10-Q

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[ ü ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

[    ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from --- to ---

Commission file number 0-12014

IMPERIAL OIL LIMITED

(Exact name of registrant as specified in its charter)

CANADA	98-0017682
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
237 Fourth Avenue S.W. Calgary, Alberta, Canada	T2P 3M9
(Address of principal executive offices)	(Postal Code)

Registrant’s telephone number, including area code: 1-800-567-3776

The registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 91 days.

YES   ü      NO      

The registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES   ü      NO      

The registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (see definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Securities Exchange Act of 1934).

Large accelerated filer   ü	Accelerated filer
Non-accelerated filer	Smaller reporting company

The registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

YES          NO    ü    

The number of common shares outstanding, as of September 30, 2014, was 847,599,011.

IMPERIAL OIL LIMITED

INDEX

	PAGE
PART I - Financial Information
Item 1 - Financial Statements.
Consolidated Statement of Income - Nine Months ended September 30, 2014 and 2013		3
Consolidated Statement of Comprehensive Income - Nine Months ended September 30, 2014 and 2013		4
Consolidated Balance Sheet - as at September 30, 2014 and December 31, 2013		5
Consolidated Statement of Cash Flows - Nine Months ended September 30, 2014 and 2013		6
Notes to the Consolidated Financial Statements		7
Item 2 -  Management’s Discussion and Analysis of Financial Condition and Results of Operations.		13
Item 3 - Quantitative and Qualitative Disclosures about Market Risk.		16
Item 4 - Controls and Procedures.		16
PART II - Other Information
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.		17
Item 6 - Exhibits.		17
SIGNATURES		18

In this report all dollar amounts are expressed in Canadian dollars unless otherwise stated. This report should be read in conjunction with the company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Statements in this report regarding future events or conditions are forward-looking statements. Actual 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.

The term “project” as used in this release can refer to a variety of different activities and does not necessarily have the same meaning as under government payment transparency reports.

2

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

IMPERIAL OIL LIMITED

CONSOLIDATED STATEMENT OF INCOME

(U.S. GAAP, unaudited)						Nine Months
	Third Quarter					to September 30
millions of Canadian dollars	2014			2013		2014		2013
REVENUES AND OTHER INCOME
Operating revenues (a) (b)		9,641			8,577		28,237		24,470
Investment and other income (note 3)		17			17		696		96
TOTAL REVENUES AND OTHER INCOME		9,658			8,594		28,933		24,566
EXPENSES
Exploration		14			30		52		74
Purchases of crude oil and products (c)		6,100			5,484		17,677		15,460
Production and manufacturing (d)		1,358			1,325		4,224		3,974
Selling and general		254			291		825		797
Federal excise tax (a)		412			385		1,165		1,041
Depreciation and depletion		276			223		836		860
Financing costs (note 5)		(1	)		(1)		3		1
TOTAL EXPENSES		8,413			7,737		24,782		22,207
INCOME BEFORE INCOME TAXES		1,245			857		4,151		2,359
INCOME TAXES		309			210		1,037		587
NET INCOME		936			647		3,114		1,772
PER SHARE INFORMATION (Canadian dollars)
Net income per common share - basic (note 8)		1.10			0.76		3.67		2.09
Net income per common share - diluted (note 8)		1.10			0.76		3.66		2.08
Dividends per common share		0.13			0.12		0.39		0.36
(a)    Federal excise tax included in operating revenues		412			385		1,165		1,041
(b)    Amounts from related parties included in operating revenues		1,201			711		2,759		1,936
(c)    Amounts to related parties included in purchases of crude oil and products		1,111			1,018		2,939		3,544
(d)    Amounts to related parties included in production and manufacturing expenses		93			85		268		255

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)					Nine Months
	Third Quarter				to September 30
millions of Canadian dollars	2014		2013		2014			2013
Net income		936		647		3,114			1,772
Other comprehensive income, net of income taxes
Post-retirement benefit liability adjustment (excluding amortization)		—		—		(38	)		(102)
Amortization of post-retirement benefit liability adjustment included in net periodic benefit costs		34		52		109			154
Total other comprehensive income/(loss)		34		52		71			52
Comprehensive income		970		699		3,185			1,824

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		As at
	Sept 30		Dec 31
millions of Canadian dollars	2014		2013
ASSETS
Current assets
Cash		43		272
Accounts receivable, less estimated doubtful accounts (a)		2,301		2,084
Inventories of crude oil and products		1,107		1,030
Materials, supplies and prepaid expenses		396		342
Deferred income tax assets		618		559
Total current assets		4,465		4,287
Long-term receivables, investments and other long-term assets		1,379		1,332
Property, plant and equipment,		49,263		47,165
less accumulated depreciation and depletion		(15,141)		(15,845)
Property, plant and equipment, net		34,122		31,320
Goodwill		224		224
Other intangible assets, net		52		55
TOTAL ASSETS		40,242		37,218
LIABILITIES
Current liabilities
Notes and loans payable (b)		1,759		1,843
Accounts payable and accrued liabilities (a) (note 7)		4,571		4,518
Income taxes payable		698		727
Total current liabilities		7,028		7,088
Long-term debt (c) (note 6)		4,443		4,444
Other long-term obligations (note 7)		2,817		3,091
Deferred income tax liabilities		3,575		3,071
TOTAL LIABILITIES		17,863		17,694
SHAREHOLDERS’ EQUITY
Common shares at stated value (d)		1,566		1,566
Earnings reinvested		22,463		19,679
Accumulated other comprehensive income (note 9)		(1,650)		(1,721)
TOTAL SHAREHOLDERS’ EQUITY		22,379		19,524
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		40,242		37,218

(a) Accounts receivable, less estimated doubtful accounts included amounts receivable from related parties of $79 million (2013 - accounts payable and accrued liabilities included amounts payable to related parties of $170 million).

(b) Notes and loans payable included amounts to related parties of $75 million (2013 - $75 million).

(c) Long-term debt included amounts to related parties of $4,316 million (2013 - $4,316 million).

(d) Number of common shares authorized and outstanding were 1,100 million and 848 million, respectively (2013 - 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)	Third Quarter					Nine Months       to September 30
millions of Canadian dollars	2014			2013		2014			2013
OPERATING ACTIVITIES
Net income		936			647		3,114			1,772
Adjustments for non-cash items:
Depreciation and depletion		276			223		836			860
(Gain)/loss on asset sales (note 3)		(4	)		(5)		(664	)		(60)
Deferred income taxes and other		185			106		411			276
Changes in operating assets and liabilities:
Accounts receivable		104			51		(217	)		(166)
Inventories, materials, supplies and prepaid expenses		42			46		(131	)		(451)
Income taxes payable		(12	)		(485)		(29	)		(607)
Accounts payable and accrued liabilities		(216	)		(226)		(20	)		282
All other items - net (a)		(81	)		(59)		14			(273)
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES		1,230			298		3,314			1,633
INVESTING ACTIVITIES
Additions to property, plant and equipment		(1,351	)		(1,810)		(3,852	)		(4,771)
Acquisition		—			—		—			(1,602)
Proceeds from asset sales		7			6		814			68
Additional investments		(35	)		—		(79	)		—
Repayment of loan from equity company		—			—		—			4
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES		(1,379	)		(1,804)		(3,117	)		(6,301)
FINANCING ACTIVITIES
Short-term debt - net		135			325		(88	)		1,359
Long-term debt issued		—			819		—			3,213
Reduction in capitalized lease obligations		(3	)		(2)		(7	)		(5)
Dividends paid		(111	)		(102)		(331	)		(305)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES		21			1,040		(426	)		4,262
INCREASE (DECREASE) IN CASH		(128	)		(466)		(229	)		(406)
CASH AT BEGINNING OF PERIOD		171			542		272			482
CASH AT END OF PERIOD		43			76		43			76
(a) Included contribution to registered pension plans		(95	)		(163)		(267	)		(461)

The information in the Notes to Consolidated Financial Statements is an integral part of these statements.

