What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 138 added, 116 removed, 725 unchanged (26% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

June 30, December 31,

September 30, December 31,

(Millions of dollars, except share amounts) 2023 2022

18 unchanged sentences

Trade accounts payable and accrued liabilities 800.6 839.2

Income taxes payable 11.6 —

Total current liabilities 827.2 854.2

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

38 unchanged sentences

(Millions of dollars) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

12 unchanged sentences

(Millions of dollars)

Six Months Ended

Nine Months Ended

September 30,

Operating Activities

49 unchanged sentences

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

Net income — — — — 219.5 — 219.5

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

Cash dividends declared ($ 0.32 per share)

— — — — ( 7.5 ) — ( 7.5 )

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

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

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

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

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

Murphy USA Inc.

22 unchanged sentences

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

Net income — — — — 167.7 — 167.7

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

Cash dividends declared ($ 0.39 per share)

— — — — ( 8.4 ) — ( 8.4 )

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

Purchase of treasury stock — — ( 65.3 ) — — — ( 65.3 )

Issuance of treasury stock — — 2.5 ( 2.7 ) — — ( 0.2 )

Amounts related to share-based compensation — — — ( 6.3 ) — — ( 6.3 )

Share-based compensation expense — — — 5.7 — — 5.7

Balance as of September 30, 2023 46,767,164 $ 0.5 $ ( 2,795.9 ) $ 502.7 $ 3,136.8 $ — $ 844.1

See notes to consolidated financial statements.

3 unchanged sentences

Description of business — Murphy USA Inc.

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.

and its consolidated subsidiaries (“Murphy USA”, "we", "us", "our" 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 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 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.

At September 30, 2023, the Company had a total of 1,724 Company stores of which 1,568 were branded as Murphy and 156 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 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.

For the three month period ended September 30, 2023, the QuickChek results cover the period July 1, 2023 to September 29, 2023 and the 2023 year-to-date period began December 31, 2022.

For the three month period ended September 30, 2022, the QuickChek results cover the period July 2, 2022 to September 30, 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.

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

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

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

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

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

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

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Total revenues $ 5,797.8 $ 0.1 $ 5,797.9 $ 6,194.4 $ 0.3 $ 6,194.7

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

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

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

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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 June 30, 2023 and December 31, 2022 were immaterial.

The deferred revenue balances at September 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.

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

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.

At September 30, 2023 and December 31, 2022, we had $ 215.8 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) June 30,

(Millions of dollars) September 30,

2023 December 31,

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

At June 30, 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.

At September 30, 2023 and December 31, 2022, the replacement cost (market value) of LIFO inventories exceeded the LIFO carrying value for petroleum products by $ 311.6 million and $ 249.1 million, respectively and for store merchandise for resale by $ 2.1 million and $ 1.6 million for September 30, 2023 and December 31, 2022, respectively.

Note 4 — Marketable Securities

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

it merely allows it subject to specific limitations.

it allows it to be 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.

4 unchanged sentences

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

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

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

September 30, 2023

(Millions of dollars) Amortized

4 unchanged sentences

Corporate bonds 2.5 — — 2.5

Corporate bonds 1.5 — — 1.5

Investment income receivable 0.1 — — 0.1

13.0 — — 13.0

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 30, 2023

(Millions of dollars) Amortized

17 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 June 30, 2023, by contractual maturity, are as follows:

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

(Millions of dollars )

3 unchanged sentences

Total $ 15.8 $ 15.8

There was no impairment on any available-for-sale marketable securities as of June 30, 2023 or December 31, 2022.

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

(Millions of dollars) September 30,

2023 December 31,

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Remaining Useful Life (in years) September 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) June 30,

(Millions of dollars) September 30,

2023 December 31,

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

5.625 % senior notes due 2027 (net of unamortized discount of $ 1.3 at September 30, 2023 and $ 1.6 at December 31, 2022)

$ 298.7 $ 298.4

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)

4.75 % senior notes due 2029 (net of unamortized discount of $ 3.7 at September 30, 2023 and $ 4.2 at December 31, 2022)

3.75 % senior notes due 2031 (net of unamortized discount of $ 4.6 at September 30, 2023 and $ 5.1 at December 31, 2022)

Term loan due 2028 (effective interest rate of 7.22 % at September 30, 2023 and 5.95 % at December 31, 2022 and net of unamortized discount of $ 0.6 at September 30, 2023 and $ 0.7 at December 31, 2022)

Capitalized lease obligations, autos and equipment, due through 2026 2.9 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 $ 392 million at June 30, 2023 and $ 394 million at December 31, 2022.

