What changed in this filing

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Item 1. Financial Statements

2022-10-27 compared with 2022-07-28 · 119 added, 92 removed, 668 unchanged (24% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

June 30, December 31,

September 30, December 31,

(Millions of dollars, except share amounts) 2022 2021

40 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars, except share and per share amounts) 2022 2021 2022 2021

11 unchanged sentences

Accretion of asset retirement obligations 0.6 0.6 2.0 1.9

Acquisition related costs 0.8 0.2 1.0 9.0

Acquisition and integration related costs 0.4 0.7 1.4 9.7

Total operating expenses 5,883.1 4,442.4 17,287.1 12,150.8

22 unchanged sentences

(Millions of dollars) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

15 unchanged sentences

(Millions of dollars)

Six Months Ended

Nine Months Ended

September 30,

Operating Activities

40 unchanged sentences

Balance as of March 31, 2021 46,767,164 0.5 ( 1,535.3 ) 525.6 1,791.5 ( 1.7 ) 780.6

Net income (loss) — — — — 128.8 — 128.8

Net income — — — — 128.8 — 128.8

Amortization of unrealized loss on interest rate hedge, net of tax — — — — — 0.2 0.2

6 unchanged sentences

Balance as of June 30, 2021 46,767,164 0.5 ( 1,683.1 ) 528.4 1,913.6 ( 1.5 ) 757.9

Net income — — — — 104.0 — 104.0

Amortization of unrealized loss on interest rate hedge, net of tax — — — — — 0.2 0.2

Cash dividends declared ($ 0.25 per share)

— — — — ( 6.4 ) — ( 6.4 )

Dividend equivalent units accrued — — — 0.2 ( 0.2 ) — —

Purchase of treasury stock — — ( 33.2 ) — — — ( 33.2 )

Issuance of treasury stock — — 0.4 ( 0.4 ) — — —

Amounts related to share-based compensation — — — ( 0.3 ) — — ( 0.3 )

Share-based compensation expense — — — 2.6 — — 2.6

Balance as of September 30, 2021 46,767,164 $ 0.5 $ ( 1,715.9 ) $ 530.5 $ 2,011.0 $ ( 1.3 ) $ 824.8

See notes to consolidated financial statements.

12 unchanged sentences

Balance as of March 31, 2022 46,767,164 0.5 ( 1,982.3 ) 516.7 2,257.6 ( 1.0 ) 791.5

Net income (loss) — — — — 183.3 — 183.3

Net income — — — — 183.3 — 183.3

Amortization of unrealized loss on interest rate hedge, net of tax — — — — — 0.2 0.2

7 unchanged sentences

Balance as of June 30, 2022 46,767,164 0.5 ( 2,183.4 ) 513.1 2,433.3 ( 0.8 ) 762.7

Net income — — — — 219.5 — 219.5

Amortization of unrealized loss on interest rate hedge, net of tax — — — — — 0.1 0.1

Cash dividends declared ($ 0.32 per share)

— — — — ( 7.5 ) — ( 7.5 )

Purchase of treasury stock — — ( 211.5 ) — — — ( 211.5 )

Issuance of treasury stock — — 0.9 ( 0.8 ) — — 0.1

Amounts related to share-based compensation — — — ( 2.1 ) — — ( 2.1 )

Share-based compensation expense — — — 4.7 — — 4.7

Balance as of September 30, 2022 46,767,164 $ 0.5 $ ( 2,394.0 ) $ 514.9 $ 2,645.3 $ ( 0.7 ) $ 766.0

See notes to consolidated financial statements.

6 unchanged sentences

The Company owns and operates a chain of retail stores under the brand name of Murphy USA® which are almost all located in close proximity to Walmart stores, markets gasoline and other products at standalone stores under the Murphy Express brand, and also has a mix of convenience stores with and without retail gasoline that operate under the name of QuickChek®.

At June 30, 2022, the Company had a total of 1,695 Company stores of which 1,151 were Murphy USA, 385 were Murphy Express and 159 were QuickChek.

At September 30, 2022, the Company had a total of 1,700 Company stores of which 1,151 were Murphy USA, 392 were Murphy Express and 157 were QuickChek.

The Company also has certain product supply and wholesale assets, including product distribution terminals and pipeline positions.

