Note T – Business Segments

Murphy’s reportable segments are organized into two major types of business activities, each subdivided into geographic areas of operations. The Company’s exploration and production activity is subdivided into segments for the United States, Canada, Malaysia, Republic of the Congo and all other countries; each of these segments derives revenues primarily from the sale of crude oil and/or natural gas. The Company’s refining and marketing segments are disclosed geographically for the United States and the United Kingdom and each derives revenue mainly from the sale of petroleum products and merchandise. The Company sells gasoline in the United States at retail stations built primarily at Walmart Supercenters. The United States business also derives revenue from production and sale of ethanol and distillers grain with solubles. The Company’s management evaluates segment performance based on income 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.

In 2012, the Company’s Board of Directors agreed to sell the U.K. exploration and production operations. The assets and liabilities associated with these U.K. oil and gas operations at December 31, 2012 are reported as held for sale in the Consolidated Balance Sheet and the results of operations are reported as discontinued operations for all periods presented in the Consolidated Statements of Income and in the segment table that follows. The sale of these U.K. oil and gas assets is expected to be completed in early 2013. In 2010, the Company announced its intention to sell its two U.S. refineries and its U.K. refining and marketing operations. On September 30, 2011, the Company completed the sale of the Superior, Wisconsin refinery and associated marketing assets. On October 1, 2011, the Company completed the sale of the Meraux, Louisiana refinery and associated marketing assets. The results of operations for the Superior and Meraux refineries and associated marketing assets have been reported as discontinued operations for all periods presented. The Company continues to actively market for sale the U.K. downstream assets. In 2012, the Company announced that its Board of Directors had approved a plan to separate the Company’s U.S. downstream subsidiary in the form of an independent, publicly owned company. The Company currently expects to complete this separation in 2013. If under U.S. generally accepted accounting principles the U.K. and U.S. downstream operations cease to qualify as continuing operations in future periods, the results of these operations would be presented as discontinued operations in the Company’s consolidated financial statements.

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. The Company had no single customer from which it derived more than 10% of its revenues. Corporate and other activities, including interest income, miscellaneous gains and losses, interest expense and unallocated overhead, are shown in the tables to reconcile the business segments to consolidated totals. As used in the table on the following page, Certain Long-Lived Assets at December 31 exclude investments, noncurrent receivables, deferred tax assets and goodwill and other intangible assets.

Excise taxes on petroleum products of $2,721,270,000, $2,796,122,000 and $2,784,368,000 for the years 2012, 2011 and 2010, respectively, which were collected by the Company’s continuing operations and remitted to various government entities, were excluded from revenues and costs and expenses.


Segment Information	Exploration and Production
(Millions of dollars)	United States			Canada		Malaysia		Republic of the Congo			Other			Total
Year ended December 31, 2012
Segment income (loss)	$	168.0			208.1		894.2		(241.1	)		(124.2	)		905.0
Revenues from external customers		1,038.0			1,084.3		2,428.1		57.6			0.1			4,608.1
Intersegment revenues		0.0			0.0		0.0		0.0			0.0			0.0
Interest income		0.0			0.0		0.0		0.0			0.0			0.0
Interest expense, net of capitalization		0.0			0.0		0.0		0.0			0.0			0.0
Income tax expense (benefit)		99.8			65.1		544.7		(64.5	)		(40.1	)		605.0
Significant noncash charges (credits)
Depreciation, depletion, amortization		330.2			345.8		532.1		33.9			2.4			1,244.4
Accretion of asset retirement obligations		11.4			13.6		12.5		0.9			0.0			38.4
Amortization of undeveloped leases		71.6			29.3		0.0		0.0			28.9			129.8
Impairment of long-lived assets		0.0			0.0		0.0		200.0			0.0			200.0
Deferred and noncurrent income taxes		231.0			72.3		73.3		(0.3	)		(1.2	)		375.1
Additions to property, plant, equipment		1,615.9			887.2		1,426.7		(20.7	)		24.7			3,933.8
Total assets at year-end		3,625.9			4,477.7		4,811.5		112.2			75.6			13,102.9

Year ended December 31, 2011
Segment income (loss)	$	152.7			328.0		812.7		(385.3	)		(293.9	)		614.2
Revenues from external customers		737.7			1,145.8		2,045.6		148.8			24.6			4,102.5
Intersegment revenues		0.0			142.8		0.0		0.0			0.0			142.8
Interest income		0.0			0.0		0.0		0.0			0.0			0.0
Interest expense, net of capitalization		0.0			0.0		0.0		0.0			0.0			0.0
Income tax expense (benefit)		86.5			135.5		434.9		16.4			7.5			680.8
Significant noncash charges (credits)
Depreciation, depletion, amortization		183.0			326.0		357.3		87.8			1.9			956.0
Accretion of asset retirement obligations		9.9			12.5		10.6		0.5			0.3			33.8
Amortization of undeveloped leases		62.2			28.8		0.0		0.0			27.2			118.2
Impairment of long-lived assets		0.0			0.0		0.0		368.6			0.0			368.6
Deferred and noncurrent income taxes		54.2			39.6		84.6		(0.9	)		(0.1	)		177.4
Additions to property, plant, equipment		696.6			885.2		694.8		79.6			20.6			2,376.8
Total assets at year-end		2,227.6			3,746.8		3,826.9		257.5			74.1			10,132.9

