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Imperial (TSE: IMO) (NYSE American: IMO):
Imperial reported estimated net income in the fourth quarter of $492 million, compared to net income of $539 million in the third quarter of 2025, primarily driven by lower upstream realizations. Excluding identified items , estimated net income was $968 million compared to $1,094 million in the third quarter of 2025. Identified items in the fourth quarter related to Norman Wells end of field life acceleration and a separate one-time charge associated with the optimization of materials and supplies inventory.
Quarterly cash flows from operating activities were $1,918 million, up from $1,798 million generated in the third quarter of 2025. Cash flows from operating activities excluding working capital were $1,260 million – which included an unfavourable $325 million related to identified items . Cash flows from operating activities excluding working capital were $1,600 million in the third quarter of 2025 – which included an unfavourable $149 million related to identified items .
Full year estimated net income was $3,268 million with cash flows from operating activities of $6,708 million. Excluding identified items , full year estimated net income was $4,299 million. Full-year cash flows from operating activities excluding the impacts of working capital were $6,033 million – which included an unfavourable $474 million related to identified items .
“This past year demonstrated the strength of our integrated business model, as we achieved record annual crude production, deployed advantaged technology at Cold Lake, and started up Canada’s largest renewable diesel facility,” said John Whelan, chairman, president and chief executive officer. “Looking ahead, we are confident in our plans to profitably grow volumes, lower unit cash costs , and progress our restructuring, while maintaining our focus on safety and operational excellence.”
Upstream production in the quarter averaged 444,000 gross oil-equivalent barrels per day. At Kearl, quarterly total gross production averaged 274,000 barrels per day (194,000 barrels Imperial’s share) with operations impacted by wet weather early in the quarter. Cold Lake averaged 153,000 barrels per day with first oil achieved at our new Leming SAGD project. The company’s share of Syncrude production in the quarter averaged 87,000 gross barrels per day and contributed to annual production of 79,000 barrels per day.
Downstream throughput in the quarter averaged 408,000 barrels per day, impacted by the planned Sarnia turnaround and additional maintenance in the company’s eastern manufacturing hub, resulting in an overall refinery capacity utilization of 94 percent. Petroleum product sales averaged 479,000 barrels per day. Full-year throughput averaged 402,000 barrels per day with capacity utilization of 93 percent and petroleum product sales of 470,000 barrels per day.
During the quarter, Imperial returned $2,072 million to shareholders through dividend payments and share repurchases under the accelerated normal course issuer bid (NCIB) program.
“Our corporate strategy, capital expenditure plans and efficiency initiatives, including restructuring, give me confidence in our ability to continue to grow shareholder value and returns,” said Whelan. “I am pleased to announce a 20 percent increase in our dividend to 87 cents per share.”
Fourth quarter highlights
* Net income of $492 million or $1.00 per share on a diluted basis, compared to $1,225 million or $2.37 per share in the fourth quarter of 2024. Results in the current quarter include identified items of $320 million after-tax related to the Norman Wells end of field life acceleration and a separate one-time $156 million after-tax charge associated with the optimization of materials and supplies inventory.
* Cash flows from operating activities of $1,918 million, up from cash flows from operating activities of $1,789 million in the fourth quarter of 2024. Cash flows from operating activities excluding working capital of $1,260 million – which included an unfavourable $325 million related to the identified items – compared to $1,650 million in the fourth quarter of 2024.
* Capital and exploration expenditures totaled $651 million, up from $423 million in the fourth quarter of 2024.
* The company returned $2,072 million to shareholders in the fourth quarter of 2025, including $361 million in dividends paid and $1,711 million with the successful completion of its accelerated share repurchases under the NCIB.
* Upstream production averaged 444,000 gross oil-equivalent barrels per day, compared to 460,000 gross oil-equivalent barrels per day in the fourth quarter of 2024, with Kearl operations impacted by wet weather early in the quarter.