4 unchanged sentences

and certain of its subsidiaries operate on a calendar year basis, while the subsidiary QuickChek uses a weekly retail calendar where each quarter has 13 weeks.

For the three month period ended June 30, 2022, the QuickChek results cover the period from April 2, 2022 to July 1, 2022 and year-to-date period began January 1, 2022.

For the three month period ended June 30, 2021, results cover the period April 3, 2021 to July 2, 2021 and the year-to-date period began on January 29, 2021.

For the three month period ended September 30, 2022, the QuickChek results cover the period from July 2, 2022 to September 30, 2022 and year-to-date period began January 1, 2022.

For the three month period ended September 30, 2021, the QuickChek results cover the period July 3, 2021 to October 1, 2021 and the year-to-date period covers January 29, 2021 (the date of acquisition) to October 1, 2021.

The difference in timing of the period ends is immaterial to the overall consolidated results.

10 unchanged sentences

The Company has determined this standard has not had a material impact on the Company's consolidated financial statements.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In August 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606.

3 unchanged sentences

The Company has determined this will not likely have a material impact on the Company's consolidated financial statements.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Revenues

7 unchanged sentences

The Company continues to account for these transactions as non-monetary exchanges under existing accounting guidance and typically reports these on a net basis in the Consolidated Statements of Income.

The following tables disaggregate our revenues by major source for the three and six months ended June 30, 2022 and 2021, respectively:

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

The following tables disaggregate our revenues by major source for the three and nine months ended September 30, 2022 and 2021, respectively:

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

(Millions of dollars) Marketing Corporate and Other Assets Consolidated Marketing Corporate and Other Assets Consolidated

12 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

(Millions of dollars) Marketing Corporate and Other Assets Consolidated Marketing Corporate and Other Assets Consolidated

43 unchanged sentences

Deferred revenue associated with both rewards programs are included in Trade accounts payable and accrued liabilities in our Consolidated Balance Sheet.

The deferred revenue balances at June 30, 2022 and December 31, 2021 were immaterial.

The deferred revenue balances at September 30, 2022 and December 31, 2021 were immaterial.

For the sale of RINs, we recognize revenue when the RIN is transferred to the counter-party and the sale is completed.

4 unchanged sentences

Trade accounts receivable on the balance sheet represents both receivables related to contracts with customers and other trade receivables.

At June 30, 2022 and December 31, 2021, we had $ 208.6 million and $ 111.8 million of receivables, respectively, related to contracts with customers recorded.

At September 30, 2022 and December 31, 2021, we had $ 157.1 million and $ 111.8 million of receivables, respectively, related to contracts with customers recorded.

All of the trade accounts receivable related to contracts with customers outstanding at the end of each period were collected during the succeeding quarter.

2 unchanged sentences

Inventories consisted of the following:

(Millions of dollars) June 30,

(Millions of dollars) September 30,

2022 December 31,

6 unchanged sentences

Murphy USA and Murphy Express branded petroleum products are valued using the last-in, first-out (LIFO) method and certain QuickChek store merchandise for resale is valued using the LIFO method.

At June 30, 2022 and December 31, 2021, the replacement cost (market value) of LIFO inventories exceeded the LIFO carrying value for petroleum products by $ 473.0 million and $ 227.5 million, respectively and for store merchandise for resale was $ 0.5 million for both June 30, 2022 and December 31, 2021.

At September 30, 2022 and December 31, 2021, the replacement cost (market value) of LIFO inventories exceeded the LIFO carrying value for petroleum products by $ 303.2 million and $ 227.5 million, respectively and for store merchandise for resale was $ 0.5 million for both September 30, 2022 and December 31, 2021.

Murphy USA Inc.

1 unchanged sentence

Note 4 — Business Acquisition

On January 29, 2021, MUSA completed the previously announced transaction to acquire 100 % of QuickChek, a privately-held convenience store chain with a regional brand which consisted of 156 stores located in New Jersey and New York, in an all-cash transaction.

The acquisition was made to expand the MUSA network into the Northeast by adding stores that had an existing food and beverage model and is consistent with the Company's stated strategic priorities of developing enhanced food and beverage capabilities and accelerating its growth plans.

On January 29, 2021, Murphy USA completed the previously announced transaction to acquire 100 % of QuickChek, a privately-held convenience store chain with a regional brand which consisted of 156 stores located in New Jersey and New York, in an all-cash transaction.

