What changed in this filing

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Item 1. Business

2022-02-17 compared with 2021-02-19 · 118 added, 98 removed, 209 unchanged (51% of the section changed)

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retail marketing operations.

Our business consists primarily of the marketing of retail motor fuel products and convenience merchandise through a large chain of 1,503 (as of December 31, 2020) retail stores operated by us, almost all of which are in close proximity to Walmart stores.

Our retail stores are located in 25 states, primarily in the Southeast, Southwest and Midwest United States.

Of these stores, 1,151 are branded Murphy USA and 352 are standalone Murphy Express locations (as of December 31, 2020).

The majority of our Murphy USA locations participate in a cents-off per gallon purchased discount program for fuel with Walmart when using specific payment method and both Murphy USA and Murphy Express locations participate in Walmart's new membership offering, Walmart+.

Subsequent to year end, on January 29, 2021, the Company completed its acquisition of Quick Chek Corporation ("QuickChek") which added 157 locations in New Jersey and New York and increased to 27 the number states where the Company operates.

Our business also includes certain product supply and wholesale assets, including product distribution terminals and pipeline positions.

As an independent publicly traded company, we are a low-price, high volume fuel retailer selling convenience merchandise through low cost small store formats and kiosks with key strategic relationships and experienced management.

In addition, on January 29, 2021, the Company acquired Quick Chek Corporation ("QuickChek"), a privately held convenience store chain.

Our business consists primarily of the marketing of retail motor fuel products and convenience merchandise through a network of 1,679 (as of December 31, 2021) retail stores located in 27 states, of which, 1,151 were branded as Murphy USA, 370 were branded as Murphy Express, and 158 were branded as QuickChek stores.

The majority of our retail gasoline stores operate under the brand name of Murphy USA and are almost all located in close proximity to Walmart stores while gasoline and other products at standalone stores are marketed under the brand name of Murphy Express.

The Murphy branded stores are primarily located in the Southeast, Southwest, and Midwest areas of the United States.

We also operate a combination of convenience stores and convenience stores with retail gasoline under the brand name of QuickChek, which are located in New Jersey and New York.

In addition, we market to unbranded wholesale customers through a mixture of Company owned and third-party product distribution terminals and pipeline positions.

As an independent publicly traded company, we have low-price, high volume fuel retail outlets selling convenience merchandise through low-cost small store formats and kiosks, as well as larger format stores that have a broader range of merchandise and food and beverage offerings that are driven by key strategic relationships and experienced management.

Our business is subject to various risks.

For a description of these risks, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K.

Information about our operations, properties and business segments, including revenues by class of products and financial information by geographic area, are provided on pages 27 through 41 , F-13 , F-15 , and F- F-30 through F-31 of this Annual Report on Form 10-K.

Information about our operations, properties and business segments, including revenues by class of products and financial information by geographic area, are provided on pages 30 through 44 , F-13 , F-15 , and F-30 through F-31 of this Annual Report on Form 10-K.

Our Competitive Strengths

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We believe our proximity to Walmart stores generates significant traffic to our existing retail stores while our competitively priced gasoline and convenience offerings appeal to our shared customers.

We continue to collaborate with Walmart on fuel discount programs, including Walmart's recently introduced Walmart+, which we believe enhances the customer value proposition as well as the competitive position of both Murphy USA and Walmart.

We continue to collaborate with Walmart on fuel discount programs, mainly Walmart+, which we believe enhances the customer value proposition as well as the competitive position of both Murphy USA and Walmart.

Winning proposition with value-conscious consumers

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In combination with our high traffic locations, our competitive gasoline prices drive high fuel volumes and gross profit.

In addition, we believe we are an industry leader in per-site tobacco sales with our low-priced tobacco products and in total store sales per square foot as we also sell a growing assortment of single-serve/immediate consumption items.

In addition, we believe we are an industry leader in per-store tobacco sales with our low-priced tobacco products and in total store sales per square foot as we also sell a growing assortment of single-serve/immediate consumption items.

We continue to provide value opportunities to our customers through our Murphy Drive Rewards loyalty program which rewards customers with discounted and free items based on purchases of qualifying fuel and merchandise.

Low cost retail operating model

We operate our retail gasoline stores with a strong emphasis on fuel sales complemented by a focused convenience offering that allows for a smaller store footprint than most of our competitors.

