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Business segments | 12 Months Ended
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Dec. 31, 2019
Business segments | 3. Business segments The company operates its business in Canada. The Upstream, Downstream and Chemical functions best define the operating segments of the business that are reported separately. The factors used to identify these reportable segments are based on the nature of the operations that are undertaken by each segment and the structure of the company’s internal organization. The Upstream segment is organized and operates to explore for and ultimately produce crude oil and its equivalent, and natural gas. The Downstream segment is organized and operates to refine crude oil into petroleum products and to distribute and market these products. The Chemical segment is organized and operates to manufacture and market hydrocarbon-based chemicals and chemical products. The above segmentation has been the long-standing practice of the company and is broadly understood across the petroleum and petrochemical industries. These functions have been defined as the operating segments of the company because they are the segments (a) that engage in business activities from which revenues are earned and expenses are incurred; (b) whose operating results are regularly reviewed by the company’s chief operating decision maker to make decisions about resources to be allocated to each segment and assess its performance; and (c) for which discrete financial information is available. Corporate and other includes assets and liabilities that do not specifically relate to business segments – primarily cash, capitalized interest costs, short-term borrowings, long-term debt and liabilities associated with incentive compensation, pension and other postretirement benefit liabilities. Net earnings effects under Corporate and other activities primarily include debt-related financing, corporate governance costs, non-service pension and postretirement benefit costs, share-based incentive compensation expenses and interest income. Segment accounting policies are the same as those described in the summary of significant accounting policies. Upstream, Downstream and Chemical expenses include amounts allocated from Corporate and other activities. The allocation is based on proportional segment expenses. Transfers of assets between segments are recorded at book amounts. Intersegment sales are made essentially at prevailing market prices. Assets and liabilities that are not identifiable by segment are allocated.
|  | Upstream |  |  | Downstream |  |  | Chemical |
millions of Canadian dollars |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | 2019 |  |  | 2018 |  |  | 2017 |
Revenues and other income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues (a) |  |  | 9,479 |  |  |  | 8,525 |  |  |  | 7,302 |  |  |  | 23,591 |  |  |  | 25,200 |  |  |  | 20,714 |  |  |  | 932 |  |  |  | 1,239 |  |  |  | 1,109 |
Intersegment sales |  |  | 3,763 |  |  |  | 2,634 |  |  |  | 2,264 |  |  |  | 1,597 |  |  |  | 1,542 |  |  |  | 1,155 |  |  |  | 229 |  |  |  | 279 |  |  |  | 262 |
Investment and other income (note 9) |  |  | 17 |  |  |  | 11 |  |  |  | 16 |  |  |  | 47 |  |  |  | 95 |  |  |  | 269 |  |  |  | - |  |  |  | - |  |  |  | - |
|  |  | 13,259 |  |  |  | 11,170 |  |  |  | 9,582 |  |  |  | 25,235 |  |  |  | 26,837 |  |  |  | 22,138 |  |  |  | 1,161 |  |  |  | 1,518 |  |  |  | 1,371 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exploration (b) (note 16) |  |  | 47 |  |  |  | 19 |  |  |  | 183 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Purchases of crude oil and products |  |  | 6,528 |  |  |  | 5,833 |  |  |  | 4,526 |  |  |  | 19,332 |  |  |  | 19,326 |  |  |  | 16,543 |  |  |  | 667 |  |  |  | 831 |  |  |  | 751 |
Production and manufacturing (c) |  |  | 4,440 |  |  |  | 4,305 |  |  |  | 3,913 |  |  |  | 1,829 |  |  |  | 1,606 |  |  |  | 1,576 |  |  |  | 251 |  |  |  | 210 |  |  |  | 209 |
Selling and general (c) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 774 |  |  |  | 773 |  |  |  | 772 |  |  |  | 86 |  |  |  | 87 |  |  |  | 78 |
