What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2023-11-02 · 133 added, 206 removed, 236 unchanged (59% of the section changed)

9 unchanged sentences

It includes information on the basis of presentation with respect to the amounts presented in the Management’s Discussion and Analysis and a discussion of the trends affecting our business.

• Results of Operations — This section provides an analysis of our results of operations, including the results of our operating segment for the three and nine months ended September 30, 2023 and 2022.

• Capital Resources and Liquidity — This section provides a discussion of our financial condition and cash flows as of and for the three and nine months ended September 30, 2023 and 2022.

• Results of Operations — This section provides an analysis of our results of operations, including the results of our operating segment for the three months ended March 31, 2024 and 2023.

• Capital Resources and Liquidity — This section provides a discussion of our financial condition and cash flows as of and for the three months ended March 31, 2024 and 2023.

It also includes a discussion of our capital structure and available sources of liquidity.

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Our Form 10-K contains a discussion of matters not included within this document, such as disclosures regarding critical accounting policies and estimates, and contractual obligations.

The Company owns and operates a chain of retail stores marketing gasoline and other products under the brand names of Murphy USA ® and Murphy Express, most of which are located in close proximity to Walmart stores, principally in the Southeast, Midwest and Southwest areas of the United States.

The Company owns and operates a chain of retail stores that market gasoline and other merchandise under the brand names of Murphy USA ® and Murphy Express, most of which are located in close proximity to Walmart stores, principally in the Southeast, Midwest and Southwest areas of the United States.

We also have a mix of convenience stores and retail gasoline stores located in New Jersey and New York that operate under the brand name of QuickChek ® .

At September 30, 2023, we had a total of 1,724 Company stores in 27 states, of which 1,568 were Murphy branded and 156 were under the QuickChek brand.

At March 31, 2024, we had a total of 1,733 Company stores in 27 states, of which 1,579 were Murphy branded and 154 were under the QuickChek brand.

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

3 unchanged sentences

and its subsidiaries for all periods presented.

Our QuickChek subsidiary uses a weekly retail calendar where each quarter has 13 weeks.

For Q3 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 Q3 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.

Our QuickChek subsidiaries use a weekly retail calendar where each quarter typically has 13 weeks.

For Q1 2024, the QuickChek results cover the period December 30, 2023 to March 29, 2024.

For Q1 2023, the QuickChek

results cover the period December 31, 2022 to March 31, 2023.

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

3 unchanged sentences

While we generally expect our volume and gross margins to remain stable in a normalized environment, they can change rapidly due to many factors.

These factors include, but are not limited to, the price of refined products, geopolitical events that disrupt the global supply, demand, and prices of crude oil, interruptions in our fuel and merchandise supply chain caused by severe weather or pandemics, the effects from pandemics such as travel restrictions and stay-at-home orders imposed during a pandemic, new or changing legislation around tobacco and e-cigarettes as well as fuel economy and vehicle emission standards, severe refinery mechanical failures for an extended period of time, cyber-attacks against the Company or our vendors, changing economic conditions that lower consumer purchasing power such as inflation, and competition in the local markets in which we operate.

The cost of our main sales products, gasoline and diesel, are greatly impacted by the cost of crude oil in the United States.

These factors include, but are not limited to, the price of refined products, geopolitical events that disrupt the global supply, overall demand, and prices of crude oil, interruptions in our fuel and merchandise supply chain caused by severe weather or pandemics, the effects from pandemics such as travel restrictions and stay-at-home orders imposed during a pandemic, new or changing legislation around tobacco and e-cigarettes as well as fuel economy and vehicle emission standards, severe refinery mechanical failures for an extended period of time, cyber-attacks against the Company or our vendors, changing economic conditions that lower consumer purchasing power such as inflation, and competition in the local markets in which we operate.

The cost of our main fuel products, gasoline and diesel, is greatly impacted by the cost of crude oil in the United States.

Historically, a rising price environment for crude oil increases the Company’s cost for wholesale fuel products purchased and increases retail fuel prices.

Rising prices can cause consumers to reduce discretionary fuel consumption, however our low-price model can also serve as a hedge to draw new customers and potentially offset the potential loss of discretionary volumes.

In Q3 2023, crude oil prices continued to be volatile and generally higher than the first six month of 2023, ranging from $70 per barrel to $94 per barrel with an average price in Q3 2023 of $82 per barrel, compared to a higher average price of $93 per barrel in Q3 2022.

Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results including Renewable Identification Numbers ("RINs")) for Q3 2023 was 34.5 cents per gallon ("cpg"), compared to 37.6 cpg in Q3 2022.

Retail fuel margin dollars decreased 28.8% in the current quarter and retail fuel volumes were lower 2.5% when compared to Q3 of 2022, which benefited from a declining commodity price environment.

Our revenues are impacted by the ability to leverage our diverse supply infrastructure in pursuit of obtaining the lowest cost fuel supply available;

Rising prices can cause consumers to reduce discretionary fuel consumption, however our low-price model can also serve as a hedge to draw new customers which can offset the potential loss of discretionary volumes.

In Q1 2024, crude oil prices were relatively stable with prices ranging from $71 per barrel to $84 per barrel with an average price in Q1 2024 of $78 per barrel, compared to a average price of $76 per barrel in Q1 2023.

Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results which include Renewable Identification Numbers ("RINs")) was 24.8 cents per gallon ("cpg") in Q1 2024, compared to 28.9 cpg in Q1 2023.

Retail fuel margin dollars decreased 5.6% in the current quarter while retail fuel volumes improved 1.0% when compared to Q1 2023.

Our revenues are impacted by the ability to leverage our diverse supply infrastructure in pursuit of obtaining the lowest cost of fuel supply available;

for example, activities such as blending bulk fuel with renewable fuels (ethanol and bio-diesel) to capture and subsequently sell RINs.

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The market price for RINs fluctuates based on a variety of factors, including but not limited to governmental and regulatory action.