We operate our Murphy USA and Murphy Express retail gasoline stores with a strong emphasis on fuel sales complemented by a focused convenience offering that allows for a smaller store footprint than most of our competitors.

We build a mix of 1,400 square foot stores and new-to-industry ("NTI") 2,800 square foot stores which we believe have low capital expenditure, maintenance and utility requirements relative to our competitors.

We have also developed standardized 208 square feet kiosks with external super coolers when the available land or economics did not support the small store format.

Many of our stores require only one or two associates to be present during business hours and 85% of our stores are located on Company-owned property and do not incur any rent expense.

The combination of a focused convenience offering and standardized smaller footprint stores allows us to achieve lower overhead costs and on-site costs compared to competitors with a much larger store format.

According to the 2019 National Association of Convenience Stores’ State of the Industry Survey, we operate at approximately 29% of the average monthly operating costs for top quartile performing stores in the industry.

In addition, we operate among the highest industry safety standards and had a Total Recordable Incident Rate (TRIR) and Days Away from Work (DAW) rate that was substantially lower than the industry averages in 2019 using the most current published data by the Bureau of Labor Statistics.

Our low cost operating model translates into a low cash fuel breakeven requirement that allows us to weather extended periods of low fuel margins and which has improved by more than 3 cpg since our spinoff in 2013.

Many of our Murphy stores require only one or two associates to be present during business hours and 77% of our stores are located on Company-owned property and do not incur any rent expense.

The combination of a focused convenience offering and standardized smaller footprint stores of our Murphy USA and Express brands allow us to achieve lower overhead costs and on-site costs compared to competitors with a much larger store format.

Distinctive fuel supply chain capabilities

We source fuel at very competitive industry benchmark prices due to the diversity of fuel options available to us in the bulk and rack product markets, our shipper status on major pipeline systems, and our access to numerous terminal locations.

In addition, we have a strong distribution system in which we analyze intraday supply options and direct third-party tanker trucks to the most favorably priced terminal to load products for each Murphy site, further reducing our fuel product costs.

In addition, we have a strong distribution system in which we analyze intraday supply options and direct third-party tanker trucks to the most favorably priced terminal to load products for our Murphy stores and QuickChek stores with gasoline, further reducing our fuel product costs.

By participating in the broader fuel supply chain, we believe our business model provides additional upside exposure to opportunities to enhance margins and volume, such as shifting non-contractual wholesale volumes to protect retail fuel supply during periods of constrained supply and elevated margins.

These activities demonstrate our belief that participating in the broader fuel supply chain provides us with added flexibility to ensure reliable low-cost fuel supply in various market conditions especially during periods of significant price volatility.

It would take substantial time and investment, both in expertise and assets, for a competitor to replicate our existing position, and we believe this continues to be a significant barrier to any attempt to emulate our business model.

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We expect that our strong cash position and availability under our credit facility will continue to provide us with a significant level of liquidity to help maintain a disciplined capital expenditure program focused on growing ratably through periods of both high and low fuel margins.

In addition, we have acquired through share repurchase over $1.5 billion of our common stock in a little more than seven years of operation.

Following the completion of the $400 million repurchase program approved in July 2019, in October 2020 the Board of Directors approved an up to $500 million share repurchase program.

After repurchases made under this program in 2020, we have approximately $375 million remaining in the program to be completed by December 31, 2023.

Further, in order to provide consistent and meaningful returns of capital to shareholders independent of share repurchase, we proudly initiated a quarterly dividend of $0.25 per share, or $1.00 per share on an annualized basis, to our shareholders beginning in December 2020.

We have more than 9,900 hardworking employees as of December 31, 2020, that are actively engaged to serve the customer, whether it is the external retail consumer or their internal co-workers.

We have acquired through share repurchases approximately $1.9 billion of our common stock in a little more than eight years of operation.

In October 2020, our Board of Directors approved a $500 million share repurchase program.

As of December 31, 2021, we had approximately $20 million remaining in the program which was completed in January 2022.

In December 2021, our Board of Directors authorized a new share repurchase program of up to $1 billion to be executed by December 31, 2026, to begin upon completion of the 2020 authorization.

Additionally, in order to provide a consistent and meaningful return of capital to shareholders independent of share repurchases, we increased our quarterly dividend to $0.29 per share, or $1.16 per share on an annualized basis, to our shareholders beginning in December 2021.

