Enhanced Investments - Financial Portal

Published: 2020-08-05


	IMPERIAL OIL LIMITED



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

								Six Months
					Second Quarter				to June 30
millions of Canadian dollars									2020	2019			2020		2019
Revenues and other income
			Revenues (a)	3,666	9,228			10,330	17,193
			Investment and other income (note 4)		44	33	70	50
Total revenues and other income				3,710	9,261			10,400	17,243

Expenses
			Exploration		3	5	4	38
			Purchases of crude oil and products (b) (note 13)	2,115	5,662			6,341	10,557
			Production and manufacturing (c)	1,273	1,715			2,852	3,310
			Selling and general (c)		183	236	349	449
			Federal excise tax and fuel charge		369	463	820	857
			Depreciation and depletion (note 13)		413	392	886	782
			Non-service pension and postretirement benefit		30	36	60	72
			Financing (d) (note 7)		17	23	36	51
Total expenses				4,403	8,532			11,348	16,116

Income (loss) before income taxes									(693)	729		(948)	1,127

Income taxes									(167)	(483)	(234)			(378)

Net income (loss)									(526)	1,212			(714)	1,505

Per share information (Canadian dollars)
Net income (loss) per common share - basic (note 11)									(0.72)	1.58	(0.97)			1.95
Net income (loss) per common share - diluted (note 11)									(0.72)	1.57	(0.97)			1.94
(a)			Amounts from related parties included in revenues.		747					2,234	2,483			3,956
(b)			Amounts to related parties included in purchases of crude oil and products.		396	908		1,135			1,636
(c) Amounts to related parties included in production and manufacturing,
					138	161	321	322
			and selling and general expenses.
(d) Amounts to related parties included in financing, (note 7).					14	24	38	52
The information in the notes to consolidated financial statements is an integral part of these statements.

		1


	IMPERIAL OIL LIMITED


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

								Six Months
					Second Quarter				to June 30
millions of Canadian dollars									2020	2019	2020		2019
Net income (loss)									(526)	1,212		(714)	1,505

Other comprehensive income (loss), net of income taxes
			Postretirement benefits liability adjustment (excluding amortization)		-	-			(114)	18

			Amortization of postretirement benefits liability adjustment
				included in net periodic benefit costs		34	28		68	55
Total other comprehensive income (loss)					34	28		(46)	73

Comprehensive income (loss)									(492)	1,240		(760)	1,578
The information in the notes to consolidated financial statements is an integral part of these statements.

		2


	IMPERIAL OIL LIMITED



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

				As at		As at
				June 30 Dec 31
millions of Canadian dollars				2020		2019
Assets
Current assets
			Cash	233		1,718
			Accounts receivable, less estimated doubtful accounts (a) (note 5)	1,866		2,699
			Inventories of crude oil and products (note 13)	1,253		1,296
			Materials, supplies and prepaid expenses	741	616
Total current assets				4,093		6,329
Investments and long-term receivables (b) (note 5)				882	891
Property, plant and equipment,				55,358		54,868
			less accumulated depreciation and depletion	(21,497)		(20,665)
Property, plant and equipment, net				33,861		34,203
Goodwill (note 13)				166	186
Other assets, including intangibles, net				498	578
Total assets				39,500		42,187

Liabilities
Current liabilities
			Notes and loans payable (c)	228	229
			Accounts payable and accrued liabilities (a) (note 9)	3,176		4,260
			Income taxes payable	-	106
Total current liabilities				3,404		4,595
Long-term debt (d) (note 8)				4,965		4,961
Other long-term obligations (note 9)				3,753		3,637
Deferred income tax liabilities				4,462		4,718
Total liabilities				16,584		17,911

Shareholders' equity
Common shares at stated value (e) (note 11)				1,357		1,375
Earnings reinvested				23,516		24,812
Accumulated other comprehensive income (loss) (note 12)				(1,957)		(1,911)
Total shareholders' equity				22,916		24,276

Total liabilities and shareholders' equity				39,500		42,187
(a)			Accounts receivable, less estimated doubtful accounts included net amounts receivable from related parties of $317 million (2019 - $1,007 million).
(b)			Investments and long-term receivables included amounts from related parties of $311 million (2019 - $296 million).
(c)			Notes and loans payable included amounts to related parties of $111 million (2019 - $111 million).
(d)			Long-term debt included amounts to related parties of $4,447 million (2019 - $4,447 million).
(e)			Number of common shares authorized and outstanding were 1,100 million and 734 million, respectively (2019 - 1,100 million and 744 million, respectively).
The information in the notes to consolidated financial statements is an integral part of these statements.
Approved by the directors August 5, 2020 /s/ Bradley W. Corson
							/s/ Daniel E. Lyons
Chairman, president and
							Senior vice-president,
chief executive officer							finance and administration, and controller

