Item 1. Financial statements
Consolidated statement of income (U.S. GAAP, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues (a) (b)
|
|
|
6,225
|
|
|
|
7,272
|
|
|
|
11,399
|
|
|
|
13,442
|
|
Investment and other income (note 3)
|
|
|
23
|
|
|
|
29
|
|
|
|
71
|
|
|
|
62
|
|
Total revenues and other income
|
|
|
6,248
|
|
|
|
7,301
|
|
|
|
11,470
|
|
|
|
13,504
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration (note 11)
|
|
|
42
|
|
|
|
16
|
|
|
|
59
|
|
|
|
33
|
|
Purchases of crude oil and products (c)
|
|
|
4,041
|
|
|
|
4,295
|
|
|
|
7,027
|
|
|
|
7,600
|
|
Production and manufacturing (d)
|
|
|
1,310
|
|
|
|
1,395
|
|
|
|
2,581
|
|
|
|
2,754
|
|
Selling and general (d)
|
|
|
267
|
|
|
|
272
|
|
|
|
537
|
|
|
|
536
|
|
Federal excise tax (a)
|
|
|
415
|
|
|
|
387
|
|
|
|
803
|
|
|
|
764
|
|
Depreciation and depletion
|
|
|
407
|
|
|
|
335
|
|
|
|
831
|
|
|
|
652
|
|
Financing costs (note 5)
|
|
|
18
|
|
|
|
5
|
|
|
|
33
|
|
|
|
8
|
|
Total expenses
|
|
|
6,500
|
|
|
|
6,705
|
|
|
|
11,871
|
|
|
|
12,347
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(252
|
)
|
|
|
596
|
|
|
|
(401
|
)
|
|
|
1,157
|
|
|
|
|
|
|
Income taxes
|
|
|
(71
|
)
|
|
|
476
|
|
|
|
(119
|
)
|
|
|
616
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(181
|
)
|
|
|
120
|
|
|
|
(282
|
)
|
|
|
541
|
|
|
|
Per share information
(Canadian dollars)
|
|
|
|
|
|
Net income (loss) per common share - basic (note 8)
|
|
|
(0.21
|
)
|
|
|
0.14
|
|
|
|
(0.33
|
)
|
|
|
0.64
|
|
Net income (loss) per common share - diluted (note 8)
|
|
|
(0.21
|
)
|
|
|
0.14
|
|
|
|
(0.33
|
)
|
|
|
0.64
|
|
Dividends per common share
|
|
|
0.15
|
|
|
|
0.13
|
|
|
|
0.29
|
|
|
|
0.26
|
|
(a) Federal excise tax included in operating revenues.
|
|
|
415
|
|
|
|
387
|
|
|
|
803
|
|
|
|
764
|
|
(b) Amounts from related parties included in operating revenues.*
|
|
|
446
|
|
|
|
937
|
|
|
|
1,009
|
|
|
|
1,543
|
|
(c) Amounts to related parties included in purchases of crude oil and
products.*
|
|
|
286
|
|
|
|
779
|
|
|
|
917
|
|
|
|
1,383
|
|
(d) Amounts to related parties included in production and manufacturing, and
selling and general
expenses.
|
|
|
157
|
|
|
|
125
|
|
|
|
261
|
|
|
|
227
|
|
* Note: Restated 2015.
The information in the Notes to
Consolidated Financial Statements is an integral part of these statements.
3
IMPERIAL OIL LIMITED
Consolidated statement of comprehensive income (U.S. GAAP, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net income (loss)
|
|
|
(181
|
)
|
|
|
120
|
|
|
|
(282
|
)
|
|
|
541
|
|
|
|
|
|
|
Other comprehensive income (loss), net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post-retirement benefit liability adjustment (excluding amortization)
|
|
|
-
|
|
|
|
-
|
|
|
|
100
|
|
|
|
(176
|
)
|
|
|
|
|
|
Amortization of post-retirement benefit liability adjustment included
in net periodic benefit costs
|
|
|
33
|
|
|
|
42
|
|
|
|
74
|
|
|
|
84
|
|
Total other comprehensive income (loss)
|
|
|
33
|
|
|
|
42
|
|
|
|
174
|
|
|
|
(92
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
|
(148
|
)
|
|
|
162
|
|
|
|
(108
|
)
|
|
|
449
|
|
The information in the Notes to Consolidated Financial Statements is an integral part of these statements.
