EARNINGS / Imperial Oil 1977 Results
IMPERIAL OIL LIMITED - EARNINGS
TORONTO, Jan. 21 /CNW/ - Imperial Oil Limited today announced 1997 net
earnings of $847 million or $5.50 a share, compared with $786 million or $4.47
a share in 1996.
Net earnings in the fourth quarter were $272 million or $1.81 a share in
1997, compared with $198 million or $1.24 a share in 1996.
Fourth-quarter earnings were positively affected by $127 million in gains
from the sale of oil and gas properties and the companyŠs interest in a
chemical technology venture, partly offset by lower prices for crude oil.
Results in the fourth quarter of 1996 included a gain of $72 million from the
resolution of long-standing taxation issues.
Total revenues increased to $11,122 million in 1997 from $10,501 million
in 1996. The company's balance of cash and marketable securities rose to $770
million at the end of 1997 from $582 million at the end of the previous year.
Imperial repurchased 9.6 million of its shares for $694 million in 1997,
reducing the number outstanding by six percent.
Bob Peterson, chairman, president and chief executive officer, said:
''1997 was a very good year for Imperial Oil and its shareholders. Earnings
increased for the sixth consecutive year, reaching record levels, and total
returns to shareholders exceeded 45 percent. However, commodity prices have
weakened substantially at the start of 1998, suggesting a challenging year
ahead.''
Supplementary information
Natural resources
Earnings from natural resources were $466 million in 1997, up from $333
million the previous year.
The increase was due mainly to gains of $143 million on the sale of oil
and gas properties and increased production at Cold Lake, offset in part by
lower oil prices, particularly for heavy oil, and by decreased production of
conventional oil.
Petroleum products
Net earnings from petroleum products were $297 million in 1997, compared
with $146 million in 1996. The improvement resulted mainly from higher
industry margins and increased sales.
Chemicals
Net earnings from chemicals reached a record $128 million, up from $68
million in 1996. Results in 1997 included a gain of $36 million on the
fourth-quarter sale of the companyŠs interest in a chemical technology
venture. Higher polyethylene margins and increased sales volumes in all
product lines also contributed to the improvement.
Corporate and other
Net earnings from corporate and other operations were negative $44
million in 1997, compared with $239 million in 1996. The main reason for the
change was $322 million in gains from the resolution of taxation issues in
1996.
IMPERIAL OIL LIMITED
-------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF EARNINGS
(unaudited) Twelve months
Fourth quarter to December 31
-------------------------------------------------------------------------
millions of dollars 1997 1996 1997 1996
-------------------------------------------------------------------------
REVENUES
Operating revenues 2,733 2,854 10,669 10,377
Investment and other income (1) 321 36 453 124
------- ------- ------- -------
TOTAL REVENUES 3,054 2,890 11,122 10,501
------- ------- ------- -------
EXPENSES
Exploration 8 8 40 45
Purchases of crude oil
and products 1,288 1,352 4,806 4,743
Operating 751 745 2,745 2,699
Federal excise tax 293 285 1,157 1,143
Depreciation and
depletion 166 177 685 703
Financing costs (3) 42 55 162 235
------- ------- ------- -------
TOTAL EXPENSES 2,548 2,622 9,595 9,568
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES 506 268 1,527 933
Income taxes on earnings 234 142 680 469
Income tax refund (2) - (72) - (322)
------- ------- ------- -------
TOTAL INCOME TAX EXPENSE 234 70 680 147
------- ------- ------- -------
NET EARNINGS 272 198 847 786
