Business Segments

12 Months Ended

Dec. 31, 2016

Business Segments [Abstract]

Business Segments

Note V – Business Segments

Murphy’s reportable segments are organized into geographic areas of operations.  The Company’s exploration and production activity is subdivided into segments for the United States, Canada, Malaysia and all other countries.  Each of these segments derives revenues primarily from the sale of crude oil, condensate, natural gas liquids and/or natural gas.  The Company’s management evaluates segment performance based on income(loss) from operations, excluding interest income and interest expense.  Intersegment transfers of crude oil, natural gas and petroleum products are at market prices and intersegment services are recorded at cost.

The Company completed the sale of its U.K. downstream assets during 2015.  The Company sold its retail marketing operations in the United Kingdom on September 30, 2014.  For all years presented, assets and liabilities associated with U.K. refining and marketing operations were reported as held for sale in the Consolidated Balance Sheets.  These operations have been reported as discontinued operations for all periods presented in these consolidated financial statements.

The Company has several customers that purchase a significant portion of its oil and natural gas production.During 2016, sales to Phillips 66 and affiliated companies represented approximately 17% of the Company’s total sales revenue.  During 2015, sales to Phillips 66 and affiliated companies represented approximately 17% of the Company’s total sales revenue.During 2014, sales to Shell Oil and affiliated companies and Phillips 66 and affiliated companies represented approximately 20% and 14%, respectively, of the Company’s total sales revenue.  Due to the quantity of active oil and natural gas purchasers in the markets whereit produces hydrocarbons, the Company does not foresee any difficulty with selling its hydrocarbon production at fair market prices.

Information about business segments and geographic operations is reported in the following tables.  For geographic purposes, revenues are attributed to the country in which the sale occurs. Corporate and other activities, including interest income, miscellaneous gains and losses, interest expense and unallocated overhead, are shown in the tablesto reconcile the business segments to consolidated totals.  As used in the table on the following page, CertainLong-Lived Assets at December 31 exclude investments, noncurrent receivables, deferred tax assets, andgoodwill and other intangible assets.

Segment Information	Exploration and Production
(Millions of dollars)	United States		Canada	Malaysia	Other	Total E&P
Year ended December 31, 2016
Segment loss	$	(205.4)	(35.9)	171.1	(54.7)	(124.9)
Revenues from external customers		685.7	365.3	753.4	0.2	1,804.6
Interest income		–	–	–	–	–
Interest expense, net of capitalization		–	–	–	–	–
Income tax expense (benefit)		(87.9)	(134.3)	85.9	(18.8)	(155.1)
Significant noncash charges (credits)
Depreciation, depletion and amortization		600.5	203.2	227.7	5.9	1,037.3
Accretion of asset retirement obligations		17.1	13.3	16.3	–	46.7
Amortization of undeveloped leases		38.4	4.5	–	0.5	43.4
Impairment of assets		–	95.1	–	–	95.1
Deferred and noncurrent income taxes		(108.4)	(175.8)	(8.5)	(18.3)	(311.0)
Additions to property, plant, equipment		269.8	361.3	101.4	(1.3)	731.2
Total assets at year-end		5,419.0	1,559.5	2,024.7	115.7	9,118.9
Year ended December 31, 2015
Segment loss	$	(615.7)	(583.4)	(653.2)	(158.6)	(2,010.9)
Revenues from external customers		1,253.6	549.7	1,131.4	–	2,934.7
Interest income		–	–	–	–	–
Interest expense, net of capitalization		–	–	–	–	–
Income tax benefit		(337.0)	(188.8)	(567.9)	(17.3)	(1,111.0)
Significant noncash charges (credits)
Depreciation, depletion and amortization		794.9	261.9	544.9	6.2	1,607.9
Accretion of asset retirement obligations		20.2	12.6	15.9	–	48.7
Amortization of undeveloped leases		59.2	14.4	–	1.8	75.4
Impairment of assets		329.0	683.6	1,480.6	–	2,493.2
Deferred and noncurrent income taxes		(187.7)	(146.0)	(579.2)	(4.6)	(917.5)
Additions to property, plant, equipment		1,263.1	184.9	244.4	39.2	1,731.6
Total assets at year-end		5,717.8	2,460.6	2,537.2	147.7	10,863.3
Year ended December 31, 2014
Segment income (loss)	$	387.1	156.5	896.2	(250.0)	1,189.8
Revenues from external customers		2,196.4	1,044.1	2,183.5	(1.3)	5,422.7
Interest income		–	–	–	–	–
Interest expense, net of capitalization		–	–	–	–	–
Income tax expense (benefit)		214.8	64.2	102.6	(95.9)	285.7
Significant noncash charges (credits)
Depreciation, depletion and amortization		840.7	316.7	735.0	5.1	1,897.5
Accretion of asset retirement obligations		17.5	15.2	18.1	–	50.8
Amortization of undeveloped leases		50.1	19.4	–	4.9	74.4
Impairment of assets		14.3	37.0	–	–	51.3
Deferred and noncurrent income taxes		39.7	43.3	(235.1)	–	(152.1)
Additions to property, plant, equipment		2,028.7	445.9	818.0	10.7	3,303.3
Total assets at year-end		5,745.7	3,769.8	4,887.1	138.7	14,541.3

