EX-99.3 4 a2233330zex-99_3.htm EX-99.3
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EXHIBIT 99.3

Unaudited Consolidated Financial Statements for the third quarter ended September 30, 2017

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)


  Three months ended
September 30		   Nine months ended
September 30		    

($ millions)

   2017   2016   2017   2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Revenues and Other Income

                    
​

Operating revenues, net of royalties (note 3)

   7 986   7 409   23 051   18 967    
​

Other income (loss) (note 4)

   43   (15 ) 84   (140 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  8 029   7 394   23 135   18 827    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Expenses

                    
​

Purchases of crude oil and products

   2 875   2 734   8 348   7 475    
​

Operating, selling and general

   2 264   2 212   6 810   6 614    
​

Transportation

   247   262   781   793    
​

Depreciation, depletion, amortization and impairment

   1 281   1 439   4 113   4 516    
​

Exploration

   13   146   78   203    
​

Gain on disposal of assets (notes 13 and 14)

   (5 ) (13 ) (555 ) (47 )  
​

Financing (income) expenses (note 7)

   (323 ) 288   (471 ) (87 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  6 352   7 068   19 104   19 467    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (Loss) before Income Taxes

   1 677   326   4 031   (640 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income Taxes – Expense (Recovery) (note 8)

                    
​

Current

   218   71   809   (112 )  
​

Deferred

   170   (137 ) 146   (442 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  388   (66 ) 955   (554 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net Earnings (Loss)

   1 289   392   3 076   (86 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net Earnings (Loss) Attributable to:

                    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Common shareholders

   1 289   392   3 076   (97 )  
​

Non-controlling interest

   —   —   —   11    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  1 289   392   3 076   (86 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other Comprehensive (Loss) Income

                    
​

Items that may be subsequently reclassified to earnings

                    
​

Foreign currency translation adjustment

   (100 ) 36   (206 ) (294 )  
​

Items that will not be reclassified to earnings

                    
​

Actuarial gain (loss) on employee retirement benefit plans, net of income taxes

   52   (434 ) 53   (474 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other Comprehensive Loss

   (48 ) (398 ) (153 ) (768 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Comprehensive Income (Loss)

  
1 241		  
(6
)
2 923		  
(854
)		  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Per Common Share (dollars) (note 9)

                    
​

Net earnings (loss) – basic

   0.78   0.24   1.85   (0.05 )  
​

Net earnings (loss) – diluted

   0.78   0.24   1.84   (0.05 )  
​

Net earnings (loss) – attributable to common shareholders – basic

   0.78   0.24   1.85   (0.06 )  
​

Net earnings (loss) – attributable to common shareholders – diluted

   0.78   0.24   1.84   (0.06 )  
​

Cash dividends

   0.32   0.29   0.96   0.87    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See accompanying notes to the interim consolidated financial statements.

  
 		  
 		  
 		  
 		  
 
​ 42   SUNCOR ENERGY INC. 2017 THIRD QUARTER ​ ​

CONSOLIDATED BALANCE SHEETS
(unaudited)

($ millions)

   September 30
2017		   December 31
2016		    
​ ​ ​ ​ ​ ​ ​

Assets

            
​

Current assets

            
​

Cash and cash equivalents

   2 757   3 016    
​

Accounts receivable

   3 598   3 182    
​

Inventories

   3 049   3 240    
​

Income taxes receivable

   157   376    
​

Assets held for sale (notes 13 and 14)

   —   1 205    
​ ​ ​ ​ ​ ​ ​

Total current assets

   9 561   11 019    
​

Property, plant and equipment, net

   72 026   71 259    
​

Exploration and evaluation

   2 043   2 038    
​

Other assets

   1 165   1 248    
​

Goodwill and other intangible assets

   3 062   3 075    
​

Deferred income taxes

   88   63    
​ ​ ​ ​ ​ ​ ​

Total assets

   87 945   88 702    
​ ​ ​ ​ ​ ​ ​

Liabilities and Shareholders' Equity

            
​

Current liabilities

            
​

Short-term debt

   2 060   1 273    
​

Current portion of long-term debt

   1 509   54    
​

Accounts payable and accrued liabilities

   5 872   5 588    
​

Current portion of provisions

   690   781    
​

Income taxes payable

   366   224    
​

Liabilities associated with assets held for sale (notes 13 and 14)