		3


	IMPERIAL OIL LIMITED


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

									Six Months
			Second Quarter		to June 30
millions of Canadian dollars			2020	2019				2020	2019
Common shares at stated value (note 11)
At beginning of period			1,357	1,427				1,375	1,446
Share purchases at stated value			-	(17)		(18)			(36)
At end of period			1,357	1,410				1,357	1,410

Earnings reinvested
At beginning of period			24,204	24,364	24,812	24,560
Net income (loss) for the period			(526)	1,212				(714)	1,505
Share purchases in excess of stated value			-	(351)				(256)	(693)
Dividends declared			(162)	(169)				(324)	(316)
Cumulative effect of accounting change (note 5)			-	-		(2)	-
At end of period			23,516	25,056	23,516	25,056

Accumulated other comprehensive income (loss) (note 12)
At beginning of period			(1,991)	(1,472)	(1,911)	(1,517)
Other comprehensive income (loss)			34	28		(46)			73
At end of period			(1,957)	(1,444)	(1,957)	(1,444)

Shareholders' equity at end of period			22,916	25,022	22,916	25,022
The information in the notes to consolidated financial statements is an integral part of these statements.

		4


	IMPERIAL OIL LIMITED



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

								Six Months
Inflow (outflow)				Second Quarter				to June 30
millions of Canadian dollars									2020	2019	2020			2019
Operating activities
Net income (loss)									(526)	1,212			(714)	1,505
Adjustments for non-cash items:
			Depreciation and depletion		413	392	866	782
			Impairment of intangible assets (note 13)		-	-	20	-
			(Gain) loss on asset sales (note 4)		(10)	(11)	(17)	(6)
			Inventory write-down to current market value (note 13)						(281)	-	-	-
			Deferred income taxes and other						(242)	(471)	(199)			(475)
Changes in operating assets and liabilities:
			Accounts receivable						(310)	99	833				(605)
			Inventories, materials, supplies and prepaid expenses		117	(40)	(82)	(21)
			Income taxes payable		(2)	(9)		(106)	(37)
			Accounts payable and accrued liabilities		(46)					(175)	(1,074)	728
All other items - net (b)					71	29	80	158
Cash flows from (used in) operating activities									(816)	1,026			(393)	2,029

Investing activities
Additions to property, plant and equipment									(205)	(394)	(515)			(825)
Proceeds from asset sales (note 4)					40	14	49	36
Loans to equity companies - net					(7)	(49)	(14)				(103)
Cash flows from (used in) investing activities									(172)	(429)	(480)			(892)

Financing activities
Reduction in finance lease obligations (note 8)					(5)	(6)	(12)	(13)
Dividends paid									(162)	(147)	(326)			(296)
Common shares purchased (note 11)					-					(368)	(274)			(729)
Cash flows from (used in) financing activities									(167)	(521)	(612)	(1,038)

Increase (decrease) in cash				(1,155)		76		(1,485)	99
Cash at beginning of period				1,388	1,011			1,718	988
Cash at end of period (a)					233	1,087		233	1,087
(a)			Cash is composed of cash in bank and cash equivalents at cost. Cash equivalents are all highly liquid securities with maturity of three months or less when purchased.
(b)			Included contributions to registered pension plans.		(41)	(57)		(100)	(98)

Income taxes (paid) refunded.					1	23		(152)	46
Interest (paid), net of capitalization.					(17)	(23)	(36)	(51)
The information in the notes to consolidated financial statements is an integral part of these statements.

		5


	IMPERIAL OIL LIMITED


Notes to consolidated financial statements (unaudited) 1. Basis of financial statement preparation

These unaudited consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) and follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual consolidated financial statements filed with the U.S. Securities and Exchange Commission (SEC) in the
			company’s 2019 annual
report on Form 10-K. In the opinion of the company, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. The
company’s exploration and production activities are accounted for under the "successful efforts" method.
The results for the six months ended June 30, 2020, are not necessarily indicative of the operations to be expected for the full year. All amounts are in Canadian dollars unless otherwise indicated. 2. Accounting changes Effective January 1, 2020, Imperial adopted the Financial Accounting Standards
			Board’s update, Financial
Instruments - Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the
				asset’s
contractual life. The valuation allowance considers the risk of loss, even if remote and considers past events, current conditions and expectations of the future. The standard did not have a material impact on the company
					’s financial statements.