4
IMPERIAL OIL LIMITED
Consolidated balance sheet (U.S. GAAP, unaudited)
|
|
|
|
|
|
|
|
|
|
|
As at
June 30
|
|
|
As at
Dec 31
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash
|
|
|
195
|
|
|
|
203
|
|
Accounts receivable, less estimated doubtful accounts (a)
|
|
|
1,977
|
|
|
|
1,581
|
|
Inventories of crude oil and products
|
|
|
919
|
|
|
|
1,190
|
|
Materials, supplies and prepaid expenses
|
|
|
551
|
|
|
|
424
|
|
Deferred income tax assets
|
|
|
339
|
|
|
|
272
|
|
Total current assets
|
|
|
3,981
|
|
|
|
3,670
|
|
Long-term receivables, investments and other long-term assets
|
|
|
1,309
|
|
|
|
1,414
|
|
Property, plant and equipment,
|
|
|
53,480
|
|
|
|
54,203
|
|
less accumulated depreciation and depletion
|
|
|
(16,514
|
)
|
|
|
(16,404
|
)
|
Property, plant and equipment, net
|
|
|
36,966
|
|
|
|
37,799
|
|
Goodwill
|
|
|
186
|
|
|
|
224
|
|
Other intangible assets, net
|
|
|
61
|
|
|
|
63
|
|
Assets held for sale (note 10)
|
|
|
741
|
|
|
|
-
|
|
Total assets
|
|
|
43,244
|
|
|
|
43,170
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Notes and loans payable (b)
|
|
|
1,862
|
|
|
|
1,952
|
|
Accounts payable and accrued liabilities (note 7)
|
|
|
3,179
|
|
|
|
2,989
|
|
Income taxes payable
|
|
|
465
|
|
|
|
452
|
|
Total current liabilities
|
|
|
5,506
|
|
|
|
5,393
|
|
Long-term debt (c) (note 6)
|
|
|
7,046
|
|
|
|
6,564
|
|
Other long-term obligations (d) (note 7)
|
|
|
3,455
|
|
|
|
3,597
|
|
Deferred income tax liabilities
|
|
|
4,165
|
|
|
|
4,191
|
|
Total liabilities
|
|
|
20,172
|
|
|
|
19,745
|
|
|
|
|
Shareholders equity
|
|
|
|
|
|
|
|
|
Common shares at stated value (e)
|
|
|
1,566
|
|
|
|
1,566
|
|
Earnings reinvested
|
|
|
23,160
|
|
|
|
23,687
|
|
Accumulated other comprehensive income (loss) (note 9)
|
|
|
(1,654
|
)
|
|
|
(1,828
|
)
|
Total shareholders equity
|
|
|
23,072
|
|
|
|
23,425
|
|
|
|
|
Total liabilities and shareholders equity
|
|
|
43,244
|
|
|
|
43,170
|
|
(a)
|
Accounts receivable, less estimated doubtful accounts included amounts receivable from related parties of $131 million (2015 - $129 million).
|
(b)
|
Notes and loans payable included amounts to related parties of $75 million (2015 - $75 million).
|
(c)
|
Long-term debt included amounts to related parties of $6,447 million (2015 - $5,952 million).
|
(d)
|
Other long-term obligations included amounts to related parties of $125 million (2015 - $146 million).
|
(e)
|
Number of common shares authorized and outstanding were 1,100 million and 848 million, respectively (2015 - 1,100 million and 848 million, respectively).
|
The information in the Notes to Consolidated Financial Statements is an integral part of these statements.
5
IMPERIAL OIL LIMITED
Consolidated statement of cash flows (U.S. GAAP, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflow (outflow)
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(181
|
)
|
|
|
120
|
|
|
|
(282
|
)
|
|
|
541
|
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and depletion
|
|
|
407
|
|
|
|
335
|
|
|
|
831
|
|
|
|
652
|
|
(Gain) loss on asset sales (note 3)
|
|
|
(13
|
)
|
|
|
(25
|
)
|
|
|
(43
|
)
|
|
|
(51
|
)
|
Deferred income taxes and other
|
|
|
(98
|
)
|
|
|
254
|
|
|
|
(180
|
)
|
|
|
272
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivables
|
|
|
(338
|
)
|
|
|
(353
|
)
|
|
|
(396
|
)
|
|
|
(566
|
)
|
Inventories, materials, supplies and prepaid expenses
|
|
|
151
|
|
|
|
(148
|
)
|
|
|
119
|
|
|
|
(163
|
)
|
Income taxes payable
|
|
|
22
|
|
|
|
148
|
|
|
|
13
|
|
|
|
332
|
|
Accounts payable and accrued liabilities
|
|
|
371
|
|
|
|
23
|
|
|
|
182
|
|
|
|
(363
|
)
|
All other items - net (a)
|
|
|
122
|
|
|
|
23
|
|
|
|
248
|
|
|
|
4
|
|
Cash flows from (used in) operating activities
|
|
|
443
|
|
|
|
377
|
|
|
|
492
|
|
|
|
658
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
(313
|
)
|
|
|
(773
|
)
|
|
|
(704
|
)
|
|
|
(1,784
|
)
|
Proceeds from asset sales (note 3)
|
|
|
17
|
|
|
|
65
|
|
|
|
50
|
|
|
|
90
|
|
Additional investments
|
|
|
(1
|
)
|
|
|
(16
|
)
|
|
|
(1
|
)
|
|
|
(32
|
)
|
Cash flows from (used in) investing activities
|
|
|
(297
|
)
|
|
|
(724
|
)
|
|
|
(655
|
)
|
|
|
(1,726
|
)
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt - net
|
|
|
20
|
|
|
|
40
|
|
|
|
(88
|
)
|
|
|
1
|
|
Long-term debt issued (note 6)
|
|
|
-
|
|
|
|
389
|
|
|
|
495
|
|
|
|
1,106
|
|
Reduction in capitalized lease obligations
|
|
|
(8
|
)
|
|
|
(4
|
)
|
|
|
(15
|
)
|
|
|
(6
|
)
|
Dividends paid
|
|
|
(118
|
)
|
|
|
(110
|
)
|
|
|
(237
|
)
|
|
|
(220
|
)
|
Cash flows from (used in) financing activities
|
|
|
(106
|
)
|
|
|
315
|
|
|
|
155
|
|
|
|
881
|
|
|
|
|
|
|
Increase (decrease) in cash
|
|
|
40
|
|
|
|
(32
|
)
|
|
|
(8
|
)
|
|
|
(187
|
)
|
Cash at beginning of period
|
|
|
155
|
|
|
|
60
|
|
|
|
203
|
|
|
|
215
|
|
Cash at end of period
(b)
|
|
|
195
|
|
|
|
28
|
|
|
|
195
|
|
|
|
28
|
|
(a) Included contribution to registered pension plans.
