SUNCORSUNCOR ENERGYENERGY INC.INC. ANNUAL REPORT 2013 ENERGY 28FEB201403485893 CONTENTS 2 Message to Shareholders 6 Our Competitive Differentiators FINANCIAL HIGHLIGHTS 8 Suncor’s Integrated Business Model Earnings ($ millions) 10 Our 2013 Goals 12 Our 2014 Targets 14 Disclaimers 16 Management’s Discussion and Analysis 83 Management’s Statement of Responsibility for Financial Reporting 84 Management’s Report on Internal Control over Financial Reporting 2009 2010 2011 2012 2013 85 Independent Auditor’s Report Net earnings 1 146 3 829 4 304 2 740 3 911 87 Audited Consolidated Financial Operating 1 115 2 634 5 674 4 847 4 700 Statements and Notes earnings 136 Supplemental Financial and Operating Information Capital Expenditures and Cash Flow from Operations SUNCOR ENERGY INC. 147 Share Trading Information ($ millions) ANNUAL REPORT 2013 2009 2010 2011 2012 2013 Capital 4 131 5 709 6 291 6 370 6 380 expenditures Cash fow from 2 799 6 656 9 746 9 733 9 412 operations Production (mboe/d) 2009 2010 2011 2012 2013 Exploration 149.3 296.9 206.7 189.9 169.9 and production Oil Sands 306.7 318.2 339.3 359.2 392.5 Total 456.0 615.1 546.0 549.1 562.4 Return on Capital Employed (%) 13.8 11.4 11.5 7.2 2.6 2009 2010 2011 2012 2013 Excluding the impact of the Voyageur impairment, ROCE for 2012 SUNCOR ENERGY INC. ANNUAL REPORT 2013 1 was 11.4% SUNCOR ENERGY INC. ANNUAL REPORT 2013 2 V OVERVIEW Oil Sands Production Growth (excluding Syncrude) ATAT A A GLANCE GLANCE (mbbls/d) 360.5 88% 94% 255MW 99% Suncor’sSuncor’s vision vision is is to to be be trusted trusted stewards stewards of of valuable valuable natural natural 324.8 Our integrated model With four refneries, We have investments in We are now 99% allowed us to access we continued to six operating wind farms crude oil-weighted resources.resources. Guided Guided by by our our values, values, we we will will lead lead the the way way to to 304.7 global pricing for 88% achieve industry-leading with a gross generating following the divestment deliver economic prosperity, improved social well-being 290.6 of production in 2013. utilization rates. capacity of 255 of non-core assets in deliver economic prosperity, improved social well-being 283.0 megawatts. our Exploration and andand a a healthy healthy environment environment for for today today and and tomorrow. tomorrow. Production business. 250 2009 2010 2011 2012 2013 OIL SANDS EXPLORATION REFINING AND SUPPLY AND TRADING WHERE WE OPERATE AND PRODUCTION MARKETING Our Oil Sands business unit is responsibly Our Exploration and Production business Our Refning and Marketing business Supply Trading and Corporate Head offce Regional offce Operated Non-operated developing one of the world’s largest unit is focused on delivering value and unit further unlocks the value of the Development provides marketing, supply Proposed Refning capacity petroleum resource basins – the growth through high margin crude oil upstream barrel through our strong and trading services to the company. Athabasca Oil Sands – through both producing and development assets. refning and marketing network. The Our renewables business includes mining and in situ technologies. bulk of our petroleum and lubricants investments in six operating wind farms. Circles are scaled to relative net capacity products are marketed globally under the Petro-Canada brand. Oil Sands KEY HIGHLIGHTS KEY HIGHLIGHTS KEY HIGHLIGHTS KEY HIGHLIGHTS Fort Hills • Oil Sands production (excluding • Portfolio repositioned for high value • Rail offoading facility opened in • Increased midstream fexibility East Coast Canada Syncrude) increased by 11% and proftable growth Montreal, providing access to through additional tankage, rail Joslyn St. John’s Hibernia from 2012 to approximately lower-cost inland crudes and pipeline access • Golden Eagle project approximately Firebag 360,500 bbls/d MacKay Edmonton Montreal White 90% complete and on budget, with • Continuous reliability improvements • Secured capacity on TransCanada’s River Syncrude Calgary Rose • Successful ramp up of Firebag frst oil expected in late 2014 led to an increase in the nameplate Gulf Coast Pipeline for shipments complex and commissioning of hot or early 2015 capacity at the Edmonton refnery that have begun in early 2014 bitumen infrastructure Denver / Terra • Current portfolio of development • Maintained #1 share of retail gasoline • Regulatory approval received for Commerce City Sarnia Hebron Nova • Fort Hills mining project sanctioned projects expected to provide value market in Canada Adelaide wind project Base Plant Mississauga into the next decade & Millennium Fort McMurray OUR RESERVES AND RESOURCES $2.1 billion $1.2 billion $2.0 billion $188 million Norway Operating earnings Operating earnings Operating earnings Golden Operating earnings Eagle Beta 7.7 billion boe Buzzard Stavanger (1) Proved plus probable