UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~FORM~~

~~10-Q~~

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2022~~2023

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

___ to

___

Commission file number

0-12014

IMPERIAL OIL LIMITED

(Exact name of registrant as specified in its charter)


CACanada~~NADA~~						98-0017682
(State or other jurisdiction						(I.R.S. Employer
of incorporation or organization)						Identification No.)

505 Quarry Park Boulevard S.E. Calgary, Alberta, Canada						T2C 5N1
(Address of principal executive offices)						(Postal Code)

1-800-567-3776

(Registrant’s telephone number, including area code)

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

Title of each class

Trading symbol

Name of each exchange on

which registered

None

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

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

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 ~~file~~

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.��

___

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act of 1934).

~~YES~~

✓


Yes						No			✓

The number of common shares outstanding, as of June 30, ~~2022~~2023 was ~~636,676,182.~~584,152,718.

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

~~Table of contents~~


			IMPERIAL OIL LIMITED

Table of contents

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, ~~2021.~~2022. 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

~~IMPERIAL OIL LIMITED~~

PART I. FINANCIAL INFORMATION

Item 1. Financial statements

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


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Revenues and other income
Revenues (a)	11,764	17,285	23,821	29,942
Investment and other income (note 3)	55	22	119	51
Total revenues and other income	11,819	17,307	23,940	29,993

Expenses
Exploration	1	1	2	3
Purchases of crude oil and products (b)	7,856	11,021	15,334	19,371
Production and manufacturing (c)	1,785	1,908	3,541	3,567
Selling and general (c)	206	191	392	416
Federal excise tax and fuel charge	598	553	1,127	1,032
Depreciation and depletion	453	451	943	877
Non-service pension and postretirement benefit	20	5	40	9
Financing (d) (note 5)	16	11	32	18
Total expenses	10,935	14,141	21,411	25,293

Income (loss) before income taxes	884	3,166	2,529	4,700

Income taxes	209	757	606	1,118

Net income (loss)	675	2,409	1,923	3,582

Per share information (Canadian dollars)
Net income (loss) per common share - basic (note 9)	1.16	3.63	3.29	5.37
Net income (loss) per common share - diluted (note 9)	1.15	3.63	3.29	5.36
(a) Amounts from related parties included in revenues.	3,556	5,175	6,692	9,134
(b) Amounts to related parties included in purchases of crude oil and products.	964	1,129	2,042	1,779
(c) Amounts to related parties included in production and manufacturing, and selling and general expenses.	125	116	260	234
(d) Amounts to related parties included in financing.	41	13	80	17

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


			IMPERIAL OIL LIMITED

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

            Six Months
       Second Quarter          to June 30
millions of Canadian dollars

2022
         2021
2022
   2021
Revenues and other income

Revenues
(a)


17,285

8,007

29,942

14,999
Investment and other income
(note 3)


22

40

51

46
Total revenues and other income


17,307

     8,047

29,993

     15,045

Expenses

Exploration

1

     2

3

     4
Purchases of crude oil and products
(b)


11,021

   4,867

19,371

   8,754
Production and manufacturing
(c)


1,908

   1,569

3,567

     3,054
Selling and general
(c)


191

200

416

     389
Federal excise tax and fuel charge

553

     465

1,032

     869
Depreciation and depletion

451

450

877

     944
Non-service
pension and postretirement benefit


5

10

9

21
Financing
(d) (note 5)


11

13

18

27
Total expenses


14,141

     7,576

25,293

14,062

Income (loss) before income taxes


3,166

471

4,700

983

Income taxes


757

   105

1,118

     225

Net income (loss)


2,409

   366

3,582

     758

Per share information
(Canadian dollars)


Net income (loss) per common share - basic
(note 9)


3.63

   0.51

5.37

1.04
Net income (loss) per common share - diluted
(note 9)


3.63

0.50

5.36

     1.04
(a) Amounts from related parties included in revenues.

5,175

     1,405

9,134

2,913
(b) Amounts to related parties included in purchases of crude oil and products.

1,129

   666

1,779

1,181
(c) Amounts to related parties included in production and manufacturing, and selling and general expenses.

116

   106

234

222
(d) Amounts to related parties included in financing (note 5).

13

     10

17

21

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

~~Table of Contents~~


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Net income (loss)	675	2,409	1,923	3,582

Other comprehensive income (loss), net of income taxes
Postretirement benefits liability adjustment (excluding amortization)	—	—	21	24

Amortization of postretirement benefits liability adjustment included in net benefit costs	10	21	20	42
Total other comprehensive income (loss)	10	21	41	66

Comprehensive income (loss)	685	2,430	1,964	3,648

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

~~IMPERIAL OIL LIMITED~~

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

        Six Months
   Second Quarter      to June 30
millions of Canadian dollars


2022

   2021

2022

   2021
Net income (loss)


2,409

     366

3,582

   758

Other comprehensive income (loss), net of income taxes
Postretirement benefits liability adjustment (excluding amortization)

-

     -

24

54

Amortization of postretirement benefits liability adjustment included in net benefit costs

21

     33

42

   66
Total other comprehensive income (loss)


21

     33

66

     120

Comprehensive income (loss)


2,430

     399

3,648

   878

~~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)


millions of Canadian dollars	As at June 30 2023	As at Dec 31 2022
Assets
Current assets
Cash and cash equivalents	2,376	3,749
Accounts receivable - net (a)	4,585	4,719
Inventories of crude oil and products	1,460	1,514
Materials, supplies and prepaid expenses	869	754
Total current assets	9,290	10,736
Investments and long-term receivables (b)	998	893
Property, plant and equipment,	55,424	54,568
less accumulated depreciation and depletion	(24,945)	(24,062)
Property, plant and equipment, net	30,479	30,506
Goodwill	166	166
Other assets, including intangibles - net	1,193	1,223
Total assets	42,126	43,524

Liabilities
Current liabilities
Notes and loans payable	122	122
Accounts payable and accrued liabilities (a) (note 7)	5,923	6,194
Income taxes payable	184	2,582
Total current liabilities	6,229	8,898
Long-term debt (c) (note 6)	4,022	4,033
Other long-term obligations (note 7)	3,418	3,467
Deferred income tax liabilities	4,629	4,713
Total liabilities	18,298	21,111

Shareholders’ equity
Common shares at stated value (d) (note 9)	1,079	1,079
Earnings reinvested	23,220	21,846
Accumulated other comprehensive income (loss) (note 10)	(471)	(512)
Total shareholders’ equity	23,828	22,413

Total liabilities and shareholders’ equity	42,126	43,524
(a) Accounts receivable - net included net amounts receivable from related parties of $1,029 million (2022 - $1,108 million).
(b) Investments and long-term receivables included amounts from related parties of $286 million (2022 - $288 million).
(c) Long-term debt included amounts to related parties of $3,447 million (2022 - $3,447 million).
(d) Number of common shares authorized and outstanding were 1,100 million and 584 million, respectively (2022 - 1,100 million and 584 million, respectively).

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

~~IMPERIAL OIL LIMITED~~

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

   As at      As at
   June 30      Dec 31
millions of Canadian dollars


2022

     2021
Assets

Current assets

Cash

2,867

     2,153
Accounts receivable - net
(a)


6,839

     3,869
Inventories of crude oil and products

1,394

     1,102
Materials, supplies and prepaid expenses

789

     689
Total current assets

11,889

     7,813
Investments and long-term receivables
(b)


754

     757
Property, plant and equipment,

57,222

     56,762
less accumulated depreciation and depletion

(26,256
)
     (25,522 )
Property, plant and equipment, net
(note 11)


30,966

     31,240
Goodwill

166

     166
Other assets, including intangibles - net

1,117

     806
Total assets


44,892

     40,782

Liabilities

Current liabilities
Notes and loans payable

122

     122
Accounts payable and accrued liabilities
(a) (note 7)


7,947

     5,184
Income taxes payable

2,018

     248
Total current liabilities

10,087

     5,554
Long-term debt
(c) (note 6)


5,044

     5,054
Other long-term obligations
(note 7)


3,453

     3,897
Deferred income tax liabilities

4,329

     4,542
Total liabilities


22,913

     19,047

Shareholders’ equity

Common shares at stated value
(d) (note 9)


1,177

     1,252
Earnings reinvested

21,913

     21,660
Accumulated other comprehensive income (loss)
(note 10)


(1,111
)
     (1,177 )
Total shareholders’ equity


21,979

     21,735

Total liabilities and shareholders’ equity


44,892

     40,782

~~(a)~~

~~Accounts receivable - net included net amounts receivable from related parties of $1,888 million (2021 - $1,031 million).~~

~~(b)~~

~~Investments and long-term receivables included amounts from related parties of $296 million (2021 - $298 million).~~

~~(c)~~

~~Long-term debt included amounts to related parties of $4,447 million (2021 - $4,447 million).~~

~~(d)~~

~~Number of common shares authorized and outstanding were 1,100 million and 637 million, respectively (2021 - 1,100 million and 678 million, respectively).~~

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

~~Table of Contents~~


			IMPERIAL OIL LIMITED

~~IMPERIAL OIL LIMITED~~

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


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Common shares at stated value (note 9)
At beginning of period	1,079	1,237	1,079	1,252
Share purchases at stated value	—	(60)	—	(75)
At end of period	1,079	1,177	1,079	1,177

Earnings reinvested
At beginning of period	22,837	22,171	21,846	21,660
Net income (loss) for the period	675	2,409	1,923	3,582
Share purchases in excess of stated value	—	(2,440)	—	(2,874)
Dividends declared	(292)	(227)	(549)	(455)
At end of period	23,220	21,913	23,220	21,913

Accumulated other comprehensive income (loss) (note 10)
At beginning of period	(481)	(1,132)	(512)	(1,177)
Other comprehensive income (loss)	10	21	41	66
At end of period	(471)	(1,111)	(471)	(1,111)