6

IMPERIAL OIL LIMITED

NOTES TO THE 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 company’s 2013 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 nine months ended September 30, 2014, 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

Third Quarter	Upstream					Downstream					Chemical
millions of dollars	2014			2013		2014			2013		2014			2013
REVENUES AND OTHER INCOME
Operating revenues (a)		2,365			1,786		6,912			6,469		364			322
Intersegment sales		1,077			1,397		318			415		93			96
Investment and other income		2			8		14			9		—			—
		3,444			3,191		7,244			6,893		457			418
EXPENSES
Exploration		14			30		—			—		—			—
Purchases of crude oil and products		1,590			1,307		5,701			5,789		296			295
Production and manufacturing		917			880		389			396		52			50
Selling and general		(1	)		1		234			217		17			17
Federal excise tax		—			—		412			385		—			—
Depreciation and depletion		219			168		52			50		3			3
Financing costs		(1	)		—		—			(1)		—			—
TOTAL EXPENSES		2,738			2,386		6,788			6,836		368			365
INCOME BEFORE INCOME TAXES		706			805		456			57		89			53
INCOME TAXES		174			201		113			11		23			14
NET INCOME		532			604		343			46		66			39
Cash flows from (used in) operating activities		1,072			601		114			(315)		77			7
CAPEX (b)		1,280			1,765		127			51		7			3
Third Quarter	Corporate and Other					Eliminations					Consolidated
millions of dollars	2014			2013		2014			2013		2014			2013
REVENUES AND OTHER INCOME
Operating revenues (a)		—			—		—			—		9,641			8,577
Intersegment sales		—			—		(1,488	)		(1,908)		—			—
Investment and other income		1			—		—			—		17			17
		1			—		(1,488	)		(1,908)		9,658			8,594
EXPENSES
Exploration		—			—		—			—		14			30
Purchases of crude oil and products		—			—		(1,487	)		(1,907)		6,100			5,484
Production and manufacturing		—			—		—			(1)		1,358			1,325
Selling and general		5			56		(1	)		—		254			291
Federal excise tax		—			—		—			—		412			385
Depreciation and depletion		2			2		—			—		276			223
Financing costs		—			—		—			—		(1	)		(1)
TOTAL EXPENSES		7			58		(1,488	)		(1,908)		8,413			7,737
INCOME BEFORE INCOME TAXES		(6	)		(58)		—			—		1,245			857
INCOME TAXES		(1	)		(16)		—			—		309			210
NET INCOME		(5	)		(42)		—			—		936			647
Cash flows from (used in) operating activities		(33	)		5		—			—		1,230			298
CAPEX (b)		20			21		—			—		1,434			1,840

(a) Included export sales to the United States of $2,092 million (2013 - $1,380 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, equipment and intangibles, additions to capital leases, additional investments and acquisition.

8

IMPERIAL OIL LIMITED

Nine Months to September 30	Upstream					Downstream					Chemical
millions of dollars	2014			2013		2014			2013		2014		2013
REVENUES AND OTHER INCOME
Operating revenues (a)		6,671			4,392		20,458			19,120		1,108		958
Intersegment sales		3,188			3,344		1,118			1,603		310		240
Investment and other income		658			55		34			39		—		—
		10,517			7,791		21,610			20,762		1,418		1,198
EXPENSES
Exploration		52			74		—			—		—		—
Purchases of crude oil and products		4,425			3,030		16,898			16,788		966		826
Production and manufacturing (c)		2,933			2,508		1,125			1,312		166		157
Selling and general		2			4		658			651		53		49
Federal excise tax		—			—		1,165			1,041		—		—
Depreciation and depletion (c)		657			443		162			401		9		9
Financing costs		3			—		—			1		—		—
TOTAL EXPENSES		8,072			6,059		20,008			20,194		1,194		1,041
INCOME BEFORE INCOME TAXES		2,445			1,732		1,602			568		224		157
INCOME TAXES		604			431		405			141		58		41
NET INCOME		1,841			1,301		1,197			427		166		116
Cash flows from (used in) operating activities		2,062			1,065		1,074			420		154		122
CAPEX (b)		3,680			6,272		310			128		15		6
Total assets as at September 30		33,799			29,693		6,027			6,159		381		374
Nine Months to September 30	Corporate and Other					Eliminations					Consolidated
millions of dollars	2014			2013		2014			2013		2014		2013
REVENUES AND OTHER INCOME
Operating revenues (a)		—			—		—			—		28,237		24,470
Intersegment sales		—			—		(4,616	)		(5,187)		—		—
Investment and other income		4			2		—			—		696		96
		4			2		(4,616	)		(5,187)		28,933		24,566
EXPENSES
Exploration		—			—		—			—		52		74
Purchases of crude oil and products		—			—		(4,612	)		(5,184)		17,677		15,460
Production and manufacturing (c)		—			—		—			(3)		4,224		3,974
Selling and general		116			93		(4	)		—		825		797
Federal excise tax		—			—		—			—		1,165		1,041
Depreciation and depletion (c)		8			7		—			—		836		860
Financing costs		—			—		—			—		3		1
TOTAL EXPENSES		124			100		(4,616	)		(5,187)		24,782		22,207
INCOME BEFORE INCOME TAXES		(120	)		(98)		—			—		4,151		2,359
INCOME TAXES		(30	)		(26)		—			—		1,037		587
NET INCOME		(90	)		(72)		—			—		3,114		1,772
Cash flows from (used in) operating activities		24			26		—			—		3,314		1,633
CAPEX (b)		61			47		—			—		4,066		6,453
Total assets as at September 30		426			364		(391	)		(509)		40,242		36,081

(a) Included export sales to the United States of $4,888 million (2013 - $4,071 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, equipment and intangibles, additions to capital leases, additional investments and acquisition.

(c) A second quarter 2013 charge in the Downstream segment of $355 million ($264 million, after-tax) associated with the company’s decision to convert the Dartmouth refinery to a terminal included the write-down of refinery plant and equipment not included in the terminal conversion of $245 million, reported as part of depreciation and depletion expenses, and decommissioning, environmental and employee-related costs of $110 million, reported as part of production and manufacturing expenses. Amounts incurred related to the project at the end of the third quarter 2014 associated with decommissioning, environmental and employee-related costs were $79 million.

9

IMPERIAL OIL LIMITED

3. Investment and other income

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

	Third Quarter				Nine Months   to September 30
millions of dollars	2014		2013		2014		2013
Proceeds from asset sales (a)		7		6		814		68
Book value of assets sold		3		1		150		8
Gain/(loss) on asset sales, before tax (a)		4		5		664		60
Gain/(loss) on asset sales, after tax (a)		2		5		498		46

(a) The nine months ended September 30, 2014 included gains of $638 million ($478 million, after tax) from the sale of the company’s interest in producing conventional assets located in Boundary Lake, Cynthia/West Pembina and Rocky Mountain House.

4. Employee retirement benefits

The components of net benefit cost were as follows:

	Third Quarter				Nine Months   to September 30
millions of dollars	2014		2013		2014		2013
Pension benefits:
Current service cost		37		46		114		136
Interest cost		82		71		241		211
Expected return on plan assets		(95)		(85)		(277)		(248)
Amortization of prior service cost		6		6		17		17
Amortization of actuarial loss		39		61		125		182
Net benefit cost		69		99		220		298
Other post-retirement benefits:
Current service cost		3		3		8		8
Interest cost		7		5		19		16
Amortization of actuarial loss		1		3		5		8
Net benefit cost		11		11		32		32

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IMPERIAL OIL LIMITED

5. Financing costs and additional notes and loans payable information

	Third Quarter					Nine Months       to September 30
millions of dollars	2014			2013		2014			2013
Debt-related interest		20			21		61			47
Capitalized interest		(20	)		(21)		(61	)		(47)
Net interest expense		—			—		—			—
Other interest		(1	)		(1)		3			1
Total financing costs		(1	)		(1)		3			1

In the first quarter of 2014, the company extended the maturity date of its existing $500 million 364-day short-term unsecured committed bank credit facility to March 2015. The company has not drawn on the facility.

6. Long-term debt

millions of dollars	As at  Sept 30  2014		As at  Dec 31  2013
Long-term debt		4,316		4,316
Capital leases		127		128
Total long-term debt		4,443		4,444

In January 2014, the company increased the capacity of its existing floating rate loan facility with an affiliated company of ExxonMobil from $5 billion to $6.25 billion.

In the third quarter of 2014, the company extended the maturity date of its existing $500 million stand-by long-term bank credit facility to August 2016. The company has not drawn on the facility.

7. Other long-term obligations

millions of dollars	As at  Sept 30  2014		As at  Dec 31  2013
Employee retirement benefits (a)		1,237		1,448
Asset retirement obligations and other environmental liabilities (b)		1,139		1,258
Share-based incentive compensation liabilities		222		140
Other obligations		219		245
Total other long-term obligations		2,817		3,091

(a) Total recorded employee retirement benefits obligations also included $53 million in current liabilities (2013 - $53 million).

(b) Total asset retirement obligations and other environmental liabilities also included $157 million in current liabilities (2013 - $154 million).

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IMPERIAL OIL LIMITED

8. Net income per share

	Third Quarter				Nine Months      to September 30
	2014		2013		2014		2013
Net income per common share - basic
Net income (millions of dollars)		936		647		3,114		1,772
Weighted average number of common shares outstanding (millions of shares)		847.6		847.6		847.6		847.6
Net income per common share (dollars)		1.10		0.76		3.67		2.09
Net income per common share - diluted
Net income (millions of dollars)		936		647		3,114		1,772
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)		3.3		3.4		3.1		3.2
Weighted average number of common shares outstanding, assuming dilution (millions of shares)		850.9		851.0		850.7		850.8
Net income per common share (dollars)		1.10		0.76		3.66		2.08

9. Other comprehensive income information

Changes in accumulated other comprehensive income:

millions of dollars	2014		2013
Balance at January 1		(1,721)		(2,455)
Post-retirement benefits liability adjustment:
Current period change excluding amounts reclassified from accumulated other comprehensive income		(38)		(102)
Amounts reclassified from accumulated other comprehensive income		109		154
Balance at September 30		(1,650)		(2,403)
Amounts reclassified out of accumulated other comprehensive income - before-tax income/(expense):

	Third Quarter					Nine Months       to September 30
millions of dollars	2014			2013		2014			2013
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost (a)		(46	)		(70)		(147	)		(207)

(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:

	Third Quarter				Nine Months       to September 30
millions of dollars	2014		2013		2014		2013
Post-retirement benefits liability adjustments:
Post-retirement benefits liability adjustment (excluding amortization)		—		—		(13)		(35)
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost		12		18		38		53
		12		18		25		18

12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OPERATING RESULTS

Third quarter 2014 vs. third quarter 2013

The company’s net income for the third quarter of 2014 was $936 million or $1.10 per share on a diluted basis, compared with $647 million or $0.76 per share for the same period last year.