The outstanding balance of the term loan was $ 391 million at September 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 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).

As of September 30, 2023, we had no outstanding borrowings under the Revolving Facility and had $ 6.2 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:

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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 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.

At September 30, 2023, our total leverage ratio was 1.75 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 $ 116.1 million or 4.50 % of consolidated net tangible assets over the life of the credit agreement.

2 unchanged sentences

Note 7 — Asset Retirement Obligations (ARO)

The majority of the ARO recognized by the Company at June 30, 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 September 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.

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

(Millions of dollars) June 30,

(Millions of dollars) September 30,

2023 December 31,

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

For the three and six month periods ended June 30, 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.

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

Three months ended September 30, 24.9 % 24.5 %

Nine months ended September 30, 24.4 % 24.2 %

In the nine months ended September 30, 2023, the Company recognized approximately $ 2.5 million of excess tax benefits related to stock compensation for employees and $ 0.5 million in other discrete tax benefits.

For 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.

As of September 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.

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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.

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

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.

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

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

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

2 unchanged sentences

Exercised ( 54,450 ) $ 76.08

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

Outstanding at September 30, 2023 297,600 $ 138.02 4.1 $ 60.6

Exercisable at September 30, 2023 167,100 $ 97.47 3.1 $ 40.8

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 June 30, 2023 are presented in the following table:

Changes in restricted stock units outstanding for Company employees during the period from December 31, 2022 to September 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)

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Forfeited ( 2,642 ) $ 176.19

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

Outstanding at September 30, 2023 120,589 $ 198.08 $ 41.2

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.

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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

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.

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

Changes in performance-based restricted stock units outstanding for Company employees during the period from December 31, 2022 to September 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)

2 unchanged sentences

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

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

Outstanding at September 30, 2023 95,477 $ 218.97 $ 32.6

2013 Stock Plan for Non-employee Directors

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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:

In addition, beginning with the 2023 annual equity grants to non-employee directors, the directors may elect to defer receipt of their vested RSUs until their service ends.

These RSUs are included in the Director RSU table below, 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 September 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)

2 unchanged sentences

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

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

Outstanding at September 30, 2023, including DSUs

23,627 $ 177.98 $ 8.1

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.

One DEU share was granted and vested on these DSUs during the third quarter period.

At September 30, 2023 there were 422 Director DSUs outstanding with an average grant date fair value of $ 258.05 under the 2013 Plan.

Murphy USA Inc.

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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 has been established to replace, on a prospective basis, the MUSA 2013 Plan and the 2013 Directors Plan, each of which expired 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.

As of September 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.

2 unchanged sentences

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:

Changes in restricted stock units outstanding for Company 2023 Plan during the period from December 31, 2022 to September 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)

1 unchanged sentence

Vested and issued 0

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.

Outstanding at September 30, 2023, including DSUs

692 $ 325.32 $ 0.2

During the three-month period ended September 30, 2023, we granted 692 DSUs and recorded director expense of $ 0.2 million related to the grants.

At September 30, 2023, there were 692 Director DSUs vested and outstanding with an average grant date fair value of $ 325.32 under the MUSA 2023 Plan.

Share-based compensation for the nine months ended September 30, 2023 and 2022, was $ 15.8 million and $ 11.7 million, respectively.

There were $ 0.4 million in income tax benefits realized for the tax deductions from options exercised for the nine months ended September 30, 2023 and there were $ 1.1 million for the nine months ended September 30, 2022.

Note 10 — Financial Instruments and Risk Management

4 unchanged sentences

For accounting purposes, the Company has not designated commodity derivative contracts as hedges, and therefore, it recognizes all gains and losses on these derivative contracts in its Consolidated Statements of Income.

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

As of June 30, 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.

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

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.

There were $ 0.3 million in cash deposits at September 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.

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, 2023 or December 31, 2022.

Interest Rate Risks

Under hedge accounting rules, the Company deferred the net charge or benefit associated with the interest rate swap entered into to manage the variability in interest payments for the variable-rate debt in association with $ 150.0 million of our outstanding term loan dated August 27, 2019 until the debt was repaid on January 29, 2021.