Shareholders’ equity at end of period	23,828	21,979	23,828	21,979

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

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

        Six Months
   Second Quarter      to June 30
millions of Canadian dollars


2022

2021

2022

2021
Common shares at stated value
(note 9)

At beginning of period

1,237

1,357

1,252

1,357
Share purchases at stated value

(60
)
(55 )

(75
)
(55 )
At end of period

1,177

1,302

1,177

1,302

Earnings reinvested

At beginning of period

22,171

22,281

21,660

22,050
Net income (loss) for the period

2,409

366

3,582

758
Share purchases in excess of stated value

(2,440
)
(1,116 )

(2,874
)
(1,116 )
Dividends declared

(227
)
(195 )

(455
)
(356 )
At end of period

21,913

21,336

21,913

21,336

Accumulated other comprehensive income (loss)
(note 10)

At beginning of period

(1,132
)
(1,902 )

(1,177
)
(1,989 )
Other comprehensive income (loss)

21

33

66

120
At end of period

(1,111
)
(1,869 )

(1,111
)
(1,869 )

Shareholders’ equity at end of period


21,979

20,769

21,979

20,769

~~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 cash flows (U.S. GAAP, unaudited)

~~IMPERIAL OIL LIMITED~~


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Operating activities
Net income (loss)	675	2,409	1,923	3,582
Adjustments for non-cash items:
Depreciation and depletion	453	451	943	877
(Gain) loss on asset sales (note 3)	(13)	(4)	(22)	(24)
Deferred income taxes and other	(15)	(149)	(71)	(480)
Changes in operating assets and liabilities:
Accounts receivable	(302)	(1,426)	134	(2,970)
Inventories, materials, supplies and prepaid expenses	420	(27)	(59)	(391)
Income taxes payable	(321)	853	(2,398)	1,312
Accounts payable and accrued liabilities	(48)	499	(303)	2,643
All other items - net (c)	36	76	(83)	47
Cash flows from (used in) operating activities	885	2,682	64	4,596

Investing activities
Additions to property, plant and equipment	(499)	(333)	(928)	(637)
Proceeds from asset sales (note 3) (b)	9	102	23	126

Loans to equity companies - net	1	1	2	2
Cash flows from (used in) investing activities	(489)	(230)	(903)	(509)

Financing activities


Finance lease obligations - reduction (note 6)	(6)	(6)	(11)	(11)
Dividends paid	(257)	(228)	(523)	(413)
Common shares purchased (note 9)	—	(2,500)	—	(2,949)
Cash flows from (used in) financing activities	(263)	(2,734)	(534)	(3,373)

Increase (decrease) in cash and cash equivalents	133	(282)	(1,373)	714
Cash and cash equivalents at beginning of period	2,243	3,149	3,749	2,153
Cash and cash equivalents at end of period (a)	2,376	2,867	2,376	2,867
(a) Cash equivalents are all highly liquid securities with maturity of three months or less.
(b) In the second quarter of 2022, a deposit of $94 million was received for the pending sale of XTO Energy Canada.
(c) Included contributions to registered pension plans.	(44)	(46)	(86)	(96)

Income taxes (paid) refunded.	(557)	(52)	(3,189)	(275)
Interest (paid), net of capitalization.	(16)	(10)	(37)	(22)

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

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

        Six Months
Inflow (outflow)
   Second Quarter      to June 30
millions of Canadian dollars


2022

2021

2022

2021
Operating activities

Net income (loss)

2,409

   366

3,582

   758
Adjustments for
non-cash
items:

Depreciation and depletion

451

   450

877

   944
(Gain) loss on asset sales
(note 3)


(4
)
   (24 )

(24
)
   (27 )
Deferred income taxes and other

(149
)
   76

(480
)
   136
Changes in operating assets and liabilities:
Accounts receivable

(1,426
)
   (775 )

(2,970
)
   (1,244 )
Inventories, materials, supplies and prepaid expenses

(27
)
   58

(391
)
   (101 )
Income taxes payable

853

   21

1,312

   42
Accounts payable and accrued liabilities

499

   655

2,643

   1,239
All other items - net
(c)


76

   25

47

   150
Cash flows from (used in) operating activities


2,682

   852

4,596

   1,897

Investing activities

Additions to property, plant and equipment

(333
)
   (241 )

(637
)
   (408 )
Proceeds from asset sales
(note 3) (b)


102

   35

126

   42
Loans to equity companies - net

1

   (1 )

2

   12
Cash flows from (used in) investing activities


(230
)
   (207 )

(509
)
   (354 )

Financing activities

Short-term debt - net

-

   -

-

   (36 )
Reduction in finance lease obligations
(note 6)


(6
)
   (4 )

(11
)
   (8 )
Dividends paid

(228
)
   (161 )

(413
)
   (323 )
Common shares purchased
(note 9)


(2,500
)
   (1,171 )

(2,949
)
   (1,171 )
Cash flows from (used in) financing activities


(2,734
)
   (1,336 )

(3,373
)
   (1,538 )

Increase (decrease) in cash


(282
)
   (691 )

714

   5
Cash at beginning of period


3,149

   1,467

2,153

   771
Cash at end of period
(a)


2,867

   776

2,867

   776
(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 $94 million deposit for the potential sale of XTO Energy Canada (note 11).
(c) Included contributions to registered pension plans.

(46
)
   (42 )

(96
)
   (70 )

Income taxes (paid) refunded.

(52
)
   27

(275
)
   28
Interest (paid), net of capitalization.

(10
)
   (14 )

(22
)
   (27 )

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

~~Table of Contents~~


			IMPERIAL OIL LIMITED

~~IMPERIAL OIL LIMITED~~

Notes to consolidated financial statements (unaudited)

1.	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 ~~2021~~2022 annual report on Form

10-K.

In the opinion of the company, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature.

The company’s exploration and production activities are accounted for under the “successful efforts” method.

The results for the six months ended June 30, ~~2022,~~2023, are not necessarily indicative of the operations to be expected for the full year.

All amounts are in Canadian dollars unless otherwise indicated.

~~Table of Contents~~


			IMPERIAL OIL LIMITED

2. Business segments


Second Quarter	Upstream		Downstream		Chemical
millions of Canadian dollars	2023	2022	2023	2022	2023	2022
Revenues and other income
Revenues (a) (b)	61	119	11,355	16,752	348	414
Intersegment sales	3,519	5,827	1,365	2,024	89	149
Investment and other income (note 3)	10	3	15	9	—	—
	3,590	5,949	12,735	18,785	437	563
Expenses
Exploration	1	1	—	—	—	—
Purchases of crude oil and products	1,432	2,357	11,133	16,261	263	401
Production and manufacturing	1,256	1,423	475	418	54	67
Selling and general	—	—	160	153	22	22
Federal excise tax and fuel charge	—	—	597	553	1	—
Depreciation and depletion	398	395	44	45	4	4
Non-service pension and postretirement benefit	—	—	—	—	—	—
Financing (note 5)	—	1	—	—	—	—
Total expenses	3,087	4,177	12,409	17,430	344	494
Income (loss) before income taxes	503	1,772	326	1,355	93	69
Income tax expense (benefit)	119	426	76	322	22	16
Net income (loss)	384	1,346	250	1,033	71	53
Cash flows from (used in) operating activities	573	2,087	228	641	55	64
Capital and exploration expenditures (c)	303	233	152	69	5	2


Second Quarter	Corporate and other		Eliminations		Consolidated
millions of Canadian dollars	2023	2022	2023	2022	2023	2022
Revenues and other income
Revenues (a) (b)	—	—	—	—	11,764	17,285
Intersegment sales	—	—	(4,973)	(8,000)	—	—
Investment and other income (note 3)	30	10	—	—	55	22
	30	10	(4,973)	(8,000)	11,819	17,307
Expenses
Exploration	—	—	—	—	1	1
Purchases of crude oil and products	—	—	(4,972)	(7,998)	7,856	11,021
Production and manufacturing	—	—	—	—	1,785	1,908
Selling and general	25	18	(1)	(2)	206	191
Federal excise tax and fuel charge	—	—	—	—	598	553
Depreciation and depletion	7	7	—	—	453	451
Non-service pension and postretirement benefit	20	5	—	—	20	5
Financing (note 5)	16	10	—	—	16	11
Total expenses	68	40	(4,973)	(8,000)	10,935	14,141
Income (loss) before income taxes	(38)	(30)	—	—	884	3,166
Income tax expense (benefit)	(8)	(7)	—	—	209	757
Net income (loss)	(30)	(23)	—	—	675	2,409
Cash flows from (used in) operating activities	29	(110)	—	—	885	2,682
Capital and exploration expenditures (c)	33	10	—	—	493	314

~~IMPERIAL OIL LIMITED~~

2.	~~Business segments~~

Second Quarter
         Upstream      Downstream      Chemical
millions of Canadian dollars


2022

2021

2022

2021

2022

   2021
Revenues and other income

Revenues
(a) (b)


119

   2,616

16,752

   5,015

414

   376
Intersegment sales

5,827

   1,312

2,024

   788

149

   79
Investment and other income
(note 3)


3

   6

9

   28

0-

   1


5,949

   3,934

18,785

   5,831

563

   456
Expenses

Exploration

1

   2

0-

   0-

0-

   0-
Purchases of crude oil and products

2,357

   2,044

16,261

   4,760

401

   240
Production and manufacturing

1,423

   1,166

418

   357

67

   46
Selling and general

0-

   0-

153

   142

22

   22
Federal excise tax and fuel charge

0-

   0-

553

   465

0-

   0-
Depreciation and depletion

395

   399

45

   39

4

   5
Non-service
pension and postretirement benefit


-

   0-

0-

   0-

0-

   0-
Financing
(note 5)


