What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 213 added, 134 removed, 628 unchanged (36% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, December 31,

June 30, December 31,

(Millions of dollars, except share amounts) 2023 2022

2 unchanged sentences

Marketable securities, current 13.0 17.9

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

Accounts receivable—trade, less allowance for doubtful accounts of $ 0.8 and $ 0.3 at 2023 and 2022, respectively

Inventories, at lower of cost or market 349.9 319.1

13 unchanged sentences

Trade accounts payable and accrued liabilities 800.4 839.2

Income taxes payable 3.1 —

Total current liabilities 815.3 854.2

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended

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

38 unchanged sentences

(Millions of dollars) Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net income $ 132.8 $ 183.3 $ 239.1 $ 335.7

3 unchanged sentences

Amortization of unrealized (gain) loss to interest expense 0.3 0.3 0.5 0.5

0.3 0.3 0.5 0.5

Deferred income tax (benefit) expense 0.1 0.1 0.1 0.1

Other comprehensive income (loss) 0.2 0.2 0.4 0.4

4 unchanged sentences

(Millions of dollars)

Three Months Ended

Six Months Ended

Operating Activities

10 unchanged sentences

Property additions ( 145.2 ) ( 144.9 )

Proceeds from sale of assets 1.8 8.1

Investment in marketable securities ( 8.4 ) —

Redemptions of marketable securities 10.5 —

25 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 — — — — 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 — — — 0.2 ( 0.2 ) — —

Purchase of treasury stock — — ( 203.6 ) — — — ( 203.6 )

Issuance of treasury stock — — 2.5 ( 2.6 ) — — ( 0.1 )

Amounts related to share-based compensation — — — ( 5.3 ) — — ( 5.3 )

Share-based compensation expense — — — 4.1 — — 4.1

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

Murphy USA Inc.

Consolidated Statements of Changes in Equity

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

10 unchanged sentences

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

Net income — — — — 132.8 — 132.8

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

Cash dividends declared ($ 0.38 per share)

— — — — ( 8.2 ) — ( 8.2 )

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

Purchase of treasury stock — — ( 95.1 ) — — — ( 95.1 )

Issuance of treasury stock — — 0.3 ( 0.4 ) — — ( 0.1 )

Amounts related to share-based compensation — — — ( 0.8 ) — — ( 0.8 )

Share-based compensation expense — — — 5.2 — — 5.2

Balance as of June 30, 2023 46,767,164 $ 0.5 $ ( 2,733.1 ) $ 505.8 $ 2,977.7 $ ( 0.1 ) $ 750.8

See notes to consolidated financial statements.

6 unchanged sentences

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.

At June 30, 2023, the Company had a total of 1,725 Company stores of which 1,566 were branded as Murphy and 159 were the QuickChek brand.

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

3 unchanged sentences

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.

For the three month period ended June 30, 2023, the QuickChek results covered the period April 1, 2023 to June 30, 2023 and the 2023 year-to-date period began December 31, 2022.

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

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

9 unchanged sentences

This is a departure from the current requirement to measure contract assets and contract liabilities at fair value.

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

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

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

1 unchanged sentence

Revenue is recognized when obligations under the terms of a contract with our customers are satisfied;

generally, this occurs with the transfer of control of our petroleum products, convenience merchandise, Renewable Identification Numbers ("RINs") and other assets to our third-party customers.

generally, this occurs with the transfer of control of our petroleum products, convenience merchandise, Renewable

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Identification Numbers ("RINs") and other assets to our third-party customers.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.

3 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 months ended March 31, 2023 and 2022, respectively:

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

The following tables disaggregate our revenues by major source for the three and six months ended June 30, 2023 and 2022, respectively:

Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

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

12 unchanged sentences

Total revenues $ 5,585.4 $ — $ 5,585.4 $ 6,766.7 $ — $ 6,766.7

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

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

Petroleum product sales

(at retail) 1

$ 7,558.9 — $ 7,558.9 $ 8,811.3 $ — $ 8,811.3

Petroleum product sales

(at wholesale) 1

885.9 — 885.9 1,027.4 — 1,027.4

Total petroleum product sales 8,444.8 — 8,444.8 9,838.7 — 9,838.7

Merchandise sales 2,015.2 — 2,015.2 1,886.6 — 1,886.6

Other operating revenues:

RINs 199.5 — 199.5 156.0 — 156.0

Other revenues 2

3.0 0.1 3.1 3.7 0.1 3.8

Total revenues $ 10,662.5 $ 0.1 $ 10,662.6 $ 11,885.0 $ 0.1 $ 11,885.1

1 Includes excise and sales taxes that remain eligible for inclusion under Topic 606

4 unchanged sentences

The transaction price at the pump typically includes some portion of sales or excise taxes as levied in the respective jurisdictions.