|
|
|
(45
|
)
|
|
|
(69
|
)
|
|
|
(76
|
)
|
|
|
(132
|
)
|
(b) Cash is composed of cash in bank and cash equivalents at cost. Cash
equivalents are all highly liquid securities with the maturity of three
months or less when purchased.
|
|
The information in the Notes to Consolidated Financial Statements is an integral part of these statements.
6
IMPERIAL OIL LIMITED
Notes to consolidated financial statements (unaudited)
1. Basis of financial statement preparation
These unaudited
consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America and follow the same accounting policies and methods of computation as, and should be read in conjunction
with, the most recent annual consolidated financial statements filed with the U.S. Securities and Exchange Commission in the companys 2015 Annual Report on Form 10-K. In the opinion of the company, the information furnished herein reflects all
known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. The companys exploration and production activities are accounted for under the
successful efforts method.
The results for the six months ended June 30, 2016, are not necessarily indicative of the operations to be expected for the
full year.
All amounts are in Canadian dollars unless otherwise indicated.
7
IMPERIAL OIL LIMITED
2. Business segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
Upstream
|
|
|
Downstream
|
|
|
Chemical
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues (a)
|
|
|
1,403
|
|
|
|
1,783
|
|
|
|
4,559
|
|
|
|
5,178
|
|
|
|
263
|
|
|
|
311
|
|
Intersegment sales
|
|
|
328
|
|
|
|
718
|
|
|
|
211
|
|
|
|
268
|
|
|
|
54
|
|
|
|
63
|
|
Investment and other income
|
|
|
2
|
|
|
|
16
|
|
|
|
20
|
|
|
|
13
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
1,733
|
|
|
|
2,517
|
|
|
|
4,790
|
|
|
|
5,459
|
|
|
|
317
|
|
|
|
373
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
|
|
|
42
|
|
|
|
16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Purchases of crude oil and products
|
|
|
905
|
|
|
|
1,070
|
|
|
|
3,555
|
|
|
|
4,071
|
|
|
|
171
|
|
|
|
205
|
|
Production and manufacturing
|
|
|
838
|
|
|
|
953
|
|
|
|
421
|
|
|
|
392
|
|
|
|
51
|
|
|
|
50
|
|
Selling and general
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
253
|
|
|
|
243
|
|
|
|
19
|
|
|
|
20
|
|
Federal excise tax
|
|
|
-
|
|
|
|
-
|
|
|
|
415
|
|
|
|
387
|
|
|
|
-
|
|
|
|
-
|
|
Depreciation and depletion
|
|
|
350
|
|
|
|
273
|
|
|
|
51
|
|
|
|
56
|
|
|
|
2
|
|
|
|
2
|
|
Financing costs (note 5)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total expenses
|
|
|
2,131
|
|
|
|
2,311
|
|
|
|
4,695
|
|
|
|
5,149
|
|
|
|
243
|
|
|
|
277
|
|
Income (loss) before income taxes
|
|
|
(398
|
)
|
|
|
206
|
|
|
|
95
|
|
|
|
310
|
|
|
|
74
|
|
|
|
96
|
|
Income taxes
|
|
|
(108
|
)
|
|
|
380
|
|
|
|
24
|
|
|
|
95
|
|
|
|
19
|
|
|
|
27
|
|
Net income (loss)
|
|
|
(290
|
)
|
|
|
(174
|
)
|
|
|
71
|
|
|
|
215
|
|
|
|
55
|
|
|
|
69
|
|
Cash flows from (used in) operating activities
|
|
|
82
|
|
|
|
(264
|
)
|
|
|
295
|
|
|
|
541
|
|
|
|
72
|
|
|
|
105
|
|
Capital and exploration expenditures
(b)
|
|
|
250
|
|
|
|
704
|
|
|
|
64
|
|
|
|
96
|
|
|
|
8
|
|
|
|
4
|
|
|
|
|
|
Second Quarter
|
|
Corporate and Other
|
|
|
Eliminations
|
|
|
Consolidated
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues (a)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,225
|
|
|
|
7,272
|
|
Intersegment sales
|
|
|
-
|
|
|
|
-
|
|
|
|
(593
|
)
|
|
|
(1,049
|
)
|
|
|
-
|
|
|
|
-
|
|
Investment and other income
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23
|
|
|
|
29
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
(593
|
)
|
|
|
(1,049
|
)
|
|
|
6,248
|
|
|
|
7,301
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42
|
|
|
|
16
|
|
Purchases of crude oil and products
|
|
|
-
|
|
|
|
-
|
|
|
|
(590
|
)
|
|
|
(1,051
|
)
|
|
|
4,041
|
|
|
|
4,295
|
|
Production and manufacturing
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,310
|
|
|
|
1,395