1

   0-

0-

   0-

0-

   0-
Total expenses


4,177

   3,611

17,430

   5,763

494

   313
Income (loss) before income taxes


1,772

   323

1,355

   68

69

   143
Income tax expense (benefit)


426

   76

322

   8

16

   34
Net income (loss)


1,346

   247

1,033

   60

53

   109
Cash flows from (used in) operating activities


2,087

   595

641

   136

64

   111
Capital and exploration expenditures
(c)


233

   130

69

   120

2

   2













Second Quarter    Corporate and other     Eliminations     Consolidated
millions of Canadian dollars

2022

2021

2022

2021

2022

   2021
Revenues and other income

Revenues
(a) (b)


0-

0-

0-

0-

17,285

   8,007
Intersegment sales

0-

0-

(8,000
)
(2,179 )

0-

   0-
Investment and other income
(note 3)


10

5

-

0-

22

   40


10

5

(8,000
)
(2,179 )

17,307

   8,047
Expenses

Exploration

0-

0-

0-

0-

1

   2
Purchases of crude oil and products

0-

0-

(7,998
)
(2,177 )

11,021

   4,867
Production and manufacturing

0-

0-

0-

0-

1,908

   1,569
Selling and general

18

38

(2
)
(2 )

191

   200
Federal excise tax and fuel charge

0-

0-

0-

0-

553

   465
Depreciation and depletion

7

7

0-

0-

451

   450
Non-service pension and postretirement benefit

5

10

0-

0-

5

   10
Financing
(note 5)


10

13

0-

0-

11
   13
Total expenses


40

68

(8,000
)
(2,179 )

14,141

7,576
Income (loss) before income taxes


(30
)
(63 )

0-

0-

3,166

   471
Income tax expense (benefit)


(7
)
(13 )

0-

0-

757

   105
Net income (loss)


(23
)
(50 )

0-

0-

2,409

   366
Cash flows from (used in) operating activities


(110
)
10

0-

0-

2,682

   852
Capital and exploration expenditures
(c)


10

7

0-

0-

314

   259

~~Table~~


			IMPERIAL OIL LIMITED

(a)Includes export sales to the United States of ~~Contents~~$2,034 million (2022 - $3,871 million).

(b)Revenues include both revenue within the scope of ASC 606 and outside the scope of ASC 606. Trade receivables in "Accounts receivable – net" reported on the Consolidated balance sheet include both receivables within the scope of ASC 606 and those outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives. Contractual terms, credit quality, and type of customer are generally similar between those revenues and receivables within the scope of ASC 606 and those outside it.


Revenues	Second Quarter
millions of Canadian dollars	2023	2022
Revenue from contracts with customers	10,922	15,871
Revenue outside the scope of ASC 606	842	1,414
Total	11,764	17,285

(c)Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions and the company’s share of similar costs for equity companies. CAPEX excludes the purchase of carbon emission credits.

~~IMPERIAL OIL LIMITED~~

~~(a)~~

~~Included export sales to the United States of $3,871 million (2021 - $1,544 million).~~

~~(b)~~

Includes approximately 13% related to revenue outside the scope of ASC 606 “Revenue from Contracts with Customers” for the three months ended June 30, 2022. Trade receivables in Accounts receivable – net reported on the Balance Sheet include both receivables within the scope of ASC 606 and those outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives

~~. Credit~~

~~quality and type of customer are generally similar~~

~~between~~

~~those revenues and receivables within the scope of ASC 606~~

~~and those outside it~~

~~(c)~~

Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions and the company’s share of similar costs for equity companies. CAPEX excludes the purchase of carbon emission credits.

~~Table of Contents~~

~~IMPERIAL OIL~~

~~LIMITED~~


			IMPERIAL OIL LIMITED


Six Months to June 30	Upstream		Downstream		Chemical
millions of Canadian dollars	2023	2022	2023	2022	2023	2022
Revenues and other income
Revenues (a) (b)	137	218	22,994	28,943	690	781
Intersegment sales	7,141	10,258	3,188	3,857	180	253
Investment and other income (note 3)	12	7	35	30	—	—
	7,290	10,483	26,217	32,830	870	1,034
Expenses
Exploration	2	3	—	—	—	—
Purchases of crude oil and products	2,975	4,247	22,329	28,773	537	716
Production and manufacturing	2,543	2,672	886	774	112	121
Selling and general	—	—	317	300	48	45
Federal excise tax and fuel charge	—	—	1,125	1,032	2	—
Depreciation and depletion	832	768	89	86	8	9
Non-service pension and postretirement benefit	—	—	—	—	—	—
Financing (note 5)	—	1	—	—	—	—
Total expenses	6,352	7,691	24,746	30,965	707	891
Income (loss) before income taxes	938	2,792	1,471	1,865	163	143
Income tax expense (benefit)	224	664	351	443	39	34
Net income (loss)	714	2,128	1,120	1,422	124	109
Cash flows from (used in) operating activities	175	3,534	(191)	1,016	23	131
Capital and exploration expenditures (c)	624	455	226	137	9	3
Total assets as at June 30	28,603	28,961	9,629	11,649	482	505

Six Months to June 30
         Upstream         Downstream         Chemical
millions of Canadian dollars


2022

2021

2022

2021

2022

   2021
Revenues and other income

Revenues
(a) (b)


218

   4,758

28,943

   9,542

781

   699
Intersegment sales

10,258

   2,663

3,857

   1,561

253

   132
Investment and other income
(note 3)


7

   6

30

   33

0-

   1


10,483

   7,427

32,830

   11,136

1,034

   832
Expenses

Exploration

3

   4

0-

   0-

0-

   0-
Purchases of crude oil and products

4,247

   3,878

28,773

   8,780

716

   449
Production and manufacturing

2,672

   2,275

774

   683

121

   96
Selling and general

0-

   0-

300

   275

45

   47
Federal excise tax and fuel charge

0-

   0-

1,032

   869

0-

   0-
Depreciation and depletion

768

   844

86

   78

9

   9
Non-service pension and postretirement benefit

0-

   0-

0-

   0-

0-

   0-
Financing
(note 5)


1

   1

0-

   0-

0-

   0-
Total expenses


7,691

   7,002

30,965

   10,685

891

   601
Income (loss) before income taxes


2,792

   425

1,865

   451

143

   231
Income tax expense (benefit)


664

   99

443

   99

34

   55
Net income (loss)


2,128

   326

1,422

   352

109

   176
Cash flows from (used in) operating activities


3,534

   1,126

1,016

   598

131

   173
Capital and exploration expenditures
(c)


455

   215

137

   188

3

   4
Total assets as at June 30
(note 11)


28,961

   31,931

11,649

   5,352

505

   481













Six Months to June 30
   Corporate and other        Eliminations        Consolidated
millions of Canadian dollars

2022

2021

2022

2021

2022

2021
Revenues and other income

Revenues
(a) (b)


0-

0-

0-

0-

29,942

   14,999
Intersegment sales

0-

0-

(14,368
)
(4,356 )

0-

   0-
Investment and other income
(note 3)


14

6

0-

0-

51

   46


14

6

(14,368
)
(4,356 )

29,993

   15,045
Expenses

Exploration

0-

0-

0-

0-

3

   4
Purchases of crude oil and products

0-

0-

(14,365
)
(4,353 )

19,371

   8,754
Production and manufacturing

0-

0-

0-

0-

3,567

   3,054
Selling and general

74

70

(3
)
(3 )

416

   389
Federal excise tax and fuel charge

0-

0-

0-

0-

1,032

   869
Depreciation and depletion

14

13

0-

0-

877

   944
Non-service pension and postretirement benefit

9

21

0-

0-

9

   21
Financing
(note 5)


17

26

0-

0-

18

   27
Total expenses


114

130

(14,368
)
(4,356 )

25,293

   14,062
Income (loss) before income taxes


(100
)
(124 )

0-

0-

4,700

   983
Income tax expense (benefit)


(23
)
(28 )

0-

0-

1,118

   225
Net income (loss)


(77
)
(96 )

0-

0-

3,582

   758
Cash flows from (used in) operating activities


(85
)
0-

0-

0-

4,596

   1,897
Capital and exploration expenditures
(c)


15

15

0-

0-

610

   422
Total assets as at June 30
(note 11)



4,016

1,606

(239
)
(431 )

44,892

   38,939


Six Months to June 30	Corporate and other		Eliminations		Consolidated
millions of Canadian dollars	2023	2022	2023	2022	2023	2022
Revenues and other income
Revenues (a) (b)	—	—	—	—	23,821	29,942
Intersegment sales	—	—	(10,509)	(14,368)	—	—
Investment and other income (note 3)	72	14	—	—	119	51
	72	14	(10,509)	(14,368)	23,940	29,993
Expenses
Exploration	—	—	—	—	2	3
Purchases of crude oil and products	—	—	(10,507)	(14,365)	15,334	19,371
Production and manufacturing	—	—	—	—	3,541	3,567
Selling and general	29	74	(2)	(3)	392	416
Federal excise tax and fuel charge	—	—	—	—	1,127	1,032
Depreciation and depletion	14	14	—	—	943	877
Non-service pension and postretirement benefit	40	9	—	—	40	9
Financing (note 5)	32	17	—	—	32	18
Total expenses	115	114	(10,509)	(14,368)	21,411	25,293
Income (loss) before income taxes	(43)	(100)	—	—	2,529	4,700
Income tax expense (benefit)	(8)	(23)	—	—	606	1,118
Net income (loss)	(35)	(77)	—	—	1,923	3,582
Cash flows from (used in) operating activities	57	(85)	—	—	64	4,596
Capital and exploration expenditures (c)	63	15	—	—	922	610
Total assets as at June 30	3,915	4,016	(503)	(239)	42,126	44,892

~~Table of Contents~~


			IMPERIAL OIL LIMITED

(a)Includes export sales to the United States of $4,409 million (2022 - $6,375 million).