   —   197    
​ ​ ​ ​ ​ ​ ​

Total current liabilities

   10 497   8 117    
​

Long-term debt

   12 278   16 103    
​

Other long-term liabilities

   1 897   2 067    
​

Provisions (note 12)

   6 485   6 542    
​

Deferred income taxes

   11 410   11 243    
​

Equity

   45 378   44 630    
​ ​ ​ ​ ​ ​ ​

Total liabilities and equity

   87 945   88 702    
​ ​ ​ ​ ​ ​ ​

See accompanying notes to the interim consolidated financial statements.

  
 		  
 		  
 
​ ​ ​ SUNCOR ENERGY INC. 2017 THIRD QUARTER    43

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

  Three months ended
September 30		   Nine months ended
September 30		    

($ millions)

   2017   2016   2017   2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating Activities

                    
​

Net earnings (loss)

   1 289   392   3 076   (86 )  
​

Adjustments for:

                    
​

Depreciation, depletion, amortization and impairment

   1 281   1 439   4 113   4 516    
​

Deferred income taxes

   170   (137 ) 146   (442 )  
​

Accretion

   62   67   184   204    
​

Unrealized foreign exchange (gain) loss on U.S. dollar denominated debt

   (441 ) 121   (845 ) (771 )  
​

Change in fair value of financial instruments and trading inventory

   45   (5 ) 112   265    
​

Gain on disposal of assets (notes 13 and 14)           

   (4 ) (13 ) (426 ) (47 )  
​

Loss on extinguishment of long-term debt (note 7)

   —   —   25   99    
​

Share-based compensation

   139   67   (85 ) (59 )  
​

Exploration

   —   139   41   139    
​

Settlement of decommissioning and restoration liabilities

   (66 ) (48 ) (255 ) (206 )  
​

Other

   (3 ) 3   37   11    
​

Decrease (increase) in non-cash working capital

   440   (46 ) 88   (734 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash flow provided by operating activities

   2 912   1 979   6 211   2 889    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Investing Activities

                    
​

Capital and exploration expenditures

   (1 695 ) (1 693 ) (4 930 ) (5 010 )  
​

Cash acquired from Canadian Oil Sands Limited

   —   —   —   109    
​

Acquisitions

   —   —   —   (946 )  
​

Proceeds from disposal of assets

   54   4   1 531   196    
​

Other investments

   (15 ) (4 ) (14 ) (11 )  
​

(Increase) decrease in non-cash working capital

   (109 ) 122   (72 ) (45 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash flow used in investing activities

   (1 765 ) (1 571 ) (3 485 ) (5 707 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Financing Activities

                    
​

Net change in short-term debt

   98   (705 ) 925   1 250    
​

Net change in long-term debt

   (14 ) (137 ) (1 768 ) (1 679 )  
​

Issuance of long-term debt (note 7)

   —   993   —   993    
​

Issuance of common shares under share option plans

   29   5   105   17    
​

(Purchase) issuance of common shares (notes 6 and 10)

   (282 ) —   (578 ) 2 782    
​

Dividends paid on common shares

   (531 ) (483 ) (1 598 ) (1 394 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash flow (used in) provided by financing activities

   (700 ) (327 ) (2 914 ) 1 969    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Increase (Decrease) in Cash and Cash Equivalents

   447   81   (188 ) (849 )  
​

Effect of foreign exchange on cash and cash equivalents

   (42 ) 13   (71 ) (98 )  
​

Cash and cash equivalents at beginning of period

   2 352   3 008   3 016   4 049    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash and Cash Equivalents at End of Period

   2 757   3 102   2 757   3 102    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Supplementary Cash Flow Information

                    
​

Interest paid

   111   86   609   597    
​

Income taxes paid (received)

   155   (46 ) 274   (56 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See accompanying notes to the interim consolidated financial statements.

