What changed in this filing

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Item 1. Financial Statements

2023-05-04 compared with 2022-10-27 · 252 added, 277 removed, 510 unchanged (51% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30, December 31,

March 31, December 31,

(Millions of dollars, except share amounts) 2023 2022

1 unchanged sentence

Cash and cash equivalents $ 102.1 $ 60.5

Accounts receivable—trade, less allowance for doubtful accounts of $ 0.1 at 2022 and 2021

Marketable securities, current 13.5 17.9

Accounts receivable—trade, less allowance for doubtful accounts of $ 0.3 at 2023 and 2022, respectively

Inventories, at lower of cost or market 303.6 319.1

1 unchanged sentence

Total current assets 711.3 726.8

Marketable securities, non-current 4.4 4.4

Property, plant and equipment, at cost less accumulated depreciation and amortization of $ 1,602.5 and $ 1,553.1 at 2023 and 2022, respectively

18 unchanged sentences

Stockholders' Equity

Preferred Stock, par $ 0.01 (authorized 20,000,000 shares,

none outstanding)

Common Stock, par $ 0.01 (authorized 200,000,000 shares,

46,767,164 shares issued at 2022 and 2021, respectively)

Treasury stock ( 24,173,162 and 21,831,904 shares held at

2022 and 2021, respectively) ( 2,394.0 ) ( 1,839.3 )

Preferred Stock, par $ 0.01 (authorized 20,000,000 shares, none outstanding)

Common Stock, par $ 0.01 (authorized 200,000,000 shares, 46,767,164 shares issued at 2023 and 2022, respectively)

Treasury stock ( 24,983,927 and 25,017,324 shares held at 2023 and 2022, respectively)

( 2,638.3 ) ( 2,633.3 )

Additional paid in capital (APIC) 501.7 518.9

7 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars, except share and per share amounts) 2023 2022

Operating Revenues

Petroleum product sales (a) $ 5,078.6 $ 3,573.9 $ 14,917.3 $ 9,614.2

Petroleum product sales 1

$ 3,994.2 $ 4,148.4

Merchandise sales 966.2 892.0

2 unchanged sentences

Operating Expenses

Petroleum product cost of goods sold (a) 4,699.3 3,353.5 13,903.3 9,004.8

Petroleum product cost of goods sold 1

3,780.6 3,856.2

Merchandise cost of goods sold 779.1 716.3

8 unchanged sentences

Other income (expense)

Interest income 1.4 0.1 1.8 0.1

Investment income 0.8 —

Interest expense ( 24.9 ) ( 19.6 )

11 unchanged sentences

Supplemental information:

(a) Includes excise taxes of:

1 Includes excise taxes of:

$ 544.8 $ 514.1

3 unchanged sentences

(Millions of dollars) Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 106.3 $ 152.4

1 unchanged sentence

Interest rate swap:

Realized gain (loss) — — — ( 0.1 )

Unrealized gain (loss) — — — 0.1

Reclassifications:

Realized gain reclassified to interest expense — — — 0.1

Amortization of unrealized (gain) loss to interest expense 0.2 0.2

0.2 0.3 0.7 0.8

Deferred income tax (benefit) expense 0.1 0.1 0.2 0.2

Other comprehensive income (loss) 0.2 0.2

4 unchanged sentences

(Millions of dollars)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities

2 unchanged sentences

Depreciation and amortization 56.4 55.4

Deferred and noncurrent income tax charges (credits) 15.0 7.2

Deferred and noncurrent income tax charges (benefits) 6.6 7.5

Accretion of asset retirement obligations 0.8 0.7

2 unchanged sentences

Other operating activities - net 9.8 4.3

Net cash provided by (required by) operating activities 771.5 587.0

Net cash provided (required) by operating activities 149.7 339.2

Investing Activities

Property additions ( 72.7 ) ( 64.0 )

Payments for acquisition, net of cash acquired — ( 641.1 )

Proceeds from sale of assets 8.5 1.0

Redemptions of marketable securities 4.5 —

Other investing activities - net ( 0.8 ) ( 0.4 )

Net cash provided by (required by) investing activities ( 215.2 ) ( 853.7 )

Net cash provided (required) by investing activities ( 69.0 ) ( 64.4 )

Financing Activities

3 unchanged sentences

Repayments of debt ( 11.8 ) ( 3.8 )

Debt issuance costs — ( 9.9 )

Amounts related to share-based compensation ( 13.5 ) ( 12.2 )

Net cash provided by (required by) financing activities ( 620.0 ) 404.4

Net cash provided (required) by financing activities ( 39.1 ) ( 175.0 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 41.6 99.8

10 unchanged sentences

— — — — ( 7.2 ) — ( 7.2 )

Dividend equivalent units accrued — — — 0.1 ( 0.1 ) — —

Purchase of treasury stock — — ( 151.8 ) — — — ( 151.8 )

3 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 — — — — 128.8 — 128.8

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

Cash dividends declared ($ 0.25 per share)

( 6.7 ) ( 6.7 )

Purchase of treasury stock — — ( 148.3 ) — — — ( 148.3 )

Issuance of treasury stock — — 0.5 ( 0.5 ) — — —

Amounts related to share-based compensation — — — ( 0.5 ) — — ( 0.5 )

Share-based compensation expense — — — 3.8 — — 3.8

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.

