Cover Page
Cover Page - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 12, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity Central Index Key | 0000049938 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Registrant Name | IMPERIAL OIL LTD | ||
Document Annual Report | true | ||
Amendment Flag | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity File Number | 0-12014 | ||
Entity Small Business | false | ||
Entity Incorporation, State or Country Code | CA | ||
Entity Emerging Growth Company | false | ||
Entity Address, Address Line One | 505 QUARRY PARK BOULEVARD S.E. | ||
Entity Tax Identification Number | 98-0017682 | ||
Entity Address, City or Town | CALGARY | ||
Entity Address, State or Province | AB | ||
Entity Address, Country | CA | ||
Entity Address, Postal Zip Code | T2C 5N1 | ||
City Area Code | 1-800 | ||
Local Phone Number | 567-3776 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Common Stock, Shares Outstanding | 739,223,338 | ||
Entity Public Float | $ 8,408,104,050 |
Consolidated statement of incom
Consolidated statement of income - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Revenues and other income | ||||
Revenues | [1],[2] | $ 34,002 | $ 34,964 | $ 29,125 |
Investment and other income (note 9) | 99 | 135 | 299 | |
Total revenues and other income | 34,101 | 35,099 | 29,424 | |
Expenses | ||||
Exploration (note 16) | [3] | 47 | 19 | 183 |
Purchases of crude oil and products | [4] | 20,946 | 21,541 | 18,145 |
Production and manufacturing | [5] | 6,520 | 6,121 | 5,586 |
Selling and general | [5] | 900 | 908 | 883 |
Federal excise tax and fuel charge | 1,808 | 1,667 | 1,673 | |
Depreciation and depletion | [3],[6] | 1,598 | 1,555 | 2,172 |
Non-service pension and postretirement benefit | 143 | 107 | 122 | |
Financing (note 13) | [7],[8] | 93 | 108 | 78 |
Total expenses | 32,055 | 32,026 | 28,842 | |
Income (loss) before income taxes | 2,046 | 3,073 | 582 | |
Income taxes (note 4) | [9],[10] | (154) | 759 | 92 |
Net income (loss) | $ 2,200 | $ 2,314 | $ 490 | |
Per share information (Canadian dollars) | ||||
Net income (loss) per common share - basic (note 11) | $ 2.88 | $ 2.87 | $ 0.58 | |
Net income (loss) per common share - diluted (note 11) | $ 2.88 | $ 2.86 | $ 0.58 | |
[1] | Amounts from related parties included in revenues, (note 17).8,569 6,383 4,110 | |||
[2] | Includes export sales to the United States of $7,190 million (2018 - $6,661 million, 2017 - $4,392 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment. | |||
[3] | The Upstream segment in 2017 includes non-cash impairment charges of $396 million, before tax, associated with the Horn River development and $379 million, before tax, associated with the Mackenzie gas project. The impairment charges are recognized in the lines “Exploration” and “Depreciation and depletion” on the Consolidated statement of income, and the “Accumulated depreciation and depletion” line of the Consolidated balance sheet. | |||
[4] | Amounts to related parties included in purchases of crude oil and products, (note 17). 3,305 4,092 2,687 | |||
[5] | Amounts to related parties included in production and manufacturing, and selling and general expenses, (note 17). 628 566 544 | |||
[6] | In 2018, the Downstream segment included a non-cash impairment charge of $46 million, before tax, associated with the Government of Ontario’s revocation of its cap and trade legislation. | |||
[7] | Amounts to related parties included in financing, (note 17). 98 89 60 | |||
[8] | The weighted average interest rate on short-term borrowings in 2019 was 1.8 percent (2018 – 1.5 percent, 2017– 0.9 percent). Average effective rate on the long-term borrowings with ExxonMobil in 2019 was 2.2 percent (2018 – 2.0 percent, 2017 – 1.3 percent). | |||
[9] | On June 28, 2019 the Alberta government enacted a 4 percent decrease in the provincial tax rate, from 12 percent to 8 percent by 2022. On November 2, 2017 the British Columbia government enacted a 1 percent increase in the provincial tax rate from 11 percent to 12 percent. | |||
[10] | Segment results in 2019 include a largely non-cash favourable impact of $662 million associated with the Alberta corporate income tax rate decrease, with the largest impact in the Upstream segment. |
Consolidated statement of inc_2
Consolidated statement of income (Parenthetical) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amounts from related parties included in revenues, (note 17). | $ 8,569 | $ 6,383 | $ 4,110 |
Amounts to related parties included in purchases of crude oil and products, (note 17). | 3,305 | 4,092 | 2,687 |
Amounts to related parties included in production and manufacturing, and selling and general expenses, (note 17). | 628 | 566 | 544 |
Amounts to related parties included in financing, (note 17). | $ 98 | $ 89 | $ 60 |
Consolidated statement of compr
Consolidated statement of comprehensive income - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net income (loss) | $ 2,200 | $ 2,314 | $ 490 |
Other comprehensive income (loss), net of income taxes | |||
Postretirement benefits liability adjustment (excluding amortization) | (505) | 158 | (54) |
Amortization of postretirement benefits liability adjustment included in net periodic benefit costs | 111 | 140 | 136 |
Total other comprehensive income (loss) | (394) | 298 | 82 |
Comprehensive income (loss) | $ 1,806 | $ 2,612 | $ 572 |
Consolidated balance sheet
Consolidated balance sheet - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Current assets | |||
Cash | [1] | $ 1,718 | $ 988 |
Accounts receivable, less estimated doubtful accounts | [2] | 2,699 | 2,529 |
Inventories of crude oil and products (note 12) | 1,296 | 1,297 | |
Materials, supplies and prepaid expenses | 616 | 541 | |
Total current assets | 6,329 | 5,355 | |
Investments and long-term receivables | [3] | 891 | 857 |
Property, plant and equipment, less accumulated depreciation and depletion | [4] | 34,203 | 34,225 |
Goodwill | 186 | 186 | |
Other assets, including intangibles, net | 578 | 833 | |
Total assets | [5],[6] | 42,187 | 41,456 |
Current liabilities | |||
Notes and loans payable (note 13) | [7] | 229 | 202 |
Accounts payable and accrued liabilities (note 12) | [2] | 4,260 | 3,688 |
Income taxes payable | 106 | 65 | |
Total current liabilities | 4,595 | 3,955 | |
Long-term debt (note 15) | [8] | 4,961 | 4,978 |
Other long-term obligations (note 6) | [9] | 3,637 | 2,943 |
Deferred income tax liabilities (note 4) | 4,718 | 5,091 | |
Total liabilities | 17,911 | 16,967 | |
Shareholders' equity | |||
Common shares at stated value (note 11) | [10] | 1,375 | 1,446 |
Earnings reinvested | 24,812 | 24,560 | |
Accumulated other comprehensive income (loss) (note 18) | (1,911) | (1,517) | |
Total shareholders' equity | 24,276 | 24,489 | |
Total liabilities and shareholders' equity | $ 42,187 | $ 41,456 | |
[1] | 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. | ||
[2] | Accounts receivable, less estimated doubtful accounts included net amounts receivable from related parties of $1,007 million (2018 – $666 million), (note 17). | ||
[3] | Investments and long-term receivables included amounts from related parties of $296 million (2018 – $146 million), (note 17). | ||
[4] | Includes property, plant and equipment under construction of $2,149 million (2018 - $1,553 million, 2017 - $1,047 million). | ||
[5] | Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842), as amended. As at December 31, 2019, Total assets include operating lease right of use assets of $260 million. An election was made not to restate prior periods. See note 14 for additional details. | ||
[6] | In 2019, the company removed $570 million from Total assets and corresponding liabilities in the Downstream segment associated with the Government of Ontario’s revocation of its cap and trade legislation. | ||
[7] | Notes and loans payable included amounts to related parties of $111 million (2018 – $75 million), (note 17). | ||
[8] | Long-term debt included amounts to related parties of $4,447 million (2018 – $4,447 million), (note 17). | ||
[9] | Other long-term obligations included amounts to related parties of $0 million (2018 – $15 million), (note 17). | ||
[10] | Number of common shares authorized and outstanding were 1,100 million and 744 million, respectively (2018 – 1,100 million and 783 million, respectively), (note 11). |
Consolidated balance sheet (Par
Consolidated balance sheet (Parenthetical) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Amounts receivable (payable) from (to) related parties | $ 1,007 | $ 666 |
Due to related parties, current | $ 111 | $ 75 |
Common shares authorized | 1,100,000,000 | 1,100,000,000 |
Common shares outstanding | 744,000,000 | 783,000,000 |
Investments and Long Term Receivables | ||
Due from related parties | $ 296 | $ 146 |
Long-term debt | ||
Due to related parties | 4,447 | 4,447 |
Other long-term obligations | ||
Due to related parties | $ 0 | $ 15 |
Consolidated statement of share
Consolidated statement of shareholders' equity - CAD ($) $ in Millions | Total | Common shares at stated value (note 11) | Earnings reinvested | Accumulated other comprehensive income (loss) (note 18) |
At beginning of year at Dec. 31, 2016 | $ 1,566 | $ 25,352 | $ (1,897) | |
Net income (loss) for the year | $ 490 | 490 | ||
Issued under the stock option plan | ||||
Share purchases at stated value | (30) | |||
Share purchases in excess of stated value | (597) | |||
Dividends declared | (531) | |||
Other comprehensive income (loss) | 82 | 82 | ||
At end of year at Dec. 31, 2017 | 24,435 | 1,536 | 24,714 | (1,815) |
Net income (loss) for the year | 2,314 | 2,314 | ||
Issued under the stock option plan | ||||
Share purchases at stated value | (90) | |||
Share purchases in excess of stated value | (1,881) | |||
Dividends declared | (587) | |||
Other comprehensive income (loss) | 298 | 298 | ||
At end of year at Dec. 31, 2018 | 24,489 | 1,446 | 24,560 | (1,517) |
Net income (loss) for the year | 2,200 | 2,200 | ||
Issued under the stock option plan | 0 | |||
Share purchases at stated value | (71) | |||
Share purchases in excess of stated value | (1,302) | |||
Dividends declared | (646) | |||
Other comprehensive income (loss) | (394) | (394) | ||
At end of year at Dec. 31, 2019 | $ 24,276 | $ 1,375 | $ 24,812 | $ (1,911) |
Consolidated statement of cash
Consolidated statement of cash flows - CAD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
Operating activities | ||||||
Net income (loss) | $ 2,200 | $ 2,314 | $ 490 | |||
Adjustments for non-cash items: | ||||||
Depreciation and depletion | 1,598 | 1,509 | 2,172 | |||
Impairment of intangible assets | 0 | 46 | 0 | |||
(Gain) loss on asset sales (note 9) | [1] | (46) | (54) | (220) | ||
Deferred income taxes and other | (237) | 806 | 321 | |||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (170) | 224 | (689) | |||
Inventories, materials, supplies and prepaid expenses | (74) | (338) | (83) | |||
Income taxes payable | 41 | 8 | (431) | |||
Accounts payable and accrued liabilities | 1,010 | (764) | 678 | |||
All other items - net | [2],[3] | 107 | 171 | 525 | ||
Cash flows from (used in) operating activities | 4,429 | 3,922 | 2,763 | |||
Investing activities | ||||||
Additions to property, plant and equipment | [3] | (1,636) | (1,491) | (993) | ||
Proceeds from asset sales (note 9) | 82 | 59 | 232 | |||
Additional investments | 0 | 0 | (1) | |||
Loan to equity company | (150) | (127) | (19) | |||
Cash flows from (used in) investing activities | (1,704) | (1,559) | (781) | |||
Financing activities | ||||||
Short-term debt - net (note 13) | 36 | 0 | 0 | |||
Reduction in finance lease obligations (note 15) | (27) | (27) | (27) | |||
Dividends paid | (631) | (572) | (524) | |||
Common shares purchased (note 11) | (1,373) | (1,971) | (627) | |||
Cash flows from (used in) financing activities | (1,995) | (2,570) | (1,178) | |||
Increase (decrease) in cash | 730 | (207) | 804 | |||
Cash at beginning of year | 988 | [4] | 1,195 | [4] | 391 | |
Cash at end of year | [4] | $ 1,718 | $ 988 | $ 1,195 | ||
[1] | 2017 included a gain of $174 million ($151 million after tax) from the sale of surplus property in Ontario. | |||||
[2] | Included contribution to registered pension plans. (211) (203) (212) | |||||
[3] | The impact of carbon emission programs are included in Additions to property, plant and equipment, and All other items - net. | |||||
[4] | Cash is composed of cash in bank and cash equivalents at cost. Cash equivalents are all highly liquid securities with maturity of three months or less when purchased. |
Consolidated statement of cas_2
Consolidated statement of cash flows (Parenthetical) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Included contribution to registered pension plans | $ (211) | $ (203) | $ (212) |
Income taxes (paid) refunded | 145 | (82) | (231) |
Interest (paid), net of capitalization | (91) | $ (110) | $ (76) |
Accounts payable and accrued liabilities | |||
Non-cash adjustments to accrued liabilities and all other items | $ 570 |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of significant accounting policies | Principles of consolidation The consolidated financial statements include the accounts of subsidiaries the company controls. Intercompany accounts and transactions are eliminated. Subsidiaries include those companies in which Imperial has both an equity interest and the continuing ability to unilaterally determine strategic, operating, investing and financing policies. Imperial Oil Resources Limited is the only significant subsidiary included in the consolidated financial statements and is wholly owned by Imperial Oil Limited. The consolidated financial statements also include the company’s share of the undivided interest in certain upstream assets, liabilities, revenues and expenses, including its 25 70.96 Revenues Imperial generally sells crude oil, natural gas and petroleum and chemical products under short-term agreements at prevailing market prices. In some cases, products may be sold under long-term agreements, with periodic price adjustments to reflect market conditions. Revenue is recognized at the amount the company expects to receive when the customer has taken control, which is typically when title transfers and the customer has assumed the risks and rewards of ownership. The prices of certain sales are based on price indices that are sometimes not available until the next period. In such cases, estimated realizations are accrued when the sale is recognized, and are finalized when final information is available. Such adjustments to revenue from performance obligations satisfied in previous periods are not significant. Payment for revenue transactions is typically due within 30 days. Revenues include amounts billed to customers for shipping and handling. Shipping and handling costs incurred up to the point of final storage prior to delivery to a customer are included in “Purchases of crude oil and products” in the Consolidated statement of income. Delivery costs from final storage to customer are recorded as a marketing expense in “Selling and general” expenses. The company does not enter into ongoing arrangements whereby it is required to repurchase its products, nor does the company provide the customer with a right of return. Future volume delivery obligations that are unsatisfied at the end of the period are expected to be fulfilled through ordinary production or purchases. These performance obligations are based on market prices at the time of the transaction and are fully constrained due to market price volatility. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and recorded as exchanges measured at the book value of the item sold. “Revenues” and “Accounts receivable, less estimated doubtful accounts” primarily arise from contracts with customers. Long-term receivables are primarily from non-customers. Consumer taxes Taxes levied on the consumer and collected by the company are excluded from the Consolidated statement of income. These are primarily provincial taxes on motor fuels, the federal goods and services tax and the federal/provincial harmonized sales tax. Derivative instruments Imperial may for trading purposes and commodity , currency exchange rates and inter est rates , firm commitments All derivative instruments, except those designated as normal purchase and normal sale, are recorded at fair value. Recognition and classification of the gain or loss that results from adjusting a derivative to fair value depends on the purpose for the derivative. The gains and losses resulting from changes in the fair value of derivatives are recorded under “Revenues” or “Purchases of crude oil and products” on the Consolidated statement of income. Fair value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Hierarchy Levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Hierarchy Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability. Hierarchy Level 3 inputs are inputs that are not observable in the market. Inventories Inventories are recorded at the lower of current market value or cost. The cost of crude oil and products is determined primarily using the last-in, first-out first-in, first-out Inventory costs include expenditures and other charges (including depreciation), directly or indirectly incurred in bringing the inventory to its existing condition and location. Selling and general expenses are reported as period costs and excluded from inventory costs. Inventories of materials and supplies are valued at cost or less. Investments The company’s interests in the underlying net assets of affiliates it does not control, but over which it exercises significant influence, are accounted for using the equity method. They are recorded at the original cost of the investment plus Imperial’s share of earnings since the investment was made, less dividends received. Imperial’s share of the after-tax These investments represent interests in non-publicly Property, plant and equipment Cost basis Imperial uses the “successful efforts” method to account for its exploration and production activities. Under this method, costs are accumulated on a field-by-field Maintenance and repair costs, including planned major maintenance, are expensed as incurred. Improvements that increase or prolong the service life or capacity of an asset are capitalized. Depreciation, depletion and amortization Depreciation, depletion and amortization are primarily determined under either the unit-of-production Acquisition costs of proved properties are amortized using a unit-of-production unit-of-production unit-of-production unit-of-production 15 50 To the extent that proved reserves for a property are substantially de-booked unit-of-production Investments in refinery and 25 Impairment assessment The company tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. Among the events or changes in circumstances which could indicate that the carrying value of an asset or asset group may not be recoverable are the following: ● A significant decrease in the market price of a long-lived asset; ● A significant adverse change in the extent or manner in which an asset is being used or in its physical condition including a significant decrease in the company’s current and projected reserve volumes; ● A significant adverse change in legal factors or in the business climate that could affect the value, including a significant adverse action or assessment by a regulator; ● An accumulation of project costs significantly in excess of the amount originally expected; ● A current-period operating loss combined with a history and forecast of operating or cash flow losses; and ● A current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Asset valuation analysis, profitability reviews and other periodic control processes assist Imperial in assessing whether events or