighted average number of common shares outstanding, assuming dilution (millions of shares)		701.9		736.3		721.1		735.7
Net income (loss) per common share (dollars)		1.29		0-		2.31		(0.97	)

Dividends per common share - declared (dollars)		0.27		0.22		0.76		0.66

(a)	For ~~Nine Months~~nine months to September 30, 2020, the Net income (loss) per common share – diluted excludes the effect of 2.1 million employee share-based awards. Share-based awards have the potential to dilute basic earnings per share in the future.

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IMPERIAL OIL LIMITED

~~12.~~10. Other comprehensive income (loss) information

Changes in accumulated other comprehensive income (loss):

millions of Canadian dollars
2020
   2019
Balance at January 1


(1,911
)

   (1,517 )
Postretirement benefits liability adjustment:

Current period change excluding amounts reclassified from accumulated other comprehensive income


(114
)

   18
Amounts reclassified from accumulated other comprehensive income


           102

              83
Balance at September 30


(1,923
)

   (1,416 )


millions of Canadian dollars	2021			2020

Balance at January 1		(1,989	)		(1,911	)
Postretirement benefits liability adjustment:
Current period change excluding amounts reclassified from accumulated other comprehensive income		54			(114	)
Amounts reclassified from accumulated other comprehensive income		99			102
Balance at September 30		(1,836	)		(1,923	)

Amounts reclassified out of accumulated other comprehensive income (loss) -

before-tax

income (expense):

    Third Quarter     Nine Months
    to September 30
millions of Canadian dollars
2020
2019
2020
2019
Amortization of postretirement benefits liability adjustment included in net periodic benefit cost
(a)


(45)

          (37 )

(135)

          (111 )


	Third Quarter				Nine Months to September 30
millions of Canadian dollars	2021		2020		2021		2020
Amortization of postretirement benefits liability adjustment included in net periodic benefit cost (a)		(44)		(45)		(132)		(135	)

(a)	This accumulated other comprehensive income component is included in the computation of net periodic benefit cost, (note 4).

~~(a) This accumulated other comprehensive income component is included in the computation of net periodic benefit cost, (note 6).~~

Income tax expense (credit) for components of other comprehensive income (loss):

       Third Quarter     Nine Months
    to September 30

millions of Canadian dollars
2020
2019
2020

2019
Postretirement benefits liability adjustments:





Postretirement benefits liability adjustment (excluding amortization)


0

0

(37
)

7

Amortization of postretirement benefits liability adjustment included in net periodic benefit cost


11

   9

33

   28
Total


11

   9

(4
)

   35


	Third Quarter				Nine Months to September 30
millions of Canadian dollars	2021		2020		2021		2020
Postretirement benefits liability adjustments:


Postretirement benefits liability adjustment (excluding amortization)		0-		0-		17		(37	)
Amortization of postretirement benefits liability adjustment included in net periodic benefit cost		11		11		33		33
Total		11		11		50		(4	)

~~13.~~11. Miscellaneous financial information

At March 31, 2021, due to the termination of transportation services agreements related to a third-party pipeline project, the company recognized a liability of $62 million, previously reported as a contingent liability in Note 10 of Imperial’s Form 10-K. In connection with the ~~second quarter~~same project, commitments under “Oth

r long-term purchase agreements” as reported in Imperial’s Form 10-K decreased by approximately $2.9 billion. The majority of ~~2020,~~these commitments related to years 2026 and beyond.

The company has received subsidies as part of the Government of ~~Canada implemented the Canada Emergency Wage Subsidy (CEWS) as part of its~~Canada’s COVID-19 Economic Response Plan. The program’s intent is to help sustain employment levels by providing expense relief to companies during the pandemic. The company qualified for these wage subsidies which are recognized throughout the year when received. The relief provided under this program, about $120 million (before tax) year-to-date, including the company’s proportionate share of a joint venture, isIt was recognized as a reduction to expense and iswas included in the Consolidated statement of income, primarily as part of “Production and manufacturing” (2020 –

120

million before tax, year-to-date).

~~As disclosed in Imperial’s 2019 Form~~

~~10-K,~~

~~goodwill is tested for impairment annually or more frequently if events or circumstances indicate it might be impaired.~~ In the first quarter of 2020, with the change in economic conditions and the reduction in the company’s market capitalization, the company assessed its goodwill balances for impairment and ~~recognized~~recogniz

d a

non-cash

goodwill impairment charge of $20 million in the company’s Upstream segment. The goodwill impairment is reflected in “Depreciation and depletion” on the Consolidated statement of income and “Goodwill” on the Consolidated balance sheet. The remaining balance of goodwill is associated with the Downstream segment.

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IMPERIAL OIL LIMITED

Item 2.