Upstream net income in the third quarter was $532 million, $72 million lower than the same period of 2013. Earnings in the third quarter of 2014 reflected the impact of lower bitumen and synthetic crude oil realizations of about $200 million. Earnings also decreased due to higher royalties along with higher energy and other operating costs totalling about $90 million. These factors were partially offset by higher liquids volumes of about $140 million, primarily due to incremental contribution from Kearl production, and the impact of a weaker Canadian dollar of about $85 million.

The company’s average realizations from the sales of synthetic crude oil decreased about 10 percent in the third quarter of 2014 to $102.58 per barrel versus $113.63 per barrel in the third quarter of 2013. The decreased realizations largely followed the West Texas Intermediate (WTI) crude oil benchmark price, which was down about eight percent to $97.25 per barrel, in U.S. dollars. The company’s average bitumen realizations at $74.82 per barrel, also followed the trend of WTI, and were down about eight percent versus the third quarter of 2013. The company’s average realizations on natural gas sales of $3.58 per thousand cubic feet in the third quarter of 2014 were higher by $0.92 per thousand cubic feet versus the same period in 2013.

Gross production of Cold Lake bitumen averaged 149,000 barrels per day in the third quarter, up from 147,000 barrels in the same period last year.

Gross production from the Kearl initial development in the third quarter was 78,000 barrels per day (55,000 barrels Imperial’s share) up from 33,000 barrels per day (23,000 barrels Imperial’s share) in the third quarter of 2013. Excluding the impact of major planned maintenance, which was executed over a two week period in September, gross production averaged 92,000 barrels per day (65,000 barrels Imperial’s share).

The company’s share of Syncrude’s gross production in the third quarter was 61,000 barrels per day, up from 57,000 barrels in the third quarter of 2013. Increased volumes were due to lower maintenance activities.

Gross production of conventional crude oil averaged 16,000 barrels per day in the third quarter, versus 22,000 barrels in the corresponding period in 2013. The lower production volume was primarily due to the impact of properties divested during the first half of 2014.

Gross production of natural gas during the third quarter of 2014 was 149 million cubic feet per day, down from 211 million cubic feet in the same period last year, reflecting the impact of properties divested during the first half of 2014.

Downstream net income was $343 million in the third quarter, $297 million higher than the third quarter of 2013. Earnings increased due to the impacts of improved refinery reliability and feedstock mix of about $110 million, along with higher industry refining margins of about $100 million, and higher marketing margins and sales volumes totalling about $70 million.

13

Chemical net income in the third quarter was a record $66 million, up from $39 million in the same quarter in 2013. Strong margins across all major product lines and the processing of cost-advantaged ethane feedstock from Marcellus shale gas contributed to these best-ever quarterly results.

Net income effects from Corporate and Other were negative $5 million in the third quarter, versus negative $42 million in the same period of 2013 due to lower share-based compensation charges.

Nine months 2014 vs. nine months 2013

Net income in the first nine months of 2014 was $3,114 million, or $3.66 per share on a diluted basis, versus $1,772 million or $2.08 per share for the first nine months of 2013.

Upstream net income for the first nine months of 2014 was $1,841 million, $540 million higher than the same period of 2013. Earnings in 2014 included a gain of $478 million from the divestment of conventional upstream producing assets. Earnings also increased due to the impacts of a weaker Canadian dollar of about $240 million and higher liquids volumes of about $150 million, primarily due to incremental contribution from Kearl production. These factors were partially offset by higher royalty costs of about $220 million and higher energy and other operating costs of about $100 million.

The company’s average realizations from the sale of synthetic crude oil increased about four percent in the first nine months of 2014 to $106.59 per barrel versus $102.98 per barrel in the corresponding period last year. The increased realizations reflected the increase in the WTI crude oil benchmark price, which was up about one percent, and the impact of a weaker Canadian dollar. The company’s average bitumen realizations in Canadian dollars for the nine months to-date in 2014 were $72.11 per barrel versus $63.86 per barrel in the same period in 2013 as the price spread between light crude oil and bitumen narrowed. The company’s average realizations on natural gas sales of $4.97 per thousand cubic feet in the first nine months of 2014 were higher by $1.76 per thousand cubic feet versus the same period in 2013.

Gross production of Cold Lake bitumen averaged 145,000 barrels per day in the first nine months, down from 152,000 barrels from the same period last year. Lower volumes were primarily due to the cyclic nature of steaming and associated production and the impact of several unplanned third-party power outages in the first quarter.

Gross production from the Kearl initial development in the first nine months of 2014 was 73,000 barrels per day (52,000 barrels Imperial’s share) versus 13,000 barrels (9,000 barrels Imperial’s share) in the same period of 2013.

During the first nine months of 2014, the company’s share of gross production from Syncrude averaged 62,000 barrels per day, compared to 63,000 barrels from the same period of 2013.

Gross production of conventional crude oil averaged 18,000 barrels per day in the first nine months of 2014, versus 21,000 barrels from the same period in 2013. The lower production volume was primarily due to the impact of properties divested during the first half of 2014.

Gross production of natural gas during the first nine months of 2014 was 171 million cubic feet per day, down from 201 million cubic feet in the same period last year. The lower production volume was primarily the result of the impact of divested properties.

14

Downstream net income was $1,197 million, up $770 million in the same period of 2013. Earnings in the first nine months of 2013 included a charge of $264 million associated with the conversion of the Dartmouth refinery to a fuels terminal. Earnings also increased due to the impacts of improved refinery reliability and feedstock mix of about $330 million, higher marketing margins and sales volumes totalling about $140 million and a weaker Canadian dollar of about $90 million. These factors were partially offset by lower industry refining margins of about $60 million.

Chemical net income was $166 million for the first nine months of 2014, up $50 million over the same period in 2013.

For the first nine months of 2014, net income effects from Corporate & Other were negative $90 million, versus negative $72 million in 2013, primarily due to changes in share-based compensation charges.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow generated from operating activities was $1,230 million in the third quarter, $932 million higher than the corresponding period in 2013. Higher cash flow was primarily due to working capital effects and higher earnings.

Investing activities used net cash of $1,379 million in the third quarter, compared with $1,804 million in the same period of 2013. Additions to property, plant and equipment were $1,351 million in the third quarter, compared with $1,810 million during the same quarter in 2013. Expenditures during the quarter were primarily directed towards the advancement of Kearl expansion and Cold Lake Nabiye projects.

Cash from financing activities was $21 million in the third quarter, compared with $1,040 million in the third quarter of 2013. Dividends paid in the third quarter of 2014 were $111 million, $9 million higher than the corresponding period in 2013. Per-share dividend paid in the third quarter was $0.13, up from $0.12 in the same period of 2013.

The above factors led to a decrease in the company’s balance of cash to $43 million at September 30, 2014 from $272 million at the end of 2013.

RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

In May 2014, the Financial Accounting Standards Board 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 is required to be adopted beginning January 1, 2017. Imperial Oil is evaluating the standard and its effect on the company’s financial statements.

15

Item 3.               Quantitative and Qualitative Disclosures about Market Risk.

Information about market risks for the nine months ended September 30, 2014 does not differ materially from that discussed on page 23 in the company’s Annual Report on Form 10-K for the year ended December 31, 2013 and Form 10-Q for the quarter ended March 31, 2014.

Item 4.               Controls and Procedures.

As indicated in the certifications in Exhibit 31 of this report, the company’s principal executive officer and principal financial officer have evaluated the company’s disclosure controls and procedures as of September 30, 2014. Based on that evaluation, these officers have concluded that the company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There has not been any change in the company’s internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

16

PART II  -  OTHER INFORMATION

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities (1)

Period	(a)  Total     number of        shares (or     units)     purchased	(b)  Average     price paid     per share (or     unit)	(c)  Total     number of     shares (or     units)     purchased     as part of     publicly     announced        plans or     programs	(d)  Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
July 2014 (July 1 – July 31)	0	0	0	1,000,000
August 2014 (Aug 1 – Aug 31)	0	0	0	1,000,000
September 2014 (Sept 1 – Sept 30)	0	0	0	1,000,000

(1) On June 23, 2014, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid and will continue its share repurchase program. The new program enables the company to repurchase up to a maximum of 1,000,000 common shares during the period June 25, 2014 to June 24, 2015. The program will end when the company has purchased the maximum allowable number of shares, or on June 24, 2015.

The company will continue to evaluate its share purchase program in the context of its overall capital activities.

Item 6.    Exhibits.

(31.1)  Certification by the principal executive officer of the company pursuant to Rule 13a-14(a).

(31.2)  Certification by the principal financial officer of the company pursuant to Rule 13a-14(a).

(32.1)  Certification by the chief executive officer of the company pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.

(32.2)  Certification by the chief financial officer of the company pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.