|
|
Selling and general
|
|
|
1
|
|
|
|
8
|
|
|
|
(3
|
)
|
|
|
2
|
|
|
|
267
|
|
|
|
272
|
|
Federal excise tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
415
|
|
|
|
387
|
|
Depreciation and depletion
|
|
|
4
|
|
|
|
4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
407
|
|
|
|
335
|
|
Financing costs (note 5)
|
|
|
19
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18
|
|
|
|
5
|
|
Total expenses
|
|
|
24
|
|
|
|
17
|
|
|
|
(593
|
)
|
|
|
(1,049
|
)
|
|
|
6,500
|
|
|
|
6,705
|
|
Income (loss) before income taxes
|
|
|
(23
|
)
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(252
|
)
|
|
|
596
|
|
Income taxes
|
|
|
(6
|
)
|
|
|
(26
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(71
|
)
|
|
|
476
|
|
Net income (loss)
|
|
|
(17
|
)
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(181
|
)
|
|
|
120
|
|
Cash flows from (used in) operating activities
|
|
|
(6
|
)
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
443
|
|
|
|
377
|
|
Capital and exploration expenditures
(b)
|
|
|
13
|
|
|
|
15
|
|
|
|
-
|
|
|
|
-
|
|
|
|
335
|
|
|
|
819
|
|
(a)
|
Included export sales to the United States of $966 million (2015 - $1,362 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.
|
(b)
|
Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to capital leases, additional investments and acquisitions.
|
8
IMPERIAL OIL LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months to June 30
|
|
Upstream
|
|
|
Downstream
|
|
|
Chemical
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues (a)
|
|
|
2,383
|
|
|
|
2,995
|
|
|
|
8,499
|
|
|
|
9,847
|
|
|
|
517
|
|
|
|
600
|
|
Intersegment sales
|
|
|
807
|
|
|
|
1,316
|
|
|
|
436
|
|
|
|
524
|
|
|
|
98
|
|
|
|
122
|
|
Investment and other income
|
|
|
21
|
|
|
|
18
|
|
|
|
49
|
|
|
|
43
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
3,211
|
|
|
|
4,329
|
|
|
|
8,984
|
|
|
|
10,414
|
|
|
|
615
|
|
|
|
722
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
|
|
|
59
|
|
|
|
33
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Purchases of crude oil and products
|
|
|
1,723
|
|
|
|
1,908
|
|
|
|
6,312
|
|
|
|
7,266
|
|
|
|
330
|
|
|
|
387
|
|
Production and manufacturing
|
|
|
1,747
|
|
|
|
1,903
|
|
|
|
736
|
|
|
|
748
|
|
|
|
98
|
|
|
|
103
|
|
Selling and general
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
491
|
|
|
|
464
|
|
|
|
41
|
|
|
|
42
|
|
Federal excise tax
|
|
|
-
|
|
|
|
-
|
|
|
|
803
|
|
|
|
764
|
|
|
|
-
|
|
|
|
-
|
|
Depreciation and depletion
|
|
|
707
|
|
|
|
532
|
|
|
|
112
|
|
|
|
108
|
|
|
|
4
|
|
|
|
5
|
|
Financing costs (note 5)
|
|
|
(4
|
)
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total expenses
|
|
|
4,230
|
|
|
|
4,378
|
|
|
|
8,454
|
|
|
|
9,350
|
|
|
|
473
|
|
|
|
537
|
|
Income (loss) before income taxes
|
|
|
(1,019
|
)
|
|
|
(49
|
)
|
|
|
530
|
|
|
|
1,064
|
|
|
|
142
|
|
|
|
185
|
|
Income taxes
|
|
|
(281
|
)
|
|
|
314
|
|
|
|
139
|
|
|
|
284
|
|
|
|
38
|
|
|
|
50
|
|
Net income (loss)
|
|
|
(738
|
)
|
|
|
(363
|
)
|
|
|
391
|
|
|
|
780
|
|
|
|
104
|
|
|
|
135
|
|
Cash flows from (used in) operating activities
|
|
|
(400
|
)
|
|
|
(515
|
)
|
|
|
764
|
|
|
|
1,055
|
|
|
|
132
|
|
|
|
160
|
|
Capital and exploration expenditures
(b)
|
|
|
596
|
|
|
|
1,594
|
|
|
|
107
|
|
|
|
221
|
|
|
|
14
|
|
|
|
16
|
|
Total assets as at June 30
|
|
|
37,166
|
|
|
|
36,612
|
|
|
|
5,239
|
|
|
|
5,839
|
|
|
|
393
|
|
|
|
381
|
|
|
|
|
|
Six Months to June 30
|
|
Corporate and Other
|
|
|
Eliminations
|
|
|
Consolidated
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues (a)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,399
|
|
|
|
13,442
|
|
Intersegment sales
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,341
|
)
|
|
|
(1,962
|
)
|
|
|
-
|
|
|
|
-
|
|
Investment and other income
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
71
|
|
|
|
62
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
(1,341
|
)
|
|
|
(1,962
|
)
|
|
|
11,470
|
|
|
|
