Analysis of Reportable Segments
Marathon Oil Corp. operates in 2 segments: United States (U.S.) and International (Int’l).
Segment Profit Margin
Marathon Oil Corp., profit margin by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 23.94% | -18.91% | 14.67% | 12.44% | -4.78% |
| International (Int’l) | 118.73% | 17.34% | 50.54% | 46.56% | 32.41% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The profit margins for both reportable segments exhibit significant volatility between 2017 and 2021, characterized by a systemic contraction in 2020 followed by a robust recovery in 2021. The International segment consistently outperformed the United States segment in terms of margin percentage throughout the entire five-year period.
- United States Segment Performance
- The U.S. segment experienced a highly unstable margin trajectory. After starting with a negative margin of -4.78% in 2017, the segment transitioned to profitability, reaching 14.67% by 2019. This progress was reversed in 2020, where the margin fell sharply to -18.91%, indicating a period of significant operational stress or adverse market conditions. However, a strong recovery occurred in 2021, with the margin increasing to 23.94%, the highest level recorded for this segment during the analyzed period.
- International Segment Performance
- The International segment maintained consistently positive margins, demonstrating greater resilience and higher profitability than the U.S. operations. Margins grew steadily from 32.41% in 2017 to a peak of 50.54% in 2019. While a contraction occurred in 2020, with margins dropping to 17.34%, the segment saw an extraordinary surge in 2021, reaching a margin of 118.73%. This suggests a substantial increase in efficiency or a highly favorable pricing environment for international assets.
- Comparative Segment Trends
- A synchronized downturn is observed in 2020 across both segments, suggesting that external macroeconomic factors impacted the company's overall profitability regardless of geography. Despite this shared dip, the International segment's floor remained above zero, whereas the U.S. segment fluctuated between profit and loss. By 2021, the profitability gap between the two segments widened significantly, with the International segment achieving an outlier level of margin expansion compared to the moderate recovery seen in the U.S. segment.
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Segment Profit Margin: United States (U.S.)
Marathon Oil Corp.; United States (U.S.); segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment income (loss) | 1,277) | (553) | 675) | 608) | (148) |
| Revenues from contracts with customers | 5,334) | 2,924) | 4,602) | 4,886) | 3,093) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 23.94% | -18.91% | 14.67% | 12.44% | -4.78% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Segment income (loss) ÷ Revenues from contracts with customers
= 100 × 1,277 ÷ 5,334 = 23.94%
The financial performance of the United States segment is characterized by significant volatility in both top-line revenue and bottom-line profitability between 2017 and 2021. The segment experienced two distinct periods of negative margins, interspersed with cycles of substantial recovery and growth.
- Revenue Trajectory
- Revenues exhibited a fluctuating pattern, starting at US$ 3,093 million in 2017 and peaking at US$ 5,334 million in 2021. A notable contraction occurred in 2020, when revenues fell to US$ 2,924 million, representing the lowest point in the analyzed period before a sharp rebound in 2021.
- Profitability and Margin Volatility
- Segment income demonstrated extreme variance, shifting from a loss of US$ 148 million in 2017 to a peak profit of US$ 1,277 million in 2021. Consequently, the segment profit margin fluctuated from -4.78% in 2017 to 23.94% in 2021. The most severe downturn was observed in 2020, where the margin collapsed to -18.91%, coinciding with the period of lowest revenue.
- Analysis of Margin Expansion
- A period of improved operational efficiency is evident between 2018 and 2019. During this interval, segment income rose from US$ 608 million to US$ 675 million despite a slight decrease in revenues from US$ 4,886 million to US$ 4,602 million, leading to a margin increase from 12.44% to 14.67%.
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Segment Profit Margin: International (Int’l)
Marathon Oil Corp.; International (Int’l); segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment income (loss) | 317) | 30) | 233) | 473) | 374) |
| Revenues from contracts with customers | 267) | 173) | 461) | 1,016) | 1,154) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 118.73% | 17.34% | 50.54% | 46.56% | 32.41% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Segment income (loss) ÷ Revenues from contracts with customers
= 100 × 317 ÷ 267 = 118.73%
The International segment experienced significant volatility in both top-line revenue and bottom-line profitability between 2017 and 2021. While revenues followed a generally downward trajectory for the majority of the period, segment income exhibited cyclical fluctuations, culminating in a sharp recovery in the final year of the analyzed period.