Management’s discussion and analysis of financial condition and results of operations

~~Current economic conditions~~

Operating results

In early 2020, the balance of supply and demand for petroleum and petrochemical products experienced two significant disruptive effects. On the demand side, the

COVID-19

pandemic spread rapidly ~~across Canada and~~through most areas of the world resulting in substantial reductions in consumer and business activity and significantly reduced ~~local and global~~ demand for crude oil, natural gas, and petroleum products. This reduction in demand coincided with announcements of increased production in certain key

oil-producing

countries which led to increases in inventory levels and sharp declines in prices for crude oil, natural gas, and petroleum products. ~~Throughout the second~~

Through 2021, demand for petroleum and ~~third quarters, the effects of~~

~~COVID-19~~

petrochemical products has continued to ~~have a negative impact on the world’s major economies and demand for~~recover, with each of the company’s ~~products, and market conditions continue to reflect considerable uncertainty. In Canada, consumer and business activity has exhibited some degree of recovery, but remains lower~~sequential quarterly financial results benefiting from stronger prices when compared to the prior ~~periods as a result of~~quarter. The company continues to closely monitor industry and global economic conditions, including recovery from the

COVID-19

pandemic. ~~Despite actions taken by key~~

~~oil-producing~~

~~countries to reduce oversupply in~~Looking beyond the ~~near-term, and improved credit market~~volatility marking recent economic conditions, ~~providing sufficient liquidity to credit-worthy companies, the unfavourable economic impacts appear increasingly likely to persist to some extent well into 2021.~~

In late March, the company announced significant reductions in 2020 capital and operating expense spending plans. Capital and exploration expenditures in 2020 are now expected to be about $900 million, below the company’s ~~earlier guidance~~annual planning process provides an opportunity to

re-affirm

the fundamentals of ~~$1.1 billion to $1.2 billion. In addition,~~

~~year-to-date~~

~~production and manufacturing expenses are $813 million lower than the prior year, enabling the company to already surpass the full-year expense reduction target of $500 million.~~

~~The effect of~~

~~COVID-19~~

~~and the current business environment on~~ supply and demand ~~patterns has negatively impacted Imperial’s financial~~that underpin our businesses. Consideration is given to a diverse set of risks and operating results in the first nine months of 2020. Industry conditions seen thus far in 2020 have led to lower realized prices for the company’s products and have resulted in substantially lower earnings and operating cash flow throughout 2020 in comparison to 2019. In response to these conditions, the company operated certain assets at reduced rates in the second and third quarters of 2020. The company advanced and extended planned maintenance and turnaround activities throughout the second and third quarters in an effort to reduce

~~on-site~~

staffing levels and to better balance production with demand. The turnaround activities at Kearl and Syncrude were completed in the third quarter. Refinery utilization rates and petroleum product sales were reduced through the second quarter of 2020, but improved in the third quarter due to improved product demands. There have been signs of economic recovery, however, the length and severity of decreased demand due to

~~COVID-19~~

~~and the current business environment are highly uncertain, with the~~other factors that may influence future energy supply and demand ~~patterns inherently difficult~~trends, including technological advancements, regulation and government policies, climate change, greenhouse gas restrictions, and other general economic conditions. The company views climate change risks as a global issue that requires collaboration among governments, private companies, consumers and other stakeholders to ~~predict.~~create meaningful solutions. These should meet the world’s increasing demand for affordable and reliable energy while creating opportunities to transition to a lower carbon future. The variety of potential transition pathways for society to a lower-carbon future, influenced by assumptions regarding economic growth, technology and governmental policy, indicates a wide range of uncertainty for the types and demand levels of energy.

The board of directors evaluates climate change risk in the context of overall enterprise risk, including other operational, strategic, and financial risks. The company ~~has reviewed its near-term spending reductions, near-term production impacts~~considers the interactions among these factors as it pursues a strategy that is resilient to a wide range of potential pathways for society’s energy transition while continuing to grow shareholder value. It takes into account emerging industry and ~~expected near-term price levels to determine whether they put its long-lived assets at risk for impairment. Despite the challenging near-term environment, the company’s view of long-term supply~~economic conditions and ~~demand fundamentals has not changed significantly. However, the company continues to assess~~market and government policy uncertainties in developing its strategic plans and longer-term price views ~~taking into account current and developing industry and economic conditions and continued market uncertainty,~~ as part of its annual business planning ~~process, targeted~~process. The company continues to make progress on its greenhouse gas emission reduction plans and efforts to position the company for ~~required Board~~success in a lower-carbon energy future. It expects to play an important role in providing energy and products that are critical to economic growth while minimizing environmental impacts and supporting society’s ambition to achieve a lower-carbon energy future. The company continues to analyze internal and external scenarios of ~~Directors review in~~future energy markets to create a deeper understanding of what resiliency requires and which opportunities could emerge, but the ~~fourth quarter. Depending on the~~assumptions and outcome of any given scenario or set of scenarios come with a high degree of uncertainty.

To the extent the planning process ~~including,~~results in ~~particular,~~ any significant ~~future~~ changes into the company’s ~~strategic~~current development plans ~~or longer-term price views, a portion of the company’s long-lived~~for its portfolio, certain assets could be at risk for impairment.

~~Table~~ The company will complete any required asset recoverability assessments in connection with the preparation and review of ~~Contents~~the company’s

year-end

financial statements for inclusion in its 2021 Form

10-K.

Until these activities are complete, it is not practicable to reasonably estimate the existence or range of potential future impairments.