* Total gross bitumen production at Kearl averaged 274,000 barrels per day (194,000 barrels Imperial’s share), compared to 299,000 barrels per day (212,000 barrels Imperial’s share) in the fourth quarter of 2024, as operations were impacted by wet weather early in the quarter.
* Gross bitumen production at Cold Lake averaged 153,000 barrels per day , compared to 157,000 barrels per day in the fourth quarter of 2024.
* Cold Lake Leming SAGD project achieved first oil and, as expected, is currently ramping up to a peak of around 9,000 barrels per day.
* The company’s share of gross production from Syncrude averaged 87,000 barrels per day, up from 81,000 barrels per day in the fourth quarter of 2024.
* Announced plans to accelerate cessation of production at Norman Wells in the Northwest Territories to the end of the third quarter of 2026 as the asset reaches end of economic field life.
* Refinery throughput averaged 408,000 barrels per day, compared to 411,000 barrels per day in the fourth quarter of 2024, primarily due to additional maintenance in the company’s eastern manufacturing hub. Capacity utilization was 94 percent, compared to 95 percent in the fourth quarter of 2024.
* Petroleum product sales were 479,000 barrels per day, up from 458,000 barrels per day in the fourth quarter of 2024, driven by higher volumes in the supply and retail channels, supported by a growing number of retail sites nationwide.
* Chemical net income of $9 million in the quarter, compared to $21 million in the fourth quarter of 2024.
Recent business environment
During the fourth quarter of 2025, the price of crude oil decreased relative to the third quarter of 2025 due to global supply outpacing demand resulting in inventory builds. The Canadian WTI/WCS spread widened as seasonal weakening in heavy crude demand coincided with an increase in WCS supply. Industry refining margins improved in the fourth quarter of 2025, influenced by geopolitical factors and supply disruptions.
Operating results
Fourth quarter 2025 vs. fourth quarter 2024
Current quarter results include identified items of $320 million after-tax ($421 million before-tax) related to the Norman Wells end of field life acceleration and a separate one-time $156 million after-tax ($206 million before-tax) charge associated with the optimization of materials and supplies inventory.
Price – Average bitumen realizations decreased by $12.58 per barrel, primarily driven by lower marker prices partially offset by favourable diluent and narrowing WTI/WCS spread. Synthetic crude oil realizations decreased by $19.03 per barrel, primarily driven by lower WTI and a weaker Synthetic/WTI spread.
Volume – Lower volumes were impacted by wet weather early in the quarter at Kearl.
Royalty – Lower royalties were primarily driven by lower commodity prices.
Identified items – $320 million after-tax ($421 million before-tax) related to the Norman Wells end of field life acceleration and a separate one-time $100 million after-tax ($131 million before-tax) charge associated with the Upstream portion of the optimization of materials and supplies inventory.
Lower production at Kearl was impacted by wet weather early in the quarter.
Margins – Higher margins primarily reflect improved market conditions.
Other – Primarily due to higher operating expenses of about $80 million, including higher energy costs, additional maintenance in the company’s eastern manufacturing hub and additional operating costs from the start-up of the Strathcona renewable diesel facility.
Lower refinery throughput was primarily due to additional maintenance in the company’s eastern manufacturing hub.
Higher petroleum product sales were primarily due to higher volumes in the supply and retail channels, supported by a growing number of retail sites nationwide.
Cash flows from operating activities primarily reflect favourable working capital impacts.
Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment.
Cash flows used in financing activities primarily reflect:
The company completed share repurchases under its normal course issuer bid on December 17, 2025.
Full-year 2025 vs. full-year 2024
Current year results include identified items of: $320 million after-tax ($421 million before-tax) related to the Norman Wells end of field life acceleration; a $306 million after-tax ($406 million before-tax) non-cash impairment charge of the Calgary Imperial Campus; a $249 million after-tax ($330 million before-tax) restructuring charge; and a one-time $156 million after-tax ($206 million before-tax) charge associated with the optimization of materials and supplies inventory.