		6


	IMPERIAL OIL LIMITED


3. Business segments

Second Quarter								Upstream		Downstream					Chemical
millions of Canadian dollars		2020								2019	2020	2019	2020				2019
Revenues and other income
			Revenues (a)	908								2,587	2,587	6,375		171	266
			Intersegment sales	262								1,116	124	487	27	48
			Investment and other income (note 4)	10		4	27	19	1	-
									1,180		3,707	2,738	6,881		199	314
Expenses
			Exploration	3		5	-	-	-	-
			Purchases of crude oil and products (note 13)	512								1,802	1,896	5,338		119	171
			Production and manufacturing	884								1,171	343	474	46	70
			Selling and general	-		-	135	201	21	23
			Federal excise tax and fuel charge	-		-	369	463	-	-
			Depreciation and depletion (note 13)	363		338	40	46	4	3
			Non-service pension and postretirement benefit
		-		-	-	-	-	-
			Financing (note 7)	-		-	-	-	-	-
Total expenses								1,762		3,316	2,783	6,522		190	267
Income (loss) before income taxes		(582)		391	(45)	359	9	47
Income taxes		(138)								(594)	(13)	101	2	9
Net income (loss)		(444)		985	(32)	258	7	38
Cash flows from (used in) operating activities		(968)		585	88	423	46	52
Capital and exploration expenditures (b)		145		301	51	111	2	6


Second Quarter								Corporate and other	Eliminations			Consolidated
millions of Canadian dollars		2020								2019	2020	2019	2020				2019
Revenues and other income
			Revenues (a)	-		-	-	-			3,666	9,228
			Intersegment sales	-		-							(413)	(1,651)		-	-
			Investment and other income (note 4)	6		10	-	-	44	33
					6		10							(413)	(1,651)				3,710	9,261
Expenses
			Exploration	-		-	-	-	3	5
			Purchases of crude oil and products (note 13)	-		-							(412)	(1,649)				2,115	5,662
			Production and manufacturing	-		-	-	-			1,273	1,715
			Selling and general	28		14	(1)	(2)	183	236
			Federal excise tax and fuel charge	-		-	-	-	369	463
			Depreciation and depletion (note 13)	6		5	-	-	413	392
			Non-service pension and postretirement benefit
		30		36	-	-	30	36
			Financing (note 7)	17		23	-	-	17	23
Total expenses		81		78							(413)	(1,651)				4,403	8,532
Income (loss) before income taxes		(75)		(68)	-	-			(693)	729
Income taxes		(18)		1	-	-			(167)				(483)
Net income (loss)		(57)		(69)	-	-			(526)	1,212
Cash flows from (used in) operating activities		1		(34)	17	-			(816)	1,026
Capital and exploration expenditures (b)		9		11	-	-	207	429

		7


	IMPERIAL OIL LIMITED


(a) Included export sales to the United States of $739 million (2019 - $2,152 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 finance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.

		8


	IMPERIAL OIL LIMITED



Six Months to June 30								Upstream		Downstream					Chemical
millions of Canadian dollars		2020								2019	2020	2019	2020				2019
Revenues and other income
			Revenues (a)					2,560		4,827	7,383	11,849		387	517
			Intersegment sales	984								2,064	692	935	71	120
			Investment and other income (note 4)	10		4	42	29	1	-
									3,554		6,895	8,117	12,813		459	637
Expenses
			Exploration	4		38	-	-	-	-
			Purchases of crude oil and products (note 13)					2,162		3,388	5,665	9,920		259	364
			Production and manufacturing					1,992		2,327	751	855	109	128
			Selling and general	-		-	316	380	46	44
			Federal excise tax and fuel charge	-		-	820	857	-	-
			Depreciation and depletion (note 13)	780		672	86	92	8	7
			Non-service pension and postretirement benefit
		-		-	-	-	-	-
			Financing (note 7)	-		-	-	-	-	-
Total expenses								4,938		6,425	7,638	12,104		422	543
Income (loss) before income taxes								(1,384)	470	479	709	37	94
Income tax expense (benefit)		(332)								(573)	109	194	9	22
Net income (loss)								(1,052)		1,043	370	515	28	72
Cash flows from (used in) operating activities		(504)		865	110	1,155		43	100
Capital and exploration expenditures (b)		376		673	127	240	11	23
Total assets as at June 30 (note 13)								33,591	35,059									4,683	5,041	404	451