17

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IMPERIAL OIL LIMITED
	(Registrant)
Date:     November 4, 2014	/s/ Paul J. Masschelin
	(Signature)
	Paul J. Masschelin
	Senior Vice-President, Finance and Administration and Controller
	(Principal Accounting Officer)
Date:     November 4, 2014	/s/ Brent A. Latimer
	(Signature)
	Brent A. Latimer
	Assistant Secretary

18

EX-31.1

Exhibit (31.1)  

CERTIFICATIONS

I, Richard M. Kruger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Imperial Oil Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    November 4, 2014

/s/ Richard M. Kruger

Richard M. Kruger

Chairman of the Board, President and

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit (31.2)  

CERTIFICATIONS

I, Paul J. Masschelin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Imperial Oil Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    November 4, 2014

/s/ Paul J. Masschelin

Paul J. Masschelin

Senior Vice-President, Finance and  Administration and Controller

(Principal Financial Officer)

EX-32.1

Exhibit (32.1)

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

For purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Richard M. Kruger, the chief executive officer of Imperial Oil Limited (the “Company”), hereby certifies that, to his knowledge:

(i)       the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:     November 4, 2014

/s/ Richard M. Kruger

Richard M. Kruger

Chairman of the Board, President and      

Chief Executive Officer

EX-32.2

Exhibit (32.2) 

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

For purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Paul J. Masschelin, the chief financial officer of Imperial Oil Limited (the “Company”), hereby certifies that, to his knowledge:

(i)       the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:     November 4, 2014

/s/ Paul J. Masschelin

Paul J. Masschelin

Senior Vice-President, Finance and        

Administration and Controller

(chief financial officer)

XML

Amounts Reclassified Out of Accumulated Other Comprehensive Income (Detail) (Reclassification Adjustment out of Accumulated Other Comprehensive Income, CAD) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost	(46)	[1]	(70)	[1]	(147)	[1]	(207)	[1]

[1] This accumulated other comprehensive income component is included in the computation of net periodic benefit cost (note 4).

XML

Long Term Debt (Detail) (CAD) In Millions, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Debt Instrument [Line Items]
Long-term debt	4,316		4,316
Capital leases	127		128
Total long-term debt	4,443	[1]	4,444	[1]

[1] Long-term debt included amounts to related parties of $4,316 million (2013 - $4,316 million).

XML

Other comprehensive income information (Tables)

9 Months Ended

Sep. 30, 2014

Changes in Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income:

millions of dollars	2014		2013
Balance at January 1		(1,721)		(2,455)
Post-retirement benefits liability adjustment:
Current period change excluding amounts reclassified from accumulated other comprehensive income		(38)		(102)
Amounts reclassified from accumulated other comprehensive income		109		154
Balance at September 30		(1,650)		(2,403)

Amounts Reclassified Out of Accumulated Other Comprehensive Income Before-Tax Income/(Expense)

Amounts reclassified out of accumulated other comprehensive income -

before-tax income/(expense):

	Third Quarter					Nine Months       to September 30
millions of dollars	2014			2013		2014			2013
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost (a)		(46	)		(70)		(147	)		(207)

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

Schedule of Income Tax Expense/(Credit) for Components of Other Comprehensive Income

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

	Third Quarter				Nine Months       to September 30
millions of dollars	2014		2013		2014		2013
Post-retirement benefits liability adjustments:
Post-retirement benefits liability adjustment (excluding amortization)		—		—		(13)		(35)
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost		12		18		38		53
		12		18		25		18

XML

Net Income Per Share (Detail) (CAD) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net income per common share - basic
NET INCOME	936	647	3,114	1,772
Weighted average number of common shares outstanding (millions of shares)	847.6	847.6	847.6	847.6
Net income per common share (dollars)	1.10	0.76	3.67	2.09
Net income per common share - diluted
NET INCOME	936	647	3,114	1,772
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)	3.3	3.4	3.1	3.2
Weighted average number of common shares outstanding, assuming dilution (millions of shares)	850.9	851.0	850.7	850.8
Net income per common share (dollars)	1.10	0.76	3.66	2.08

XML

Basis of financial statement preparation

9 Months Ended

Sep. 30, 2014

Basis of financial statement preparation

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 company’s 2013 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 nine months ended September 30, 2014, are not necessarily indicative of the operations to be expected for the full year.

All amounts are in Canadian dollars unless otherwise indicated.

XML

Gains and Losses on Asset Sales (Parenthetical) (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Investment And Other Income [Line Items]
Gain/(loss) on asset sales, before tax	4	[1]	5	[1]	664	[1]	60	[1]
Gain/(loss) on asset sales, after tax	2	[1]	5	[1]	498	[1]	46	[1]
Conventional Assets
Investment And Other Income [Line Items]
Gain/(loss) on asset sales, before tax					638
Gain/(loss) on asset sales, after tax					478

[1] The nine months ended September 30, 2014 included gains of $638 million ($478 million, after tax) from the sale of the company's interest in producing conventional assets located in Boundary Lake, Cynthia/West Pembina and Rocky Mountain House.

XML

Gains and Losses on Asset Sales (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Investment And Other Income [Line Items]
Proceeds from asset sales	7	[1]	6	[1]	814	[1]	68	[1]
Book value of assets sold	3		1		150		8
Gain/(loss) on asset sales, before tax	4	[1]	5	[1]	664	[1]	60	[1]
Gain/(loss) on asset sales, after tax	2	[1]	5	[1]	498	[1]	46	[1]

[1] The nine months ended September 30, 2014 included gains of $638 million ($478 million, after tax) from the sale of the company's interest in producing conventional assets located in Boundary Lake, Cynthia/West Pembina and Rocky Mountain House.

XML

Components of Net Periodic Benefit Cost (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Pension benefits
Defined Benefit Plan Disclosure [Line Items]
Current service cost	37	46	114	136
Interest cost	82	71	241	211
Expected return on plan assets	(95)	(85)	(277)	(248)
Amortization of prior service cost	6	6	17	17
Amortization of actuarial loss	39	61	125	182
Net benefit cost	69	99	220	298
Other post-retirement benefits
Defined Benefit Plan Disclosure [Line Items]
Current service cost	3	3	8	8
Interest cost	7	5	19	16
Amortization of actuarial loss	1	3	5	8
Net benefit cost	11	11	32	32

XML

Financing Costs and Additional Notes and Loans Payable Information (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Debt-related interest	20	21	61	47
Capitalized interest	(20)	(21)	(61)	(47)
Net interest expense
Other interest	(1)	(1)	3	1
Total financing costs	(1)	(1)	3	1

XML

Consolidated Statement of Cash Flows (U.S. GAAP) (Parenthetical) (CAD) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Included contribution to registered pension plans	(95)	(163)	(267)	(461)

XML

Financing Costs and Additional Notes and Loans Payable Information - Additional Information (Detail) (Unsecured committed bank credit facility, CAD) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Unsecured committed bank credit facility
Financing Activities [Line Items]
Debt instrument, maturity date	Mar. 31, 2015
Line of Credit maximum borrowing capacity	500

XML

Income Tax Expense/(Credit) for Components of Other Comprehensive Income (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Post-retirement benefits liability adjustment (excluding amortization)			(13)	(35)
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost	12	18	38	53
Total	12	18	25	18

XML

Consolidated Statement Of Income (U.S. GAAP) (CAD) In Millions, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
REVENUES AND OTHER INCOME
Operating revenues	9,641	[1],[2],[3]	8,577	[1],[2],[3]	28,237	[1],[2],[4]	24,470	[1],[2],[4]
Investment and other income (note 3)	17		17		696		96
TOTAL REVENUES AND OTHER INCOME	9,658		8,594		28,933		24,566
EXPENSES
Exploration	14		30		52		74
Purchases of crude oil and products	6,100	[5]	5,484	[5]	17,677	[5]	15,460	[5]
Production and manufacturing	1,358	[6]	1,325	[6]	4,224	[6],[7]	3,974	[6],[7]
Selling and general	254		291		825		797
Federal excise tax	412	[2]	385	[2]	1,165	[2]	1,041	[2]
Depreciation and depletion	276		223		836	[7]	860	[7]
Financing costs (note 5)	(1)		(1)		3		1
TOTAL EXPENSES	8,413		7,737		24,782		22,207
INCOME BEFORE INCOME TAXES	1,245		857		4,151		2,359
INCOME TAXES	309		210		1,037		587
NET INCOME	936		647		3,114		1,772
PER SHARE INFORMATION (Canadian dollars)
Net income per common share - basic (note 8)	1.10		0.76		3.67		2.09
Net income per common share - diluted (note 8)	1.10		0.76		3.66		2.08
Dividends per common share	0.13		0.12		0.39		0.36

[1] Amounts from related parties included in operating revenues 1,201 711 2,759 1,936

[2] Federal excise tax included in operating revenues 412 385 1,165 1,041

[3] Included export sales to the United States of $2,092 million (2013 - $1,380 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

[4] Included export sales to the United States of $4,888 million (2013 - $4,071 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

[5] Amounts to related parties included in purchases of crude oil and products 1,111 1,018 2,939 3,544

[6] Amounts to related parties included in production and manufacturing expenses 93 85 268 255

[7] A second quarter 2013 charge in the Downstream segment of $355 million ($264 million, after-tax) associated with the company's decision to convert the Dartmouth refinery to a terminal included the write-down of refinery plant and equipment not included in the terminal conversion of $245 million, reported as part of depreciation and depletion expenses, and decommissioning, environmental and employee-related costs of $110 million, reported as part of production and manufacturing expenses. Amounts incurred related to the project at the end of the third quarter 2014 associated with decommissioning, environmental and employee-related costs were $79 million.