13,504
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
59
|
|
|
|
33
|
|
Purchases of crude oil and products
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,338
|
)
|
|
|
(1,961
|
)
|
|
|
7,027
|
|
|
|
7,600
|
|
Production and manufacturing
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,581
|
|
|
|
2,754
|
|
Selling and general
|
|
|
10
|
|
|
|
32
|
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
537
|
|
|
|
536
|
|
Federal excise tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
803
|
|
|
|
764
|
|
Depreciation and depletion
|
|
|
8
|
|
|
|
7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
831
|
|
|
|
652
|
|
Financing costs (note 5)
|
|
|
37
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33
|
|
|
|
8
|
|
Total expenses
|
|
|
55
|
|
|
|
44
|
|
|
|
(1,341
|
)
|
|
|
(1,962
|
)
|
|
|
11,871
|
|
|
|
12,347
|
|
Income (loss) before income taxes
|
|
|
(54
|
)
|
|
|
(43
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(401
|
)
|
|
|
1,157
|
|
Income taxes
|
|
|
(15
|
)
|
|
|
(32
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(119
|
)
|
|
|
616
|
|
Net income (loss)
|
|
|
(39
|
)
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(282
|
)
|
|
|
541
|
|
Cash flows from (used in) operating activities
|
|
|
(4
|
)
|
|
|
(42
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
492
|
|
|
|
658
|
|
Capital and exploration expenditures
(b)
|
|
|
26
|
|
|
|
38
|
|
|
|
-
|
|
|
|
-
|
|
|
|
743
|
|
|
|
1,869
|
|
Total assets as at June 30
|
|
|
662
|
|
|
|
413
|
|
|
|
(216
|
)
|
|
|
(411
|
)
|
|
|
43,244
|
|
|
|
42,834
|
|
(a)
|
Included export sales to the United States of $1,763 million (2015 - $2,163 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.
|
(b)
|
Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to capital leases, additional investments and acquisitions.
|
9
IMPERIAL OIL LIMITED
3. Investment and other income
Investment and other income included gains and losses on asset sales as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Proceeds from asset sales
|
|
|
17
|
|
|
|
65
|
|
|
|
50
|
|
|
|
90
|
|
Book value of assets sold
|
|
|
4
|
|
|
|
40
|
|
|
|
7
|
|
|
|
39
|
|
Gain (loss) on asset sales, before tax
|
|
|
13
|
|
|
|
25
|
|
|
|
43
|
|
|
|
51
|
|
Gain (loss) on asset sales, after tax
|
|
|
10
|
|
|
|
17
|
|
|
|
34
|
|
|
|
40
|
|
4. Employee retirement benefits
The components of net benefit cost were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Pension benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost
|
|
|
51
|
|
|
|
51
|
|
|
|
102
|
|
|
|
102
|
|
Interest cost
|
|
|
79
|
|
|
|
77
|
|
|
|
158
|
|
|
|
154
|
|
Expected return on plan assets
|
|
|
(100
|
)
|
|
|
(96
|
)
|
|
|
(199
|
)
|
|
|
(193
|
)
|
Amortization of prior service cost
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
|
8
|
|
Amortization of actuarial loss
|
|
|
41
|
|
|
|
49
|
|
|
|
82
|
|
|
|
99
|
|
Net benefit cost
|
|
|
74
|
|
|
|
85
|
|
|
|
148
|
|
|
|
170
|
|
|
|
|
|
|
Other post-retirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost
|
|
|
4
|
|
|
|
4
|
|
|
|
8
|
|
|
|
8
|
|
Interest cost
|
|
|
6
|
|
|
|
6
|
|
|
|
13
|
|
|
|
12
|
|
Amortization of actuarial loss
|
|
|
4
|
|
|
|
3
|
|
|
|
7
|
|
|
|
6
|
|
Net benefit cost
|
|
|
14
|
|
|
|
13
|
|
|
|
28
|
|
|
|
26
|
|
5. Financing costs and additional notes and loans
payable information
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Debt-related interest
|
|
|
32
|
|
|
|
20
|
|
|
|
63
|
|
|
|
43
|
|
Capitalized interest
|
|
|
(13
|
)
|
|
|
(15
|
)
|
|
|
(26
|
)
|
|
|
(38
|
)
|
Net interest expense
|
|
|
19
|
|
|
|
5
|
|
|
|
37
|
|
|
|
5
|
|
Other interest
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
3
|
|
Total financing costs
|
|
|
18
|
|
|
|
5
|
|
|
|
33
|
|
|
|
8
|
|
In March 2016, the company extended the maturity date of its existing $500 million 364-day short-term unsecured committed bank credit
facility to March 2017. The company has not drawn on the facility.