reserves Aberdeen London $4.6 billion $2.3 billion $2.6 billion $301million United Kingdom Cash fow from operations Cash fow from operations Cash fow from operations Cash fow from operations 23.2 billion boe Contingent resources(1) • 58% In Situ and 23% Mining 392,500 bbls/d 169,900 boe/d 431,300 bbls/d 3:1 (1) Please see the Disclaimers section for more Production volumes Production volumes Crude oil processed Three barrels traded for every barrel produced Tripoli information on reserves and resources. Libya 3 SUNCOR ENERGY INC. ANNUAL REPORT 2013 SUNCOR ENERGY INC. ANNUAL REPORT 2013 4 WELCOME Suncor is Canada’s leading integrated energy company. Suncor’s operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refning, product marketing under the Petro-Canada brand and a renewable energy portfolio. Key Indicators Year ended December 31 2009 2010 2011 2012 2013 Financial (dollars per common share) Net earnings 0.96 2.45 2.74 1.77 2.61 Operating earnings 0.93 1.69 3.61 3.14 3.13 Cash fow from operations 2.34 4.25 6.20 6.30 6.27 Dividend 0.30 0.40 0.43 0.50 0.73 Financial ($ millions) Operating revenues (net of royalties) 17 459 31 315 38 339 38 107 39 593 Total assets 69 746 68 607 74 741 76 401 78 315 Key Metrics Total debt to total debt plus shareholders’ equity (%) 29 26 22 22 22 Net debt to cash fow from operations (times) 4.8 1.7 0.7 0.7 0.7 This Annual Report contains forward-looking information based on Suncor’s current expectations, estimates, projections and assumptions. Refer to the Disclaimers section of this Annual Report for information on the material risk factors and assumptions underlying our forward-looking information. For assumptions underlying certain statements made throughout this Annual Report, refer to the Disclaimers section of this Annual Report. Certain fnancial measures in this Annual Report – namely operating earnings, cash fow from operations, free cash fow, return on capital employed (ROCE) and Oil Sands cash operating costs – are non-GAAP fnancial measures and therefore not prescribed by GAAP. Refer to the Advisories section of the Management’s Discussion and Analysis dated February 28, 2014 (MD&A) of this Annual Report for defnitions of these non-GAAP measures, reconciliations to the relevant GAAP measures and certain other advisories All fnancial information is reported in Canadian dollars, unless otherwise noted. Production volumes are presented on a working-interest basis, before royalties, unless otherwise noted. Crude oil and natural gas liquids (NGL) volumes have been converted to mcfe or mmcfe on a one bbl to six mcf basis in this Annual Report. Also, certain natural gas volumes have been converted to boe or mboe on the same basis. Refer to the Disclaimers section of this Annual Report. For a list of abbreviations that may be used in this Annual Report, refer to the Advisories section of the MD&A. Amounts in this Annual Report relating to 2010 to 2013 are based on information prepared in accordance with International Financial Reporting Standards. Effective January 1, 2013, Suncor adopted new and amended accounting standards, defned in the Accounting Policies and Critical Accounting Estimates section of the MD&A. Comparative fgures presented in this Annual Report pertaining to Suncor’s 2012 results have been restated while comparative fgures pertaining to Suncor’s results prior to and including 2011 have not been restated in accordance with the respective transitional provisions of the new and amended standards. Amounts for 2009 are presented in accordance with a previous GAAP in effect prior to January 1, 2011. Users of this information are cautioned that 2009 results may not be directly comparable with those for 2010 through 2013. Figures for part of 2009 (January 1 to July 31) represent Suncor’s results prior to the merger with Petro-Canada and do not refect the results of Petro-Canada. SUNCOR ENERGY INC. ANNUAL REPORT 2013 1 THE PRESIDENT AND CHIEF EXECUTIVE OFFICER The end of one year and the start of another is always a Performance Highlights: MESSAGE TO time to refect. Perhaps one of the things I am most struck • $900 million less than our by is how we are all connected through the global supply original budget. SHAREHOLDERS of and demand for energy. $6.4 billion 2013 actual capital expenditures • The third consecutive year our In 2013, the world’s population continued to expand and (excluding capitalized interest) capital program spending has come in under budget. current growth trends show our globe growing to nine billion people before the middle of this century. With that growing population comes an increased demand for energy. • We have generated in excess of $8 billion in free cash fow over the In fact, the International Energy Agency predicts that, by >$2.6 billion last three years, allowing Suncor 2035, demand for energy will increase by over 30%.