Consolidated Statement of Income. U.S. GAAP (CAD $) 12 Months Ended Dec. 31, 2009 In Millions, except Per Share data Revenues and other income , Operating revenues $21,292 Investment and other income (note 9) 106 Total revenues and other income 21,398 Expenses Exploration 153  Purchases of crude oil and products 11,934  Production and manufacturing 3,951 Selling and general 1,106  Federal excise tax 1,268 Depreciation and depletion 781 Financing costs (note 13) 5 Total expenses 19,198 Income before income taxes 2,200 Income taxes (note 4) 621 Net income $1,579 Per-share information (Canadian dollars) Net income per common share - basic (note 11) $1.86 Net income per common share - diluted (note 11) $1.84 Dividends $0.4 Operating revenues include amounts from related parties of $1,699 million (2008 - $2,150 million, 2007 - $1,772 million), (n Operating revenues include federal excise tax of $1,268 million (2008 - $1,312 million, 2007 - $1,307 million). Production and manufacturing expenses include amounts to related parties of $217 million (2008 - $169 million, 2007 - $15 Purchases of crude oil and products include amounts from related parties of $3,111 million (2008 - $4,729 million, 2007 - $3 12 Months Ended 12 Months Ended Dec. 31, 2008 Dec. 31, 2007 , , $31,240 $25,069 339 374 31,579 25,443 132 106   18,865 14,026   4,228 3,474 1,038 1,335   1,312 1,307 728 780 0 36 26,303 21,064 5,276 4,379 1,398 1,191 $3,878 $3,188 $4.39 $3.43 $4.36 $3.41 $0.38 $0.35 on, 2007 - $1,772 million), (note 15). $1,307 million). 08 - $169 million, 2007 - $154 million), (note 15). 08 - $4,729 million, 2007 - $3,331 million), (note 15). Consolidated Balance Sheet. U.S. GAAP (CAD $) Dec. 31, 2009 In Millions Current Assets  Cash $513 Accounts receivable, less estimated doubtful amounts 1,714 Inventories of crude oil and products (note 12) 564 Materials, supplies and prepaid expenses 247 Deferred income tax assets (note 4) 467 Total current assets 3,505 Long-term receivables, investments and other long-term assets 854 Property, plant and equipment, less accumulated depreciation and depletion (note 3) 12,852 Goodwill (note 3) 204 Other intangible assets, net 58 Total assets (note 3) 17,473 Current liabilities Notes and loans payable (note 13) 109  Accounts payable and accrued liabilities 2,811 Income taxes payable 848 Total current liabilities 3,768 Capitalized lease obligations (note 14) 31 Other long-term obligations (note 6) 2,839 Deferred income tax liabilities (note 4) 1,396 Total liabilities 8,034 Shareholders' equity  Common shares at stated value (note 11) 1,508 Earnings reinvested 9,252 Accumulated other comprehensive income (1,321) Total shareholders' equity 9,439 Total liabilities and shareholders' equity $17,473 Accounts payable and accrued liabilities include amounts to related parties of $59 million (2008 - $127 million), (note 15). Cash is composed of cash in bank and cash equivalents at cost. Cash equivalents are all highly liquid securities with maturit Number of common shares outstanding was 848 million (2008 - 859 million), (note 11). Dec. 31, 2008  $1,974 1,455 673 180 361 4,643 881 11,248 204 59 17,035 109  2,586 1,498 4,193 34 2,254 1,489 7,970  1,528 8,484 (947) 9,065 $17,035 8 - $127 million), (note 15). liquid securities with maturity of three months or less when purchased. Statement Of Shareholders Equity And Other Comprehensive Income U.S. GAAP (CAD $) In Millions At beginning of year at Dec. 31, 2006 $1,677 Cumulative effect of accounting change (note 4) Post-retirement benefits liability adjustment (note 5) Issued under the stock option plan 12 Net income for the year Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost Share purchases at stated value (89) Share purchases in excess of stated value Other comprehensive income Dividends At end of year at Dec. 31, 2007 1,600 Cumulative effect of accounting change (note 4) Post-retirement benefits liability adjustment (note 5) Issued under the stock option plan 7 Net income for the year Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost Share purchases at stated value (79) Share purchases in excess of stated value Other comprehensive income Dividends At end of year at Dec. 31, 2008 1,528 Cumulative effect of accounting change (note 4) Post-retirement benefits liability adjustment (note 5) Issued under the stock option plan 1 Net income for the year Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost Share purchases at stated value (21) Share purchases in excess of stated value Other comprehensive income Dividends At end of year at Dec. 31, 2009 $1,508 Accumulated other Earnings reinvested comprehensive income Total $6,462 ($733) 14 (87) 3,188 3,188 72 (2,269) (324) 7,071 (748) 7,923 0 (283) 3,878 3,878 84 (2,131) (334) 8,484 (947) 9,065 0 (468) 1,579 1,579 94 (471) (340) $9,252 ($1,321) $9,439 Consolidated Statement of Cash Flows. U.S. GAAP (CAD $) 12 Months Ended Dec. 31, 2009 In Millions Operating activities Net income $1,579 Adjustments for non-cash items: Depreciation and depletion 781 (Gain)/loss on asset sales (45) Deferred income taxes and other (61) Changes in operating assets and liabilities: Accounts receivable (261) Inventories and prepaids 42 Income taxes payable (650) Accounts payable 271  All other items - net (65) Cash from operating activities 1,591 Investing activities Additions to property, plant and equipment and intangibles (2,285) Proceeds from asset sales 67 Loans to equity company 2 Cash from (used in) investing activities (2,216) Financing activities Short-term debt - net 0 Repayment of long-term debt 0 Long-term debt issued 0 Reduction in capitalized lease obligations (4) Issuance of common shares under stock option plan 1 Common shares purchased (note 11) (492) Dividends paid (341) Cash from (used in) financing activities (836) Increase (decrease) in cash (1,461) Cash at beginning of year 1,974  Cash at end of year $513  Cash is composed of cash in bank and cash equivalents at cost. Cash equivalents are all highly liquid securities with maturit Includes contribution to registered pension plans of $180 million (2008 - $165 million, 2007 - $163 million). 