##### 



(ESSO IMPERIAL OIL LETTERHEAD NEWS BANNER) Imperial Oil announces first-quarter financial and operating results Toronto, April 21, 2005 Imperial Oil today announced net income for the first quarter of
2005 of $393 million or $1.12 a share, versus $466 million or $1.29 a share for the first quarter
of 2004. Lower earnings were mainly due to the negative impact of about $130 million from lower volumes and
higher maintenance costs associated with a major coker turnaround at Syncrude. The companys
excellent 2004 operating performance continued into the first quarter of 2005 with strong
performances at Cold Lake, downstream and chemical facilities more than offsetting the natural
decline in conventional crude oil and natural gas operations. Strong light crude oil and natural gas prices and industry refining and petrochemical margins
totalling about $250 million were favourable compared to the first quarter of 2004, but their
positive impact on earnings were moderated by lower Cold Lake bitumen realizations of about $50
million and the impact of a higher Canadian dollar of about $80 million. The lower earnings were
also due to higher stock-related compensation expenses of about $80 million primarily as a result
of the significant increase in the companys share price. Recognizing stock-related compensation
expenses in earnings, on the basis of market prices of the companys shares, has been a
long-standing, transparent accounting practice of the company. Total revenues were $5,958 million in the first quarter, versus $5,067 million in the corresponding period of 2004. Capital and exploration expenditures were $325
million, compared with $353 million a year earlier. During the first quarter the company
repurchased 3.7 million shares for $323 million. At March 31, 2005 the companys balance of cash
and marketable securities was $537 million, compared with $1,279 million at the end of 2004. Imperials chairman, president and chief executive officer Tim Hearn said the company continued to
achieve improvements in the controllable aspects of the business, such as cost management, volume
performance and operating reliability. Our strategy is to consistently deliver solid operating
and financial performance over the long term, which is the key to success irrespective of market
conditions or commodity prices, Hearn said. Imperial Oil is one of Canadas largest corporations and has been a leading member of the countrys
petroleum industry for 125 years. It is one of Canadas largest producers of crude oil and natural
gas liquids and a major producer of natural gas. It is also Canadas largest producer and marketer
of petroleum products, sold primarily under the Esso brand, and a major producer of petrochemicals. - 30 - For further information:Investor relations
    
    Media relationsSusan Swan
    
    Richard OFarrell(416) 968-4262
    
    (416) 968-4875




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##### 



(ESSO IMPERIAL OIL BANNER PAGE 2) Highlights Cold Lake production increased Bitumen production at Imperials Cold Lake, Alta., facility averaged more than 150,000 barrels a
day during the first quarter of 2005, compared with about 120,000 barrels a day in the first
quarter of 2004. The increase was due to steaming cycles from existing wells and additional
production from about 200 new wells that were completed in 2004. Also, drilling is expected to
begin in 2005 in one of two new expansion areas for which regulatory approval was received in 2004. Kearl drilling confirms high-quality resource Completion of a second phase of delineation drilling at Imperials oil-sands property at Kearl,
Alta., which began last December, confirmed a high-quality resource, with the potential to produce
up to 300,000 barrels a day over a 40-plus year lifespan. Regulatory applications for development
of the resource are expected to be filed in 2005. If the project proceeds, Imperial will hold a
70-percent interest and will act as operator in a joint project with ExxonMobil Canada. Refinery and chemicals operations continue strong performance Operating performance in Imperials refining and chemicals businesses remained strong through the
first quarter of 2005. Refinery utilization was 96 percent and total refinery throughput was more
than 76 million litres a day, both close to record levels. In chemicals, strong industry demand
resulted in higher production volumes for polyethylene and benzene.




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##### 



IMPERIAL OIL LIMITED   FINANCIAL HIGHLIGHTS
  Three monthsto March 312005
    
    
    2004Net income (U.S. GAAP, million of dollars)Natural resources
    
    
    242
    
    
    
    319Petroleum products
    
    
    112
    
    
    
    135Chemicals
    
    
    34
    
    
    
    12Corporate and other
    
    
    5
    
    
    
    Net income (U.S. GAAP)
    
    
    393
    
    
    
    466Cash flow from (used in) operating activities
    
    
    (57
    )
    
    
    398Capital and exploration expenditures
    
    
    325
    
    
    
    353Per-share information (dollars)Net income  basic
    
    
    1.13
    
    
    
    1.29Net income  diluted
    
    
    1.12
    
    
    
    1.29Dividends
    
    
    0.22
    
    
    
    0.22Share prices  close at March 31
Toronto Stock Exchange (Canadian dollars)
    
    
    92.02
    
    
    
    58.87American Stock Exchange (U.S. dollars)
    
    
    76.14
    
    
    