changes in circumstances indicate the carrying amounts of any of its assets may not be recoverable. In general, Imperial does not view temporarily low prices or margins as an indication of impairment. Management believes prices over the long-term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long-term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments and technological and efficiency advancements. OPEC investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities and levels of prosperity. Because the lifespans of the company’s major assets are measured in decades, the value of these assets is predominantly based on long-term views of future commodity prices and development and production costs. During the lifespan of these major assets, the company expects that oil and gas prices will experience significant volatility, and consequently these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether the events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the company considers recent periods of operating losses in the context of its longer-term view of prices. While near-term prices are subject to wide fluctuations, longer term price views are more stable and meaningful for purposes of assessing future cash flows. When the industry experiences a prolonged and deep reduction in commodity prices, the market supply and demand conditions may result in changes to the company’s long-term price or margin assumptions it uses for its capital investment decisions. To the extent those changes result in a significant reduction to its long-term oil prices or natural gas prices or margin ranges, the company may consider that situation, in conjunction with other events or changes in circumstances such as a history of operating losses, as an indicator of potential impairment for certain assets. In the upstream, the standardized measure of discounted cash flows included in the “Supplemental information on oil and gas exploration and production activities” is required to use prices based on the yearly average of first-day-of-the-month The company has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 process, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the company’s assumptions of future capital allocations, crude oil and natural gas commodity prices, including price differentials, refining and chemical margins, volumes, development and operating costs, foreign currency exchange rates and inflation rates. Volumes are based on projected field and facility production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. Cash flow estimates for impairment testing exclude the effects of derivative instruments. An asset group is impaired if its estimated future undiscounted cash flows are less than the asset group’s carrying value. Impairments are measured by the amount by which the carrying value exceeds fair value. Fair value is based on market prices if an active market exists for the asset group or discounted cash flows using a discount rate commensurate with the risk. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs would be recorded based on the estimated economic chance of success and the length of time that the company expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period. Gains on sales of proved and unproved properties are only recognized when there is neither uncertainty about the recovery of costs applicable to any interest retained nor any substantial obligation for future performance by the company. Losses on properties sold are recognized when incurred or when the properties are held for sale and the fair value of the properties is less than the carrying value. Gains or losses on assets sold are included in “Investment and other income” in the Consolidated statement of income. Interest capitalization Interest costs incurred to finance expenditures during the construction phase of projects are capitalized as part of property, plant and equipment and are depreciated over the service life of the related assets. The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use. Leases In situations where assets are leased, right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year, by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for tankers and finance leases is excluded from the calculation of right of use assets and lease liabilities. Assets leased for nearly all of their useful lives are accounted for as finance leases. In general, leases are capitalized using the company’s incremental borrowing rate. See note 14 to the consolidated financial statements on page 90 for further details. Goodwill and other intangible assets Goodwill is not subject to amortization. Goodwill is tested for impairment annually or more frequently if events or circumstances indicate it might be impaired. Impairment losses are recognized in current period earnings. The evaluation for impairment of goodwill is based on a comparison of the carrying values of goodwill and associated operating assets with the estimated present value of net cash flows from those operating assets. Intangible assets with determinable useful lives are amortized over the estimated service lives of the assets. Computer software development costs are amortized over a maximum of 15 years and customer lists are amortized over a maximum of 10 years. The amortization is included in “Depreciation and depletion” in the Consolidated statement of income. Asset retirement obligations and other environmental liabilities Legal obligations associated with site restoration on the retirement of assets with determinable useful lives are recognized when they are incurred, which is typically at the time the assets are installed. These obligations primarily relate to soil reclamation and remediation, and costs of abandonment and demolition of oil and gas wells and related facilities. The company uses estimates, assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, the credit-adjusted risk-free rate to be used, and inflation rates. The obligations are initially measured at fair value and discounted to present value. A corresponding amount equal to that of the initial obligation is added to the capitalized costs of the related asset. Over time, the discounted asset retirement obligation amount will be accreted for the change in its present value, and the initial capitalized costs will be depreciated over the useful lives of the related assets. No asset retirement obligations are set up for those manufacturing, distribution, marketing and office facilities with an indeterminate useful life. Asset retirement obligations for these facilities generally become firm at the time the facilities are permanently shut down and dismantled. These obligations may include the costs of asset disposal and additional soil remediation. However, these sites have indeterminate lives based on plans for continued operations, and as such, the fair value of the conditional legal obligations cannot be measured, since it is impossible to estimate the future settlement dates of such obligations. Provision for environmental liabilities of these assets is made when it is probable that obligations have been incurred and the amount can be reasonably estimated. Provisions for environmental liabilities are determined based on engineering estimated costs, taking into account the anticipated method and extent of remediation consistent with legal requirements, current technology and the possible use of the location. These provisions are not reduced by possible recoveries from third parties and projected cash expenditures are not discounted. Foreign-currency translation Monetary assets and liabilities in foreign currencies have been translated at the rates of exchange prevailing on December 31. Any exchange gains or losses are recognized in income. Share-based compensation The company awards share-based compensation to certain employees in the form of restricted stock units. Compensation expense is measured each reporting period based on the company’s current stock price and is recorded as “Selling and general” expenses in the Consolidated statement of income over the requisite service period of each award. See note 8 to the consolidated financial statements on page 86 for further details. Recently issued accounting standards Effective January 1, 2020, Imperial adopted the Financial Accounting Standards Board’s update, Financial Instruments - Credit Losses (Topic 326) |
Accounting changes
Accounting changes | 12 Months Ended |
Dec. 31, 2019 | |
Accounting changes | 2. Accounting changes Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842) |
Business segments
Business segments | 12 Months Ended |
Dec. 31, 2019 | |
Business segments | 3. Business segments The company operates its business in Canada. The Upstream, Downstream and Chemical functions best define the operating segments of the business that are reported separately. The factors used to identify these reportable segments are based on the nature of the operations that are undertaken by each segment and the structure of the company’s internal organization. The Upstream segment is organized and operates to explore for and ultimately produce crude oil and its equivalent, and natural gas. The Downstream segment is organized and operates to refine crude oil into petroleum products and to distribute and market these products. The Chemical segment is organized and operates to manufacture and market hydrocarbon-based chemicals and chemical products. The above segmentation has been the long-standing practice of the company and is broadly understood across the petroleum and petrochemical industries. These functions have been defined as the operating segments of the company because they are the segments (a) that engage in business activities from which revenues are earned and expenses are incurred; (b) whose operating results are regularly reviewed by the company’s chief operating decision maker to make decisions about resources to be allocated to each segment and assess its performance; and (c) for which discrete financial information is available. Corporate and other includes assets and liabilities that do not specifically relate to business segments – primarily cash, capitalized interest costs, short-term borrowings, long-term debt and liabilities associated with incentive compensation, pension and other postretirement benefit liabilities. Net earnings effects under Corporate and other activities primarily include debt-related financing, corporate governance costs, non-service Segment accounting policies are the same as those described in the summary of significant accounting policies. Upstream, Downstream and Chemical expenses include amounts allocated from Corporate and other activities. The allocation is based on proportional segment expenses. Transfers of assets between segments are recorded at book amounts. Intersegment sales are made essentially at prevailing market prices. Assets and liabilities that are not identifiable by segment are allocated. Upstream Downstream Chemical millions of Canadian dollars 2019 2018 2017 2019 2018 2017 2019 2018 2017 Revenues and other income Revenues (a) 9,479 8,525 7,302 23,591 25,200 20,714 932 1,239 1,109 Intersegment sales 3,763 2,634 2,264 1,597 1,542 1,155 229 279 262 Investment and other income (note 9) 17 11 16 47 95 269 - - - 13,259 11,170 9,582 25,235 26,837 22,138 1,161 1,518 1,371 Expenses Exploration (b) (note 16) 47 19 183 - - - - - - Purchases of crude oil and products 6,528 5,833 4,526 19,332 19,326 16,543 667 831 751 Production and manufacturing (c) 4,440 4,305 3,913 1,829 1,606 1,576 251 210 209 Selling and general (c) - - - 774 773 772 86 87 78 Federal excise tax and fuel charge - - - 1,808 1,667 1,673 - - - Depreciation and depletion (b) (d) 1,374 1,278 1,939 186 242 202 16 14 12 Non-service (c) - - - - - - - - - Financing (note 13) 3 1 13 - 2 - - - - Total expenses 12,392 11,436 10,574 23,929 23,616 20,766 1,020 1,142 1,050 Income (loss) before income taxes 867 (266 ) (992 ) 1,306 3,221 1,372 141 376 321 Income tax expense (benefit) (e) (note 4) (481 ) (128 ) (286 ) 345 855 332 33 101 86 Net income (loss) 1,348 (138 ) (706 ) 961 2,366 1,040 108 275 235 Cash flows from (used in) operating activities 2,423 916 1,257 1,965 2,749 1,396 172 354 235 Capital and exploration expenditures (f) 1,248 991 416 484 383 200 34 25 17 Property, plant and equipment Cost 47,050 46,435 45,542 6,123 5,900 5,683 954 916 888 Accumulated depreciation and depletion (15,889 ) (15,050 ) (13,844 ) (3,830 ) (3,763 ) (3,594 ) (680 ) (662 ) (644 ) Net property, plant and equipment (g) 31,161 31,385 31,698 2,293 2,137 2,089 274 254 244 Total assets (h) (i) 34,554 34,829 35,044 5,179 5,119 4,890 416 438 399 Corporate and other Eliminations Consolidated millions of Canadian dollars 2019 2018 2017 2019 2018 2017 2019 2018 2017 Revenues and other income Revenues (a) - - - - - - 34,002 34,964 29,125 Intersegment sales - - - (5,589 ) (4,455 ) (3,681 ) - - - Investment and other income (note 9) 35 29 14 - - - 99 135 299 35 29 14 (5,589 ) (4,455 ) (3,681 ) 34,101 35,099 29,424 Expenses Exploration (b) (note 16) - - - - - - 47 19 183 Purchases of crude oil and products - - - (5,581 ) (4,449 ) (3,675 ) 20,946 21,541 18,145 Production and manufacturing (c) - - - - - - 6,520 6,121 5,698 Selling and general (c) 48 54 49 (8 ) (6 ) (6 ) 900 908 893 Federal excise tax and fuel charge - - - - - - 1,808 1,667 1,673 Depreciation and depletion (b) (d) 22 21 19 - - - 1,598 1,555 2,172 Non-service (c) 143 107 - - - - 143 107 - Financing (note 13) 90 105 65 - - - 93 108 78 Total expenses 303 287 133 (5,589 ) (4,455 ) (3,681 ) 32,055 32,026 28,842 Income (loss) before income taxes (268 ) (258 ) (119 ) - - - 2,046 3,073 582 Income tax expense (benefit) (e) (note 4) (51 ) (69 ) (40 ) - - - (154 ) 759 92 Net income (loss) (217 ) (189 ) (79 ) - - - 2,200 2,314 490 Cash flows from (used in) operating activities (124 ) (116 ) (125 ) (7 ) 19 - 4,429 3,922 2,763 Capital and exploration expenditures (f) 48 28 38 - - - 1,814 1,427 671 Property, plant and equipment Cost 741 693 665 - - - 54,868 53,944 52,778 Accumulated depreciation and depletion (266 ) (244 ) (223 ) - - - (20,665 ) (19,719 ) (18,305 ) Net property, plant and equipment (g) 475 449 442 - - - 34,203 34,225 34,473 Total assets (h) (i) 2,536 1,548 1,703 (498 ) (478 ) (435 ) 42,187 41,456 41,601 (a) Includes export sales to the United States of $7,190 million (2018 - $6,661 million, 2017 - $4,392 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment. (b) The Upstream segment in 2017 includes non-cash (c) As part of the implementation of Accounting Standard Update, Compensation – Retirement Benefits (Topic 715), beginning January 1, 2018, Corporate and other includes all non-service (d) In 2018, the Downstream segment included a non-cash (e) Segment results in 2019 include a largely non- cash (f) Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance (g) Includes property, plant and equipment under construction of $2,149 million (2018 - $1,553 million, 2017 - $1,047 million). (h) Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842) (i) In 2019, the company removed $570 million from Total assets and corresponding liabilities in the Downstream segment associated with the Government of Ontario’s revocation of its cap and trade legislation . |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | millions of Canadian dollars 2019 2018 2017 Current income tax expense (a) 140 (14 ) (58 ) Deferred income tax expense (a) (294 ) 773 150 Total income tax expense (a) (154 ) 759 92 Statutory corporate tax rate (percent) 26.0 26.9 26.9 Increase (decrease) resulting from: Disposals (b) (0.6 ) (0.3 ) (5.3 ) Enacted tax rate change (a) (31.9 ) - 0.9 Other (c) (1.0 ) (1.9 ) (6.6 ) Effective income tax rate (7.5 ) 24.7 15.9 (a) On June 28, 2019 the Alberta government enacted a 4 percent decrease in the provincial tax rate, from 12 percent to 8 percent by 2022. On November 2, 2017 the British Columbia government enacted a 1 percent increase in the provincial tax rate from 11 percent to 12 percent. (b) 2017 disposals we (c) Other decreases in 2017 and 2018 were primarily related to prior year adjustments and re-assessments. Deferred income taxes are based on differences between the accounting and tax values of assets and liabilities. These differences in value are re-measured at each year-end using the tax rates and tax laws expected to apply when those differences are realized or settled in the future. s millions of Canadian dollars 2019 2018 2017 Depreciation and amortization 5,164 5,726 5,564 Successful drilling and land acquisitions 750 856 762 Pension and benefits (469 ) (336 ) (422 ) Asset retirement obligation (336 ) (381 ) (376 ) Capitalized interest 117 121 118 LIFO inventory valuation (276 ) (107 ) (318 ) Tax loss carryforwards (141 ) (658 ) (936 ) Other (161 ) (150 ) (196 ) Net deferred income tax liabilities 4,648 5,071 4,196 Unrecognized tax benefits Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts recognized in the financial statements. The following table summarizes the movement in unrecognized tax benefits: millions of Canadian dollars 2019 2018 2017 Balance as of January 1 36 78 106 Additions for prior years’ tax positions 1 9 2 Reductions for prior years’ tax positions - (2 ) - Reductions due to lapse of the statute of limitations - - - Settlements with tax authorities (2 ) (49 ) (30 ) Balance as of December 31 35 36 78 The unrecognized tax benefit balances shown above are predominately related to tax positions that would reduce the company’s effective tax rate if the positions are favourably resolved. Unfavourable resolution of these tax positions generally would not increase the effective tax rate. The 2019, 2018 and 2017 changes in unrecognized tax benefits did not have a material effect on the company’s net income or cash flow. The company’s tax filings from 2015 to 2019 are subject to examination by the tax authorities. Tax filings from 2003 to 2014 have open objections and therefore are also subject to examination by the tax authorities. The Canada Revenue Agency has made certain adjustments to the company’s filings. Management has evaluated these adjustments and is formally disputing those matters to which the company disagrees. Many of these outstanding matters will not be resolved until after 2020. The impact on unrecognized tax benefits and the company’s effective income tax rate from these matters is not expected to be material. Resolution of the related tax positions could take many years to complete. It is difficult to predict the timing of resolution for tax positions since such timing is not entirely within the control of the company. The company classifies interest on income tax related balances as interest expense or interest income and classifies tax related penalties as operating expense. |
Employee retirement benefits
Employee retirement benefits | 12 Months Ended |
Dec. 31, 2019 | |