Year ended December 31, 2010
Segment income (loss)	$	72.7			213.8		659.4		(77.2	)		(92.3	)		776.4
Revenues from external customers		659.9			780.2		1,837.9		155.7			3.9			3,437.6
Intersegment revenues		0.0			118.9		0.0		0.0			0.0			118.9
Interest income		0.0			0.0		0.0		0.0			0.0			0.0
Interest expense, net of capitalization		0.0			0.0		0.0		0.0			0.0			0.0
Income tax expense (benefit)		30.0			79.1		414.1		20.6			0.5			544.3
Significant noncash charges (credits)
Depreciation, depletion, amortization		281.1			225.5		379.0		95.5			1.5			982.6
Accretion of asset retirement obligations		6.9			11.2		9.8		0.4			0.5			28.8
Amortization of undeveloped leases		68.5			33.7		0.0		0.0			5.8			108.0
Deferred and noncurrent income taxes		(48.6	)		34.5		145.5		(0.9	)		0.0			130.5
Additions to property, plant, equipment		369.4			804.4		467.9		163.6			49.8			1,855.1
Total assets at year-end		1,651.3			3,242.6		3,333.1		678.9			88.9			8,994.8


Geographic Information	Certain Long-Lived Assets at December 31
(Millions of dollars)	United States		Canada		Malaysia		United Kingdom		Republic of the Congo		Other		Total
2012	$	4,177.4		4,190.5		4,101.2		703.2		5.9		39.2		13,217.4
2011		2,953.1		3,493.4		3,154.8		694.7		133.7		52.2		10,481.9
2010		3,178.8		3,028.8		2,807.0		706.3		579.4		74.3		10,374.6


Segment Information (Continued)	Refining and Marketing
(Millions of dollars)	United States			United Kingdom			Total			Corporate and Other			Discontinued Operations		Consolidated
Year ended December 31, 2012
Segment income (loss)	$	105.4			52.2			157.6			(98.5	)		6.8		970.9
Revenues from external customers		17,723.4			6,283.0			24,006.4			11.5			0.0		28,626.0
Intersegment revenues		0.0			0.0			0.0			0.0			0.0		0.0
Interest income		0.0			0.0			0.0			6.5			0.0		6.5
Interest expense, net of capitalization		0.0			0.0			0.0			14.9			0.0		14.9
Income tax expense (benefit)		72.7			24.7			97.4			(43.5	)		0.0		658.9
Significant noncash charges (credits)
Depreciation, depletion, amortization		75.2			47.3			122.5			8.7			0.0		1,375.6
Accretion of asset retirement obligations		0.9			0.0			0.9			0.0			0.0		39.3
Amortization of undeveloped leases		0.0			0.0			0.0			0.0			0.0		129.8
Impairment of long-lived assets		61.0			0.0			61.0			0.0			0.0		261.0
Deferred and noncurrent income taxes		(20.0	)		(6.2	)		(26.2	)		(32.3	)		0.0		316.6
Additions to property, plant, equipment		111.5			22.2			133.7			8.2			58.1		4,133.8
Total assets at year-end		2,026.5			1,160.3			3,186.8			1,009.6			223.3		17,522.6

Year ended December 31, 2011
Segment income (loss)	$	223.6			(33.3	)		190.3			(75.0	)		143.2		872.7
Revenues from external customers		17,471.9			6,030.3			23,502.2			33.4			0.0		27,638.1
Intersegment revenues		0.0			0.0			0.0			0.0			0.0		142.8
Interest income		0.0			0.0			0.0			10.1			0.0		10.1
Interest expense, net of capitalization		0.0			0.0			0.0			40.7			0.0		40.7
Income tax expense (benefit)		146.6			(12.1	)		134.5			(52.1	)		0.0		763.2
Significant noncash charges (credits)
Depreciation, depletion, amortization		68.3			46.7			115.0			8.7			0.0		1,079.7
Accretion of asset retirement obligations		0.9			0.0			0.9			0.0			0.0		34.7
Amortization of undeveloped leases		0.0			0.0			0.0			0.0			0.0		118.2
Impairment of long-lived assets		0.0			0.0			0.0			0.0			0.0		368.6
Deferred and noncurrent income taxes		28.5			(5.3	)		23.2			(43.6	)		0.0		157.0
Additions to property, plant, equipment		100.1			22.2			122.3			5.3			67.8		2,572.2
Total assets at year-end		1,806.5			1,193.8			3,000.3			790.8			214.1		14,138.1

Year ended December 31, 2010
Segment income (loss)	$	165.3			(34.7	)		130.6			(157.9	)		49.0		798.1
Revenues from external customers		13,750.4			2,905.0			16,655.4			(56.9	)		0.0		20,036.1
Intersegment revenues		0.0			0.0			0.0			0.0			0.0		118.9
Interest income		0.0			0.0			0.0			6.9			0.0		6.9
Interest expense, net of capitalization		0.0			0.0			0.0			34.7			0.0		34.7
Income tax expense (benefit)		101.8			(22.3	)		79.5			(47.2	)		0.0		576.6
Significant noncash charges (credits)
Depreciation, depletion, amortization		60.1			41.4			101.5			8.0			0.0		1,092.1
Accretion of asset retirement obligations		0.8			0.0			0.8			0.0			0.0		29.6
Amortization of undeveloped leases		0.0			0.0			0.0			0.0			0.0		108.0
Deferred and noncurrent income taxes		5.1			3.2			8.3			7.8			0.0		146.6
Additions to property, plant, equipment		221.0			69.1			290.1			5.9			112.6		2,263.7
Total assets at year-end		2,996.6			1,113.6			4,110.2			940.3			187.9		14,233.2


Geographic Information	Revenues from External Customers for the Year
(Millions of dollars)	United States		Canada		Malaysia		United Kingdom		Republic of the Congo		Other		Total
2012	$	18,729.9		1,119.9		2,415.6		6,302.7		57.6		0.3		28,626.0
2011		18,184.0		1,180.3		2,063.0		6,037.4		148.8		24.6		27,638.1
2010		14,386.6		809.3		1,793.8		2,885.1		156.5		4.8		20,036.1