The acquisition was made to expand the Company's network into the Northeast by adding stores that had an existing food and beverage model and is consistent with the Company's stated strategic priorities of developing enhanced food and beverage capabilities and accelerating its growth plans.

The excess of the purchase price over the fair value of the net, identifiable assets acquired was recorded as goodwill.

31 unchanged sentences

In connection with the acquisition, the Company recognized certain acquisition-related expenses which were expensed as incurred.

These expenses, recognized within acquisition related costs in the consolidated statements of operations, include amounts related to transaction and integration costs, including fees for advisory and professional services incurred as part of the acquisition and integration costs subsequent to the acquisition in the amount of $ 1.0 million and $ 9.0 million for the six months ended June 30, 2022 and 2021, respectively.

These expenses, recognized within acquisition related costs in the consolidated statements of income, include amounts related to transaction and integration costs, including fees for advisory and professional services incurred as part of the acquisition and integration costs subsequent to the acquisition in the amount of $ 1.4 million and $ 9.7 million for the nine months ended September 30, 2022 and 2021, respectively.

Note 5 — Goodwill and Intangible Assets

The Company's goodwill is assigned to its Marketing segment and no ne of the goodwill is deductible for tax purposes.

(Millions of dollars) June 30,

(Millions of dollars) September 30,

2022 December 31,

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets subject to amortization at June 30, 2022 and December 31, 2021 consisted of the following:

Remaining Useful Life (in years) June 30, 2022 December 31, 2021

Intangible assets subject to amortization at September 30, 2022 and December 31, 2021 consisted of the following:

Remaining Useful Life (in years) September 30, 2022 December 31, 2021

(Millions of dollars) Cost Net Cost Net

10 unchanged sentences

Long-term debt consisted of the following:

(Millions of dollars) June 30,

(Millions of dollars) September 30,

2022 December 31,

5.625 % senior notes due 2027 (net of unamortized discount of $ 1.8 at June 30, 2022 and $ 2.0 at December 2021)

5.625 % senior notes due 2027 (net of unamortized discount of $ 1.7 at September 30, 2022 and $ 2.0 at December 2021)

$ 298.3 $ 298.0

4.75 % senior notes due 2029 (net of unamortized discount of $ 4.5 at June 30, 2022 and $ 4.8 at December 31, 2021)

3.75 % senior notes due 2031 (net of unamortized discount of $ 5.4 at June 30, 2022 and $ 5.7 at December 31,2021)

Term loan due 2028 (effective interest rate of 2.84 % at June 30, 2022 and 2.27 % at December 31, 2021 and net of unamortized discount of $ 0.8 at June 30, 2022 and $ 0.9 at December 31, 2021)

4.75 % senior notes due 2029 (net of unamortized discount of $ 4.4 at September 30, 2022 and $ 4.8 at December 31, 2021)

3.75 % senior notes due 2031 (net of unamortized discount of $ 5.2 at September 30, 2022 and $ 5.7 at December 31,2021)

Term loan due 2028 (effective interest rate of 4.34 % at September 30, 2022 and 2.27 % at December 31, 2021 and net of unamortized discount of $ 0.7 at September 30, 2022 and $ 0.9 at December 31, 2021)

Capitalized lease obligations, autos and equipment, due through 2026 2.6 2.7

23 unchanged sentences

The credit agreement provides for a senior secured term loan in an aggregate principal amount of $ 400 million (the "Term Facility") (which was borrowed in full on January 29, 2021) and revolving credit commitments in an aggregate amount equal to $ 350 million (the "Revolving Facility", and together with the Term Facility, the "Credit Facilities").

The outstanding balance of the term loan was $ 396 million at June 30, 2022 and $ 398 million at December 31, 2021.

The outstanding balance of the term loan was $ 395 million at September 30, 2022 and $ 398 million at December 31, 2021.

The term loan is due January 2028 and we are required to make quarterly principal payments of $ 1 million, which began on July 1, 2021.

As of June 30, 2022, we had no outstanding borrowings under the revolving facility while there were $ 4.7 million in outstanding letters of credit, which reduces the amount available to borrow.

As of September 30, 2022, we had no outstanding borrowings under the Revolving Facility and had $ 4.7 million in outstanding letters of credit (which reduces the amount available to borrow under the Revolving Facility).