Employee retirement benefits | Retirement benefits, which cover almost all retired employees and their surviving spouses, include pension income and certain health care and life insurance benefits. They are met through funded registered retirement plans and through unfunded supplementary benefits that are paid directly to recipients. Pension income benefits consist mainly of company-paid defined benefit plans that are based on years of service and final average earnings. The company shares in the cost of health care and life insurance benefits. The company’s benefit obligations are based on the projected benefit method of valuation that includes employee service to date and present compensation levels, as well as a projection of salaries to retirement. The expense and obligations for both funded and unfunded benefits are determined in accordance with accepted actuarial practices and U.S. GAAP. The process for determining retirement-income expense and related obligations includes making certain long-term assumptions regarding the discount rate, rate of return on plan assets and rate of compensation increases. The obligation and pension expense can vary significantly with changes in the assumptions used to estimate the obligation and the expected return on plan assets. The benefit obligations and plan assets associated with the company’s defined benefit plans are measured on December 31. Pension benefits Other postretirement benefits 2019 2018 2019 2018 Assumptions used to determine benefit obligations at December 31 (percent) Discount rate 3.10 3.90 3.10 3.90 Long-term rate of compensation increase 4.50 4.50 4.50 4.50 millions of Canadian dollars Change in projected benefit obligation Projected benefit obligation at January 1 8,359 8,785 582 670 Current service cost 228 239 16 17 Interest cost 324 302 20 22 Actuarial loss (gain) 1,053 (498 ) 99 (101 ) Amendments 283 - - - Benefits paid (a) (461 ) (469 ) (24 ) (26 ) Projected benefit obligation at December 31 9,786 8,359 693 582 Accumulated benefit obligation at December 31 8,814 7,661 The discount rate for the purpose of calculating year-end 5.66 40 Pension benefits Other postretirement benefits millions of Canadian dollars 2019 2018 2019 2018 Change in plan assets Fair value at January 1 7,691 7,870 Actual return (loss) on plan assets 1,114 20 Company contributions 211 203 Benefits paid (b) (417 ) (402 ) Fair value at December 31 8,599 7,691 Plan assets in excess of (less than) projected benefit obligation at December 31 Funded plans (590 ) (180 ) Unfunded plans (597 ) (488 ) (693 ) (582 ) Total (c) (1,187 ) (668 ) (693 ) (582 ) (a) Benefit payments for funded and unfunded plans. (b) Benefit payments for funded plans only. (c) Fair value of assets less projected benefit obligation shown above. Funding of registered retirement plans complies with federal and provincial pension regulations, and the company makes contributions to the plans based on an independent actuarial valuation. In accordance with authoritative guidance relating to the accounting for defined pension and other postretirement benefits plans, the underfunded status of the company’s defined benefit postretirement plans was recorded as a liability in the Consolidated balance sheet, and the changes in that funded status in the year in which the changes occurred was recognized through other comprehensive income. Pension benefits Other postretirement benefits millions of Canadian dollars 2019 2018 2019 2018 Amounts recorded in the Consolidated balance sheet consist of: Current liabilities (27 ) (27 ) (31 ) (28 ) Other long-term obligations (1,160 ) (641 ) (662 ) (554 ) Total recorded (1,187 ) (668 ) (693 ) (582 ) Amounts recorded in accumulated other comprehensive income consist of: Net actuarial loss (gain) 2,256 2,117 133 33 Prior service cost 283 - - - Total recorded in accumulated other comprehensive income, before tax 2,539 2,117 133 33 The company establishes the long-term expected rate of return on plan assets by developing a forward-looking long-term return assumption for each asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-term return assumption for each asset class. The 2019 long-term expected return of percent used in the calculations of pension expense compares to an actual rate of return of percent and percent over the last 10- and 20-year periods respectively, ending December 31, 2019. 2019 2018 2017 2019 2018 2017 Assumptions used to determine net periodic benefit cost for years ended December 31 (percent) Discount rate 3.90 3.40 3.75 3.90 3.40 3.75 Long-term rate of return on funded assets 4.50 5.00 5.50 - - - Long-term rate of compensation increase 4.50 4.50 4.50 4.50 4.50 4.50 millions of Canadian dollars Components of net periodic benefit cost Current service cost 228 239 217 16 17 16 Interest cost 324 302 313 20 22 23 Expected return on plan assets (349 ) (402 ) (408 ) - - - Amortization of prior service cost - 4 10 - - - Amortization of actuarial loss (gain) 149 175 176 (1 ) 6 8 Net periodic benefit cost 352 318 308 35 45 47 Changes in amounts recorded in accumulated other comprehensive income Net actuarial loss (gain) 288 (116 ) 123 99 (101 ) (49 ) Amortization of net actuarial (loss) gain included in net periodic benefit cost (149 ) (175 ) (176 ) 1 (6 ) (8 ) Prior service cost 283 - - - - - Amortization of prior service cost included in net periodic benefit cost - (4 ) (10 ) - - - Total recorded in other comprehensive income 422 (295 ) (63 ) 100 (107 ) (57 ) Total recorded in net periodic benefit cost and other comprehensive 774 23 245 135 (62 ) (10 ) Costs for defined contribution plans, primarily the employee savings plan, were $43 million in 2019 (2018 - $41 million, 2017 - $40 million). A summary of the change in accumulated other comprehensive income is shown in the table below: Total pension and other postretirement benefits millions of Canadian dollars 2019 2018 2017 (Charge) credit to other comprehensive income, before tax (522 ) 402 120 Deferred income tax (charge) credit (note 18) 128 (104) (38) (Charge) credit to other comprehensive income, after tax (394 ) 298 82 The company’s investment strategy for pension plan assets reflects a long-term view, a careful assessment of the market-cap-weighted . The 2019 fair value of the pension plan assets, including the level within the fair value hierarchy, is shown in the table below: Fair value measurements at December 31, 2019, using: millions of Canadian dollars Total Level 1 Level 2 Level 3 Net Asset Asset class Equity securities Canadian 210 210 Non-Canadian 2,449 2,449 Debt securities - Canadian Corporate 1,379 1,379 Government 4,299 4,299 Asset backed 1 1 Equities – Venture capital 204 204 Cash 57 40 17 Total plan assets at fair value 8,599 40 8,559 The 2018 fair value of the pension plan assets, including the level within the fair value hierarchy, is shown in the table below: Fair value measurements at December 31, 2018, using: millions of Canadian dollars Total Level 1 Level 2 Level 3 Net Asset Asset class Equity securities Canadian 170 170 Non-Canadian 2,035 2,035 Debt securities - Canadian Corporate 1,231 1,231 Government 3,987 3,987 Asset backed 3 3 Equities – Venture capital 226 226 Cash 39 33 6 Total plan assets at fair value 7,691 33 - - 7,658 A summary of pension plans with accumulated benefit obligations in excess of plan assets is shown in the table below: Pension benefits millions of Canadian dollars 2019 2018 For funded pension plans with accumulated benefit obligations in excess of plan assets: (a) Projected benefit obligation 1,042 943 Accumulated benefit obligation 942 852 Fair value of plan assets 870 739 Accumulated benefit obligation less fair value of plan assets 72 113 For unfunded plans covered by book reserves: Projected benefit obligation 597 488 Accumulated benefit obligation 536 451 (a) The amounts shown for funded pension plans with accumulated benefit obligations in excess of plan assets represent the company’s proportionate share of a joint venture sponsored pension plan. For the company sponsored funded plan, plan assets exceeded the accumulated benefit obligation in both 2019 and 2018. Estimated 2020 amortization from accumulated other comprehensive income millions of Canadian dollars Pension benefits Other postretirement benefits Net actuarial loss (gain) (a) 157 9 Prior service cost (b) 13 - (a) The company amortizes the net balance of actuarial loss (gain) as a component of net periodic benefit cost over the average remaining service period of active plan participants. (b) The company amortizes prior service cost on a straight-line basis. Cash flows Benefit payments expected in: millions of Canadian dollars Pension benefits Other postretirement benefits 2020 460 31 2021 460 31 2022 460 32 2023 460 32 2024 460 32 2025 - 2029 2,245 160 In 2020, the company expects to make cash |
Other long-term obligations
Other long-term obligations | 12 Months Ended |
Dec. 31, 2019 | |
Other long-term obligations | 6. Other long-term obligations millions of Canadian dollars 2019 2018 Employee retirement benefits (a) (note 5) 1,822 1,195 Asset retirement obligations and other environmental liabilities (b) (d) 1,388 1,435 Share-based incentive compensation liabilities (note 8) 65 78 Operating lease liability (c) (note 14) 143 - Other obligations 219 235 Total other long-term obligations 3,637 2,943 (a) Total recorded employee retirement benefits obligations also included $58 million in current liabilities (2018 – $55 million). (b) Total asset retirement obligations and other environmental liabilities also included $124 million in current liabilities (2018 – $118 million). (c) Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842), (d) For 2019, the asset retirement obligations were discounted at 6 percent (2018 - 6 percent). Asset retirement obligations incurred in the current period were Level 3 fair value measurements. The following table summarizes the activity in the liability for asset retirement obligations: millions of Canadian dollars 2019 2018 Balance as at January 1 1,417 1,397 Additions (deductions) (23 ) (5 ) Accretion 80 85 Settlement (74 ) (60 ) Balance as at December 31 1,400 1,417 |
Financial and derivative instru
Financial and derivative instruments | 12 Months Ended |
Dec. 31, 2019 | |
Financial and derivative instruments | 7. 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 December 31, 2019 and at December 31, 2018, the fair value of long-term debt ($4,447 million, excluding finance lease obligations) was primarily a level 2 measurement. Derivative instruments The company’s size, strong capital structure and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the company’s enterprise-wide risk from changes in commodity prices and currency exchange rates. In addition, the company uses commodity-based contracts, including derivative instruments to manage commodity price risk. 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 carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $0 million (2018- $31 million), gross liabilities of and collateral receivable of $6 million (2018 - at year end . At December 31, 2019, the net notional forward long / (short) position of derivative instruments was ( barrels for crude and barrels for products. At December 31, 2018, the net notional forward long / (short) position of derivative instruments was (340,000) barrels for crude and (350,000) barrels for products . Realized and unrealized gain or (loss) on derivative instruments recognized in the Consolidated statement of income is included in the following lines on a before-tax millions of Canadian dollars 2019 2018 2017 Revenues (3 ) 6 - Purchases of crude oil and products (7 ) (24 ) (5 ) Total (10 ) (18 ) (5 ) |
Share-based incentive compensat
Share-based incentive compensation programs | 12 Months Ended |
Dec. 31, 2019 | |
Share-based incentive compensation programs | 8. Share-based incentive compensation programs Share-based incentive compensation programs are designed to retain selected employees, reward them for high performance and promote individual contribution to sustained improvement in the company’s future business performance and shareholder value over the long-term. The nonemployee directors also participate in share-based incentive compensation programs. Restricted stock units and deferred share units Under the restricted stock unit plan, each unit entitles the recipient to the conditional right to receive from the company, upon vesting, an amount equal to the value of one common share of the company, based on the five-day Fifty perc The deferred share unit plan is made available to nonemployee directors. The nonemployee directors can elect to receive all or part of their eligible directors’ fees in units. The number of units granted is determined at the end of each calendar quarter by dividing the dollar amount of the nonemployee director’s fees for that calendar quarter elected to be received as deferred share units by the average closing price of the company’s shares for the five consecutive trading days (“average closing price”) immediately prior to the last day of the calendar quarter. Additional units are granted to represent dividends on unexercised units, and are calculated by dividing the cash dividend payable on the company’s shares by the average closing price immediately prior to the payment date for that dividend and multiplying the resulting number by the number of deferred share units held by the recipient, as adjusted for any share splits. Deferred share units cannot be exercised until after termination of service as a director, including termination due to death, and must be exercised in their entirety in one election no later than December 31 of the year following the year of termination of service. On the exercise date, the cash value to be received for the units is determined based on the company’s average closing price immediately prior to the date of exercise, as adjusted for any share splits. All units require settlement by cash payments with the following exceptions. The restricted stock unit program provides that, for units granted to Canadian residents, the recipient may receive one common share of the company per unit or elect to receive the cash payment for the units that vest on the seventh year anniversary of the grant date. For units where 50 percent vest on the fifth anniversary of the grant date and the remainder vest on either the tenth anniversary of grant, or the later of ten years following the grant date or the retirement date of the recipient, the recipient may receive one common share of the company per unit or elect to receive cash payment for all that vest. The company accounts for all units by using the fair-value-based method. The fair value of awards in the form of restricted stock and deferred share units is the market price of the company’s stock. Under this method, compensation expense related to the units of these programs is measured each reporting period based on the company’s current stock price and is recorded in the Consolidated statement of income over the requisite service period of each award. The following table summarizes information about these units for the year ended December 31, 2019: Restricted Deferred Outstanding at January 1, 2019 5,302,825 151,695 Granted 854,800 18,468 Vested / Exercised (1,241,280 ) - Forfeited and cancelled (3,540 ) - Outstanding at December 31, 2019 4,912,805 170,163 In 2019, the before-tax compensation expense charged against income for these programs was $34 million (2018 - $32 million, 2017 - $14 million). Income tax benefit recognized in income related to compensation expense for the year was $9 million (2018- $9 million, 2017 - $4 million). Cash payments of $50 million were made for these programs in 2019 (2018- $59 million, 2017 - $71 million). As of December 31, 2019, there was $76 million of total before-tax non-vested non-vested |
Investment and other income
Investment and other income | 12 Months Ended |
Dec. 31, 2019 | |
Investment and other income | 9. Investment and other income Investment and other income includes gains and losses on asset sales as follows: millions of Canadian dollars 2019 2018 2017 Proceeds from asset sales 82 59 232 Book value of asset sales 36 5 12 Gain (loss) on asset sales, before-tax (a) 46 54 220 Gain (loss) on asset sales, after-tax (a) 42 38 192 (a) 2017 included a gain of $174 million ($151 million after tax) from the sale of surplus property in Ontario. |
Litigation and other contingenc
Litigation and other contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Litigation and other contingencies | 10. Litigation and other contingencies A variety of claims have been made against Imperial and its subsidiaries in a number of lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavourable outcome is reasonably possible and which are significant, the company discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of the company’s contingency disclosures, “significant” includes material matters, as well as other matters which management believes should be disclosed. Based on a consideration of all relevant facts and circumstances, the company does not believe the ultimate outcome of any currently pending lawsuits against the company will have a material adverse effect on the company’s operations, financial condition, or financial statements taken as a whole. Additionally, the company has other commitments arising in the normal course of business for operating and capital needs, all of which are expected to be fulfilled with no adverse consequences material to the company’s operations or financial condition. Unconditional purchase obligations, as defined by accounting standards, are those long-term commitments that are non-cancelable As a result of the completed sale of Imperial’s remaining company-owned Esso retail sites, the company was contingently liable at December 31, 2019, for guarantees relating to performance under contracts of other third-party obligations totalling $30 million (2018 - $35 million). At December 31, 2019 the company is contingently liable for up to $64 million, under existing indemnification arrangements, for costs associated with continuing a third party pipeline project development (2018 - $46 million). |
Common shares
Common shares | 12 Months Ended |
Dec. 31, 2019 | |
Common shares | 11. Common shares thousands of shares At December 31 2019 Authorized 1,100,000 1,100,000 Common shares outstanding 743,902 782,565 12-month 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 Millions of Balance as at January 1, 2017 847,599 1,566 Issued under employee share-based awards 2 - Purchases at stated value (16,359 ) (30 ) Balance as at December 31, 2017 831,242 1,536 Issued under employee share-based awards 2 - Purchases at stated value (48,679 ) (90 ) Balance as at December 31, 2018 782,565 1,446 Issued under employee share-based awards 1 - Purchases at stated value (38,664 ) (71 ) Balance as at December 31, 2019 743,902 1,375 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: 2019 2017 Net income (loss) per common share – basic Net income (loss) (millions of Canadian dollars) 2,200 2,314 490 Weighted average number of common shares outstanding (millions of shares) 762.7 807.5 842.9 Net income (loss) per common share (dollars) 2.88 2.87 0.58 Net income (loss) per common share – diluted Net income (loss) (millions of Canadian dollars) 2,200 2,314 490 Weighted average number of common shares outstanding (millions of shares) 762.7 807.5 842.9 Effect of employee share-based awards (millions of shares) 2.3 2.6 2.8 Weighted average number of common shares outstanding, assuming dilution (millions of shares) 765.0 810.1 845.7 Net income (loss) per common share (dollars) 2.88 2.86 0.58 Dividends per common share – declared (dollars) 0.85 0.73 0.63 |
Miscellaneous financial informa
Miscellaneous financial information | 12 Months Ended |
Dec. 31, 2019 | |
Miscellaneous financial information | 12. Miscellaneous financial information In 2019, net income included an after-tax loss last-in, first-out Inventories of crude oil and products at year-end millions of Canadian dollars 2019 2018 Crude oil 764 731 Petroleum products 396 473 Chemical products 64 72 Other 72 21 Total inventories of crude oil and products 1,296 1,297 Research expenditures are mainly spent on developing technologies to improve bitumen recovery, reduce costs and reduce the environmental impact of upstream operations, including technologies to reduce greenhouse gas emissions intensity, supporting environmental and process improvements in the refineries, as well as accessing ExxonMobil’s research worldwide. The company has scientific research agreements with affiliates Net research and development costs charged to expenses in 2019 were $133 million (2018 – $110 million, 2017 – $111 million). These costs are included in expenses due to the uncertainty of future benefits. Accounts payable and accrued liabilities included accrued taxes other than income taxes of $397 million at December 31, 2019 (2018 – $413 million). |