------- ------- ------- -------
PER-SHARE INFORMATION - dollars
Net earnings 1.81 1.24 5.50 4.47
Dividends 0.55 0.55 2.20 2.05
CONSOLIDATED STATEMENT OF CASH FLOWS Twelve months
(unaudited) Fourth quarter to December 31
inflow/(outflow)
millions of dollars 1997 1996 1997 1996
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings 272 198 847 786
Exploration expenses (a) 8 8 40 45
Depreciation and depletion 166 177 685 703
After tax (gain)/loss
from asset sales (1) (127) (2) (179) 19
Deferred income tax and other (5) (1) 34 (104)
------- ------- ------- -------
Total cash flow from earnings 314 380 1,427 1,449
Change in operating assets
and liabilities (b) (108) 73 (440) 287
------- ------- ------- -------
CASH FROM
OPERATING ACTIVITIES 206 453 987 1,736
------- ------- ------- -------
INVESTING ACTIVITIES
Capital and exploration
expenditures (211) (225) (639) (564)
Proceeds from asset sales 764 76 968 177
Marketable securities-net - - (1) 357
Promissory notes of Exxon
Corporation subsidiary-net (4) - - - 1,191
------- ------- ------- -------
CASH FROM (USED IN)
INVESTING ACTIVITIES 553 (149) 328 1,161
------- ------- ------- -------
CASH FLOW BEFORE
FINANCING ACTIVITIES 759 304 1,315 2,897
FINANCING ACTIVITIES
Repayment of long-term debt - (135) (91) (476)
Common shares purchased (5) (174) (76) (694) (1,772)
Dividends paid (83) (80) (343) (361)
------- ------- ------- -------
CASH FROM (USED IN)
FINANCING ACTIVITIES (257) (291) (1,128) (2,609)
------- ------- ------- -------
INCREASE (DECREASE) IN CASH 502 13 187 288
CASH AT BEGINNING OF PERIOD 246 548 561 273
------- ------- ------- -------
CASH AT END OF PERIOD (c) 748 561 748 561
------- ------- ------- -------
(a) Exploration expenses, deducted in arriving at net earnings, are
reclassified and included in investing activities in the consolidated
statement of cash flows.
(b) Includes inflows of $637 million in 1996 due to income tax refund and
outflows of $223 million in 1997 due to related income tax on refund
interest.
(c) Total cash and short-term securities at December 31, 1997 was $770
million (1996 -- $582 million).
CONSOLIDATED BALANCE SHEET As at As at
(unaudited) Dec. 31 Dec. 31
millions of dollars 1997 1996
ASSETS
Cash and marketable securities at cost 770 582
Accounts receivable 1,090 1,130
Inventories of crude oil and products 466 398
Materials, supplies and prepaid expenses 102 93
Investments and other long-term assets 203 225
Property, plant and equipment 7,172 7,814
Goodwill 257 282
------- -------
TOTAL ASSETS (a) 10,060 10,524
------- -------
LIABILITIES
Current payables and accrued liabilities 2,158 2,377
Long-term debt (6) 1,506 1,542
Other long-term obligations 1,013 1,057
------- -------
TOTAL LIABILITIES 4,677 4,976
DEFERRED INCOME TAXES 1,000 981
SHAREHOLDERS' EQUITY 4,383 4,567
------- -------
TOTAL LIABILITIES, DEFERRED INCOME TAXES AND
SHAREHOLDERS' EQUITY 10,060 10,524
------- -------
(a) TOTAL ASSETS BY SEGMENT
Natural resources 4,636 5,344
Petroleum products 4,010 4,079
Chemicals 425 407
Corporate and other 1,160 972
Intersegment receivables eliminated
in consolidation (171) (278)
------- -------
Total Assets 10,060 10,524
------- -------
BUSINESS SEGMENTS Twelve months
(unaudited) Fourth quarter to December 31
millions of dollars 1997 1996 1997 1996
REVENUES
Natural resources
External 543 332 1,499 983
Intersegment 302 410 1,346 1,511
------- ------- ------- -------
Total 845 742 2,845 2,494
------- ------- ------- -------
Petroleum products
External 2,203 2,324 8,558 8,574
Intersegment 49 59 220 224
------- ------- ------- -------
Total 2,252 2,383 8,778 8,798
------- ------- ------- -------
Chemicals
External 275 205 1,002 820
Intersegment 10 15 42 55
------- ------- ------- -------