    44.84
   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
  Beginning in the fourth quarter of 2004, the company reported its financial results based on
generally accepted accounting principles (GAAP) in the United States of America. The financial
results of the three previous quarters in 2004 have been recompiled and refiled under U.S. GAAP in
accordance with Canadian regulatory requirements. The comparative numbers in the MD&A are presented
under U.S. GAAP. The differences between U.S. and Canadian GAAP are small for Imperial and an
explanation of them as they apply to the company including a tabular reconciliation between net
income reported under U.S. GAAP and under Canadian GAAP is included in note 2 to the unaudited
consolidated financial statements. OPERATING RESULTS
The companys net income for the first quarter of 2005 was $393 million or $1.12 a share on a
diluted basis, versus $466 million or $1.29 a share for the same period last year. Lower earnings were mainly due to the negative impact of about $130 million from lower volumes and
higher maintenance costs associated with a major coker turnaround at Syncrude. The companys
excellent 2004 operating performance continued into the first quarter of 2005 with strong
performances at Cold Lake, downstream and chemical facilities more than offsetting the natural
decline in conventional crude oil and natural gas operations. Strong light crude oil and natural gas prices and industry refining and petrochemical margins
totalling about $250 million were favourable compared to the first quarter of 2004, but their
positive impact on earnings were moderated by lower Cold Lake bitumen realizations of about $50
million and the impact of a higher Canadian dollar of about $80 million. The lower earnings were
also due to higher stock-related compensation expenses of about $80 million primarily as a result
of the significant increase in the companys share price. Recognizing stock-related compensation
expenses in earnings, on the basis of market prices of the companys shares, has been a
long-standing, transparent accounting practice of the company.




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##### 



IMPERIAL OIL LIMITED   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OFOPERATIONS (continued ...)
  Total revenues were $5,958 million in the first quarter versus $5,067 million in the corresponding
period last year. Natural resources
During the first quarter of 2005, net income from natural resources was $242 million compared with
$319 million in the same period last year. Earnings decreased due to lower production and higher
maintenance costs at Syncrude, lower Cold Lake bitumen realizations, lower conventional crude oil
and natural gas liquids (NGLs) volumes and the negative impact of a higher Canadian dollar
totalling $270 million. These factors were partly offset by higher realizations for light crude oil
and natural gas, and higher Cold Lake bitumen volumes totalling $220 million. Increased
stock-related compensation expenses also contributed to the decline. While U.S. dollar Brent crude oil prices averaged about 50 percent higher in the first quarter, the
companys Canadian dollar realizations for conventional crude oil at $58.28 a barrel, compared with
$42.70 a barrel in the same period last year, were 36 percent higher mainly because of a stronger
Canadian dollar. Average realizations for Cold Lake bitumen in the first quarter of 2005 were about
25 percent lower than those of the same period in 2004, reflecting a significant widening of price
spread between light crude oil and Cold Lake bitumen. The companys realizations for natural gas
were slightly higher, averaging $7.02 a thousand cubic feet in the first quarter of 2005, compared
with $6.58 during the same period last year. In the first quarter, total gross production of crude oil and natural gas liquids (NGLs) was 260
thousand barrels a day versus 263 thousand barrels in the same period last year. Gross production of Cold Lake bitumen was higher, averaging 152 thousand barrels a day during the
first quarter of 2005 versus 121 thousand barrels in the first quarter of 2004, due to the cyclic
nature of production at Cold Lake. Gross production from the companys share of Syncrude decreased to 39 thousand barrels a day from
63 thousand barrels in the first quarter of 2004. Advancing the originally planned second-quarter
coker turnaround into the first quarter and higher unplanned maintenance to other processing units
were the main reasons for lower production volumes. The turnaround was completed in early April and
all processing units returned to normal operation. During the first three months this year, gross production of conventional crude oil averaged 40
thousand barrels a day versus 44 thousand barrels a day in the first quarter of 2004. Natural
reservoir decline in the Western Canadian Basin was the main reason for the reduced production. Gross production of NGLs available for sale decreased to 29 thousand barrels a day in the first
quarter of 2005 from 35 thousand barrels last year, mainly due to declining NGL content of Wizard
Lake gas production. For the first quarter, gross production of natural gas averaged 585 million cubic feet a day,
essentially flat compared to last year. Effective April 1, 2005, the company and an affiliate of Exxon Mobil Corporation in Canada have
agreed to combine their respective Western Canada production organizations into one single
organization. Under the consolidation, Imperial will operate all Western Canada properties. There
are no asset ownership changes. The consolidation is expected to result in efficiencies from a
streamlined organization.




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##### 



IMPERIAL OIL LIMITED   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OFOPERATIONS (continued ...)
  Petroleum products
The net income from petroleum products was $112 million in the first quarter of 2005, compared with
$135 million during the same period a year ago. Lower earnings were mainly due to the unfavourable
impact of a higher Canadian dollar, higher stock-related compensation expenses, partly offset by
stronger industry refining margins. Operating performance in the companys refining businesses remained strong through the first
quarter of 2005. Refinery utilization was 96 percent and total refinery throughput was more than 76
million litres a day. Chemicals
Net income in the first quarter of 2005 from chemical operations was $34 million, compared with $12
million during the same period last year. Earnings increased because of higher margins and volumes
for polyethylene and benzene as a result of increased industry demand. Corporate and other
Net income from corporate and other operations was positive $5 million in the first quarter of
2005, compared with nil in the same period last year. Earnings increased mainly due to interest
income on a higher average cash balance. LIQUIDITY AND CAPITAL RESOURCES Cash flow from operating activities was negative $57 million during the first quarter of 2005,
compared with $398 million in the same period last year. The decrease in cash inflow was mainly due
to the timing of scheduled income tax payments, additional funding contribution to the employee
pension plan and lower net income. During the first quarter of 2005, capital and exploration expenditures were $325 million, compared
with $353 million during the corresponding period a year ago. For the resources segment, capital
and exploration expenditures were used mainly at Syncrude to maintain and expand production
capacity. Capital expenditures for the products segment were used on the project to reduce sulphur
content in diesel fuels. During the first quarter, the company continued its share-purchase program and bought 3.7 million
shares for $323 million under a normal course issuer bid that began on June 23, 2004, which has an
allowable maximum purchase of 17.9 million shares. The maximum number of shares that may yet be
purchased under the current program is about six million. Total cash dividends of $77 million were paid in the first quarter of 2005, down from $80 million
paid in the same period last year as a result of the companys share-purchase program. Per-share
dividends paid in the first quarter were $0.22, unchanged from the same quarter last year. The above factors led to a decrease in the companys balance of cash and marketable securities to
$537 million at March 31, 2005, from $1,279 million at the end of 2004.