Those taxes that are collected for remittance to governmental entities on a pass-through basis are not recognized as revenue and they are recorded to a liability account until they are paid.

Those taxes that are collected for remittance to governmental entities on a pass-through basis are not recognized as revenue and they are recorded

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to a liability account until they are paid.

Our customers typically use a mixture of cash, checks, credit cards and debit cards to pay for our products as they are received.

1 unchanged sentence

These receivables are typically collected in two to seven days , depending on the terms with the particular credit/debit card providers.

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

Payment fees retained by the credit/debit card providers are recorded as Store and other operating expenses in the Consolidated Statements of Income.

Petroleum product sales (at wholesale).

18 unchanged sentences

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.

The deferred revenue balances at June 30, 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 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.

At June 30, 2023 and December 31, 2022, we had $ 155.3 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.

4 unchanged sentences

Inventories consisted of the following:

(Millions of dollars) March 31,

(Millions of dollars) June 30,

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 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.

At June 30, 2023 and December 31, 2022, the replacement cost (market value) of LIFO inventories exceeded the LIFO carrying value for petroleum products by $ 261.1 million and $ 249.1 million, respectively and for store merchandise for resale by $ 1.8 million and $ 1.6 million for June 30, 2023 and December 31, 2022, respectively.

Note 4 — Marketable Securities

10 unchanged sentences

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

The carrying values of marketable securities and the balance sheet location at June 30, 2023 and December 31, 2022 consisted of the following:

June 30, 2023

(Millions of dollars) Amortized

Losses Estimated

Available-for-sale debt securities:

Available-for-sale securities:

Marketable securities current

4 unchanged sentences

13.0 — — 13.0

Marketable securities non-current

Corporate bonds 4.4 — — 4.4

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

(Millions of dollars) Amortized

Losses Estimated

Marketable securities non-current

Corporate bonds 5.9 — — 5.9

Corporate bonds 1.5 — — 1.5

Total marketable securities $ 20.4 $ — $ — $ 20.4

2 unchanged sentences

Losses Estimated

Available-for-sale debt securities:

Available-for-sale securities:

Marketable securities current

7 unchanged sentences

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:

The amortized cost basis and fair value of the Company's available-for-sale marketable securities at June 30, 2023, by contractual maturity, are as follows:

(Millions of dollars )

3 unchanged sentences

Total $ 20.3 $ 20.3

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

There was no impairment on any available-for-sale marketable securities as of June 30, 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) March 31,

(Millions of dollars) June 30,

2023 December 31,

1 unchanged sentence

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 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.

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 which 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 March 31, 2023 and December 31, 2022 consisted of the following:

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

Intangible assets subject to amortization at June 30, 2023 and December 31, 2022 consisted of the following:

Remaining Useful Life (in years) June 30, 2023 December 31, 2022

(Millions of dollars) Cost Net Cost Net

10 unchanged sentences

Long-term debt consisted of the following:

(Millions of dollars) March 31,

(Millions of dollars) June 30,

2023 December 31,

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

5.625 % senior notes due 2027 (net of unamortized discount of $ 1.4 at June 30, 2023 and $ 1.6 at December 31, 2022)

$ 298.6 $ 298.4

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)

4.75 % senior notes due 2029 (net of unamortized discount of $ 3.9 at June 30, 2023 and $ 4.2 at December 31, 2022)

3.75 % senior notes due 2031 (net of unamortized discount of $ 4.7 at June 30, 2023 and $ 5.1 at December 31, 2022)

Term loan due 2028 (effective interest rate of 6.94 % at June 30, 2023 and 5.95 % at December 31, 2022 and net of unamortized discount of $ 0.7 at June 30, 2023 and December 31, 2022, respectively)

Capitalized lease obligations, autos and equipment, due through 2026 2.7 2.3

21 unchanged sentences

Revolving Credit Facility and Term Loan

On January 29, 2021, the Company entered into a new credit agreement that consists of both a cash flow revolving credit facility and a senior secured term loan that replaced the Company's prior ABL facility and term loan.