Federal excise tax and fuel charge |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,808 |  |  |  | 1,667 |  |  |  | 1,673 |  |  |  | - |  |  |  | - |  |  |  | - |
Depreciation and depletion (b) (d) |  |  | 1,374 |  |  |  | 1,278 |  |  |  | 1,939 |  |  |  | 186 |  |  |  | 242 |  |  |  | 202 |  |  |  | 16 |  |  |  | 14 |  |  |  | 12 |
Non-service pension and postretirement benefit (c) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Financing (note 13) |  |  | 3 |  |  |  | 1 |  |  |  | 13 |  |  |  | - |  |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total expenses |  |  | 12,392 |  |  |  | 11,436 |  |  |  | 10,574 |  |  |  | 23,929 |  |  |  | 23,616 |  |  |  | 20,766 |  |  |  | 1,020 |  |  |  | 1,142 |  |  |  | 1,050 |
Income (loss) before income taxes |  |  | 867 |  |  |  | (266 | ) |  |  | (992 | ) |  |  | 1,306 |  |  |  | 3,221 |  |  |  | 1,372 |  |  |  | 141 |  |  |  | 376 |  |  |  | 321 |
Income tax expense (benefit) (e) (note 4) |  |  | (481 | ) |  |  | (128 | ) |  |  | (286 | ) |  |  | 345 |  |  |  | 855 |  |  |  | 332 |  |  |  | 33 |  |  |  | 101 |  |  |  | 86 |
Net income (loss) |  |  | 1,348 |  |  |  | (138 | ) |  |  | (706 | ) |  |  | 961 |  |  |  | 2,366 |  |  |  | 1,040 |  |  |  | 108 |  |  |  | 275 |  |  |  | 235 |
Cash flows from (used in) operating activities |  |  | 2,423 |  |  |  | 916 |  |  |  | 1,257 |  |  |  | 1,965 |  |  |  | 2,749 |  |  |  | 1,396 |  |  |  | 172 |  |  |  | 354 |  |  |  | 235 |
Capital and exploration expenditures (f) |  |  | 1,248 |  |  |  | 991 |  |  |  | 416 |  |  |  | 484 |  |  |  | 383 |  |  |  | 200 |  |  |  | 34 |  |  |  | 25 |  |  |  | 17 |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost |  |  | 47,050 |  |  |  | 46,435 |  |  |  | 45,542 |  |  |  | 6,123 |  |  |  | 5,900 |  |  |  | 5,683 |  |  |  | 954 |  |  |  | 916 |  |  |  | 888 |
Accumulated depreciation and depletion |  |  | (15,889 | ) |  |  | (15,050 | ) |  |  | (13,844 | ) |  |  | (3,830 | ) |  |  | (3,763 | ) |  |  | (3,594 | ) |  |  | (680 | ) |  |  | (662 | ) |  |  | (644 | )
Net property, plant and equipment (g) |  |  | 31,161 |  |  |  | 31,385 |  |  |  | 31,698 |  |  |  | 2,293 |  |  |  | 2,137 |  |  |  | 2,089 |  |  |  | 274 |  |  |  | 254 |  |  |  | 244 |
Total assets (h) (i) |  |  | 34,554 |  |  |  | 34,829 |  |  |  | 35,044 |  |  |  | 5,179 |  |  |  | 5,119 |  |  |  | 4,890 |  |  |  | 416 |  |  |  | 438 |  |  |  | 399 |
|  | Corporate and other |  |  | Eliminations |  |  | Consolidated |
millions of Canadian dollars |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | 2019 |  |  | 2018 |  |  | 2017 |
Revenues and other income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues (a) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 34,002 |  |  |  | 34,964 |  |  |  | 29,125 |
Intersegment sales |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,589 | ) |  |  | (4,455 | ) |  |  | (3,681 | ) |  |  | - |  |  |  | - |  |  |  | - |
Investment and other income (note 9) |  |  | 35 |  |  |  | 29 |  |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 99 |  |  |  | 135 |  |  |  | 299 |
|  |  | 35 |  |  |  | 29 |  |  |  | 14 |  |  |  | (5,589 | ) |  |  | (4,455 | ) |  |  | (3,681 | ) |  |  | 34,101 |  |  |  | 35,099 |  |  |  | 29,424 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exploration (b) (note 16) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 47 |  |  |  | 19 |  |  |  | 183 |
Purchases of crude oil and products |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,581 | ) |  |  | (4,449 | ) |  |  | (3,675 | ) |  |  | 20,946 |  |  |  | 21,541 |  |  |  | 18,145 |
Production and manufacturing (c) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,520 |  |  |  | 6,121 |  |  |  | 5,698 |
Selling and general (c) |  |  | 48 |  |  |  | 54 |  |  |  | 49 |  |  |  | (8 | ) |  |  | (6 | ) |  |  | (6 | ) |  |  | 900 |  |  |  | 908 |  |  |  | 893 |
Federal excise tax and fuel charge |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,808 |  |  |  | 1,667 |  |  |  | 1,673 |
Depreciation and depletion (b) (d) |  |  | 22 |  |  |  | 21 |  |  |  | 19 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,598 |  |  |  | 1,555 |  |  |  | 2,172 |