There are other market related factors that can impact the net benefit we receive from RINs on a company-wide basis either favorably or unfavorably.

The Renewable Fuel Standard ("RFS") program continues to be unpredictable and prices received for ethanol RINs averaged $1.41 in Q3 2023 compared to $1.58 in Q3 2022.

Our business model does not depend on our ability to generate revenues from RINs.

There are other market related factors that can impact the revenue received for RINs on a company-wide basis either favorably or unfavorably.

The Renewable Fuel Standard ("RFS") program continues to be unpredictable and prices received by us for ethanol RINs averaged $0.57 per RIN in Q1 2024 compared to $1.60 per RIN in Q1 2023.

Our business model does not depend on our ability to generate revenues from RINs, and we have historically observed that changes in revenue are typically coupled with offsetting changes in cost of goods that minimizes the majority of any revenue movement.

Revenue from the sales of RINs is included in “Other operating revenues” in the Consolidated Statements of Income.

As of September 30, 2023, we had $1.3 billion of Senior Notes and a $391 million term loan outstanding.

As of March 31, 2024, we had $1.3 billion of Senior Notes and a $389 million term loan outstanding.

We believe that we will generate sufficient cash from operations to fund our ongoing operating requirements and service our debt obligations.

At September 30, 2023, we had additional available capacity under the committed $350 million cash flow revolving credit facility, with none drawn.

At March 31, 2024, we had additional available capacity under the committed $350 million cash flow revolving credit facility, with none drawn.

We expect to use the credit facilities to provide us with available financing to meet any short-term ongoing cash needs in excess of internally generated cash flows.

To the extent necessary, we will borrow under these facilities to fund our ongoing operating requirements.

There can be no assurances that we will generate sufficient cash from operations or be able to draw on the credit facilities, or obtain and draw upon other credit facilities.

To the extent necessary, we will borrow under these facilities to fund our ongoing operating requirements and other corporate initiatives.

There can be no assurances, however, that we will generate sufficient cash from operations or be able to draw on the credit facilities, obtain commitments for our incremental facility, or obtain and draw upon other credit facilities.

For additional information, see Significant Sources of Capital in the Capital Resources and Liquidity section.

The Company currently anticipates total capital expenditures (including land for future developments) for the full year 2024 to range from approximately $400 million to $450 million depending on how many new stores are completed.

We intend to fund the remainder of our capital program in 2023 primarily using operating cash flow but will supplement funding where necessary using borrowings available under cash flow revolving credit facilities.

We believe that our business will continue to grow in the future as we expand the food and beverage capabilities within our network.

We intend to fund the remainder of our capital program in 2024 primarily using operating cash flow but will supplement funding where necessary through borrowings under our revolving credit facilities.

We believe that our business will continue to grow in the future as we expand additional capabilities such as food and beverage within our network.

We maintain a pipeline of desirable future store locations for development.

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We currently estimate our ongoing effective tax rate to be between 24% and 26% for the remainder of the year.

Our business has inherent seasonality due to the concentration of our retail stores in certain geographic areas, as well as customer activity and behaviors during different seasons.

Our business has inherent seasonality due to the concentration of our retail stores in certain geographic areas, as well as customer behaviors during different seasons.

In general, sales volumes and operating incomes are typically highest in the second and third quarters during the summer-activity months and lowest during the winter months.

As a result, operating results for the three and nine months ended September 30, 2023, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2023.

As a result, operating results for the three months ended March 31, 2024, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2024.

Business Segment

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

For additional operating segment information, see Note 23 “Business Segments” in the audited combined financial statements for the year ended December 31, 2022 included with our Annual Report on Form 10-K and Note 16 “Business Segments” in the accompanying unaudited consolidated financial statements for the three and nine months ended September 30, 2023.

For additional operating segment information, see Note 22 “Business Segments” in the audited combined financial statements for the year ended December 31, 2023 included with our Annual Report on Form 10-K and Note 16 “Business Segments” in the accompanying unaudited consolidated financial statements for the three months ended March 31, 2024.

Results of Operations

Consolidated Results

For the three months ended September 30, 2023, the Company reported net income of $167.7 million, or $7.69 per diluted share, on revenue of $5.8 billion.

For the three months ended March 31, 2024, the Company reported net income of $66.0 million, or $3.12 per diluted share, on revenue of $4.8 billion.

Net income was $106.3 million for the same period in 2023, or $4.80 per diluted share, on $5.1 billion of revenue.

The decrease in net income was primarily due to lower all-in fuel contribution combined with increases in store operating expenses, general and administrative expenses, interest expense, and depreciation and amortization expense, which were partially offset by higher overall merchandise contributions, lower payment fees, and lower income tax expense.

For the nine months ended September 30, 2023, the Company reported net income of $406.8 million, or $18.47 per diluted share, on revenue of $16.5 billion.

Net income for the same period in 2022 was $555.2 million, or $22.76 per diluted share, on $18.1 billion of revenue.

The decrease in net income is primarily due to lower all-in fuel contribution, and increases in store operating expenses, general and administrative expenses, interest expense and depreciation and amortization expense, which were partially offset by higher merchandise contribution, lower payment fees, and lower income tax expense.

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

The decrease in net income was primarily due to lower total fuel contribution combined with increases in store operating expenses, general and administrative expenses, and depreciation and amortization expense, which were partially offset by higher fuel sales volumes, higher overall merchandise contributions, and lower income tax expense.

Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

Revenues for Q1 2024 decreased $0.3 billion, or 4.6%, compared to the same quarter in 2023.

The decrease in revenues was due to 7.1% lower retail fuel sales prices and 2.5% lower fuel sales volumes and was partially offset by an increase in merchandise sales prices and units.

The decrease in revenues was due to 5.4% lower retail fuel sales prices and PS&W revenues which were partially offset by 1.0% higher fuel sales volumes and an increase in merchandise sales prices and units.