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##### 



IMPERIAL OIL LIMITED   QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
  Information about market risks for the three months ended March 31, 2005 does not differ materially
from that discussed on page 32 in the companys annual report to shareholders for the year ended
December 31, 2004, except for the following sensitivity: Earnings
sensitivity (a)
millions of dollars after taxEight cents decrease (increase) in the value of the Canadian dollar
versus the U.S. dollar
    
    
    + (-
    )
    
    
    400
 The sensitivity of net income to changes in the Canadian dollar versus the U.S. dollar increased
from 2004 year-end by about $18 million (after tax) for each one-cent difference. This is primarily
due to the increase in crude oil prices and industry refining margins.  (a)
    The amount quoted to illustrate the impact of the sensitivity represents a change of about
10 percent in the value of the commodity at the end of the first quarter 2005. The sensitivity
calculation shows the impact on annual net income that results from a change in one factor, after
tax and royalties and holding all other factors constant. While the sensitivity is applicable under
current conditions, it may not apply proportionately to larger fluctuations.




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##### 



IMPERIAL OIL LIMITED   CONSOLIDATED STATEMENT OF INCOME(U.S. GAAP, unaudited)
    
    Three monthsto March 31millions of Canadian dollars
    
    2005
    
    
    2004REVENUESOperating revenues (a)
    
    
    5,940
    
    
    
    5,056Investment and other income (4)
    
    
    18
    
    
    
    11TOTAL REVENUES
    
    
    5,958
    
    
    
    5,067EXPENSESExploration
    
    
    21
    
    
    
    16Purchases of crude oil and products
    
    
    3,639
    
    
    
    2,833Production and manufacturing (5)
    
    
    817
    
    
    
    683Selling and general (5)(6)
    
    
    346
    
    
    
    293Federal excise tax (a)
    
    
    307
    
    
    
    304Depreciation and depletion
    
    
    238
    
    
    
    216Financing costs (7)
    
    
    2
    
    
    
    2TOTAL EXPENSES
    
    
    5,370
    
    
    
    4,347INCOME BEFORE INCOME TAXES
    
    
    588
    
    
    
    720INCOME TAXES
    
    
    195
    
    
    
    254NET INCOME (3)
    
    
    393
    
    
    
    466NET INCOME PER COMMON SHARE  BASIC (dollars) (10)
    
    
    1.13
    
    
    
    1.29NET INCOME PER COMMON SHARE  DILUTED (dollars) (10)
    
    
    1.12
    
    
    
    1.29DIVIDENDS PER COMMON SHARE
    
    
    0.22
    
    
    
    0.22(a)     Federal excise tax included in
operating revenues
    
    
    307
    
    
    
    304
 Certain figures for the prior year have been reclassified in the financial statements to conform
with the current years presentation.




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##### 



IMPERIAL OIL LIMITED   CONSOLIDATED STATEMENT OF CASH FLOWS(U.S. GAAP, unaudited)
    
    Three monthsinflow/(outflow)
    
    to March 31millions of Canadian dollars
    
    2005
    
    
    2004OPERATING ACTIVITIESNet income
    
    
    393
    
    
    
    466Adjustment for non-cash items:Depreciation and depletion
    
    
    238
    
    
    
    216(Gain)/loss on asset sales, after income tax
(4)
    
    
    (2
    )
    
    
    (1
    )Deferred income taxes and other
    
    
    (63
    )
    
    
    (39
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (209
    )
    
    
    (179
    )Inventories and prepaids
    
    
    (324
    )
    
    
    (295
    )Income taxes payable
    
    
    (312
    )
    
    
    39Accounts payable
    
    
    502
    
    
    
    151All other items  net (a)
    
    
    (280
    )
    
    
    40CASH FROM (USED IN) OPERATING ACTIVITIES
    
    
    (57
    )
    
    
    398INVESTING ACTIVITIESAdditions to property, plant and
equipment and intangibles
    
    
    (304
    )
    
    
    (327
    )Proceeds from asset sales
    
    
    7
    
    
    
    13CASH FROM (USED IN) INVESTING ACTIVITIES
    
    
    (297
    )
    
    
    (314
    )FINANCING ACTIVITIESRepayment of long-term debt
    
    
    (1
    )
    
    
    Issuance of common shares under stock option plan
    
    
    13
    
    
    
    6Common shares purchased (10)
    
    
    (323
    )
    
    
    (147
    )Dividends paid
    
    
    (77
    )
    
    
    (80
    )CASH FROM (USED IN) FINANCING ACTIVITIES
    
    
    (388
    )
    
    
    (221
    )INCREASE (DECREASE) IN CASH
    
    
    (742
    )
    
    
    (137
    )CASH AT BEGINNING OF PERIOD
    
    
    1,279
    
    
    
    448CASH AT END OF PERIOD
    
    
    537
    
    
    
    311
  (a)
    Includes contribution to registered pension plan of $339 million (2004  $2 million). Certain figures for the prior year have been reclassified in the financial statements to conform
with the current years presentation.