Non-service pension and postretirement benefit (c) |  |  | 143 |  |  |  | 107 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 143 |  |  |  | 107 |  |  |  | - |
Financing (note 13) |  |  | 90 |  |  |  | 105 |  |  |  | 65 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 93 |  |  |  | 108 |  |  |  | 78 |
Total expenses |  |  | 303 |  |  |  | 287 |  |  |  | 133 |  |  |  | (5,589 | ) |  |  | (4,455 | ) |  |  | (3,681 | ) |  |  | 32,055 |  |  |  | 32,026 |  |  |  | 28,842 |
Income (loss) before income taxes |  |  | (268 | ) |  |  | (258 | ) |  |  | (119 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,046 |  |  |  | 3,073 |  |  |  | 582 |
Income tax expense (benefit) (e) (note 4) |  |  | (51 | ) |  |  | (69 | ) |  |  | (40 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (154 | ) |  |  | 759 |  |  |  | 92 |
Net income (loss) |  |  | (217 | ) |  |  | (189 | ) |  |  | (79 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,200 |  |  |  | 2,314 |  |  |  | 490 |
Cash flows from (used in) operating activities |  |  | (124 | ) |  |  | (116 | ) |  |  | (125 | ) |  |  | (7 | ) |  |  | 19 |  |  |  | - |  |  |  | 4,429 |  |  |  | 3,922 |  |  |  | 2,763 |
Capital and exploration expenditures (f) |  |  | 48 |  |  |  | 28 |  |  |  | 38 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,814 |  |  |  | 1,427 |  |  |  | 671 |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost |  |  | 741 |  |  |  | 693 |  |  |  | 665 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 54,868 |  |  |  | 53,944 |  |  |  | 52,778 |
Accumulated depreciation and depletion |  |  | (266 | ) |  |  | (244 | ) |  |  | (223 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (20,665 | ) |  |  | (19,719 | ) |  |  | (18,305 | )
Net property, plant and equipment (g) |  |  | 475 |  |  |  | 449 |  |  |  | 442 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 34,203 |  |  |  | 34,225 |  |  |  | 34,473 |
Total assets (h) (i) |  |  | 2,536 |  |  |  | 1,548 |  |  |  | 1,703 |  |  |  | (498 | ) |  |  | (478 | ) |  |  | (435 | ) |  |  | 42,187 |  |  |  | 41,456 |  |  |  | 41,601 |
(a) | Includes export sales to the United States of $7,190 million (2018 - $6,661 million, 2017 - $4,392 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.
(b) | The Upstream segment in 2017 includes non-cash impairment charges of $396 million, before tax, associated with the Horn River development and $379 million, before tax, associated with the Mackenzie gas project. The impairment charges are recognized in the lines “Exploration” and “Depreciation and depletion” on the Consolidated statement of income, and the “Accumulated depreciation and depletion” line of the Consolidated balance sheet.
(c) | As part of the implementation of Accounting Standard Update, Compensation – Retirement Benefits (Topic 715), beginning January 1, 2018, Corporate and other includes all non-service pension and postretirement benefit expense. Prior to 2018, the majority of these costs were allocated to the operating segments.
(d) | In 2018, the Downstream segment included a non-cash impairment charge of $46 million, before tax, associated with the Government of Ontario’s revocation of its cap and trade legislation.
(e) | Segment results in 2019 include a largely non- cash favourable impact of $662 million associated with the Alberta corporate income tax rate decrease, with the largest impact in the Upstream segment.
(f) | Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.
(g) | Includes property, plant and equipment under construction of $2,149 million (2018 - $1,553 million, 2017 - $1,047 million).
(h) | Effective January 1, 2019, Imperial adopted the Financial Accounting Standards Board’s standard, Leases (Topic 842) , as amended. As at December 31, 2019, Total assets include operating lease right of use assets of $260 million. An election was made not to restate prior periods. See note 14 for additional details.
(i) | In 2019, the company removed $570 million from Total assets and corresponding liabilities in the Downstream segment associated with the Government of Ontario’s revocation of its cap and trade legislation .

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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