Total cost of sales in Q1 2024 decreased $0.2 billion, or 4.3%, when compared to Q1 2023.

In the current-year quarter, the decrease was primarily due to lower fuel cost and lower fuel volumes sold and was partially offset by higher merchandise costs.

Store and other operating expenses increased $11.1 million, or 4.4%, in Q3 2023 from Q3 2022, primarily due to higher employee related expenses, store maintenance costs, and inventory shrink costs, partially offset by lower payment fees.

In the current-year quarter, the decrease was primarily due to lower fuel cost and was partially offset by higher fuel volumes sold and higher merchandise costs.

Store and other operating expenses increased $13.8 million, or 5.8%, in Q1 2024 from Q1 2023, primarily due to higher employee related expenses and maintenance costs at existing stores combined with net new store operating expenses.

Selling, general and administrative ("SG&A") expenses for Q1 2024 increased $3.1 million, or 5.3%, from Q1 2023.

The increase in SG&A costs is primarily due to higher employee and incentive costs and professional and technology fees from business improvement initiatives.

The increase in SG&A costs is primarily due to higher employee costs incurred in Q1 2024.

Depreciation and amortization expense increased $2.3 million in Q1, or 4.1%, when compared to the same period of 2023, primarily due to higher cost for the new larger store formats for Murphy USA stores and raze-and-rebuild activity in the period.

The effective income tax rate was approximately 24.9% for Q3 of 2023 compared to approximately 24.5% in Q3 2022.

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

Year-to-date revenues for nine months of 2023 decreased $1.6 billion, or 9.0%, compared to the same period in 2022.

The decrease in revenues was due to lower retail fuel sales and lower product supply and wholesale ("PS&W") revenues excluding RINs and was partially offset by higher retail fuel sales volumes, increased merchandise sales, and higher RINs revenue.

Year-to-date cost of sales decreased $1.5 billion, or 9.2%, compared to 2022.

In the current-year period, the lower costs were primarily due to lower wholesale fuel prices, partially offset by higher sales volumes, and higher merchandise costs.

Store and other operating expenses increased $31.2 million, or 4.3%, in the first nine months of 2023, primarily due to higher employee related costs, increased store maintenance expenses and inventory shrink costs, partially offset by lower payment fees.

SG&A expenses for the first nine months of 2023 increased $27.6 million, or 18.3%, compared to the first nine months of 2022.

The increase in SG&A costs is primarily due to an increase in employee and incentive costs and professional and technology services for business improvement initiatives.

Depreciation and amortization expense increased $7.2 million, or 4.4%, year-to-date from the same period of 2022 primarily due to higher depreciation on the newer larger store formats of Murphy USA stores.

The effective income tax rate was approximately 24.4% for the nine months ended September 30, 2023 versus 24.2% for the same period of 2022.

The effective income tax rate was approximately 19.4% for Q1 2024 compared to approximately 23.5% in Q1 2023.

The Q1 2024 effective tax rate is lower due primarily to excess tax benefits on equity awards that vested during the quarter.

Segment Results

A summary of the Company’s earnings by business segment follows:

A summary of the Company’s net income by business segment follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023

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Net Income $ 66.0 $ 106.3

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

Marketing segment net income for the three months ended September 30, 2023 was lower compared to the same period in 2022 primarily due to:

• Lower all-in fuel contribution

• Lower fuel sales volumes

Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

Marketing segment net income for the three months ended March 31, 2024 was lower compared to the same period in 2023 primarily due to:

• Lower total fuel contribution

• Higher store and other operating expenses

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The items below partially offset the decrease in net income in the current period:

• Higher merchandise contribution

• Lower payment fees

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

Marketing segment net income for the nine months ended September 30, 2023 was lower compared to the same nine-month period in 2022 primarily due to:

• Lower all-in fuel contribution

• Higher store and other operating expenses

• Higher SG&A expenses

The items below partially offset the decrease in net income in the nine-month period:

• Higher merchandise contribution

• Higher fuel sales volumes

• Lower payment fees

(Millions of dollars, except revenue per store month (in thousands) and store counts) Three Months Ended

September 30, Nine Months Ended

September 30,

• Higher merchandise contribution

(Millions of dollars, except revenue per same store sales (in thousands) and store counts) Three Months Ended

Marketing Segment 2024 2023

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Interest expense (2.1) (2.3)

Other nonoperating income (expense) 0.1 — 0.1 —

Total other income (expense) $ (2.1) $ (2.3)

(Millions of dollars, except revenue per store month (in thousands) and store counts) Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars, except revenue per same store sales (in thousands) and store counts) Three Months Ended

Marketing Segment 2024 2023

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Total non-tobacco sales revenue same store sales 1,2

74.7 75.1 73.5 69.5

Total merchandise sales revenue same store sales 1,2

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Three Months Ended

September 30, Nine Months Ended

September 30,

Key Operating Metrics 2024 2023

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Total PS&W contribution ($ Millions) 6.7 (50.1)

RINs (included in Other operating revenues on Consolidated Statements of Income) ($ Millions) 81.8 87.6 281.2 243.6

RINs (included in Other operating revenues on Consolidated

Statements of Income) ($ Millions) 29.4 115.3

Total fuel contribution ($ Millions) $ 286.1 $ 329.9

Three Months Ended

September 30, Nine Months Ended

September 30,

Key Operating Metrics 2023 2022 2023 2022

Retail fuel volume - chain (Million gal) 1,153.1 1,141.8

Retail fuel volume - per store (K gal APSM) 1

245.8 256.4 241.8 244.0

Retail fuel volume - per store (K gal SSS) 2

241.7 251.8 237.7 240.7

Total fuel contribution (including retail, PS&W and RINs) (cpg) 34.5 37.6 31.0 35.6

Total fuel contribution (cpg) 24.8 28.9

Retail fuel margin (cpg) 21.7 23.2

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2 2023 amounts not revised for 2024 raze-and-rebuild activity

The reconciliation of the components of total fuel contribution to the Consolidated Statements of Income is as follows:

The reconciliation of the total fuel contribution to the Consolidated Statements of Income is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

Key Operating Metrics 2024 2023

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2 Includes store-level discounts for MDR redemptions and excludes change in value of unredeemed MDR points

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

Net income in the Marketing segment for Q3 2023 decreased $49.6 million, to $187.2 million when compared to the Q3 2022 period.