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##### 



IMPERIAL OIL LIMITED   CONSOLIDATED BALANCE SHEET(U.S. GAAP, unaudited)
    
    As at
    
    
    As atMar. 31
    
    
    Dec. 31millions of Canadian dollars
    
    2005
    
    
    2004ASSETSCurrent assetsCash
    
    
    537
    
    
    
    1,279Accounts receivable, less estimated
doubtful accounts
    
    
    1,835
    
    
    
    1,626Inventories of crude oil and products
    
    
    669
    
    
    
    432Materials, supplies and prepaid expenses
    
    
    198
    
    
    
    112Deferred income tax assets
    
    
    576
    
    
    
    448Total current assets
    
    
    3,815
    
    
    
    3,897Investments and other long-term assets
    
    
    127
    
    
    
    130Property, plant and equipment,
less accumulated depreciation and depletion
    
    
    9,709
    
    
    
    9,647Goodwill
    
    
    204
    
    
    
    204Other intangible assets, net
    
    
    149
    
    
    
    149TOTAL ASSETS
    
    
    14,004
    
    
    
    14,027LIABILITIESCurrent liabilitiesShort-term debt
    
    
    81
    
    
    
    81Accounts payable and accrued liabilities
    
    
    3,025
    
    
    
    2,525Income taxes payable
    
    
    745
    
    
    
    1,057Current portion of long-term debt
    
    
    1,313
    
    
    
    995Total current liabilities
    
    
    5,164
    
    
    
    4,658Long-term debt (8)
    
    
    48
    
    
    
    367Other long-term obligations (9)
    
    
    1,241
    
    
    
    1,525Deferred income tax liabilities
    
    
    1,222
    
    
    
    1,155TOTAL LIABILITIES
    
    
    7,675
    
    
    
    7,705SHAREHOLDERS EQUITYCommon shares at stated value (10)
    
    
    1,795
    
    
    
    1,801Earnings reinvested (11)
    
    
    4,902
    
    
    
    4,889Accumulated other nonowner changes in equity (12)
    
    
    (368
    )
    
    
    (368
    )TOTAL SHAREHOLDERS EQUITY
    
    
    6,329
    
    
    
    6,322TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    
    14,004
    
    
    
    14,027
 Certain figures for the prior year have been reclassified in the financial statements to conform
with the current years presentation.     /s/ T.J. Hearn
    
    /s/ P.A. SmithChairman, president and
    
    Controller andchief executive officer
    
    senior vice-president,finance and administration




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##### 



IMPERIAL OIL LIMITED   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 
  1.
    Basis of financial statement presentation Effective the fourth quarter of 2004, the company prepares its financial statements in accordance
with the
generally accepted accounting principles (GAAP) of the United States of America. Prior to the
fourth quarter of
2004, the companys financial statements were prepared in conformity with Canadian GAAP and refiled
in U.S.
GAAP in accordance with Canadian regulatory requirements. A reconciliation of the differences
between GAAP
in Canada and the United States of America as they apply to the company is provided in note 2. All
amounts are
in Canadian dollars unless otherwise indicated. These unaudited consolidated financial statements follow the same accounting policies and methods
of
computation as, and should be read in conjunction with, the most recent annual consolidated
financial statements.
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.  2.
    Differences between United States and Canadian generally accepted accounting principles Reconciliation of the line items of the consolidated income statement, consolidated statement of
cash flows and consolidated balance sheet is provided below: Consolidated income statement
    
    Reported
    
    
    Increase/(decrease) due to
    
    
    Reportedunder
    
    
    
    
    
    
    
    
    
    
    undermillion of dollars
    
    Cdn. GAAP
    
    
    (a)
    
    
    (b)
    
    
    U.S. GAAP(Three months to March 31, 2005)Depreciation and depletion
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    238Financing costs
    
    
    11
    
    
    
    (9
    )
    
    
    
    
    
    
    2Income taxes
    
    
    192
    
    
    
    3
    
    
    
    
    
    
    
    195Net income
    
    
    387
    
    
    
    6
    
    
    
    
    
    
    
    393(Three months to March 31, 2004)Depreciation and depletion
    
    
    215
    
    
    
    1
    
    
    
    
    
    
    
    216Financing costs
    
    
    10
    
    
    
    (8
    )
    
    
    
    
    
    
    2Income taxes
    
    
    204
    
    
    
    3
    
    
    
    47
    
    
    
    254Net income
    
    
    509
    
    
    
    4
    
    
    
    (47
    )
    
    
    466
 Consolidated statement of cash flows
    
    Reported
    
    
    Increase/(decrease) due to
    
    
    Reportedunder
    
    
    
    
    
    
    
    
    
    
    undermillion of dollars
    
    Cdn. GAAP
    
    
    (a)
    
    
    (b)
    
    
    U.S. GAAP(Three months to March 31, 2005)Net income
    
    
    387
    
    
    
    6
    
    
    
    
    
    
    
    393Depreciation and depletion
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    238Deferred income taxes and other
    
    
    (66
    )
    
    
    3
    
    
    
    
    
    
    
    (63
    )Cash from operating activities
    
    
    (66
    )
    
    
    9
    
    
    
    
    
    
    
    (57
    )Additions to property, plant and equipment
    
    
    (295
    )
    