  
 		  
 		  
 		  
 		  
 
​ 44   SUNCOR ENERGY INC. 2017 THIRD QUARTER ​ ​

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited)

($ millions)

   Share
Capital		   Contributed
Surplus		   Accumulated
Other
Comprehensive
Income		   Non-
controlling
Interest		   Retained
Earnings		   Total   Number
of
Common
Shares
(thousands)		    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

At December 31, 2015

   19 466   633   1 265   —   17 675   39 039   1 446 013    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   —   —   —   11   (97 ) (86 ) —    
​ ​ ​

Foreign currency translation adjustment

   —   —   (294 ) —   —   (294 ) —    
​ ​ ​

Actuarial loss on employee retirement benefit plans, net of income taxes of $167

   —   —   —   —   (474 ) (474 ) —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total comprehensive (loss) income

   —   —   (294 ) 11   (571 ) (854 ) —    
​ ​ ​

Issued under share option plans

   64   (44 ) —   —   —   20   597    
​ ​ ​

Issued for cash, net of income taxes of $26 (note 10)

   2 808   —   —   —   —   2 808   82 225    
​ ​ ​

Issued for the acquisition of Canadian Oil Sands Limited

   3 154   —   —   1 172   —   4 326   98 814    
​ ​ ​

Equity transactions to eliminate non-controlling interest in Canadian Oil Sands Limited

   1 298   —   —   (1 183 ) (115 ) —   36 879    
​ ​ ​

Share-based compensation

   —   31   —   —   —   31   —    
​ ​ ​

Dividends paid on common shares

   —   —   —   —   (1 394 ) (1 394 ) —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

At September 30, 2016

   26 790   620   971   —   15 595   43 976   1 664 528    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

At December 31, 2016

   26 942   588   1 007   —   16 093   44 630   1 667 914    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings

   —   —   —   —   3 076   3 076   —    
​ ​ ​

Foreign currency translation adjustment

   —   —   (206 ) —   —   (206 ) —    
​ ​ ​

Actuarial gain on employee retirement benefit plans, net of income taxes of $20

   —   —   —   —   53   53   —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total comprehensive (loss) income

   —   —   (206 ) —   3 129   2 923   —    
​ ​ ​

Issued under share option plans

   134   (30 ) —   —   —   104   2 982    
​ ​ ​

Purchase of common shares for cancellation (note 6)

   (233 ) —   —   —   (345 ) (578 ) (14 441 )  
​ ​ ​

Change in liability for share purchase commitment (note 6)

   (53 ) —   —   —   (91 ) (144 ) —    
​ ​ ​

Share-based compensation

   —   41   —   —   —   41   —    
​ ​ ​

Dividends paid on common shares

   —   —   —   —   (1 598 ) (1 598 ) —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

At September 30, 2017

   26 790   599   801   —   17 188   45 378   1 656 455    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See accompanying notes to the interim consolidated financial statements.

  
 		  
 		  
 		  
 		  
 
​ ​ ​ SUNCOR ENERGY INC. 2017 THIRD QUARTER    45

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. REPORTING ENTITY AND DESCRIPTION OF THE BUSINESS

Suncor Energy Inc. (Suncor or the company) is an integrated energy company headquartered in Canada. Suncor's operations include oil sands development and upgrading, onshore and offshore oil and gas production, petroleum refining, and product marketing primarily under the Petro-Canada brand. The consolidated financial statements of the company comprise the company and its subsidiaries and the company's interests in associates and joint arrangements.

The address of the company's registered office is 150 – 6th Avenue S.W., Calgary, Alberta, Canada, T2P 3E3.

2. BASIS OF PREPARATION

(a) Statement of Compliance

These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), specifically International Accounting Standard (IAS) 34 Interim Financial Reporting as issued by the International Accounting Standards Board. They are condensed as they do not include all of the information required for full annual financial statements, and they should be read in conjunction with the consolidated financial statements for the year ended December 31, 2016.

The policies applied in these condensed interim consolidated financial statements are based on IFRS issued and outstanding as at October 25, 2017.

(b) Basis of Measurement

The consolidated financial statements are prepared on a historical cost basis except as detailed in the accounting policies disclosed in the company's consolidated financial statements for the year ended December 31, 2016.

(c) Functional Currency and Presentation Currency

These consolidated financial statements are presented in Canadian dollars, which is the company's functional currency.