12 Months Ended 12 Months Ended Dec. 31, 2008 Dec. 31, 2007 $3,878 $3,188 728 780 (241) (215) 387 75 679 (261) (159) 13 0 (77) (798) 250   (211) (127) 4,263 3,626 (1,231) (899) 272 279 (2) 0 (961) (620) 0 (65) 0 (1,722) 0 500 (3) (4) 7 12 (2,210) (2,358) (330) (319) (2,536) (3,956) 766 (950)  1,208 2,158 $1,974  $1,208  liquid securities with maturity of three months or less when purchased. 163 million). Summary of significant accounting policies 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 1. Summary of significant accounting policies Principles of consolidation The consolidated financial statements include the accounts of Imperial Oil Limited and its subsidiaries. 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. Significant subsidiaries included in the consolidated financial statements include Imperial Oil Resources Limited, Imperial Oil Resources N.W.T. Limited, Imperial Oil Resources Ventures Limited and McColl-Frontenac Petroleum Inc. All of the above companies are wholly owned. A significant portion of the companys Upstream activities is conducted jointly Summary of significant accounting policies with other companies. The accounts reflect the Accounting changes 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 2. Accounting changes Fair value measurements Effective January1, 2009, the company adopted the authoritative guidance for fair value measurements as they relate to nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis. The guidance defines fair value, establishes a framework for measuring fair value when an entity is required to use a fair value measure for recognition or disclosure purposes and expands the disclosures about fair value measures. The adoption did not have a material impact on the companys financial statements. The company previously adopted the guidance as it relates to financial assets and liabilities that are measured at fair value and for nonfinancial assets and liabilities that are measured at fair value on a recurring basis. Oil and Accounting changes gas reserves Effective December31, 2009, the Business segments 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 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 companys 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 the distribution and marketing of these products. The Chemical segment is organized and operates to manufacture and market hydrocarbon-based Business segments chemicals and chemical products. The above Income taxes 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 4. Income taxes millions of dollars 2009 2008 2007 Current income tax expense 694 1,005 1,163 Deferred income tax expense (a) (73) 393 28 Total income tax expense (b) 621 1,398 1,191 Statutory corporate tax rate (percent) 28.7 29.5 30.1 Increase/(decrease) resulting from: Enacted tax rate change 0.2 (2.2) Other (0.7) (3.0) (0.7) Effective income tax rate 28.2 26.5 27.2 a) The provisions for deferred income taxes in 2009 include net (charges)/credits for the Income taxes effect of changes in tax laws and rates of $(4) million Employee retirement benefits 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 5. 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 companys 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 Employee retirement benefits funded and unfunded benefits are determined in Other long-term obligations 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 6. Other long-term obligations millions of dollars 2009 2008 Employee retirement benefits (note 5) (a) 1,682 1,151 Asset retirement obligations and other environmental liabilities (b) 806 728 Share-based incentive compensation liabilities (note 8) 144 159 Other obligations 207 216 Total other long-term obligations 2,839 2,254 a) Total recorded employee retirement benefit obligations also include $47 million in current liabilities (2008 $45 million). b) Total asset retirement obligations and other environmental liabilities also include $114 million in current liabilities (2008 $83 million). Asset retirement obligations incurred in the Other long-term obligations current period were Level 3 (unobservable inputs) fair Derivatives and financial instruments 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 7. Derivatives and financial instruments The company did not enter into any energy derivatives, foreign-exchange forward contracts or currency and interest-rate swaps in the past three years. The company maintains a system of controls that includes a policy covering the authorization, reporting and monitoring of derivative activity. The fair value of the companys financial instruments is determined by reference to various market data and other appropriate valuation techniques. There are no material differences between the fair values of the companys financial instruments and the recorded book value. Derivatives and financial instruments Share-based incentive compensation programs 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 8. Share-based incentive compensation programs Share-based incentive compensation programs are designed to retain selected employees, reward them for high performance and promote individual contribution to sustained improvement in the companys future business performance and shareholder value. Incentive share units, deferred share units and restricted stock units Incentive share units have value if the market price of the companys common shares when the unit is