Financing and additional notes
Financing and additional notes and loans payable information | 12 Months Ended |
Dec. 31, 2019 | |
Financing and additional notes and loans payable information | 13. Financing and additional notes and loans payable information millions of Canadian dollars 2019 2018 2017 Debt-related interest (a) 138 133 103 Capitalized interest (48 ) (28 ) (38) Net interest expense 90 105 65 Other interest 3 3 13 Total financing (b) 93 108 78 (a) Includes related party interest with ExxonMobil. (b) The weighted average interest rate on short-term borrowings in 2019 was 1.8 percent (2018 – 1.5 percent, 2017– 0.9 percent). Average effective rate on the long-term borrowings with ExxonMobil in 2019 was 2.2 percent (2018 – 2.0 percent, 2017 – 1.3 percent). In November increased the capacity of its non-interest with ExxonMobil from marketing, transportation and derivative At December 31, 2019 the company had borrowed $111 million under this arrangement. In November 2019, the company extended the maturity date of its existing $250 million committed long-term line of credit to November 2021 no In December 2019, the company extended the maturity date of its existing $250 million committed short-term line of credit to December 2020 no |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leased facilities | 14. Leases The company generally purchases the property, plant and equipment used in operations, but there are situations where assets are leased, primarily storage tanks, rail cars, marine vessels and transportation facilities. Right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year, by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for tankers and finance leases is excluded from the calculation of right of use assets and lease liabilities. Usually, assets are leased only for a portion of their useful lives and are accounted for as operating leases. In limited situations assets are leased for nearly all of their useful lives and are accounted for as finance leases. In general, leases are capitalized using the company’s incremental borrowing rate. Variable payments under these lease agreements are not significant. Residual value guarantees, restrictions, or covenants related to leases, and transactions with related parties are also not significant. The company’s activities as a lessor are not material. At adoption of the lease accounting change (see note 2), on January 1, 2019, an operating lease liability of $298 million was recorded and the operating lease right of use asset was $298 million. There was no cumulative earnings effect adjustment. The table below summarizes the total lease cost incurred: 2019 millions of Canadian dollars Operating Finance Operating lease cost 151 Short-term and other (net of sublease rental income) 76 Amortization of right of use assets 55 Interest on lease liabilities 40 Total lease cost 227 95 The following table summarizes the amounts related to operating leases and finance leases recorded on the Consolidated balance sheet as at December 31, 2019: 2019 millions of Canadian dollars Operating leases Finance leases Right of use assets Included in Other assets, including intangibles, net 260 Included in Property, plant and equipment, net 546 Total right of use assets 260 546 Lease liability due within one year Included in Accounts payable and accrued liabilities 115 15 Included in Notes and loans payable 18 Long-term lease liability Included in Other long-term obligations 143 - Included in Long-term debt 514 Total lease liability 258 547 The maturity analysis of the company’s lease liabilities, weighted average remaining lease term and weighted average discount rates applied at December 31, 2019, are summarized below: 2019 millions of Canadian dollars, unless noted Operating Finance Maturity analysis of lease liabilities 202 0 121 71 2021 70 50 2022 30 49 2023 13 48 2024 11 47 2025 and beyond 30 1,086 Total lease payments 275 1,351 Discount to present value (17 ) (804 ) Total lease liability 258 547 Weighted average remaining lease term (years) 4 40 Weighted average discount rate (percent) 2.6 7.5 In addition to the operating lease liabilities in the table immediately above, at December 31, 2019, The table below summarizes the cash paid for amounts included in the measurement of lease liabilities and the right of use assets obtained in exchange for new lease liabilities: 2019 millions of Canadian dollars Operating Finance Cash paid for amounts included in the measurement of lease liabilities Cash flows from operating activities 147 45 Cash flows from financing activities 27 Non-cash For January 1 adoption of Leases (Topic 842) 298 In exchange for new lease liabilities during the year 104 Disclosures under the previous lease standard (Topic 840) Net rental cost incurred under both cancelable and non-cancelable operating leases was $221 million in 2018 and $206 million in 2017. At December 31, 2018, minimum undiscounted lease commitments under non-cancelable operating leases for 2019 and beyond were $291 million. |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2019 | |
Long-term debt | 15. Long-term debt millions of Canadian dollars At December 31 2019 2018 Long-term debt (a) 4,447 4,447 Finance leases (b) 514 531 Total long-term debt 4,961 4,978 (a) Borrowed under an existing agreement with an affiliated company of ExxonMobil that provides for a long-term, variable-rate, Canadian dollar loan from ExxonMobil to the company of up to $7.75 billion at interest equivalent to Canadian market rates. The agreement is effective until June 30, 2025, cancelable if ExxonMobil provides at least 370 days advance written notice. (b) Finance leases are primarily associated with transportation facilities and services agreements. The average imputed rate was 7.5 percent in 2019 (2018 – 7.1 percent). Total finance lease obligations also include $18 million in current liabilities (2018 - $27 million). Principal payments on finance leases of approximately $13 million on average per year are due in each of the next four years after December 31, 2020. In September 2019, the company extended the maturity date of its existing long-term, variable-rate, Canadian dollar loan from ExxonMobil to June 30, 2025. All other terms and conditions remain unchanged. |
Accounting for suspended explor
Accounting for suspended exploratory well costs | 12 Months Ended |
Dec. 31, 2019 | |
Accounting for suspended exploratory well costs | 16. Accounting for suspended exploratory well costs The company continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. 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. Exploratory well costs that were capitalized in prior years as part of the Horn River project for a period greater than one year were expensed in 2017. The following two tables provide details of the changes in the balance of suspended exploratory well costs, as well as an aging summary of those costs. Change in capitalized suspended exploratory well costs: millions of Canadian dollars 2019 2018 2017 Balance as at January 1 - - 143 Additions pending the determination of proved reserves - - - Charged to expense - - (143 ) Reclassification to wells, facilities and equipment based on the determination of proved reserves - - - Balance as at December 31 - - - Period end capitalized suspended exploratory well costs: millions of Canadian dollars 2019 2018 2017 Capitalized for a period of one year or less - - - Capitalized for a period of between one and ten years - - - Capitalized for a period of greater than one year - - - Total - - - Exploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. The table below provides a breakdown of the number of projects with only exploratory well costs capitalized for a period of one year or less and those that have had exploratory well costs capitalized for a period greater than one year. 2019 2018 2017 Number of projects that only have exploratory well costs capitalized for a period of one year or less - - - Number of projects that have exploratory well costs capitalized for a period of greater than one year - - - Total - - - |
Transactions with related parti
Transactions with related parties | 12 Months Ended |
Dec. 31, 2019 | |
Transactions with related parties | 17. Transactions with related parties Revenues and expenses of the company also include the results of transactions with affiliated companies of ExxonMobil in the normal course of operations. These were conducted on terms comparable to those which would have been conducted with unrelated parties and primarily consisted of the purchase and sale of crude oil, natural gas, petroleum and chemical products, as well as technical, engineering and research, and development costs. Transactions with ExxonMobil also included amounts paid and received in connection with the company’s participation in a number of upstream activities conducted jointly in Canada. In addition, the company has existing agreements with ExxonMobil: a) To provide computer and customer support services to the company and to share common business and operational support services that allow the companies to consolidate duplicate work and systems; b To operate certain western Canada production properties owned by ExxonMobil, as well as provide for the delivery of management, business and technical services to ExxonMobil in Canada. These agreements are designed to provide organizational efficiencies and to reduce costs. No separate legal entities were created from these arrangements. Separate books of account continue to be maintained for the company and ExxonMobil. The company and ExxonMobil retain ownership of their respective assets, and there is no impact on operations or reserves; c To provide for the delivery of management, business and technical services to Syncrude Canada Ltd. by ExxonMobil; d To provide for the option of equal participation in new upstream opportunities; and e To enter into derivative agreements on each other’s behalf. Certain charges from ExxonMobil have been capitalized; they are not material in the aggregate. The amounts of purchases and sales by Imperial in 2019, with ExxonMobil, were $3,245 million and $8,552 million respectively (2018 - $4,036 million and $6,364 million respectively). As at December 31, 2019, the company had outstanding long-term loans of $4,447 million (2018 – $4,447 million) and short-term loans of $111 million (2018 – $75 million) from ExxonMobil (see note 15, Long-term debt, on page 92 89 Imperial has other related party transactions not detailed above in note 17, as they are not significant. |
Other comprehensive income (los
Other comprehensive income (loss) information | 12 Months Ended |
Dec. 31, 2019 | |
Other comprehensive income (loss) information | 18. Other comprehensive income (loss) information Changes in accumulated other comprehensive income (loss): millions of Canadian dollars 2019 2018 2017 Balance at January 1 (1,517 ) (1,815 ) (1,897 ) Postretirement benefits liability adjustment: Current period change excluding amounts reclassified from accumulated other (505 ) 158 (54 ) Amounts reclassified from accumulated other comprehensive income 111 140 136 Balance at December 31 (1,911 ) (1,517 ) (1,815 ) Amounts reclassified out of accumulated other comprehensive income (loss) - before-tax millions of Canadian dollars 2019 2018 2017 Amortization of postretirement benefits liability adjustment included in net periodic benefit cost (a) (148 ) (185 ) (194 ) (a) . Income tax expense (credit) for components of other comprehensive income (loss): millions of Canadian dollars 2019 2017 Postretirement benefits liability adjustments: Postretirement benefits liability adjustment (excluding amortization) (165 ) 59 (20 ) Amortization of postretirement benefits liability adjustment included in net periodic benefit cost 37 45 58 Total (128 ) 104 38 |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of subsidiaries the company controls. Intercompany accounts and transactions are eliminated. Subsidiaries include those companies in which Imperial has both an equity interest and the continuing ability to unilaterally determine strategic, operating, investing and financing policies. Imperial Oil Resources Limited is the only significant subsidiary included in the consolidated financial statements and is wholly owned by Imperial Oil Limited. The consolidated financial statements also include the company’s share of the undivided interest in certain upstream assets, liabilities, revenues and expenses, including its 25 70.96 |
Revenues | Revenues Imperial generally sells crude oil, natural gas and petroleum and chemical products under short-term agreements at prevailing market prices. In some cases, products may be sold under long-term agreements, with periodic price adjustments to reflect market conditions. Revenue is recognized at the amount the company expects to receive when the customer has taken control, which is typically when title transfers and the customer has assumed the risks and rewards of ownership. The prices of certain sales are based on price indices that are sometimes not available until the next period. In such cases, estimated realizations are accrued when the sale is recognized, and are finalized when final information is available. Such adjustments to revenue from performance obligations satisfied in previous periods are not significant. Payment for revenue transactions is typically due within 30 days. Revenues include amounts billed to customers for shipping and handling. Shipping and handling costs incurred up to the point of final storage prior to delivery to a customer are included in “Purchases of crude oil and products” in the Consolidated statement of income. Delivery costs from final storage to customer are recorded as a marketing expense in “Selling and general” expenses. The company does not enter into ongoing arrangements whereby it is required to repurchase its products, nor does the company provide the customer with a right of return. Future volume delivery obligations that are unsatisfied at the end of the period are expected to be fulfilled through ordinary production or purchases. These performance obligations are based on market prices at the time of the transaction and are fully constrained due to market price volatility. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and recorded as exchanges measured at the book value of the item sold. “Revenues” and “Accounts receivable, less estimated doubtful accounts” primarily arise from contracts with customers. Long-term receivables are primarily from non-customers. |
Consumer taxes | Consumer taxes Taxes levied on the consumer and collected by the company are excluded from the Consolidated statement of income. These are primarily provincial taxes on motor fuels, the federal goods and services tax and the federal/provincial harmonized sales tax. |
Derivative instruments | Derivative instruments Imperial may for trading purposes and commodity , currency exchange rates and inter est rates , firm commitments All derivative instruments, except those designated as normal purchase and normal sale, are recorded at fair value. Recognition and classification of the gain or loss that results from adjusting a derivative to fair value depends on the purpose for the derivative. The gains and losses resulting from changes in the fair value of derivatives are recorded under “Revenues” or “Purchases of crude oil and products” on the Consolidated statement of income. |
Fair value | Fair value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Hierarchy Levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Hierarchy Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability. Hierarchy Level 3 inputs are inputs that are not observable in the market. |
Inventories | Inventories Inventories are recorded at the lower of current market value or cost. The cost of crude oil and products is determined primarily using the last-in, first-out first-in, first-out Inventory costs include expenditures and other charges (including depreciation), directly or indirectly incurred in bringing the inventory to its existing condition and location. Selling and general expenses are reported as period costs and excluded from inventory costs. Inventories of materials and supplies are valued at cost or less. |
Investments | Investments The company’s interests in the underlying net assets of affiliates it does not control, but over which it exercises significant influence, are accounted for using the equity method. They are recorded at the original cost of the investment plus Imperial’s share of earnings since the investment was made, less dividends received. Imperial’s share of the after-tax These investments represent interests in non-publicly |