Interest payable on the Credit Facilities is based on either:

13 unchanged sentences

Pursuant to the credit agreement's covenant limiting certain restricted payments, certain payments in respect of our equity interests, including dividends, when the total leverage ratio, calculated on a pro forma basis, is greater than 3.0 to 1.0 could be limited.

At June 30, 2022, our total leverage ratio was 1.76 to 1.0 which meant our ability at that date to make restricted payments was not limited.

At September 30, 2022, our total leverage ratio was 1.53 to 1.0 which meant our ability at that date to make restricted payments was not limited.

If our total leverage ratio, on a pro forma basis, exceeds 3.0 to 1.0, any restricted payments made following that time until the ratio is once again, on a pro forma basis, below 3.0 to 1.0 would be limited by the covenant, which contains certain exceptions, including an ability to make restricted payments in cash in an aggregate amount not to exceed the greater of $ 114.5 million or 4.50 % of consolidated net tangible assets over the life of the credit agreement.

2 unchanged sentences

Note 7 — Asset Retirement Obligations (ARO)

The majority of the ARO recognized by the Company at June 30, 2022 and December 31, 2021 is related to the estimated costs to dismantle and abandon certain of its retail gasoline stores.

The majority of the ARO recognized by the Company at September 30, 2022 and December 31, 2021 is related to the estimated costs to dismantle and abandon certain of its retail gasoline stores.

The Company has not recorded an ARO for certain of its marketing assets because sufficient information is presently not available to estimate a range of potential settlement dates for the obligation.

2 unchanged sentences

A reconciliation of the beginning and ending aggregate carrying amount of the ARO is shown in the following table.

(Millions of dollars) June 30,

(Millions of dollars) September 30,

2022 December 31,

11 unchanged sentences

The effective tax rate is calculated as the amount of income tax expense (benefit) divided by income before income tax expense (benefit).

For the three and six month periods ended June 30, 2022 and 2021, the Company’s approximate effective tax rates were as follows:

Three months ended June 30, 24.0 % 24.2 %

Six months ended June 30, 24.0 % 24.3 %

In the six months ended June 30, 2022, the Company recognized approximately $ 2.0 million of excess tax benefits related to stock compensation for employees and $ 0.4 million in other discrete tax benefits.

For the six months ended June 30, 2021, the Company recognized approximately $ 1.1 million in excess tax benefits related to stock compensation, $ 1.0 million for other discrete tax items related to state deferred tax rate adjustments due to the QuickChek acquisition, and $ 0.4 million in other discrete tax benefits.

As of June 30, 2022, the earliest years remaining open for federal audit and/or settlement are 2018 and 2017 for state purposes.

For the three and nine month periods ended September 30, 2022 and 2021, the Company’s approximate effective tax rates were as follows:

Three months ended September 30, 24.5 % 24.5 %

Nine months ended September 30, 24.2 % 24.4 %

In the nine months ended September 30, 2022, the Company recognized approximately $ 2.5 million of excess tax benefits related to stock compensation for employees and $ 0.4 million in other discrete tax benefits.

For the nine months ended September 30, 2021, the Company recognized approximately $ 1.2 million in excess tax benefits related to stock compensation, $ 1.0 million for other discrete tax items related to state deferred tax rate adjustments due to the QuickChek acquisition, and $ 0.4 million in other discrete tax benefits.

As of September 30, 2022, the earliest years remaining open for federal audit and/or settlement are 2018 and 2017 for state purposes.

Although the Company believes that recorded liabilities for unsettled issues are adequate, additional gains or losses could occur in future periods from resolution of outstanding unsettled matters.

19 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in options outstanding for Company employees during the period from December 31, 2021 to June 30, 2022 are presented in the following table:

Changes in options outstanding for Company employees during the period from December 31, 2021 to September 30, 2022 are presented in the following table:

Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Millions of Dollars)

7 unchanged sentences

The awards granted in the current year were under the MUSA 2013 Plan, are valued at the grant date fair value, and vest over 3 years.