exercised exceeds the market value when the unit was issued, as adjusted for any share splits. The issue price of incentive share units is the closing price of the companys shares on the Toronto Stock Exchange on the grant date. Up to 50 percent of the units may be exercised after one year Share-based incentive compensation programs from issuance; an additional 25 percent may be exercised Investment and other income 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 9. Investment and other income Investment and other income includes gains and losses on asset sales as follows: millions of dollars 2009 2008 2007 Proceeds from asset sales 67 272 279 Book value of assets sold 22 31 64 Gain/(loss) on asset sales, before tax (a)(b) 45 241 215 Gain/(loss) on asset sales, after tax (a)(b) 38 209 156 a) 2007 included a gain of $200 million ($142 million, after tax) from the sale of the companys interests in a natural gas producing property in British Columbia and in the Willesden Green producing property. b) 2008 included a gain of $219 million ($187 Investment and other income million, after tax) from the sale of the companys equity Litigation and other contingencies 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 10. Litigation and other contingencies A variety of claims have been made against Imperial Oil Limited 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 Litigation and other contingencies estimated or when the liability is believed to be only Common shares 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 11. Common shares thousands of shares As at Dec. 31 2009 As at Dec. 31 2008 Authorized 1,100,000 1,100,000 From 1995 through 2008, the company purchased shares under fourteen 12-month normal course issuer bid share repurchase programs, as well as an auction tender. On June25, 2009, another 12- month normal course issuer bid program was implemented with an allowable purchase of 42.4million shares (five percent of the total on June15, 2009), less shares purchased from Exxon Mobil Corporation and shares purchased by the employee savings plan and company pension fund. The results of these activities are as shown below. Year Common shares Purchased shares (thousands) Miscellaneous financial information 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 12. Miscellaneous financial information In 2009, net income included an after-tax gain of $46 million (2008 $27 million gain, 2007 $25 million gain) attributable to the effect of changes in last- in, first-out (LIFO) inventories. The replacement cost of inventories was estimated to exceed their LIFO carrying values at December31, 2009 by $1,579 million (2008 $994 million). Inventories of crude oil and products at year-end consisted of the following: millions of dollars 2009 2008 Crude oil 312 328 Petroleum products 186 268 Chemical products 53 65 Natural gas and other 13 12 Miscellaneous financial information Total inventories of crude oil and Financing costs 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 13. Financing costs millions of dollars 2009 2008 2007 Debt- related interest 5 8 62 Capitalized interest (5) (8) (36) Net interest expense 26 Other interest 5 10 Total financing costs (a) 5 36 a) Cash interest payments in 2009 were $8 million (2008 $6 million, 2007 $80 million). The weighted average interest rate on short-term borrowings in 2009 was 0.7 Financing costs percent (2008 3.5 percent). Leased facilities and capitalized lease obligations 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 14. Leased facilities and capitalized lease obligations At December31, 2009, the company held non- cancelable operating leases covering office buildings, rail cars, service stations and other properties with minimum undiscounted lease commitments totaling $415 million as indicated in the following table: Payments due by period millions of dollars 2010 2011 2012 2013 2014 After 2014 Total Lease payments under minimum commitments (a) 72 68 59 53 49 114 415 a) Total rental expenditures incurred for operating leases in 2009 was $129 million (2008 $149 million, 2007 $98 million), Leased facilities and capitalized lease obligations which included minimum rental expenditures of $128 Transactions with related parties 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares 15. Transactions with related parties Revenues and expenses of the company also include the results of transactions with Exxon Mobil Corporation and affiliated companies (ExxonMobil) in the normal course of operations. These were conducted on terms as favourable as they would have been with unrelated parties and primarily consisted of the purchase and sale of crude oil, natural gas, petroleum and chemical products, as well as transportation, technical and engineering services. Transactions with ExxonMobil also included amounts paid and received in connection with the companys participation in a number of upstream activities conducted jointly in Canada. In addition, the company has existing agreements with ExxonMobil to: a) provide computer and customer Transactions with related parties support services to the company and to share Document Information 12 Months Ended Dec. 31, 2009 CAD ($) CAD / shares Document Type 10-K Amendment Flag false Document Period End Date 2009-12-31 Entity Information (CAD $) 12 Months Ended Dec. 31, 2009 Trading Symbol IMO Entity Registrant Name IMPERIAL OIL LTD Entity Central Index Key 0000049938 Current Fiscal Year End Date --12-31 Entity Well-known Seasoned Issuer Yes Entity Current Reporting Status Yes Entity Voluntary Filers No Entity Filer Category Large Accelerated Filer Entity Common Stock, Shares Outstanding Entity Public Float Feb. 12, 2010 Jun. 30, 2009 847,602,581 $11,626,102,344
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