Murphy USA Inc.

Consolidated Statements of Changes in Equity

(Millions of dollars, except share amounts) Shares Par Treasury Stock APIC Retained Earnings AOCI Total

4 unchanged sentences

— — — — ( 8.1 ) — ( 8.1 )

Purchase of treasury stock — — ( 151.8 ) — — — ( 151.8 )

Issuance of treasury stock — — 8.8 ( 8.8 ) — — —

Amounts related to share-based compensation — — — ( 12.2 ) — — ( 12.2 )

Share-based compensation expense — — — 2.9 — — 2.9

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 — — — — 183.3 — 183.3

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

Cash dividends declared ($ 0.31 per share)

— — — — ( 7.4 ) — ( 7.4 )

Dividend equivalent units accrued — — — 0.1 ( 0.1 ) — —

3 unchanged sentences

Share-based compensation expense — — — 4.9 — — 4.9

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

Balance as of March 31, 2023 46,767,164 $ 0.5 $ ( 2,638.3 ) $ 501.7 $ 2,853.2 $ ( 0.3 ) $ 716.8

See notes to consolidated financial statements.

3 unchanged sentences

Description of business — Murphy USA Inc.

and its consolidated subsidiaries (“Murphy USA” or the “Company”) markets refined products through a network of retail gasoline stores and to unbranded wholesale customers.

and its consolidated subsidiaries (“Murphy USA”, "we", or the “Company”) markets refined products through a network of retail gasoline stores and to unbranded wholesale customers.

In addition, we operate non-fuel convenience stores in select markets.

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 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 owns and operates a chain of retail stores under the brand names of Murphy USA® and Murphy Express most of which are located in close proximity to Walmart stores, and also has a mix of convenience stores with and without retail gasoline that operate under the name of QuickChek®.

At March 31, 2023, the Company had a total of 1,720 Company stores of which 1,562 were branded as Murphy and 158 were the QuickChek brand.

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

1 unchanged sentence

On August 30, 2013, Murphy USA was separated from Murphy Oil through the distribution of 100 % of the common stock of Murphy USA to holders of Murphy Oil stock.

On January 29, 2021, the Company acquired 100 % of Quick Chek Corporation ("QuickChek"), a privately held convenience store chain.

Murphy USA Inc., Murphy Oil USA, Inc.

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 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.

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

For the three month period ended March 31, 2023, the QuickChek results cover the period from December 31, 2022 to March 31, 2023.

For the three month period ended March 31, 2022, the QuickChek results cover the period January 1, 2022 to April 1, 2022.

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

6 unchanged sentences

Recently Issued Accounting Standards —

In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848):

This standard extends certain of the optional expedients and exceptions in ASC 848 that apply to derivative contracts impacted by the discounting transition, including derivatives that do not reference LIBOR or other reference rates that are expected to be discontinued.

The new standard applies to all entities and is in effect for a limited time, from March 12, 2020 through December 31, 2022.

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.

In August 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 606)," 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.

Under Topic 606, the acquirer applies the revenue model as if it had originated the contracts.

1 unchanged sentence

This ASU is effective for the Company for the year beginning January 1, 2023, with early adoption permitted.

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

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

In December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848." The amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024.

These amendments apply to all entities and are effective upon issuance of the Update.

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

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 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

Petroleum product sales (at retail) 1

$ 4,550.4 $ — $ 4,550.4 $ 3,168.3 $ — $ 3,168.3

Petroleum product sales (at wholesale) 1

528.2 — 528.2 405.6 — 405.6

Total petroleum product sales 5,078.6 — 5,078.6 3,573.9 — 3,573.9

Merchandise sales 1,027.2 — 1,027.2 953.4 — 953.4

Other operating revenues:

RINs 87.6 — 87.6 71.5 — 71.5

Other revenues 2

1.0 0.3 1.3 1.5 0.1 1.6

Total revenues $ 6,194.4 $ 0.3 $ 6,194.7 $ 4,600.3 $ 0.1 $ 4,600.4

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following tables disaggregate our revenues by major source for the three months ended March 31, 2023 and 2022, respectively:

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

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

Petroleum product sales (at retail) 1

Petroleum product sales

(at retail) 1

$ 3,586.1 $ — $ 3,586.1 $ 3,728.4 $ — $ 3,728.4

Petroleum product sales (at wholesale) 1

Petroleum product sales

(at wholesale) 1

408.1 — 408.1 420.0 — 420.0

17 unchanged sentences

Payment fees retained by the credit/debit card providers are recorded as Store and other operating expenses.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Petroleum product sales (at wholesale).