Six Months to June 30								Corporate and other	Eliminations			Consolidated
millions of Canadian dollars		2020								2019	2020	2019	2020				2019
Revenues and other income
			Revenues (a)	-		-	-	-	10,330	17,193
			Intersegment sales	-		-	(1,747)	(3,119)		-	-
			Investment and other income (note 4)	17		17	-	-	70	50
					17		17	(1,747)	(3,119)	10,400	17,243
Expenses
			Exploration	-		-	-	-	4	38
			Purchases of crude oil and products (note 13)	-		-	(1,745)	(3,115)				6,341	10,557
			Production and manufacturing	-		-	-	-			2,852	3,310
			Selling and general	(11)		29	(2)	(4)	349	449
			Federal excise tax and fuel charge	-		-	-	-	820	857
			Depreciation and depletion (note 13)	12		11	-	-	886	782
			Non-service pension and postretirement benefit
		60		72	-	-	60	72
			Financing (note 7)	36		51	-	-	36	51
Total expenses		97		163	(1,747)	(3,119)	11,348	16,116
Income (loss) before income taxes		(80)								(146)	-	-			(948)	1,127
Income tax expense (benefit)		(20)		(21)	-	-			(234)				(378)
Net income (loss)		(60)								(125)	-	-			(714)	1,505
Cash flows from (used in) operating activities		(42)		(91)	-	-			(393)	2,029
Capital and exploration expenditures (b)		24		22	-	-	538	958
Total assets as at June 30 (note 13)								1,088		1,822	(266)	(444)	39,500	41,929

		9


	IMPERIAL OIL LIMITED


(a) Included export sales to the United States of $2,112 million (2019 - $3,816 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 finance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.

		10


	IMPERIAL OIL LIMITED


4. Investment and other income

Investment and other income included gains and losses on asset sales as follows:
										Six Months
					Second Quarter			to June 30
millions of Canadian dollars				2020	2019		2020	2019
Proceeds from asset sales				40	14		49	36
Book value of asset sales				30	3		32	30
Gain (loss) on asset sales, before tax				10	11		17	6
Gain (loss) on asset sales, after tax				9	10		15	6
5. Allowance for current expected credit loss (CECL) Effective January 1, 2020, the company adopted the Financial Accounting Standards
					Board’s update,
Financial Instruments									– Credit Losses (Topic 326), as amended. The standard requires a valuation allowance
for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the
asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers
past events, current conditions and reasonable and supportable forecasts. The standard requires this expected loss methodology for trade receivables, certain other financial assets and off-balance-sheet credit exposures. The cumulative effect adjustment related to the adoption of this standard reduced
							“Earnings
reinvested” in Shareholders’ equity by $2 million. The company is exposed to credit losses primarily through sales of petroleum products, crude oil, natural gas liquids and natural gas, as well as loans to equity companies and joint venture receivables. A
							counterparty’s
ability to pay is assessed through a credit review process that considers payment terms, the						counterparty’s
established credit rating or the										company’s assessment of the counterparty’s credit worthiness, contract terms,
and other risks. The company can require prepayment or collateral to mitigate certain credit risks. The company groups financial assets into portfolios that share similar risk characteristics for purposes of determining the allowance for credit losses. Each reporting period, the company assesses whether a significant change in credit loss or risk has occurred. Among the quantitative and qualitative factors considered are historical financial data, current conditions, industry and country risk, current credit ratings and the quality of third-party guarantees secured from the counterparty. Financial assets are written off in whole, or in part, when practical recovery efforts have been exhausted and no reasonable expectation of recovery exists. Subsequent recoveries of amounts previously written off are recognized in earnings. The company manages receivable portfolios using past due balances as a key credit quality indicator. The company recognizes a credit allowance for off-balance-sheet credit exposures as a liability on the balance sheet, separate from the allowance for credit losses related to recognized financial assets. These exposures could include unfunded loans to equity companies and financial guarantees that cannot be cancelled unilaterally by the company. During the first half of 2020, the COVID-19 pandemic spread rapidly through most areas of the world resulting in economic uncertainty, global financial market volatility, and negative effects in the credit markets. The company has considered these effects, along with the significantly lower balances of trade receivables at the end of the quarter, in its estimate of credit losses and concluded no material adjustment to credit allowances in the quarter was required. At June 30, 2020, the
		company’s evaluation of financial assets under Financial
Instruments			– Credit Losses (Topic 326), as amended included $1,420 million of accounts receivable, net of
allowances of $4 million, and investments and long-term receivables of $326 million. The company has determined that, at this time, no credit allowance is required for investments and long-term receivables. There is currently no off-balance-sheet credit exposure.