At that time the hedge was de-designated and therefore hedge accounting is no longer applicable and mark-to-market gains and losses are recognized in the period in which the change occurs in the Consolidated Statements of Income in interest expense.

The current loan balance subject to the hedge is $ 52.5 million.

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

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

An interest rate derivative that the Company used to effect the hedge entered into in August 2019 matured during the quarter ended September 30, 2023.

The amount of pre-tax gains in accumulated other comprehensive loss that was reclassified into interest expense was $ 0.1 million and $ 0.6 million for the three and nine months ended September 30, 2023, respectively.

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.

Note 11 — Earnings Per Share

2 unchanged sentences

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:

As of September 30, 2023, approximately $ 41.0 million remained under the 2021 authorization.

In addition, on May 2, 2023, we announced that our Board of Directors approved 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 nine months ended September 30, 2023, the Company repurchased 584,086 shares of common stock for an average price of $ 298.12 per share including brokerage fees and excise tax.

For the nine months ended September 30, 2022, 2,482,804 shares were repurchased for an average price of $ 228.33 per share.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

March 31, Nine Months Ended

September 30,

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

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

3 unchanged sentences

Note 12 — Other Financial Information

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.

CASH FLOW DISCLOSURES — Cash income tax payments, net of refunds, were $ 94.5 million and $ 141.5 million for the nine-month periods ended September 30, 2023 and 2022, respectively.

Interest paid, net of amounts capitalized, was $ 75.3 million and $ 66.2 million for the nine-month periods ended September 30, 2023 and 2022, respectively.

CHANGES IN WORKING CAPITAL:

Six Months Ended

Nine Months Ended

September 30,

(Millions of dollars) 2023 2022

15 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 June 30, 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 September 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.

2 unchanged sentences

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.

See also Note 10 "Financial Instruments and Risk Management" in these consolidated financial statements for the period ended September 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 June 30, 2023 and December 31, 2022:

June 30, 2023

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

September 30, 2023

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

3 unchanged sentences

Corporate bonds — 2.6 — 2.6

Corporate bonds — 1.5 — 1.5

Accounts receivable - trade

Interest rate swap derivative — — 0.5 0.5

Prepaid expenses and other current assets:

31 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 June 30, 2023 and December 31, 2022.

At June 30, 2023 At December 31, 2022

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

At September 30, 2023 At December 31, 2022

Carrying Carrying

28 unchanged sentences

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

Since no assurance can be given that future recoveries from other sources will occur, the Company has not recorded a benefit for likely recoveries at June 30, 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 September 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 June 30, 2023.

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

12 unchanged sentences

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

As of June 30, 2023, there were a number of outstanding claims that are of a routine nature.

As of September 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 June 30, 2023, the Company had contingent liabilities of $ 8.7 million on outstanding letters of credit.

At September 30, 2023, the Company had contingent liabilities of $ 10.2 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.

14 unchanged sentences

Lease income associated with these leases is immaterial.

Lessee — We lease land for 419 stores, one terminal, a hangar and various equipment.

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

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.

Included in our leased land are 102

Murphy USA Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 June 30,

(Millions of dollars) Classification September 30,

2023 December 31,

Operating (Right-of-use) Operating lease right-of-use assets, net $ 451.9 $ 449.6

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

Finance Property, plant, and equipment, at cost, less accumulated depreciation of $ 38.9 at September 30, 2023 and $ 30.5 at December 31, 2022

Total leased assets $ 568.2 $ 574.2

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) Classification 2023 2022 2023 2022

5 unchanged sentences

Cash flow information:

Six Months Ended

Nine Months Ended

September 30,

(Millions of dollars) 2023 2022

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturity of Lease Liabilities at June 30, 2023:

Maturity of Lease Liabilities at September 30, 2023:

(Millions of dollars) Operating leases Finance

8 unchanged sentences

Lease Term and Discount Rate:

Six Months Ended

Nine Months Ended

September 30,

Weighted average remaining lease term (years)

12 unchanged sentences

Three Months Ended

June 30, 2023 June 30, 2022

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

September 30, 2023 September 30, 2022

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

Marketing $ 4,042.0 $ 5,797.8 $ 187.2 $ 6,194.4 $ 236.8

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

June 30, 2023 June 30, 2022

Nine Months Ended

September 30, 2023 September 30, 2022

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

4 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements