What changed in this filing

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Item 1A. Risk Factors

2025-02-20 compared with 2024-02-16 · 43 added, 54 removed, 271 unchanged (26% of the section changed)

10 unchanged sentences

If a significant accident or event occurs for which we are not adequately insured, our operations and financial results could be adversely affected.

The scope and nature of our operations are subject to a variety of operational hazards and risks, including explosions, fires, toxic emissions, and natural catastrophes that must be managed through continual oversight and control.

oversight and control.

These and other risks are present throughout our operations.

As protection against these hazards and risks, we maintain insurance against many, but not all, potential losses or liabilities arising from such risks.

Uninsured losses and liabilities arising from operating risks could reduce the funds available to

us for capital and investment spending and could have a material adverse effect on our financial condition, results of operations and cash flows.

Uninsured losses and liabilities arising from operating risks could reduce the funds available to us for capital and investment spending and could have a material adverse effect on our financial condition, results of operations and cash flows.

Our indebtedness could restrict our business and adversely impact our financial condition, results of operations or cash flows;

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Our leverage may increase the overall cost of debt funding and decrease the overall debt capacity and commercial credit available to us.

Our leverage could increase with additional borrowings on our shelf registration statement.

Our leverage could increase with additional borrowings on our shelf registration statement or increases in the size of our revolving credit facility or term loan.

We have below investment-grade ratings on our notes from Moody’s and S&P while our credit facilities are rated investment grade.

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This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control.

We cannot provide assurance that our business will generate cash flow from operations, or that future borrowings will be available to us under our credit agreement or any future credit facilities or otherwise, in an amount sufficient to enable us to meet our payment obligations under the notes and our other debt and to fund other liquidity needs.

If we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, including the notes, sell assets, reduce or delay capital investments,

or seek to raise additional capital.

We cannot provide assurance that our business will generate cash flow from operations, or that future

borrowings will be available to us under our credit agreement or any future credit facilities or otherwise, in an amount sufficient to enable us to meet our payment obligations under the notes and our other debt and to fund other liquidity needs.

If we are unable to implement one or more of these alternatives, we may not be able to meet our payment obligations under the notes and our other debt.

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We are also required to evaluate amortizable intangible assets and fixed assets for impairment if there are indicators of a possible impairment.

In 2024, we recorded an impairment charge related to fixed assets of $8.2 million that was largely attributable to competitive pressures in a few Northeast markets.

We may have additional impairment charges in future periods in connection with our periodic evaluation of our goodwill and intangible assets.

There is significant judgement required in the analysis of a potential impairment of goodwill, identified intangible assets and fixed assets.

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An impairment charge would be determined based on the estimated fair value of the assets and any such impairment charge could have a material adverse effect on our business, financial condition and results of operations.

In connection with our Separation from Murphy Oil, Murphy Oil has agreed to indemnify us for certain liabilities and we have agreed to indemnify Murphy Oil for certain liabilities.

If we are required to act under these indemnities to Murphy Oil, we may need to divert cash to meet those obligations and our financial results could be negatively impacted.

The Murphy Oil indemnity may not be sufficient to insure us against the full amount of liabilities for which it will be allocated responsibility, and Murphy Oil may not be able to satisfy its indemnification obligations to us in the future.

Pursuant to the Separation and Distribution Agreement ("the Separation") and certain other agreements with Murphy Oil, Murphy Oil has agreed to indemnify us for certain liabilities, and we have agreed to indemnify Murphy Oil for certain liabilities.

Indemnities that we may be required to provide Murphy Oil are not subject to any cap, may be significant and could negatively impact our business, particularly indemnities relating to our actions that could impact the tax-free nature of the distribution.

Third parties could also seek to hold us

responsible for any of the liabilities that Murphy Oil has agreed to retain, and under certain circumstances, we may be subject to continuing contingent liabilities of Murphy Oil following the Separation.

Further, Murphy Oil may not be able to fully satisfy its indemnification obligations.

Moreover, even if we ultimately succeed in recovering from Murphy Oil any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves.

Each of these risks could negatively affect our business, results of operations and financial condition.

The anticipated benefits of the QuickChek acquisition may not be realized or those benefits may take longer to realize than expected.

The long-term success of the QuickChek acquisition will depend on our ability to realize the forecasted benefits and cost savings from our acquisition of QuickChek.

We may not be able to maintain the growth rate, levels of revenue, earnings, or operating efficiency that we and QuickChek have achieved to-date, or might have achieved separately.