8 unchanged sentences

As noted above, a mixture of payment types are used for these revenues and the same terms for credit/debit card receivables are realized.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The most significant judgment with respect to merchandise sales revenue is determining whether we are the principal or agent for some categories of merchandise such as lottery tickets, lotto, newspapers and other small categories of merchandise.

7 unchanged sentences

We recognize loyalty revenue when a customer redeems an earned reward.

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 September 30, 2022 and December 31, 2021 were immaterial.

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

The deferred revenue balances at March 31, 2023 and December 31, 2022 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 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.

At March 31, 2023 and December 31, 2022, we had $ 158.9 million and $ 164.1 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.

These receivables were generally related to credit and debit card transactions along with short term bulk and wholesale sales to our customers, which have a very short settlement window.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Inventories

Inventories consisted of the following:

(Millions of dollars) September 30,

(Millions of dollars) March 31,

2023 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 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.

At March 31, 2023 and December 31, 2022, the replacement cost (market value) of LIFO inventories exceeded the LIFO carrying value for petroleum products by $ 277.3 million and $ 249.1 million, respectively and for store merchandise for resale by $ 1.6 million for both March 31, 2023 and December 31, 2022.

Note 4 — Marketable Securities

The Company invests a portion of its excess operational cash in marketable securities.

The goal of the Company's investment policy, in order of priority, are as follows:

(1) preservation of principal, (2) maintaining a high degree of liquidity to meet cash flow requirements, and (3) deliver competitive returns subject to prevailing market conditions and the Company's stated objectives related to safety and liquidity.

Nothing in the policy is intended to indicate that management must invest excess operational cash;

it merely allows it subject to specific limitations.

Securities are generally required to have a final maturity of 24 months or less with a weighted average maturity for the portfolio of no longer than 12 months and must have an active secondary market.

Investments may include U.S.

Treasury bills, notes and bonds, U.S.

Agency securities, repurchase agreements, certificates of deposit, institutional, government money market funds that maintain a stable $ 1.00 net asset value, domestic and foreign commercial paper, municipal securities, domestic and foreign debt issued by corporations or financial institutions with the primary objective of minimizing the potential risk of principal loss.

The Company determines the classification of its marketable securities based on its investment strategy at the time of purchase.

All marketable securities in the periods presented have been classified as available-for-sale.

T he carrying values of marketable securities and the balance sheet location at March 31, 2023 and December 31, 2022 consisted of the following:

March 31, 2023

(Millions of dollars) Amortized

Losses Estimated

Available-for-sale debt securities:

Marketable securities current

Government Bonds $ 5.9 $ — — $ 5.9

Corporate bonds 4.5 — — 4.5

Corporate bonds 3.0 — — 3.0

Investment income receivable 0.1 — — 0.1

13.5 — — 13.5

Marketable securities non-current

Corporate bonds 4.4 — — 4.4

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 — Business Acquisition

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.

The factors contributing to the recognition of goodwill are a mixture of direct and reverse synergies that are expected to be realized by both QuickChek and Murphy USA as a result of this acquisition.

The direct synergies include additional margin capture on the retail fuel side from the tactical pricing decisions and improved benefits from increased scale on the product acquisition side combined with other cost savings in both merchandise and store operations.

The reverse synergies reflect management's ability to leverage QuickChek's product pricing and operational capabilities related to food and beverage sales to Murphy branded stores.

All fair values were final as of December 31, 2021.

The Company has determined that the trade name has an indefinite life, as there is no economic, contractual, or other factors that limit its useful life and expects to generate value as long as the trade name is utilized, and therefore is not subject to amortization.

The fair value of intangible assets was based on widely-accepted valuation techniques, including discounted cash flows.

The following table summarizes the fair value of the consideration transferred at the date of the acquisition, as well as the calculation of goodwill based on the excess of consideration over the fair value of net assets acquired:

March 31, 2023

(Millions of dollars) Amortized

Losses Estimated

Total marketable securities $ 17.9 $ — $ — $ 17.9

December 31, 2022

(Millions of dollars) Amortized

Losses Estimated

Available-for-sale debt securities:

Marketable securities current

Government Bonds $ 8.8 $ — $ — $ 8.8

Corporate bonds 6.0 — — 6.0

Corporate bonds 3.0 — — 3.0

Investment income receivable 0.1 — — 0.1

17.9 — — 17.9

Marketable securities non-current

Corporate bonds 4.4 — — 4.4

Total marketable securities $ 22.3 $ — $ — $ 22.3

The amortized cost basis and fair value of the Company's available-for-sale marketable securities at March 31, 2023, by contractual maturity, are as follows:

(Millions of dollars )

Cash paid to shareholders $ 641.9

Less cash and cash equivalents acquired 0.8

Fair value of consideration transferred, net of cash acquired $ 641.1

Assets acquired:

Accounts receivable $ 8.0

Inventories 24.3

Prepaid expenses and other current assets 5.5

Property and equipment 447.1

Right of use assets 237.6

Other assets 5.4

Identified intangible assets 106.8

Liabilities assumed:

Accounts payable and accrued expenses ( 68.4 )

Deferred income tax liabilities ( 58.5 )

Asset retirement obligation ( 1.2 )

Current and long term debt, including finance lease obligations ( 148.5 )

Deferred credits and other liabilities ( 7.4 )

Operating lease liabilities ( 237.6 )

Net assets acquired 313.1

Goodwill 328.0

Fair value of consideration transferred, net of cash and cash equivalents acquired $ 641.1

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

Amortized Cost Fair Value

Less than 1 year $ 16.4 $ 16.4

1 to 2 years 1.5 1.5

Total $ 17.9 $ 17.9

There was no impairment on any available-for-sale marketable securities as of March 31, 2023 or December 31, 2022.

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) September 30,

(Millions of dollars) March 31,

2023 December 31,

Goodwill balance, at beginning of period $ 328.0 $ —

QuickChek acquisition — 328.0

Goodwill balance, at end of period $ 328.0 $ 328.0

In connection with the acquisition of QuickChek on January 29, 2021, we recorded the following amount of intangible assets.

2021 Remaining Useful Life

(Millions of dollars) Carrying Value (in years)

Intangible assets subject to amortization:

Intangible lease liability $ ( 9.1 ) 13.6

Intangible assets not subject to amortization:

Trade name 115.4 n/a

Liquor licenses 0.5 n/a

Total intangible assets acquired $ 106.8

Goodwill $ 328.0 $ 328.0

We amortize intangible assets subject to amortization on a straight-line basis based on the period for which the economic benefits of the asset or liability are expected to be realized.

The intangible assets subject to amortization was in addition to the Company's existing intangible asset pipeline space, which is being amortized over a 40 year life.

The intangible assets subject to amortization includes pipeline space, which is being amortized over a 40 year life and the intangible lease liability acquired from QuickChek that is being amortized over the remaining life of the underlying leases.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Intangible assets subject to amortization at March 31, 2023 and December 31, 2022 consisted of the following:

Remaining Useful Life (in years) March 31, 2023 December 31, 2022

(Millions of dollars) Cost Net Cost Net

10 unchanged sentences

Long-term debt consisted of the following:

(Millions of dollars) September 30,

(Millions of dollars) March 31,

2023 December 31,

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

5.625 % senior notes due 2027 (net of unamortized discount of $ 1.5 at March 31, 2023 and $ 1.6 at December 31, 2022)

$ 298.5 $ 298.4

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)

4.75 % senior notes due 2029 (net of unamortized discount of $ 4.0 at March 31, 2023 and $ 4.2 at December 31, 2022)

3.75 % senior notes due 2031 (net of unamortized discount of $ 4.9 at March 31, 2023 and $ 5.1 at December 31, 2022)

Term loan due 2028 (effective interest rate of 6.45 % at March 31, 2023 and 5.95 % at December 31, 2022 and net of unamortized discount of $ 0.7 at March 31, 2023 and December 31, 2022, respectively)

Capitalized lease obligations, autos and equipment, due through 2026 2.0 2.3

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 $ 395 million at September 30, 2022 and $ 398 million at December 31, 2021.

The outstanding balance of the term loan was $ 393 million at March 31, 2023 and $ 394 million at December 31, 2022.

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 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:

As of March 31, 2023, 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 Term Facility is based on either:

• the London interbank offered rate, adjusted for statutory reserve requirements (the “Adjusted LIBO Rate”);

• the Alternate Base Rate, which is defined as the highest of (a) the rate of interest last quoted by The Wall Street Journal as the "Prime Rate", (b) the greater of the federal funds effective rate and the overnight bank funding rate determined by the Federal Reserve Bank of New York from time to time plus 0.50 % per annum and (c) the one-month Adjusted LIBO Rate plus 1.00 % per annum,

plus, (A) in the case of Adjusted LIBO Rate borrowings, (i) with respect to the Revolving Facility, spreads ranging from 1.75 % to 2.25 % per annum depending on a total debt to EBITDA ratio or (ii) with respect to the Term Facility, a spread of 1.75 % per annum and (B) in the case of Alternate Base Rate borrowings (i) with respect to the Revolving Facility, spreads ranging from 0.75 % to 1.25 % per annum depending on a total debt to EBITDA ratio or (ii) with respect to the Term Facility, a spread of 1.75 % per annum.