Revenues	Six Months to June 30
millions of Canadian dollars	2023	2022
Revenue from contracts with customers	21,442	26,735
Revenue outside the scope of ASC 606	2,379	3,207
Total	23,821	29,942

~~IMPERIAL OIL LIMITED~~

~~(a)~~

~~Included export sales to the United States of $6,375 million (2021 - $3,113 million).~~

~~(b)~~

Includes approximately 11% related to revenue outside the scope of ASC 606 “Revenue from Contracts with Customers” for the six months ended June 30, 2022. Trade receivables in Accounts receivable – net reported on the Balance Sheet include both receivables within the scope of ASC 606 and those outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives

~~. Credit~~

~~quality and type of customer are generally similar~~

~~between~~

~~those revenues and receivables within the scope of ASC 606~~

~~and those outside it~~

~~(c)~~

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

3.
			IMPERIAL OIL LIMITED

3. Investment and other income

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


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Proceeds from asset sales	9	8	23	32
Book value of asset sales	(4)	4	1	8
Gain (loss) on asset sales, before tax	13	4	22	24
Gain (loss) on asset sales, after tax	10	3	18	19

       Second Quarter
Six Months
to June 30

millions of Canadian dollars

2022
2021
2022
2021
Proceeds from asset sales

8

     35

32

     42
Book value of asset sales

4

     11

8

     15
Gain (loss) on asset sales, before tax

4

     24

24

     27
Gain (loss) on asset sales, after tax

3

     22

19

     24

4.	Employee retirement benefits

The components of net benefit cost were as follows:

       Second Quarter
Six Months
to June 30

millions of Canadian dollars

2022
2021
2022
2021
Pension benefits:

Service cost

70

     81

140

     162
Interest cost

74

     68

147

     136
Expected return on plan assets

(103)

     (107)

(206)

     (214)
Amortization of prior service cost

4

     4

8

     8
Amortization of actuarial loss (gain)

21

     36

43

     72
Net benefit cost

66

     82

132

     164

Other postretirement benefits:
Service cost

5

     7

11

     14
Interest cost

6

     5

12

     11
Amortization of actuarial loss (gain)

3

     4

5

     8
Net benefit cost

14

     16

28

     33

5.	~~Financing costs~~

       Second Quarter
Six Months
to June 30

millions of Canadian dollars
2022
2021
2022
2021
Debt-related interest

20

     20

32

     41
Capitalized interest

(10)

     (7)

(15)
     (15)
Net interest expense

10

     13

17

     26
Other interest

1

     -

1

     1
Total financing

11

     13

18

     27


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Pension benefits:
Service cost	40	70	81	140
Interest cost	93	74	186	147
Expected return on plan assets	(93)	(103)	(186)	(206)
Amortization of prior service cost	4	4	8	8
Amortization of actuarial loss (gain)	11	21	22	43
Net benefit cost	55	66	111	132

Other postretirement benefits:
Service cost	3	5	6	11
Interest cost	7	6	14	12
Amortization of actuarial loss (gain)	(2)	3	(4)	5
Net benefit cost	8	14	16	28

5. Financing costs


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Debt-related interest	49	20	95	32
Capitalized interest	(33)	(10)	(63)	(15)
Net interest expense	16	10	32	17
Other interest	—	1	—	1
Total financing	16	11	32	18

In June 2022, the company reduced its existing $500 million committed long-term line of credit to $250 million and extended the maturity date to June 30, 2023. The company also extended one of its $250 million committed long-term lines of credit to June 30, 2024. The company has not drawn on any of its outstanding $750 million of available credit facilities.

~~Table of Contents~~


			IMPERIAL OIL LIMITED

6. Long-term debt


	As at June 30	As at Dec 31
millions of Canadian dollars	2023	2022
Long-term debt	3,447	3,447
Finance leases	575	586
Total long-term debt	4,022	4,033

7. Other long-term obligations


	As at June 30	As at Dec 31
millions of Canadian dollars	2023	2022
Employee retirement benefits (a)	875	902
Asset retirement obligations and other environmental liabilities (b)	2,165	2,150
Share-based incentive compensation liabilities	107	101
Operating lease liability (c)	127	151
Other obligations	144	163
Total other long-term obligations	3,418	3,467
(a)Total recorded employee retirement benefits obligations also included $63 million in current liabilities (2022 - $63 million). (b)Total asset retirement obligations and other environmental liabilities also included $116 million in current liabilities (2022 - $116 million). (c)Total operating lease liability also included $106 million in current liabilities (2022 - $100 million). In addition to the total operating lease liability, additional undiscounted commitments for leases not yet commenced totalled $60 million (2022 - $14 million).

~~IMPERIAL OIL LIMITED~~

6.	~~Long-term debt~~

   As at
June 30      As at
Dec 31
  millions of Canadian dollars
2022
     2021
Long-term debt

4,447

     4,447
Finance leases

597

607

Total long-term debt

5,044

     5,054

7.	~~Other long-term obligations~~

   As at
June 30      As at
Dec 31
  millions of Canadian dollars
2022
     2021
Employee retirement benefits
(a)


1,323

     1,362
Asset retirement obligations and other environmental liabilities
(b)


1,733

     1,713
Share-based incentive compensation liabilities

119

     79
Operating lease liability
(c)


122

     147
Other obligations

156

     596
Total other long-term obligations

3,453

     3,897

~~(a)~~

~~Total recorded employee retirement benefits obligations also included $56 million in current liabilities (2021 - $56 million).~~

~~(b)~~

~~Total asset retirement obligations and other environmental liabilities also included $102 million in current liabilities (2021 - $102 million).~~

~~(c)~~

Total operating lease liability also included $86 million in current liabilities (2021 - $102 million). In addition to the total operating lease liability, additional undiscounted commitments for leases not yet commenced totalled $11 million (2021 - $5 million).

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~


			IMPERIAL OIL LIMITED

8.	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 June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the fair value of long-term debt ($~~4,447~~3,447 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~~its business segments 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~~derivatives, to manage commodity price risk and to generate returns from trading. 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 placed on derivative counterparties. The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.

The net notional long/(short) position of derivative instruments was:


	As at June 30	As at Dec 31
thousands of barrels	2023	2022
Crude	8,040	1,800
Products	(670)	(350)

   As at
June 30    As at
Dec 31
thousands of barrels
2022
   2021
Crude

8,680

   7,390
Products

(930
)
   (560 )

Realized and unrealized ~~gain or~~ gain/(loss) on derivative instruments recognized in the Consolidated statement of income is included in the following lines on a

before-tax

basis:


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Revenues	10	(51)	(13)	(14)

Second Quarter         Six Months
to June 30
millions of Canadian dollars

2022
2021
2022
   2021
Revenues

(51
)
(9 )

(14
)
(9 )
Purchases of crude oil and products

-

(19 )

-

    (33 )
Total

(51
)
(28 )

(14
)
(42 )

~~Table of Contents~~


			IMPERIAL OIL LIMITED

The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement iswere as follows:


At June 30, 2023
millions of Canadian dollars
	Fair value				Effect of counterparty netting	Effect of collateral netting	Net carrying value
	Level 1	Level 2	Level 3	Total
Assets
Derivative assets (a)	11	31	—	42	(11)	—	31

Liabilities
Derivative liabilities (b)	13	26	—	39	(11)	(2)	26
(a)Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”. (b)Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities” and “Other long-term obligations”.

At June 30, 2022
millions of Canadian dollars
   Fair value    Effect of Effect of Net
               counterparty collateral carrying
      Level 1    Level 2    Level 3    Total    netting netting value
Assets


Derivative assets
(a)


35



25



-



60



(44
)

(3
)

13

Liabilities


Derivative liabilities
(b)


32



47



-



79



(44
)

-

35

~~(a)~~

~~Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”.~~

~~(b)~~

~~Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities” and “Other long-term obligations”.~~


At December 31, 2022
millions of Canadian dollars
	Fair value				Effect of counterparty netting	Effect of collateral netting	Net carrying value
	Level 1	Level 2	Level 3	Total
Assets
Derivative assets (a)	17	32	—	49	(27)	—	22

Liabilities
Derivative liabilities (b)	21	20	—	41	(27)	(4)	10
(a)Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”. (b)Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities” and “Other long-term obligations”.

At December 31, 2021
millions of Canadian dollars
   Fair value    Effect of Effect of Net
               counterparty collateral carrying
      Level 1    Level 2    Level 3    Total    netting netting value
Assets

Derivative assets
(a)
   24    17    -    41    (31 ) - 10

Liabilities

Derivative liabilities
(b)
   31    12    -    43    (31 ) (7 ) 5

~~(a)~~

~~Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”.~~

~~(b)~~

~~Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities” and “Other long-term obligations”.~~

At June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the company had ~~$16~~$8 million and $6$14 million, respectively, 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.

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~


			IMPERIAL OIL LIMITED

9. Common shares


thousands of shares	As at June 30 2023	As at Dec 31 2022
Authorized	1,100,000	1,100,000
Outstanding	584,153	584,153

9.	~~Common shares~~

           As of              As of
   June 30      Dec 31
thousands of shares

2022


2021

Authorized

1,100,000

   1,100,000
Common shares outstanding

636,676

   678,080

~~The~~

~~12-month~~

normal course issuer bid program that was in place during the first quarter of 2022 came into effect June 29, 2021. The program enabled the company to purchase up to a maximum of 35,583,671 common shares (5 percent of the total shares on June 15, 2021), which included 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 participated to maintain its ownership percentage at approximately 69.6 percent. The program completed on January 31, 2022 as a result of the company purchasing the maximum allowable number of shares under the program.