    
    (9
    )
    
    
    
    
    
    
    (304
    )Cash from (used in) investing activities
    
    
    (288
    )
    
    
    (9
    )
    
    
    
    
    
    
    (297
    )(Three months to March 31, 2004)Net income
    
    
    509
    
    
    
    4
    
    
    
    (47
    )
    
    
    466Depreciation and depletion
    
    
    215
    
    
    
    1
    
    
    
    
    
    
    
    216Deferred income taxes and other
    
    
    (89
    )
    
    
    3
    
    
    
    47
    
    
    
    (39
    )Cash from operating activities
    
    
    390
    
    
    
    8
    
    
    
    
    
    
    
    398Additions to property, plant and equipment
    
    
    (319
    )
    
    
    (8
    )
    
    
    
    
    
    
    (327
    )Cash from (used in) investing activities
    
    
    (306
    )
    
    
    (8
    )
    
    
    
    
    
    
    (314
    )




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##### 



IMPERIAL OIL LIMITED   Consolidated balance sheet
    
    Reported
    
    
    Increase/(decrease) due to
    
    
    Reportedunder
    
    
    
    
    
    
    
    
    
    
    undermillions of dollars
    
    Cdn. GAAP
    
    
    (a)
    
    
    (c)
    
    
    U.S. GAAP(As at March 31, 2005)Investments and other long-term assets
    
    
    573
    
    
    
    
    
    
    
    (446
    )
    
    
    127Property, plant and equipment, net
    
    
    9,622
    
    
    
    87
    
    
    
    
    
    
    
    9,709Other intangible assets, net
    
    
    52
    
    
    
    
    
    
    
    97
    
    
    
    149Total assets
    
    
    14,266
    
    
    
    87
    
    
    
    (349
    )
    
    
    14,004Other long-term obligations
    
    
    1,032
    
    
    
    
    
    
    
    209
    
    
    
    1,241Deferred income tax liabilities
    
    
    1,383
    
    
    
    29
    
    
    
    (190
    )
    
    
    1,222Earnings reinvested
    
    
    4,844
    
    
    
    58
    
    
    
    
    
    
    
    4,902Accumulated other nonowner changes in equity
    
    
    
    
    
    
    
    
    
    
    (368
    )
    
    
    (368
    )Total liabilities and shareholders equity
    
    
    14,266
    
    
    
    87
    
    
    
    (349
    )
    
    
    14,004(As at December 31, 2004)Investments and other long-term assets
    
    
    270
    
    
    
    
    
    
    
    (140
    )
    
    
    130Property, plant and equipment, net
    
    
    9,569
    
    
    
    78
    
    
    
    
    
    
    
    9,647Other intangible assets, net
    
    
    52
    
    
    
    
    
    
    
    97
    
    
    
    149Total assets
    
    
    13,992
    
    
    
    78
    
    
    
    (43
    )
    
    
    14,027Other long-term obligations
    
    
    1,010
    
    
    
    
    
    
    
    515
    
    
    
    1,525Deferred income tax liabilities
    
    
    1,319
    
    
    
    26
    
    
    
    (190
    )
    
    
    1,155Earnings reinvested
    
    
    4,837
    
    
    
    52
    
    
    
    
    
    
    
    4,889Accumulated other nonowner changes in equity
    
    
    
    
    
    
    
    
    
    
    (368
    )
    
    
    (368
    )Total liabilities and shareholders equity
    
    
    13,992
    
    
    
    78
    
    
    
    (43
    )
    
    
    14,027
  (a)
    Under U.S. GAAP, interest costs related to major capital projects under construction are
required to be
capitalized as part of property, plant and equipment. Under Canadian GAAP, the company did not
capitalize
interest costs for the same projects.(b)
    Under U.S. GAAP, income tax liabilities and assets are adjusted for the effect of a change in
tax laws or
rates. Under Canadian GAAP, the use of a substantially enacted income law or rate to adjust income
tax liabilities
and assets is allowed under certain circumstances.(c)
    Under U.S. GAAP, the accumulated benefit obligation (ABO) is the actuarial present value of
benefits
attributed to employee service rendered up to the end of the year and is based on current
compensation levels.
Since the amount by which the ABO less the fair value of plan assets was greater than the liability
previously
recognized in the consolidated balance sheet, an additional minimum pension liability was required.
The minimum
pension liability has no impact on net income and because this adjustment was non-cash, its effect
has been
excluded from the accompanying consolidated statement of cash flows. No such adjustment is required
under
Canadian GAAP.




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##### 



IMPERIAL OIL LIMITED    3.
    BUSINESS SEGMENTS(U.S. GAAP, unaudited) Natural
    
    
    PetroleumThree months to March 31
    
    Resources
    
    
    Products
    
    
    Chemicalsmillions of dollars
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUESExternal sales (a)
    
    
    999
    
    
    
    890
    
    
    
    4,599
    
    
    
    3,923
    
    
    
    342
    
    
    
    243Intersegment sales (b)
    
    
    700
    
    
    
    639
    
    
    
    596
    
    
    
    369
    
    
    
    78
    
    
    
    65Investment and other income
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    8
    
    
    
    
    
    
    
    TOTAL REVENUES
    
    
    1,699
    
    
    
    1,529
    
    
    
    5,206
    
    
    
    4,300
    
    
    
    420
    
    
    
    308EXPENSESExploration (c)
    
    
    21
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchases (b)
    