- Revenue Performance
- A consistent downward trend in revenues from contracts with customers was observed from 2017 through 2020. Revenue decreased from 1,154 million US$ in 2017 to a low of 173 million US$ in 2020. A slight recovery occurred in 2021, with revenue increasing to 267 million US$, although this remained significantly below the levels seen in the 2017-2018 period.
- Segment Income Volatility
- Segment income peaked in 2018 at 473 million US$, followed by a steep decline that reached a minimum of 30 million US$ in 2020. However, 2021 saw a robust recovery, with income rising to 317 million US$. The divergence between the slow recovery of revenue and the rapid recovery of income suggests a shift in the drivers of profitability within the segment.
- Profit Margin Analysis
- The segment profit margin initially improved, rising from 32.41% in 2017 to a peak of 50.54% in 2019. This trend reversed sharply in 2020, with the margin contracting to 17.34%. In 2021, the margin exhibited an anomalous surge to 118.73%. A margin exceeding 100% indicates that segment income for that period was derived from sources beyond direct contract revenues, such as non-operating gains, asset divestitures, or other accounting adjustments.
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Segment Return on Assets (Segment ROA)
Marathon Oil Corp., ROA by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 8.33% | -3.44% | 3.80% | 3.51% | -0.88% |
| International (Int’l) | 31.89% | 2.78% | 15.23% | 22.71% | 8.90% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The segment return on assets (ROA) for the period between 2017 and 2021 exhibits significant volatility across both geographic segments, with a pronounced cyclical pattern characterized by a sharp downturn in 2020 followed by a strong recovery in 2021.
- United States Segment Performance
- The U.S. segment experienced fluctuating returns, beginning with a negative ROA of -0.88% in 2017. A recovery occurred in 2018 and 2019, where returns stabilized between 3.51% and 3.80%. This progress was reversed in 2020, when the ROA fell to -3.44%, marking the lowest point in the five-year period. However, the segment achieved its peak performance in 2021, with ROA rising to 8.33%.
- International Segment Performance
- The international segment consistently outperformed the U.S. segment in terms of asset efficiency. Starting at 8.90% in 2017, returns surged to 22.71% in 2018 before moderating to 15.23% in 2019. Similar to the U.S. segment, a significant contraction occurred in 2020, with ROA dropping to 2.78%. The period concluded with a substantial increase in 2021, reaching a high of 31.89%.
- Comparative Segment Analysis
- A consistent performance gap is observed, as the international segment maintained a higher ROA than the U.S. segment in every reported year. While both segments were susceptible to the same macro-economic pressures in 2020, the international segment demonstrated a greater capacity for high-magnitude returns, particularly evidenced by the disparity between the 2021 results of 31.89% internationally versus 8.33% in the United States.
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Segment ROA: United States (U.S.)
Marathon Oil Corp.; United States (U.S.); segment ROA calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment income (loss) | 1,277) | (553) | 675) | 608) | (148) |
| Total assets | 15,339) | 16,063) | 17,781) | 17,321) | 16,863) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 8.33% | -3.44% | 3.80% | 3.51% | -0.88% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment ROA = 100 × Segment income (loss) ÷ Total assets
= 100 × 1,277 ÷ 15,339 = 8.33%
The financial performance of the U.S. reportable segment is characterized by significant volatility in earnings and a gradual contraction of the asset base over the five-year period ending December 31, 2021.
- Segment Income Trends
- Income levels exhibited substantial fluctuations, with losses recorded in 2017 (-$148 million) and 2020 (-$553 million). A period of stability and growth was observed between 2018 and 2019, with income rising from $608 million to $675 million. The period concluded with a sharp recovery in 2021, where segment income reached a peak of $1,277 million.
- Asset Base Dynamics
- Total assets showed a moderate increase from 2017 to 2019, peaking at $17,781 million. Subsequently, a downward trend emerged, with assets declining to $16,063 million in 2020 and further to $15,339 million by the end of 2021. This reduction in the asset base occurred concurrently with the recovery in profitability.