The current

12-month

normal course issuer bid program came into effect June 29, ~~2022~~2023 under which Imperial will continue its existing share purchase program. The program enables the company to purchase up to a maximum of ~~31,833,809~~29,207,635 common shares (5 percent of the total shares on June 15, ~~2022)~~2023) 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. Imperial plans to accelerate its share purchases under the normal course issuer bid program, and anticipates repurchasing all remaining allowable shares ~~by the end of October 2022.~~ prior to year end.Purchase plans may be modified at any time without prior notice.

On May 6, 2022, the company commenced a substantial issuer bid pursuant to which it offered to purchase for cancellation up to $2.5 billion of its common shares through a modified Dutch auction and proportionate tender offer. The substantial issuer bid was completed on June 15, 2022, with the company taking up and paying for 32,467,532 common shares at a price of $77.00 per share, for an aggregate purchase of $2.5 billion and 4.9 percent of Imperial’s issued and outstanding shares as the close of business on May 2, 2022. This included 22,597,379 shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.

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, 2020		734,077			1,357
Issued under employee share-based awards		7			-
Purchases at stated value		(56,004	)		(105	)
Balance as at December 31, 2021		678,080			1,252		Balance as at December 31, 2021	678,080	1,252
Issued under employee share-based awards		-			-		Issued under employee share-based awards	—	—
Purchases at stated value		(41,404	)		(75	)	Purchases at stated value	(93,927)	(173)
Balance as at June 30, 2022		636,676			1,177
Balance as at December 31, 2022							Balance as at December 31, 2022	584,153	1,079
Issued under employee share-based awards							Issued under employee share-based awards	—	—
Purchases at stated value							Purchases at stated value	—	—
Balance as at June 30, 2023							Balance as at June 30, 2023	584,153	1,079

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

The following table provides the calculation of basic and diluted earnings per common share and the dividends declared by the company on its outstanding common shares:

     Six Months
Second Quarter      to June 30

2022
2021
2022
2021
Net income (loss) per common share - basic

Net income (loss)
(millions of Canadian dollars)


2,409

   366

3,582

   758
Weighted average number of common shares outstanding
(millions of shares)


663.0

   724.1

666.7

   729.1
Net income (loss) per common share
(dollars)


3.63

   0.51

5.37

   1.04
Net income (loss) per common share - diluted

Net income (loss)
(millions of Canadian dollars)


2,409

   366

3,582

   758
Weighted average number of common shares outstanding
(millions of shares)


663.0

   724.1

666.7

   729.1
Effect of employee share-based awards
(millions of shares)


1.4

   1.7

1.4

   1.7
Weighted average number of common shares outstanding, assuming dilution
(millions of shares)


664.4

   725.8

668.1

   730.8
Net income (loss) per common share
(dollars)


3.63

   0.50

5.36

   1.04
Dividends per common share - declared
(dollars)


0.34

   0.27

0.68

   0.49


	Second Quarter		Six Months to June 30
	2023	2022	2023	2022
Net income (loss) per common share – basic
Net income (loss) (millions of Canadian dollars)	675	2,409	1,923	3,582
Weighted average number of common shares outstanding (millions of shares)	584.2	663.0	584.2	666.7
Net income (loss) per common share (dollars)	1.16	3.63	3.29	5.37
Net income (loss) per common share – diluted
Net income (loss) (millions of Canadian dollars)	675	2,409	1,923	3,582
Weighted average number of common shares outstanding (millions of shares)	584.2	663.0	584.2	666.7
Effect of employee share-based awards (millions of shares)	1.1	1.4	1.1	1.4
Weighted-average number of common shares outstanding, assuming dilution (millions of shares)	585.3	664.4	585.3	668.1
Net income (loss) per common share (dollars)	1.15	3.63	3.29	5.36
Dividends per common share – declared (dollars)	0.50	0.34	0.94	0.68

~~Table of Contents~~


			IMPERIAL OIL LIMITED

10. Other comprehensive income (loss) information

Changes in accumulated other comprehensive income (loss):


millions of Canadian dollars	2023	2022
Balance at January 1	(512)	(1,177)
Postretirement benefits liability adjustment:
Current period change excluding amounts reclassified from accumulated other comprehensive income	21	24
Amounts reclassified from accumulated other comprehensive income	20	42
Balance at June 30	(471)	(1,111)

Amounts reclassified out of accumulated other comprehensive income (loss) - before-tax income (expense):


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Amortization of postretirement benefits liability adjustment included in net benefit cost (a)	(13)	(27)	(26)	(55)
(a) This accumulated other comprehensive income component is included in the computation of net benefit cost (note 4).

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


	Second Quarter		Six Months to June 30
millions of Canadian dollars	2023	2022	2023	2022
Postretirement benefits liability adjustments:
Postretirement benefits liability adjustment (excluding amortization)	—	—	7	8
Amortization of postretirement benefits liability adjustment included in net benefit cost	3	6	6	13
Total	3	6	13	21

millions of Canadian dollars


    2022

2021
Balance at January 1

(1,177
)
(1,989 )
Postretirement benefits liability adjustment:
Current period change excluding amounts reclassified from accumulated other comprehensive income

24

     54
Amounts reclassified from accumulated other comprehensive income

42

     66
Balance at June 30

(1,111
)
   (1,869 )

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

~~before-tax~~

~~income (expense):~~

      Six Months
   Second Quarter    to June 30
millions of Canadian dollars


2022

2021

    2022

   2021
Amortization of postretirement benefits liability adjustment included in net benefit cost
(a)


(27
)
(44)

(55)

(88)

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

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

         Six Months
   Second Quarter    to June 30
millions of Canadian dollars


2022

   2021

    2022

   2021
Postretirement benefits liability adjustments:

Postretirement benefits liability adjustment (excluding amortization)

-

   -

8

   17
Amortization of postretirement benefits liability adjustment included in net benefit cost

6

   11

13

   22

Total

6

   11

21

   39

~~11. Divestment activities~~

Jointly with ExxonMobil Canada, Imperial signed an agreement in the second quarter with Whitecap Resources Inc. for the sale of its interests in XTO Energy Canada which include assets in the Montney and Duvernay areas of central Alberta, for approximately $1.9 billion ($0.9 billion Imperial’s share), subject to working capital and other adjustments. The transaction is expected to close prior to the end of the third quarter of 2022, subject to regulatory approvals. Imperial’s net assets held for sale associated with this transaction include about $0.9 billion of total assets (about $0.8 billion of property, plant and equipment) and about $0.1 billion total liabilities in the Upstream segment. The company estimates that total cash flow from the divestment will be approximately $0.9 billion, and expects to recognize a gain at closing of approximately $0.2 billion. Estimated gain and net cash flow could change due to market factors, working capital adjustments, tax impacts and closing dates.

1918

~~Table~~


			IMPERIAL OIL LIMITED

Item 2. Management’s discussion and analysis of ~~Contents~~

~~IMPERIAL OIL LIMITED~~

~~Item 2.~~

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

Non-GAAP

financial measures and other specified financial measures

Certain measures included in this document are not prescribed by U.S. Generally Accepted Accounting Principles (GAAP). These measures constitute

~~“non-GAAP~~

“non-GAAP financial measures” under Securities and Exchange Commission Regulation G and Item 10(e) of Regulation S-K, and “specified financial measures” under National Instrument

52-112

Non-GAAP

and Other Financial Measures Disclosure

of the Canadian Securities Administrators.

Reconciliation of these

non-GAAP

financial measures to the most comparable GAAP measure, and other information required by these regulations, have been provided.

Non-GAAP

financial measures and specified financial measures are not standardized financial measures under GAAP and do not have a standardized definition. As such, these measures may not be directly comparable to measures presented by other companies, and should not be considered a substitute for GAAP financial measures.

Net income (loss) excluding identified items

Net income (loss) excluding identified items is a

non-GAAP

financial measure that is total net income (loss) excluding individually significant

non-operational

events with an absolute corporate total earnings impact of at least $100 million in a given quarter. The net income (loss) impact of an identified item for an individual segment in a given quarter may be less than $100 million when the item impacts several segments or several periods. The most directly comparable financial measure that is disclosed in the financial statements is ~~net~~"Net income (loss)" within the company’s Consolidated statement of income. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant

non-operational

events from business results. The company believes this view provides investors increased transparency into business results and trends, and provides investors with a view of the business as seen through the eyes of management. Net income (loss) excluding identified items is not meant to be viewed in isolation or as a substitute for net income (loss) as prepared in accordance with U.S. GAAP. All identified items are presented on an

after-tax

basis.

Reconciliation of net income (loss) excluding identified items

There were no identified items in the second quarter or

year-to-date

~~2022~~ 2023 and ~~2021.~~2022.

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~


			IMPERIAL OIL LIMITED

~~Current~~Recent business environment

During ~~the~~

~~COVID-19~~

pandemic, industry investment to maintain and increase production capacity was restrained to preserve capital, resulting in underinvestment and supply tightness as demand for petroleum and petrochemical products recovered. Across late 2021 and the first half of ~~2022, this dynamic, along with supply chain constraints and a continuation~~2023, the price of ~~demand recovery, led~~crude oil decreased as the global oil market saw higher inventory levels. In addition, the Canadian WTI/WCS spread continued to ~~a steady increase~~recover in ~~oil and natural gas prices and refining margins. In~~the second quarter, but remains weaker than the first half of ~~2022, tightness in the oil and natural gas markets was further exacerbated by Russia’s invasion~~2022. Refining margins declined on steady supply of Ukraine and subsequent sanctions imposed upon business and other activities in Russia. The price of crude oil and certain regional natural gas indicators increased to levels not seen for several years. By the end of the second quarter, high prices had led to a tempering of demand for some products. Commodity and product prices are expected to remain volatile given the current global economic and geopolitical uncertainty affecting supply and demand.diesel.

Operating results

Second quarter ~~2022~~2023 vs. second quarter ~~2021~~

2022


	Second Quarter
millions of Canadian dollars, unless noted	2023	2022
Net income (loss) (U.S. GAAP)	675	2,409
Net income (loss) per common share, assuming dilution (dollars)	1.15	3.63

   Second Quarter
millions of Canadian dollars, unless noted


2022

               2021
Net income (loss) (U.S. GAAP)


2,409

   366
Net income (loss) per common share, assuming dilution
(dollars)


3.63

   0.50

Upstream

Net income (loss) factor analysis

millions of Canadian dollars

Price – ~~Higher~~Lower bitumen realizations were ~~generally in line with increases in~~primarily driven by lower marker prices ~~driven primarily by increased demand~~ and ~~supply chain constraints.~~the widening WTI/WCS spread. Average bitumen realizations ~~increased~~decreased by ~~$55.01~~$43.63 per barrel, generally in line with WCS, and synthetic crude oil realizations ~~increased~~decreased by ~~$63.87~~$43.75 per barrel, generally in line with WTI.

Volumes – ~~Higher~~Lower volumes were primarily driven by the timing of planned turnaround activities at Syncrude, ~~partially offset by downtime~~and production and steam cycle timing at ~~Kearl.~~

Cold Lake.

Royalty – ~~Higher~~Lower royalties were primarily driven by ~~improved~~weakened commodity prices.

Other – Includes favourable foreign exchange impacts of about $180 million, and lower operating expenses of about $130 million, resulting primarily from lower energy prices.

Marker prices and average realizations


	Second Quarter
Canadian dollars, unless noted	2023	2022
West Texas Intermediate (US$ per barrel)	73.56	108.52
Western Canada Select (US$ per barrel)	58.49	95.80
WTI/WCS Spread (US$ per barrel)	15.07	12.72
Bitumen (per barrel)	68.64	112.27
Synthetic crude oil (per barrel)	100.92	144.67
Average foreign exchange rate (US$)	0.74	0.78


			IMPERIAL OIL LIMITED

Production


	Second Quarter
thousands of barrels per day	2023	2022
Kearl (Imperial's share)	154	159
Cold Lake	132	144
Syncrude (a)	66	81

Kearl total gross production (thousands of barrels per day)	217	224

(a)In the second quarter of 2023, Syncrude gross production included about 0 thousand barrels per day of bitumen and other products (2022 - 2 thousand barrels per day) that were exported to the operator's facilities using an existing interconnect pipeline.

Lower production at Cold Lake was primarily driven by timing of production and steam cycles.

Lower production at Syncrude was primarily driven by the timing of the annual coker turnaround.

Downstream

Net income (loss) factor analysis

millions of Canadian dollars

Margins – Lower margins primarily reflect weaker market conditions.

Other – Includes higher ~~operating expenses~~turnaround impacts of about ~~$180~~$230 million, ~~primarily higher energy prices,~~reflecting the planned turnaround activities at Strathcona refinery, partially offset by favourable foreign exchange impacts of about ~~$60~~$110 million.

~~Marker prices and average realizations~~

   Second Quarter
Canadian dollars, unless noted


2022

   2021
West Texas Intermediate (US$ per barrel)


108.52

           66.17
Western Canada Select (US$ per barrel)


95.80

   54.64
WTI/WCS Spread (US$ per barrel)


12.72

   11.53
Bitumen
(per barrel)


112.27

   57.26
Synthetic crude oil
(per barrel)


144.67

   80.80
Average foreign exchange rate (US$)


0.78

   0.81

Refinery utilization and petroleum product sales


	Second Quarter
thousands of barrels per day, unless noted	2023	2022
Refinery throughput	388	412
Refinery capacity utilization (percent)	90	96
Petroleum product sales	475	480

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~

~~Production~~

   Second Quarter
thousands of barrels per day


2022

           2021
Kearl
(Imperial’s share)


159

   181
Cold Lake


144

   142
Syncrude
(a)


81

   47

Kearl total gross production
(thousands of barrels per day)


224

   255

(a) In the second quarter of 2022, Syncrude gross production included about 2 thousand barrels per day of bitumen (2021 - rounded to 0 thousand barrels per day) that was exported to the operator’s facilities using an existing interconnect pipeline.

Lower ~~production at Kearl was primarily a result of downtime.~~

~~Higher production at Syncrude was primarily a result of the timing of turnaround activities.~~

~~Downstream~~

~~Net income (loss) factor analysis~~

~~millions of Canadian dollars~~

~~Margins – Higher margins primarily reflect improved market conditions.~~

Other – Includes lower turnaround impacts of about $130 million, reflecting the absence of turnaround activities at Strathcona refinery, partially offset by higher operating expenses of about $70 million, primarily higher energy costs.

Refinery utilization and petroleum product sales

   Second Quarter
thousands of barrels per day, unless noted


2022

             2021
Refinery throughput


412

   332
Refinery capacity utilization
(percent)


96

   78
Petroleum product sales


480

   429

~~Improved~~ refinery throughput in the second quarter of ~~2022 was primarily driven by reduced~~2023 reflects the impact of planned turnaround ~~activity and increased demand.~~

activities at the Strathcona refinery.

~~Improved petroleum product sales in the second quarter of 2022 were mainly due to increased demand.~~

Chemicals

Net income (loss) factor analysis

millions of Canadian dollars

~~Table of Contents~~


			IMPERIAL OIL LIMITED

Corporate and other


	Second Quarter
millions of Canadian dollars	2023	2022
Net income (loss) (U.S. GAAP)	(30)	(23)

   Second Quarter
millions of Canadian dollars


2022

           2021
Net income (loss) (U.S. GAAP)


    (23)

        (50)

Liquidity and capital resources


	Second Quarter
millions of Canadian dollars	2023	2022
Cash flow generated from (used in):
Operating activities	885	2,682
Investing activities	(489)	(230)
Financing activities	(263)	(2,734)
Increase (decrease) in cash and cash equivalents	133	(282)

Cash and cash equivalents at period end	2,376	2,867

   Second Quarter
millions of Canadian dollars


2022

        2021
Cash flow generated from (used in):

Operating activities


2,682

852
Investing activities


(230
)
(207 )
Financing activities


(2,734
)
(1,336 )
Increase (decrease) in cash and cash equivalents


(282
)
(691 )

Cash and cash equivalents at period end


2,867

776

Cash flow generated from operating activities primarily reflects ~~higher~~lower Upstream realizations and ~~improved~~ Downstream margins.

Cash flow used in investing activities primarily reflects higher additions to property, plant and ~~equipment.~~

equipment, and lower proceeds from asset sales.

Cash flow used in financing activities primarily reflects:

   Second Quarter
millions of Canadian dollars, unless noted


2022

           2021
Dividends paid


228

   161
Per share dividend paid
(dollars)


0.34

     0.22
Share repurchases
(a)


2,500

   1,171
Number of shares purchased
(millions)
(a)


32.5

   29.5
(a) Share repurchases were made under the company’s substantial issuer bid that commenced on May 6, 2022 and expired on June 10, 2022. Includes shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.


	Second Quarter
millions of Canadian dollars, unless noted	2023	2022
Dividends paid	257	228
Per share dividend paid (dollars)	0.44	0.34
Share repurchases (a)	—	2,500
Number of shares purchased (millions) (a)	—	32.5

On(a)The company did not purchase shares during the second quarter of 2023. In the second quarter of 2022, share repurchases were made under the company's substantial issuer bid that commenced on May 6, 2022 ~~the company commenced a substantial issuer bid pursuant to which it offered to purchase for cancellation up to $2.5 billion of its common shares through a modified Dutch auction~~ and ~~proportionate tender offer. The substantial issuer bid was completed~~expired on June ~~15,~~10, 2022, ~~with the company taking up~~ and paying for 32,467,532 common shares at a price of $77.00 per share, for an aggregate purchase of $2.5 billion and 4.9 percent of Imperial’s issued and outstanding shares as the close of business on May 2, 2022. This included ~~22,597,379~~ shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.

On June 27, ~~2022,~~2023, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid and will continue its existing share purchase program. The program enables the company to purchase up to a maximum of ~~31,833,809~~ 29,207,635common shares during the period June 29, ~~2022~~2023 to June 28, ~~2023.~~2024. 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, ~~2023.~~2024. Imperial plans to accelerate its share purchases under the normal course issuer bid program, and anticipates repurchasing all remaining allowable shares ~~by the end of October 2022.~~prior to year end. Purchase plans may be modified at any time without prior notice.

Contractual obligations

In ~~June 2022,~~the second quarter of 2023, the company ~~reduced its existing $500 million committed~~entered into a long-term ~~line of credit to $250 million~~purchase agreement with a third party for about $3 billion. It has no impact on the 2023 and ~~extended the maturity date to June 30, 2023.~~2024 obligations disclosed in Imperial's 2022 annual report on Form 10-K. The company ~~also extended one of its $250 million committed long-term lines of credit to June 30, 2024. The company has~~does not ~~drawn~~believe that the increased obligation will have a material effect on ~~any of its outstanding $750 million of available credit facilities.~~

Imperial's operations, financial condition or financial statements.