(d) Use of Estimates and Judgment

The timely preparation of financial statements requires that management make estimates and assumptions and use judgment. Accordingly, actual results may differ from estimated amounts as future confirming events occur. Significant estimates and judgment used in the preparation of the financial statements are described in the company's consolidated financial statements for the year ended December 31, 2016.

(e) Income taxes

The company recognizes the impacts of income tax rate changes in earnings in the period the rate change is substantively enacted.

​ 46   SUNCOR ENERGY INC. 2017 THIRD QUARTER ​ ​

3. SEGMENTED INFORMATION

The company's operating segments are reported based on the nature of their products and services and management responsibility.

Intersegment sales of crude oil and natural gas are accounted for at market values and are included, for segmented reporting, in revenues of the segment making the transfer and expenses of the segment receiving the transfer. Intersegment amounts are eliminated on consolidation.

Three months ended September 30        Oil Sands
 		           Exploration and
       Production
 		       Refining and
   Marketing
 		           Corporate,
       Energy Trading
       and Eliminations
 		           Total
 		   
($ millions)     2017     2016     2017     2016     2017     2016     2017     2016     2017     2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Revenues and Other Income                                                          
​
Gross revenues     2 319     2 320     766     462     5 110     4 679     5     12     8 200     7 473    
​
Intersegment revenues     914     647     —     85     30     32     (944 )   (764 )   —     —    
​
Less: Royalties     (82 )   (20 )   (132 )   (44 )   —     —     —     —     (214 )   (64 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating revenues, net of royalties     3 151     2 947     634     503     5 140     4 711     (939 )   (752 )   7 986     7 409    
​
Other (loss) income     (6 )   3     1     7     48     13     —     (38 )   43     (15 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
      3 145     2 950     635     510     5 188     4 724     (939 )   (790 )   8 029     7 394    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Expenses                                                                
​
Purchases of crude oil and products     135     135     —     —     3 620     3 334     (880 )   (735 )   2 875     2 734    
​
Operating, selling and general     1 513     1 420     109     107     481     549     161     136     2 264     2 212    
​
Transportation     164     159     21     20     76     95     (14 )   (12 )   247     262    
​
Depreciation, depletion, amortization and impairment     859     971     236     270     161     164     25     34     1 281     1 439    
​
Exploration     3     —     10     146     —     —     —     —     13     146    
​
Gain on disposal of assets     (3 )   —     —     —     (2 )   (13 )   —     —     (5 )   (13 )  
​
Financing expenses (income)     40     57     —     12     2     —     (365 )   219     (323 )   288    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
      2 711     2 742     376     555     4 338     4 129     (1 073 )   (358 )   6 352     7 068    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Earnings (Loss) before Income Taxes     434     208     259     (45 )   850     595     134     (432 )   1 677     326    
​
Income Taxes – Expense (Recovery)                                                                
​
Current     67     (16 )   119     9     217     167     (185 )   (89 )   218     71    
​
Deferred     53     62     (21 )   (198 )   36     (8 )   102     7     170     (137 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
      120     46     98     (189 )   253     159     (83 )   (82 )   388     (66 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net Earnings (Loss)     314     162     161     144     597     436     217     (350 )   1 289     392    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Capital and Exploration Expenditures     1 340     1 306     189     283     159     101     7     3     1 695     1 693    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ SUNCOR ENERGY INC. 2017 THIRD QUARTER    47

Nine months ended September 30        Oil Sands
 		           Exploration and
       Production
 		       Refiningand
   Marketing
 		           Corporate,
       Energy Trading
       and Eliminations
 		           Total
 		   
