Page 27 - Suncor AR English

Operating Earnings

Consolidated Operating Earnings Reconciliation(1)

Year ended December 31 ($ millions) 2013 2012 2011
Net earnings as reported 3 911 2 740 4 304
.......................................................................................................................................................................................................................................................
Unrealized foreign exchange loss (gain) on U.S. dollar denominated debt 521 (157) 161
.......................................................................................................................................................................................................................................................
Impairments (net of reversals), write-offs, and provisions(2) 563 2 176 629
.......................................................................................................................................................................................................................................................
Recognition of risk mitigation proceeds (223) — —
.......................................................................................................................................................................................................................................................
Net impact of not proceeding with the Voyageur upgrader project 58 — —
.......................................................................................................................................................................................................................................................
(Gain) loss on significant disposals(3) (130) — 107
.......................................................................................................................................................................................................................................................
Impact of income tax rate adjustments on deferred income taxes(4) — 88 442
.......................................................................................................................................................................................................................................................
Adjustments to provisions for assets acquired through the merger(5) — — 31

Operating earnings(1) 4 700 4 847 5 674

(1) Non-GAAP financial measure. See the Advisories – Non-GAAP Financial Measures section of this MD&A.
(2) In 2011, the company recorded net impairment charges of $503 million ($514 million initial impairment, net of $11 million of subsequent impairment
reversals) against assets pertaining to its operations in Libya, which were shut-in as a result of political unrest. The company also recorded $68 million
of after-tax impairment charges against certain North America Onshore assets and after-tax write-offs of crude inventories of $58 million.

(3) In 2011, the company disposed of assets resulting in after-tax losses of $107 million, consisting of $99 million on the partial disposition of interests in
the Voyageur upgrader and Fort Hills projects, and $8 million for the sale of non-core Exploration and Production assets.
(4) In the first quarter of 2011, the U.K. government announced an increase in the tax rate on oil and gas profits in the North Sea that increased the
statutory tax rate on Suncor’s earnings in the U.K. from 50% to 59.3% in 2011 and to 62% in future years, resulting in an increase to deferred

income tax expense of $442 million.
(5) In 2011, Suncor recorded an after-tax provision of $31 million in the Exploration and Production segment related to a royalty dispute concerning the
deductibility of certain costs for a period before the merger with Petro-Canada.

Bridge Analysis of Consolidated Operating Earnings ($ millions)(1)

4 847 146
751
353 (92) (659)
(373)
(273)
4 700

2012
Volumes Price, Margin Royalties
Inventory
Operating DD&A and Financing 2013
and Mix
and Other and Exploration
Expense and
Revenue
Transportation Other income
Expense
24FEB201419252129

(1)
For an explanation of the construction of this bridge analysis, see the Advisories – Non-GAAP Financial Measures section of this MD&A.

SUNCOR ENERGY INC. ANNUAL REPORT 2013 23