    
    647
    
    
    
    478
    
    
    
    4,083
    
    
    
    3,206
    
    
    
    283
    
    
    
    222Production and manufacturing
    
    
    472
    
    
    
    381
    
    
    
    296
    
    
    
    258
    
    
    
    49
    
    
    
    44Selling and general
    
    
    20
    
    
    
    4
    
    
    
    294
    
    
    
    269
    
    
    
    32
    
    
    
    20Federal excise tax
    
    
    
    
    
    
    
    
    
    
    307
    
    
    
    304
    
    
    
    
    
    
    
    Depreciation and depletion
    
    
    176
    
    
    
    153
    
    
    
    59
    
    
    
    59
    
    
    
    3
    
    
    
    3Financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TOTAL EXPENSES
    
    
    1,336
    
    
    
    1,032
    
    
    
    5,039
    
    
    
    4,096
    
    
    
    367
    
    
    
    289INCOME BEFORE INCOME TAXES
    
    
    363
    
    
    
    497
    
    
    
    167
    
    
    
    204
    
    
    
    53
    
    
    
    19INCOME TAXES
    
    
    121
    
    
    
    178
    
    
    
    55
    
    
    
    69
    
    
    
    19
    
    
    
    7NET INCOME
    
    
    242
    
    
    
    319
    
    
    
    112
    
    
    
    135
    
    
    
    34
    
    
    
    12EXPORT SALES TO THE UNITED STATES
    
    
    337
    
    
    
    332
    
    
    
    166
    
    
    
    254
    
    
    
    198
    
    
    
    138CASH FLOW FROM OPERATING ACTIVITIES
    
    
    17
    
    
    
    395
    
    
    
    (98
    )
    
    
    (4
    )
    
    
    25
    
    
    
    3CAPEX (c)
    
    
    243
    
    
    
    275
    
    
    
    70
    
    
    
    64
    
    
    
    3
    
    
    
    6TOTAL ASSETS AS AT March 31 (b)
    
    
    7,002
    
    
    
    6,559
    
    
    
    6,253
    
    
    
    5,783
    
    
    
    504
    
    
    
    486CAPITAL EMPLOYED AS AT March 31
    
    
    4,250
    
    
    
    3,874
    
    
    
    2,703
    
    
    
    2,819
    
    
    
    208
    
    
    
    243
 CorporateThree months to March 31
    
    and Other
    
    
    Consolidatedmillions of dollars
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUESExternal sales (a)
    
    
    
    
    
    
    
    
    
    
    5,940
    
    
    
    5,056Intersegment sales (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment and other income
    
    
    7
    
    
    
    3
    
    
    
    18
    
    
    
    11TOTAL REVENUES
    
    
    7
    
    
    
    3
    
    
    
    5,958
    
    
    
    5,067EXPENSESExploration (c)
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    16Purchases (b)
    
    
    
    
    
    
    
    
    
    
    3,639
    
    
    
    2,833Production and manufacturing
    
    
    
    
    
    
    
    
    
    
    817
    
    
    
    683Selling and general
    
    
    
    
    
    
    
    
    
    
    346
    
    
    
    293Federal excise tax
    
    
    
    
    
    
    
    
    
    
    307
    
    
    
    304Depreciation and depletion
    
    
    
    
    
    
    1
    
    
    
    238
    
    
    
    216Financing costs
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2TOTAL EXPENSES
    
    
    2
    
    
    
    3
    
    
    
    5,370
    
    
    
    4,347INCOME BEFORE INCOME TAXES
    
    
    5
    
    
    
    
    
    
    
    588
    
    
    
    720INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    195
    
    
    
    254NET INCOME
    
    
    5
    
    
    
    
    
    
    
    393
    
    
    
    466EXPORT SALES TO THE UNITED STATES
    
    
    
    
    
    
    
    
    
    
    701
    
    
    
    724CASH FLOW FROM OPERATING ACTIVITIES
    
    
    (1
    )
    
    
    4
    
    
    
    (57
    )
    
    
    398CAPEX (c)
    
    
    9
    
    
    
    8
    
    
    
    325
    
    
    
    353TOTAL ASSETS AS AT March 31 (b)
    
    
    650
    
    
    
    368
    
    
    
    14,004
    
    
    
    12,826CAPITAL EMPLOYED AS AT March 31
    
    
    669
    
    
    
    348
    
    
    
    7,830
    
    
    
    7,284
  (a)
    Includes crude sales made by Products in order to optimize refining operations.(b)
    Consolidated amounts exclude intersegment transactions, as follows: 2005
    
    
    2004Purchases
    
    
    1,374
    
    
    
    1,073Total intersegment sales
    
    
    1,374
    
    
    
    1,073Intersegment receivables and payables
    
    
    405
    
    
    
    370
  (c)
    Capital and exploration expenditures (CAPEX) include exploration expenses, additions
to property, plant, equipment and intangibles and additions to capital leases.