Property, plant and equipment | Property, plant and equipment Cost basis Imperial uses the “successful efforts” method to account for its exploration and production activities. Under this method, costs are accumulated on a field-by-field Maintenance and repair costs, including planned major maintenance, are expensed as incurred. Improvements that increase or prolong the service life or capacity of an asset are capitalized. Depreciation, depletion and amortization Depreciation, depletion and amortization are primarily determined under either the unit-of-production Acquisition costs of proved properties are amortized using a unit-of-production unit-of-production unit-of-production unit-of-production 15 50 To the extent that proved reserves for a property are substantially de-booked unit-of-production Investments in refinery and 25 Impairment assessment The company tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. Among the events or changes in circumstances which could indicate that the carrying value of an asset or asset group may not be recoverable are the following: ● A significant decrease in the market price of a long-lived asset; ● A significant adverse change in the extent or manner in which an asset is being used or in its physical condition including a significant decrease in the company’s current and projected reserve volumes; ● A significant adverse change in legal factors or in the business climate that could affect the value, including a significant adverse action or assessment by a regulator; ● An accumulation of project costs significantly in excess of the amount originally expected; ● A current-period operating loss combined with a history and forecast of operating or cash flow losses; and ● A current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Asset valuation analysis, profitability reviews and other periodic control processes assist Imperial in assessing whether events or changes in circumstances indicate the carrying amounts of any of its assets may not be recoverable. In general, Imperial does not view temporarily low prices or margins as an indication of impairment. Management believes prices over the long-term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long-term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments and technological and efficiency advancements. OPEC investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities and levels of prosperity. Because the lifespans of the company’s major assets are measured in decades, the value of these assets is predominantly based on long-term views of future commodity prices and development and production costs. During the lifespan of these major assets, the company expects that oil and gas prices will experience significant volatility, and consequently these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether the events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the company considers recent periods of operating losses in the context of its longer-term view of prices. While near-term prices are subject to wide fluctuations, longer term price views are more stable and meaningful for purposes of assessing future cash flows. When the industry experiences a prolonged and deep reduction in commodity prices, the market supply and demand conditions may result in changes to the company’s long-term price or margin assumptions it uses for its capital investment decisions. To the extent those changes result in a significant reduction to its long-term oil prices or natural gas prices or margin ranges, the company may consider that situation, in conjunction with other events or changes in circumstances such as a history of operating losses, as an indicator of potential impairment for certain assets. In the upstream, the standardized measure of discounted cash flows included in the “Supplemental information on oil and gas exploration and production activities” is required to use prices based on the yearly average of first-day-of-the-month The company has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 process, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the company’s assumptions of future capital allocations, crude oil and natural gas commodity prices, including price differentials, refining and chemical margins, volumes, development and operating costs, foreign currency exchange rates and inflation rates. Volumes are based on projected field and facility production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. Cash flow estimates for impairment testing exclude the effects of derivative instruments. An asset group is impaired if its estimated future undiscounted cash flows are less than the asset group’s carrying value. Impairments are measured by the amount by which the carrying value exceeds fair value. Fair value is based on market prices if an active market exists for the asset group or discounted cash flows using a discount rate commensurate with the risk. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs would be recorded based on the estimated economic chance of success and the length of time that the company expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period. Gains on sales of proved and unproved properties are only recognized when there is neither uncertainty about the recovery of costs applicable to any interest retained nor any substantial obligation for future performance by the company. Losses on properties sold are recognized when incurred or when the properties are held for sale and the fair value of the properties is less than the carrying value. Gains or losses on assets sold are included in “Investment and other income” in the Consolidated statement of income. |
Interest capitalization | Interest capitalization Interest costs incurred to finance expenditures during the construction phase of projects are capitalized as part of property, plant and equipment and are depreciated over the service life of the related assets. The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use. |
Leases | Leases In situations where assets are leased, right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year, by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for tankers and finance leases is excluded from the calculation of right of use assets and lease liabilities. Assets leased for nearly all of their useful lives are accounted for as finance leases. In general, leases are capitalized using the company’s incremental borrowing rate. See note 14 to the consolidated financial statements on page 90 for further details. |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill is not subject to amortization. Goodwill is tested for impairment annually or more frequently if events or circumstances indicate it might be impaired. Impairment losses are recognized in current period earnings. The evaluation for impairment of goodwill is based on a comparison of the carrying values of goodwill and associated operating assets with the estimated present value of net cash flows from those operating assets. Intangible assets with determinable useful lives are amortized over the estimated service lives of the assets. Computer software development costs are amortized over a maximum of 15 years and customer lists are amortized over a maximum of 10 years. The amortization is included in “Depreciation and depletion” in the Consolidated statement of income. |
Asset retirement obligations and other environmental liabilities | Asset retirement obligations and other environmental liabilities Legal obligations associated with site restoration on the retirement of assets with determinable useful lives are recognized when they are incurred, which is typically at the time the assets are installed. These obligations primarily relate to soil reclamation and remediation, and costs of abandonment and demolition of oil and gas wells and related facilities. The company uses estimates, assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, the credit-adjusted risk-free rate to be used, and inflation rates. The obligations are initially measured at fair value and discounted to present value. A corresponding amount equal to that of the initial obligation is added to the capitalized costs of the related asset. Over time, the discounted asset retirement obligation amount will be accreted for the change in its present value, and the initial capitalized costs will be depreciated over the useful lives of the related assets. No asset retirement obligations are set up for those manufacturing, distribution, marketing and office facilities with an indeterminate useful life. Asset retirement obligations for these facilities generally become firm at the time the facilities are permanently shut down and dismantled. These obligations may include the costs of asset disposal and additional soil remediation. However, these sites have indeterminate lives based on plans for continued operations, and as such, the fair value of the conditional legal obligations cannot be measured, since it is impossible to estimate the future settlement dates of such obligations. Provision for environmental liabilities of these assets is made when it is probable that obligations have been incurred and the amount can be reasonably estimated. Provisions for environmental liabilities are determined based on engineering estimated costs, taking into account the anticipated method and extent of remediation consistent with legal requirements, current technology and the possible use of the location. These provisions are not reduced by possible recoveries from third parties and projected cash expenditures are not discounted. |
Foreign-currency translation | Foreign-currency translation Monetary assets and liabilities in foreign currencies have been translated at the rates of exchange prevailing on December 31. Any exchange gains or losses are recognized in income. |
Share-based compensation | Share-based compensation The company awards share-based compensation to certain employees in the form of restricted stock units. Compensation expense is measured each reporting period based on the company’s current stock price and is recorded as “Selling and general” expenses in the Consolidated statement of income over the requisite service period of each award. See note 8 to the consolidated financial statements on page 86 for further details. |
Leases (Topic 842) | |
Accounting changes | Recently issued accounting standards Effective January 1, 2020, Imperial adopted the Financial Accounting Standards Board’s update, Financial Instruments - Credit Losses (Topic 326) |
Business segments (Tables)
Business segments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Segments | Upstream Downstream Chemical millions of Canadian dollars 2019 2018 2017 2019 2018 2017 2019 2018 2017 Revenues and other income Revenues (a) 9,479 8,525 7,302 23,591 25,200 20,714 932 1,239 1,109 Intersegment sales 3,763 2,634 2,264 1,597 1,542 1,155 229 279 262 Investment and other income (note 9) 17 11 16 47 95 269 - - - 13,259 11,170 9,582 25,235 26,837 22,138 1,161 1,518 1,371 Expenses Exploration (b) (note 16) 47 19 183 - - - - - - Purchases of crude oil and products 6,528 5,833 4,526 19,332 19,326 16,543 667 831 751 Production and manufacturing (c) 4,440 4,305 3,913 1,829 1,606 1,576 251 210 209 Selling and general (c) - - - 774 773 772 86 87 78 Federal excise tax and fuel charge - - - 1,808 1,667 1,673 - - - Depreciation and depletion (b) (d) 1,374 1,278 1,939 186 242 202 16 14 12 Non-service (c) - - - - - - - - - Financing (note 13) 3 1 13 - 2 - - - - Total expenses 12,392 11,436 10,574 23,929 23,616 20,766 1,020 1,142 1,050 Income (loss) before income taxes 867 (266 ) (992 ) 1,306 3,221 1,372 141 376 321 Income tax expense (benefit) (e) (note 4) (481 ) (128 ) (286 ) 345 855 332 33 101 86 Net income (loss) 1,348 (138 ) (706 ) 961 2,366 1,040 108 275 235 Cash flows from (used in) operating activities 2,423 916 1,257 1,965 2,749 1,396 172 354 235 Capital and exploration expenditures (f) 1,248 991 416 484 383 200 34 25 17 Property, plant and equipment Cost 47,050 46,435 45,542 6,123 5,900 5,683 954 916 888 Accumulated depreciation and depletion (15,889 ) (15,050 ) (13,844 ) (3,830 ) (3,763 ) (3,594 ) (680 ) (662 ) (644 ) Net property, plant and equipment (g) 31,161 31,385 31,698 2,293 2,137 2,089 274 254 244 Total assets (h) (i) 34,554 34,829 35,044 5,179 5,119 4,890 416 438 399 Corporate and other Eliminations Consolidated millions of Canadian dollars 2019 2018 2017 2019 2018 2017 2019 2018 2017 Revenues and other income Revenues (a) - - - - - - 34,002 34,964 29,125 Intersegment sales - - - (5,589 ) (4,455 ) (3,681 ) - - - Investment and other income (note 9) 35 29 14 - - - 99 135 299 35 29 14 (5,589 ) (4,455 ) (3,681 ) 34,101 35,099 29,424 Expenses Exploration (b) (note 16) - - - - - - 47 19 183 Purchases of crude oil and products - - - (5,581 ) (4,449 ) (3,675 ) 20,946 21,541 18,145 Production and manufacturing (c) - - - - - - 6,520 6,121 5,698 Selling and general (c) 48 54 49 (8 ) (6 ) (6 ) 900 908 893 Federal excise tax and fuel charge - - - - - - 1,808 1,667 1,673 Depreciation and depletion (b) (d) 22 21 19 - - - 1,598 1,555 2,172 Non-service (c) 143 107 - - - - 143 107 - Financing (note 13) 90 105 65 - - - 93 108 78 Total expenses 303 287 133 (5,589 ) (4,455 ) (3,681 ) 32,055 32,026 28,842 Income (loss) before income taxes (268 ) (258 ) (119 ) - - - 2,046 3,073 582 Income tax expense (benefit) (e) (note 4) (51 ) (69 ) (40 ) - - - (154 ) 759 92 Net income (loss) (217 ) (189 ) (79 ) - - - 2,200 2,314 490 Cash flows from (used in) operating activities (124 ) (116 ) (125 ) (7 ) 19 - 4,429 3,922 2,763 Capital and exploration expenditures (f) 48 28 38 - - - 1,814 1,427 671 Property, plant and equipment Cost 741 693 665 - - - 54,868 53,944 52,778 Accumulated depreciation and depletion (266 ) (244 ) (223 ) - - - (20,665 ) (19,719 ) (18,305 ) Net property, plant and equipment (g) 475 449 442 - - - 34,203 34,225 34,473 Total assets (h) (i) 2,536 1,548 1,703 (498 ) (478 ) (435 ) 42,187 41,456 41,601 (a) Includes export sales to the United States of $7,190 million (2018 - $6,661 million, 2017 - $4,392 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment. (b) The Upstream segment in 2017 includes non-cash (c) As part of the implementation of Accounting Standard Update, Compensation – Retirement Benefits (Topic 715), beginning January 1, 2018, Corporate and other includes all non-service (d) In 2018, the Downstream segment included a non-cash (e) Segment results in 2019 include a largely non- cash (f) Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance (g) Includes property, plant and equipment under construction of $2,149 million (2018 - $1,553 million, 2017 - $1,047 million). (h) Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842) (i) In 2019, the company removed $570 million from Total assets and corresponding liabilities in the Downstream segment associated with the Government of Ontario’s revocation of its cap and trade legislation . |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Income Tax Expense (Benefit) | millions of Canadian dollars 2019 2018 2017 Current income tax expense (a) 140 (14 ) (58 ) Deferred income tax expense (a) (294 ) 773 150 Total income tax expense (a) (154 ) 759 92 Statutory corporate tax rate (percent) 26.0 26.9 26.9 Increase (decrease) resulting from: Disposals (b) (0.6 ) (0.3 ) (5.3 ) Enacted tax rate change (a) (31.9 ) - 0.9 Other (c) (1.0 ) (1.9 ) (6.6 ) Effective income tax rate (7.5 ) 24.7 15.9 (a) On June 28, 2019 the Alberta government enacted a 4 percent decrease in the provincial tax rate, from 12 percent to 8 percent by 2022. On November 2, 2017 the British Columbia government enacted a 1 percent increase in the provincial tax rate from 11 percent to 12 percent. (b) 2017 disposals we (c) Other decreases in 2017 and 2018 were primarily related to prior year adjustments and re-assessments. |
Components of Deferred Income Tax Liabilities and Assets | Components of deferred income tax liabilities and asset s millions of Canadian dollars 2019 2018 2017 Depreciation and amortization 5,164 5,726 5,564 Successful drilling and land acquisitions 750 856 762 Pension and benefits (469 ) (336 ) (422 ) Asset retirement obligation (336 ) (381 ) (376 ) Capitalized interest 117 121 118 LIFO inventory valuation (276 ) (107 ) (318 ) Tax loss carryforwards (141 ) (658 ) (936 ) Other (161 ) (150 ) (196 ) Net deferred income tax liabilities 4,648 5,071 4,196 |
Unrecognized Tax Benefits | The following table summarizes the movement in unrecognized tax benefits: millions of Canadian dollars 2019 2018 2017 Balance as of January 1 36 78 106 Additions for prior years’ tax positions 1 9 2 Reductions for prior years’ tax positions - (2 ) - Reductions due to lapse of the statute of limitations - - - Settlements with tax authorities (2 ) (49 ) (30 ) Balance as of December 31 35 36 78 |
Employee retirement benefits (T
Employee retirement benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Assumptions Used to Determine Benefit Obligations | The benefit obligations and plan assets associated with the company’s defined benefit plans are measured on December 31. Pension benefits Other postretirement benefits 2019 2018 2019 2018 Assumptions used to determine benefit obligations at December 31 (percent) Discount rate 3.10 3.90 3.10 3.90 Long-term rate of compensation increase 4.50 4.50 4.50 4.50 millions of Canadian dollars Change in projected benefit obligation Projected benefit obligation at January 1 8,359 8,785 582 670 Current service cost 228 239 16 17 Interest cost 324 302 20 22 Actuarial loss (gain) 1,053 (498 ) 99 (101 ) Amendments 283 - - - Benefits paid (a) (461 ) (469 ) (24 ) (26 ) Projected benefit obligation at December 31 9,786 8,359 693 582 Accumulated benefit obligation at December 31 8,814 7,661 |
Change in Plan Assets of Pension and Other Postretirement Benefits | Pension benefits Other postretirement benefits millions of Canadian dollars 2019 2018 2019 2018 Change in plan assets Fair value at January 1 7,691 7,870 Actual return (loss) on plan assets 1,114 20 Company contributions 211 203 Benefits paid (b) (417 ) (402 ) Fair value at December 31 8,599 7,691 Plan assets in excess of (less than) projected benefit obligation at December 31 Funded plans (590 ) (180 ) Unfunded plans (597 ) (488 ) (693 ) (582 ) Total (c) (1,187 ) (668 ) (693 ) (582 ) (a) Benefit payments for funded and unfunded plans. (b) Benefit payments for funded plans only. (c) Fair value of assets less projected benefit obligation shown above. |
Amounts Recorded in Consolidated Balance Sheet and Accumulated Other Comprehensive Income | Pension benefits Other postretirement benefits millions of Canadian dollars 2019 2018 2019 2018 Amounts recorded in the Consolidated balance sheet consist of: Current liabilities (27 ) (27 ) (31 ) (28 ) Other long-term obligations (1,160 ) (641 ) (662 ) (554 ) Total recorded (1,187 ) (668 ) (693 ) (582 ) Amounts recorded in accumulated other comprehensive income consist of: Net actuarial loss (gain) 2,256 2,117 133 33 Prior service cost 283 - - - Total recorded in accumulated other comprehensive income, before tax 2,539 2,117 133 33 |
Assumptions Used to Determine Periodic Benefit Cost | 2019 2018 2017 2019 2018 2017 Assumptions used to determine net periodic benefit cost for years ended December 31 (percent) Discount rate 3.90 3.40 3.75 3.90 3.40 3.75 Long-term rate of return on funded assets 4.50 5.00 5.50 - - - Long-term rate of compensation increase 4.50 4.50 4.50 4.50 4.50 4.50 millions of Canadian dollars Components of net periodic benefit cost Current service cost 228 239 217 16 17 16 Interest cost 324 302 313 20 22 23 Expected return on plan assets (349 ) (402 ) (408 ) - - - Amortization of prior service cost - 4 10 - - - Amortization of actuarial loss (gain) 149 175 176 (1 ) 6 8 Net periodic benefit cost 352 318 308 35 45 47 Changes in amounts recorded in accumulated other comprehensive income Net actuarial loss (gain) 288 (116 ) 123 99 (101 ) (49 ) Amortization of net actuarial (loss) gain included in net periodic benefit cost (149 ) (175 ) (176 ) 1 (6 ) (8 ) Prior service cost 283 - - - - - Amortization of prior service cost included in net periodic benefit cost - (4 ) (10 ) - - - Total recorded in other comprehensive income 422 (295 ) (63 ) 100 (107 ) (57 ) Total recorded in net periodic benefit cost and other comprehensive 774 23 245 135 (62 ) (10 ) |
Summary of Change in Accumulated Other Comprehensive Income | A summary of the change in accumulated other comprehensive income is shown in the table below: Total pension and other postretirement benefits millions of Canadian dollars 2019 2018 2017 (Charge) credit to other comprehensive income, before tax (522 ) 402 120 Deferred income tax (charge) credit (note 18) 128 (104) (38) (Charge) credit to other comprehensive income, after tax (394 ) 298 82 |
Fair Value of Pension Plan Assets Including Level within Fair Value Hierarchy | The 2019 fair value of the pension plan assets, including the level within the fair value hierarchy, is shown in the table below: Fair value measurements at December 31, 2019, using: millions of Canadian dollars Total Level 1 Level 2 Level 3 Net Asset Asset class Equity securities Canadian 210 210 Non-Canadian 2,449 2,449 Debt securities - Canadian Corporate 1,379 1,379 Government 4,299 4,299 Asset backed 1 1 Equities – Venture capital 204 204 Cash 57 40 17 Total plan assets at fair value 8,599 40 8,559 The 2018 fair value of the pension plan assets, including the level within the fair value hierarchy, is shown in the table below: Fair value measurements at December 31, 2018, using: millions of Canadian dollars Total Level 1 Level 2 Level 3 Net Asset Asset class Equity securities Canadian 170 170 Non-Canadian 2,035 2,035 Debt securities - Canadian Corporate 1,231 1,231 Government 3,987 3,987 Asset backed 3 3 Equities – Venture capital 226 226 Cash 39 33 6 Total plan assets at fair value 7,691 33 - - 7,658 |
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | A summary of pension plans with accumulated benefit obligations in excess of plan assets is shown in the table below: Pension benefits millions of Canadian dollars 2019 2018 For funded pension plans with accumulated benefit obligations in excess of plan assets: (a) Projected benefit obligation 1,042 943 Accumulated benefit obligation 942 852 Fair value of plan assets 870 739 Accumulated benefit obligation less fair value of plan assets 72 113 For unfunded plans covered by book reserves: Projected benefit obligation 597 488 Accumulated benefit obligation 536 451 (a) The amounts shown for funded pension plans with accumulated benefit obligations in excess of plan assets represent the company’s proportionate share of a joint venture sponsored pension plan. For the company sponsored funded plan, plan assets exceeded the accumulated benefit obligation in both 2019 and 2018. |