The decrease was primarily due to lower total all-in fuel contribution and increases in store operating expenses and SG&A expenses partially offset by higher merchandise contribution and lower income tax expense.

Total revenues for the Marketing segment decreased $0.4 billion to $5.8 billion in Q3 2023 compared to $6.2 billion in Q3 2022.

The reduction in revenues was due to lower fuel prices and slightly lower retail fuel volumes sold, partially offset by higher merchandise sales.

Revenues included excise taxes collected and remitted to government authorities of $582.1 million in Q3 2023 and $569.7 million in Q3 2022.

Retail fuel margin dollars decreased 28.8% as a result of a retail fuel margin of 28.7 cpg for Q3 2023 compared to 39.3 cpg in Q3 2022, which had benefited from a declining commodity price environment.

In addition, Q3 2023 retail fuel volumes decreased 2.5%.

Total fuel sales volumes on a SSS basis decreased 4.7% to 241.7 thousand gallons per store in the 2023 period when compared to Q3 2022.

Total PS&W margin dollars, including RINs, improved by $91.8 million from Q3 2022 results.

The quarter-over-quarter increase reflects a higher contribution from inventory pricing adjustments partially offset by weaker spot-to-rack spreads.

The Q3 2023 quarter included the sale of 58.0 million RINs at an average selling price of $1.41 per RIN while Q3 2022 had sales of 55.6 million RINs at an average price of $1.58 per RIN, resulting in a decrease in RINs revenue of $5.8 million.

Total merchandise sales were $1.1 billion in Q3 2023 and $1.0 billion in Q3 2022.

Total merchandise contribution in Q3 2023 improved 3.0% compared to Q3 2022 due to higher unit sales volumes and retail prices.

Total SSS merchandise contribution dollars grew 1.2%, which included an increase of 3.1% in tobacco products and a 0.3% decrease in non-tobacco products.

Store and other operating expenses increased $11.0 million in Q3 2023 compared to Q3 2022, primarily due to employee related expenses, store maintenance costs, and inventory shrink costs partially offset by lower payment fees.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were higher by 5.8%, primarily due to increased employee related expenses, maintenance costs, and inventory shrink costs.

SG&A expenses increased $7.6 million in Q3 2023 compared to Q3 2022 due primarily to higher salaries and related benefits, professional and technology fees from business improvement initiatives, and employee incentive expenses.

Depreciation and amortization expense increased $2.9 million, or 5.8%, in Q3 2023 compared to Q3 2022 due to new larger store formats for Murphy USA stores and raze-and-rebuild activity in the quarter.

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

Net income in the Marketing segment for the nine months ended September 30, 2023 decreased $140.2 million compared to the nine months ended September 30, 2022 period, due to lower all-in fuel contributions, increased store operating expenses, higher selling general and administrative costs which were partially offset by higher merchandise contributions and lower income tax expense.

Total revenues for the Marketing segment were approximately $16.5 billion for the nine-month period ended September 30, 2023 compared to $18.1 billion for the same period ended September 30, 2022.

The decrease in revenues were due to a 13.8% decrease in retail fuel sales prices, decreased total PS&W revenues, including RINs, and was partially offset by a 1.4% increase in number of gallons sold and a 5.4% increase in merchandise sales.

Revenues included excise taxes collected and remitted to government authorities of $1.7 billion in the nine months ended September 30, 2023 and $1.6 billion in 2022.

Retail fuel margin dollars decreased 10.9% in the nine-month period ended September 30, 2023 compared to the prior-year nine months on a margin rate of 26.4 cpg which was 12.0% lower than the margin rate of 30.0 cpg in the same period of 2022, this decrease was partially offset by total fuel volumes which increased 1.4%.

Total fuel sales volumes on a SSS basis decreased 1.8% to 237.7 thousand gallons per store in 2023 compared to 2022.

Total PS&W margin dollars, including RINs, generated income of $166.7 million in the 2023 nine-month period compared to income of $196.9 million in the first nine months of 2022, a decrease of $30.2 million.

The decrease was due to timing and inventory pricing adjustments, partially offset by higher RINs revenue.

The nine months ended September 30, 2023 includes the sales of 186.6 million RINs at an average selling price of $1.51 per RIN while the prior-year period had sales of 179.1 million RINs at an average price of $1.36 per RIN, resulting in an increase in RIN revenue of $37.6 million.

Total merchandise sales increased 5.4% to $3.1 billion in the nine months ended September 30, 2023 compared to $2.9 billion in the first nine months of 2022 due to higher sales volumes and prices across the chain in most categories.

Year-to-date total merchandise contribution in 2023 increased 4.8% compared to the same period of

Total SSS merchandise margin grew 2.9% with an increase of 3.3% in tobacco products and 2.6% in non-tobacco products.

Store and other operating expenses increased $31.1 million in the current year compared to the same period of 2022, primarily due to employee related expenses, maintenance expenses and inventory shrink costs, partially offset by lower payment fees.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent increased 5.1%, primarily due to employee related expenses, maintenance costs, and inventory shrink.

SG&A expenses increased $27.6 million in 2023 compared to 2022 due primarily to the increased salaries and benefits, professional and technology services for business improvement initiatives, and employee incentive expenses.

Depreciation and amortization expense increased $6.0 million, or 3.9%, in the first nine months of 2023 due to new larger store formats for Murphy USA stores combine with raze-and-rebuild activities.

Same store sales information compared to APSM metrics

Variance from prior year Variance from prior year

Three months ended Nine months ended

September 30, 2023 September 30, 2023

Retail fuel volume per month (4.7) % (4.2) % (1.8) % (0.9) %

Variance from prior year

Three months ended

March 31, 2024

Fuel gallons per month (0.9) % (0.1) %

Merchandise sales 3.2 % 3.1 %

6 unchanged sentences

2 Includes all MDR activity

Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

Net income in the Marketing segment for Q1 2024 decreased $40.4 million, to $85.5 million when compared to the Q1 2023 period.

The decrease was primarily due to lower total fuel contribution and increases in store operating expenses and SG&A expenses partially offset by higher fuel sales volumes and higher merchandise contribution.

Total fuel contribution for Q1 2024, was $286.1 million, a decrease of $43.8 million or 13.3%, compared to Q1 2023.

This reduction was due to lower retail fuel contribution, combined with lower contribution from PS&W margins, and was partially offset by slightly higher fuel volumes sold in the period when compared to Q1 of 2023.

Retail fuel margins on a cpg basis decreased 6.5% in Q1 2024 to 21.7 cpg, compared to 23.2 cpg in the prior year period.

Total retail fuel volumes increased 1.0%, while fuel sales volumes on an SSS basis decreased 0.9% to 227.3 thousand gallons per store in Q1 2024 when compared to Q1 2023.

Total product supply and wholesale contribution dollars, including RINs, decreased $29.1 million in Q1 2024 when compared to Q1 2023, primarily due to timing of transactions during the quarter and lower RIN sales volume, partially offset by the favorable impact of a rising price environment.

Total merchandise sales were $1.0 billion in both Q1 2024 and 2023.

Total merchandise contribution in Q1 2024 improved 2.4% compared to Q1 2023 due to higher unit sales volumes and retail prices, up 0.5% and 1.9%, respectively.

Total SSS merchandise contribution dollars grew 2.2%, which included an increase of 6.2% in tobacco products and a 1.3% decrease in non-tobacco products.

Store and other operating expenses increased $13.9 million in Q1 2024 compared to Q1 2023, primarily due to higher employee related expenses and maintenance costs at existing stores combined with net new store operating expenses.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were 6.8% higher, primarily attributable to increased employee related expenses, maintenance, and property taxes.

SG&A expenses increased $3.1 million in Q1 2024 compared to Q1 2023, due primarily to higher salaries and related benefits, partially offset by lower professional fees.

Depreciation and amortization expense increased $2.5 million, or 4.8%, in Q1 2024 compared to Q1 2023 due to new larger store formats for Murphy USA stores and raze-and-rebuild activity in the quarter.

Corporate and Other Assets

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

After-tax results for Corporate and other assets for Q3 2023 were a loss of $19.5 million compared to a loss of $17.3 million in Q3 2022.

The increase in loss was primarily due to higher interest expense and other nonoperating loss and was partially offset by higher investment income.

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

After-tax results for Corporate and other assets for the nine months ended September 30, 2023 were a loss of $58.0 million compared to a loss of $49.8 million in the same period of 2022.

The increase in loss was primarily due to higher interest and depreciation expense, a lower gain on sale of corporate assets, and was partially offset by higher investment and nonoperating income in 2023 compared to 2022.

Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

Loss from continuing operations for Corporate and other assets for Q1 2024 was $19.5 million, compared to a loss of $19.6 million in Q1 2023.

Investment income in the current year quarter was $0.4 million higher but was offset by $0.5 million of slightly higher interest expense.

Non-GAAP Measures

The following table sets forth the Company’s Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022.

operations, net settlement proceeds, (gain) loss on sale of assets, loss on early debt extinguishment, transaction and integration costs related to acquisition, and other non-operating (income) expense).

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three months ended March 31, 2024 and 2023.

EBITDA means net income (loss) plus net interest expense, plus income tax expense, depreciation and amortization, and Adjusted EBITDA adds back (i) other non-cash items (e.g., impairment of properties and accretion of asset retirement obligations) and (ii) other items that management does not consider to be meaningful in assessing our operating performance (e.g., (income) from discontinued operations, net settlement proceeds, (gain) loss on sale of assets, loss on early debt extinguishment, transaction and integration costs related to acquisition, and other non-operating (income) expense).

EBITDA and Adjusted EBITDA are not measures that are prepared in accordance with U.S.

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Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023

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(Gain) loss on sale of assets (0.4) 0.2

Acquisition and integration related costs — 0.4 — 1.4

Other nonoperating (income) expense (0.4) (0.3)

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Significant Sources of Capital

As of September 30, 2023, we had $124.8 million of cash and cash equivalents and $15.9 million of marketable securities.

As of March 31, 2024, we had $56.7 million of cash and cash equivalents and total marketable securities of $10.6 million.

Our cash management policy provides that cash balances in excess of a certain threshold may be reinvested in certain types of low-risk investments.

We have a committed cash flow revolving credit facility (the "revolving facility”) of $350 million, which was undrawn at September 30, 2023, which can be utilized for working capital and other general corporate purposes, including supporting our operating model as described herein.

We believe our short-term and long-term liquidity is adequate to fund not only our operations, but also our anticipated near-term and long-term funding requirements, including capital spending programs, execution of announced share repurchase programs, potential dividend payments, repayment of debt maturities and other amounts that may ultimately be paid in connection with contingencies.

We have a committed cash flow revolving credit facility (the "revolving facility”) of $350 million, which was undrawn at March 31, 2024, which can be utilized for working capital and other general corporate purposes, including supporting our operating model as described herein.

Additional borrowing capacity under the revolving facility may be extended at our request and with the consent of the participating lenders.

We believe our existing cash on hand and future borrowing capacity of our existing facilities is adequate to fund not only our operations, but also our anticipated near-term and long-term funding requirements, including capital spending programs, execution of announced share repurchase programs, potential dividend payments, repayment of debt maturities and other amounts that may ultimately be paid in connection with contingencies.