Price – Average bitumen realizations decreased by $7.52 per barrel, primarily driven by lower marker prices partially offset by narrowing WTI/WCS spread and favourable diluent. Synthetic crude oil realizations decreased by $12.92 per barrel, primarily driven by lower WTI.
Volume – Inventory impacts partially offset by higher production.
Royalty – Lower royalties were primarily driven by lower commodity prices.
Other – Primarily due to favourable foreign exchange impacts of about $190 million.
Identified items – $320 million after-tax ($421 million before-tax) related to the Norman Wells end of field life acceleration and a separate one-time $100 million after-tax ($131 million before-tax) charge associated with the Upstream portion of the optimization of materials and supplies inventory.
Margins – Higher margins primarily reflect improved market conditions.
Other – Primarily due to higher operating expenses of about $140 million driven by higher energy costs, additional maintenance in the company’s eastern manufacturing hub of about $70 million, and unfavourable wholesale volume impacts of about $60 million, partially offset by lower turnaround impacts of about $100 million.
Margins – Lower margins primarily reflect weaker industry polyethylene margins.
Current year results include identified items of a $306 million after-tax ($406 million before-tax) non-cash
impairment charge of the Calgary Imperial Campus and a $249 million after-tax ($330 million before-tax) restructuring charge; results also reflect higher incentive compensation as a result of the higher share price.
Cash flows from operating activities primarily reflect favourable working capital impacts.
Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment.
Cash flows used in financing activities primarily reflect:
On June 23, 2025, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid to continue its then-existing share purchase program. The program enabled the company to purchase up to a maximum of 25,452,248 common shares during the period June 29, 2025 to June 28, 2026. The program completed on December 17, 2025 as a result of the company purchasing the maximum allowable number of shares under the program.
Key financial and operating data follow.
Forward-looking statements
Statements of future events or conditions in this report, including projections, targets, expectations, estimates, and business plans, are forward-looking statements. Similarly, discussion of roadmaps or future plans related to carbon capture, transportation and storage, biofuel, hydrogen, and other future plans to reduce emissions and emission intensity of the company, its affiliates and third parties are dependent on future market factors, such as continued technological progress, policy support and timely rule-making and permitting, and represent forward-looking statements. Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, seek, estimate, expect, future, continue, likely, may, should, will and similar references to future periods. Forward-looking statements in this report include, but are not limited to, references to the strength of the company’s integrated business model; the company’s plans to grow volumes, lower unit cash costs and progress the restructuring, while maintaining focus on safety and operational excellence; expected impacts of the company’s strategy, capital expenditure plans and efficiency initiatives including restructuring, including impacts on the ability to grow shareholder value and returns; the company’s Leming SAGD redevelopment project, including timing and anticipated peak production; and the cessation of production at Norman Wells, including impacts and timing.
Forward-looking statements are based on the company’s current expectations, estimates, projections and assumptions at the time the statements are made. Actual future financial and operating results, including expectations and assumptions concerning future energy demand, supply and mix; production rates, growth and mix across various assets; project plans, timing, costs, technical evaluations and capacities and the company’s ability to effectively execute on these plans and operate its assets, including the Strathcona renewable diesel project and the Leming SAGD redevelopment project; the adoption and impact of new facilities or technologies on reductions to greenhouse gas emissions intensity, including but not limited to technologies using solvents to replace energy intensive steam at Cold Lake, Strathcona renewable diesel, carbon capture and storage including in connection with hydrogen for the renewable diesel project, recovery technologies and efficiency projects, and any changes in the scope, terms, or costs of such projects; for shareholder returns, assumptions such as cash flow forecasts, financing sources and capital structure, participation of the company’s majority shareholder in the normal course issuer bid, and the results of periodic and ongoing evaluation of alternate uses of capital; the amount and timing of emissions reductions, including the impact of lower carbon fuels; the degree and timeliness of support that will be provided by policymakers and other stakeholders for various new technologies such as carbon capture and storage will be provided; receipt of regulatory approvals in a timely manner, especially with respect to large scale emissions reduction projects; availability and performance of third-party service providers including service providers located outside of Canada and ExxonMobil global capability centres; refinery utilization and product sales; applicable laws and government policies, including with respect to climate change, greenhouse gas emissions reductions and low carbon fuels; the ability to offset any ongoing or renewed inflationary pressures; capital and environmental expenditures; cash generation, financing sources and capital structure, such as dividends and shareholder returns, including the timing and amounts of share repurchases; and commodity prices, foreign exchange rates and general market conditions, could differ materially depending on a number of factors.
These factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and petrochemical products and resulting price, differential and margin impacts, including Canadian and foreign government action with respect to supply levels, prices, trade tariffs, trade controls or sanctions, the occurrence of disruptions in trade alliances or agreements or a broader breakdown in global trade, and disruptions in military alliances or wars; political or regulatory events, including changes in law or government policy, applicable royalty rates, and tax laws; third-party opposition to company and service provider operations, projects and infrastructure; competition from alternative energy sources and competitors who may be more experienced or established in these markets; availability and allocation of capital; the receipt, in a timely manner, of regulatory and third-party approvals, including for new technologies relating to the company’s lower emissions business activities; failure, delay, reduction, revocation or uncertainty regarding supportive policy and market development for the adoption of emerging lower emission energy technologies and other technologies that support emissions reductions; environmental regulation, including climate change and greenhouse gas regulation and changes to such regulation; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; the results of research programs and new technologies, including with respect to greenhouse gas emissions, and the ability to bring new technologies to scale on a commercially competitive basis, and the competitiveness of alternative energy and other emission reduction technologies; availability and performance of third-party service providers including those located outside of Canada and ExxonMobil global capability centres; environmental risks inherent in oil and gas exploration and production activities; effectiveness of company risk management programs and emergency response preparedness; operational hazards and risks; cybersecurity incidents including incidents caused by actors employing emerging technologies such as artificial intelligence; currency exchange rates; general economic conditions, including inflation and the occurrence and duration of economic recessions or downturns; and other factors discussed in Item 1A risk factors and Item 7 management’s discussion and analysis of financial condition and results of operations of Imperial’s most recent annual report on Form 10-K.
Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to Imperial. Imperial’s actual results may differ materially from those expressed or implied by its forward-looking statements and readers are cautioned not to place undue reliance on them. Imperial undertakes no obligation to update any forward-looking statements contained herein, except as required by applicable law.
Forward-looking and other statements regarding Imperial’s environmental, social and other sustainability efforts and aspirations are not an indication that these statements are material to investors or require disclosure in the company’s filings with securities regulators. In addition, historical, current and forward-looking environmental, social and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future, including future rule-making. Individual projects or opportunities may advance based on a number of factors, including availability of stable and supportive policy, technology for cost-effective abatement, company planning process, and alignment with partners and other stakeholders.
In this release all dollar amounts are expressed in Canadian dollars unless otherwise stated. This release should be read in conjunction with Imperial’s most recent Form 10-K. Note that numbers may not add due to rounding.
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 in any government payment transparency reports.
In this release, unless the context otherwise indicates, reference to “the company” or “Imperial” includes Imperial Oil Limited and its subsidiaries.
Attachment VI
Non-GAAP financial measures and other specified financial measures
Certain measures included in this document are not prescribed by U.S. Generally Accepted Accounting Principles (GAAP). These measures constitute “non-GAAP financial measures” under Securities and Exchange Commission Regulation G and Item 10(e) of Regulation S-K, and “specified financial measures” under National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure of the Canadian Securities Administrators.
Reconciliation of these non-GAAP financial measures to the most comparable GAAP measure, and other information required by these regulations, have been provided. Non-GAAP financial measures and specified financial measures are not standardized financial measures under GAAP and do not have a standardized definition. As such, these measures may not be directly comparable to measures presented by other companies, and should not be considered a substitute for GAAP financial measures.