Estimated 2020 Amortization from Accumulated Other Comprehensive Income | Estimated 2020 amortization from accumulated other comprehensive income millions of Canadian dollars Pension benefits Other postretirement benefits Net actuarial loss (gain) (a) 157 9 Prior service cost (b) 13 - (a) The company amortizes the net balance of actuarial loss (gain) as a component of net periodic benefit cost over the average remaining service period of active plan participants. (b) The company amortizes prior service cost on a straight-line basis. |
Benefit Payments Expected | Benefit payments expected in: millions of Canadian dollars Pension benefits Other postretirement benefits 2020 460 31 2021 460 31 2022 460 32 2023 460 32 2024 460 32 2025 - 2029 2,245 160 |
Other long-term obligations (Ta
Other long-term obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Long-Term Obligations | millions of Canadian dollars 2019 2018 Employee retirement benefits (a) (note 5) 1,822 1,195 Asset retirement obligations and other environmental liabilities (b) (d) 1,388 1,435 Share-based incentive compensation liabilities (note 8) 65 78 Operating lease liability (c) (note 14) 143 - Other obligations 219 235 Total other long-term obligations 3,637 2,943 (a) Total recorded employee retirement benefits obligations also included $58 million in current liabilities (2018 – $55 million). (b) Total asset retirement obligations and other environmental liabilities also included $124 million in current liabilities (2018 – $118 million). (c) Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842), (d) For 2019, the asset retirement obligations were discounted at 6 percent (2018 - 6 percent). |
Schedule of Asset Retirement Obligations | Asset retirement obligations incurred in the current period were Level 3 fair value measurements. The following table summarizes the activity in the liability for asset retirement obligations: millions of Canadian dollars 2019 2018 Balance as at January 1 1,417 1,397 Additions (deductions) (23 ) (5 ) Accretion 80 85 Settlement (74 ) (60 ) Balance as at December 31 1,400 1,417 |
Financial and derivative inst_2
Financial and derivative instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Realized and Unrealized Gain or (Loss) on Derivative Instruments | Realized and unrealized gain or (loss) on derivative instruments recognized in the Consolidated statement of income is included in the following lines on a before-tax millions of Canadian dollars 2019 2018 2017 Revenues (3 ) 6 - Purchases of crude oil and products (7 ) (24 ) (5 ) Total (10 ) (18 ) (5 ) |
Share-based incentive compens_2
Share-based incentive compensation programs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summarized Information about Incentive Share, Deferred Share and Restricted Stock Units | The following table summarizes information about these units for the year ended December 31, 2019: Restricted Deferred Outstanding at January 1, 2019 5,302,825 151,695 Granted 854,800 18,468 Vested / Exercised (1,241,280 ) - Forfeited and cancelled (3,540 ) - Outstanding at December 31, 2019 4,912,805 170,163 |
Investment and other income (Ta
Investment and other income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Gains and Losses on Asset Sales | Investment and other income includes gains and losses on asset sales as follows: millions of Canadian dollars 2019 2018 2017 Proceeds from asset sales 82 59 232 Book value of asset sales 36 5 12 Gain (loss) on asset sales, before-tax (a) 46 54 220 Gain (loss) on asset sales, after-tax (a) 42 38 192 (a) 2017 included a gain of $174 million ($151 million after tax) from the sale of surplus property in Ontario. |
Common shares (Tables)
Common shares (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Common Shares | thousands of shares At December 31 2019 Authorized 1,100,000 1,100,000 Common shares outstanding 743,902 782,565 |
Common Share Activities | The company’s common share activities are summarized below: Thousands of Millions of Balance as at January 1, 2017 847,599 1,566 Issued under employee share-based awards 2 - Purchases at stated value (16,359 ) (30 ) Balance as at December 31, 2017 831,242 1,536 Issued under employee share-based awards 2 - Purchases at stated value (48,679 ) (90 ) Balance as at December 31, 2018 782,565 1,446 Issued under employee share-based awards 1 - Purchases at stated value (38,664 ) (71 ) Balance as at December 31, 2019 743,902 1,375 |
Calculation of Basic and Diluted Earnings Per Share | 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: 2019 2017 Net income (loss) per common share – basic Net income (loss) (millions of Canadian dollars) 2,200 2,314 490 Weighted average number of common shares outstanding (millions of shares) 762.7 807.5 842.9 Net income (loss) per common share (dollars) 2.88 2.87 0.58 Net income (loss) per common share – diluted Net income (loss) (millions of Canadian dollars) 2,200 2,314 490 Weighted average number of common shares outstanding (millions of shares) 762.7 807.5 842.9 Effect of employee share-based awards (millions of shares) 2.3 2.6 2.8 Weighted average number of common shares outstanding, assuming dilution (millions of shares) 765.0 810.1 845.7 Net income (loss) per common share (dollars) 2.88 2.86 0.58 Dividends per common share – declared (dollars) 0.85 0.73 0.63 |
Miscellaneous financial infor_2
Miscellaneous financial information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories of Crude Oil and Products | Inventories of crude oil and products at year-end millions of Canadian dollars 2019 2018 Crude oil 764 731 Petroleum products 396 473 Chemical products 64 72 Other 72 21 Total inventories of crude oil and products 1,296 1,297 |
Financing and additional note_2
Financing and additional notes and loans payable information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financing and Additional Notes and Loans Payable Information | millions of Canadian dollars 2019 2018 2017 Debt-related interest (a) 138 133 103 Capitalized interest (48 ) (28 ) (38) Net interest expense 90 105 65 Other interest 3 3 13 Total financing (b) 93 108 78 (a) Includes related party interest with ExxonMobil. (b) The weighted average interest rate on short-term borrowings in 2019 was 1.8 percent (2018 – 1.5 percent, 2017– 0.9 percent). Average effective rate on the long-term borrowings with ExxonMobil in 2019 was 2.2 percent (2018 – 2.0 percent, 2017 – 1.3 percent). |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule Of Lease Cost | The table below summarizes the total lease cost incurred: 2019 millions of Canadian dollars Operating Finance Operating lease cost 151 Short-term and other (net of sublease rental income) 76 Amortization of right of use assets 55 Interest on lease liabilities 40 Total lease cost 227 95 |
Schedule Of Operating Leases and Finance Leases Recorded In Balance Sheet | The following table summarizes the amounts related to operating leases and finance leases recorded on the Consolidated balance sheet as at December 31, 2019: 2019 millions of Canadian dollars Operating leases Finance leases Right of use assets Included in Other assets, including intangibles, net 260 Included in Property, plant and equipment, net 546 Total right of use assets 260 546 Lease liability due within one year Included in Accounts payable and accrued liabilities 115 15 Included in Notes and loans payable 18 Long-term lease liability Included in Other long-term obligations 143 - Included in Long-term debt 514 Total lease liability 258 547 |
Maturity Of Lease Liabilities | The maturity analysis of the company’s lease liabilities, weighted average remaining lease term and weighted average discount rates applied at December 31, 2019, are summarized below: 2019 millions of Canadian dollars, unless noted Operating Finance Maturity analysis of lease liabilities 202 0 121 71 2021 70 50 2022 30 49 2023 13 48 2024 11 47 2025 and beyond 30 1,086 Total lease payments 275 1,351 Discount to present value (17 ) (804 ) Total lease liability 258 547 Weighted average remaining lease term (years) 4 40 Weighted average discount rate (percent) 2.6 7.5 |
Schedule Of Measurement Of Lease Liabilities and Right Of Use Assets | 2019 millions of Canadian dollars Operating Finance Cash paid for amounts included in the measurement of lease liabilities Cash flows from operating activities 147 45 Cash flows from financing activities 27 Non-cash For January 1 adoption of Leases (Topic 842) 298 In exchange for new lease liabilities during the year 104 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-Term Debt | millions of Canadian dollars At December 31 2019 2018 Long-term debt (a) 4,447 4,447 Finance leases (b) 514 531 Total long-term debt 4,961 4,978 (a) Borrowed under an existing agreement with an affiliated company of ExxonMobil that provides for a long-term, variable-rate, Canadian dollar loan from ExxonMobil to the company of up to $7.75 billion at interest equivalent to Canadian market rates. The agreement is effective until June 30, 2025, cancelable if ExxonMobil provides at least 370 days advance written notice. (b) Finance leases are primarily associated with transportation facilities and services agreements. The average imputed rate was 7.5 percent in 2019 (2018 – 7.1 percent). Total finance lease obligations also include $18 million in current liabilities (2018 - $27 million). Principal payments on finance leases of approximately $13 million on average per year are due in each of the next four years after December 31, 2020. |
Accounting for suspended expl_2
Accounting for suspended exploratory well costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Change in Capitalized Suspended Exploratory Well Costs | Change in capitalized suspended exploratory well costs: millions of Canadian dollars 2019 2018 2017 Balance as at January 1 - - 143 Additions pending the determination of proved reserves - - - Charged to expense - - (143 ) Reclassification to wells, facilities and equipment based on the determination of proved reserves - - - Balance as at December 31 - - - |
Schedule of Aging of Capitalized Exploratory Well Costs | Period end capitalized suspended exploratory well costs: millions of Canadian dollars 2019 2018 2017 Capitalized for a period of one year or less - - - Capitalized for a period of between one and ten years - - - Capitalized for a period of greater than one year - - - Total - - - |
Number of Projects With Suspended Exploratory Well Costs | The table below provides a breakdown of the number of projects with only exploratory well costs capitalized for a period of one year or less and those that have had exploratory well costs capitalized for a period greater than one year. 2019 2018 2017 Number of projects that only have exploratory well costs capitalized for a period of one year or less - - - Number of projects that have exploratory well costs capitalized for a period of greater than one year - - - Total - - - |
Other comprehensive income (l_2
Other comprehensive income (loss) information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Changes in Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss): millions of Canadian dollars 2019 2018 2017 Balance at January 1 (1,517 ) (1,815 ) (1,897 ) Postretirement benefits liability adjustment: Current period change excluding amounts reclassified from accumulated other (505 ) 158 (54 ) Amounts reclassified from accumulated other comprehensive income 111 140 136 Balance at December 31 (1,911 ) (1,517 ) (1,815 ) |
Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss) - Before-Tax Income (Expense) | millions of Canadian dollars 2019 2018 2017 Amortization of postretirement benefits liability adjustment included in net periodic benefit cost (a) (148 ) (185 ) (194 ) (a) . |
Income Tax Expense (Credit) for Components of Other Comprehensive Income (Loss) | millions of Canadian dollars 2019 2017 Postretirement benefits liability adjustments: Postretirement benefits liability adjustment (excluding amortization) (165 ) 59 (20 ) Amortization of postretirement benefits liability adjustment included in net periodic benefit cost 37 45 58 Total (128 ) 104 38 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Line Items] | |
Amortization of computer software development costs, in years | 15 years |
Amortization of customer lists, in years | 10 years |
Refinery And Chemical Process | |
Significant Accounting Policies [Line Items] | |
Property plant and equipment, useful life | 25 years |
Maximum | Mining Heavy Equipment | |
Significant Accounting Policies [Line Items] | |
Property plant and equipment, useful life | 15 years |
Maximum | Ore Processing Plant Assets | |
Significant Accounting Policies [Line Items] | |
Property plant and equipment, useful life | 50 years |
Syncrude Joint Venture | |
Significant Accounting Policies [Line Items] | |
Undivided interest in oil and gas activities | 25.00% |
Kearl Joint Venture | |
Significant Accounting Policies [Line Items] | |
Undivided interest in oil and gas activities | 70.96% |
Accounting changes - Additional
Accounting changes - Additional Information (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Jan. 01, 2019 |
Change in Accounting Estimate [Abstract] | ||
Operating Lease, Right-of-Use Asset | $ 260 | $ 298 |
Operating Lease, Liability | $ 258 | $ 298 |
Business Segments (Detail)
Business Segments (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Revenues and other income | ||||
Revenues | [1],[2] | $ 34,002 | $ 34,964 | $ 29,125 |
Investment and other income (note 9) | 99 | 135 | 299 | |
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME | 34,101 | 35,099 | 29,424 | |
Expenses | ||||
Exploration (note 16) | [3] | 47 | 19 | 183 |
Purchases of crude oil and products | [4] | 20,946 | 21,541 | 18,145 |
Production and manufacturing | [5] | 6,520 | 6,121 | 5,698 |
Selling and general | [5] | 900 | 908 | 893 |
Federal excise tax and fuel charge | 1,808 | 1,667 | 1,673 | |
Depreciation and depletion | [3],[6] | 1,598 | 1,555 | 2,172 |
Non-service pension and postretirement benefit | [5] | 143 | 107 | |
Financing (note 13) | [7],[8] | 93 | 108 | 78 |
Total expenses | 32,055 | 32,026 | 28,842 | |
Income (loss) before income taxes | 2,046 | 3,073 | 582 | |
Income tax expense (benefit) (note 4) | [9],[10] | (154) | 759 | 92 |
Net income (loss) | 2,200 | 2,314 | 490 | |
Cash flows from (used in) operating activities | 4,429 | 3,922 | 2,763 | |
Capital and exploration expenditures | [11] | 1,814 | 1,427 | 671 |
Property, plant and equipment Cost | 54,868 | 53,944 | 52,778 | |
Accumulated depreciation and depletion | (20,665) | (19,719) | (18,305) | |
Net property, plant and equipment | [12] | 34,203 | 34,225 | 34,473 |
Total assets | [13],[14] | 42,187 | 41,456 | 41,601 |
Consolidation, Eliminations | ||||
Revenues and other income | ||||
Intersegment sales | (5,589) | (4,455) | (3,681) | |
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME | (5,589) | (4,455) | (3,681) | |
Expenses | ||||
Purchases of crude oil and products | (5,581) | (4,449) | (3,675) | |
Selling and general | [5] | (8) | (6) | (6) |
Total expenses | (5,589) | (4,455) | (3,681) | |
Cash flows from (used in) operating activities | (7) | 19 | ||
Total assets | [13],[14] | (498) | (478) | (435) |
Upstream | ||||
Revenues and other income | ||||
Revenues | [2] | 9,479 | 8,525 | 7,302 |
Intersegment sales | 3,763 | 2,634 | 2,264 | |
Investment and other income (note 9) | 17 | 11 | 16 | |
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME | 13,259 | 11,170 | 9,582 | |
Expenses | ||||
Exploration (note 16) | [3] | 47 | 19 | 183 |
Purchases of crude oil and products | 6,528 | 5,833 | 4,526 | |
Production and manufacturing | [5] | 4,440 | 4,305 | 3,913 |
Depreciation and depletion | [3],[6] | 1,374 | 1,278 | 1,939 |
Financing (note 13) | 3 | 1 | 13 | |
Total expenses | 12,392 | 11,436 | 10,574 | |
Income (loss) before income taxes | 867 | (266) | (992) | |
Income tax expense (benefit) (note 4) | [10] | (481) | (128) | (286) |
Net income (loss) | 1,348 | (138) | (706) | |
Cash flows from (used in) operating activities | 2,423 | 916 | 1,257 | |
Capital and exploration expenditures | [11] | 1,248 | 991 | 416 |
Property, plant and equipment Cost | 47,050 | 46,435 | 45,542 | |
Accumulated depreciation and depletion | (15,889) | (15,050) | (13,844) | |
Net property, plant and equipment | [12] | 31,161 | 31,385 | 31,698 |
Total assets | [13],[14] | 34,554 | 34,829 | 35,044 |
Downstream | ||||
Revenues and other income | ||||
Revenues | [2] | 23,591 | 25,200 | 20,714 |
Intersegment sales | 1,597 | 1,542 | 1,155 | |
Investment and other income (note 9) | 47 | 95 | 269 | |
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME | 25,235 | 26,837 | 22,138 | |
Expenses | ||||
Purchases of crude oil and products | 19,332 | 19,326 | 16,543 | |
Production and manufacturing | [5] | 1,829 | 1,606 | 1,576 |
Selling and general | [5] | 774 | 773 | 772 |
Federal excise tax and fuel charge | 1,808 | 1,667 | 1,673 | |
Depreciation and depletion | [3],[6] | 186 | 242 | 202 |
Financing (note 13) | 0 | 2 | ||
Total expenses | 23,929 | 23,616 | 20,766 | |
Income (loss) before income taxes | 1,306 | 3,221 | 1,372 | |
Income tax expense (benefit) (note 4) | [10] | 345 | 855 | 332 |
Net income (loss) | 961 | 2,366 | 1,040 | |
Cash flows from (used in) operating activities | 1,965 | 2,749 | 1,396 | |
Capital and exploration expenditures | [11] | 484 | 383 | 200 |
Property, plant and equipment Cost | 6,123 | 5,900 | 5,683 | |
Accumulated depreciation and depletion | (3,830) | (3,763) | (3,594) | |
Net property, plant and equipment | [12] | 2,293 | 2,137 | 2,089 |
Total assets | [13],[14] | 5,179 | 5,119 | 4,890 |
Chemical | ||||
Revenues and other income | ||||
Revenues | [2] | 932 | 1,239 | 1,109 |
Intersegment sales | 229 | 279 | 262 | |
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME | 1,161 | 1,518 | 1,371 | |
Expenses | ||||
Purchases of crude oil and products | 667 | 831 | 751 | |
Production and manufacturing | [5] | 251 | 210 | 209 |
Selling and general | [5] | 86 | 87 | 78 |
Depreciation and depletion | [3],[6] | 16 | 14 | 12 |
Total expenses | 1,020 | 1,142 | 1,050 | |
Income (loss) before income taxes | 141 | 376 | 321 | |
Income tax expense (benefit) (note 4) | [10] | 33 | 101 | 86 |
Net income (loss) | 108 | 275 | 235 | |
Cash flows from (used in) operating activities | 172 | 354 | 235 | |
Capital and exploration expenditures | [11] | 34 | 25 | 17 |
Property, plant and equipment Cost | 954 | 916 | 888 | |
Accumulated depreciation and depletion | (680) | (662) | (644) | |
Net property, plant and equipment | [12] | 274 | 254 | 244 |
Total assets | [13],[14] | 416 | 438 | 399 |
Corporate and Other | ||||
Revenues and other income | ||||
Investment and other income (note 9) | 35 | 29 | 14 | |
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME | 35 | 29 | 14 | |
Expenses | ||||
Selling and general | [5] | 48 | 54 | 49 |
Depreciation and depletion | [3],[6] | 22 | 21 | 19 |
Non-service pension and postretirement benefit | [5] | 143 | 107 | 0 |
Financing (note 13) | 90 | 105 | 65 | |
Total expenses | 303 | 287 | 133 | |
Income (loss) before income taxes | (268) | (258) | (119) | |
Income tax expense (benefit) (note 4) | [10] | (51) | (69) | (40) |
Net income (loss) | (217) | (189) | (79) | |
Cash flows from (used in) operating activities | (124) | (116) | (125) | |
Capital and exploration expenditures | [11] | 48 | 28 | 38 |
Property, plant and equipment Cost | 741 | 693 | 665 | |
Accumulated depreciation and depletion | (266) | (244) | (223) | |