Operating Activities

Net cash provided by operating activities was $510.9 million for the nine months ended September 30, 2023, and $771.5 million for the same period of 2022, a decrease of $260.6 million.

The decrease for the current year is primarily related to the year-over-year changes in amounts from non-cash working capital of $116.0 million and the decrease in net income of $148.4 million compared to the same period in 2022.

For the current year, operating cash required by changes in non-cash operating working capital of $97.2 million was due to a decrease

in accounts payable and accrued liabilities of $49.7 million which was related to the timing of payments, an increase in accounts receivable of $63.8 million due to the timing of receipts, and an increase in inventory of $16.3 million due to higher merchandise prices and volumes.

The decline in net cash provided by operating activities was also partially offset by a decrease in prepaid expenses of $21.0 million due primarily to the timing of for software licenses and maintenance agreements, and an increase of $11.6 million in income taxes payable.

Net cash provided by operating activities was $136.0 million for the three months ended March 31, 2024 and was $149.7 million for the same period of 2023, a decrease of $13.7 million, or 9.2%.

The decrease for the three months ended March 31, 2024 is mainly due to a decrease in net income of $40.3 million, an increase in the amount of cash provided from changes in noncash working capital of $34.6 million, and lower deferred and noncurrent tax changes of $7.1 million partially offset by increased depreciation of $2.3 million compared to the same period in 2023.

For the three months ended March 31, 2024, operating cash provided by changes in non-cash operating working capital of $4.2 million was due to a decrease in inventory of $48.6 million due to higher merchandise prices and volumes, an increase of $16.3 million in income taxes payable due in part to phase-out of federal bonus depreciation resulting in higher current tax expense, and was partially offset by an increase in accounts receivable of $45.7 million due to the timing of receipts, a decrease in accounts payable and accrued liabilities of $9.3 million which was related to the timing of payments, and an increase in prepaid expenses of $5.7 million.

Investing Activities

For the nine months ended September 30, 2023, cash required by investing activities was $217.0 million compared to $215.2 million in 2022.

The $1.8 million increase in investing cash requirements in 2023 compared to the prior year was primarily due to an increase of $1.5 million in capital expenditures due to the timing of projects and a decrease in the amount of proceeds from sales of corporate assets of $6.2 million, partially offset by net cash provided of $6.7 million from maturities of marketable securities net of new investments in marketable securities of which there were none in 2022.

For the three months ended March 31, 2024, cash required by investing activities was $74.9 million compared to $69.0 million in 2023.

The $5.9 million increase in cash required by investing activities in 2024 compared to the prior year was primarily due to an increase of $3.5 million in capital expenditures due to the timing of projects and a reduction of $3.5 million in the amount of maturities of marketable securities, partially offset by net cash provided of $1.0 million from proceeds from the sale of assets.

Financing Activities

Financing activities in the nine months ended September 30, 2023 required cash of $229.6 million compared to cash of $620.0 million in the nine months ended September 30, 2022, a decrease of $390.4 million.

The first nine months of 2023 included payments of $172.7 million for the repurchase of common shares, which was a decrease of $394.2 million compared to repurchases of $566.9 million in the 2022 period.

Financing activities in the three months ended March 31, 2024 required cash of $122.2 million compared to cash of $39.1 million in the three months ended March 31, 2023, an increase of $83.1 million.

The first three months of 2024 included payments of $86.4 million for the repurchase of common shares, which was an increase of $72.7 million compared to repurchases of $13.7 million in the 2023 period.

Amounts related to share-based compensation required $9.6 million more in cash during 2024 than in 2023.

Dividend payments increased $2.6 million in 2023 compared to amounts paid in the first nine months of 2022.

During 2023 there was $8.0 million borrowed and $19.6 million in repayments of debt versus $11.4 million in debt repaid in 2022.

During the nine months ended September 30, 2023, the Company paid cash dividend payments of $1.14 per common share, for a total of $24.7 million, compared to the period ended September 30, 2022, in which dividends of $0.92 per share were paid for total cash dividend payments of $22.1 million.

Dividend payments increased $0.7 million in 2024 compared to amounts paid in the first three months of 2023.

Net repayments of debt required $3.9 million in 2024 compared to $3.8 million in 2023.

During the three months ended March 31, 2024, the Company paid cash dividend payments of $0.42 per common share, for a total of $8.8 million, compared to the period ended March 31, 2023, in which dividends of $0.37 per common share were paid for total cash dividend payments of $8.1 million.

As a part of our capital allocation strategy, the Company's intention is to deliver targeted double-digit growth in the per share dividend over time.

On October 26, 2023, the Board of Directors declared a quarterly cash dividend of $0.41 per common share, or $1.64 per share on an annualized basis.

The dividend is payable on December 1, 2023, to shareholders of record as of November 6, 2023.

On May 9, 2024, the Board of Directors declared a quarterly cash dividend of $0.44 per common share, or $1.76 per share on an annualized basis.

The dividend is payable on June 3, 2024, to shareholders of record as of May 20, 2024.

Share Repurchase Program

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

On May 2, 2023, our Board of Directors approved a share repurchase authorization of up to $1.5 billion.

The authorization value excludes any excise tax that may be incurred.

During the nine months ended September 30, 2023 a total of 584,086 shares were repurchased for $174.1 million, including excise tax under the 2021 program.

As of September 30, 2023, we had approximately $41.0 million remaining under the 2021 authorization.

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 2021 authorization and to be executed by December 31, 2028.

The new authorization reaffirms the Company's commitment to supplement organic growth initiatives with shareholder distributions, including our dividend growth plan, to maximize value creation over time.

The entirety of this authorization is available as of September 30, 2023.

Our long-term debt at September 30, 2023 and December 31, 2022 was as set forth below:

(Millions of dollars) September 30,

During the three months ended March 31, 2024, a total of 216,036 shares were repurchased for $86.9 million, including excise tax under the 2023 program.

As of March 31, 2024, we had approximately $1.3 billion remaining under the 2023 authorization.