---



##### 



IMPERIAL OIL LIMITED    4.
    Investment and other income Investment and other income includes gains and losses on asset sales as follows: Three monthsto March 31millions of dollars
    
    2005
    
    
    2004Proceeds from asset sales
    
    
    7
    
    
    
    13Book value of assets sold
    
    
    5
    
    
    
    12Gain/(loss) on asset sales, before tax
    
    
    2
    
    
    
    1Gain/(loss) on asset sales, after tax
    
    
    2
    
    
    
    1
  5.
    Employee retirement benefits The components of net benefit cost included in total expenses in the consolidated
statement of earnings are as follows: Three monthsto March 31millions of dollars
    
    2005
    
    
    2004Pension benefits:Current service cost
    
    
    22
    
    
    
    20Interest cost
    
    
    60
    
    
    
    59Expected return on plan assets
    
    
    (64
    )
    
    
    (56
    )Amortization of prior service cost
    
    
    6
    
    
    
    7Recognized actuarial loss
    
    
    21
    
    
    
    17Net benefit cost
    
    
    45
    
    
    
    47Other post-retirement benefits:Current service cost
    
    
    2
    
    
    
    2Interest cost
    
    
    6
    
    
    
    6Recognized actuarial loss
    
    
    2
    
    
    
    1Net benefit cost
    
    
    10
    
    
    
    9
  6.
    Headquarters relocation On September 29, 2004, the company announced its intention to relocate its head office from
Toronto, Ontario, to
Calgary, Alberta. Completion of the move is expected by August 2005. Expenses in connection with the headquarters relocation activity are expected to total
approximately $85 million
($57 million, after tax) most of which are expected to be recognized in the second and third
quarter of 2005 in
conjunction with employee relocations and compensation payments for employees who choose not to
move.  7.
    Financing costs Three monthsto March 31millions of dollars
    
    2005
    
    
    2004Debt related interest
    
    
    11
    
    
    
    10Capitalized interest
    
    
    (9
    )
    
    
    (8
    )Net interest expense
    
    
    2
    
    
    
    2Other interest
    
    
    
    
    
    
    Total financing costs
    
    
    2
    
    
    
    2




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##### 



IMPERIAL OIL LIMITED    8.
    Long-term debt As at
    
    
    As atMar. 31
    
    
    Dec. 312005
    
    
    2004Issued
    
    
    Maturity date
    
    Interest rate
    
    
    millions of dollars2003
    
    
    $250 million due May 26, 2005 and
$250 million due August 26, 2005
    
    Variable
    
    
    
    
    
    
    2003
    
    
    January 19, 2006
    
    Variable
    
    
    
    
    
    
    318Long-term debt
    
    
    
    
    
    
    
    
    
    
    318Capital leases
    
    
    
    
    
    
    48
    
    
    
    49Total long-term debt (a)
    
    
    
    
    
    
    48
    
    
    
    367
  (a)
    These amounts exclude that portion of long-term debt totalling $1,313 million
(December 31, 2004  $995 million), which matures within one year and is included in
current liabilities.  9.
    Other long-term obligations As at
    
    
    As atMarch 31
    
    
    Dec. 31millions of dollars
    
    2005
    
    
    2004Employee retirement benefits (a)
    
    
    755
    
    
    
    1,052Asset retirement obligations and other environmental liabilities (b)
    
    
    379
    
    
    
    380Other obligations
    
    
    107
    
    
    
    93Total other long-term obligations
    
    
    1,241
    
    
    
    1,525
  (a)
    Total recorded employee retirement benefits obligations also include $48 million in
current
liabilities (December 31, 2004  $48 million).(b)
    Total asset retirement obligations and other environmental liabilities also include $76 million
in
current liabilities (December 31, 2004  $76 million).  10.
    Common shares As at
    
    
    As atMar. 31
    
    
    Dec. 31thousands of shares
    
    2005
    
    
    2004Authorized
    
    
    450,000
    
    
    
    450,000Common shares outstanding
    
    
    345,887
    
    
    
    349,320
 In 1995 through 2003, the company purchased shares under nine 12-month normal course share purchase
programs, as well as an auction tender. On June 23, 2004, another 12-month normal course program
was
implemented with an allowable purchase of up to 17.9 million shares (five percent of the total on
June 21, 2004),
less any shares purchased by the employee savings plan and company pension fund. The results of
these activities
are as shown below: millions ofYear
    
    Shares
    
    
    Dollars1995 - 2003
    
    
    218.9
    
    
    
    5,9682004 - First quarter
    
    
    2.5
    
    
    
    147Full year
    
    
    13.6
    
    
    
    8722005 - First quarter
    
    
    3.7
    
    
    
    323Cumulative purchases to date
    
    
    236.2
    
    
    
    7,163
 Exxon Mobil Corporations participation in the above maintained its ownership interest in Imperial
at 69.6 percent.




---



##### 



IMPERIAL OIL LIMITED   The following table provides the calculation of net income per common share: Three monthsto March 312005
    
    
    2004Net income per common share  basicNet income (millions of dollars)
    
    
    393
    
    
    
    466Weighted average number of common
shares outstanding (millions of shares)
    
    
    348.3
    
    
    
    361.7Net income per common share (dollars)
    
    
    1.13
    
    
    
    1.29Net income per common share  dilutedNet income (millions of dollars)
    
    
    393
    
    
    
    466Weighted average number of common shares
outstanding (millions of shares)
    
    
    348.3
    
    
    
    361.7Effect of employee stock-based awards (millions of shares)
    
    
    1.2
    
    
    
    0.7Weighted average number of common shares
outstanding, assuming dilution
(millions of shares)
    
    
    349.5
    
    
    
    362.4Net income per common share (dollars)
    
    
    1.12
    
    
    