Changes in restricted stock units outstanding for Company employees during the period from December 31, 2021 to June 30, 2022 are presented in the following table:

Changes in restricted stock units outstanding for Company employees during the period from December 31, 2021 to September 30, 2022 are presented in the following table:

Employee RSUs Number of units Weighted Average Grant Date Fair Value Total Fair Value (Millions of Dollars)

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in performance-based restricted stock units outstanding for Company employees during the period from December 31, 2021 to June 30, 2022 are presented in the following table:

Changes in performance-based restricted stock units outstanding for Company employees during the period from December 31, 2021 to September 30, 2022 are presented in the following table:

Employee PSU's Number of Units Weighted Average Grant Date Fair Value Total Fair Value (Millions of Dollars)

11 unchanged sentences

These awards typically vest at the end of three years .

Changes in restricted stock units outstanding for Company non-employee directors during the period from December 31, 2021 to June 30, 2022 are presented in the following table:

Changes in restricted stock units outstanding for Company non-employee directors during the period from December 31, 2021 to September 30, 2022 are presented in the following table:

Director RSU's Number of Units Weighted Average Grant Date Fair Value Total Fair Value (Millions of Dollars)

3 unchanged sentences

Outstanding at 9/30/2022 26,892 $ 132.54 $ 7.4

For the six months ended June 30, 2022 and 2021, share-based compensation was $ 7.0 million and $ 7.4 million, respectively.

There were $ 0.5 million and $ 0.1 million in income tax benefits realized for the tax deductions from options exercised for the six months ended June 30, 2022 and 2021, respectively.

For the nine months ended September 30, 2022 and 2021, share-based compensation was $ 11.7 million and $ 10.0 million, respectively.

There were $ 1.1 million and $ 0.4 million in income tax benefits realized for the tax deductions from options exercised for the nine months ended September 30, 2022 and 2021, respectively.

Murphy USA Inc.

7 unchanged sentences

Certain interest rate derivative contracts were accounted for as hedges and gain or loss associated with recording the fair value of these contracts was deferred in AOCI until the anticipated transactions occur.

As of June 30, 2022, all current commodity derivative activity is immaterial.

At June 30, 2022, there was $ 1.6 million cash deposit and at December 31, 2021 the cash deposit was $ 0.6 million related to commodity derivative contracts reported in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

These cash deposits have not been used to increase the reported net assets or reduce the reported net liabilities on the derivative contracts at June 30, 2022 or December 31, 2021.

As of September 30, 2022, all current commodity derivative activity is immaterial.

At September 30, 2022, there was $ 0.9 million cash deposit and at December 31, 2021 the cash deposit was $ 0.6 million related to commodity derivative contracts reported in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

These cash deposits have not been used to increase the reported net assets or reduce the reported net liabilities on the derivative contracts at September 30, 2022 or December 31, 2021.

Interest Rate Risks

3 unchanged sentences

The Company is reclassifying the accumulated other comprehensive loss on the previous interest rate swap, $ 2.4 million as of the de-designation date, into interest expense using a straight-line approach over the remaining life of the originally designated hedging relationship.

The amount of pre-tax gains in accumulated other comprehensive loss that was reclassified into interest expense was $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2022, respectively.

The amount of pre-tax gains in accumulated other comprehensive loss that was reclassified into interest expense was $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2021, respectively.

The remaining balance at June 30, 2022 was $ 1.1 million.

The amount of pre-tax gains in accumulated other comprehensive loss that was reclassified into interest expense was $ 0.2 million and $ 0.7 million for the three and nine months ended September 30, 2022, respectively.

The amount of pre-tax gains in accumulated other comprehensive loss that was reclassified into interest expense was $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2021, respectively.

The remaining balance at September 30, 2022 was $ 0.9 million.

Prior to the de-designation, changes in the fair values of the interest rate swaps were recorded as a component of other comprehensive loss.

4 unchanged sentences

The 2020 program was completed in January 2022, and a new authorized program for up to $ 1 billion, approved in December 2021 to be executed by December 31, 2026, is now in effect.

For the six months ended June 30, 2022, the Company repurchased 1,716,166 shares of common stock for an average price of $ 207.10 per share including brokerage fees.

For the six months ended June 30, 2021, 1,483,758 shares were repurchased for an average price of $ 133.65 per share.

For the nine months ended September 30, 2022, the Company repurchased 2,482,804 shares of common stock for an average price of $ 228.33 per share including brokerage fees.

