Discontinued Operations

9 Months Ended

Sep. 30, 2014

Discontinued Operations [Abstract]

Discontinued Operations

Note D – Discontinued Operations

The Company has previously announced its intention to sell its U.K. refining and marketing operations.  The Company has accounted for this U.K. downstream business as discontinued operations for all periods presented, including a reclassification of 2013 operating results and cash flows for this business to discontinued operations.  The U.K. downstream operations were previously reported as a separate segment within the Company’s former refining and marketing business.  On September 30, 2014, the Company completed the sale of its U.K. retail marketing operations.  The Company received the net proceeds of $232.7 million upon open of banking operations on October 1, 2014.  Although Murphy had previously signed an agreement to sell the Milford Haven, Wales, refinery and terminal assets, the transaction could not be completed by the October 31, 2014 deadline.  The refinery is currently in a period of shut-down and will be decommissioned and operated as a petroleum storage and distribution terminal while the Company seeks a buyer for the terminal facility and three inland terminals. The Company realized an after-tax gain of $98.7 million on the sale of the U.K. retail marketing operation in the third quarter 2014, but this gain was essentially offset by a similar reduction in the carrying value of its held for sale Milford Haven, Wales refinery.

On August 30, 2013, Murphy Oil Corporation (the “Company”) distributed 100% of the outstanding common stock of Murphy USA Inc. (“MUSA”) to its shareholders in a generally tax-free spin-off for U.S. federal income tax purposes.  Prior to the separation, MUSA held all of the Company’s U.S. downstream operations, including retail gasoline stations and other marketing assets, plus two ethanol production facilities.  The shares of MUSA common stock aretraded on the New York Stock Exchange under the ticker symbol “MUSA.”  The Company has no continuing involvement with MUSA operations.  Accordingly, the operating results and the cash flows for these former U.S. downstream operations have been reported as discontinued operations in the 2013 consolidated financial statements.  The U.S. downstream operations were previously reported as a separate segment within the Company’s former refining and marketing business.

The Company also sold its oil and gas assets in the United Kingdom during 2013.  After-tax gains on sale of the assets were $216.2 million in the nine months ended September 30, 2013.  The Company has accounted for these U.K. upstream operations as discontinued operations in its consolidated financial statements for all periods presented.

Note D – Discontinued Operations (Contd.)

The results of operations associated with these discontinued operations for the three-month and nine-month periods ended September 30, 2014 and 2013 were as follows:

		Three Months		Nine Months
		Ended September 30,		Ended September 30,
(Thousands of dollars)		2014	2013	2014	2013
Revenues	$	509,037	4,502,100	2,752,557	15,981,683
Income before income taxes, including pretax gain on   disposals of $130,568 during the nine-month period in 2013	$	(27,163)	38,329	(61,396)	355,668
Income tax expense (benefit)		(1,813)	18,598	(8,757)	15,266
Income (loss) from discontinued operations	$	(25,350)	19,731	(52,639)	340,402

The following table presents the carrying value of the major categories of assets and liabilities of U.K. refining and marketing operations reflected as held for sale on the Company’s Consolidated Balance Sheets at September 30, 2014 and December 31, 2013.

	September 30,		December 31,
(Millions of dollars)	2014		2013
Current assets
Cash	$	197,607	301,302
Accounts receivable		378,804	302,059
Inventories		85,757	254,240
Other		73,707	86,131
Total current assets held for sale	$	735,875	943,732
Non-current assets
Property, plant and equipment, net	$	37,304	360,347
Other		23,203	21,057
Total non-current assets held for sale	$	60,507	381,404
Current liabilities
Accounts payable	$	185,846	637,432
Other		–	1,708
Total current liabilities associated with assets held for sale	$	185,846	639,140
Non-current liabilities
Deferred income taxes payable	$	70,424	68,096
Other		4,613	27,448
Total non-current liabilities associated with assets held for sale	$	75,037	95,544