Total 285 220 1,044 875
------- ------- ------- -------
Corporate and other
External 33 29 63 124
Intersegment 2 3 9 9
------- ------- ------- -------
Total 35 32 72 133
------- ------- ------- -------
Total External Revenues (a) 3,054 2,890 11,122 10,501
------- ------- ------- -------
EARNINGS
Natural resources 174 139 466 333
Petroleum products 47 11 297 146
Chemicals 55 12 128 68
Corporate and other (4) 36 (44) 239
------- ------- ------- -------
Net earnings 272 198 847 786
------- ------- ------- -------
CASH FLOW FROM EARNINGS
Natural resources 199 267 771 814
Petroleum products 102 40 556 276
Chemicals 27 16 119 89
Corporate and other (14) 57 (19) 270
------- ------- ------- -------
Total cash flow from earnings 314 380 1,427 1,449
------- ------- ------- -------
CAPITAL AND EXPLORATION EXPENDITURES
Natural resources 130 128 433 352
Petroleum products 72 80 168 171
Chemicals 4 6 25 20
Corporate and other 5 11 13 21
------- ------- ------- -------
Total capital and exploration
expenditures 211 225 639 564
------- ------- ------- -------
(a) Includes export sales to
the United States 351 329 1,139 1,175
OPERATING STATISTICS Twelve months
(unaudited) Fourth quarter to December 31
1997 1996 1997 1996
GROSS CRUDE OIL PRODUCTION
(thousands of barrels a day)
Conventional 74 96 82 95
Cold Lake 116 100 114 85
Syncrude 59 52 52 50
------- ------ ------- -------
Total crude oil production 249 248 248 230
Natural gas liquids (NGL's)
available for sale 22 25 22 26
------- ------ ------- -------
Total crude oil and
NGL production 271 273 270 256
------- ------ ------- -------
NATURAL GAS
(millions of cubic feet a day)
Production (gross) 417 486 454 474
Production available
for sale (gross) 235 283 278 280
Sales 321 338 354 344
AVERAGE SALES PRICES (dollars)
Conventional crude oil sales
(a barrel) 24.03 29.56 25.03 26.71
Par crude oil price
at Edmonton (a barrel) 27.32 32.61 27.90 29.40
Heavy crude oil at Hardisty
(Bow River, a barrel) 19.28 27.11 21.13 25.08
Natural gas sales
(a thousand cubic feet) 2.20 2.26 2.11 1.99
PETROLEUM PRODUCTS SALES
(millions of litres a day)
Gasolines 32.2 31.3 31.2 31.5
Heating, diesel and jet fuels 27.8 27.1 26.2 25.5
Heavy fuel oils 5.5 5.4 5.1 5.7
Liquefied petroleum gas, lube
oils and other products 14.7 11.2 12.5 11.7
------- ------ ------- -------
Total petroleum products 80.2 75.0 75.0 74.4
------- ------ ------- -------
Total refinery throughput 70.5 64.5 71.3 68.9
Refinery capacity utilization
(percent) 91 83 92 88
PETROCHEMICAL SALES
(thousands of tonnes a day) 3.5 3.0 3.4 3.2
SHARE OWNERSHIP, TRADING AND PERFORMANCE Twelve months
(unaudited) Fourth quarter to December 31
1997 1996 1997 1996
RETURN ON AVERAGE CAPITAL EMPLOYED (a)
(percent) 15.2 12.4
RETURN ON AVERAGE SHAREHOLDER EQUITY
(percent) 18.9 14.9
SHARE OWNERSHIP
Outstanding shares (thousands)
Monthly weighted average 150,347 159,816 154,046 175,856
At December 31 149,328 158,963
Number of shareholders
At December 31 18,459 19,095
SHARE PRICES (dollars)
High 92.30 64.90 92.30 64.90
Low 78.00 57.05 59.60 47.90
Close at December 31 92.00 64.50
(a) Capital employed is defined as short and long-term debt and
shareholders' equity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1.Investment and other income
Fourth quarter 1997 includes a gain of $188 million ($72 million after
tax) on the sale of the Judy Creek and Swan Hills producing properties
and related facilities, as well as a gain of $52 million ($36 million
after tax) on the sale of the company's interest in a chemical technology
venture to Exxon Corporation. Gains on asset sales for the full year
1997 were $376 million ($179 million after tax). In 1996 losses of $8
million ($19 million after tax) were recorded on the sale of assets.