We have 14,615 dedicated and hardworking employees as of December 31, 2021, that are actively engaged to serve the customer, whether it is the external retail consumer or their internal co-workers.

We believe our sustainable business model and organic growth opportunities support an employee value proposition that makes Murphy USA an attractive place to work.

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Grow organically

We intend for our independent growth plan to be a key driver of our organic growth over the next several years, which is demonstrated by the 352 standalone Murphy Express locations (as of December 31, 2020) we have developed, the majority of which were developed after our 2013 spin-off from Murphy Oil Corporation.

We expect to build up to 55 NTI locations and up to 25 raze-and-rebuilds per year, targeting high-return locations either in high traffic areas, near Walmart Supercenters, or by strategic infill in our core market areas complemented by our supply chain capabilities.

While we were previously focused on smaller lot sizes, we now expect to build more NTI stores that are 2,800 square feet or larger.

We intend for our independent growth plan to be a key driver of our organic growth over the next several years, which is demonstrated by the 370 standalone Murphy Express locations (as of December 31, 2021) we have

developed, the majority of which were developed after our 2013 spin-off from Murphy Oil Corporation.

We expect to build up to 45 NTI locations and up to 35 raze-and-rebuilds in 2022 and are targeting up to 55 NTI and up to 25 raze-and-rebuilds per year in future periods, focusing on high-return locations either in high traffic areas, near Walmart Supercenters, or by strategic infill in our core market areas complemented by our supply chain capabilities.

While we were previously focused on smaller lot sizes, we now expect to build more Murphy branded NTI stores that are 2,800 square feet or larger, as well as our NTI QuickChek branded locations in their existing footprint, which average between 5,000 to 7,000 square feet in size.

Our real estate development team works to maintain a multi-year pipeline of projects that supports continued ratable expansion in these high-return locations.

Diversify merchandise mix

We plan to continuously evaluate our remaining kiosk strategy in an effort to maximize our site economics and return on investment.

Complementary to that strategy, we are continually refining our 1,200-1,400 square foot and 2,800 square foot designs to create a foundation for increasing higher-margin non-tobacco sales and diversifying our merchandise offerings.

Key to achieving the highest potential returns from our large and small format stores is the development and execution of enhanced food and beverage ("F&B") capabilities.

We plan to continuously evaluate our remaining kiosk strategy in an effort to maximize our store economics and return on investment.

Complementary to that strategy, we are continually refining Murphy branded 1,400 square foot and 2,800 square foot designs to create a foundation for increasing higher-margin non-tobacco sales and diversifying our merchandise offerings.

Key to achieving the highest potential returns from our large and small format stores is the development and execution of enhanced food and beverage ("F&B") capabilities by leveraging QuickChek's F&B offering.

We expect to further expand merchandise revenue and margins through our primary supplier relationship with Core-Mark Holding Company, Inc.

("Core-Mark") and in addition, to optimize our promotional planning, merchandise assortment, and pricing effectiveness, in order to help boost overall site returns.

("Core-Mark") and in addition, to optimize our promotional planning, merchandise assortment, and pricing effectiveness, in order to help boost overall store returns.

Sustain cost leadership position

We believe that sustaining our low cost position is a strategic advantage as a retailer of commodity products.

We are undertaking several initiatives for the purpose of increasing efficiency which should allow us to continue to beat inflation on per-site operating costs to help sustain low site level costs.

We also believe that through our planned growth and efficiency initiatives, we can achieve reductions in overhead costs to support an overall improvement in site returns and keep costs properly scaled as we grow organically.

We are undertaking several initiatives for the purpose of increasing efficiency which should allow us to continue to beat inflation on per-store operating costs to help sustain low store-level costs.

We also believe that through our planned growth and efficiency initiatives, we can control overhead costs to support an overall improvement in store returns and keep costs properly scaled as we grow organically.

In order to do this successfully, we will focus on the continued development of our employees and foster an operating culture aligned with business performance, including cost leadership.

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We will continue to invest in capabilities and asset positions that support our supply chain strategy.

Our distinctive business model and supply chain advantage allows us to deliver consistent margins over time, helping the business to better withstand periods of volatility and uncertainty.

Our distinctive business model and supply chain advantage allows us to deliver consistent margins over time and withstand periods of volatility and uncertainty.