- Return on Assets (ROA) Interpretation
- The Segment ROA closely tracked the volatility of the segment income, shifting from -0.88% in 2017 to a high of 3.80% in 2019, before dropping to -3.44% in 2020. A significant expansion in efficiency was observed in 2021, with the ROA climbing to 8.33%. This peak was the result of a dual effect: a substantial increase in net income coupled with a reduced asset denominator, indicating a marked improvement in the productivity of the remaining asset base.
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Segment ROA: International (Int’l)
Marathon Oil Corp.; International (Int’l); segment ROA calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment income (loss) | 317) | 30) | 233) | 473) | 374) |
| Total assets | 994) | 1,081) | 1,530) | 2,083) | 4,201) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 31.89% | 2.78% | 15.23% | 22.71% | 8.90% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment ROA = 100 × Segment income (loss) ÷ Total assets
= 100 × 317 ÷ 994 = 31.89%
The International segment exhibits a financial trajectory characterized by a substantial and consistent reduction in the asset base alongside significant volatility in earnings and return metrics between 2017 and 2021.
- Asset Base Compression
- A continuous downward trend is observed in total assets, which declined from 4,201 million US dollars in 2017 to 994 million US dollars by the end of 2021. This represents a total reduction of approximately 76% over the five-year period, indicating a strategic contraction or divestment of assets within the international portfolio.
- Segment Income Volatility
- Earnings within the segment demonstrated considerable fluctuation. After an initial increase from 374 million US dollars in 2017 to a peak of 473 million US dollars in 2018, income declined sharply, reaching a period low of 30 million US dollars in 2020. A strong recovery occurred in 2021, with income rising to 317 million US dollars.
- Return on Assets (ROA) Dynamics
- The Segment ROA experienced extreme variance, moving from 8.90% in 2017 to a low of 2.78% in 2020, before surging to a period high of 31.89% in 2021. The dramatic increase in ROA during the final year is attributable to the simultaneous recovery of segment income and the significantly diminished asset base, which amplified the return percentage.
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Segment Asset Turnover
Marathon Oil Corp., asset turnover by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 0.35 | 0.18 | 0.26 | 0.28 | 0.18 |
| International (Int’l) | 0.27 | 0.16 | 0.30 | 0.49 | 0.27 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The asset turnover ratios for both reportable segments exhibit significant volatility between 2017 and 2021, characterized by a notable synchronized decline in 2020 followed by a strong recovery in 2021.
- United States Segment Performance
- The U.S. segment demonstrated an overall upward trajectory in asset efficiency over the five-year period. After starting at 0.18 in 2017, the ratio climbed to 0.28 in 2018 and remained relatively stable in 2019 at 0.26. A regression to 0.18 occurred in 2020, matching the 2017 baseline, before the segment reached its peak efficiency of 0.35 in 2021, representing the highest asset turnover recorded for this segment within the period.
- International Segment Performance
- The International segment experienced more pronounced fluctuations. A sharp increase was observed in 2018, where the ratio peaked at 0.49. This was followed by a consistent downward trend, falling to 0.30 in 2019 and reaching a period low of 0.16 in 2020. By 2021, the segment showed a recovery, returning to its 2017 level of 0.27.
- Comparative Segment Analysis
- Between 2017 and 2019, the International segment consistently maintained a higher asset turnover ratio than the U.S. segment, indicating superior asset utilization during those years. However, this dynamic shifted in 2021, when the U.S. segment outperformed the International segment (0.35 versus 0.27). Both segments experienced a simultaneous contraction in 2020, suggesting that external macroeconomic factors impacted asset productivity across all geographic operations.
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Segment Asset Turnover: United States (U.S.)
Marathon Oil Corp.; United States (U.S.); segment asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from contracts with customers | 5,334) | 2,924) | 4,602) | 4,886) | 3,093) |
| Total assets | 15,339) | 16,063) | 17,781) | 17,321) | 16,863) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.35 | 0.18 | 0.26 | 0.28 | 0.18 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment asset turnover = Revenues from contracts with customers ÷ Total assets
= 5,334 ÷ 15,339 = 0.35
The U.S. segment exhibited significant volatility in revenue generation and asset utilization efficiency between 2017 and 2021. The asset turnover ratio followed a cyclical pattern, experiencing sharp declines followed by strong recoveries, ultimately reaching a five-year peak in 2021.