~~IMPERIAL OIL LIMITED~~

Third quarter 2021 vs. third quarter 2020

~~As disclosed in Imperial’s 2019 Form~~

~~10-K,~~

~~low crude oil and natural gas prices can impact the company’s estimates~~The company recorded net income of ~~proved reserves as reported under U.S. Securities and Exchange Commission (SEC) rules. Imperial’s average~~

~~year-to-date~~

~~realizations for crude oil have been significantly affected by low prices since the end of the first quarter. Similar to downward revisions of proved bitumen reserves at~~

~~year-end~~

~~2016 that resulted from low prices, if average prices remain near current levels, under the SEC definition of proved reserves, certain quantities that qualified as proved reserves at~~

~~year-end~~

~~2019, primarily proved bitumen reserves at Kearl (totalling approximately 60 percent of the company’s 3.5 billion~~

~~oil-equivalent~~

~~barrels of net proved reserves), will not qualify as proved reserves at~~

~~year-end~~

~~2020. Proved reserves estimates can be impacted by~~$908 million or $1.29 per share on a ~~number of factors including completion and optimization of development projects, reservoir performance, regulatory approvals, government policies, consumer preferences, changes~~diluted basis in the amount and timing of capital investments, royalty framework, and significant changes in long-term oil and gas price levels. The company does not expect the operation of the underlying projects or its outlook for future production volumes to be affected by a possible downward revision of reported proved reserves under the SEC definition.

~~In the second~~third quarter of ~~2020, Canadian federal and provincial governments introduced plans and programs to support business and economic activities~~2021, up from net income of $3 million or $0.00 per share in ~~response to~~ the ~~disruptive impacts from the~~

~~COVID-19~~

~~pandemic. The Government~~same period of ~~Canada implemented the Canada Emergency Wage Subsidy (CEWS) as part of its~~

~~COVID-19~~2020.

Economic Response Plan, and has recently announced its intent to extend the CEWS until June 2021. The company received wage subsidies under this program and, if eligible, intends to continue to apply for these wage subsidies. Additionally, the Government of Alberta announced its Recovery Plan, including a proposed acceleration of the Alberta corporate income tax rate decrease originally legislated in 2019. If enacted, the Alberta corporate income tax rate would be reduced to eight percent beginning July 1, 2020, compared with a previously legislated reduction to eight percent beginning January 1, 2022. The proposed corporate income tax rate change is not expected to have a significant impact on the company’s financial statements.

~~The company has taken steps, in line with federal and provincial guidelines and restrictions, to limit the spread of~~

~~COVID-19~~

among employees, contractors and the broader community, while also maintaining operations to ensure reliable supply of products to customers as a provider of essential services. The company maintains robust business continuity plans, which have been activated to minimize the impact of

~~COVID-19~~

~~on workforce productivity.~~

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IMPERIAL OIL LIMITED

~~Operating results~~

~~Third quarter 2020 vs. third quarter 2019~~

~~The company~~Upstream recorded net income of $3$524 million ~~or $0.00 per share on a diluted basis~~ in the third quarter of ~~2020,~~2021, compared to ~~net income of $424 million or $0.56 per share in the same period of 2019.~~

~~Upstream recorded~~ a net loss of $74 million in the ~~third quarter of 2020, compared to net income of $209 million in the~~ same period of ~~2019. Results were negatively impacted by lower~~2020. Improved results reflect higher realizations of about ~~$490~~$730 million and ~~lower~~higher volumes of about ~~$110~~$350 million. These items were partially offset by ~~lower royalties of about $150 million and lower~~higher operating expenses of about ~~$130~~$210 million, higher royalties of about $190 million and unfavourable foreign exchange impacts of about $60 million.

West Texas Intermediate (WTI) averaged US$~~40.93~~70.52 per barrel in the third quarter of ~~2020, down~~2021, up from US$~~56.44~~40.93 per barrel in the same quarter of ~~2019.~~2020. Western Canada Select (WCS) averaged US$~~31.81~~57.08 per barrel and US$~~44.21~~31.81 per barrel for the same periods. The WTI / WCS differential averaged approximately US$913 per barrel for the third quarter of ~~2020, compared to~~2021, up from around US$129 in the same period of ~~2019.~~2020.

The Canadian dollar averaged US$~~0.75~~0.79 in the third quarter of ~~2020, a decrease~~2021, an increase of US$~~0.01~~0.04 from the third quarter of ~~2019.~~2020.

Imperial’s average Canadian dollar realizations for bitumen ~~decreased~~increased in the quarter, ~~primarily due to a decrease~~generally in line with WCS. Bitumen realizations averaged $60.44 per barrel in the third quarter of 2021, up from $35.95 per barrel in the third quarter of ~~2020, compared to $51.12 per barrel in the third quarter of 2019.~~2020. The company’s average Canadian dollar realizations for synthetic crude ~~decreased~~increased generally in line with WTI, adjusted for changes in exchange rates and transportation costs. Synthetic crude realizations averaged ~~$50.79~~$85.94 per barrel in the third quarter of ~~2020, compared to $77.27~~2021, up from $50.79 per barrel in the same period of ~~2019.~~2020.

Total gross production of Kearl bitumen averaged ~~189,000~~274,000 barrels per day in the third quarter ~~(134,000~~(194,000 barrels Imperial’s share), ~~compared to 224,000~~up from 189,000 barrels per day ~~(159,000~~(134,000 barrels Imperial’s share) in the third quarter of ~~2019. Lower~~2020. Higher production was ~~due to~~primarily driven by the ~~advancement and extension~~absence of a prior year third-party pipeline outage, market-demand production balancing, and impacts associated with planned turnaround ~~at the site and a third-party pipeline outage.~~activities.

Gross production of Cold Lake bitumen averaged ~~131,000~~135,000 barrels per day in the third quarter, ~~compared to 142,000~~up from 131,000 barrels per day in the same period of ~~2019. Lower production was mainly due to production timing associated with steam management.~~2020.

The company’s share of gross production from Syncrude averaged ~~67,000~~78,000 barrels per day, ~~compared to 69,000~~up from 67,000 barrels per day in the third quarter of ~~2019.~~2020. Higher production was primarily driven by the absence of the prior year turnaround.

Downstream recorded net income of ~~$77~~$293 million in the third quarter of ~~2020,~~2021, compared to net income of ~~$221~~$77 million in the same period of ~~2019. Results were negatively impacted by lower~~2020. Improved results primarily reflect higher margins of about ~~$230 million and lower sales volumes of about $70~~$280 million. These items were offset by lower operating expenses of about $70 million, and improved reliability of about $50 million, primarily related to the absence of the Sarnia fractionation tower incident which occurred in April 2019.

Refinery throughput averaged ~~341,000~~404,000 barrels per day, ~~compared to 363,000~~up from 341,000 barrels per day in the third quarter of ~~2019.~~2020. Capacity utilization was 8194 percent, ~~compared to 86~~up from 81 percent in the third quarter of ~~2019. Reduced~~2020. Higher throughput was ~~due to lower market demand, partially offset~~driven by ~~reduced planned maintenance.~~increased demand.

Petroleum product sales were ~~449,000~~485,000 barrels per day, ~~compared to 488,000~~up from 449,000 barrels per day in the third quarter of ~~2019. Lower~~2020. Improved petroleum product sales were mainly due to ~~reduced demand from the~~

~~COVID-19~~increased demand.

~~pandemic.~~

Chemical net income was ~~$27~~$121 million in the third quarter, ~~compared to $38~~up from $27 million in the same quarter of ~~2019.~~2020, primarily due to higher polyethylene margins.

Corporate and other expenses were ~~$27~~$30 million in the third quarter, ~~compared to $44~~up from $27 million in the same period of ~~2019.~~2020.

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IMPERIAL OIL LIMITED

Nine months ~~2020~~2021 vs. nine months ~~2019~~2020

Net ~~loss~~income in the first nine months of ~~2020~~2021 was ~~$711~~$1,666 million, or ~~$0.97~~$2.31 per share on a diluted basis, compared to a net ~~income~~loss of ~~$1,929~~$711 million or ~~$2.51~~$0.97 per share in the first nine months of ~~2019. Current year results include a favourable impact of about $90 million~~

~~after-tax,~~2020.

~~associated with the Canada Emergency Wage Subsidy (CEWS), which includes Imperial’s proportionate share of a joint venture.~~

~~Year-to-date~~

~~2019 results included a favourable impact of $662 million associated with the Alberta corporate income tax rate decrease.~~

Upstream recorded a net ~~loss~~income of ~~$1,126~~$850 million for the first nine months of the year, compared to a net ~~income~~loss of ~~$1,252~~$1,126 million in ~~the same period of 2019. Results were negatively impacted by lower~~2020. Improved results reflect higher realizations of about ~~$2,330~~$2,570 million ~~absence of a favourable impact of $689 million associated with the Alberta corporate income tax rate decrease in 2019,~~ and ~~lower~~higher volumes of about ~~$300~~$620 million. These items were partially offset by ~~lower~~higher royalties of about ~~$460~~$490 million, ~~lower~~higher operating expenses of about ~~$320~~$490 million, ~~favourable~~and unfavourable foreign exchange impacts of about ~~$120 million and about $60 million associated with the CEWS received by the company which includes Imperial’s proportionate share of a joint venture.~~$180 million.

West Texas Intermediate averaged US$~~38.10~~65.04 per barrel in the first nine months of ~~2020, down~~2021, up from US$~~57.10~~38.10 per barrel in ~~the same period of 2019.~~2020. Western Canada Select averaged US$~~24.72~~52.45 per barrel and US$~~45.32~~24.72 per barrel for the same periods. The WTI / WCS differential ~~widened to average~~of approximately US$13 per barrel in the first nine months of ~~2020, from around US$12 per barrel~~2021, was generally in line with the same period of ~~2019.~~2020.

The Canadian dollar averaged US$~~0.74~~0.80 in the first nine months of ~~2020, a decrease~~2021, an increase of US$~~0.01~~0.06 from ~~the same period in 2019.~~2020.

Imperial’s average Canadian dollar realizations for bitumen ~~decreased~~increased in the first nine months of ~~2020 primarily due to a decrease~~2021, generally in line with WCS. Bitumen realizations averaged $55.30 per barrel, up from $22.24 per barrel ~~compared to $52.44 per barrel from~~in the same period ~~in 2019.~~of 2020. The company’s average Canadian dollar realizations for synthetic crude ~~decreased~~increased generally in line with WTI, ~~in the first nine months of 2020,~~ adjusted for changes in exchange rates and transportation costs. Synthetic crude realizations averaged $77.62 per barrel, up from $49.06 per barrel ~~compared to $74.59 per barrel from~~in the same period ~~in 2019.~~of 2020.