XML

Consolidated Balance Sheet (U.S. GAAP) (Parenthetical) (CAD) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Due to related parties, current	75	75
Amounts (payable) receivable from related parties	79	(170)
Due to related parties, noncurrent	4,316	4,316
Common shares authorized	1,100	1,100
Common shares outstanding	848	848

XML

Other Long-Term Obligations (Detail) (CAD) In Millions, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Schedule of Other Liabilities [Line Items]
Employee retirement benefits	1,237	[1]	1,448	[1]
Asset retirement obligations and other environmental liabilities	1,139	[2]	1,258	[2]
Share-based incentive compensation liabilities	222		140
Other obligations	219		245
Total other long-term obligations	2,817		3,091

[1] Total recorded employee retirement benefits obligations also included $53 million in current liabilities (2013 - $53 million).

[2] Total asset retirement obligations and other environmental liabilities also included $157 million in current liabilities (2013 - $154 million).

XML

Long-term debt (Tables)

9 Months Ended

Sep. 30, 2014

Long-Term Debt

millions of dollars	As at  Sept 30  2014		As at  Dec 31  2013
Long-term debt		4,316		4,316
Capital leases		127		128
Total long-term debt		4,443		4,444

XML

Other Long-Term Obligations (Parenthetical) (Detail) (CAD) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of Other Liabilities [Line Items]
Employee retirement benefits obligations in current liabilities	53	53
Asset retirement obligations and other environmental liabilities in current liabilities	157	154

XML

Net income per share (Tables)

9 Months Ended

Sep. 30, 2014

Calculation of Basic and Diluted Earnings Per Share

	Third Quarter				Nine Months      to September 30
	2014		2013		2014		2013
Net income per common share - basic
Net income (millions of dollars)		936		647		3,114		1,772
Weighted average number of common shares outstanding (millions of shares)		847.6		847.6		847.6		847.6
Net income per common share (dollars)		1.10		0.76		3.67		2.09
Net income per common share - diluted
Net income (millions of dollars)		936		647		3,114		1,772
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)		3.3		3.4		3.1		3.2
Weighted average number of common shares outstanding, assuming dilution (millions of shares)		850.9		851.0		850.7		850.8
Net income per common share (dollars)		1.10		0.76		3.66		2.08

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Consolidated Statement of Cash Flows (U.S. GAAP) (CAD) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
OPERATING ACTIVITIES
NET INCOME	936		647		3,114		1,772
Adjustments for non-cash items:
Depreciation and depletion	276		223		836	[1]	860	[1]
(Gain)/loss on asset sales (note 3)	(4)	[2]	(5)	[2]	(664)	[2]	(60)	[2]
Deferred income taxes and other	185		106		411		276
Changes in operating assets and liabilities:
Accounts receivable	104		51		(217)		(166)
Inventories, materials, supplies and prepaid expenses	42		46		(131)		(451)
Income taxes payable	(12)		(485)		(29)		(607)
Accounts payable and accrued liabilities	(216)		(226)		(20)		282
All other items - net	(81)	[3]	(59)	[3]	14	[3]	(273)	[3]
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES	1,230		298		3,314		1,633
INVESTING ACTIVITIES
Additions to property, plant and equipment	(1,351)		(1,810)		(3,852)		(4,771)
Acquisition							(1,602)
Proceeds from asset sales	7	[2]	6	[2]	814	[2]	68	[2]
Additional investments	(35)				(79)
Repayment of loan from equity company							4
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES	(1,379)		(1,804)		(3,117)		(6,301)
FINANCING ACTIVITIES
Short-term debt - net	135		325		(88)		1,359
Long-term debt issued			819				3,213
Reduction in capitalized lease obligations	(3)		(2)		(7)		(5)
Dividends paid	(111)		(102)		(331)		(305)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES	21		1,040		(426)		4,262
INCREASE (DECREASE) IN CASH	(128)		(466)		(229)		(406)
CASH AT BEGINNING OF PERIOD	171		542		272		482
CASH AT END OF PERIOD	43		76		43		76

[1] A second quarter 2013 charge in the Downstream segment of $355 million ($264 million, after-tax) associated with the company's decision to convert the Dartmouth refinery to a terminal included the write-down of refinery plant and equipment not included in the terminal conversion of $245 million, reported as part of depreciation and depletion expenses, and decommissioning, environmental and employee-related costs of $110 million, reported as part of production and manufacturing expenses. Amounts incurred related to the project at the end of the third quarter 2014 associated with decommissioning, environmental and employee-related costs were $79 million.

[2] The nine months ended September 30, 2014 included gains of $638 million ($478 million, after tax) from the sale of the company's interest in producing conventional assets located in Boundary Lake, Cynthia/West Pembina and Rocky Mountain House.

[3] Included contribution to registered pension plans (95 ) (163) (267 ) (461)

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Consolidated Statement Of Income (U.S. GAAP) (Parenthetical) (CAD) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Federal excise tax included in operating revenues	412	[1]	385	[1]	1,165	[1]	1,041	[1]
Amounts from related parties included in operating revenues	1,201		711		2,759		1,936
Amounts to related parties included in purchases of crude oil and products	1,111		1,018		2,939		3,544
Amounts to related parties included in production and manufacturing expenses	93		85		268		255

[1] Federal excise tax included in operating revenues 412 385 1,165 1,041

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Other comprehensive income information

9 Months Ended

Sep. 30, 2014

Other comprehensive income information

9. Other comprehensive income information

Changes in accumulated other comprehensive income:

millions of dollars	2014		2013
Balance at January 1		(1,721)		(2,455)
Post-retirement benefits liability adjustment:
Current period change excluding amounts reclassified from accumulated other comprehensive income		(38)		(102)
Amounts reclassified from accumulated other comprehensive income		109		154
Balance at September 30		(1,650)		(2,403)
Amounts reclassified out of accumulated other comprehensive income - before-tax income/(expense):

	Third Quarter					Nine Months       to September 30
millions of dollars	2014			2013		2014			2013
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost (a)		(46	)		(70)		(147	)		(207)

(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:

	Third Quarter				Nine Months       to September 30
millions of dollars	2014		2013		2014		2013
Post-retirement benefits liability adjustments:
Post-retirement benefits liability adjustment (excluding amortization)		—		—		(13)		(35)
Amortization of post-retirement benefits liability adjustment included in net periodic benefit cost		12		18		38		53
		12		18		25		18

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	IMO
Entity Registrant Name	IMPERIAL OIL LTD
Entity Central Index Key	0000049938
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	847,599,011

XML

Business segments (Tables)

9 Months Ended

Sep. 30, 2014

Business Segments

Third Quarter	Upstream					Downstream					Chemical
millions of dollars	2014			2013		2014			2013		2014			2013
REVENUES AND OTHER INCOME
Operating revenues (a)		2,365			1,786		6,912			6,469		364			322
Intersegment sales		1,077			1,397		318			415		93			96
Investment and other income		2			8		14			9		—			—
		3,444			3,191		7,244			6,893		457			418
EXPENSES
Exploration		14			30		—			—		—			—
Purchases of crude oil and products		1,590			1,307		5,701			5,789		296			295
Production and manufacturing		917			880		389			396		52			50
Selling and general		(1	)		1		234			217		17			17
Federal excise tax		—			—		412			385		—			—
Depreciation and depletion		219			168		52			50		3			3
Financing costs		(1	)		—		—			(1)		—			—
TOTAL EXPENSES		2,738			2,386		6,788			6,836		368			365
INCOME BEFORE INCOME TAXES		706			805		456			57		89			53
INCOME TAXES		174			201		113			11		23			14
NET INCOME		532			604		343			46		66			39
Cash flows from (used in) operating activities		1,072			601		114			(315)		77			7
CAPEX (b)		1,280			1,765		127			51		7			3
Third Quarter	Corporate and Other					Eliminations					Consolidated
millions of dollars	2014			2013		2014			2013		2014			2013
REVENUES AND OTHER INCOME
Operating revenues (a)		—			—		—			—		9,641			8,577
Intersegment sales		—			—		(1,488	)		(1,908)		—			—
Investment and other income		1			—		—			—		17			17
		1			—		(1,488	)		(1,908)		9,658			8,594
EXPENSES
Exploration		—			—		—			—		14			30
Purchases of crude oil and products		—			—		(1,487	)		(1,907)		6,100			5,484
Production and manufacturing		—			—		—			(1)		1,358			1,325
Selling and general		5			56		(1	)		—		254			291
Federal excise tax		—			—		—			—		412			385
Depreciation and depletion		2			2		—			—		276			223
Financing costs		—			—		—			—		(1	)		(1)
TOTAL EXPENSES		7			58		(1,488	)		(1,908)		8,413			7,737
INCOME BEFORE INCOME TAXES		(6	)		(58)		—			—		1,245			857
INCOME TAXES		(1	)		(16)		—			—		309			210
NET INCOME		(5	)		(42)		—			—		936			647
Cash flows from (used in) operating activities		(33	)		5		—			—		1,230			298
CAPEX (b)		20			21		—			—		1,434			1,840

(a) Included export sales to the United States of $2,092 million (2013 - $1,380 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, equipment and intangibles, additions to capital leases, additional investments and acquisition.