		11


	IMPERIAL OIL LIMITED


6. Employee retirement benefits

The components of net benefit cost were as follows:
								Six Months
				Second Quarter				to June 30
millions of Canadian dollars								2020	2019	2020		2019
Pension benefits:
			Current service cost	77	57	153	114
			Interest cost	77	81	154	162
			Expected return on plan assets	(98)	(88)		(196)			(175)
			Amortization of prior service cost	3	-	7	-
			Amortization of actuarial loss (gain)	39	38	77	75
			Net periodic benefit cost	98	88	195	176

Other postretirement benefits:
			Current service cost	6	4	12	8
			Interest cost	6	6	12	11
			Amortization of actuarial loss (gain)	3	(1)	6	(1)
			Net periodic benefit cost	15	9	30	18
7. Financing costs
							Six Months
				Second Quarter				to June 30
millions of Canadian dollars								2020	2019		2020		2019
Debt-related interest				26	34	60	73
Capitalized interest				(9)	(11)	(24)	(22)
Net interest expense				17	23	36	51
Other interest				-	-	-	-
Total financing				17	23	36	51
During the second quarter of 2020, in addition to existing credit facilities of $500 million, the company entered into a $500 million committed short-term line of credit to May 2021, and a $300 million committed short-term line of credit to June 2021. The company has not drawn on any of its credit facilities. 8. Long-term debt
							As at			As at
							June 30	Dec 31
millions of Canadian dollars							2020				2019
Long-term debt							4,447				4,447
Finance leases							518		514
Total long-term debt							4,965				4,961

		12


	IMPERIAL OIL LIMITED


9. Other long-term obligations
					As at	As at
						June 30	Dec 31
millions of Canadian dollars					2020			2019
Employee retirement benefits (a)					1,977			1,822
Asset retirement obligations and other environmental liabilities (b)					1,384			1,388
Share-based incentive compensation liabilities					54			65
Operating lease liability (c)					107			143
Other obligations					231			219
Total other long-term obligations					3,753			3,637
(a) Total recorded employee retirement benefits obligations also included $58 million in current liabilities (2019 - $58 million). (b) Total asset retirement obligations and other environmental liabilities also included $124 million in current liabilities (2019 - $124
million).
(c) Total operating lease liability also included $106 million in current liabilities (2019 - $115 million).				In addition to the total operating
lease liability, additional undiscounted commitments for leases not yet commenced totalled $27 million (2019 - $6 million).
10. Financial and derivative instruments Financial instruments

The fair value of the								company’s financial instruments is determined by reference to various market data and
other appropriate valuation techniques. There are no material differences between the fair value of the company’s financial instruments and the recorded carrying value. At June 30, 2020 and December 31, 2019 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.

At June 30, 2020, the carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $27 million, gross liabilities of $74 million and collateral receivable of $70 million, with the net effects reflected in
			“Accounts receivable, less estimated doubtful accounts” on the Consolidated balance sheet. At
December 31, 2019 the carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $0 million, gross liabilities of $2 million and collateral receivable of $6 million.

At June 30, 2020, the net notional forward long / (short) position of derivative instruments was (1,920,000) barrels for crude and (240,000) barrels for products. At December 31, 2019, the net notional forward long / (short) position of derivative instruments was (590,000) barrels for crude and 0 barrels for products.

Realized and unrealized gain or (loss) on derivative instruments recognized on the Consolidated statement of income is included in the following lines on a before-tax basis:


													Six Months
													Second Quarter	to June 30
millions of Canadian dollars												2020	2019	2020	2019
Revenues											(9)	-	(8)	(2)
Purchases of crude oil and products											(52)	-	(18)	(6)
Total											(61)	-	(26)	(8)

		13


	IMPERIAL OIL LIMITED


11. Common shares
				As of	As of
					June 30	Dec 31
thousands of shares				2020	2019
Authorized				1,100,000	1,100,000
Common shares outstanding				734,077	743,902
The 12-month normal course issuer bid program that was in place during the second quarter of 2020, came into effect on June 27, 2019. The program enabled the company to purchase up to a maximum of 38,211,086 common shares (5 percent of the total shares on June 13, 2019), which included shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. Exxon Mobil Corporation participated to maintain its ownership percentage at approximately 69.6 percent. The program ended on June 26, 2020, and purchases under this program were suspended on April 1, 2020. Upon expiration, the company had purchased 28,697,514 shares under the program.