Total gross production of Kearl bitumen averaged ~~202,000~~260,000 barrels per day in the first nine months of ~~2020 (143,000~~2021 (185,000 barrels Imperial’s share), ~~down~~up from ~~204,000~~202,000 barrels per day ~~(145,000~~(143,000 barrels Imperial’s share) in the same period of ~~2019. Lower~~2020. Higher production was ~~mainly due to~~primarily driven by the absence of prior year production balancing ~~of near-term production~~ with ~~demand through~~market demands and the ~~advancement and extension~~outage of ~~planned turnaround activities and~~ a third-party ~~pipeline outage, partially offset by the addition of supplemental crushing facilities in 2020.~~pipeline.

Gross production of Cold Lake bitumen averaged ~~131,000~~139,000 barrels per day in the first nine months of ~~2020, compared to 141,000~~2021, up from 131,000 barrels per day in the same period of ~~2019. Lower production was mainly due to production timing associated with steam management.~~2020.

During the first nine months of ~~2020,~~2021, the company’s share of gross production from Syncrude averaged ~~63,000~~68,000 barrels per day, ~~compared to 76,000~~up from 63,000 barrels per day in the same period of ~~2019. Lower production was mainly due to the balancing of near term production with demand.~~2020.

Downstream net income was ~~$447~~$645 million ~~compared to $736~~for the first nine months of the year, up from $447 million in the same period of ~~2019.~~2020. Results ~~were negatively impacted by lower~~have improved due to higher margins of about ~~$460~~$330 million, ~~and lower sales volumes~~partially offset by unfavourable foreign exchange impacts of about ~~$220~~$120 million. These items were offset by improved reliability of $200 million, primarily due to the absence of the Sarnia fractionation tower incident which occurred in April 2019, lower operating expenses of $140 million and lower turnaround costs of $70 million primarily related to reduced turnaround activity in the current year.

Refinery throughput averaged ~~334,000~~367,000 barrels per day in the first nine months of ~~2020, compared to 363,000~~2021, up from 334,000 barrels per day in the same period of ~~2019.~~2020. Capacity utilization was 7986 percent, ~~compared to 86~~up from 79 percent in the same period of ~~2019. Lower~~2020. Higher throughput was ~~primarily due to~~driven by reduced ~~demand from~~impacts associated with the

COVID-19

pandemic, partially offset by ~~the absence of impacts from the Sarnia fractionation tower incident which occurred in April 2019.~~

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~~IMPERIAL OIL LIMITED~~

a planned turnaround at Strathcona.

Petroleum product sales were ~~423,000~~442,000 barrels per day in the first nine months of ~~2020, compared to 481,000~~2021, up from 423,000 barrels per day in the same period of ~~2019. Lower~~2020. Improved petroleum product sales were mainly due to reduced ~~demand resulting from~~impacts associated with the

COVID-19

pandemic.

Chemical net income was ~~$55~~$297 million in the first nine months of ~~2020, compared to $110~~2021, up from $55 million in the same period of ~~2019. Results were negatively impacted by lower margins of about $60 million.~~2020, primarily due to higher polyethylene margins.

Corporate and other expenses were ~~$87~~$126 million in the first nine months of ~~2020, compared to $169~~2021, up from $87 million in the same period of ~~2019,~~2020, mainly due to ~~lower~~higher share-based compensation costs.

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Liquidity and capital resources

Cash flow generated from operating activities was ~~$875~~$1,947 million in the third quarter, ~~compared with cash flow generated~~up from ~~operating activities of $1,376~~$875 million in the corresponding period in ~~2019,~~2020, primarily reflecting ~~lower~~higher Upstream realizations ~~in the Upstream~~ and ~~lower margins in the Downstream.~~Downstream margins.

Investing activities used net cash of ~~$125~~$259 million in the third quarter, compared with ~~$413~~$125 million used in the same period of ~~2019, primarily reflecting lower additions~~2020. Full-year 2021 capital and exploration expenditures are now expected to ~~property, plant and equipment.~~be around $1.1 billion, down from previous guidance of $1.2 billion.

Cash used in financing activities was ~~$166~~$589 million in the third quarter, compared with ~~$519~~$166 million used in the third quarter of ~~2019.~~2020. Dividends paid in the third quarter of ~~2020~~2021 were ~~$162~~$195 million. The per share dividend paid in the third quarter was ~~$0.22, consistent with $0.22 in~~$0.27, an increase of $0.05 from the same period of ~~2019. The company did not purchase shares during the third quarter. In~~2020. During the third quarter, ~~of 2019,~~ the company, under its share purchase program, purchased about ~~9.8~~9.0 million shares for ~~$343~~$313 million, including shares purchased from Exxon Mobil Corporation. In the third quarter of 2020, the company did not purchase any shares under its share purchase program.

The company’s cash balance was ~~$817~~$1,875 million at September 30, ~~2020,~~2021, versus ~~$1,531~~$817 million at the end of third quarter ~~2019.~~2020.