The Term Facility amortizes in quarterly installments starting with the first amortization payment being due on July 1, 2021 at a rate of 1.00 % per annum.

Murphy USA is also required to prepay the Term Facility with a portion of its excess cash flow, a portion of the net cash proceeds of certain asset sales and casualty events (subject to certain reinvestment rights) and the net cash proceeds of issuances of indebtedness not permitted under the Credit Agreement.

The credit agreement allows Murphy USA to prepay, in whole or in part, the Term Facility outstanding

plus, (A) in the case of Adjusted LIBO Rate borrowings, a spread of 1.75 % per annum and (B) in the case of Alternate Base Rate borrowings, a spread of 0.75 % per annum.

Interest payable on the Revolving Facility is based on either:

• the term secured overnight financing rate, plus 0.10 % credit spread adjustment for all interest periods (the "Adjusted SOFR Rate"), which is subject to a 0.0 % floor;

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

thereunder, together with any accrued and unpaid interest, with prior notice but without premium or penalty other than breakage and redeployment costs.

plus, (A) in the case of Adjusted SOFR Rate borrowings, a spread of 1.75 % to 2.25 % per annum depending on a total debt to EBITDA ratio and (B) in the case of Alternate Base Rate borrowings, spreads of 0.75 % to 1.25 % per annum depending on a total debt to EBITDA ratio.

The Term Facility amortizes in quarterly installments starting with the first amortization payment being due on July 1, 2021 at a rate of 1.00 % per annum.

The credit agreement allows Murphy USA to prepay, in whole or in part, the Term Facility outstanding thereunder, together with any accrued and unpaid interest, with prior notice but without premium or penalty other than breakage and redeployment costs.

The credit agreement contains certain covenants that limit, among other things, the ability of the Company and certain of its subsidiaries to incur additional indebtedness or liens, to make certain investments, to enter into sale-leaseback transactions, to make certain restricted payments, to enter into consolidations, mergers or sales of material assets and other fundamental changes, to transact with affiliates, to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends, or to make certain accounting changes.

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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 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.

At March 31, 2023, our total leverage ratio was 1.58 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 $ 110.5 million or 4.50 % of consolidated net tangible assets over the life of the credit agreement.

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Note 7 — Asset Retirement Obligations (ARO)

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 majority of the ARO recognized by the Company at March 31, 2023 and December 31, 2022 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.

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In these cases, the obligation will be initially recognized in the period in which sufficient information exists to estimate the obligation.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Millions of dollars) September 30,

(Millions of dollars) March 31,

2023 December 31,

Balance at beginning of period $ 43.3 $ 39.2

Addition for acquisition — 1.2

Accretion expense 0.8 2.7

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The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the lack of availability of additional information.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 — Income Taxes

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 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.

For the three month periods ended March 31, 2023 and 2022, the Company’s approximate effective tax rates were as follows:

Three months ended March 31, 23.5 % 24.0 %

In the three months ended March 31, 2023, the Company recognized approximately $ 2.1 million of excess tax benefits related to stock compensation for employees and $ 0.2 million in other discrete tax benefits.

For the three months ended March 31, 2022, the Company recognized approximately $ 1.5 million of excess tax benefits related to stock compensation for employees.

As of March 31, 2023, the earliest year remaining open for Federal audits and/or settlement is 2019 and for state audits and/or settlement is 2018.

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.

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2013 Long-Term Incentive Plan

Effective August 30, 2013, certain of our employees participate in the Murphy USA 2013 Long-Term Incentive Plan which was subsequently amended and restated effective as of February 8, 2017 (the “MUSA 2013 Plan”).

The MUSA 2013 Plan authorizes the Executive Compensation Committee of our Board of Directors (“the Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unit awards), cash awards, and performance awards to our employees.

Effective August 30, 2013, certain of our employees began to participate in the Murphy USA 2013 Long-Term Incentive Plan which was subsequently amended and restated effective as of February 8, 2017 (the “MUSA 2013 Plan”).

The MUSA 2013 Plan authorizes the Executive Compensation Committee of our Board of Directors (“the Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unit awards), dividend equivalent units, cash awards, and performance awards to our employees.

No more than 5.5 million shares of MUSA common stock may be delivered under the MUSA 2013 Plan and no more than 1 million shares of common stock may be awarded to any one employee, subject to adjustment for changes in capitalization.

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DEUs issued are included with grants in each respective table as applicable.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK OPTIONS – The Committee fixes the option price of each option granted at no less than fair market value (FMV) on the date of the grant and fixes the option term at no more than 7 years from such date.