The current 12-month limited normal course issuer bid program came into effect on June 29, 2020 and is used primarily to eliminate dilution from shares issued in conjunction with Imperial's restricted stock unit plan. The program enables the company to purchase up to a maximum of 50,000 common shares, which includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. As in the past, Exxon Mobil Corporation has advised the company that it intends to participate to maintain its ownership percentage at approximately 69.6 percent.

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


The company's common share activities are summarized below:
										Thousands of	Millions of
				shares	dollars
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
Issued under employee share-based awards				-	-
Purchases at stated value				(9,825)	(18)
Balance as at June 30, 2020				734,077	1,357

The following table provides the calculation of basic and diluted earnings per common share and the dividends declared by the company on its outstanding common shares:
							Six Months
										Second Quarter	to June 30
										2020	2019			2020	2019
Net income (loss) per common share - basic
Net income (loss) (millions of Canadian dollars)									(526)	1,212		(714)	1,505
Weighted average number of common shares outstanding (millions of shares)									734.1	767.4			736.5	772.5
Net income (loss) per common share (dollars)									(0.72)	1.58			(0.97)	1.95
								Net income (loss) per common share - diluted
Net income (loss) (millions of Canadian dollars)									(526)	1,212		(714)	1,505
Weighted average number of common shares outstanding (millions of shares)									734.1	767.4			736.5	772.5
Effect of employee share-based awards (millions of shares) (a)										-	2.5			-	2.4
Weighted average number of common shares outstanding,
			assuming dilution (millions of shares)						734.1	769.9			736.5	774.9
Net income (loss) per common share (dollars)									(0.72)	1.57		(0.97)	1.94
Dividends per common share - declared (dollars)									0.22	0.22		0.44	0.41
(a) For Second Quarter 2020 and Six Months to June 30, 2020, the Net income (loss) per common share				– diluted excludes the effect
of 2.0 million employee share-based awards. Share-based awards have the potential to dilute basic earnings per share in the future.

		14


	IMPERIAL OIL LIMITED


12. Other comprehensive income (loss) information

Changes in accumulated other comprehensive income (loss):

millions of Canadian dollars							2020	2019
Balance at January 1						(1,911)	(1,517)
Postretirement benefits liability adjustment:
			Current period change excluding amounts reclassified
				from accumulated other comprehensive income				(114)	18
			Amounts reclassified from accumulated other comprehensive income			68	55
Balance at June 30						(1,957)	(1,444)

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

								Six Months
									Second Quarter	to June 30
millions of Canadian dollars								2020	2019		2020	2019
Amortization of postretirement benefits liability adjustment
			included in net periodic benefit cost (a)	(45)	(37)	(90)	(74)
(a) This accumulated other comprehensive income component is included in the computation of net periodic benefit cost, (note 6).

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

								Six Months
									Second Quarter	to June 30
millions of Canadian dollars								2020	2019		2020	2019
Postretirement benefits liability adjustments:
			Postretirement benefits liability adjustment (excluding amortization)	-	-	(37)	7
			Amortization of postretirement benefits liability adjustment
				included in net periodic benefit cost	11	9	22	19
Total				11	9	(15)	26
13. Miscellaneous financial information Crude oil and product inventories are carried at the lower of current market value or cost, determined under the last-in, first-out method (LIFO). In the first quarter of 2020, a non-cash charge of $281 million after-tax was recorded associated with the carrying value of crude oil inventory exceeding the current market value. In the second quarter of 2020, the first quarter's temporary non-cash inventory charge was reversed. The inventory balance will continue to be re-evaluated at the end of each quarter. At year-end, any adjustment to the carrying value is considered a permanent adjustment.

As disclosed in
									Imperial’s 2019 Form 10-K, goodwill is tested for impairment annually or more frequently if
events or circumstances indicate it might be impaired. In the first quarter of 2020, with the change in economic conditions and the reduction in the
	company’s market capitalization, the company assessed its
goodwill balances for impairment and recognized a non-cash goodwill impairment charge of $20 million in the company’s Upstream segment. The goodwill impairment is reflected in “Depreciation and depletion” on the Consolidated statement of income and
	“Goodwill” on the Consolidated balance sheet. The remaining balance
of goodwill is associated with the Downstream segment.

		15