Cash flow generated from operating activities was ~~$482~~$3,844 million in the first nine months of ~~2020, compared with cash flow generated~~2021, up from ~~operating activities of $3,405~~$482 million in the same period of ~~2019,~~2020, primarily reflecting ~~lower~~higher Upstream realizations ~~in the Upstream~~ and ~~unfavourable working capital impacts.~~Downstream margins.

Investing activities used net cash of ~~$605~~$613 million in the first nine months of ~~2020, compared with $1,305~~2021, up from $605 million used in the same period of ~~2019, primarily reflecting lower additions~~2020. Full-year 2021 capital and exploration expenditures are now expected to ~~property, plant and equipment.~~be around $1.1 billion, down from previous guidance of $1.2 billion.

Cash used in financing activities was ~~$778~~$2,127 million in the first nine months of ~~2020, compared with $1,557~~2021, up from $778 million used in the same period of ~~2019.~~2020. Dividends paid in the first nine months of ~~2020~~2021 were ~~$488~~$518 million. The per share dividend paid in the first nine months of ~~2020~~2021 was ~~$0.66,~~$0.71, up from ~~$0.60~~$0.66 in the same period of ~~2019.~~2020. During the first nine months of ~~2020,~~2021, the company, under its share purchase program, purchased about ~~9.8~~38.5 million shares for ~~$274 million.~~$1,484 million, including shares purchased from Exxon Mobil Corporation. In the first nine months of ~~2019,~~2020, the company purchased about ~~29.6~~9.8 million shares for ~~$1,072 million.~~

~~During the second quarter of 2020, in addition to existing credit facilities of $500~~$274 million, the company entered into a $500 million committed short-term line of credit to May 2021, and a $300 million committed short-term line of credit to June 2021. The company has not drawn on any of its credit facilities.

On June 23, 2020, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a limited normal course issuer bid. The program is used primarily to eliminate dilution fromincluding shares issued in conjunction with Imperial’s restricted stock unit plan, and enables the company to purchase up to a maximum of 50,000 common shares during the period June 29, 2020 to June 28, 2021. This maximum includes shares purchased ~~under the normal course issuer bid and~~ from Exxon Mobil ~~Corporation concurrent with, but outside~~Corporation.

At March 31, 2021, due to the termination of ~~the normal course issuer bid. As in the past, Exxon Mobil Corporation has advised~~transportation services agreements related to a third-party pipeline project, the company ~~that it intends~~recognized a liability of $62 million, previously reported as a contingent liability in Note 10 of Imperial’s Form

10-K.

In connection with the same project, commitments under “Other long-term purchase agreements” as reported in Imperial’s Form

10-K

decreased by approximately $2.9 billion. The majority of these commitments related to ~~participate to maintain its ownership percentage at approximately 69.6 percent. The program will end should the company purchase the maximum allowable number of shares, or on June 28, 2021.~~

years 2026 and beyond.

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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 release include, but are not limited to, references to the use of derivative instruments and effectiveness of risk mitigation; ~~market~~the variety of potential transition pathways for society to a lower-carbon future indicating a wide range of uncertainty for types and demand levels of energy; the company’s efforts with respect to climate risk, including the evaluation of climate risk in the context of overall enterprise risk and the ~~extent~~ability to pursue a strategy resilient to a wide range of pathways for society’s energy transition while growing shareholder value; progress on greenhouse gas emission reduction plans and ~~length of ongoing effects of~~efforts to position the

~~COVID-19~~

~~pandemic on economic activity; previously announced expense reduction target~~ company for success in a lower-carbon energy future; and the ~~adjusted expected full year~~company’s role in providing products critical to economic growth, minimizing environmental impacts and supporting society’s ambition to achieve a lower-carbon energy future; plans for purchases under the amended share purchase program; and full-year capital and exploration expenditures of ~~about $900 million~~$1.1 billion for 2020; the company’s view of long-term supply and demand fundamentals; the impacts of future reductions in long-term price outlooks, including impairment of long-lived assets; the impact of current low oil and natural gas prices on proved reserves under SEC rules, including the possible downward revision of proved bitumen reserves; the intention to continue applying for the Canada Emergency Wage Subsidy; the impact of the Government of Alberta acceleration of corporate income tax rate decrease; and the impact of measures implemented in response to

~~COVID-19.~~2021.

Forward-looking statements are based on the company’s 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; commodity prices, foreign exchange rates and general market conditions; production rates, growth and mix; project plans, timing, costs, technical evaluations and capacities and the company’s ability to effectively execute on these plans and operate its assets; the adoption and impact of new facilities, technologies or products, including on reductions to greenhouse gases; plans to mitigate climate risk and the resilience of company strategy to a range of pathways for society’s energy transition; applicable laws and government policies, including restrictions in response to

COVID-19

and environmental regulation; progression of

COVID-19

and its impacts on Imperial’s ability to operate its assets, including the possible shutdown of facilities due to

COVID-19

outbreaks; the company’s ability to effectively execute on its business continuity plans and pandemic response activities; the ability of the company to achieve cost savings and adjust maintenance work; the performance of third-party service providers, including diluent supply by pipeline to Kearl; the adoption and impact of new facilities or technologies, including on reductions to greenhouse gas emissions intensity; refinery utilization and product sales; applicable laws and government policies, including production curtailment and restrictions in response to