2.Income Tax Refund
During 1996, settlement was reached with Revenue Canada for an $843
million federal tax refund including interest, relating to a number of
outstanding taxation issues pertaining to the natural resources business
for the period 1974 to 1990. A portion of the refund was recognized in
earnings in prior years and $278 million was included in 1996 earnings.
In addition to the $278 million recorded in earnings for the federal
tax refund, a further $44 million was recognized in 1996 for provincial
tax refunds and related interest, for a total of $322 million. The
provincial tax refund amounts have not been finalized; this could result
in an additional amount being recorded in future earnings.
3.Financing Costs Twelve months
Fourth quarter to December 31
------------------------------------------------------------------------
(millions of dollars) 1997 1996 1997 1996
------------------------------------------------------------------------
Interest
Debt related interest 32 31 122 133
Other interest (a) 2 6 9 28
----- ----- ----- ------
Total interest expense 34 37 131 161
Foreign exchange expense on
long-term debt (b) 8 18 31 74
----- ----- ----- ------
Total financing costs 42 55 162 235
----- ----- ----- ------
(a) Settlement of a prior year claim against the company in 1996 resulted
in a $20 million charge ($11 million after tax).
(b) In 1997, the company redeemed $50 million (U.S.) of its long-term
debt for $67 million (Canadian), resulting in a $6 million
foreign-exchange expense ($4 million after tax). In 1996 the company
redeemed $350 million (U.S.) for $476 million (Canadian), resulting in a
$51 million foreign-exchange expense ($33 million after tax). These
items are included in the respective amounts for each year.
4. Promissory notes of Exxon Corporation subsidiary
In 1995, the company entered into agreements with a wholly owned
subsidiary of Exxon Corporation under which the company purchased
Canadian-dollar discounted promissory notes at competitive Canadian
interest rates. In May 1996 the notes were repaid in full.
5.Share Purchase Programs
In 1995 and 1996 the company purchased shares under two 12-month
normal course share-purchase programs. Also in 1996, the company
undertook an auction tender in which 24 million shares were purchased at
a total cost of $1,440 million. On June 19, 1997 another 12-month normal
course program was implemented with an allowable purchase of 7.7 million
shares (five percent of the total at that date), less any shares
purchased by the employee savings plan and company pension funds. The
results of these activities are as shown below.
Exxon Corporation's participation in the above maintained its ownership
interest in Imperial at 69.6 percent.
------------------------------------------------------------------------
millions of
Year Shares Dollars
------------------------------------------------------------------------
1995 4.8 236
1996 - Fourth quarter 1.3 76
Full Year 30.1 1,772
1997 - Fourth quarter 2.0 174
Full Year 9.6 694
Cumulative purchases to date 44.5 2,702
6. Long-term Debt As at As at
Dec. 31 Dec. 31
------------------------------------------------------------------------
(millions of dollars) 1997 1996
------------------------------------------------------------------------
Long-term debt (at period-end exchange rates) 1,707 1,684
Foreign-exchange loss on U.S.$ debt (a) (201) (142)
------ ------
Long-term debt 1,506 1,542
------ ------
(a) The foreign-exchange loss on U.S.-dollar debt is being amortized to
earnings over the remaining life of the debt.
------------------------------------------------------------------------ |