    1.29
 If the provisions for expensing the value of employee stock options of Financial Accounting
Standard No.123,
Accounting for Stock-Based Compensation had been adopted prior to January 1, 2003, the impact on
compensation expense, net income and net income per share for the first quarter in 2004 would have
been
negligible. All expenses for employee stock options would have been recognized in net income as of
December 31, 2004.  11.
    Earnings reinvested Three monthsto March 31millions of dollars
    
    2005
    
    
    2004Earnings reinvested at beginning of period
    
    
    4,889
    
    
    
    3,952Net income for the period
    
    
    393
    
    
    
    466Share purchases in excess of stated value
    
    
    (304
    )
    
    
    (134
    )Dividends
    
    
    (76
    )
    
    
    (80
    )Earnings reinvested at end of period
    
    
    4,902
    
    
    
    4,204
  12.
    Nonowner changes in shareholders equity Three monthsto March 31millions of dollars
    
    2005
    
    
    2004Net income
    
    
    393
    
    
    
    466Other nonowner changes in equity (a)
    
    
    
    
    
    
    Total nonowner changes in shareholders equity
    
    
    393
    
    
    
    466
  (a)
    Minimum pension liability adjustmemt.




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##### 



IMPERIAL OIL LIMITED   OPERATING STATISTICS(unaudited)
    
    Three monthsto March 312005
    
    
    2004GROSS CRUDE OIL AND NGL PRODUCTION (thousands of barrels a day)Conventional
    
    
    40
    
    
    
    44Cold Lake
    
    
    152
    
    
    
    121Syncrude
    
    
    39
    
    
    
    63Total crude oil production
    
    
    231
    
    
    
    228Natural gas liquids (NGLs) available for sale
    
    
    29
    
    
    
    35Total crude oil and NGL production
    
    
    260
    
    
    
    263NET CRUDE OIL AND NGL PRODUCTION (thousands of barrels a day)Conventional
    
    
    31
    
    
    
    34Cold Lake
    
    
    139
    
    
    
    112Syncrude
    
    
    39
    
    
    
    62Total crude oil production
    
    
    209
    
    
    
    208Natural gas liquids (NGLs) available for sale
    
    
    24
    
    
    
    28Total crude oil and NGL production
    
    
    233
    
    
    
    236COLD LAKE BLEND SALES (thousands of barrels a day)
    
    
    205
    
    
    
    164NGL SALES (thousands of barrels a day)
    
    
    46
    
    
    
    48NATURAL GAS (millions of cubic feet a day)Production (gross)
    
    
    585
    
    
    
    581Production (net)
    
    
    522
    
    
    
    522Sales
    
    
    522
    
    
    
    511AVERAGE PRICES (Canadian dollars)Conventional crude oil sales (a barrel)
    
    
    58.28
    
    
    
    42.70Par crude oil price at Edmonton (a barrel)
    
    
    62.63
    
    
    
    46.81Heavy crude oil at Hardisty (Bow River, a barrel)
    
    
    39.49
    
    
    
    35.50NGL sales (a barrel)
    
    
    35.27
    
    
    
    31.87Natural gas sales (a thousand cubic feet)
    
    
    7.02
    
    
    
    6.58PETROLEUM PRODUCTS SALES (millions of litres a day)Gasolines
    
    
    32.2
    
    
    
    31.9Heating, diesel and jet fuels
    
    
    30.2
    
    
    
    29.7Heavy fuel oils
    
    
    5.3
    
    
    
    5.2Lube oils and other products
    
    
    5.5
    
    
    
    4.6Net petroleum products sales
    
    
    73.2
    
    
    
    71.4Sales under purchase and sale agreements
    
    
    15.0
    
    
    
    15.1Total petroleum products sales
    
    
    88.2
    
    
    
    86.5TOTAL REFINERY THROUGHPUT (millions of litres a day)
    
    
    76.5
    
    
    
    75.9REFINERY CAPACITY UTILIZATION (percent)
    
    
    96
    
    
    
    95PETROCHEMICAL SALES (thousands of tonnes a day)
    
    
    3.3
    
    
    
    3.0




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##### 



IMPERIAL OIL LIMITED   SHARE OWNERSHIP, TRADING AND PERFORMANCE(unaudited)
    
    Three monthsto March 312005
    
    
    2004RETURN ON AVERAGE CAPITAL EMPLOYED (a)(rolling 4 quarters, percent)
    
    
    25.7
    
    
    
    23.1RETURN ON AVERAGE SHAREHOLDERS EQUITY(rolling 4 quarters, percent)
    
    
    31.8
    
    
    
    29.2INTEREST COVERAGE RATIO  EARNINGS BASIS(rolling 4 quarters, times covered)
    
    
    77.2
    
    
    
    58.9SHARE OWNERSHIPOutstanding shares (thousands)Monthly weighted average
    
    
    348,291
    
    
    
    361,699At March 31
    
    
    345,887
    
    
    
    360,297Number of shareholdersAt March 31
    
    
    14,773
    
    
    
    15,381SHARE PRICESToronto Stock Exchange (Canadian dollars)High
    
    
    94.33
    
    
    
    64.45Low
    
    
    67.51
    
    
    
    56.42Close at March 31
    
    
    92.02
    
    
    
    58.87American Stock Exchange (U.S. dollars)High
    
    
    77.20
    
    
    
    48.70Low
    
    
    54.80
    
    
    
    42.34Close at March 31
    
    
    76.14
    
    
    
    44.84
  (a)
    Return on capital employed is the rolling four quarters net income excluding the
after-tax cost of
financing, divided by the average rolling four quarters capital employed.