Invest for the long term

We maintain a portfolio of predominantly fee-simple assets and utilize what we believe to be an appropriate debt structure that will allow us to be resilient during times of volatility in fuel demand, price, and margin.

We believe our strong financial position should allow us to profitably execute our low-cost, high volume retail strategy through periods of both high and low fuel margins while preserving the ability to re-invest in and grow our existing sites, brand image and supporting capabilities.

Furthermore, in addition to our site development capital and capability building investments we have diversified our shareholder distribution mechanism to provide consistent return of capital through quarterly cash dividends and meaningful share repurchase programs as we continue to focus on maximizing shareholder value.

Furthermore, in addition to our store-development capital and investments in new capabilities, we have diversified our shareholder distribution mechanism to provide consistent return of capital through quarterly cash dividends and meaningful share repurchase programs as we continue to focus on maximizing shareholder value.

Industry Trends

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retail marketing operations.

Our headquarters are located at 200 Peach Street, El Dorado, Arkansas 71730 and our general telephone number is (870) 875-7600.

Our Murphy USA headquarters is located at 200 Peach Street, El Dorado, Arkansas 71730 and our general telephone number is (870) 875-7600.

Our Internet website is www.murphyusa.com.

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Description of Our Business

We market fueling products through a network of Company retail stores and unbranded wholesale customers.

We market fueling products and convenience merchandise through a network of Company retail stores.

We also market to unbranded wholesale customers through a mixture of Company owned and third-party terminals.

During 2021, the Company sold approximately 4.4 billion gallons of motor fuel through our retail outlets.

Below is a table that lists the states where we operate Company-owned stores at December 31, 2020 and the number of stores in each state.

Below is a table that lists the states where we operate our stores at December 31, 2021 and the number of stores in each state.

All of our stores are company owned.

of stores State No.

Alabama 81 Kentucky 48 Ohio 44

Arkansas 69 Louisiana 79 Oklahoma 55

Colorado 25 Michigan 27 South Carolina 63

Florida 131 Missouri 50 Tennessee 93

Georgia 99 Mississippi 55 Texas 327

Iowa 22 Nebraska 5 Utah 5

Illinois 43 Nevada 4 Virginia 23

Indiana 39 New Mexico 19

Kansas 7 North Carolina 90 Total 1,503

The following table provides a history of our Company-owned station count during the three-year period ended December 31, 2020:

Alabama 81 Kentucky 48 New York 19

Arkansas 69 Louisiana 80 North Carolina 90

Colorado 27 Michigan 27 Ohio 44

Florida 134 Missouri 50 Oklahoma 55

Georgia 99 Mississippi 55 South Carolina 67

Iowa 22 Nebraska 5 Tennessee 93

Illinois 43 Nevada 4 Texas 333

Indiana 39 New Jersey 139 Utah 5

Kansas 7 New Mexico 21 Virginia 23

The following table provides a history of our store count during the three-year period ended December 31, 2021:

Years Ended December 31,

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Start of period 1,503 1,489 1,472

Acquired 156 — —

New construction 23 24 17

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End of period 1,679 1,503 1,489

Since 2007, we have purchased from Walmart the properties underlying many of our Company stores.

Since 2007, we have purchased from Walmart the properties underlying many of our stores.

Each of our owned properties that were purchased from Walmart are also subject to Easements and Covenants with Restrictions Affecting Land (“ECRs”), which impose customary restrictions on the use of such properties, which Walmart has the right to enforce.

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For the remaining stores located on or adjacent to Walmart property that are not owned, we have a master lease agreement that allows us to rent land from Walmart.

The master lease agreement contains general terms applicable to all rental sites on Walmart property in the United States.

The term of the leases is ten years at each station, with us holding four successive five-year extension options at each site.

Approximately half of the leased sites have over 15 years of term remaining, including renewals, should the Company decide to exercise the renewal

The master lease agreement contains general terms applicable to all rental stores on Walmart property in the United States.

The term of the leases is ten years at each store, with us holding four successive five-year extension options at each site.

Approximately half of the leased sites have over 11 years of term remaining, including renewals, should the Company decide to exercise the renewal options.

The agreement permits Walmart to terminate it in its entirety, or only as to affected sites, at its option under customary circumstances (including in certain events of bankruptcy or insolvency), or if we improperly transfer the rights under the agreements to another party.