For the nine months ended September 30, 2021, 1,699,043 shares were repurchased for an average price of $ 136.22 per share.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of basic and diluted earnings per share computations for the three and six months ended June 30, 2022 and 2021:

The following table provides a reconciliation of basic and diluted earnings per share computations for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars, except share and per share amounts) 2022 2021 2022 2021

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Potentially dilutive shares excluded from the calculation as their inclusion would be anti-dilutive 2022 2021 2022 2021

2 unchanged sentences

Total anti-dilutive shares — 83,003 4,603 103,457

Note 12 — Other Financial Information

CASH FLOW DISCLOSURES — Cash income taxes paid, net of refunds, was $ 87.4 million and $ 44.6 million for the six month periods ended June 30, 2022 and 2021, respectively.

Interest paid, net of amounts capitalized, was $ 39.5 million and $ 31.4 million for the six month periods ended June 30, 2022 and 2021, respectively.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Other Financial Information

CASH FLOW DISCLOSURES — Cash income taxes paid, net of refunds, was $ 141.5 million and $ 86.1 million for the nine month periods ended September 30, 2022 and 2021, respectively.

Interest paid, net of amounts capitalized, was $ 66.2 million and $ 57.9 million for the nine month periods ended September 30, 2022 and 2021, respectively.

CHANGES IN WORKING CAPITAL:

Six Months Ended

Nine Months Ended

September 30,

(Millions of dollars) 2022 2021

13 unchanged sentences

The carrying value of the Company’s Cash and cash equivalents, Accounts receivable-trade, Trade accounts payable, interest rate swap contracts and accrued liabilities approximates fair value.

See also Note 10 "Financial Instruments and Risk Management" in these consolidated financial statements for the period ended June 30, 2022, for more information.

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at June 30, 2022 and December 31, 2021.

See also Note 10 "Financial Instruments and Risk Management" in these consolidated financial statements for the period ended September 30, 2022, for more information.

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at September 30, 2022 and December 31, 2021.

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties.

3 unchanged sentences

The fair value of these, which represents fees associated with obtaining the instruments, was nominal.

At June 30, 2022 At December 31, 2021

At September 30, 2022 At December 31, 2021

Carrying Carrying

2 unchanged sentences

Current and long-term debt, excluding finance leases $ ( 1,673.3 ) $ ( 1,623.3 ) $ ( 1,673.5 ) $ ( 1,709.5 )

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 — Contingencies

8 unchanged sentences

and laws and regulations affecting the Company’s relationships with employees, suppliers, customers, stockholders and others.

Because governmental actions are often motivated by political considerations, may be taken without full consideration of their consequences, and may

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

be taken in response to actions of other governments, it is not practical to attempt to predict the likelihood of such actions, the form the actions may take or the effect such actions may have on the Company.

Because governmental actions are often motivated by political considerations, may be taken without full consideration of their consequences, and may be taken in response to actions of other governments, it is not practical to attempt to predict the likelihood of such actions, the form the actions may take or the effect such actions may have on the Company.

ENVIRONMENTAL MATTERS AND LEGAL MATTERS — Murphy USA is subject to numerous federal, state and local laws and regulations dealing with the environment.

11 unchanged sentences

Certain environmental expenditures are likely to be recovered by the Company from other sources, primarily environmental funds maintained by certain states.

Since no assurance can be given that future recoveries from other sources will occur, the Company has not recorded a benefit for likely recoveries at June 30, 2022, however certain jurisdictions provide reimbursement for these expenses which have been considered in recording the net exposure.

Since no assurance can be given that future recoveries from other sources will occur, the Company has not recorded a benefit for likely recoveries at September 30, 2022, however certain jurisdictions provide reimbursement for these expenses which have been considered in recording the net exposure.

Environmental Protection Agency (EPA) currently considers the Company a Potentially Responsible Party (PRP) at one Superfund site.

1 unchanged sentence

However, based on current negotiations and available information, the Company believes that it is a de minimis party as to ultimate responsibility at the Superfund site.

Accordingly, the Company has not recorded a liability for remedial costs at the Superfund site at June 30, 2022.

Accordingly, the Company has not recorded a liability for remedial costs at the Superfund site at September 30, 2022.

The Company could be required to bear a pro rata share of costs attributable to nonparticipating PRPs or could be assigned additional responsibility for remediation at this site or other Superfund sites.

2 unchanged sentences

However, there is the possibility that additional environmental expenditures could be required to address contamination, including as a result of discovering additional contamination or the imposition of new or revised requirements applicable to known contamination.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Murphy USA is engaged in a number of other legal proceedings, all of which the Company considers routine and incidental to its business.