Net property, plant and equipment | [12] | 475 | 449 | 442 |
Total assets | [13],[14] | $ 2,536 | $ 1,548 | $ 1,703 |
[1] | Amounts from related parties included in revenues, (note 17).8,569 6,383 4,110 | |||
[2] | Includes export sales to the United States of $7,190 million (2018 - $6,661 million, 2017 - $4,392 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment. | |||
[3] | The Upstream segment in 2017 includes non-cash impairment charges of $396 million, before tax, associated with the Horn River development and $379 million, before tax, associated with the Mackenzie gas project. The impairment charges are recognized in the lines “Exploration” and “Depreciation and depletion” on the Consolidated statement of income, and the “Accumulated depreciation and depletion” line of the Consolidated balance sheet. | |||
[4] | Amounts to related parties included in purchases of crude oil and products, (note 17). 3,305 4,092 2,687 | |||
[5] | As part of the implementation of Accounting Standard Update, Compensation – Retirement Benefits (Topic 715), beginning January 1, 2018, Corporate and other includes all non-service pension and postretirement benefit expense. Prior to 2018, the majority of these costs were allocated to the operating segments. | |||
[6] | In 2018, the Downstream segment included a non-cash impairment charge of $46 million, before tax, associated with the Government of Ontario’s revocation of its cap and trade legislation. | |||
[7] | Amounts to related parties included in financing, (note 17). 98 89 60 | |||
[8] | The weighted average interest rate on short-term borrowings in 2019 was 1.8 percent (2018 – 1.5 percent, 2017– 0.9 percent). Average effective rate on the long-term borrowings with ExxonMobil in 2019 was 2.2 percent (2018 – 2.0 percent, 2017 – 1.3 percent). | |||
[9] | On June 28, 2019 the Alberta government enacted a 4 percent decrease in the provincial tax rate, from 12 percent to 8 percent by 2022. On November 2, 2017 the British Columbia government enacted a 1 percent increase in the provincial tax rate from 11 percent to 12 percent. | |||
[10] | Segment results in 2019 include a largely non-cash favourable impact of $662 million associated with the Alberta corporate income tax rate decrease, with the largest impact in the Upstream segment. | |||
[11] | Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits. | |||
[12] | Includes property, plant and equipment under construction of $2,149 million (2018 - $1,553 million, 2017 - $1,047 million). | |||
[13] | Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842), as amended. As at December 31, 2019, Total assets include operating lease right of use assets of $260 million. An election was made not to restate prior periods. See note 14 for additional details. | |||
[14] | In 2019, the company removed $570 million from Total assets and corresponding liabilities in the Downstream segment associated with the Government of Ontario’s revocation of its cap and trade legislation. |
Business Segments (Parenthetica
Business Segments (Parenthetical) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Segment Reporting Information [Line Items] | ||||
Impairment charge, before tax | $ 46 | |||
Plant and equipment under construction | $ 2,149 | 1,553 | $ 1,047 | |
Operating Lease, Right-of-Use Asset | 260 | $ 298 | ||
Upstream | Alberta | ||||
Segment Reporting Information [Line Items] | ||||
Noncash impact | 662 | |||
Accounts payable and accrued liabilities | ||||
Segment Reporting Information [Line Items] | ||||
Non-cash adjustments to accrued liabilities and all other items | 570 | |||
United States Exports | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | $ 7,190 | $ 6,661 | 4,392 | |
Horn River Development | ||||
Segment Reporting Information [Line Items] | ||||
Impairment charge, before tax | 396 | |||
Mackenzie Gas Project | ||||
Segment Reporting Information [Line Items] | ||||
Impairment charge, before tax | $ 379 |
Income Taxes (Detail)
Income Taxes (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Schedule Of Income Tax [Line Items] | ||||
Current income tax expense | [1] | $ 140 | $ (14) | $ (58) |
Deferred income tax expense | [1] | (294) | 773 | 150 |
Total income tax expense | [1],[2] | $ (154) | $ 759 | $ 92 |
Statutory corporate tax rate (percent) | 26.00% | 26.90% | 26.90% | |
Disposals | [3] | (0.60%) | (0.30%) | (5.30%) |
Enacted tax rate change | [1] | (31.90%) | 0.90% | |
Other | [4] | (1.00%) | (1.90%) | (6.60%) |
Effective income tax rate | (7.50%) | 24.70% | 15.90% | |
[1] | On June 28, 2019 the Alberta government enacted a 4 percent decrease in the provincial tax rate, from 12 percent to 8 percent by 2022. On November 2, 2017 the British Columbia government enacted a 1 percent increase in the provincial tax rate from 11 percent to 12 percent. | |||
[2] | Segment results in 2019 include a largely non-cash favourable impact of $662 million associated with the Alberta corporate income tax rate decrease, with the largest impact in the Upstream segment. | |||
[3] | 2017 disposals were primarily associated with the sale of surplus property in Ontario. | |||
[4] | Other decreases in 2017 and 2018 were primarily related to prior year adjustments and re-assessments. |
Income Taxes (Parenthetical) (D
Income Taxes (Parenthetical) (Detail) | Jun. 28, 2019 | Nov. 02, 2017 |
Alberta government [Member] | ||
Schedule Of Income Tax [Line Items] | ||
Increase/Decrease in the provincial tax rate | (4.00%) | |
Alberta government [Member] | Minimum | ||
Schedule Of Income Tax [Line Items] | ||
Provincial tax rate | 8.00% | |
Alberta government [Member] | Maximum | ||
Schedule Of Income Tax [Line Items] | ||
Provincial tax rate | 12.00% | |
British columbia government [Member] | ||
Schedule Of Income Tax [Line Items] | ||
Increase/Decrease in the provincial tax rate | 1.00% | |
British columbia government [Member] | Minimum | ||
Schedule Of Income Tax [Line Items] | ||
Provincial tax rate | 11.00% | |
British columbia government [Member] | Maximum | ||
Schedule Of Income Tax [Line Items] | ||
Provincial tax rate | 12.00% |
Components of Deferred Income T
Components of Deferred Income Tax Liabilities and Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Components Of Deferred Tax Assets And Liabilities [Line Items] | |||
Depreciation and amortization | $ 5,164 | $ 5,726 | $ 5,564 |
Successful drilling and land acquisitions | 750 | 856 | 762 |
Pension and benefits | (469) | (336) | (422) |
Asset retirement obligation | (336) | (381) | (376) |
Capitalized interest | 117 | 121 | 118 |
LIFO inventory valuation | (276) | (107) | (318) |
Tax loss carryforwards | (141) | (658) | (936) |
Other | (161) | (150) | (196) |
Net deferred income tax liabilities | $ 4,648 | $ 5,071 | $ 4,196 |
Unrecognized Tax Benefits (Deta
Unrecognized Tax Benefits (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Unrecognized Tax Benefits [Line Items] | |||
Balance as of January 1 | $ 36 | $ 78 | $ 106 |
Additions for prior years' tax positions | 1 | 9 | 2 |
Reductions for prior years' tax positions | (2) | ||
Settlements with tax authorities | (2) | (49) | (30) |
Balance as of December 31 | $ 35 | $ 36 | $ 78 |
Assumptions Used to Determine B
Assumptions Used to Determine Benefit Obligations (Detail) | Dec. 31, 2019 | Dec. 31, 2018 |
Pension benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.10% | 3.90% |
Long-term rate of compensation increase | 4.50% | 4.50% |
Other postretirement benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.10% | 3.90% |
Long-term rate of compensation increase | 4.50% | 4.50% |
Change in Projected Benefit Obl
Change in Projected Benefit Obligation (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Projected benefit obligation at January 1 | $ 8,359 | $ 8,785 | |
Current service cost | 228 | 239 | $ 217 |
Interest cost | 324 | 302 | 313 |
Actuarial loss (gain) | 1,053 | (498) | |
Amendments | 283 | ||
Benefits paid | (461) | (469) | |
Projected benefit obligation at December 31 | 9,786 | 8,359 | 8,785 |
Accumulated benefit obligation at December 31 | 8,814 | 7,661 | |
Other postretirement benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Projected benefit obligation at January 1 | 582 | 670 | |
Current service cost | 16 | 17 | 16 |
Interest cost | 20 | 22 | 23 |
Actuarial loss (gain) | 99 | (101) | |
Benefits paid | (24) | (26) | |
Projected benefit obligation at December 31 | $ 693 | $ 582 | $ 670 |
Employee Retirement Benefits -
Employee Retirement Benefits - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate assumed for 2020 | 5.66% | ||
Health care cost trend rate assumed for 2040 | 3.57% | ||
Long-term expected return | 4.50% | ||
Actual rate of return | 8.10% | 6.60% | |
Cost for defined contributions plans | $ 43 | $ 41 | $ 40 |
Plan assets invested in venture capital partnerships | 3.00% | ||
Cash contributions to pension plans in 2020 | $ 216 | ||
Post Retirement Benefit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Sensitivity percentage | 1.00% | ||
Increase in service and interest cost | $ 5 | ||
Increase in Accumulated Postretirement Benefit Obligation | 75 | ||
Decrease in Service and interest cost | 4 | ||
Decrease in Accumulated Postretirement Benefit Obligation | $ 60 | ||
Equity Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation securities | 30.00% | ||
Debt Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation securities | 67.00% |
Change in Plan Assets and Plan
Change in Plan Assets and Plan Assets in Excess of Less Than Projected Benefit Obligation (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Fair value at January 1 | $ 7,691 | ||
Fair value at December 31 | 8,599 | $ 7,691 | |
Pension benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Fair value at January 1 | 7,691 | 7,870 | |
Actual return (loss) on plan assets | 1,114 | 20 | |
Company contributions | 211 | 203 | |
Benefits paid | [1] | (417) | (402) |
Fair value at December 31 | 8,599 | 7,691 | |
Funded plans | (590) | (180) | |
Unfunded plans | (597) | (488) | |
Total | [2] | (1,187) | (668) |
Other postretirement benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Unfunded plans | (693) | (582) | |
Total | [2] | $ (693) | $ (582) |
[1] | Benefit payments for funded plans only. | ||
[2] | Fair value of assets less projected benefit obligation shown above. |
Amounts Recorded in Consolidate
Amounts Recorded in Consolidated Balance Sheet and Accumulated Other Comprehensive Income (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Current liabilities | $ (58) | $ (55) | |
Other long-term obligations | [1] | (1,822) | (1,195) |
Pension benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Current liabilities | (27) | (27) | |
Other long-term obligations | (1,160) | (641) | |
Total recorded | (1,187) | (668) | |
Net actuarial loss (gain) | 2,256 | 2,117 | |
Prior service cost | 283 | ||
Total recorded in accumulated other comprehensive income, before tax | 2,539 | 2,117 | |
Other postretirement benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Current liabilities | (31) | (28) | |
Other long-term obligations | (662) | (554) | |
Total recorded | (693) | (582) | |
Net actuarial loss (gain) | 133 | 33 | |
Total recorded in accumulated other comprehensive income, before tax | $ 133 | $ 33 | |
[1] | Total recorded employee retirement benefits obligations also included $58 million in current liabilities (2018 – $55 million). |
Assumptions Used to Determine P
Assumptions Used to Determine Periodic Benefit Cost (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Long-term rate of return on funded assets | 4.50% | ||
Pension benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Discount rate | 3.90% | 3.40% | 3.75% |
Long-term rate of return on funded assets | 4.50% | 5.00% | 5.50% |
Long-term rate of compensation increase | 4.50% | 4.50% | 4.50% |
Other postretirement benefits | |||
Schedule Of Defined Benefit Plans Disclosures [Line Items] | |||
Discount rate | 3.90% | 3.40% | 3.75% |
Long-term rate of compensation increase | 4.50% | 4.50% | 4.50% |
Components of Net Periodic Bene
Components of Net Periodic Benefit Cost and Changes in Amounts Recorded in Accumulated Other Comprehensive Income (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total recorded in other comprehensive income | $ 522 | $ (402) | $ (120) |
Pension benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Current service cost | 228 | 239 | 217 |
Interest cost | 324 | 302 | 313 |
Expected return on plan assets | (349) | (402) | (408) |
Amortization of prior service cost | 4 | 10 | |
Amortization of actuarial loss (gain) | 149 | 175 | 176 |
Net periodic benefit cost | 352 | 318 | 308 |
Net actuarial loss (gain) | 288 | (116) | 123 |
Amortization of net actuarial (loss) gain included in net periodic benefit cost | (149) | (175) | (176) |
Prior service costs | 283 | ||
Amortization of prior service cost included in net periodic benefit cost | (4) | (10) | |
Total recorded in other comprehensive income | 422 | (295) | (63) |
Total recorded in net periodic benefit cost and other comprehensive income, before tax | 774 | 23 | 245 |
Other postretirement benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Current service cost | 16 | 17 | 16 |
Interest cost | 20 | 22 | 23 |
Amortization of actuarial loss (gain) | (1) | 6 | 8 |
Net periodic benefit cost | 35 | 45 | 47 |
Net actuarial loss (gain) | 99 | (101) | (49) |
Amortization of net actuarial (loss) gain included in net periodic benefit cost | 1 | (6) | (8) |
Total recorded in other comprehensive income | 100 | (107) | (57) |
Total recorded in net periodic benefit cost and other comprehensive income, before tax | $ 135 | $ (62) | $ (10) |
Summary of Change in Accumulate
Summary of Change in Accumulated Other Comprehensive Income (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
(Charge) credit to other comprehensive income, before tax | $ (522) | $ 402 | $ 120 |
Deferred income tax (charge) credit (note 18) | 128 | (104) | (38) |
(Charge) credit to other comprehensive income, after tax | $ (394) | $ 298 | $ 82 |
Fair Value of Pension Plan Asse
Fair Value of Pension Plan Assets Including Level Within Fair Value Hierarchy (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | $ 8,599 | $ 7,691 |
Investments that are measured at fair value using net asset value | 8,559 | 7,658 |
Canadian Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 210 | 170 |
Investments that are measured at fair value using net asset value | 210 | 170 |
Non-Canadian Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 2,449 | 2,035 |
Investments that are measured at fair value using net asset value | 2,449 | 2,035 |
Corporate Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 1,379 | 1,231 |
Investments that are measured at fair value using net asset value | 1,379 | 1,231 |
Government Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 4,299 | 3,987 |
Investments that are measured at fair value using net asset value | 4,299 | 3,987 |
Asset Backed Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 1 | 3 |
Investments that are measured at fair value using net asset value | 1 | 3 |
Equities - Venture Capital | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 204 | 226 |
Investments that are measured at fair value using net asset value | 204 | 226 |
Cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 57 | 39 |
Investments that are measured at fair value using net asset value | 17 | 6 |
Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | 40 | 33 |
Level 1 | Cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total plan assets at fair value | $ 40 | $ 33 |
Pension Plan with Accumulated B
Pension Plan with Accumulated Benefit Obligation in Excess of Plan Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 8,599 | $ 7,691 | |
Funded Pension Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Projected benefit obligation | [1] | 1,042 | 943 |
Accumulated benefit obligation | [1] | 942 | 852 |
Fair value of plan assets | [1] | 870 | 739 |
Accumulated benefit obligation less fair value of plan assets | [1] | 72 | 113 |
Unfunded Pension Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Projected benefit obligation | 597 | 488 | |
Accumulated benefit obligation | $ 536 | $ 451 | |
[1] | The amounts shown for funded pension plans with accumulated benefit obligations in excess of plan assets represent the company’s proportionate share of a joint venture sponsored pension plan. For the company sponsored funded plan, plan assets exceeded the accumulated benefit obligation in both 2019 and 2018. |
Estimated 2020 Amortization fro
Estimated 2020 Amortization from Accumulated Other Comprehensive Income (Detail) $ in Millions | Dec. 31, 2019CAD ($) | |
Pension benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss (gain) | $ 157 | [1] |
Prior service cost | 13 | [2] |
Other postretirement benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss (gain) | $ 9 | [1] |
[1] | The company amortizes the net balance of actuarial loss (gain) as a component of net periodic benefit cost over the average remaining service period of active plan participants. | |
[2] | The company amortizes prior service cost on a straight-line basis. |
Expected Benefit Payments (Deta
Expected Benefit Payments (Detail) $ in Millions | Dec. 31, 2019CAD ($) |
Pension benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | $ 460 |
2021 | 460 |
2022 | 460 |
2023 | 460 |
2024 | 460 |
2025 - 2029 | 2,245 |
Other postretirement benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 31 |
2021 | 31 |
2022 | 32 |
2023 | 32 |
2024 | 32 |
2025 - 2029 | $ 160 |
Other Long-Term Obligations (De
Other Long-Term Obligations (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Other Liabilities [Line Items] | |||
Employee retirement benefits | [1] | $ 1,822 | $ 1,195 |
Asset retirement obligations and other environmental liabilities | [2],[3] | 1,388 | 1,435 |
Share-based incentive compensation liabilities | 65 | 78 | |
Operating lease liability | [4] | 143 | |
Other obligations | 219 | 235 | |
Total other long-term obligations | [5] | $ 3,637 | $ 2,943 |
[1] | Total recorded employee retirement benefits obligations also included $58 million in current liabilities (2018 – $55 million). | ||
[2] | For 2019, the asset retirement obligations were discounted at 6 percent (2018 - 6 percent). | ||
[3] | Total asset retirement obligations and other environmental liabilities also included $124 million in current liabilities (2018 – $118 million). | ||
[4] | Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842), as amended. The standard requires all leases to be recorded on the balance sheet as a right of use asset and liability. The long-term lease liability for operating leases is included in Other long-term obligations (see note 14). | ||
[5] | Other long-term obligations included amounts to related parties of $0 million (2018 – $15 million), (note 17). |
Other Long-Term Obligations (Pa
Other Long-Term Obligations (Parenthetical) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Other Liabilities [Line Items] | ||
Employee retirement benefit obligations in current liabilities | $ 58 | $ 55 |
Asset retirement obligations and other environmental liabilities in current liabilities | $ 124 | $ 118 |
Asset retirement obligations discount rate | 6.00% | 6.00% |
Schedule of Asset Retirement Ob
Schedule of Asset Retirement Obligations (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Changes in Asset Retirement Obligations [Line Items] | ||
Balance as at January 1 | $ 1,417 | $ 1,397 |
Additions (deductions) | (23) | (5) |
Accretion | 80 | 85 |
Settlement | (74) | (60) |
Balance as at December 31 | $ 1,400 | $ 1,417 |
Financial and derivative inst_3
Financial and derivative instruments - Additional Information (Detail) $ in Millions | Dec. 31, 2019CAD ($)bbl | Dec. 31, 2018CAD ($)bbl |