In addition, the master lease agreement prohibits us from selling a leased station or allowing a third party to operate a leased station without written consent from Walmart.

As of December 31, 2020, we own the sites of 1,047 of our Murphy USA stores and we lease and operate 99 Murphy USA sites from Walmart, also we lease and sublease 3 other sites from Walmart.

We have five Murphy USA sites located near Walmart locations where we pay rent to other landowners.

In addition, the master lease agreement prohibits us from selling a leased store or allowing a third party to operate a leased store without written consent from Walmart.

As of December 31, 2021, we own the sites of 1,047 of our Murphy USA stores and we lease and operate 99 Murphy USA sites from Walmart, and we also lease and sublease 3 other sites from Walmart.

We have 5 Murphy USA sites located near Walmart locations where we pay rent to other landowners.

As of December 31, 2021, we have 233 Murphy Express stores where we own the land and 137 locations where we rent the underlying land.

All leases for Murphy branded stores are operating leases.

As of December 31, 2021, we have 8 QuickChek stores of which we own the land and 150 QuickChek stores where we rent the underlying land and building.

QuickChek has both operating and finance type leases and at December 31, 2021, had 30 stores with finance leases, 40 stores with operating leases and 80 stores which had both a finance and an operating lease.

Of the operating leases, over half have an average remaining term, including renewals, of 25 years and of the finance leases, over half have an average remaining term, including renewals, of over 19 years.

For more information about our operating leases, see Note 20 "Leases" to the accompanying audited consolidated financial statements for the three years ended December 31, 2021.

As of December 31, 2020, we have 227 Murphy Express sites where we own the land and 125 locations where we rent the underlying land.

We have numerous sources for our retail fuel supply, including nearly all of the major and large oil companies operating in the U.S.

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We also receive products at terminals owned by others either in exchange for deliveries from our terminals or by outright purchase.

In addition to the motor fuel sold at our Company stores, our stores carry a broad selection of snacks, beverages, tobacco products and non-food merchandise.

In addition to the motor fuel sold at our Company stores, our stores carry a broad selection of snacks, beverages, tobacco products and non-food merchandise, as well as a greater food and beverage offering at our QuickChek locations.

In 2021, we purchased more than 70% of our merchandise from a single vendor, Core-Mark, with whom we renewed a new five-year supply agreement in January 2021.

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Branded retail outlets:

1,151 1,161 1,160 1,158 1,152

Murphy USA® 1,151 1,151 1,161 1,160 1,158

Murphy Express 370 352 328 312 288

QuickChek® 158 — — — —

Total 1,679 1,503 1,489 1,472 1,446

As of December 31,

2021 2020 2019 2018 2017

Retail marketing:

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26.3 25.2 16.1 16.2 16.4

Retail fuel margin per gallon (cpg) (1)

21.9 22.9 13.8 14.7 14.0

Gallons sold per store month (in thousands) 229.4 219.5 248.3 244.0 245.3

Merchandise sales revenue per store month $ 166.3 $ 148.7 $ 139.7 $ 140.5 $ 144.4

Merchandise sales revenue per store month (in thousands) $ 186.7 $ 166.3 $ 148.7 $ 139.7 $ 140.5

Merchandise margin as a percentage of merchandise sales 19.1% 15.6% 16.0% 16.5% 16.1%

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Our business is organized into one reporting segment (Marketing).

The Marketing segment includes our retail marketing sites and product supply and wholesale assets.

The Marketing segment includes our retail marketing stores and product supply and wholesale assets.

For operating segment information, see Note 22 “Business Segments” in the accompanying audited consolidated financial statements for the three-year period ended December 31, 2021.

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The retail gasoline industry in the United States is highly competitive due to ease of entry and constant change in the number and type of retailers offering similar products and services.

With respect to merchandise, our retail sites compete with other convenience store chains, independently owned convenience stores, supermarkets, drugstores, discount clubs, gasoline service stations, mass merchants, fast food operations and other similar retail outlets.

Non-traditional retailers, including supermarkets, discount club stores and mass merchants, now compete directly with retail gasoline sites.

With respect to merchandise, our retail stores compete with other convenience store chains, independently owned convenience stores, supermarkets, drugstores, discount clubs, gasoline service stores, mass merchants, fast food operations and other similar retail outlets.

Non-traditional retailers, including supermarkets, discount club stores and mass merchants, now compete directly with retail gasoline stores.