Nine Months to September 30	Upstream					Downstream					Chemical
millions of dollars	2014			2013		2014			2013		2014		2013
REVENUES AND OTHER INCOME
Operating revenues (a)		6,671			4,392		20,458			19,120		1,108		958
Intersegment sales		3,188			3,344		1,118			1,603		310		240
Investment and other income		658			55		34			39		—		—
		10,517			7,791		21,610			20,762		1,418		1,198
EXPENSES
Exploration		52			74		—			—		—		—
Purchases of crude oil and products		4,425			3,030		16,898			16,788		966		826
Production and manufacturing (c)		2,933			2,508		1,125			1,312		166		157
Selling and general		2			4		658			651		53		49
Federal excise tax		—			—		1,165			1,041		—		—
Depreciation and depletion (c)		657			443		162			401		9		9
Financing costs		3			—		—			1		—		—
TOTAL EXPENSES		8,072			6,059		20,008			20,194		1,194		1,041
INCOME BEFORE INCOME TAXES		2,445			1,732		1,602			568		224		157
INCOME TAXES		604			431		405			141		58		41
NET INCOME		1,841			1,301		1,197			427		166		116
Cash flows from (used in) operating activities		2,062			1,065		1,074			420		154		122
CAPEX (b)		3,680			6,272		310			128		15		6
Total assets as at September 30		33,799			29,693		6,027			6,159		381		374
Nine Months to September 30	Corporate and Other					Eliminations					Consolidated
millions of dollars	2014			2013		2014			2013		2014		2013
REVENUES AND OTHER INCOME
Operating revenues (a)		—			—		—			—		28,237		24,470
Intersegment sales		—			—		(4,616	)		(5,187)		—		—
Investment and other income		4			2		—			—		696		96
		4			2		(4,616	)		(5,187)		28,933		24,566
EXPENSES
Exploration		—			—		—			—		52		74
Purchases of crude oil and products		—			—		(4,612	)		(5,184)		17,677		15,460
Production and manufacturing (c)		—			—		—			(3)		4,224		3,974
Selling and general		116			93		(4	)		—		825		797
Federal excise tax		—			—		—			—		1,165		1,041
Depreciation and depletion (c)		8			7		—			—		836		860
Financing costs		—			—		—			—		3		1
TOTAL EXPENSES		124			100		(4,616	)		(5,187)		24,782		22,207
INCOME BEFORE INCOME TAXES		(120	)		(98)		—			—		4,151		2,359
INCOME TAXES		(30	)		(26)		—			—		1,037		587
NET INCOME		(90	)		(72)		—			—		3,114		1,772
Cash flows from (used in) operating activities		24			26		—			—		3,314		1,633
CAPEX (b)		61			47		—			—		4,066		6,453
Total assets as at September 30		426			364		(391	)		(509)		40,242		36,081

(a) Included export sales to the United States of $4,888 million (2013 - $4,071 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, equipment and intangibles, additions to capital leases, additional investments and acquisition.

(c) A second quarter 2013 charge in the Downstream segment of $355 million ($264 million, after-tax) associated with the company’s decision to convert the Dartmouth refinery to a terminal included the write-down of refinery plant and equipment not included in the terminal conversion of $245 million, reported as part of depreciation and depletion expenses, and decommissioning, environmental and employee-related costs of $110 million, reported as part of production and manufacturing expenses. Amounts incurred related to the project at the end of the third quarter 2014 associated with decommissioning, environmental and employee-related costs were $79 million.

XML

Consolidated Statement of Comprehensive Income (U.S. GAAP) (CAD) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
NET INCOME	936	647	3,114	1,772
Other comprehensive income, net of income taxes
Post-retirement benefit liability adjustment (excluding amortization)			(38)	(102)
Amortization of post-retirement benefit liability adjustment included in net periodic benefit costs	34	52	109	154
Total other comprehensive income/(loss)	34	52	71	52
Comprehensive income	970	699	3,185	1,824

XML

Employee retirement benefits

9 Months Ended

Sep. 30, 2014

Employee retirement benefits

4. Employee retirement benefits

The components of net benefit cost were as follows:

	Third Quarter				Nine Months   to September 30
millions of dollars	2014		2013		2014		2013
Pension benefits:
Current service cost		37		46		114		136
Interest cost		82		71		241		211
Expected return on plan assets		(95)		(85)		(277)		(248)
Amortization of prior service cost		6		6		17		17
Amortization of actuarial loss		39		61		125		182
Net benefit cost		69		99		220		298
Other post-retirement benefits:
Current service cost		3		3		8		8
Interest cost		7		5		19		16
Amortization of actuarial loss		1		3		5		8
Net benefit cost		11		11		32		32

XML

Investment and other income

9 Months Ended

Sep. 30, 2014

Investment and other income

3. Investment and other income

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

	Third Quarter				Nine Months   to September 30
millions of dollars	2014		2013		2014		2013
Proceeds from asset sales (a)		7		6		814		68
Book value of assets sold		3		1		150		8
Gain/(loss) on asset sales, before tax (a)		4		5		664		60
Gain/(loss) on asset sales, after tax (a)		2		5		498		46

(a) The nine months ended September 30, 2014 included gains of $638 million ($478 million, after tax) from the sale of the company’s interest in producing conventional assets located in Boundary Lake, Cynthia/West Pembina and Rocky Mountain House.

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Other long-term obligations (Tables)

9 Months Ended

Sep. 30, 2014

Other Long-Term Obligations

millions of dollars	As at  Sept 30  2014		As at  Dec 31  2013
Employee retirement benefits (a)		1,237		1,448
Asset retirement obligations and other environmental liabilities (b)		1,139		1,258
Share-based incentive compensation liabilities		222		140
Other obligations		219		245
Total other long-term obligations		2,817		3,091

(a) Total recorded employee retirement benefits obligations also included $53 million in current liabilities (2013 - $53 million).

(b) Total asset retirement obligations and other environmental liabilities also included $157 million in current liabilities (2013 - $154 million).

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Investment and other income (Tables)

9 Months Ended

Sep. 30, 2014

Gains and Losses on Asset Sales

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

	Third Quarter				Nine Months   to September 30
millions of dollars	2014		2013		2014		2013
Proceeds from asset sales (a)		7		6		814		68
Book value of assets sold		3		1		150		8
Gain/(loss) on asset sales, before tax (a)		4		5		664		60
Gain/(loss) on asset sales, after tax (a)		2		5		498		46

(a) The nine months ended September 30, 2014 included gains of $638 million ($478 million, after tax) from the sale of the company’s interest in producing conventional assets located in Boundary Lake, Cynthia/West Pembina and Rocky Mountain House.

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Other long-term obligations

9 Months Ended

Sep. 30, 2014

Other long-term obligations

7. Other long-term obligations

millions of dollars	As at  Sept 30  2014		As at  Dec 31  2013
Employee retirement benefits (a)		1,237		1,448
Asset retirement obligations and other environmental liabilities (b)		1,139		1,258
Share-based incentive compensation liabilities		222		140
Other obligations		219		245
Total other long-term obligations		2,817		3,091

(a) Total recorded employee retirement benefits obligations also included $53 million in current liabilities (2013 - $53 million).

(b) Total asset retirement obligations and other environmental liabilities also included $157 million in current liabilities (2013 - $154 million).

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Financing costs and additional notes and loans payable information

9 Months Ended

Sep. 30, 2014

Financing costs and additional notes and loans payable information

5. Financing costs and additional notes and loans payable information

	Third Quarter					Nine Months       to September 30
millions of dollars	2014			2013		2014			2013
Debt-related interest		20			21		61			47
Capitalized interest		(20	)		(21)		(61	)		(47)
Net interest expense		—			—		—			—
Other interest		(1	)		(1)		3			1
Total financing costs		(1	)		(1)		3			1

In the first quarter of 2014, the company extended the maturity date of its existing $500 million 364-day short-term unsecured committed bank credit facility to March 2015. The company has not drawn on the facility.

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Long-term debt

9 Months Ended

Sep. 30, 2014

Long-term debt

6. Long-term debt

millions of dollars	As at  Sept 30  2014		As at  Dec 31  2013
Long-term debt		4,316		4,316
Capital leases		127		128
Total long-term debt		4,443		4,444

In January 2014, the company increased the capacity of its existing floating rate loan facility with an affiliated company of ExxonMobil from $5 billion to $6.25 billion.

In the third quarter of 2014, the company extended the maturity date of its existing $500 million stand-by long-term bank credit facility to August 2016. The company has not drawn on the facility.