~~COVID-19;~~

~~financing sources and capital structure, including the ability to issue long-term debt;~~ and capital and environmental expenditures 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 and the impact of

COVID-19

on demand; ~~general economic conditions;~~ availability and allocation of capital; ~~currency exchange rates; transportation for accessing markets;~~ political or regulatory events, including changes in law or government policy such as tax laws, production curtailment and actions in response to

COVID-19;

~~availability~~environmental regulation, including climate change and ~~performance of third-party service providers, including~~greenhouse gas regulation and changes to such regulation; environmental risks inherent in ~~light of restrictions related to~~

~~COVID-19;~~

oil and gas exploration and production activities; management effectiveness and disaster response preparedness, including business continuity plans in response to

COVID-19;

~~environmental risks inherent in oil and gas exploration and production activities; environmental regulation, including climate change and greenhouse gas regulation and changes to such regulation;~~ unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; ~~the receipt, in a timely manner, of regulatory and third-party approvals;~~ the results of research programs and new technologies, and ability to bring new technologies to commercial scale on a cost-competitive basis; operational hazards and risks; ~~cybersecurity incidents, including increased reliance on remote working arrangements~~the receipt, in a timely manner, of regulatory and ~~activation of business continuity plans due to~~

~~COVID-19;~~

third-party approvals; currency exchange rates; general economic conditions; and other factors discussed in Item 1A risk factors and Item 7 management’s discussion and analysis of financial condition and results of operations of Imperial Oil Limited’s most recent annual report on Form

10-K

and subsequent interim reports on Form

10-Q.

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. Imperial’s 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.

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.

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IMPERIAL OIL LIMITED

Item 3.

Quantitative and qualitative disclosures about market risk

Information about market risks for the nine months ended September 30, ~~2020,~~2021, does not differ materially from that discussed on page 2732 of the company’s annual report on Form

10-K

for the year ended December 31, ~~2019~~2020 and on page 2624 of the Form

10-Q

for the quarter ended June 30, ~~2020.~~2021.

Item 4.

Controls and procedures

As indicated in the certifications in Exhibit 31 of this report, the company’s principal executive officer and principal financial officer have evaluated the company’s disclosure controls and procedures as of September 30, ~~2020.~~2021. Based on that evaluation, these officers have concluded that the company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. There has not been any change in the company’s internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

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IMPERIAL OIL LIMITED

PART II. OTHER INFORMATION

Item 1.

Legal proceedings

On October 20, 2020, Imperial was issued a Notice of Intention to Issue an Environmental Penalty Order by the Ontario Ministry of the Environment, Conservation and Parks under the Ontario Environmental Protection Act, R.S.O. 1990, c. E.19. The Notice of Intention contains 10 alleged contraventions at Imperial’s refinery in Sarnia, Ontario for discharging more than 225 kilograms of sulphur dioxide in a

~~24-hour~~

period from acid combustion equipment between July, 2019 and October, 2019, pursuant to section 5(1) of Ontario Regulation 530/18 Air Pollution – Discharge of Sulphur Dioxide from Petroleum Facilities. The Notice of Intention proposes a total administrative penalty amount of $977,145, and is subject to possible reductions upon review. Imperial is evaluating the possibility of an appeal of a final environmental penalty order.

~~Item 1A.~~

~~Risk factors~~

~~The risk factors that are discussed in Item 1A of the company’s annual report on Form~~

~~10-K~~

Imperial has elected to use a $1 million threshold for the year ended December 31, 2019 reference risk factors related to commodity supply and demand, and public health. These risk factors encompass, among other things, production oversupply, as a result of increased production in key producing countries as well as demand reduction due to the

~~COVID-19~~

~~pandemic that was characterized as a global pandemic in March, 2020, and have led to volatility in commodity prices.~~

~~As a result of~~

~~COVID-19,~~

~~governments in many countries have mandated quarantines, closures,~~

~~stay-at-home~~

~~orders and travel restrictions that have had a significant impact on demand for the company’s products. While these effects are expected to be temporary, a resurgence of cases of~~

~~COVID-19~~

~~leads to a highly uncertain business environment. Although there has been some movement toward~~

~~pre-pandemic~~

activity levels, the duration of the business disruptions internationally and related financial impact cannot be reasonably estimated at this time and continued or new restrictions could continue to impact the demand for products.

Imperial’s future business results, including cash flows and financing needs, will be affected by the extent and duration of these conditions and the effectiveness of responsive actions that the company and others take, including our actions to reduce capital and operating expenses and government actions to address the

~~COVID-19~~

~~pandemic. The impact of~~

~~COVID-19~~

could also have an effect on the financial markets and result in an increase to the cost of capital due to risk. The company’s results will also be affected by any resulting negative impacts on national and global economies and markets from a prolonged decrease of economic activity.

~~The company has had positive~~

~~COVID-19~~

cases at its operating sites that have not had a material impact on its operations or business. However, if the company’s mitigation and response efforts prove insufficient, large outbreaks of epidemics, pandemics or other health crises such as

~~COVID-19~~

at operating sites, particularly in remote locations and where work camps are utilized, could impact the company’s personnel and its operations. The company could also be impacted by disruption to supply chains, methods of distribution and key third-party service providers, which could impact the ability to produce or sell its products, as well as increasing the costs associated with its operations and decreasing revenues and margins.