- Revenue Trends
- Revenues from contracts with customers showed substantial fluctuations, rising from US$ 3,093 million in 2017 to US$ 4,886 million in 2018. After a slight dip in 2019 and a significant contraction to US$ 2,924 million in 2020, revenues rebounded sharply to reach a period high of US$ 5,334 million by December 31, 2021.
- Asset Base Evolution
- The total asset base grew modestly from US$ 16,863 million in 2017 to a peak of US$ 17,781 million in 2019. This trend reversed after 2019, with a consistent reduction in total assets over the following two years, resulting in a year-end balance of US$ 15,339 million in 2021.
- Asset Turnover Analysis
- The segment asset turnover ratio closely mirrored revenue volatility. The ratio increased from 0.18 in 2017 to 0.28 in 2018, before returning to 0.18 in 2020 during the period of lowest revenue. The expansion to 0.35 in 2021 represents the highest level of efficiency in the period, driven by the convergence of peak revenues and a contracted asset base.
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Segment Asset Turnover: International (Int’l)
Marathon Oil Corp.; International (Int’l); segment asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from contracts with customers | 267) | 173) | 461) | 1,016) | 1,154) |
| Total assets | 994) | 1,081) | 1,530) | 2,083) | 4,201) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.27 | 0.16 | 0.30 | 0.49 | 0.27 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment asset turnover = Revenues from contracts with customers ÷ Total assets
= 267 ÷ 994 = 0.27
The International segment experienced a period of significant contraction in both revenue and asset base between 2017 and 2021, resulting in volatile asset turnover ratios. The overall trajectory indicates a substantial downsizing of the segment's operational footprint.
- Revenue Trends
- A severe downward trend in revenues is observed, with values falling from 1,154 million US$ in 2017 to a minimum of 173 million US$ in 2020. Although a partial recovery occurred in 2021, with revenues rising to 267 million US$, the figure remained significantly below 2017 levels.
- Asset Base Reduction
- Total assets declined consistently every year throughout the period. The asset base shrunk from 4,201 million US$ in 2017 to 994 million US$ in 2021, representing a reduction of approximately 76%. This continuous decrease suggests an aggressive divestment strategy or significant impairment of international assets.
- Segment Asset Turnover Analysis
- The asset turnover ratio exhibited high volatility, peaking at 0.49 in 2018. This peak was driven by the fact that the reduction in total assets outpaced the decline in revenues during that specific window. Subsequently, the ratio declined to a low of 0.16 in 2020, as revenue losses accelerated more rapidly than the reduction of the asset base. By 2021, the ratio returned to 0.27, mirroring the 2017 level, as revenues began to stabilize while assets continued to decrease.
The synchronization of declining assets and revenues suggests a strategic scaling back of international operations. The recovery of the asset turnover ratio in 2021 indicates an improvement in the efficiency of the remaining assets relative to the revenue they generate, following the nadir reached in 2020.
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Segment Capital Expenditures to Depreciation
Marathon Oil Corp., capital expenditures to depreciation by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 0.52 | 0.51 | 1.13 | 1.18 | 1.03 |
| International (Int’l) | 0.00 | 0.01 | 0.13 | 0.20 | 0.13 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
An analysis of the ratio of capital expenditures to depreciation across reportable segments reveals a significant shift in investment strategy beginning in 2020. The data indicates a transition from a period of asset expansion and replacement to a phase of concentrated capital discipline and reduced investment relative to asset depreciation.
- United States (U.S.) Segment
- Between 2017 and 2019, the U.S. segment maintained a ratio consistently above 1.0, peaking at 1.18 in 2018. This indicates that capital expenditures exceeded depreciation, suggesting an investment strategy focused on growth or the aggressive modernization of the asset base. However, a sharp contraction occurred in 2020, with the ratio falling to 0.51, and remaining nearly stagnant at 0.52 in 2021. This represents a substantial reduction in the rate of reinvestment relative to the depreciation of existing assets.
- International (Int’l) Segment
- The international segment exhibited consistently low reinvestment ratios compared to the domestic segment. From 2017 to 2019, ratios fluctuated between 0.13 and 0.20, signaling that capital spending was significantly lower than the depreciation of assets. This trend culminated in a near-complete cessation of relative investment in 2020, where the ratio dropped to 0.01. Data for the subsequent period is unavailable.