Our credit agreement consists of both a cash flow revolving credit facility and a senior secured term loan.

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 $ 393 million at March 31, 2023 and $ 394 million at December 31, 2022.

The outstanding balance of the term loan was $ 392 million at June 30, 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 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).

As of June 30, 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, a spread of 1.75 % per annum and (B) in the case of Alternate Base Rate borrowings, a spread of 0.75 % per annum.

• the term overnight financing rate, plus the applicable Alternative Reference Rate Committee ("ARRC") recommended credit spread adjustment (the “Adjusted Term SOFR Rate”);

plus, (A) in the case of Adjusted Term SOFR 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:

4 unchanged sentences

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 Term Facility amortizes in quarterly installments, which commenced 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.

5 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 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.

At June 30, 2023, our total leverage ratio was 1.66 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 $ 112.2 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 March 31, 2023 and December 31, 2022 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 June 30, 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.

4 unchanged sentences

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

(Millions of dollars) March 31,

(Millions of dollars) June 30,

2023 December 31,

8 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 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.

For the three and six month periods ended June 30, 2023 and 2022, the Company’s approximate effective tax rates were as follows:

Three months ended June 30, 24.4 % 24.0 %

Six months ended June 30, 24.0 % 24.0 %

In the six months ended June 30, 2023, the Company recognized approximately $ 2.3 million of excess tax benefits related to stock compensation for employees and $ 0.5 million in other discrete tax benefits.

For 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.

As of June 30, 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.

5 unchanged sentences

The maximum cash amount payable pursuant to any “performance-based” award to any participant in any calendar year is $ 5.0 million.

Beginning with its initial quarterly dividend in December 2020, the Company issues dividend equivalent units ("DEU") on all outstanding, unvested equity awards (except stock options) in an amount commensurate with regular quarterly dividends paid on common stock.

The terms of the DEU mirror the underlying awards and will only vest if the related award vests.

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

On May 4, 2023, the 2023 Omnibus Incentive Compensation Plan (the "MUSA 2023 Plan") was approved by shareholders and became effective for all future grants for both employees and directors, as described later in the footnote.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

regular quarterly dividends paid on common stock.

The terms of the DEU mirror the underlying awards and will only vest if the related award vests.

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

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.

7 unchanged sentences

Stock price at valuation date $ 263.48

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)

Changes in options outstanding for Company employees during the period from December 31, 2022 to June 30, 2023 are presented in the following table:

2013 Plan — Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Millions of Dollars)

Outstanding at December 31, 2022 313,950 $ 112.06

1 unchanged sentence

Exercised ( 12,400 ) $ 79.05

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

Outstanding at June 30, 2023 339,650 $ 130.25 4.0 $ 61.4

Exercisable at June 30, 2023 208,700 $ 92.87 3.0 $ 45.5

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 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)

Changes in restricted stock units outstanding for Company employees during the period from December 31, 2022 to June 30, 2023 are presented in the following table:

2013 Plan — Employee RSUs Number of units Weighted Average Grant Date Fair Value Total Fair Value (Millions of Dollars)

Outstanding at December 31, 2022 149,366 $ 125.51

2 unchanged sentences

Forfeited ( 1,249 ) $ 176.57

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

Outstanding at June 30, 2023 135,092 $ 171.49 $ 42.0

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.

2 unchanged sentences

For the TSR portion of the awards, the fair value was determined to be $ 330.18 per unit.

For the ROACE portion of the awards, the valuation will be based on the grant date fair value of $ 263.48 per unit and the number of awards will be periodically assessed to determine the probability of vesting.

For the ROACE portion of the awards, the valuation will be based on the grant date fair

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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)

value of $ 263.48 per unit and the number of awards will be periodically assessed to determine the probability of vesting.

Changes in performance-based restricted stock units outstanding for Company employees during the period from December 31, 2022 to June 30, 2023 are presented in the following table:

2013 Plan — Employee PSUs Number of Units Weighted Average Grant Date Fair Value Total Fair Value (Millions of Dollars)

Outstanding at December 31, 2022 106,001 $ 160.03

1 unchanged sentence

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

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

Outstanding at June 30, 2023 95,360 $ 210.75 $ 29.7

2013 Stock Plan for Non-employee Directors

3 unchanged sentences

An aggregate of 500,000 shares of common stock was reserved for issuance of grants under the Directors Plan.

With approval of the 2023 Omnibus Plan, all future director grants will be granted under that plan.