Our long-term debt at March 31, 2024 and December 31, 2023 was as set forth below:

(Millions of dollars) March 31,

2024 December 31,

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 $3.7 at September 30, 2023 and $4.2 at December 31, 2022) 496.3 495.8

3.75% senior notes due 2031 (net of unamortized discount of $4.6 at September 30, 2023 and $5.1 at December 31, 2022) 495.4 494.9

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) 390.4 393.3

5.625% senior notes due 2027 (net of unamortized discount of $1.2 at March 31, 2024 and $1.3 at December 31, 2023) $ 298.8 $ 298.7

4.75% senior notes due 2029 (net of unamortized discount of $3.4 at March 31, 2024 and $3.6 at December 31, 2023) 496.6 496.4

3.75% senior notes due 2031 (net of unamortized discount of $4.3 at March 31, 2024 and $4.4 at December 31, 2023) 495.7 495.6

Term loan due 2028 (effective interest rate of 7.21% at March 31, 2024 and 7.23% at December 31, 2023 and net of unamortized discount of $0.5 at March 31, 2024 and $0.6 at December 31, 2023) 388.5 389.4

Capitalized lease obligations, autos and equipment, due through 2026 3.7 3.1

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Total long-term debt, net of current $ 1,783.1 $ 1,784.7

On April 25, 2017, Murphy Oil USA, Inc., our primary operating subsidiary, issued $300 million of 5.625% Senior Notes due 2027 (the "2027 Senior Notes").

The 2027 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our Credit Facilities.

The indenture governing the 2027 Senior Notes contains restrictive covenants that limit, among other things, the ability of Murphy USA, Murphy Oil USA, Inc.

and the restricted subsidiaries to incur additional indebtedness or liens, dispose of assets, make certain restricted payments or investments, enter into transactions with affiliates or merge with or into other entities.

On September 13, 2019, Murphy Oil USA, Inc., issued $500 million of 4.75% Senior Notes due 2029 (the “2029 Senior Notes”).

On April 25, 2017, Murphy Oil USA, Inc.

("MOUSA"), our primary operating subsidiary, issued $300 million of 5.625% Senior Notes due 2027 (the "2027 Senior Notes") under its existing shelf registration statement.

The 2027 Senior Notes are fully and unconditionally guaranteed by the Company and by the Company's subsidiaries that guarantee our Credit Facilities (as defined below).

The indenture governing the 2027 Senior Notes contains

restrictive covenants that limit, among other things, the ability of the Company, MOUSA, and the restricted subsidiaries to incur additional indebtedness or liens, dispose of assets, make certain restricted payments or investments, enter into transactions with affiliates or merge with or into other entities.

On September 13, 2019, MOUSA, issued $500 million of 4.75% Senior Notes due 2029 (the “2029 Senior Notes”).

The net proceeds from the issuance of the 2029 Senior Notes were used to fund, in part, the tender offer and redemption of a prior note issuance.

The 2029 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our Credit Facilities.

The indenture governing the 2029 Senior Notes contains restrictive covenants that are substantially similar to the covenants for the 2027 Senior Notes.

On January 29, 2021, Murphy Oil USA, Inc., issued $500 million of 3.75% Senior Notes due 2031 (the “2031 Senior Notes” and, together with the 2027 Senior Notes and the 2029 Senior Notes, the "Senior Notes").

The net proceeds from the issuance of the 2031 Senior Notes were used to fund the acquisition of QuickChek and for other obligations related to that purpose.

The 2031 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our Credit Facilities.

The indenture governing the 2031 Senior Notes contains restrictive covenants that are substantially similar to the covenants for the 2027 and 2029 Senior Notes.

The Senior Notes and the guarantees rank equally with all of our and the guarantors’ existing and future senior unsecured indebtedness and effectively junior to our and the guarantors’ existing and future secured indebtedness (including indebtedness with respect to the Credit Facilities) to the extent of the value of the assets securing such indebtedness.

The Senior Notes are structurally subordinated to all of the existing and future third-party liabilities, including trade payables, of our existing and future subsidiaries that do not guarantee the Senior Notes.

The 2029 Senior Notes are fully and unconditionally guaranteed by the Company and by the Company's subsidiaries that guarantee our Credit Facilities.

The indenture governing the 2029 Senior Notes contains restrictive covenants that are essentially identical to the covenants for the 2027 Senior Notes.

On January 29, 2021, MOUSA, issued $500 million of 3.75% Senior Notes due 2031 (the "2031 Senior Notes" and, together with the 2027 Senior Notes and the 2029 Senior Notes, the "Senior Notes").

The net proceeds from the issuance of the 2031 Senior Notes were used, in part, to fund the acquisition of QuickChek and other obligations related to that transaction.

The 2031 Senior Notes are fully and unconditionally guaranteed by the Company and by the Company's subsidiaries that guarantee our Credit Facilities.

The indenture governing the 2031 Senior Notes contains restrictive covenants that are essentially identical to the covenants for the 2027 and 2029 Senior Notes.

The Senior Notes and related guarantees rank equally with all of our and the guarantors’ existing and future senior unsecured indebtedness and effectively junior to our and the guarantors’ existing and future secured indebtedness (including indebtedness with respect to the Credit Facilities) to the extent of the value of the assets securing such indebtedness.

Revolving Credit Facility and Term Loan

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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 $391 million at September 30, 2023 and $394 million at December 31, 2022.

The outstanding balance of the term loan was $389 million at March 31, 2024 and $390 million at December 31, 2023.

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

As of September 30, 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).

As of March 31, 2024, 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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• 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 SOFR Rate plus 1.00% per annum,

plus, (A) in the case of Adjusted SOFR Rate borrowings, spreads ranging from 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 ranging from 0.75% to 1.25% per annum depending on a total debt to EBITDA ratio.

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 ranging from 0.75% to 1.25% per annum depending on a total debt to EBITDA ratio.

