Suncor Energy Inc. (SU) Cash Flow Statement

The persistently high OCF-to-net-income ratios indicate that reported earnings understate cash generation, largely because depreciation of roughly $1.7B to $2.0B per quarter is a non-cash charge that dwarfs reported profits. The Q4 2024 ratio of 6.21x reflects a sharply depressed net income of $818M against $5.1B of operating cash flow, which investors should treat as a timing or one-off effect rather than a normal run-rate. Some portion of the gap likely reflects working capital movements, so the conversion quality should be read alongside the reported working capital swings rather than assumed to be fully recurring.

The trajectory points to a meaningful recovery in cash generation, though the recent Q3 2026 FCF of $4.6B sits well above the 2024 run-rate and may reflect favorable commodity pricing rather than structural improvement. The FCF margin of 24.8% is strong relative to the peer set, where Chevron and Exxon report 15.0% and 11.1%, though this comparison is sensitive to the timing of working capital and the volatility inherent in the sector. Investors should monitor whether margins hold as the Q1 2026 weak quarter (8.5% FCF margin) demonstrates how quickly the trajectory can reverse.

Quarterly CapEx has remained in a fairly tight band of roughly $1.1B to $2.0B, suggesting a relatively stable sustaining program rather than a heavy growth-driven spending cycle. The CapEx-to-revenue ratio dipping to 7.1% in Q2 2026 and 7.2% in Q1 2026 may indicate a period of deferred spending, which warrants scrutiny because oil sands assets require consistent reinvestment to maintain upgrader reliability. Without a split between maintenance and growth capital, it is difficult to determine whether the lower recent spend represents discipline or underinvestment.

The dividend appears to be a fixed commitment, consistently near $700M per quarter regardless of cash generation, which makes it a key constraint when FCF falls, as seen in Q1 2026 when FCF of $1.3B barely covered the dividend and buybacks. Buybacks have been sizable and in some quarters likely exceeded residual FCF, suggesting capital returns are partly funded from balance sheet capacity or prior cash accumulation. Acquisition activity has been minimal, with the notable exception of Q4 2024 and the small Q3 2026 inflow, indicating a focus on returning cash rather than deploying it into large new projects.