10
IMPERIAL OIL LIMITED
6. Long-term debt
|
|
|
|
|
|
|
|
|
|
|
As at
June 30
|
|
|
As at
Dec 31
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
Long-term debt
|
|
|
6,447
|
|
|
|
5,952
|
|
Capital leases
|
|
|
599
|
|
|
|
612
|
|
Total long-term debt
|
|
|
7,046
|
|
|
|
6,564
|
|
In the first half of 2016, the company increased its long-term debt by $495 million by drawing on an existing facility with an
affiliated company of Exxon Mobil Corporation. The increased debt was used to supplement normal operations and capital projects.
7. Other long-term
obligations
|
|
|
|
|
|
|
|
|
|
|
As at
June 30
|
|
|
As at
Dec 31
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
Employee retirement benefits (a)
|
|
|
1,289
|
|
|
|
1,470
|
|
Asset retirement obligations and other environmental liabilities (b)
|
|
|
1,670
|
|
|
|
1,628
|
|
Share-based incentive compensation liabilities
|
|
|
142
|
|
|
|
134
|
|
Other obligations
|
|
|
354
|
|
|
|
365
|
|
Total other long-term obligations
|
|
|
3,455
|
|
|
|
3,597
|
|
(a)
|
Total recorded employee retirement benefits obligations also included $58 million in current liabilities (2015 - $59 million).
|
(b)
|
Total asset retirement obligations and other environmental liabilities also included $117 million in current liabilities (2015 - $116 million).
|
8. Net income (loss) per-share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net income (loss) per common share - basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) (millions of Canadian dollars)
|
|
|
(181
|
)
|
|
|
120
|
|
|
|
(282
|
)
|
|
|
541
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (millions of shares)
|
|
|
847.6
|
|
|
|
847.6
|
|
|
|
847.6
|
|
|
|
847.6
|
|
|
|
|
|
|
Net income (loss) per common share (dollars)
|
|
|
(0.21
|
)
|
|
|
0.14
|
|
|
|
(0.33
|
)
|
|
|
0.64
|
|
|
|
|
|
|
Net income (loss) per common share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) (millions of Canadian dollars)
|
|
|
(181
|
)
|
|
|
120
|
|
|
|
(282
|
)
|
|
|
541
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (millions of shares)
|
|
|
847.6
|
|
|
|
847.6
|
|
|
|
847.6
|
|
|
|
847.6
|
|
Effect of share-based awards (millions of shares)
|
|
|
3.0
|
|
|
|
3.1
|
|
|
|
2.9
|
|
|
|
3.0
|
|
Weighted average number of common shares outstanding assuming dilution (millions of shares)
|
|
|
850.6
|
|
|
|
850.7
|
|
|
|
850.5
|
|
|
|
850.6
|
|
|
|
|
|
|
Net income (loss) per common share (dollars)
|
|
|
(0.21
|
)
|
|
|
0.14
|
|
|
|
(0.33
|
)
|
|
|
0.64
|
|
11
IMPERIAL OIL LIMITED
9. Other comprehensive income (loss) information
Changes in accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
Balance at January 1
|
|
|
(1,828
|
)
|
|
|
(2,059
|
)
|
Post-retirement benefits liability adjustment:
|
|
|
|
|
|
|
|
|
Current period change excluding amounts reclassified from accumulated other comprehensive income
|
|
|
100
|
|
|
|
(176
|
)
|
Amounts reclassified from accumulated other comprehensive
income
|
|
|
74
|
|
|
|
84
|
|
Balance at June 30
|
|
|
(1,654
|
)
|
|
|
(2,151
|
)
|
Amounts reclassified out of accumulated other comprehensive income (loss) - before-tax income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Amortization of post-retirement benefits liability adjustment
included in net periodic benefit cost (a)
|
|
|
(48
|
)
|
|
|
(56
|
)
|
|
|
(94
|
)
|
|
|
(113
|
)
|
(a)
|
This accumulated other comprehensive income component is included in the computation of net periodic benefit cost (note 4).
|
Income tax expense (credit) for components of other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
to June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Post-retirement benefits liability adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post-retirement benefits liability adjustment (excluding amortization)
|
|
|
-
|
|
|
|
-
|
|
|
|
37
|
|
|
|
(61
|
)
|
Amortization of post-retirement benefits liability adjustment
included in net periodic benefit cost
|
|
|
15
|
|
|
|
15
|
|
|
|
20
|
|
|
|
30
|
|
Total
|
|
|
15
|
|
|
|
15
|
|
|
|
57
|
|
|
|
(31
|
)
|
10. Assets held for sale
On March 8,
2016, the company announced that it had entered into agreements which will result in the sale and transition of its remaining company-owned Esso retail stations to a branded wholesaler operating model for approximately $2.8 billion. Under the
branded wholesaler model, Imperial supplies fuel to independent third parties who own and/or operate the sites in alignment with Esso brand standards. The companys gain on sale, which is subject to final closing adjustments, is anticipated to
be in the range of $2.0 billion to $2.1 billion ($1.7 billion to $1.8 billion after tax). Subsequent to the quarter, in July the company completed the sale of its sites in Saskatchewan, Manitoba, Nova Scotia and Newfoundland for approximately $85
million, having an approximate net book value of $23 million. The remaining transactions are anticipated to close by year-end 2016, subject to regulatory approvals.