($ millions)     2017     2016     2017     2016     2017     2016     2017     2016     2017     2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Revenues and Other Income                                                          
​
Gross revenues     6 559     4 715     2 538     1 588     14 482     12 796     28     34     23 607     19 133    
​
Intersegment revenues     2 462     1 451     —     114     55     96     (2 517 )   (1 661 )   —     —    
​
Less: Royalties     (180 )   (48 )   (376 )   (118 )   —     —     —     —     (556 )   (166 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating revenues, net of royalties     8 841     6 118     2 162     1 584     14 537     12 892     (2 489 )   (1 627 )   23 051     18 967    
​
Other income (loss)     25     18     (22 )   45     86     26     (5 )   (229 )   84     (140 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
      8 866     6 136     2 140     1 629     14 623     12 918     (2 494 )   (1 856 )   23 135     18 827    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Expenses                                                                
​
Purchases of crude oil and products     390     447     —     —     10 456     8 659     (2 498 )   (1 631 )   8 348     7 475    
​
Operating, selling and general     4 641     4 143     321     368     1 462     1 617     386     486     6 810     6 614    
​
Transportation     521     489     66     65     232     271     (38 )   (32 )   781     793    
​
Depreciation, depletion, amortization and impairment     2 727     2 826     809     1 087     489     506     88     97     4 113     4 516    
​
Exploration     9     30     69     173     —     —     —     —     78     203    
​
Gain on disposal of assets     (4 )   (33 )   —     —     (454 )   (14 )   (97 )   —     (555 )   (47 )  
​
Financing expenses (income)     125     176     22     62     12     12     (630 )   (337 )   (471 )   (87 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
      8 409     8 078     1 287     1 755     12 197     11 051     (2 789 )   (1 417 )   19 104     19 467    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Earnings (Loss) before Income Taxes     457     (1 942 )   853     (126 )   2 426     1 867     295     (439 )   4 031     (640 )  
​
Income Taxes – Expense (Recovery)                                                                
​
Current     129     (453 )   456     200     631     486     (407 )   (345 )   809     (112 )  
​
Deferred     (11 )   (64 )   (118 )   (462 )   23     15     252     69     146     (442 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
      118     (517 )   338     (262 )   654     501     (155 )   (276 )   955     (554 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net Earnings (Loss)     339     (1 425 )   515     136     1 772     1 366     450     (163 )   3 076     (86 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Capital and Exploration Expenditures     3 899     3 667     631     829     385     502     15     12     4 930     5 010    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ 48   SUNCOR ENERGY INC. 2017 THIRD QUARTER ​ ​

4. OTHER INCOME (LOSS)

Other income consists of the following:

  Three months ended
September 30		   Nine months ended
September 30		    

($ millions)

   2017   2016   2017   2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Energy trading activities

                    
​

Losses recognized in earnings during the period

   (38 ) (45 ) (18 ) (63 )  
​

(Losses) gains on inventory valuation          

   (3 ) 31   (46 ) 48    
​

Risk management activities(1)

   (2 ) (23 ) 32   (253 )  
​

Investment and interest income

   86   8   140   56    
​

Risk mitigation and insurance proceeds(2)

   —   —   —   26    
​

Change in value of pipeline commitments and other

   —   14   (24 ) 46    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  43   (15 ) 84   (140 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(1)
Includes fair value changes related to short-term derivative contracts in the Oil Sands and Refining and Marketing segments and long-term forward starting interest rate swaps in the Corporate segment.

(2)
Includes property damage insurance proceeds recorded in the second quarter of 2016 for the Terra Nova asset in the Exploration and Production segment.

5. SHARE-BASED COMPENSATION

The following table summarizes the share-based compensation expense recorded for all plans within Operating, Selling and General expense.


  Three months ended
September 30		   Nine months ended
September 30		    

($ millions)

   2017   2016   2017   2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Equity-settled plans

   8   7   41   31    
​

Cash-settled plans

   132   61   224   206    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  140   68   265   237    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

6. NORMAL COURSE ISSUER BID

On April 26, 2017, the company announced its intention to commence a new Normal Course Issuer Bid (the 2017 NCIB) to repurchase shares through the facilities of the Toronto Stock Exchange, New York Stock Exchange and/or alternative trading platforms. Pursuant to the 2017 NCIB, the company may purchase for cancellation up to approximately $2.0 billion worth of its common shares between May 2, 2017 and May 1, 2018. During the third quarter of 2017, the company repurchased 7.2 million common shares under the 2017 NCIB at an average price of $39.19 per share, for a total repurchase cost of $282 million.