- Comparative Segment Trends
- A synchronized decline in ratios is observable across both segments in 2020. While the U.S. segment remained the primary recipient of capital allocation, the magnitude of the decline in both regions suggests a broader corporate shift toward capital preservation or a strategic pivot away from capital-intensive growth during that period.
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Segment Capital Expenditures to Depreciation: United States (U.S.)
Marathon Oil Corp.; United States (U.S.); segment capital expenditures to depreciation calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 1,018) | 1,137) | 2,550) | 2,620) | 2,081) |
| Depreciation, depletion and amortization | 1,972) | 2,211) | 2,250) | 2,217) | 2,011) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.52 | 0.51 | 1.13 | 1.18 | 1.03 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation, depletion and amortization
= 1,018 ÷ 1,972 = 0.52
A significant shift in investment strategy is observed within the United States segment between 2017 and 2021. The period is characterized by a transition from an expansionary phase, where investments exceeded the depletion of assets, to a period of substantial capital expenditure reduction and asset harvesting.
- Capital Expenditure Trends
- Expenditures experienced an initial increase from 2,081 million US$ in 2017 to a peak of 2,620 million US$ in 2018, maintaining a high level of 2,550 million US$ in 2019. A sharp contraction occurred in 2020, with expenditures falling to 1,137 million US$, and further declining to 1,018 million US$ by the end of 2021.
- Depreciation, Depletion, and Amortization Stability
- Depreciation, depletion, and amortization charges remained relatively stable over the five-year period, ranging from a low of 1,972 million US$ in 2021 to a peak of 2,250 million US$ in 2019. The consistency of these charges contrasts with the high volatility seen in capital spending.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio remained above 1.0 from 2017 through 2019, reaching a maximum of 1.18 in 2018, indicating that capital reinvestment was sufficient to cover the depreciation of the asset base. However, the ratio declined precipitously to 0.51 in 2020 and 0.52 in 2021. This indicates that for the final two years of the period, capital expenditures covered only approximately half of the depreciation, depletion, and amortization charges, reflecting a strategic pivot toward capital preservation.
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Segment Capital Expenditures to Depreciation: International (Int’l)
Marathon Oil Corp.; International (Int’l); segment capital expenditures to depreciation calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | —) | 1) | 16) | 39) | 42) |
| Depreciation, depletion and amortization | 68) | 82) | 121) | 197) | 328) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.00 | 0.01 | 0.13 | 0.20 | 0.13 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation, depletion and amortization
= 0 ÷ 68 = 0.00
The International segment demonstrates a sustained trajectory of disinvestment and asset contraction between 2017 and 2021. This period is characterized by a precipitous decline in capital allocation and a simultaneous reduction in the cost of asset consumption, suggesting a strategic wind-down or a significant shift in regional operational priorities.
- Capital Expenditure Trends
- Capital expenditures experienced a sharp downward trend, falling from 42 million US dollars in 2017 to 1 million US dollars in 2020. This represents a near-total cessation of investment in the International segment over a four-year period.
- Depreciation, Depletion, and Amortization (DD&A)
- DD&A expenses decreased consistently from 328 million US dollars in 2017 to 68 million US dollars in 2021. This steady decline reflects a shrinking depreciable asset base, as existing assets are depleted without equivalent replacement.
- Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation remained significantly below 1.0 throughout the analysis period, indicating that the segment did not replace its depreciating assets. After a marginal increase to 0.20 in 2018, the ratio collapsed to 0.01 by 2020, signaling that reinvestment has effectively ceased relative to the rate of asset depletion.
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Revenues from contracts with customers
Marathon Oil Corp., revenues from contracts with customers by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 5,334) | 2,924) | 4,602) | 4,886) | 3,093) |
| International (Int’l) | 267) | 173) | 461) | 1,016) | 1,154) |
| Total | 5,601) | 3,097) | 5,063) | 5,902) | 4,247) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Total revenues from contracts with customers exhibited significant volatility between 2017 and 2021, characterized by a peak in 2018 and a substantial contraction in 2020, followed by a strong recovery in 2021. The overall revenue trend reflects a strategic or operational shift toward a heavy concentration in domestic markets.