The major classes of assets classified as held for sale within the Downstream segment at June 30, 2016, were as follows:
|
|
|
|
|
|
|
As at
June 30
|
|
millions of Canadian dollars
|
|
2016
|
|
Assets held for sale
|
|
|
|
|
Accounts receivable and prepaid expenses
|
|
|
5
|
|
Inventories
|
|
|
20
|
|
Net property, plant and equipment
|
|
|
678
|
|
Goodwill
|
|
|
38
|
|
Total assets held for sale
|
|
|
741
|
|
12
IMPERIAL OIL LIMITED
11. Accounting for suspended exploratory well costs
For the category of exploratory well costs at year-end 2015 that were capitalized for a period greater than 12 months, a total of $24 million was expensed in the second
quarter of 2016.
12. Recently issued accounting standards
In May 2014,
the Financial Accounting Standards Board (FASB) issued a new standard,
Revenue from Contracts with Customers.
The standard establishes a single revenue recognition model for all contracts with customers, eliminates industry specific
requirements and expands disclosure requirements. The standard will be adopted beginning January 1, 2018. Imperial is evaluating the standard and its effect on the companys financial statements.
In February 2016, the FASB issued a new standard,
Leases
. The standard requires all leases with an initial term greater than one year be recorded on the balance
sheet as an asset and lease liability. The standard is required to be adopted beginning January 1, 2019. Imperial is evaluating the standard and its effect on the companys financial statements.
13
IMPERIAL OIL LIMITED
Item 2.
|
Managements discussion and analysis of financial
condition and results of operations
|
Operating
results
Second quarter 2016 vs. second quarter 2015
The
companys net loss for the second quarter of 2016 was $181 million or $0.21 per share on a diluted basis, compared to net income of $120 million or $0.14 per share for the same period last year. Wildfires in northern Alberta significantly
impacted results in the quarter, reducing net income by about $170 million.
Upstream recorded a net loss in the second quarter of $290 million, compared to a net
loss of $174 million in the same period of 2015. Results in the second quarter of 2016 reflected lower realizations of about $500 million, the impact of the northern Alberta wildfires on Syncrude and Kearl operations of about $155 million and higher
depreciation expense of about $50 million. These factors were partially offset by higher Kearl and Cold Lake volumes of about $105 million, the impact of a weaker Canadian dollar of about $65 million and the favourable impact of lower royalties of
about $50 million. Earnings in the second quarter of 2015 reflected the impact associated with increased Alberta corporate income taxes of about $327 million.
West Texas Intermediate (WTI) averaged US$45.64 per barrel in the second quarter of 2016, down from US$57.90 per barrel in the same quarter of 2015. Western Canada
Select (WCS) averaged US$32.36 per barrel and US$46.41 per barrel respectively for the same periods. The WTI / WCS differential widened to 29 percent in the second quarter of 2016, from 20 percent in the same period of 2015.
During the second quarter of 2016, the Canadian dollar weakened relative to the U.S. dollar versus the same period of 2015. The Canadian dollar averaged US$0.78 in the
second quarter of 2016, a decrease of US$0.03 from the second quarter of 2015.
Imperials average Canadian dollar realizations for bitumen and synthetic
crudes declined essentially in line with the North American benchmarks, adjusted for changes in the exchange rate and transportation costs. Bitumen realizations averaged $29.45 per barrel for the second quarter of 2016, a decrease of $19.71 per
barrel versus the second quarter of 2015. Synthetic crude realizations averaged $58.58 per barrel, a decrease of $16.62 per barrel for the same period of 2015.
Gross production of Cold Lake bitumen averaged 163,000 barrels per day in the second quarter, up from 161,000 barrels in the same period last year. Incremental volumes
from Nabiye offset cycle timing in the base operation.
Gross production of Kearl bitumen averaged 155,000 barrels per day in the second quarter (110,000 barrels
Imperials share) up from 130,000 barrels per day (92,000 barrels Imperials share) during the second quarter of 2015. Kearl production was reduced in the current quarter by 64,000 barrels per day (45,000 Imperials share) due to the
Alberta wildfires and planned maintenance activities.
The companys share of gross production from Syncrude averaged 18,000 barrels per day, compared to
52,000 barrels in the second quarter of 2015. Syncrude production was reduced in the current quarter by 54,000 barrels per day due to the Alberta wildfires and planned maintenance activities.
Downstream net income was $71 million in the second quarter, compared to $215 million in the same period of 2015. Earnings decreased mainly due to the impact of higher
refinery turnarounds of about $115 million and lower industry margins of about $45 million.
Refinery throughput averaged 246,000 barrels per day, compared to
373,000 barrels in the second quarter of 2015. The decrease was mainly associated with planned turnaround activity at the Strathcona and Nanticoke refineries. Excluding the impact of the planned turnarounds, capacity utilization averaged 97 percent.
Petroleum product sales were 470,000 barrels per day, compared to 478,000 barrels per day in the second quarter of 2015.
14
IMPERIAL OIL LIMITED
Chemical net income was $55 million in the second quarter, compared to $69 million in the same quarter of 2015.
Net income effects from Corporate and Other were negative $17 million in the second quarter, compared to positive $10 million in the same period of 2015.