The company has initiated numerous emergency response and business continuity plans, and a substantial portion of the company’s workforce has implemented remote working arrangements. If the company is not able to effectively operate and manage through these plans and alternative arrangements, the negative impacts could include reduced productivity and increased costs.

~~The~~

~~COVID-19~~

pandemic continues to evolve, with an increase of cases in many areas and the potential for additional public health restrictions. The evolution of the pandemic remains highly uncertain, and it is difficult to predict the ultimate impact of it or the timing of any resolution of the current supply imbalances. We continue to monitor market developments and evaluate the impacts of decreased demand on our production levels, as well as impacts on project development and future production.

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~~IMPERIAL OIL LIMITED~~

disclosing environmental proceedings.

Item 2.

Unregistered sales of equity securities and use of proceeds

Issuer purchases of equity securities

Total number of
shares purchased


	Total number of shares purchased		Average price paid per share (Canadian dollars)		Total number of shares purchased as part of publicly announced plans or programs		Maximum number of shares that may yet be purchased under the plans or programs (a)

July 2021
(July 1 - July 31)		2,988,970		35.22		2,988,970		32,452,369
August 2021
(August 1 - August 31)		2,988,983		33.38		2,988,983		29,463,386
September 2021
(September 1 - September 30)		2,989,039		35.94		2,989,039		26,474,347

Average price paid
per share

~~(Canadian dollars)~~

Total number of
shares purchased
as part of publicly
announced plans
or programs

Maximum number
of shares that may
yet be purchased
under the plans or
programs

~~(a)~~

~~July 2020~~

~~(July 1 - July 31)~~

~~50,000~~

~~August 2020~~

~~(August 1 - August 31)~~

~~50,000~~

~~September 2020~~

~~(September 1 - September 30)~~

~~50,000~~

(a)

On June 23, ~~2020,~~2021, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a ~~limited~~new normal course issuer ~~bid.~~bid and will continue its existing share purchase program. The program ~~is used primarily to eliminate dilution from shares issued in conjunction with Imperial’s restricted stock unit plan, and~~ enables the company to purchase up to a maximum of ~~50,000~~35,583,671 common shares during the period June 29, ~~2020~~2021 to June 28, ~~2021.~~2022. This maximum includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. As in the past, Exxon Mobil Corporation has advised the company that it intends to participate to maintain its ownership percentage at approximately 69.6 percent. The program will end should the company purchase the maximum allowable number of shares, or on June 28, ~~2021.~~2022.

The company will continue to evaluate its share purchase program in the context of its overall capital activities. Purchase plans may be modified at any time without prior notice.

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IMPERIAL OIL LIMITED

Item 6.

Exhibits

(31.1) Certification by the principal executive officer of the company pursuant to Rule

13a-14(a).

(31.2) Certification by the principal financial officer of the company pursuant to Rule

13a-14(a).

(32.1) Certification by the chief executive officer of the company pursuant to Rule

13a-14(b)

and 18 U.S.C. Section 1350.

(32.2) Certification by the chief financial officer of the company pursuant to Rule

13a-14(b)

and 18 U.S.C. Section 1350.

(101) Interactive Data Files (formatted as Inline XBRL).

(104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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IMPERIAL OIL LIMITED

~~Item 6.~~

~~Exhibits~~

~~(31.1)~~ ~~Certification by the principal executive officer of the company pursuant to Rule~~

~~13a-14(a).~~

~~(31.2)~~ ~~Certification by the principal financial officer of the company pursuant to Rule~~

~~13a-14(a).~~

~~(32.1)~~ ~~Certification by the chief executive officer of the company pursuant to Rule~~

~~13a-14(b)~~

~~and 18 U.S.C. Section 1350.~~

~~(32.2)~~ ~~Certification by the chief financial officer of the company pursuant to Rule~~

~~13a-14(b)~~

~~and 18 U.S.C. Section 1350.~~

~~(101) Interactive Data Files (formatted as Inline XBRL).~~

~~(104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).~~

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~~IMPERIAL OIL LIMITED~~

SIGNATURES

Pursuant to the requirements of the

Securities Exchange Act

of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				Imperial Oil Limited (Registrant)

Date: November ~~4, 2020~~3, 2021				/s/ Daniel E. Lyons ---------------------------------------------------
				(Signature)
				Daniel E. Lyons
				Senior vice-president, finance and administration, and controller (Principal accounting officer)



Date: November ~~4, 2020~~3, 2021				/s/ Cathryn Walker ---------------------------------------------------
				(Signature)
				Cathryn Walker
				Assistant corporate secretary

2927


	As at		As at
	Sept 30		Dec 31
millions of Canadian dollars	2020		2019
Employee retirement benefits (a)		1,965		1,822
Asset retirement obligations and other environmental liabilities (b)		1,388		1,388
Share-based incentive compensation liabilities		33		65
Operating lease liability (c)		95		143
Other obligations		232		219
Total other long-term obligations		3,713		3,637


thousands of shares	As of Sept 30 2020		As of Dec 31 2019
Authorized		1,100,000		1,100,000
Common shares outstanding		734,077		743,902

(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)