2 unchanged sentences

At this early stage, the ultimate outcome of these matters remain uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be determined.

Based on information currently available to the Company, the ultimate resolution of those other legal matters is not expected to have a material adverse effect on the Company’s net income, financial condition or liquidity in a future period.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Based on information currently available to the Company, the ultimate resolution of these other legal matters is not expected to have a material adverse effect on the Company’s net income, financial condition or liquidity in a future period.

INSURANCE — The Company maintains insurance coverage at levels that are customary and consistent with industry standards for companies of similar size.

Murphy USA maintains statutory workers compensation insurance with a deductible of $ 1.0 million per occurrence, general liability insurance with a self-insured retention of $ 3.0 million per occurrence, and auto liability insurance with a deductible of $ 0.3 million per occurrence.

As of June 30, 2022, there were a number of outstanding claims that are of a routine nature.

As of September 30, 2022, there were a number of outstanding claims that are of a routine nature.

The estimated incurred but unpaid liabilities relating to these claims are included in Trade account payables and accrued liabilities on the Consolidated Balance Sheets.

6 unchanged sentences

OTHER MATTERS — In the normal course of its business, the Company is required under certain contracts with various governmental authorities and others to provide financial guarantees or letters of credit that may be drawn upon if the Company fails to perform under those contracts.

At June 30, 2022, the Company had contingent liabilities of $ 9.8 million on outstanding letters of credit.

At September 30, 2022, the Company had contingent liabilities of $ 9.8 million on outstanding letters of credit.

The Company has not accrued a liability in its balance sheet related to these financial guarantees and letters of credit because it is believed that the likelihood of having these drawn is remote.

11 unchanged sentences

As the implicit interest rate is not readily determinable in most of the Company's lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lessor — We have various arrangements for certain spaces for food service and vending equipment as well as subleases under which we are the lessor.

3 unchanged sentences

Our lease agreements do not contain any material residual value guarantees and approximately 102 stores leased from Walmart contain restrictive covenants, though the restrictions are deemed to have an immaterial impact.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leases are reflected in the following balance sheet accounts:

(Millions of dollars) Classification June 30,

(Millions of dollars) Classification September 30,

2022 December 31,

Operating (Right-of-use) Operating lease right-of-use assets, net $ 453.1 $ 419.2

Finance Property, plant, and equipment, at cost, less accumulated depreciation of $ 24.2 at June 30, 2022 and $ 16.7 at December 31, 2021

Finance Property, plant, and equipment, at cost, less accumulated depreciation of $ 27.3 at September 30, 2022 and $ 16.7 at December 31, 2021

Total leased assets $ 581.2 $ 556.5

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) Classification 2022 2021 2022 2021

4 unchanged sentences

Net lease costs $ 19.8 $ 18.2 $ 56.8 $ 48.0

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash flow information:

Six Months Ended

Nine Months Ended

September 30,

(Millions of dollars) 2022 2021

3 unchanged sentences

Financing cash flows from finance leases $ 8.4 $ 7.0

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturity of Lease Liabilities at June 30, 2022:

Maturity of Lease Liabilities at September 30, 2022:

(Millions of dollars) Operating leases Finance leases

9 unchanged sentences

Lease Term and Discount Rate:

Six Months Ended

Nine Months Ended

September 30,

Weighted average remaining lease term (years)

4 unchanged sentences

Operating leases 6.4 %

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 — Business Segment

6 unchanged sentences

Three Months Ended

June 30, 2022 June 30, 2021

(Millions of dollars) Total Assets at June 30, 2022 External Revenues Income (Loss) External Revenues Income (Loss)

September 30, 2022 September 30, 2021

(Millions of dollars) Total Assets at September 30, 2022 External Revenues Income (Loss) External Revenues Income (Loss)

Marketing $ 3,821.5 $ 6,194.4 $ 236.8 $ 4,600.3 $ 121.1

1 unchanged sentence

Total $ 4,135.1 $ 6,194.7 $ 219.5 $ 4,600.4 $ 104.0

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

June 30, 2022 June 30, 2021

Nine Months Ended

September 30, 2022 September 30, 2021

External Revenues Income (Loss) External Revenues Income (Loss)

4 unchanged sentences

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-Q

Item 1. Financial Statements