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Stock price at valuation date $ 263.48

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Changes in options outstanding for Company employees during the period from December 31, 2022 to March 31, 2023 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)

Outstanding at 12/31/2021 366,100 $ 90.44

Outstanding at December 31, 2022 313,950 $ 112.06

Granted 38,100 $ 263.48

Exercised ( 3,400 ) $ 110.69

Forfeited ( 9,100 ) $ 119.43

Outstanding at 9/30/2022 315,900 $ 111.89 4.3 $ 51.5

Exercisable at 9/30/2022 152,400 $ 80.74 3.1 $ 29.6

Outstanding at March 31, 2023 348,650 $ 128.62 4.2 $ 45.1

Exercisable at March 31, 2023 217,700 $ 91.81 3.2 $ 36.2

RESTRICTED STOCK UNITS (MUSA 2013 Plan) – The Committee has granted time-based restricted stock units (RSUs) as part of the compensation plan for its executives and certain other employees since its inception.

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 September 30, 2022 are presented in the following table:

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

Changes in restricted stock units outstanding for Company employees during the period from December 31, 2022 to March 31, 2023 are presented in the following table:

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

Outstanding at 12/31/2021 175,627 $ 95.93

Outstanding at December 31, 2022 149,366 $ 125.51

Granted 12,948 $ 259.45

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Forfeited ( 796 ) $ 167.30

Outstanding at 9/30/2022 152,158 $ 126.76 $ 41.8

Outstanding at March 31, 2023 114,132 $ 155.41 $ 29.5

PERFORMANCE-BASED RESTRICTED STOCK UNITS (MUSA 2013 Plan) – In February 2023, the Committee awarded performance-based restricted stock units (performance units or PSU) to certain employees.

Half of the performance units vest based on a 3-year return on average capital employed ("ROACE") calculation and the other half vest based on a 3-year total shareholder return ("TSR") calculation that compares MUSA to a group of 18 peer companies.

Half of the performance units vest based on a three-year return on average capital employed ("ROACE") calculation and the other half vest based on a three-year total shareholder return ("TSR") calculation that compares MUSA to a group of 17 peer companies.

The portion of the awards that vest based on TSR qualify as a market condition and must be valued using a Monte Carlo valuation model.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

Changes in performance-based restricted stock units outstanding for Company employees during the period from December 31, 2022 to March 31, 2023 are presented in the following table:

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

Outstanding at 12/31/2021 127,638 $ 117.59

Outstanding at December 31, 2022 106,001 $ 160.03

Granted 62,029 $ 295.32

Vested and issued ( 72,799 ) $ 121.83 $ 19.0

Forfeited ( 6,360 ) $ 133.98

Outstanding at 9/30/2022 105,879 $ 160.21 $ 29.1

Outstanding at March 31, 2023 95,231 $ 211.04 $ 24.6

2013 Stock Plan for Non-employee Directors

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RESTRICTED STOCK UNITS (Directors Plan) – The Committee has also granted time based RSUs to the non-employee directors of the Company as part of their overall compensation package for being a member of the Board of Directors.

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 September 30, 2022 are presented in the following table:

Awards prior to 2023 vest at the end of three years and those granted in 2023 vest at the end of one year .

Changes in restricted stock units outstanding for Company non-employee directors during the period from December 31, 2022 to March 31, 2023 are presented in the following table:

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

Outstanding at 12/31/2021 30,664 $ 100.23

Outstanding at December 31, 2022 26,923 $ 132.38

Granted 6,523 $ 260.76

Vested and issued ( 9,880 ) $ 103.89 $ 2.6

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

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.

Outstanding at March 31, 2023 23,566 $ 179.87 $ 6.1

DEFERRED STOCK UNITS (Directors Plan) — Effective January 1, 2023, non-employee directors can elect to receive their annual retainers in the form of Deferred Stock Units ("DSUs").

The DSUs are recognized at their fair value on the date of the grant.

Director fees which are deferred into stock units are calculated and expensed each quarter by taking fees earned during the quarter and dividing by the closing price of our common stock on the last trading day of the quarter.

Each DSU represents the right to receive one share of common stock following the completion of a director's service.

In addition, beginning with the 2023 equity grants, members may elect to defer receipt of their vested equity shares until their service ends.

These unvested equity grants are included in the Director RSU table above, will vest in one year and become deferred stock units.

During the three-month period ended March 31, 2023, we granted 421 DSUs and recorded director expense of $ 0.1 million related to the grants.

At March 31, 2023 there were 421 Director DSUs outstanding with an average grant date fair value of $ 258.05 .

For the three months ended March 31, 2023 and 2022, share-based compensation was $ 4.9 million and $ 2.9 million, respectively.

There were $ 0.1 million in income tax benefits realized for the tax deductions from options exercised for the three months ended March 31, 2023 and there were none for the three months ended March 31, 2022.

Murphy USA Inc.

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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 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.

As of March 31, 2023, all current commodity derivative activity is immaterial.