The following table summarizes the share repurchase activities during the period:


  Three months ended
September 30		   Nine months ended
September 30		    

($ millions, except as noted)

   2017   2016   2017   2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Share repurchase activities (thousands of common shares)

                    
​

Shares repurchased

   7 220   —   14 441   —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Amounts charged to

                    
​

Share capital

   116   —   233   —    
​

Retained earnings

   166   —   345   —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Share repurchase cost

   282   —   578   —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ SUNCOR ENERGY INC. 2017 THIRD QUARTER    49

Under an automatic repurchase plan agreement with an independent broker, the company has recorded the following liability for share repurchases that may take place during its internal blackout period:

($ millions)

   September 30
2017		   Dec 31
2016		    
​ ​ ​ ​ ​ ​ ​

Amounts charged to

            
​

Share capital

   53   —    
​

Retained earnings

   91   —    
​ ​ ​ ​ ​ ​ ​

Liability for share purchase commitment

   144   —    
​ ​ ​ ​ ​ ​ ​

7. FINANCING (INCOME) EXPENSE


  Three months ended
September 30		   Nine months ended
September 30		    

($ millions)

   2017   2016   2017   2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest on debt

   218   243   704   753    
​

Capitalized interest

   (182 ) (153 ) (552 ) (434 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest expense

   36   90   152   319    
​

Interest on pension and other post-retirement benefits

   14   18   44   45    
​

Accretion

   62   67   184   204    
​

Foreign exchange (gain) loss on U.S. dollar denominated debt

   (441 ) 121   (845 ) (771 )  
​

Foreign exchange and other

   6   (8 ) (31 ) 17    
​

Loss on extinguishment of long-term debt

   —   —   87   99    
​

Realized gains on foreign currency hedges

   —   —   (62 ) —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  (323 ) 288   (471 ) (87 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

During the second quarter of 2017, the company completed an early retirement of its US$1.250 billion (book value of $1.700 billion) long-term notes originally scheduled to mature on June 1, 2018 for US$1.344 billion ($1.830 billion), including US$31 million ($42 million) of accrued interest. In conjunction with the early retirement of the notes, the company also realized gains of $62 million on foreign currency hedges resulting in an overall debt extinguishment loss of $25 million ($10 million after-tax).

During the third quarter of 2016, the company issued $700 million of senior unsecured Series 5 Medium Term Notes maturing on September 14, 2026. The notes have a coupon of 3.00% and were priced at $99.751 per note for an effective yield of 3.029%. The company also issued $300 million of senior unsecured Series 5 Medium Term Notes maturing on September 13, 2046. The notes have a coupon of 4.34% and were priced at $99.900 per note for an effective yield of 4.346%.

During the second quarter of 2016, the company purchased US$688 million ($891 million) principal value (book value of $864 million) of subsidiary debt acquired through the acquisition of Canadian Oil Sands Limited (COS) for US$751 million ($973 million) including US$8 million ($10 million) of accrued interest, resulting in a debt extinguishment loss of $99 million ($73 million after-tax). The company also repaid approximately $600 million of the credit facility acquired in the COS transaction.

8. INCOME TAXES

In the third quarter of 2016, the United Kingdom (U.K.) government enacted a decrease in the supplementary charge rate on oil and gas profits in the North Sea that reduced the statutory tax rate on Suncor's earnings in the U.K. from 50% to 40%. The company revalued its deferred income tax balances, resulting in a deferred income tax recovery of $180 million.

​ 50   SUNCOR ENERGY INC. 2017 THIRD QUARTER ​ ​

9. EARNINGS (LOSS) PER COMMON SHARE


  Three months ended
September 30		   Nine months ended
September 30		    

($ millions)

   2017   2016   2017   2016    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   1 289   392   3 076   (86 )  
​

Dilutive impact of accounting for awards as equity-settled(1)

   —   —   (1 ) —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss) – diluted

   1 289   392   3 075   (86 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss) attributable to common shareholders

   1 289   392   3 076   (97 )  
​

Dilutive impact of accounting for awards as equity-settled(1)

   —   —   (1 ) —    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss) – diluted attributable to common shareholders

   1 289   392   3 075   (97 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

(millions of common shares)

                    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Weighted average number of common shares

   1 659   1 664   1 665   1 591    
​

Dilutive securities:

                    
​

Effect of share options

   3   2   4   1    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Weighted average number of diluted common shares

   1 662   1 666   1 669   1 592    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

(dollars per common share)