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, casualty events (subject to certain reinvestment rights) and net cash proceeds of issuances of indebtedness not permitted under the credit agreement.

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

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

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

The Revolving Facility also imposes total leverage ratio and secured net leverage ratio financial maintenance covenants which are tested quarterly.

increase that limit to 5.5 to 1.0 and a maximum secured net leverage ratio of 3.75 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 4.25 to 1.0.

The Revolving Facility credit agreement also impose total leverage ratio and secured net leverage ratio financial maintenance covenants which are tested quarterly.

Pursuant to the total leverage ratio financial maintenance covenant, the Company must maintain a total leverage ratio of not more than 5.0 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 5.5 to 1.0 and a maximum secured net leverage ratio of not more than 3.75 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 4.25 to 1.0.

The Credit Agreement also contains customary events of default.

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

At September 30, 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 the 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.

At March 31, 2024, our total leverage ratio was 1.76 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 $113.6 million or 4.5% of consolidated net tangible assets over the life of the credit agreement.

All obligations under the credit agreement are guaranteed by Murphy USA and the subsidiary guarantors party thereto, and all obligations under the credit agreement, including the guarantees of those obligations, are secured by certain assets of Murphy USA, Murphy Oil USA, Inc.

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Supplemental Guarantor Financial Information

The following is a description of the guarantees with respect to the Senior Notes and the Credit Facilities, for which MOUSA is primary obligor, and for which the Company and certain 100% owned subsidiaries provide full and unconditional guarantees on a joint and several basis.

The following is a description of the guarantees with respect to the Senior Notes and the Credit Facilities, for which MOUSA is primary obligor, and for which the Company and certain subsidiaries provide full and unconditional guarantees on a joint and several basis.

See "—Debt" above for additional information concerning the Company's outstanding indebtedness, all of which is guaranteed as described below.

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The combined assets, liabilities and results of operations of MOUSA and the guarantors are not materially different from corresponding amounts presented in the consolidated financial statements included herein.

MOUSA is our primary operating subsidiary and generated the vast majority of our revenues for the three and nine months ended September 30, 2023, and accounted for the vast majority of our total assets as of September 30, 2023.

MOUSA is our primary operating subsidiary and generated the vast majority of our revenues for the three months ended March 31, 2024, and accounted for the vast majority of our total assets as of March 31, 2024.

In the event MOUSA itself were unable to service the Company's consolidated debt obligations, our business and financial condition would be materially adversely impacted.

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Capital spending and investments in our Marketing segment relate primarily to the acquisition of land and the construction of new Company stores.

Marketing capital is also deployed to improve our existing stores as needed to ensure reliability and continued performance, which we refer to as sustaining capital.

We also invest capital in our Corporate and other assets segment.

The following table outlines our capital spending and investments by segment for the three and nine month periods ended September 30, 2023 and 2022:

Our Marketing capital is also deployed to improve our existing stores, which we refer to as maintenance capital.

We use maintenance capital in this business as needed to ensure reliability and continued performance of our stores.

We also invest in our Corporate and other assets segment which is primarily technology related.

The following table outlines our capital spending and investments by segment for the three month periods ended March 31, 2024 and 2023:

Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023

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Total $ 82.2 $ 73.4

We currently expect capital expenditures for the full year 2023 to range from approximately $325 million to $375 million, including $235 million to $265 million for retail growth, and $50 million to $60 million for maintenance capital, with the remaining funds earmarked for other corporate investments and other strategic initiatives.

We currently expect capital expenditures for the full year 2024 to range from approximately $400 million to $450 million, including $275 million to $315 million for retail growth, approximately $75 million to $80 million for maintenance capital, with the remaining funds earmarked for other corporate investments and other strategic initiatives.

See Note 18 “Commitments” in the audited consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K for more information.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainties, including, but not limited to our M&A activity, anticipated store openings, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, and share repurchases.

Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties.

This Quarterly Report on Form 10-Q contains certain statements or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainties, including, but not limited to our M&A activity, anticipated store openings and associated capital expenditures, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, and share repurchases.

statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties.

Actual future results may differ materially from historical results or current expectations depending upon factors including, but not limited to:

The Company's ability to successfully expand our food and beverage offerings;

our ability to successfully expand our food and beverage offerings;

our ability to continue to maintain a good business relationship with Walmart;

successful execution of our growth strategy, including our ability to realize the anticipated benefits from such growth initiatives, and the timely completion of construction associated with our newly planned stores which may be impacted by the financial health of third parties;

our ability to effectively manage our inventory, disruptions in our supply chain and our ability to control costs;

geopolitical events, that impact the supply and demand and price of crude oil;

our ability to effectively manage our inventory, manage disruptions in our supply chain and our ability to control costs;

geopolitical events, such as Russia's invasion of Ukraine and the conflicts in the Middle East, that impact the supply and demand and price of crude oil;

the impact of severe weather events, such as hurricanes, floods and earthquakes;

the impact of a global health pandemic, the impact of any systems failures, cybersecurity and/or security breaches of the company or its vendor partners, including any security breach that results in theft, transfer or unauthorized disclosure of customer, employee or company information or our compliance with information security and privacy laws and regulations in the event of such an incident;

the impact of a global health pandemic and any governmental response thereto;

the impact of any systems failures, cybersecurity and/or security breaches of the company or its vendor partners, including any security breach that results in theft, transfer or unauthorized disclosure of customer, employee or company information or our compliance with information security and privacy laws and regulations in the event of such an incident;

successful execution of our information technology strategy;

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future tobacco or e-cigarette legislation and any other efforts that make purchasing tobacco products more costly or difficult could hurt our revenues and impact gross margins;

changes to the Company's capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the Company's share repurchases, or management of operating cash;

efficient and proper allocation of our capital resources, including the timing, declaration, amount and payment of any future dividends or levels of the Company's share repurchases, or management of operating cash;

the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, and general economic conditions;

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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 2. Management’s Discussion and Analysis