RESTRICTED STOCK UNITS (2013 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.

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)

DEFERRED STOCK UNITS (2013 Directors Plan) — Effective January 1, 2023, non-employee directors can elect to receive their annual cash 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 DSUs 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 annual equity grants to non-employee directors, these directors may elect to defer receipt of their vested RSUs until their service ends.

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

Changes in restricted stock units outstanding for Company non-employee directors during the period from December 31, 2022 to June 30, 2023 are presented in the following table:

2013 Plan — Director RSUs and DSUs Number of Units Weighted Average Grant Date Fair Value Total Fair Value (Millions of Dollars)

Outstanding at December 31, 2022 26,923 $ 132.38

1 unchanged sentence

Vested and issued ( 9,880 ) $ 110.19 $ 2.7

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.

Outstanding at June 30, 2023, including DSUs 23,598 $ 178.20 $ 7.3

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 under the 2013 Plan.

No additional shares will be granted under the 2013 Plan.

At June 30, 2023 there were 421 Director DSUs outstanding with an average grant date fair value of $ 258.05 under the 2013 Plan.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2023 Omnibus Incentive Compensation Plan

On May 4, 2023, the MUSA 2023 Plan became effective upon the approval of the Company's stockholders.

The MUSA 2023 Plan has been established to replace, on a prospective basis, the MUSA 2013 Plan and the 2013 Directors Plan, each of which expire on August 8, 2023.

The MUSA 2023 Plan authorizes the Executive Compensation Committee of our Board of Directors (“the Committee”) to grant to non-employee directors, employees, and consultants of the Company, or any of its subsidiaries, stock options (incentive stock options ("ISOs") and nonqualified stock options ("NQSO")), stock appreciation rights ("SARs"), restricted stock, restricted stock units ("RSUs"), performance awards or other cash-based awards and other stock-based awards.

The maximum number of shares available for issuance under the MUSA 2023 Plan shall not exceed in the aggregate 1,725,000 shares (subject to certain adjustments).

As of June 30, 2023, other than the deferred stock units described below, no other grants have been made under the MUSA 2023 Plan.

DEFERRED STOCK UNITS — Non-employee directors can elect to receive their annual cash retainers in the form of DSUs.

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

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

Changes in restricted stock units outstanding for Company 2023 Plan during the period from December 31, 2022 to June 30, 2023 are presented in the following table:

2023 Plan — RSUs and Director DSUs Number of Units Weighted Average Grant Date Fair Value Total Fair Value (Millions of Dollars)

Outstanding at December 31, 2022 — $ —

Vested and issued —

Outstanding at June 30, 2023, including DSUs 366 $ 311.11 $ 0.1

During the three-month period ended June 30, 2023, we granted 366 DSUs and recorded director expense of $ 0.1 million related to the grants.

At June 30, 2023, there were 366 Director DSUs vested and outstanding with an average grant date fair value of $ 311.11 under the MUSA 2023 Plan.

Share-based compensation for the six months ended June 30, 2023 and 2022, was $ 10.1 million and $ 7.0 million, respectively.

There were $ 0.3 million in income tax benefits realized for the tax deductions from options exercised for the six months ended June 30, 2023 and there were $ 0.5 million for the six months ended June 30, 2022.

Note 10 — Financial Instruments and Risk Management

5 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 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.

As of June 30, 2023, all current commodity derivative activity is immaterial.

There were $ 1.0 million in cash deposits at June 30, 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.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2023 or December 31, 2022.

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 $ 0.2 million for the three months ended March 31, 2023 and 2022, respectively.

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

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, 2023 and 2022, respectively.

The remaining balance at June 30, 2023 was $ 0.2 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.

2 unchanged sentences

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

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

As of June 30, 2023, approximately $ 105.7 million remained under the 2021 authorization.

In addition, on May 2, 2023, we announced that our Board of Directors authorized a new share repurchase authorization of up to $ 1.5 billion to begin upon completion of the current $ 1 billion authorization and to be executed by December 31, 2028.

For the six months ended June 30, 2023, the Company repurchased 382,992 shares of common stock for an average price of $ 284.01 per share including brokerage fees and excise tax.

For the six months ended June 30, 2022, 1,716,166 shares were repurchased for an average price of $ 207.10 per share.