~~Table of Contents~~


			IMPERIAL OIL LIMITED

Six months ~~2022~~2023 vs. six months ~~2021~~

2022


	Six Months
millions of Canadian dollars, unless noted	2023	2022
Net income (loss) (U.S. GAAP)	1,923	3,582
Net income (loss) per common share, assuming dilution (dollars)	3.29	5.36

   Six Months
millions of Canadian dollars, unless noted


2022

             2021
Net income
(loss) (U.S. GAAP)


3,582

   758
Net income (loss) per common share, assuming dilution
(dollars)


5.36

     1.04

Upstream

Net income (loss) factor analysis

millions of Canadian dollars

Price – ~~Higher~~Lower bitumen realizations were ~~generally in line with increases in~~primarily driven by lower marker prices ~~driven primarily by increased demand~~ and ~~supply chain constraints.~~the widening WTI/WCS spread. Average bitumen realizations ~~increased~~decreased by ~~$49.08~~$42.59 per barrel, generally in line with WCS, and synthetic crude oil realizations ~~increased~~decreased by ~~$58.99~~$29.68 per barrel, generally in line with WTI.

Volumes – Lower volumes were primarily driven by ~~downtime~~the timing of planned turnaround activities at ~~Kearl,~~Syncrude, and production and steam cycle timing at Cold Lake, partially offset by the ~~timing~~absence of ~~turnaround activities~~extreme cold weather and reduced unplanned downtime at ~~Syncrude.~~

Kearl.

Royalty – ~~Higher~~Lower royalties were primarily driven by ~~improved~~weakened commodity prices.

Other – Includes ~~higher operating expenses of about $220 million, primarily higher energy prices, partially offset by~~ favourable foreign exchange impacts of about ~~$60~~$330 million, and lower operating expenses of about $50 million.

Marker prices and average realizations


	Six Months
Canadian dollars, unless noted	2023	2022
West Texas Intermediate (US$ per barrel)	74.77	101.77
Western Canada Select (US$ per barrel)	54.92	88.13
WTI/WCS Spread (US$ per barrel)	19.85	13.64
Bitumen (per barrel)	58.94	101.53
Synthetic crude oil (per barrel)	101.73	131.41
Average foreign exchange rate (US$)	0.74	0.79

~~Average realizations and marker prices~~

   Six Months
Canadian dollars, unless noted


2022

             2021
West Texas Intermediate
(US$ per barrel)


101.77

   62.22
Western Canada Select
(US$ per barrel)


88.13

   50.14
WTI/WCS Spread
(US$ per barrel)


13.64

   12.08
Bitumen
(per barrel)


101.53

   52.45
Synthetic crude oil
(per barrel)


131.41

   72.42
Average foreign exchange rate
(US$)


0.79

   0.80

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~


			IMPERIAL OIL LIMITED

Production


	Six Months
thousands of barrels per day	2023	2022
Kearl (Imperial's share)	169	146
Cold Lake	137	142
Syncrude (a)	71	79

Kearl total gross production (thousands of barrels per day)	238	205

~~Production~~

   Six Months
thousands of barrels per day


2022

           2021
Kearl
(Imperial’s share)


146

   180
Cold Lake


142

   141
Syncrude
(a)


79

   63

Kearl total gross production
(thousands of barrels per day)


205

   253

(a)In ~~2022,~~2023, Syncrude gross production included about 21 thousand barrels per day of bitumen ~~(2021~~and other products (2022 - ~~rounded to 0~~2 thousand barrels per day) that ~~was~~were exported to the ~~operator’s~~operator's facilities using an existing interconnect pipeline.

~~Lower~~Higher production at Kearl was primarily ~~a result~~driven by the absence of ~~downtime.~~

~~Higher production at Syncrude was primarily~~extreme cold weather, and reduced unplanned downtime as a result of the ~~timing~~successful rollout of ~~turnaround activities.~~

the winterization strategy.

Downstream

Net income (loss) factor analysis

millions of Canadian dollars

Margins – ~~Higher~~Lower margins primarily reflect ~~improved~~weaker market conditions.

Other – ~~Includes lower~~Favourable foreign exchange impacts of about $190 million and improved volumes of about $110 million, partially offset by higher turnaround impacts of about ~~$130~~$250 million, reflecting the ~~absence of~~planned turnaround activities at Strathcona ~~refinery, partially offset by higher operating expenses of about $90 million, primarily higher energy costs.~~refinery.

Refinery utilization and petroleum product sales

   Six Months
thousands of barrels per day, unless noted


2022

             2021
Refinery throughput


406

   348
Refinery capacity utilization
(percent)


95

   81
Petroleum product sales


464

   421

Refinery utilization and petroleum product sales

~~Improved~~


	Six Months
thousands of barrels per day, unless noted	2023	2022
Refinery throughput	403	406
Refinery capacity utilization (percent)	93	95
Petroleum product sales	465	464

Lower refinery throughput in ~~2022 was primarily driven by reduced~~2023 reflects the impact of planned turnaround ~~activity and increased demand.~~

activities at the Strathcona refinery.

~~Improved petroleum product sales in 2022 primarily reflects increased demand.~~

Chemicals

Net income (loss) factor analysis

millions of Canadian dollars

~~Table of Contents~~


			IMPERIAL OIL LIMITED

Corporate and other


	Six Months
millions of Canadian dollars	2023	2022
Net income (loss) (U.S. GAAP)	(35)	(77)

   Six Months
millions of Canadian dollars


2022

           2021
Net income (loss) (U.S. GAAP)


(77)

        (96 )

Liquidity and capital resources


	Six Months					Six Months
millions of Canadian dollars	2022		2021		millions of Canadian dollars	2023	2022
Cash flow generated from (used in):					Cash flow generated from (used in):
Operating activities	4,596		1,897		Operating activities	64	4,596
Investing activities	(509	)	(354	)	Investing activities	(903)	(509)
Financing activities	(3,373	)	(1,538	)	Financing activities	(534)	(3,373)
Increase (decrease) in cash and cash equivalents	714		5		Increase (decrease) in cash and cash equivalents	(1,373)	714

Cash flow generated from operating activities primarily reflects ~~higher~~unfavourable working capital impacts, including an income tax catch-up payment of $2.1 billion, as well as lower Upstream realizations ~~improved~~and Downstream ~~margins and favourable working capital impacts.~~

margins.

Cash flow used in investing activities primarily reflects higher additions to property, plant and ~~equipment.~~

equipment, and lower proceeds from asset sales.

Cash flow used in financing activities primarily reflects:


	Six Months
millions of Canadian dollars, unless noted	2023	2022
Dividends paid	523	413
Per share dividend paid (dollars)	0.88	0.61
Share repurchases (a)	—	2,949
Number of shares purchased (millions) (a)	—	41.4
(a)The company did not purchase shares during the six months ended June 30, 2023. In the six months ended June 30, 2022, share repurchases were made under the company's normal course issuer bid program and substantial issuer bid that commenced on May 6, 2022 and expired on June 10, 2022. Includes shares purchased from Exxon Mobil Corporation concurrent with, but outside of, the normal course issuer bid, and by way of a proportionate tender under the company's substantial issuer bid.

   Six Months
millions of Canadian dollars, unless noted


2022

           2021
Dividends paid


413

   323
Per share dividend paid
(dollars)


0.61

     0.44
Share repurchases
(a)


2,949

   1,171
Number of shares purchased
(millions) (a)


41.4

   29.5
(a) Share repurchases were made under the company’s normal course issuer bid program and substantial issuer bid that commenced on May 6, 2022 and expired on June 10, 2022. Includes shares purchased from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid, and by way of a proportionate tender under the company’s substantial issuer bid.

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			IMPERIAL OIL LIMITED

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; The company’s purchases under the normal course issuer bid ~~including~~and plans to accelerate completion ~~by the end of October 2022; the sale of XTO Energy Canada and expected closing timing, adjustments and estimated cash flow and gain;~~prior to year end; and the ~~expectation of commodity and product price volatility.~~company’s belief that the commitment related to long-term purchase agreement will not have a material adverse effect on the company.

Forward-looking statements are based on the ~~company’s~~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; 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;~~ for shareholder returns, assumptions such as cash flow forecasts, financing sources and capital structure, participation of the company’s majority shareholder and the results of periodic and ongoing evaluation of alternate uses of capital; project plans, timing, costs, technical evaluations and capacities and the company’s ability to effectively execute on these plans and operate its assets; capital and environmental expenditures; that regulatory approvals related to the sale of XTO Energy Canada will be received in a timely manner and the sale will close as anticipated; the adoption and impact of new facilities or technologies on reductions to GHG emissions intensity; receipt of regulatory approvals; applicable laws and government policies, including with respect to climate change and GHG emissions reductions; progression of

~~COVID-19~~

~~and its impacts on Imperial’s ability to operate its assets;~~ and commodity prices, foreign exchange rates and general market conditions could differ materially depending on a number of factors.

These factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and petrochemical products and resulting price, differential and margin impacts, including foreign government action with respect to supply levels and prices, the impact of

COVID-19

on demand and the occurrence of wars; availability and allocation of capital; ~~unanticipated technical or operational difficulties; operational hazards and risks; the receipt, in a timely manner, of regulatory and third-party approvals;~~ project management and schedules and timely completion of projects; ~~management effectiveness and disaster response preparedness, including business continuity plans in response to~~

~~COVID-19;~~

unanticipated technical or operational difficulties; availability and performance of third-party service ~~providers, including in light of restrictions related to~~

~~COVID-19;~~

~~the results of research programs and new technologies, and ability to bring new technologies to commercial scale on a cost-competitive basis;~~providers; environmental risks inherent in oil and gas exploration and production activities; political or regulatory events, including changes in law or government ~~policy such as tax laws, production curtailment~~policy; management effectiveness and ~~actions in~~disaster response to

~~COVID-19;~~

preparedness; operational hazards and risks; cybersecurity incidents, including increased reliance on remote working arrangements; currency exchange rates; general economic conditions; and other factors discussed in Item 1A risk factors and Item 7 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.