These non-traditional gasoline retailers have obtained a significant share of the gasoline market, and their market share is expected to grow, and these retailers may use promotional pricing or discounts, both at the fuel pump and in the convenience store, to encourage in-store merchandise sales and gasoline sales.

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A significant change in any of these factors, including a significant decrease in consumer demand (other than typical seasonal variations), could materially affect our motor fuel and merchandise volumes, motor fuel gross profit and overall customer traffic, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We sell gasoline primarily under the Murphy USA ® and Murphy Express brands, which are trademarks of Murphy Oil.

The Trademark License Agreement that we entered into with Murphy Oil in connection with the Separation contained a trademark license granting us the right to continue to use such Murphy Oil-owned trademarks throughout the term of that agreement subject to the terms and conditions therein.

As of January 29, 2021, we have added the QuickChek ® brand to our portfolio.

In the highly competitive business in which we operate, our trade names, service marks and trademarks are important to distinguish our products and services from those of our competitors.

We sell gasoline primarily under the Murphy USA® and Murphy Express brands, which we acquired from Murphy Oil.

We acquired ownership of the QuickChek® trademark and others as a result of the QuickChek acquisition.

We are not aware of any facts which would negatively impact our continuing use of any of the above trade names, service marks or trademarks.

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All of our Company stores use a standard hardware and software platform for point-of-sale (“POS”) that facilitates item level scanning of merchandise for sales and inventory, and the secure acceptance of all major payment methods – cash, check, credit, debit, fleet and mobile.

In addition, our QuickChek stores have self-service checkouts and support third-party delivery services.

Our standard approach to large scale and geographically dispersed deployments reduces total technology cost of ownership for the POS and inherently makes the system easier to use, support, and replace.

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Some of our current and former properties have been operated by third parties whose handling and management of hazardous materials were not under our control, and substantially all of them have or previously had motor fuel or petroleum product storage tanks.

Pursuant to certain environmental laws, we could be responsible for investigating and remediating contamination relating to such sites, including impacts attributable to prior site occupants or other third parties, and for implementing remedial measures to mitigate the risk of future contamination.

Pursuant to certain environmental laws, we could be responsible for investigating and remediating contamination relating to such stores, including impacts attributable to prior site occupants or other third parties, and for implementing remedial measures to mitigate the risk of future contamination.

We may also have liability for contamination and violations of environmental laws under contractual arrangements with third parties, such as landlords and former owners of our sites, including at our sites in close proximity to Walmart stores.

Contamination has been identified at certain of our current and former terminals and retail fueling stores, and we are continuing to conduct investigation and remediation activities in relation to such properties.

Contamination has been identified at certain of our current and former terminals and retail fueling stores, and we are

continuing to conduct investigation and remediation activities in relation to such properties.

The discovery of additional contamination or the imposition of further investigation or remediation obligations at these or other properties could result in significant costs.

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In 2019, the EPA and NHTSA jointly finalized part one of the Safer Affordable Fuel-Efficient ("SAFE") Vehicles Rule, which reduced the penalties for violations of CAFE standards and revoked California's authority to set its own fuel economy standards.

However, in December 2021, NHTSA published a final rule that repealed part one of the SAFE Vehicles Rule, meaning that California's ability to set its own standards will no longer be preempted by federal law.

In March 2020, EPA and NHTSA finalized part two of the SAFE Vehicles Rule, which amended and made less stringent the 2012 CAFE fuel economy and emissions standards for fleets of 2021-2026 model year cars and light duty trucks.

However, in January 2021, President Biden signed an executive order that, among other things, directed heads of federal agencies to review various rules and regulations promulgated during the previous presidential administration, including parts one and two of the SAFE Vehicles Rule, indicating that a Biden administration may seek to impose stricter fuel economy and emissions standards for cars and light duty trucks and reinstate California's authority to set its own fuel economy standards.

Subsequently, over the course of 2021 the agencies separately proposed, and the EPA finalized, standards that are more stringent than those in part two of the SAFE Vehicles Rule, with the proposed NHTSA CAFE standards addressing the 2024-2026 model years and the finalized EPA GHG standards addressing the 2023-2026 model years.