We may not be able to maintain the growth rate,

levels of revenue, earnings, or operating efficiency that we and QuickChek have achieved to-date, or might have achieved separately.

Many factors affecting our ability to realize anticipated benefits are outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenues, and could materially impact our business, financial condition, and results of operations.

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Our ability to successfully manage operating costs is important because we have little or no influence on the sales prices or regional and worldwide consumer demand for oil and gasoline.

Furthermore, oil prices, wholesale motor fuel costs, motor fuel sales volumes, motor fuel gross margins and merchandise sales can be subject to seasonal fluctuations.

For example, consumer demand for motor fuel typically increases during the summer driving season, and typically falls during the winter months.

Travel, recreation and construction are typically higher in these months in the geographic areas in which we operate, increasing the demand for motor fuel and merchandise that we sell.

Furthermore, oil prices, wholesale fuel costs, fuel sales volumes, fuel gross margins and merchandise sales can be subject to seasonal fluctuations.

For example, consumer demand for fuel typically increases during the summer driving season, and typically falls during the winter months.

Travel, recreation and construction are typically higher in these months in the geographic areas in which we operate, increasing the demand for fuel and merchandise that we sell.

Therefore, our revenues and/or sales volumes are typically higher in the second and third quarters of our fiscal year.

A significant change in any of these factors, including a significant decrease in consumer demand (other than typical seasonal variations), could materially affect our motor fuel and

merchandise volumes, motor fuel gross profit and overall customer traffic, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows.

A significant change in any of these factors, including a significant decrease in consumer demand (other than typical seasonal variations), could materially affect our fuel and merchandise volumes, fuel gross profit and overall customer traffic, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Further, recessionary economic conditions, higher interest rates, higher gasoline and other energy costs, inflation, increases in commodity prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws or other economic factors may affect consumer spending or buying habits, and could adversely affect the demand for products we sell at our retail stores.

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An inability to maintain a multi-year new store project pipeline may cause our Company's growth to slow in 2025 and beyond.

Our ability to grow by at least 30 to 35 new stores and at least 35 raze-and-rebuild stores in 2024 and by at least 45 NTI stores and at least 35 raze-and-rebuild stores in future years relies on the continued growth of our project pipeline and the building material supply chain.

Our ability to grow by up to 50 new stores and up to 30 raze-and-rebuild stores in 2025 and by at least 50 NTI stores and at least 30 raze-and-rebuild stores in future years relies on the continued growth of our project pipeline and the building material supply chain.

We have a very active Asset Development group that works to focus on our key target areas to locate suitable traffic count locations for this future growth.

If the Asset Development group is unable to locate suitable locations or is unable to close the purchase for those locations in a timely fashion, the Company could find that it does not have sufficient land to fulfill its pipeline.

If the Asset Development group is unable to locate suitable locations or is unable to close the acquisition of those locations in a timely fashion, the Company could find that it does not have sufficient land to fulfill its pipeline.

Further, permitting delays due to local government agency ability to timely respond to our requests or construction delays from supply chain or labor constraints could also negatively impact our project pipeline.

1 unchanged sentence

A disruption in supply could have a material effect on our business.

In 2023, over 77% of our merchandise, including most tobacco products and grocery items, was purchased from a single wholesale grocer, Core-Mark.

In 2024, over 78% of our merchandise, including most nicotine products and grocery items, was purchased from a single wholesale grocer, Core-Mark.

In January 2021, we renewed and extended for another five years a supply contract with Core-Mark.

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Walmart continues to be a key relationship with regard to our Murphy USA network.

At December 31, 2023, most of our Murphy branded stores were located in close proximity to Walmart Supercenter stores and we participate with the Walmart+ program.

At December 31, 2024, most of our Murphy branded stores were located in close proximity to Walmart Supercenter stores and we participate in the Walmart+ program.

Therefore, our relationship with Walmart, the continued goodwill of Walmart and the integrity of Walmart’s brand name in the retail marketplace are all important drivers for our business.

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As it is, refiners are obligated to obtain—either by blending biofuels into petroleum-based fuels or through purchase on the open market—and then retire with the federal government RINs to satisfy their individual obligations.

On June 21, 2023, the EPA announced a final

rule to establish biofuel volume requirement and associated percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel for 2023-2025.

On June 21, 2023, the EPA announced a final rule to establish biofuel volume requirement and associated percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel for 2023-2025.

The rule includes steady growth of biofuels for use in the United States' fuel supply for 2023, 2024, and 2025, however the projected growth of Renewable Diesel production could outstrip the statutory mandated biofuel blending requirements.