XML

Net income per share

9 Months Ended

Sep. 30, 2014

Net income per share

8. Net income per share

	Third Quarter				Nine Months      to September 30
	2014		2013		2014		2013
Net income per common share - basic
Net income (millions of dollars)		936		647		3,114		1,772
Weighted average number of common shares outstanding (millions of shares)		847.6		847.6		847.6		847.6
Net income per common share (dollars)		1.10		0.76		3.67		2.09
Net income per common share - diluted
Net income (millions of dollars)		936		647		3,114		1,772
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)		3.3		3.4		3.1		3.2
Weighted average number of common shares outstanding, assuming dilution (millions of shares)		850.9		851.0		850.7		850.8
Net income per common share (dollars)		1.10		0.76		3.66		2.08

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Long Term Debt - Additional Information (Detail) (CAD) In Millions, unless otherwise specified			3 Months Ended
	Jan. 31, 2014 Floating Rate Loan Facility Exxon Mobil	Dec. 31, 2013 Floating Rate Loan Facility Exxon Mobil	Sep. 30, 2014 Revolving demand loan
Line of Credit Facility [Line Items]
Line of Credit maximum borrowing capacity	6,250	5,000	500
Debt instrument, maturity date			Aug. 31, 2016

XML

Financing costs and additional notes and loans payable information (Tables)

9 Months Ended

Sep. 30, 2014

Schedule Of Financing Costs

	Third Quarter					Nine Months       to September 30
millions of dollars	2014			2013		2014			2013
Debt-related interest		20			21		61			47
Capitalized interest		(20	)		(21)		(61	)		(47)
Net interest expense		—			—		—			—
Other interest		(1	)		(1)		3			1
Total financing costs		(1	)		(1)		3			1

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Business Segments (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013		Dec. 31, 2013
REVENUES AND OTHER INCOME
Operating revenues	9,641	[1],[2],[3]	8,577	[1],[2],[3]	28,237	[1],[2],[4]	24,470	[1],[2],[4]
Investment and other income	17		17		696		96
TOTAL REVENUES AND OTHER INCOME	9,658		8,594		28,933		24,566
EXPENSES
Exploration	14		30		52		74
Purchases of crude oil and products	6,100	[5]	5,484	[5]	17,677	[5]	15,460	[5]
Production and manufacturing	1,358	[6]	1,325	[6]	4,224	[6],[7]	3,974	[6],[7]
Selling and general	254		291		825		797
Federal excise tax	412	[2]	385	[2]	1,165	[2]	1,041	[2]
Depreciation and depletion	276		223		836	[7]	860	[7]
Financing costs	(1)		(1)		3		1
TOTAL EXPENSES	8,413		7,737		24,782		22,207
INCOME BEFORE INCOME TAXES	1,245		857		4,151		2,359
INCOME TAXES	309		210		1,037		587
NET INCOME	936		647		3,114		1,772
Cash flows from (used in) operating activities	1,230		298		3,314		1,633
CAPEX	1,434	[8]	1,840	[8]	4,066	[8]	6,453	[8]
Total assets as at September 30	40,242		36,081		40,242		36,081		37,218
Upstream
REVENUES AND OTHER INCOME
Operating revenues	2,365	[3]	1,786	[3]	6,671	[4]	4,392	[4]
Intersegment sales	1,077		1,397		3,188		3,344
Investment and other income	2		8		658		55
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME	3,444		3,191		10,517		7,791
EXPENSES
Exploration	14		30		52		74
Purchases of crude oil and products	1,590		1,307		4,425		3,030
Production and manufacturing	917		880		2,933	[7]	2,508	[7]
Selling and general	(1)		1		2		4
Depreciation and depletion	219		168		657	[7]	443	[7]
Financing costs	(1)				3
TOTAL EXPENSES	2,738		2,386		8,072		6,059
INCOME BEFORE INCOME TAXES	706		805		2,445		1,732
INCOME TAXES	174		201		604		431
NET INCOME	532		604		1,841		1,301
Cash flows from (used in) operating activities	1,072		601		2,062		1,065
CAPEX	1,280	[8]	1,765	[8]	3,680	[8]	6,272	[8]
Total assets as at September 30	33,799		29,693		33,799		29,693
Downstream
REVENUES AND OTHER INCOME
Operating revenues	6,912	[3]	6,469	[3]	20,458	[4]	19,120	[4]
Intersegment sales	318		415		1,118		1,603
Investment and other income	14		9		34		39
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME	7,244		6,893		21,610		20,762
EXPENSES
Purchases of crude oil and products	5,701		5,789		16,898		16,788
Production and manufacturing	389		396		1,125	[7]	1,312	[7]
Selling and general	234		217		658		651
Federal excise tax	412		385		1,165		1,041
Depreciation and depletion	52		50		162	[7]	401	[7]
Financing costs			(1)				1
TOTAL EXPENSES	6,788		6,836		20,008		20,194
INCOME BEFORE INCOME TAXES	456		57		1,602		568
INCOME TAXES	113		11		405		141
NET INCOME	343		46		1,197		427
Cash flows from (used in) operating activities	114		(315)		1,074		420
CAPEX	127	[8]	51	[8]	310	[8]	128	[8]
Total assets as at September 30	6,027		6,159		6,027		6,159
Chemical
REVENUES AND OTHER INCOME
Operating revenues	364	[3]	322	[3]	1,108	[4]	958	[4]
Intersegment sales	93		96		310		240
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME	457		418		1,418		1,198
EXPENSES
Purchases of crude oil and products	296		295		966		826
Production and manufacturing	52		50		166	[7]	157	[7]
Selling and general	17		17		53		49
Depreciation and depletion	3		3		9	[7]	9	[7]
TOTAL EXPENSES	368		365		1,194		1,041
INCOME BEFORE INCOME TAXES	89		53		224		157
INCOME TAXES	23		14		58		41
NET INCOME	66		39		166		116
Cash flows from (used in) operating activities	77		7		154		122
CAPEX	7	[8]	3	[8]	15	[8]	6	[8]
Total assets as at September 30	381		374		381		374
Corporate and Other
REVENUES AND OTHER INCOME
Investment and other income	1				4		2
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME	1				4		2
EXPENSES
Selling and general	5		56		116		93
Depreciation and depletion	2		2		8	[7]	7	[7]
TOTAL EXPENSES	7		58		124		100
INCOME BEFORE INCOME TAXES	(6)		(58)		(120)		(98)
INCOME TAXES	(1)		(16)		(30)		(26)
NET INCOME	(5)		(42)		(90)		(72)
Cash flows from (used in) operating activities	(33)		5		24		26
CAPEX	20	[8]	21	[8]	61	[8]	47	[8]
Total assets as at September 30	426		364		426		364
Consolidation, Eliminations
REVENUES AND OTHER INCOME
Intersegment sales	(1,488)		(1,908)		(4,616)		(5,187)
TOTAL OPERATING REVENUES, INTERSEGMENT SALES, INVESTMENT AND OTHER INCOME	(1,488)		(1,908)		(4,616)		(5,187)
EXPENSES
Purchases of crude oil and products	(1,487)		(1,907)		(4,612)		(5,184)
Production and manufacturing			(1)				(3)	[7]
Selling and general	(1)				(4)
TOTAL EXPENSES	(1,488)		(1,908)		(4,616)		(5,187)
Total assets as at September 30	(391)		(509)		(391)		(509)

[1] Amounts from related parties included in operating revenues 1,201 711 2,759 1,936

[2] Federal excise tax included in operating revenues 412 385 1,165 1,041

[3] Included export sales to the United States of $2,092 million (2013 - $1,380 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

[4] Included export sales to the United States of $4,888 million (2013 - $4,071 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

[5] Amounts to related parties included in purchases of crude oil and products 1,111 1,018 2,939 3,544

[6] Amounts to related parties included in production and manufacturing expenses 93 85 268 255

[7] A second quarter 2013 charge in the Downstream segment of $355 million ($264 million, after-tax) associated with the company's decision to convert the Dartmouth refinery to a terminal included the write-down of refinery plant and equipment not included in the terminal conversion of $245 million, reported as part of depreciation and depletion expenses, and decommissioning, environmental and employee-related costs of $110 million, reported as part of production and manufacturing expenses. Amounts incurred related to the project at the end of the third quarter 2014 associated with decommissioning, environmental and employee-related costs were $79 million.

[8] Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant, equipment and intangibles, additions to capital leases, additional investments and acquisition.

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Consolidated Balance Sheet (U.S. GAAP) (CAD) In Millions, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Current assets
Cash	43		272
Accounts receivable, less estimated doubtful accounts	2,301	[1]	2,084	[1]
Inventories of crude oil and products	1,107		1,030
Materials, supplies and prepaid expenses	396		342
Deferred income tax assets	618		559
Total current assets	4,465		4,287
Long-term receivables, investments and other long-term assets	1,379		1,332
Property, plant and equipment,	49,263		47,165
less accumulated depreciation and depletion	(15,141)		(15,845)
Property, plant and equipment, net	34,122		31,320
Goodwill	224		224
Other intangible assets, net	52		55
TOTAL ASSETS	40,242		37,218
Current liabilities
Notes and loans payable	1,759	[2]	1,843	[2]
Accounts payable and accrued liabilities (note 7)	4,571	[1]	4,518	[1]
Income taxes payable	698		727
Total current liabilities	7,028		7,088
Long-term debt (note 6)	4,443	[3]	4,444	[3]
Other long-term obligations (note 7)	2,817		3,091
Deferred income tax liabilities	3,575		3,071
TOTAL LIABILITIES	17,863		17,694
SHAREHOLDERS' EQUITY
Common shares at stated value	1,566	[4]	1,566	[4]
Earnings reinvested	22,463		19,679
Accumulated other comprehensive income (note 9)	(1,650)		(1,721)
TOTAL SHAREHOLDERS' EQUITY	22,379		19,524
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	40,242		37,218

[1] Accounts receivable, less estimated doubtful accounts included amounts receivable from related parties of $79 million (2013 - accounts payable and accrued liabilities included amounts payable to related parties of $170 million).