The EPA and NHTSA also regulate GHG emission and fuel efficiency standards for medium and heavy-duty vehicles and in August 2016, jointly finalized "Phase 2" vehicle and engine performance standards covering model years 2021 through 2027, which apply to semi-trucks, large pick-up trucks and vans, and all types and sizes of buses and work trucks.

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Sale of Regulated Products

In certain areas where our retail sites are located, state or local laws limit the hours of operation for the sale of alcoholic beverages and restrict the sale of alcoholic beverages and tobacco products to persons younger than a certain age.

In certain areas where our retail stores are located, state or local laws limit the hours of operation for the sale of alcoholic beverages and restrict the sale of alcoholic beverages and tobacco products to persons younger than a certain age.

State and local regulatory agencies have the authority to approve, revoke, suspend or deny applications for and renewals of permits and licenses relating to the sale of alcoholic beverages, as well as to issue fines to convenience stores for the improper sale of alcoholic beverages and tobacco products.

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Such a loss or imposition could have a material adverse effect on our business, liquidity and results of operations.

In many states, retailers of alcoholic beverages have been held responsible for damages caused by intoxicated individuals who purchased alcoholic beverages from them.

In many states, retailers of alcoholic beverages have been held responsible for damages caused by intoxicated individuals

who purchased alcoholic beverages from them.

While the potential exposure for damage claims as a seller of alcoholic beverages and tobacco products is substantial, we have adopted procedures intended to minimize such exposure.

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Other Regulatory Matters

Our retail sites are also subject to regulation by federal agencies and to licensing and regulations by state and local health, sanitation, fire and other departments relating to the development and operation of retail sites, including regulations relating to zoning and building requirements and the preparation and sale of food.

Difficulties in obtaining or failures to obtain the required licenses or approvals could delay or prevent the development of a new retail site in a particular area.

Our retail stores are also subject to regulation by federal agencies and to licensing and regulations by state and local health, sanitation, fire and other departments relating to the development and operation of retail stores, including regulations relating to zoning and building requirements and the preparation and sale of food.

Difficulties in obtaining or failures to obtain the required licenses or approvals could delay or prevent the development of a new retail store in a particular area.

Our operations are also subject to federal and state laws governing such matters as wage rates, overtime and citizenship requirements.

At the federal and state levels, there are proposals under consideration from time to time to increase minimum wage rates and periods of protected leaves.

Increases in wages, overtime pay, or benefits due to changes in the statutory minimum salary requirements or minimum wage rates or mandated health benefits would result in an increase in our labor costs.

Such cost increases, or the penalties for failing to comply, could adversely affect our business, financial condition, and results of operations.

We monitor such changes to ensure our continued compliance with these ever-changing regulations.

Human Capital

We know that the strength of our workforce is a significant contributor to the success of Murphy USA.

As of December 31, 2020, Murphy USA had more than 9,900 employees, including 4,900 full-time employees and 5,000 part-time employees working at our stores and corporate headquarters.

We are committed to the attraction, development, retention, and safety of our employees.

Our initiatives for fiscal 2020 address among other things (i) Our Principles, (ii) Inclusion and Diversity, (iii) Talent Management, (iv) Total Rewards, (v) Our COVID-19 Response, and (vi) Workforce Safety.

Our principles are at the foundation of how we operate at Murphy USA.

In fact, our principles are the values that shape the character of our company.

We aim to have our human capital management focus be based on these Principles of Integrity, Respect, Citizenship, and Spirit.

At Murphy USA, we know that the strength of our workforce is critical to our long-term success and we strive to build upon this through the foundation laid by our Principles.

As of December 31, 2021, Murphy USA had 14,615 employees, including 6,245 full-time employees and 8,370 part-time employees working at our stores, support centers, and corporate headquarters.

Murphy USA is committed to the attraction, development, retention, and safety of our employees.

Our initiatives for fiscal year 2021 addressed, among other things, (i) Our Principles, (ii) Inclusion and Diversity, (iii) Talent Management, (iv) Total Rewards, (v) Our COVID-19 Response, and (vi) Workforce Safety.

Our Principles are the heart of our rich culture, creating the foundation of how we operate at Murphy USA.

They are the values that shape the strong character of our company.

The basis for our human capital management focus is driven by our core Principles of Integrity, Respect, Citizenship, and Spirit.

Integrity Respect Citizenship Spirit

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We encourage and promote diverse approaches in all our thoughts, ideas and actions.