- United States Revenue Performance
- Domestic revenues experienced an initial surge from $3,093 million in 2017 to $4,886 million in 2018. After a period of moderate fluctuation and a sharp contraction to $2,924 million in 2020, the segment achieved a five-year peak of $5,334 million in 2021, indicating a robust recovery and growth in the U.S. market.
- International Revenue Performance
- The international segment demonstrated a consistent and severe downward trajectory over the analyzed period. Revenues declined from $1,154 million in 2017 to a low of $173 million in 2020. Although a marginal increase to $267 million was recorded in 2021, the segment remains significantly diminished compared to 2017 levels.
- Geographic Revenue Concentration
- A structural shift in revenue distribution is observable. In 2017, international operations accounted for approximately 27% of total revenues. By 2021, this contribution fell to approximately 4.8%. Consequently, the United States segment has become the primary driver of total revenue, accounting for the vast majority of the company's financial intake by the end of the period.
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Depreciation, depletion and amortization
Marathon Oil Corp., depreciation, depletion and amortization by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 1,972) | 2,211) | 2,250) | 2,217) | 2,011) |
| International (Int’l) | 68) | 82) | 121) | 197) | 328) |
| Not allocated to segments | 26) | 23) | 26) | 27) | 33) |
| Total | 2,066) | 2,316) | 2,397) | 2,441) | 2,372) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The total depreciation, depletion, and amortization expenses exhibited a period of relative stability followed by a notable decline. After a peak of 2,441 million US dollars in 2018, total expenses decreased annually, reaching a five-year low of 2,066 million US dollars by December 31, 2021.
- United States Segment Performance
- The U.S. segment represents the primary driver of depreciation, depletion, and amortization costs. Expenses in this region increased from 2,011 million US dollars in 2017 to a peak of 2,250 million US dollars in 2019. Subsequently, a downward trend emerged, with costs falling to 1,972 million US dollars in 2021. The U.S. segment consistently accounts for the vast majority of the total expenditure throughout the analyzed period.
- International Segment Contraction
- A significant and consistent reduction is observed in the International segment. Costs plummeted from 328 million US dollars in 2017 to 68 million US dollars in 2021. This represents a substantial contraction in the asset base or a shift in the depreciation schedule associated with international operations, reflecting a diminishing contribution to the overall expense profile.
- Non-Allocated and Aggregate Trends
- Expenses not allocated to specific segments remained relatively stable, fluctuating within a narrow range between 23 million and 33 million US dollars. The overall aggregate trend indicates that the decline in total depreciation, depletion, and amortization is primarily attributable to the sharp reduction in international expenses and a moderate decrease in U.S. expenditures after 2019.
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Segment income (loss)
Marathon Oil Corp., segment income (loss) by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 1,277) | (553) | 675) | 608) | (148) |
| International (Int’l) | 317) | 30) | 233) | 473) | 374) |
| Not allocated to segments | (648) | (928) | (428) | 15) | (1,056) |
| Total | 946) | (1,451) | 480) | 1,096) | (830) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The consolidated financial performance over the observed five-year period is characterized by significant volatility, with total segment income fluctuating between substantial losses and notable profits. A recurring pattern emerges where operational gains in specific segments are periodically offset by significant unallocated expenses and external market shocks, most prominently seen in the sharp contraction of 2020.
- United States (U.S.) Segment Performance
- The U.S. segment exhibits the highest degree of volatility among the reportable operations. Following an initial loss in 2017, the segment transitioned to profitability in 2018 and 2019. A severe downturn occurred in 2020, resulting in a loss of 553 million US$, before rebounding sharply in 2021 to reach a period high of 1,277 million US$. This suggests a high sensitivity to market conditions within domestic operations.
- International (Int’l) Segment Performance
- International operations maintained a consistently positive contribution to total income throughout the period. While the segment experienced a decline in profitability peaking in 2018 and reaching a low of 30 million US$ in 2020, it avoided the deep losses seen in the U.S. segment. The International segment served as a stabilizing factor, providing a buffer during periods of domestic instability.