There were $ 0.4 million in cash deposits at March 31, 2023 and none at December 31, 2022 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 March 31, 2023 or December 31, 2022.

Interest Rate Risks

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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 $ 0.2 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.

The amount of pre-tax gains in accumulated other comprehensive loss that was reclassified into interest expense was $ 0.2 million for the three months ended March 31, 2023 and 2022, respectively.

The remaining balance at March 31, 2023 was $ 0.4 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.

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Diluted earnings per common share adjusts basic earnings per common share for the effects of stock options and restricted stock in the periods where such items are dilutive.

On October 28, 2020, the Board of Directors approved a $ 500 million share repurchase program effective through December 2023.

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 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.

On December 1, 2021, our Board of Directors approved a share repurchase authorization of up to $ 1 billion that expires December 31, 2026.

As of March 31, 2023, approximately $ 200.0 million remained under the 2021 authorization.

For the three months ended March 31, 2023, the Company repurchased 48,848 shares of common stock for an average price of $ 279.67 per share including brokerage fees.

For the three months ended March 31, 2022, 836,953 shares were repurchased for an average price of $ 181.36 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 nine months ended September 30, 2022 and 2021:

The following tables provide a reconciliation of basic and diluted earnings per share computations for the three months ended March 31, 2023 and 2022:

Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars, except share and per share amounts) 2023 2022

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Earnings per common share $ 4.89 $ 6.18

Three Months Ended

(Millions of dollars, except share and per share amounts) 2023 2022

Earnings per common share - assuming dilution:

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Dilutive share-based awards 394 419

Weighted average common shares outstanding - assuming dilution (in thousands) 23,650 26,153 24,398 26,883

Weighted average common shares outstanding - assuming dilution

(in thousands) 22,133 25,074

Earnings per common share assuming dilution $ 4.80 $ 6.08

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Three Months Ended

September 30, Nine Months Ended

September 30,

Potentially dilutive shares excluded from the calculation as their inclusion would be anti-dilutive 2023 2022

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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.

CASH FLOW DISCLOSURES — Cash income tax was a refund of $ 0.3 million for the three month period ended March 31, 2023 and there were no cash income taxes paid or refunds received for the three month period ended March 31, 2022.

Interest paid, net of amounts capitalized, was $ 29.2 million and $ 26.2 million for the three month periods ended March 31, 2023 and 2022, respectively.

CHANGES IN WORKING CAPITAL:

Nine Months Ended

September 30,

Three Months Ended

(Millions of dollars) 2023 2022

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Level 3 inputs are unobservable inputs which reflect assumptions about pricing by market participants.

At the balance sheet date, the fair value of commodity derivatives contracts was determined using NYMEX quoted values and the value of the Interest rate swap derivative was derived by using level 3 inputs, but the balances for each were immaterial.

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 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 Company's available-for-sale marketable securities consist of high quality, investment grade securities from diverse issuers.

We value these securities at the closing price in the principal active markets as of the last business day of the reporting period.

The fair values of the Company's marketable securities by asset class are described in Note 4 "Marketable Securities" in these consolidated financial statements for the period ended March 31, 2023.

We value the deferred compensation plan assets, which consist of money market and mutual funds, based on quoted prices in active markets at the measurement date.

For additional information on deferred compensation plans see also Note 14 "Employee and Retirement Benefit Plans" in the audited consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K for more information.

The tables below excludes Cash and cash equivalents, Accounts receivable-trade, and Trade accounts payable and accrued liabilities, all of which had fair values approximating carrying amounts.

See also Note 10 "Financial Instruments and Risk Management" in these consolidated financial statements for the period ended March 31, 2023, for more information.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial assets and liabilities measured at fair value on a recurring basis

The following tables present the Company's financial assets and liabilities measured at fair value on a recurring basis, as of March 31, 2023 and December 31, 2022:

March 31, 2023

(Millions of dollars) Level 1 Level 2 Level 3 Fair Value

Financial assets

Marketable securities, current

Government Bonds $ — $ 5.9 $ — $ 5.9

Corporate bonds — 4.6 — 4.6

Corporate Bonds — 3.0 — 3.0

Accounts receivable - trade

Interest rate swap derivative — — 0.8 0.8

Prepaid expenses and other current assets:

Fuel derivative — — 0.5 0.5

Marketable securities, non-current

Corporate bonds — 4.4 — 4.4

Deferred compensation plan assets 10.8 — — 10.8

Financial liabilities

Deferred credits and other liabilities

Deferred compensation plan liabilities ( 15.7 ) — — ( 15.7 )