Six months 2016 vs. six months 2015
Net loss in the first six months of
2016 was $282 million, or $0.33 per share on a diluted basis, versus net income of $541 million or $0.64 per share for the first six months of 2015.
Upstream
recorded a net loss of $738 million for the first six months of 2016, compared to a net loss of $363 million for the same period last year. The loss in 2016 reflected lower realizations of about $870 million, the impact of the northern Alberta
wildfires on Syncrude and Kearl operations of about $155 million and higher depreciation expense of about $105 million. These factors were partially offset by the impact of a weaker Canadian dollar of about $135 million, higher Kearl and Cold
Lake volumes of about $130 million, the favourable impact of lower royalties of about $80 million and lower energy cost of about $60 million. Earnings in the second quarter of 2015 reflected the impact associated with increased Alberta corporate
income taxes of about $327 million.
West Texas Intermediate averaged US$39.78 per barrel in the first six months of 2016 down from US$53.35 per barrel in the same
period last year. Western Canada Select averaged US$25.88 per barrel and US$40.14 per barrel respectively for the same periods. The WTI / WCS differential widened to 35 percent in the first six months of 2016, from 25 percent in the same period of
2015.
During the first six months of 2016, the Canadian dollar weakened relative to the U.S. dollar versus the same period of 2015. The Canadian dollar averaged
US$0.75 in the first six months of 2016, a decrease of US$0.06 from the same period of 2015.
Imperials average Canadian dollar realizations for bitumen and
synthetic crudes declined essentially in line with the North American benchmarks, adjusted for changes in the exchange rate and transportation costs. Bitumen realizations averaged $20.76 per barrel for the first six months of 2016, a decrease of
$18.39 per barrel versus the same period of 2015. Synthetic crude realizations averaged $48.59 per barrel, a decrease of $15.30 per barrel for the same period of 2015.
Gross production of Cold Lake bitumen averaged 164,000 barrels per day in the first six months, up from 156,000 barrels from the same period last year, primarily due to
Nabiye production.
Gross production of Kearl bitumen averaged 175,000 barrels per day in the first six months of 2016 (124,000 barrels Imperials share) up
from 113,000 barrels per day (80,000 barrels Imperials share). The increase was the result of the start-up of the expansion project and improved reliability of the initial development. Kearl production was reduced by 32,000 barrels per day
(23,000 Imperials share) due to the Alberta wildfires and planned maintenance activities.
During the first six months of 2016, the companys share of
gross production from Syncrude averaged 49,000 barrels per day, compared to 63,000 barrels from the same period of 2015. Syncrude production was reduced by 13,000 barrels per day due to the Alberta wildfires and planned maintenance activities.
Downstream net income was $391 million, compared to $780 million from the same period of 2015. Earnings decreased due to the impact of lower downstream margins of about
$480 million and higher refinery turnarounds of about $115 million. These factors were partially offset by the impact of a weaker Canadian dollar of about $130 million and lower fuels marketing operating costs of about $50 million.
Refinery throughput averaged 323,000 barrels per day in the first six months of 2016, compared to 383,000 barrels in the same period of 2015. Capacity utilization
decreased to 77 percent from 91 percent in the same period of 2015. The lower utilization reflected higher turnaround activity in 2016.
15
IMPERIAL OIL LIMITED
Petroleum product sales were 469,000 barrels per day in the first six months of 2016, compared to 476,000 barrels per
day in the same period of 2015.
Chemical net income was $104 million, compared to $135 million in the same period of 2015.
For the first six months of 2016, net income effects from Corporate and Other were negative $39 million, versus negative $11 million in 2015.
Liquidity and capital resources
Cash flow generated from operating
activities was $443 million in the second quarter, compared with $377 million in the corresponding period in 2015. Positive working capital effects offset the lower earnings.
Investing activities used net cash of $297 million in the second quarter, compared with $724 million in the same period of 2015, reflecting the completion of major
upstream growth projects.
Cash used in financing activities was $106 million in the second quarter, compared with cash from financing activities of $315 million in
the second quarter of 2015. Dividends paid in the second quarter of 2016 were $118 million. The
per-share dividend paid in the second quarter was $0.14, up from $0.13 in the same period of 2015.
The companys cash balance was $195 million at June 30, 2016, versus $28 million at the end of the second quarter of 2015.
Recently issued accounting standards
In May 2014, the Financial Accounting
Standards Board (FASB) issued a new standard,
Revenue from Contracts with Customers.
The standard establishes a single revenue recognition model for all contracts with customers, eliminates industry specific requirements and expands
disclosure requirements. The standard will be adopted beginning January 1, 2018. Imperial is evaluating the standard and its effect on the companys financial statements.
In February 2016, the FASB issued a new standard,
Leases
. The standard requires all leases with an initial term greater than one year be recorded on the balance
sheet as an asset and lease liability. The standard is required to be adopted beginning January 1, 2019. Imperial is evaluating the standard and its effect on the companys financial statements.
Forward-looking statements
Statements in this report regarding future
events or conditions are forward-looking statements. Actual future financial and operating results could differ materially due to the impact of market conditions, changes in law or governmental policy, changes in operating conditions and costs,
changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors.
16
IMPERIAL OIL LIMITED