As a result, the amount of renewable credits available could outpace the demand, resulting in lower prices.

If so, the number of renewable credits available could outpace the demand, resulting in lower prices.

We could be adversely affected if we are not able to attract and retain qualified personnel.

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In addition, the retail gasoline industry in the United States is highly competitive due to ease of entry and constant change in the number and type of retailers offering similar products and services.

With respect to merchandise, our retail stores compete with other convenience store chains, independently owned convenience stores, supermarkets, drugstores, discount clubs, gasoline service stores, mass merchants, fast food operations

and other similar retail outlets.

Non-traditional retailers, including supermarkets, discount club stores and mass merchants, now compete directly with retail gasoline stores.

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Competition from these retailers may reduce our market share and our revenues, and the resulting impact on our business and results of operations could be materially adverse.

Future tobacco legislation and/or regulation, potential court rulings affecting the tobacco industry, campaigns to discourage smoking, increases in tobacco taxes and wholesale cost increases of tobacco products could have a material adverse impact on our retail operating revenues and gross margin.

Sales of tobacco products have historically accounted for an important portion of our total sales of convenience store merchandise.

Significant increases in wholesale cigarette costs and tax increases on tobacco products, as well as future legislation and/or regulation, potential rulings in court cases impacting the tobacco industry, and national and local campaigns to discourage smoking in the United States, may have an adverse effect on the demand for tobacco products, and therefore reduce our revenues and profits.

Also, increasing regulations, including those for e-cigarettes, vapor products, and new tobacco products could offset some of the recent gains we have experienced from selling these products.

Governing bodies continue to consider banning flavored tobacco products and have done so in some instances.

If such efforts continue to be successful, it could have a further negative impact on our tobacco sales.

These factors could materially and adversely affect our retail price of cigarettes, tobacco unit volume and sales, merchandise gross margin and overall customer traffic.

Reduced sales of tobacco products or smaller gross margins on the sales we make could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Currently, major cigarette manufacturers offer substantial rebates to retailers unless prohibited by state or local laws.

Future nicotine legislation and/or regulation, potential court rulings affecting the nicotine industry, campaigns to discourage smoking, increases in nicotine taxes and wholesale cost increases of nicotine products could have a material adverse impact on our retail operating revenues and gross margin.

Sales of nicotine products have historically accounted for an important portion of our total sales of convenience store merchandise.

Significant increases in wholesale costs and tax increases on nicotine products, as well as future legislation and/or regulation, potential rulings in court cases impacting the nicotine industry, and national and local campaigns to discourage the use of nicotine products in the United States, may have an adverse effect on the demand for nicotine products, and therefore reduce our revenues and profits.

Also, increasing regulations, including those for e-cigarettes, vapor products, and new nicotine products could offset some of the recent gains we have experienced from selling these products.

Local governing bodies continue to consider banning specific nicotine products and have done so in some instances.

If such efforts continue to be successful, it could have a further negative impact on our nicotine sales.

Likewise, major cigarette manufacturers currently offer substantial rebates to retailers unless prohibited by state or local laws.

We include these rebates as a component of our gross margin.

In the event these rebates are no longer offered, or decreased, our profit from cigarette sales will decrease accordingly.

In addition, reduced retail display allowances on cigarettes offered by cigarette manufacturers would negatively affect gross margins.

These factors could materially affect our retail price of cigarettes, cigarette unit volume and revenues, merchandise gross margin and overall customer traffic, which could in turn have a material adverse effect on our business, financial condition, results of operations and cash flows.

These factors could materially and adversely affect our retail price of nicotine products, unit volume and sales, merchandise gross margin and overall customer traffic.

Reduced sales of nicotine products or smaller gross margins on the sales we make could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Changes in consumer behavior and travel as a result of changing economic conditions, the development of alternative energy technologies or otherwise could affect our business.

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Similarly, advanced technology, improved fuel efficiency and increased use of “green” automobiles (e.g., those automobiles that do not use gasoline or that are powered by hybrid engines) will reduce demand for gasoline and could otherwise change our customers' shopping habits or lead to new forms of fueling destinations or new competitive pressures.

Developments regarding climate change and the effects of greenhouse gas emissions on climate change and the environment have led to increased use of “green”

In addition, in August 2021, the Biden Administration issued an executive order which set a target to make half of all new vehicles sold in 2030 zero emission vehicles.

Developments regarding climate change and the effects of greenhouse gas emissions on climate change and the environment have led to increased use of “green” automobiles.