Geographic Information	Certain Long-Lived Assets at December 31
(Millions of dollars)	United States		Canada	Malaysia	United Kingdom	Other	Total
2016	$	5,121.6	1,451.4	1,637.0	–	106.2	8,316.2
2015		5,484.7	2,310.6	1,912.0	–	111.1	9,818.4
2014		5,419.5	3,574.6	4,258.8	0.4	78.1	13,331.4

Segment Information — Continued
(Millions of dollars)	Corporate and Other		Discontinued Operations	Consolidated Total
Year ended December 31, 2016
Segment loss	$	(149.1)	(2.0)	(276.0)
Revenues from external customers		69.5	–	1,874.1
Interest income		2.9	–	2.9
Interest expense, net of capitalization		148.2	–	148.2
Income tax expense (benefit)		(64.1)	–	(219.2)
Significant noncash charges (credits)
Depreciation, depletion and amortization		16.8	–	1,054.1
Accretion of asset retirement obligations		–	–	46.7
Amortization of undeveloped leases		–	–	43.4
Impairment of assets		–	–	95.1
Deferred and noncurrent income taxes		(76.8)	–	(387.8)
Additions to property, plant, equipment		21.9	–	753.1
Total assets at year-end		1,149.9	27.1	10,295.9
Year ended December 31, 2015
Segment loss	$	(244.9)	(15.0)	(2,270.8)
Revenues from external customers		98.4	–	3,033.1
Interest income		4.0	–	4.0
Interest expense, net of capitalization		117.4	–	117.4
Income tax expense (benefit)		84.5	–	(1,026.5)
Significant noncash charges (credits)
Depreciation, depletion and amortization		11.9	–	1,619.8
Accretion of asset retirement obligations		–	–	48.7
Amortization of undeveloped leases		–	–	75.4
Impairment of assets		–	–	2,493.2
Deferred and noncurrent income taxes		(60.5)	–	(978.0)
Additions to property, plant, equipment		59.9	–	1,791.5
Total assets at year-end		592.2	38.3	11,493.8
Year ended December 31, 2014
Segment income (loss)	$	(164.8)	(119.4)	905.6
Interest income		7.7	–	7.7
Interest expense, net of capitalization		115.8	–	115.8
Income tax expense (benefit)		(58.4)	–	227.3
Significant noncash charges (credits)
Depreciation, depletion and amortization		8.7	–	1,906.2
Accretion of asset retirement obligations		–	–	50.8
Amortization of undeveloped leases		–	–	74.4
Impairment of assets		–	–	51.3
Deferred and noncurrent income taxes		(18.8)	–	(170.9)
Additions to property, plant, equipment		14.5	–	3,317.8
Total assets at year-end		1,773.9	427.1	16,742.3

Geographic Information	Revenues from External Customers for the Year
(Millions of dollars)	United States		Canada	Malaysia	Other	Total
2016	$	693.2	421.1	759.3	0.5	1,874.1
2015		1,260.0	557.3	1,210.9	4.9	3,033.1
2014		2,201.5	1,052.4	2,233.0	(10.8)	5,476.1