$ ( 4.9 ) $ 17.9 $ 1.3 $ 14.3

December 31, 2022

(Millions of dollars) Level 1 Level 2 Level 3 Fair Value

Financial assets

Marketable securities, current

Government Bonds $ — $ 8.8 $ — $ 8.8

Corporate bonds — 6.1 — 6.1

Corporate Bonds — 3.0 — 3.0

Accounts receivable - trade

Interest rate swap derivative — — 1.3 1.3

Marketable securities, non-current

Corporate bonds — 4.4 — 4.4

Deferred compensation plan assets 9.5 — — 9.5

Financial liabilities

Deferred credits and other liabilities

Deferred compensation plan liabilities ( 14.7 ) — — ( 14.7 )

$ ( 5.2 ) $ 22.3 $ 1.3 $ 18.4

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair value of financial instruments not recognized at fair value

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

The table excludes Cash and cash equivalents, Accounts receivable-trade, Restricted cash, and Trade accounts payable and accrued liabilities, all of which had fair values approximating carrying amounts.

The fair value of Current and Long-term debt was estimated based on rates offered to the Company at that time for debt of the same maturities and these qualify as Level 1 inputs.

The fair value of Current and Long-term debt was estimated based on rates offered to the Company at that time for debt of the same maturities.

The Company has off-balance sheet exposures relating to certain financial guarantees and letters of credit.

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

At September 30, 2022 At December 31, 2021

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at March 31, 2023 and December 31, 2022.

At March 31, 2023 At December 31, 2022

Carrying Carrying

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Current and long-term debt, excluding finance leases $ ( 1,673.2 ) $ ( 1,646.8 ) $ ( 1,673.3 ) $ ( 1,643.0 )

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 — Contingencies

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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 September 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

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

other sources will occur, the Company has not recorded a benefit for likely recoveries at March 31, 2023, 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.

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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 September 30, 2022.

Accordingly, the Company has not recorded a liability for remedial costs at the Superfund site at March 31, 2023.

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.

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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.

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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.

Murphy USA believes that it has valid defenses, and it intends to vigorously defend against these claims.

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.

1 unchanged sentence

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

As of March 31, 2023, 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.

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

At March 31, 2023, 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.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15 — Lease Accounting

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we recognize lease expense for these leases on a straight-line basis over the lease term.

The Company's leases have remaining lease terms of approximately 1 year to 35 years, which may include the option to extend the lease when it is reasonably certain the Company will exercise the option.

The Company's leases have remaining lease terms of 1 year or less to 35 years, which may include the option to extend the lease when it is reasonably certain the Company will exercise the option.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from 5 to 20 years or more.

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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.

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Lessee — We lease land for 435 stores, one terminal, a hangar and various equipment.

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.

Our lease agreements do not contain any material residual value guarantees.

Included in our leased land are 102 properties leased from Walmart which contain restrictive covenants, though the restrictions are deemed to have an immaterial impact.

Leases are reflected in the following balance sheet accounts:

(Millions of dollars) Classification September 30,

(Millions of dollars) Classification March 31,

2023 December 31,

Operating (Right-of-use) Operating lease right-of-use assets, net $ 443.5 $ 449.6

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

Finance Property, plant, and equipment, at cost, less accumulated depreciation of $ 31.9 at March 31, 2023 and $ 30.5 at December 31, 2022

Total leased assets $ 564.2 $ 574.2

4 unchanged sentences

Total lease liabilities $ 591.0 $ 598.3

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) Classification 2023 2022

1 unchanged sentence

Finance lease cost

Amortization of leased assets Depreciation & amortization 4.0 4.3 11.9 10.7

Amortization of leased assets Depreciation and amortization 3.8 4.0

Interest on lease liabilities Interest expense 2.4 2.3

Net lease costs $ 19.6 $ 18.3

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash flow information:

Nine Months Ended

September 30,

Three Months Ended

(Millions of dollars) 2023 2022

3 unchanged sentences

Financing cash flows from finance leases $ 2.8 $ 2.8

Maturity of Lease Liabilities at September 30, 2022:

(Millions of dollars) Operating leases Finance leases

Maturity of Lease Liabilities at March 31, 2023:

(Millions of dollars) Operating leases Finance

2023 $ 37.6 $ 14.4

3 unchanged sentences

2027 47.2 15.5

After 2026 576.5 137.4

Total lease payments 761.6 202.2

2 unchanged sentences

Lease Term and Discount Rate:

Nine Months Ended

September 30,

Three Months Ended

Weighted average remaining lease term (years)

14 unchanged sentences

Three Months Ended

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

Corporate and other assets 313.6 0.3 ( 17.3 ) 0.1 ( 17.1 )

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

Nine Months Ended

September 30, 2022 September 30, 2021

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

(Millions of dollars)

March 31, 2023 March 31, 2022

(Millions of dollars) Total Assets at March 31, 2023 External Revenues Income (Loss) External Revenues Income (Loss)

Marketing $ 3,858.6 $ 5,077.1 $ 125.9 $ 5,118.3 $ 169.1

2 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