Cash flows from (used in) operating activities excluding working capital
Cash flows from (used in) operating activities excluding working capital is a non-GAAP financial measure that is the total cash flows from operating activities less the changes in operating assets and liabilities in the period. The most directly comparable financial measure that is disclosed in the financial statements is “Cash flows from (used in) operating activities” within the company’s Consolidated statement of cash flows. Management believes it is useful for investors to consider these numbers in comparing the underlying performance of the company’s business across periods when there are significant period-to-period differences in the amount of changes in working capital. Changes in working capital is equal to “Changes in operating assets and liabilities” as disclosed in the company’s Consolidated statement of cash flows and in Attachment II of this document. This measure assesses the cash flows at an operating level, and as such, does not include proceeds from asset sales as defined in Cash flows from operating activities and asset sales in the Frequently Used Terms section of the company’s annual Form 10-K.
Free cash flow
Free cash flow is a non-GAAP financial measure that is cash flows from operating activities less additions to property, plant and equipment and equity company investments plus proceeds from asset sales. The most directly comparable financial measure that is disclosed in the financial statements is “Cash flows from (used in) operating activities” within the company’s Consolidated statement of cash flows. This measure is used to evaluate cash available for financing activities (including but not limited to dividends and share purchases) after investment in the business.
Net income (loss) excluding identified items
Net income (loss) excluding identified items is a non-GAAP financial measure that is total net income (loss) excluding individually significant non-operational events with an absolute corporate total earnings impact of at least $100 million in a given quarter. Net income (loss) excluding identified items per common share is a non-GAAP ratio which is calculated by dividing Net income (loss) excluding identified items by the weighted-average number of common shares outstanding, assuming dilution. The net income (loss) impact of an identified item for an individual segment may be less than $100 million when the item impacts several segments or several periods. The most directly comparable financial measure that is disclosed in the financial statements is “Net income (loss)” within the company’s Consolidated statement of income. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The company believes this view provides investors increased transparency into business results and trends, and provides investors with a view of the business as seen through the eyes of management. Net income (loss) excluding identified items is not meant to be viewed in isolation or as a substitute for net income (loss) as prepared in accordance with U.S. GAAP. All identified items are presented on an after-tax basis.
Cash operating costs (cash costs)
Cash operating costs is a non-GAAP financial measure that consists of total expenses, less purchases of crude oil and products, federal excise taxes and fuel charge, financing, and costs that are non-cash in nature, including depreciation and depletion, and non-service pension and postretirement benefit. The components of cash operating costs include “Production and manufacturing”, “Selling and general” and “Exploration” from the company’s Consolidated statement of income, and as disclosed in Attachment III of this document. The sum of these income statement lines serves as an indication of cash operating costs and does not reflect the total cash expenditures of the company. The most directly comparable financial measure that is disclosed in the financial statements is “Total expenses” within the company’s Consolidated statement of income. This measure is useful for investors to understand the company’s efforts to optimize cash through disciplined expense management.
Unit cash operating costs (unit cash costs)
Unit cash operating costs is a non-GAAP ratio. Unit cash operating costs (unit cash costs) is calculated by dividing cash operating costs by total gross oil-equivalent production, and is calculated for the Upstream segment, as well as the major Upstream assets. Cash operating costs is a non-GAAP financial measure and is disclosed and reconciled above. This measure is useful for investors to understand the expense management efforts of the company’s major assets as a component of the overall Upstream segment. Unit cash operating cost, as used by management, does not directly align with the definition of “Average unit production costs” as set out by the U.S. Securities and Exchange Commission (SEC), and disclosed in the company’s SEC Form 10-K.
After more than a century, Imperial continues to be an industry leader in applying technology and innovation to responsibly develop Canada’s energy resources. As Canada’s largest petroleum refiner, a major producer of crude oil, a key petrochemical producer and a leading fuels marketer from coast to coast, our company remains committed to high standards across all areas of our business.
Source: Imperial
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