Other market and social initiatives such as public and private initiatives that aim to subsidize the development of non-fossil fuel energy sources may also reduce the competitiveness of gasoline.

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Many governments, including those that are members of the Organization of Petroleum Exporting Countries (“OPEC”), unilaterally intervene at times in the orderly market of petroleum and natural gas produced in their countries through such actions as setting prices, determining rates of production, and controlling who may buy and sell the production.

In addition, prices and availability of petroleum, natural gas and refined products could be influenced by political unrest and by various governmental policies to restrict or increase petroleum usage and supply.

In addition, prices and availability of petroleum, natural gas and refined products could be influenced by political unrest and by various governmental policies to restrict or increase

petroleum usage and supply.

Other governmental actions that could affect our operations and earnings include tax changes, royalty increases and regulations concerning:

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We operate in many different locations around the United States.

The occurrence of an event, including but not limited to acts of nature such as hurricanes, floods, earthquakes and other forms of severe weather, and mechanical equipment failures, industrial accidents, fires, explosions, acts of war and intentional terrorist attacks could result in damage to our facilities, and the resulting interruption and loss of associated revenues;

The occurrence of an event, including but not limited to acts of nature such as hurricanes, floods, earthquakes and other forms of severe weather, and mechanical equipment failures, industrial accidents, fires, explosions, acts of war and terrorist attacks could result in damage to our facilities, and the resulting interruption and loss of associated revenues;

environmental pollution or contamination;

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In particular, we could be liable for contamination relating to properties that we own, lease or operate or that we or our predecessors previously owned, leased or operated.

Substantially all of these properties have or in the past had storage tanks to store motor fuel or petroleum products.

Substantially all of these properties have or in the past had storage tanks to store motor fuel or

petroleum products.

Leaks from such tanks may impact soil or groundwater and could result in substantial costs.

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Our business is also affected by fuel economy standards and GHG vehicle emission reduction measures.

As such fuel economy and GHG reduction requirements become more stringent over time, demand for our products may be adversely affected.

As such fuel economy and GHG reduction requirements have tended to become more stringent over time, demand for our products may be adversely affected.

In addition, some of our facilities are subject to GHG regulation.

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Our retail operations are subject to extensive government laws and regulations, and the cost of compliance with such laws and regulations can be material.

Our retail operations are subject to extensive local, state and federal governmental laws and regulations relating to, among other things, the sale of alcohol, tobacco, lottery and lotto, employment conditions, including minimum wage requirements, and public accessibility requirements.

Our retail operations are subject to extensive local, state and federal governmental laws and regulations relating to, among other things, the sale of alcohol, nicotine, lottery and lotto, employment conditions, including minimum wage requirements, and public accessibility requirements.

The cost of compliance with these laws and regulations can have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, failure to comply with local, state and federal laws and regulations to which our operations are subject may result in penalties and costs that could adversely affect our business, financial condition, results of operations and cash flows.

In certain areas where our retail stores are located, state or local laws limit the retail stores’ hours of operation or sale of alcoholic beverages, tobacco products, possible inhalants and lottery tickets, in particular to minors.

In certain areas where our retail stores are located, state or local laws limit the retail stores’ hours of operation or sale of alcoholic beverages, nicotine products, possible inhalants and lottery tickets, in particular to minors.

Failure to comply with these laws could adversely affect our revenues and results of operations because these state and local regulatory agencies have the power to revoke, suspend or deny applications for and renewals of permits and licenses relating to the sale of these products or to seek other remedies, such as the imposition of fines or other penalties.

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• providing that our directors may be removed by our stockholders only for cause;

• establishing super majority vote requirements for our shareholders to amend certain provisions of our Certificate of Incorporation and our Bylaws;

• authorizing a large number of shares of stock that are not yet issued, which would allow our board of directors to issue shares to persons friendly to current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of us;

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• establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted on by stockholders at the annual stockholder meetings.

In addition, we are subject to Section 203 of the Delaware General Corporation Law, which may have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging takeover attempts that could have resulted in a premium over the market price for shares of our common stock.

In addition, Certificate of Incorporation includes provisions that are similar to Section 203 of the Delaware General Corporation Law, and may have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging takeover attempts that could have resulted in a premium over the market price for shares of our common stock.

These provisions apply even if a takeover offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board of directors determines is not in our and our stockholders’ best interests.

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The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock.

For example, we could grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions.

For example, we could grant holders of preferred

stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions.

Similarly, the repurchase or redemption rights or dividend, distribution or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.

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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-K

Item 1A. Risk Factors