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”~~"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 six months ended June 30, ~~2022,~~2023, does not differ materially from that discussed on page 3332 of the company’s annual report on Form

10-K

for the year ended December 31, ~~2021 and on page 23 of the Form 10-Q for the quarter ended March 31,~~ 2022.

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 June 30, ~~2022.~~2023. 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

Imperial has elected to use a $1 million (U.S. dollars) threshold for disclosing environmental proceedings.

Item 2. Unregistered sales of equity securities and use of proceeds

Issuer purchases of equity securities

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) (b) (c)

April 2022


-



-



-



-

(April 1 - April 30)

May 2022


-



-



-



-

(May 1 - May 31)

June 2022


32,467,532



77.00



32,467,532



-

(June 1 - June 28)

(June 29 - June 30)


-



-



-



31,833,809

~~(a)~~

Total number of

On June 23, 2021, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a normal course issuer bid to continue its existing share purchase program. The program enabled the company to purchase up to a maximum of 35,583,671 common shares during the period June 29, 2021 to June 28, 2022. This maximum included 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 normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. Exxon Mobil Corporation participated to maintain its ownership percentage at approximately 69.6 percent. The program ended on January 31, 2022 as a result of the company purchasing the maximum allowable number of shares under the program.plans or
programs (a) (b)

April 2023

(April 1 - April 30)

—

May 2023

(May 1 - May 31)

—

June 2023

(June 1 - June 30)

—

~~(b)~~

On June 27, 2022, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid and will continue its existing share purchase program. The program enables the company to purchase up to a maximum of 31,833,809 common shares during the period June 29, 2022 to June 28, 2023. 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, 2023. Imperial plans to accelerate its share purchases under the normal course issuer bid program and anticipates repurchasing all remaining allowable shares by the end of October 2022.

(a)On June 27, 2022, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid and to continue its existing share purchase program. The program enabled the company to purchase up to a maximum of 31,833,809 common shares during the period June 29, 2022 to June 28, 2023. This maximum included 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 advised the company that it intended to participate to maintain its ownership percentage at approximately 69.6 percent. The program ended on October 21, 2022 as a result of the company purchasing the maximum allowable number of shares under the program.

~~(c)~~

(b)On June 27, 2023, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid and will continue its existing share purchase program. The program enables the company to purchase up to a maximum of 29,207,635 common shares during the period June 29, 2023 to June 28, 2024. 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, 2024. Imperial plans to accelerate its share purchases under the normal course issuer bid program and anticipates repurchasing all remaining allowable shares prior to year end.

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.

Item 5. Other information

During the three months ended June 30, 2023, none of the Company's directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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~~IMPERIAL OIL LIMITED~~


			IMPERIAL OIL LIMITED

Item 6. Exhibits

~~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).

~~Table of Contents~~

~~IMPERIAL OIL LIMITED~~


			IMPERIAL OIL LIMITED

SIGNATURES

~~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:

August 1, 2023

~~August 3, 2022~~

/s/ Daniel E. Lyons

(Signature)

~~(Signature)~~

Daniel E. Lyons

Senior vice-president, finance and
administration, and controller

~~administration, and controller~~

(Principal accounting officer)

Date:

August 1, 2023

~~August 3, 2022~~

/s/ Cathryn Walker

(Signature)

~~(Signature)~~

Cathryn Walker

Assistant corporate secretary

3130

	~~Page~~
		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			20	19
Item 3. Quantitative and qualitative disclosures about market risk			28	27
Item 4. Controls and procedures			28	27

PART II. OTHER INFORMATION			29	28
Item 1. Legal proceedings			29	28
Item 2. Unregistered sales of equity securities and use of proceeds			29	28
Item 5. Other information		28
Item 6. Exhibits			30	29

SIGNATURES			31	30



					Six Months
	Second Quarter				to June 30
millions of Canadian dollars	2022		2021		2022		2021
Revenues and other income
Revenues (a)		17,285		8,007		29,942		14,999
Investment and other income (note 3)		22		40		51		46
Total revenues and other income		17,307		8,047		29,993		15,045

Expenses
Exploration		1		2		3		4
Purchases of crude oil and products (b)		11,021		4,867		19,371		8,754
Production and manufacturing (c)		1,908		1,569		3,567		3,054
Selling and general (c)		191		200		416		389
Federal excise tax and fuel charge		553		465		1,032		869
Depreciation and depletion		451		450		877		944
Non-service pension and postretirement benefit		5		10		9		21
Financing (d) (note 5)		11		13		18		27
Total expenses		14,141		7,576		25,293		14,062

Income (loss) before income taxes		3,166		471		4,700		983

Income taxes		757		105		1,118		225

Net income (loss)		2,409		366		3,582		758

Per share information (Canadian dollars)
Net income (loss) per common share - basic (note 9)		3.63		0.51		5.37		1.04
Net income (loss) per common share - diluted (note 9)		3.63		0.50		5.36		1.04
(a) Amounts from related parties included in revenues.		5,175		1,405		9,134		2,913
(b) Amounts to related parties included in purchases of crude oil and products.		1,129		666		1,779		1,181
(c) Amounts to related parties included in production and manufacturing, and selling and general expenses.		116		106		234		222
(d) Amounts to related parties included in financing (note 5).		13		10		17		21



	As at		As at
	June 30		Dec 31
millions of Canadian dollars	2022		2021
Assets
Current assets
Cash	2,867		2,153
Accounts receivable - net (a)	6,839		3,869
Inventories of crude oil and products	1,394		1,102
Materials, supplies and prepaid expenses	789		689
Total current assets	11,889		7,813
Investments and long-term receivables (b)	754		757
Property, plant and equipment,	57,222		56,762
less accumulated depreciation and depletion	(26,256	)	(25,522	)
Property, plant and equipment, net (note 11)	30,966		31,240
Goodwill	166		166
Other assets, including intangibles - net	1,117		806
Total assets	44,892		40,782

Liabilities
Current liabilities
Notes and loans payable	122		122
Accounts payable and accrued liabilities (a) (note 7)	7,947		5,184
Income taxes payable	2,018		248
Total current liabilities	10,087		5,554
Long-term debt (c) (note 6)	5,044		5,054
Other long-term obligations (note 7)	3,453		3,897
Deferred income tax liabilities	4,329		4,542
Total liabilities	22,913		19,047

Shareholders’ equity
Common shares at stated value (d) (note 9)	1,177		1,252
Earnings reinvested	21,913		21,660
Accumulated other comprehensive income (loss) (note 10)	(1,111	)	(1,177	)
Total shareholders’ equity	21,979		21,735

Total liabilities and shareholders’ equity	44,892		40,782



					Six Months
Inflow (outflow)	Second Quarter				to June 30
millions of Canadian dollars	2022		2021		2022		2021
Operating activities
Net income (loss)	2,409		366		3,582		758
Adjustments for non-cash items:
Depreciation and depletion	451		450		877		944
(Gain) loss on asset sales (note 3)	(4	)	(24	)	(24	)	(27	)
Deferred income taxes and other	(149	)	76		(480	)	136
Changes in operating assets and liabilities:
Accounts receivable	(1,426	)	(775	)	(2,970	)	(1,244	)
Inventories, materials, supplies and prepaid expenses	(27	)	58		(391	)	(101	)
Income taxes payable	853		21		1,312		42
Accounts payable and accrued liabilities	499		655		2,643		1,239
All other items - net (c)	76		25		47		150
Cash flows from (used in) operating activities	2,682		852		4,596		1,897

Investing activities
Additions to property, plant and equipment	(333	)	(241	)	(637	)	(408	)
Proceeds from asset sales (note 3) (b)	102		35		126		42
Loans to equity companies - net	1		(1	)	2		12
Cash flows from (used in) investing activities	(230	)	(207	)	(509	)	(354	)

Financing activities
Short-term debt - net	-		-		-		(36	)
Reduction in finance lease obligations (note 6)	(6	)	(4	)	(11	)	(8	)
Dividends paid	(228	)	(161	)	(413	)	(323	)
Common shares purchased (note 9)	(2,500	)	(1,171	)	(2,949	)	(1,171	)
Cash flows from (used in) financing activities	(2,734	)	(1,336	)	(3,373	)	(1,538	)

Increase (decrease) in cash	(282	)	(691	)	714		5
Cash at beginning of period	3,149		1,467		2,153		771
Cash at end of period (a)	2,867		776		2,867		776
(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 $94 million deposit for the potential sale of XTO Energy Canada (note 11).
(c) Included contributions to registered pension plans.	(46	)	(42	)	(96	)	(70	)

Income taxes (paid) refunded.	(52	)	27		(275	)	28
Interest (paid), net of capitalization.	(10	)	(14	)	(22	)	(27	)


At June 30, 2022
millions of Canadian dollars
	Fair value								Effect of			Effect of			Net
									counterparty			collateral			carrying
	Level 1		Level 2		Level 3		Total		netting			netting			value
Assets
Derivative assets (a)		35		25		-		60		(44	)		(3	)		13

Liabilities
Derivative liabilities (b)		32		47		-		79		(44	)		-			35


At December 31, 2021
millions of Canadian dollars
	Fair value								Effect of			Effect of			Net
									counterparty			collateral			carrying
	Level 1		Level 2		Level 3		Total		netting			netting			value
Assets
Derivative assets (a)		24		17		-		41		(31	)		-			10

Liabilities
Derivative liabilities (b)		31		12		-		43		(31	)		(7	)		5


	As of		As of
	June 30		Dec 31
thousands of shares	2022		2021

Authorized		1,100,000		1,100,000
Common shares outstanding		636,676		678,080


	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) (b) (c)
April 2022	-	-	-	-
(April 1 - April 30)
May 2022	-	-	-	-
(May 1 - May 31)
June 2022	32,467,532	77.00	32,467,532	-
(June 1 - June 28)
(June 29 - June 30)	-	-	-	31,833,809