Financial Instruments And Derivatives [Line Items] | ||
Fair value of collateral receivable | $ 6 | $ 0 |
Long-term Debt, Fair Value | 4,447 | 4,447 |
Fair value of derivative asset | 0 | 31 |
Fair value of derivative liability | $ 2 | $ 15 |
Product | ||
Financial Instruments And Derivatives [Line Items] | ||
Net notional forward long / (short) position of derivative instruments | bbl | 0 | (340,000) |
Crude Oil | ||
Financial Instruments And Derivatives [Line Items] | ||
Net notional forward long / (short) position of derivative instruments | bbl | (590,000) | (350,000) |
Summary of Realized and Unreali
Summary of Realized and Unrealized Gain or (Loss) on Derivative Instruments (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Financial Instruments And Derivatives [Line Items] | |||
Revenues | $ (3) | $ 6 | |
Purchases of crude oil and products | (7) | (24) | (5) |
Total | $ (10) | $ (18) | $ (5) |
Share-Based Incentive Compens_3
Share-Based Incentive Compensation Programs - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense charged against income | $ 34 | $ 32 | $ 14 |
Income tax benefit recognized in income related to compensation expense | 9 | 9 | 4 |
Cash payment for compensation expense | 50 | $ 59 | $ 71 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Before-tax unrecognized compensation expense related to non-vested restricted stock | $ 76 | ||
Weighted average vesting period of nonvested restricted stock | 4 years 1 month 6 days | ||
Restricted Stock Units | Restricted Stock Unit Plan 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage restricted stock units vested on third anniversary of the grant date | 50.00% | ||
Percentage restricted stock units vested on seventh anniversary of the grant date | 50.00% | ||
Restricted Stock Units | Restricted Stock Unit Plan 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage restricted stock units vested on fifth anniversary of the grant date | 50.00% | ||
Percentage restricted stock units vested on tenth anniversary of the grant date | 50.00% | ||
Restricted Stock Units | Restricted Stock Unit Plan 3 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage restricted stock units vested on fifth anniversary of the grant date | 50.00% | ||
Percentage restricted stock units vested on tenth anniversary of the grant date | 50.00% |
Summarized Information About In
Summarized Information About Incentive Share, Deferred Share and Restricted Stock Units (Detail) | 12 Months Ended |
Dec. 31, 2019shares | |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at January 1, 2019 | 5,302,825 |
Granted | 854,800 |
Vested / Exercised | (1,241,280) |
Forfeited and cancelled | (3,540) |
Outstanding at December 31, 2019 | 4,912,805 |
Deferred Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at January 1, 2019 | 151,695 |
Granted | 18,468 |
Vested / Exercised | 0 |
Forfeited and cancelled | 0 |
Outstanding at December 31, 2019 | 170,163 |
Gains and Losses on Asset Sales
Gains and Losses on Asset Sales (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Investment And Other Income [Line Items] | ||||
Proceeds from asset sales | $ 82 | $ 59 | $ 232 | |
Book value of asset sales | 36 | 5 | 12 | |
Gain (loss) on asset sales, before-tax | [1] | 46 | 54 | 220 |
Gain (loss) on asset sales, after-tax | [1] | $ 42 | $ 38 | $ 192 |
[1] | 2017 included a gain of $174 million ($151 million after tax) from the sale of surplus property in Ontario. |
Gains and Losses on Asset Sal_2
Gains and Losses on Asset Sales (Parenthetical) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Investment And Other Income [Line Items] | ||||
Gain (loss) on asset sales, before tax | [1] | $ 46 | $ 54 | $ 220 |
Gain (loss) on asset sales, after tax | [1] | $ 42 | $ 38 | 192 |
Surplus Property | ||||
Investment And Other Income [Line Items] | ||||
Gain (loss) on asset sales, before tax | 174 | |||
Gain (loss) on asset sales, after tax | $ 151 | |||
[1] | 2017 included a gain of $174 million ($151 million after tax) from the sale of surplus property in Ontario. |
Litigation and Other Continge_2
Litigation and Other Contingencies - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Litigation And Other Contingencies [Line Items] | ||
Total payment on unconditional purchase obligation | $ 0 | |
Total other third party obligations payable | 30 | $ 35 |
Indemnification Agreement [Member] | ||
Litigation And Other Contingencies [Line Items] | ||
Total other third party obligations payable | $ 64 | $ 46 |
Common Shares - Additional Info
Common Shares - Additional Information (Detail) - shares | Jun. 27, 2019 | Jun. 13, 2019 |
Class of Stock [Line Items] | ||
Normal course issuer bid share repurchase shares authorized | 38,211,086 | |
Percent of total shares | 5.00% | |
Exxon Mobil Corporation's ownership interest in Imperial | 69.60% | |
Normal course issuer bid share repurchase term, months | 12 months |
Summary of Common Shares (Detai
Summary of Common Shares (Detail) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Authorized | 1,100,000,000 | 1,100,000,000 |
Common shares outstanding | 743,902,000 | 782,565,000 |
Common Share Activities (Detail
Common Share Activities (Detail) - CAD ($) shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Class of Stock [Line Items] | ||||
Common stock beginning balance, shares | 782,565 | |||
Common stock, ending balance, shares | 743,902 | 782,565 | ||
Common stock beginning balance, value | [1] | $ 1,446 | ||
Common stock, ending balance, value | [1] | $ 1,375 | $ 1,446 | |
Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock beginning balance, shares | 782,565 | 831,242 | 847,599 | |
Issued under employee share-based awards, shares | 1 | 2 | 2 | |
Purchases at stated value, shares | (38,664) | (48,679) | (16,359) | |
Common stock, ending balance, shares | 743,902 | 782,565 | 831,242 | |
Common stock beginning balance, value | $ 1,446 | $ 1,536 | $ 1,566 | |
Issued under employee share-based awards, value | 0 | 0 | 0 | |
Purchases at stated value, value | (71) | (90) | (30) | |
Common stock, ending balance, value | $ 1,375 | $ 1,446 | $ 1,536 | |
[1] | Number of common shares authorized and outstanding were 1,100 million and 744 million, respectively (2018 – 1,100 million and 783 million, respectively), (note 11). |
Calculation of basic and dilute
Calculation of basic and diluted earnings per common share and the dividend declared by the company on its outstanding common shares (Detail) - CAD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net income (loss) per common share - basic | |||
Net income (loss) | $ 2,200 | $ 2,314 | $ 490 |
Weighted average number of common shares outstanding (millions of shares) | 762.7 | 807.5 | 842.9 |
Net income (loss) per common share (dollars) | $ 2.88 | $ 2.87 | $ 0.58 |
Net income (loss) per common share - diluted | |||
Net income (loss) | $ 2,200 | $ 2,314 | $ 490 |
Weighted average number of common shares outstanding (millions of shares) | 762.7 | 807.5 | 842.9 |
Effect of employee share-based awards (millions of shares) | 2.3 | 2.6 | 2.8 |
Weighted average number of common shares outstanding, assuming dilution (millions of shares) | 765 | 810.1 | 845.7 |
Net income (loss) per common share (dollars) | $ 2.88 | $ 2.86 | $ 0.58 |
Dividends per common share - declared (dollars) | $ 0.85 | $ 0.73 | $ 0.63 |
Miscellaneous Financial Infor_3
Miscellaneous Financial Information - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Additional Financial Information [Line Items] | |||
Effect of LIFO inventory liquidation on income (loss) | $ (22) | $ 16 | $ 5 |
Difference between LIFO carrying values and replacement cost of inventories | 1,200 | 900 | |
Research and development costs charged to expenses | 133 | 110 | $ 111 |
Accounts payable and accrued liabilities included accrued taxes other than income taxes | $ 397 | $ 413 |
Inventories of Crude Oil and Pr
Inventories of Crude Oil and Products (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Product Information [Line Items] | ||
Crude oil | $ 764 | $ 731 |
Petroleum products | 396 | 473 |
Chemical products | 64 | 72 |
Other | 72 | 21 |
Total inventories of crude oil and products | $ 1,296 | $ 1,297 |
Financing and Additional Note_3
Financing and Additional Notes and Loans Payable Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Debt-related interest | [1] | $ 138 | $ 133 | $ 103 |
Capitalized interest | (48) | (28) | (38) | |
Net interest expense | 90 | 105 | 65 | |
Other interest | 3 | 3 | 13 | |
Total financing | [2],[3] | $ 93 | $ 108 | $ 78 |
[1] | Includes related party interest with ExxonMobil. | |||
[2] | Amounts to related parties included in financing, (note 17). 98 89 60 | |||
[3] | The weighted average interest rate on short-term borrowings in 2019 was 1.8 percent (2018 – 1.5 percent, 2017– 0.9 percent). Average effective rate on the long-term borrowings with ExxonMobil in 2019 was 2.2 percent (2018 – 2.0 percent, 2017 – 1.3 percent). |
Financing and Additional Note_4
Financing and Additional Notes and Loans Payable Information (Parenthetical) (Detail) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Weighted average interest rate on short-term borrowings | 1.80% | 1.50% | 0.90% |
Average effective rate for affiliate long-term borrowing | 2.20% | 2.00% | 1.30% |
Financing and Additional Note_5
Financing and Additional Notes and Loans Payable Information - Additional Information (Detail) - CAD ($) | 1 Months Ended | ||
Dec. 31, 2019 | Nov. 30, 2019 | Nov. 29, 2019 | |
Long Term Line Of Credit | |||
Financing Activities [Line Items] | |||
Non-interest bearing, revolving demand loan, outstanding amount | $ 0 | ||
Debt instrument, maturity date | Nov. 30, 2021 | ||
Non-interest bearing, revolving demand loan, remaining borrowing capacity | $ 250,000,000 | ||
Short Term Line of Credit | |||
Financing Activities [Line Items] | |||
Non-interest bearing, revolving demand loan, outstanding amount | $ 0 | ||
Debt instrument, maturity date | Dec. 31, 2020 | ||
Non-interest bearing, revolving demand loan, remaining borrowing capacity | $ 250,000,000 | ||
Exxon Mobil | Revolving demand loan | |||
Financing Activities [Line Items] | |||
Non-interest bearing, revolving demand loan, maximum borrowing capacity | $ 150,000,000 | $ 75,000,000 | |
Non-interest bearing, revolving demand loan, outstanding amount | $ 111,000,000 |
Leases - Additional Information
Leases - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Operating Leased Assets [Line Items] | ||||
Undiscounted Commitments | $ 6 | |||
Operating Lease, Liability | 258 | $ 298 | ||
Operating Lease, Right-of-Use Asset | $ 260 | $ 298 | ||
Net rental cost incurred for operating leases | $ 221 | $ 206 | ||
Minimum undiscounted lease commitments | $ 291 |
Schedule Of Lease Cost (Details
Schedule Of Lease Cost (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Operating leases [Member] | |
Lease, cost | |
Operating lease cost, Operating leases | $ 151 |
Short-term and other (net of sublease rental income), Operating leases | 76 |
Total lease cost | 227 |
Finance leases [Member] | |
Lease, cost | |
Amortization of right of use assets | 55 |
Interest on lease liabilities, Finance leases | 40 |
Total lease cost | $ 95 |
Schedule Of Operating Leases an
Schedule Of Operating Leases and Finance Leases Recorded In Balance Sheet (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Jan. 01, 2019 | |
Right of use assets | |||
Right of use assets, Operating leases | $ 260 | $ 298 | |
Right of use assets, Finance leases | 546 | ||
Long-term lease liability | |||
Long-term lease liability, Operating leases | [1] | 143 | |
Total Operating leases liability | 258 | $ 298 | |
Total Finance leases liability | 547 | ||
Other LongTerm Obligations [Member] | |||
Long-term lease liability | |||
Long-term lease liability, Operating leases | 143 | ||
Long-term lease liability, Finance leases | 0 | ||
Long-term Debt [Member] | |||
Long-term lease liability | |||
Long-term lease liability, Operating leases | |||
Long-term lease liability, Finance leases | 514 | ||
Property, Plant and Equipment [Member] | |||
Right of use assets | |||
Right of use assets, Operating leases | |||
Right of use assets, Finance leases | 546 | ||
Other Assets Including Intangible Assets [Member] | |||
Right of use assets | |||
Right of use assets, Operating leases | 260 | ||
Right of use assets, Finance leases | |||
Accounts Payable and Accrued Liabilities [Member] | |||
Lease liability due within one year | |||
Lease liability due within one year, Operating leases | 115 | ||
Lease liability due within one year, Finance leases | 15 | ||
Notes and Loans Payable [Member] | |||
Lease liability due within one year | |||
Lease liability due within one year, Operating leases | |||
Lease liability due within one year, Finance leases | $ 18 | ||
[1] | Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842), as amended. The standard requires all leases to be recorded on the balance sheet as a right of use asset and liability. The long-term lease liability for operating leases is included in Other long-term obligations (see note 14). |
Maturity Of Lease Liabilities (
Maturity Of Lease Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Jan. 01, 2019 |
Operating Lease | ||
2020 | $ 121 | |
2021 | 70 | |
2022 | 30 | |
2023 | 13 | |
2024 | 11 | |
2025 and beyond | 30 | |
Total lease payments | 275 | |
Discount to present value | (17) | |
Total lease liability | $ 258 | $ 298 |
Weighted average remaining lease term (years) | 4 years | |
Weighted average discount rate (percent) | 2.60% | |
Finance Lease | ||
2020 | $ 71 | |
2021 | 50 | |
2022 | 49 | |
2023 | 48 | |
2024 | 47 | |
2025 and beyond | 1,086 | |
Total lease payments | 1,351 | |
Discount to present value | (804) | |
Total lease liability | $ 547 | |
Weighted average remaining lease term (years) | 40 years | |
Weighted average discount rate (percent) | 7.50% |
Schedule Of Measurement Of Leas
Schedule Of Measurement Of Lease Liabilities and Right Of Use Assets (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Jan. 01, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Cash flows from operating activities, Operating leases | $ 147 | |
Cash flows from operating activities, Finance leases | 45 | |
Cash flows from financing activities | ||
Cash flows from financing activities, Finance leases | 27 | |
Non-cash right of use assets recorded for lease liabilities | ||
For January 1 adoption of Leases | 258 | $ 298 |
For January 1 adoption of Leases | 547 | |
Adoption of Leases Topic (842) [Member] | ||
Non-cash right of use assets recorded for lease liabilities | ||
For January 1 adoption of Leases | 298 | |
For January 1 adoption of Leases | ||
In exchange for new lease liabilities during the year | 104 | |
In exchange for new lease liabilities during the year |
Long-Term Debt (Detail)
Long-Term Debt (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Long-term debt | [1] | $ 4,447 | $ 4,447 |
Finance leases | [2] | 514 | 531 |
Total long-term debt | [3] | $ 4,961 | $ 4,978 |
[1] | Borrowed under an existing agreement with an affiliated company of ExxonMobil that provides for a long-term, variable-rate, Canadian dollar loan from ExxonMobil to the company of up to $7.75 billion at interest equivalent to Canadian market rates. The agreement is effective until June 30, 2025, cancelable if ExxonMobil provides at least 370 days advance written notice. | ||
[2] | Finance leases are primarily associated with transportation facilities and services agreements. The average imputed rate was 7.5 percent in 2019 (2018 – 7.1 percent). Total finance lease obligations also include $18 million in current liabilities (2018 - $27 million). Principal payments on finance leases of approximately $13 million on average per year are due in each of the next four years after December 31, 2020. | ||
[3] | Long-term debt included amounts to related parties of $4,447 million (2018 – $4,447 million), (note 17). |
Long-Term Debt (Parenthetical)
Long-Term Debt (Parenthetical) (Detail) - CAD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Maximum long-term borrowing from affiliate | $ 7,750,000,000 | |
Cancellation period long-term borrowing from affiliate, days | 370 days | |
Capitalized lease obligations for marine services, average imputed rate | 7.50% | 7.10% |
Total capitalized lease obligations in current liabilities | $ 18,000,000 | $ 27,000,000 |
Principal payments on capital leases, in two years | 13,000,000 | |
Principal payments on capital leases, in three years | 13,000,000 | |
Principal payments on capital leases, in four years | 13,000,000 | |
Principal payments on capital leases, in five years | $ 13,000,000 |
Period End Capitalized Suspende
Period End Capitalized Suspended Exploratory Well Costs (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Projects with Exploratory Well Costs Capitalized for More than One Year [Line Items] | ||||||
Capitalized suspended exploratory well costs, total | $ 143 | |||||
Beginning Balance | 143 | |||||
Additions pending the determination of proved reserves | ||||||
Charged to expense | (143) | |||||
Reclassification to wells, facilities and equipment based on the determination of proved reserves | ||||||
Ending Balance | ||||||
Capitalized for a period of one year or less | ||||||
Capitalized For Period Of Between One And Ten Years | ||||||
Projects with Exploratory Well Costs Capitalized for More than One Year [Line Items] | ||||||
Capitalized suspended exploratory well costs | ||||||
Capitalized For A Period Of Greater Than One Year | ||||||
Projects with Exploratory Well Costs Capitalized for More than One Year [Line Items] | ||||||
Capitalized suspended exploratory well costs |
Number of Projects with Explora
Number of Projects with Exploratory Well Costs (Detail) - Project | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Exploratory Wells Drilled [Line Items] | |||
Number of projects that only have exploratory well costs capitalized for a period of one year or less | |||
Number of projects that have exploratory well costs capitalized for a period of greater than one year | |||
Total projects |
Transactions with Related Par_2
Transactions with Related Parties - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Amounts of sales by Imperial | $ 8,569 | $ 6,383 | $ 4,110 |
Financing costs | 98 | 89 | $ 60 |
Long-Term Loans | |||
Related Party Transaction [Line Items] | |||
Outstanding loans from an affiliate | 4,447 | 4,447 | |
Short-Term Loans | |||
Related Party Transaction [Line Items] | |||
Outstanding loans from an affiliate | 111 | 75 | |
Exxon Mobil | |||
Related Party Transaction [Line Items] | |||
Amounts of purchases by Imperial | 3,245 | 4,036 | |
Amounts of sales by Imperial | 8,552 | 6,364 | |
Financing costs | $ 96 | $ 87 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at January 1 | $ (1,517) | $ (1,815) | $ (1,897) |
Current period change excluding amounts reclassified from accumulated other comprehensive income | (505) | 158 | (54) |
Amounts reclassified from accumulated other comprehensive income | 111 | 140 | 136 |
Balance at December 31 | $ (1,911) | $ (1,517) | $ (1,815) |
Amounts Reclassified Out of Acc
Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of postretirement benefits liability adjustment included in net periodic benefit cost | [1] | $ (148) | $ (185) | $ (194) |
[1] | This accumulated other comprehensive income component is included in the computation of net periodic benefit cost (note 5). |
Income Tax Expense (Credit) for
Income Tax Expense (Credit) for Components of Other Comprehensive Income (Loss) (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Postretirement benefits liability adjustment (excluding amortization) | $ (165) | $ 59 | $ (20) |
Amortization of postretirement benefits liability adjustment included in net periodic benefit cost | 37 | 45 | 58 |
Total | $ (128) | $ 104 | $ 38 |