The following tables provide a reconciliation of basic and diluted earnings per share computations for the three and six months ended June 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

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

4 unchanged sentences

Earnings per common share $ 6.12 $ 7.65 $ 11.01 $ 13.81

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

March 31, Six Months Ended

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

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

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

2 unchanged sentences

Total anti-dilutive shares 50,885 20,293 50,885 72,193

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Other Financial Information

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.

CASH FLOW DISCLOSURES — Cash income tax payments, net of refunds, were $ 46.5 million and $ 87.4 million for the six-month periods ended June 30, 2023 and 2022, respectively.

Interest paid, net of amounts capitalized, was $ 46.2 million and $ 39.5 million for the six-month periods ended June 30, 2023 and 2022, respectively.

CHANGES IN WORKING CAPITAL:

Three Months Ended

Six Months Ended

(Millions of dollars) 2023 2022

5 unchanged sentences

Net (increase) decrease in noncash operating working capital $ ( 61.6 ) $ 47.8

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13 — Assets and Liabilities Measured at Fair Value

6 unchanged sentences

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.

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 June 30, 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.

1 unchanged sentence

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.

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

The tables below exclude 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 June 30, 2023, for more information.

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

The following tables present the Company's financial assets and liabilities measured at fair value on a recurring basis, as of June 30, 2023 and December 31, 2022:

June 30, 2023

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

10 unchanged sentences

Corporate bonds — 5.9 — 5.9

Corporate bonds — 1.5 — 1.5

Deferred compensation plan assets 11.3 — — 11.3

3 unchanged sentences

$ ( 6.3 ) $ 20.4 $ 1.1 $ 15.2

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

14 unchanged sentences

$ ( 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

3 unchanged sentences

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

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

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at June 30, 2023 and December 31, 2022.

At June 30, 2023 At December 31, 2022

Carrying Carrying

13 unchanged sentences

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.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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, 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.

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 March 31, 2023.

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

8 unchanged sentences

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.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 March 31, 2023, there were a number of outstanding claims that are of a routine nature.

As of June 30, 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.

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 March 31, 2023, the Company had contingent liabilities of $ 9.8 million on outstanding letters of credit.

At June 30, 2023, the Company had contingent liabilities of $ 8.7 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

16 unchanged sentences

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.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leases are reflected in the following balance sheet accounts:

(Millions of dollars) Classification March 31,

(Millions of dollars) Classification June 30,

2023 December 31,

Operating (Right-of-use) Operating lease right-of-use assets, net $ 448.2 $ 449.6

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

Finance Property, plant, and equipment, at cost, less accumulated depreciation of $ 35.8 at June 30, 2023 and $ 30.5 at December 31, 2022

Total leased assets $ 566.2 $ 574.2

4 unchanged sentences

Total lease liabilities $ 595.4 $ 598.3

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

June 30, Six Months Ended

(Millions of dollars) Classification 2023 2022 2023 2022

5 unchanged sentences

Cash flow information:

Three Months Ended

Six Months Ended

(Millions of dollars) 2023 2022

3 unchanged sentences

Financing cash flows from finance leases $ 7.7 $ 5.6

Maturity of Lease Liabilities at March 31, 2023:

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturity of Lease Liabilities at June 30, 2023:

(Millions of dollars) Operating leases Finance

8 unchanged sentences

Lease Term and Discount Rate:

Three Months Ended

Six Months Ended

Weighted average remaining lease term (years)

4 unchanged sentences

Operating leases 6.5 %

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 — Business Segment

Note 16 — Business Segments

Our operations include the sale of retail motor fuel products and convenience merchandise along with the wholesale and bulk sale capabilities of our product supply and wholesale group.

5 unchanged sentences

Three Months Ended

March 31, 2023 March 31, 2022

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

June 30, 2023 June 30, 2022

(Millions of dollars) Total Assets at June 30, 2023 External Revenues Income (Loss) External Revenues Income (Loss)

Marketing $ 3,837.2 $ 5,585.4 $ 151.7 $ 6,766.7 $ 199.1

1 unchanged sentence

Total $ 4,204.8 $ 5,585.4 $ 132.8 $ 6,766.7 $ 183.3

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

June 30, 2023 June 30, 2022

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

(Millions of dollars)

Marketing $ 10,662.5 $ 277.6 $ 11,885.0 $ 368.2

Corporate and other assets 0.1 ( 38.5 ) 0.1 ( 32.5 )

Total $ 10,662.6 $ 239.1 $ 11,885.1 $ 335.7

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