[2] Notes and loans payable included amounts to related parties of $75 million (2013 - $75 million).

[3] Long-term debt included amounts to related parties of $4,316 million (2013 - $4,316 million).

[4] Number of common shares authorized and outstanding were 1,100 million and 848 million, respectively (2013 - 1,100 million and 848 million, respectively).

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Business segments

9 Months Ended

Sep. 30, 2014

Business segments

2. Business segments

Third Quarter	Upstream					Downstream					Chemical
millions of dollars	2014			2013		2014			2013		2014			2013
REVENUES AND OTHER INCOME
Operating revenues (a)		2,365			1,786		6,912			6,469		364			322
Intersegment sales		1,077			1,397		318			415		93			96
Investment and other income		2			8		14			9		—			—
		3,444			3,191		7,244			6,893		457			418
EXPENSES
Exploration		14			30		—			—		—			—
Purchases of crude oil and products		1,590			1,307		5,701			5,789		296			295
Production and manufacturing		917			880		389			396		52			50
Selling and general		(1	)		1		234			217		17			17
Federal excise tax		—			—		412			385		—			—
Depreciation and depletion		219			168		52			50		3			3
Financing costs		(1	)		—		—			(1)		—			—
TOTAL EXPENSES		2,738			2,386		6,788			6,836		368			365
INCOME BEFORE INCOME TAXES		706			805		456			57		89			53
INCOME TAXES		174			201		113			11		23			14
NET INCOME		532			604		343			46		66			39
Cash flows from (used in) operating activities		1,072			601		114			(315)		77			7
CAPEX (b)		1,280			1,765		127			51		7			3
Third Quarter	Corporate and Other					Eliminations					Consolidated
millions of dollars	2014			2013		2014			2013		2014			2013
REVENUES AND OTHER INCOME
Operating revenues (a)		—			—		—			—		9,641			8,577
Intersegment sales		—			—		(1,488	)		(1,908)		—			—
Investment and other income		1			—		—			—		17			17
		1			—		(1,488	)		(1,908)		9,658			8,594
EXPENSES
Exploration		—			—		—			—		14			30
Purchases of crude oil and products		—			—		(1,487	)		(1,907)		6,100			5,484
Production and manufacturing		—			—		—			(1)		1,358			1,325
Selling and general		5			56		(1	)		—		254			291
Federal excise tax		—			—		—			—		412			385
Depreciation and depletion		2			2		—			—		276			223
Financing costs		—			—		—			—		(1	)		(1)
TOTAL EXPENSES		7			58		(1,488	)		(1,908)		8,413			7,737
INCOME BEFORE INCOME TAXES		(6	)		(58)		—			—		1,245			857
INCOME TAXES		(1	)		(16)		—			—		309			210
NET INCOME		(5	)		(42)		—			—		936			647
Cash flows from (used in) operating activities		(33	)		5		—			—		1,230			298
CAPEX (b)		20			21		—			—		1,434			1,840

(a) Included export sales to the United States of $2,092 million (2013 - $1,380 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, equipment and intangibles, additions to capital leases, additional investments and acquisition.

Nine Months to September 30	Upstream					Downstream					Chemical
millions of dollars	2014			2013		2014			2013		2014		2013
REVENUES AND OTHER INCOME
Operating revenues (a)		6,671			4,392		20,458			19,120		1,108		958
Intersegment sales		3,188			3,344		1,118			1,603		310		240
Investment and other income		658			55		34			39		—		—
		10,517			7,791		21,610			20,762		1,418		1,198
EXPENSES
Exploration		52			74		—			—		—		—
Purchases of crude oil and products		4,425			3,030		16,898			16,788		966		826
Production and manufacturing (c)		2,933			2,508		1,125			1,312		166		157
Selling and general		2			4		658			651		53		49
Federal excise tax		—			—		1,165			1,041		—		—
Depreciation and depletion (c)		657			443		162			401		9		9
Financing costs		3			—		—			1		—		—
TOTAL EXPENSES		8,072			6,059		20,008			20,194		1,194		1,041
INCOME BEFORE INCOME TAXES		2,445			1,732		1,602			568		224		157
INCOME TAXES		604			431		405			141		58		41
NET INCOME		1,841			1,301		1,197			427		166		116
Cash flows from (used in) operating activities		2,062			1,065		1,074			420		154		122
CAPEX (b)		3,680			6,272		310			128		15		6
Total assets as at September 30		33,799			29,693		6,027			6,159		381		374
Nine Months to September 30	Corporate and Other					Eliminations					Consolidated
millions of dollars	2014			2013		2014			2013		2014		2013
REVENUES AND OTHER INCOME
Operating revenues (a)		—			—		—			—		28,237		24,470
Intersegment sales		—			—		(4,616	)		(5,187)		—		—
Investment and other income		4			2		—			—		696		96
		4			2		(4,616	)		(5,187)		28,933		24,566
EXPENSES
Exploration		—			—		—			—		52		74
Purchases of crude oil and products		—			—		(4,612	)		(5,184)		17,677		15,460
Production and manufacturing (c)		—			—		—			(3)		4,224		3,974
Selling and general		116			93		(4	)		—		825		797
Federal excise tax		—			—		—			—		1,165		1,041
Depreciation and depletion (c)		8			7		—			—		836		860
Financing costs		—			—		—			—		3		1
TOTAL EXPENSES		124			100		(4,616	)		(5,187)		24,782		22,207
INCOME BEFORE INCOME TAXES		(120	)		(98)		—			—		4,151		2,359
INCOME TAXES		(30	)		(26)		—			—		1,037		587
NET INCOME		(90	)		(72)		—			—		3,114		1,772
Cash flows from (used in) operating activities		24			26		—			—		3,314		1,633
CAPEX (b)		61			47		—			—		4,066		6,453
Total assets as at September 30		426			364		(391	)		(509)		40,242		36,081

(a) Included export sales to the United States of $4,888 million (2013 - $4,071 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, equipment and intangibles, additions to capital leases, additional investments and acquisition.

(c) A second quarter 2013 charge in the Downstream segment of $355 million ($264 million, after-tax) associated with the company’s decision to convert the Dartmouth refinery to a terminal included the write-down of refinery plant and equipment not included in the terminal conversion of $245 million, reported as part of depreciation and depletion expenses, and decommissioning, environmental and employee-related costs of $110 million, reported as part of production and manufacturing expenses. Amounts incurred related to the project at the end of the third quarter 2014 associated with decommissioning, environmental and employee-related costs were $79 million.

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Business Segments (Parenthetical) (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Segment Reporting Information [Line Items]
Operating revenues	9,641	[1],[2],[3]	8,577	[1],[2],[3]	28,237	[1],[2],[4]	24,470	[1],[2],[4]
Write-down of refinery plant and equipment reported as depreciation and depletion expenses							245
Decommissioning, environmental and employee-related costs reported as production and manufacturing expenses							110
Amount incurred related to decommissioning, environmental and employee related cost	79
Pre Tax
Segment Reporting Information [Line Items]
Charges related to conversion of refinery to terminal							355
After Tax
Segment Reporting Information [Line Items]
Charges related to conversion of refinery to terminal							264
United States Exports
Segment Reporting Information [Line Items]
Operating revenues	2,092		1,380		4,888		4,071

[1] Amounts from related parties included in operating revenues 1,201 711 2,759 1,936

[2] Federal excise tax included in operating revenues 412 385 1,165 1,041

[3] Included export sales to the United States of $2,092 million (2013 - $1,380 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

[4] Included export sales to the United States of $4,888 million (2013 - $4,071 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.

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Changes in Accumulated Other Comprehensive Income (Detail) (CAD) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at January 1			(1,721)	(2,455)
Current period change excluding amounts reclassified from accumulated other comprehensive income			(38)	(102)
Amounts reclassified from accumulated other comprehensive income	34	52	109	154
Balance at September 30	(1,650)	(2,403)	(1,650)	(2,403)

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Employee retirement benefits (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Components of Net Benefit Cost

The components of net benefit cost were as follows:

	Third Quarter				Nine Months   to September 30
millions of dollars	2014		2013		2014		2013
Pension benefits:
Current service cost		37		46		114		136
Interest cost		82		71		241		211
Expected return on plan assets		(95)		(85)		(277)		(248)
Amortization of prior service cost		6		6		17		17
Amortization of actuarial loss		39		61		125		182
Net benefit cost		69		99		220		298
Other post-retirement benefits:
Current service cost		3		3		8		8
Interest cost		7		5		19		16
Amortization of actuarial loss		1		3		5		8
Net benefit cost		11		11		32		32