We understand the importance of the strengths, experiences and perspectives of others.

We understand the value gained through embracing the strengths, experiences, and perspectives of others.

Believe in the power of good actions.

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We work closely with each other to drive our success through reliable and consistent execution.

We are committed to living our principles, including "Respect" specifically as it relates to inclusion and diversity.

We are intentional about working towards increasing visible and invisible diversity throughout Murphy USA.

For instance:

We are committed to living our Principles, specifically, the principle of "Respect" as it relates to inclusion and diversity.

We are intentional about working towards increasing visible and invisible diversity throughout Murphy USA through several talent initiatives:

• We partner with universities to attract diverse talent.

• We identify critical roles and potential successors with our succession management program.

• We strive to lift up talent through differentiated and personalized development .

• We strive to lift up talent through differentiated and personalized development opportunities .

We employ thoughtful talent management strategies, including annual succession planning, bi-annual people reviews, promotion review committees, mid-year and annual performance reviews, and cohort performance review calibrations.

We are dedicated to helping our employees succeed professionally through learning and development.

We are dedicated to helping our employees succeed professionally by offering a robust suite of learning and development opportunities.

• Our field teams have comprehensive functional training programs at each level.

• We have individual development plans (IDPs) and an eLearning platform for employee-driven development.

• We provide leadership development opportunities for all leaders.

• We provide tuition reimbursement for home office employees and store managers.

• We have individual development plans (IDPs) and an eLearning platform to support employee-driven development.

• Leadership development opportunities are available for all leaders.

• We provide tuition reimbursement for home office employees, store managers, and assistant store managers.

• We sponsor employees seeking to earn their GED.

We have demonstrated a history of investing in our employees by offering competitive salaries and wages.

We offer comprehensive benefit packages designed to support employees' overall well-being.

We have benefit packages available at all levels of the organization.

The benefit package offered to our full-time employees is:

• Comprehensive health, dental and vision insurance.

• Parental leave is available to all new parents for birth, adoption or foster placement.

The benefits package offered to our full-time employees includes:

• Comprehensive health, dental, vision, and life insurance.

• Parental leave available to all new parents for birth, adoption or foster placement.

• An Employee Assistance Program.

• Profit sharing

• 401K program with matching up to 6%

• 401K program with company match.

• Paid time off including:

vacation, sick, bereavement, and holidays

vacation, sick, parental, bereavement, and holidays.

At present, all QuickChek benefit plans continue to operate as they did prior to our acquisition.

We continue to evaluate QuickChek's benefit plans, and such evaluation could lead to consolidation with the Murphy USA plans in the future.

The benefits offered by QuickChek are very similar to the benefits listed above.

We value the health, well-being and safety of our employees, customers, and communities.

Our executive leadership team initiated a COVID-19 Crisis Response Team to address the critical safety, operational and business risks associated with the pandemic.

In March 2020, we launched a voluntary work-from-home plan available to virtually all home office based employees and revised critical work practices to promote a safe work environment for over 9,400 field-based employees and our customers.

We established a temporary Emergency Sick Pay program for store-level employees who were negatively impacted by COVID-19.

In March 2020, we launched a voluntary work-from-home plan available to virtually all home-office based employees and revised critical work practices to promote a safer work environment for employees and our customers.

We established a temporary Emergency Sick Pay program for store-level employees who were negatively impacted by COVID-19 and continued to support our employees throughout the COVID-19 pandemic by offering these programs through July 2021.

We are committed to keeping our employees and customers safe through fostering and maintaining a strong safety culture and emphasizing the importance of our employees’ role in identifying, mitigating and communicating safety risks.

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Our headquarters of approximately 120,000 square feet is located at 200 Peach Street, El Dorado, Arkansas.

We also own and operate two other office buildings in El Dorado, Arkansas that house our store support center and technology services personnel as of December 31, 2020 .

We also own and operate two other office buildings in El Dorado, Arkansas that house our store support center and technology services personnel, and we own and operate an office building and training center in

Whitehouse Station, New Jersey for our QuickChek store support personnel.

We have numerous owned and leased properties for our retail fueling stores as described under “Description of Our Business,” as well as wholly-owned product distribution terminals.

3 unchanged sentences

Alternatively, you may access these reports at the SEC’s website at http://www.sec.gov .

The information contained on these websites referenced herein is not incorporated by reference into this filing.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business