- Not Allocated to Segments
- Items not allocated to segments acted as a consistent drag on overall profitability in four of the five years analyzed. Substantial negative values were recorded in 2017, 2019, 2020, and 2021, with the most significant deficit occurring in 2017. These unallocated costs frequently eroded the operational gains achieved by the U.S. and International segments.
- Total Segment Income Trends
- The total income trend mirrors the volatility of the U.S. segment and the impact of unallocated costs. The aggregate result swung from a loss of 830 million US$ in 2017 to a peak profit of 1,096 million US$ in 2018, followed by a severe decline to a loss of 1,451 million US$ in 2020. The recovery in 2021 to 946 million US$ indicates a strong corrective trend following the 2020 downturn.
In summary, the financial data reveals a reliance on the U.S. segment for primary growth, though this dependence introduces significant risk due to its volatility. The International segment provides a reliable but smaller stream of income, while corporate-level unallocated expenses remain a persistent pressure on the bottom line.
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Total assets
Marathon Oil Corp., total assets by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 15,339) | 16,063) | 17,781) | 17,321) | 16,863) |
| International (Int’l) | 994) | 1,081) | 1,530) | 2,083) | 4,201) |
| Not allocated to segments | 661) | 812) | 934) | 1,917) | 948) |
| Total | 16,994) | 17,956) | 20,245) | 21,321) | 22,012) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Total assets experienced a consistent year-over-year decline between December 31, 2017, and December 31, 2021, decreasing from 22,012 million US$ to 16,994 million US$. This represents an overall reduction of approximately 22.8% over the five-year period.
- United States Segment Trends
- The U.S. segment remains the primary driver of the asset base. Assets in this region grew modestly from 16,863 million US$ in 2017 to a peak of 17,781 million US$ in 2019. Following this peak, a downward trend emerged, with assets falling to 16,063 million US$ in 2020 and further to 15,339 million US$ by the end of 2021.
- International Segment Contraction
- A severe and continuous reduction in international assets is observed throughout the period. Assets decreased from 4,201 million US$ in 2017 to 994 million US$ in 2021. This precipitous decline of approximately 76% indicates a strategic divestment or significant impairment of international holdings.
- Non-Allocated Assets
- Assets not allocated to segments demonstrated volatility, characterized by a sharp increase to 1,917 million US$ in 2018 from 948 million US$ in 2017. Following this spike, these assets declined steadily each year, reaching 661 million US$ by December 31, 2021.
- Asset Concentration Analysis
- The proportional concentration of assets shifted heavily toward the United States. Due to the rapid contraction of the international segment, the U.S. segment's share of total assets increased from approximately 76.7% in 2017 to roughly 90.2% in 2021.
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Capital expenditures
Marathon Oil Corp., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States (U.S.) | 1,018) | 1,137) | 2,550) | 2,620) | 2,081) |
| International (Int’l) | —) | 1) | 16) | 39) | 42) |
| Not allocated to segments | 14) | 13) | 25) | 26) | 27) |
| Total | 1,032) | 1,151) | 2,591) | 2,685) | 2,150) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Total capital expenditures exhibited a cyclical pattern characterized by initial growth followed by a sharp contraction. From 2017 to 2018, total spending increased by approximately 25%, peaking at 2,685 million USD. This was followed by a marginal decline in 2019, after which expenditures fell precipitously in 2020 to 1,151 million USD, continuing a slight downward trajectory into 2021.
- United States Segment Investment
- The U.S. segment represents the primary driver of capital allocation, consistently accounting for the vast majority of total expenditures. Spending in this region peaked in 2018 at 2,620 million USD before experiencing a significant reduction of approximately 61% by 2021. The correlation between U.S. spending and total capital expenditure is nearly absolute, indicating that corporate investment strategy is heavily centered on domestic operations.
- International Segment Retrenchment
- A consistent and aggressive reduction in international capital expenditures is observed over the five-year period. Starting at 42 million USD in 2017, spending declined annually, reaching a nominal 1 million USD by 2020 and showing no recorded expenditure in 2021. This trajectory indicates a strategic pivot away from international assets.
- Non-Allocated Expenditures
- Capital expenditures not allocated to specific segments remained relatively stable and minimal. These costs declined from 27 million USD in 2017 to 14 million USD in 2021, reflecting a proportional reduction in corporate-level spending consistent with the broader contraction in capital investment.
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