                    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings (loss) per share

   0.78   0.24   1.85   (0.05 )  
​

Diluted earnings (loss) per share

   0.78   0.24   1.84   (0.05 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings (loss) per share attributable to common shareholders

   0.78   0.24   1.85   (0.06 )  
​

Diluted earnings (loss) per share attributable to common shareholders

   0.78   0.24   1.84   (0.06 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(1)
Cash payment alternatives are accounted for as cash-settled plans. As these awards can be exchanged for common shares of the company, they are considered potentially dilutive and are included in the calculation of the company's diluted net earnings (loss) per share if they have a dilutive impact in the period. Accounting for these awards as equity-settled was determined to have a dilutive impact for the three and nine months ended September 30, 2017 (anti-dilutive for the three and nine months ended September 30, 2016).

10. SHARE CAPITAL

On June 22, 2016, the company issued 82.2 million common shares for $35.00 per common share. Gross proceeds were approximately $2.878 billion ($2.782 billion net of fees).

11. FINANCIAL INSTRUMENTS

Derivative Financial Instruments

(a) Non-Designated Derivative Financial Instruments

The following table presents the company's non-designated Energy Trading, and Risk Management derivatives measured at fair value as at September 30, 2017:

($ millions)

   Energy
Trading		   Risk
Management		   Total    
​ ​ ​ ​ ​ ​ ​ ​ ​

Fair value outstanding at December 31, 2016

   (36 ) (18 ) (54 )  
​

Cash Settlements – received during the period

   (17 ) (63 ) (80 )  
​

(Losses) gains recognized in earnings during the period (note 4)

   (18 ) 32   14    
​ ​ ​ ​ ​ ​ ​ ​ ​

Fair value outstanding at September 30, 2017

   (71 ) (49 ) (120 )  
​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ SUNCOR ENERGY INC. 2017 THIRD QUARTER    51

(b) Fair Value Hierarchy

The following table presents the company's financial instruments measured at fair value for each hierarchy level as at September 30, 2017:

($ millions)

   Level 1   Level 2   Level 3   Total Fair
Value		    
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accounts receivable

   39   56   —   95    
​

Accounts payable

   (98 ) (117 ) —   (215 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  (59 ) (61 ) —   (120 )  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

During the third quarter of 2017, there were no transfers between Level 1 and Level 2 fair value measurements and no transfers into and out of Level 3 fair value measurements.

The company uses forward starting interest rate swaps to mitigate its exposure to the effect of future interest rate movements on future debt issuances. As at September 30, 2017, the company had $924 million in outstanding forward swaps. An increase in interest rates of 0.04% during the quarter resulted in an increase in value of $14 million associated with the remaining swaps. An increase in interest rates of 0.02% during the nine months ended September 30, 2017 resulted in an increase in value of $5 million associated with the remaining swaps.

Non-Derivative Financial Instruments

At September 30, 2017, the carrying value of fixed-term debt accounted for under amortized cost was $12.6 billion (December 31, 2016 – $15.1 billion) and the fair value was $14.9 billion (December 31, 2016 – $17.5 billion). The estimated fair value of long-term debt is based on pricing sourced from market data.

12. PROVISIONS

An increase in the credit-adjusted risk-free interest rate to 4.00% (December 31, 2016 – 3.90%) partially offset by recognition of additional disturbances resulted in an overall decrease in the decommissioning and restoration provision of $15 million for the nine months ended September 30, 2017.

13. SALE OF LUBRICANTS BUSINESS

On February 1, 2017, the company completed the previously announced sale of its lubricants business for proceeds of $1.1 billion before closing adjustments and other closing costs. The sale of this business resulted in an after-tax gain of $354 million, including a current tax expense of $101 million and a deferred tax recovery of $11 million, in the Refining and Marketing segment.

14. SALE OF CEDAR POINT

The company sold its interest in the Cedar Point wind facility in southwestern Ontario for proceeds of $291 million before closing adjustments and other closing costs, with an effective date of January 1, 2017. The disposition resulted in an after-tax gain of $83 million, including a current tax expense of $29 million and a deferred tax recovery of $15 million, in the Corporate, Energy Trading and Eliminations segment.

​ 52   SUNCOR ENERGY INC. 2017 THIRD QUARTER ​ ​



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EXHIBIT 99.3