What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-31 compared with 2025-05-08 · 134 added, 69 removed, 287 unchanged (41% 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 months ended March 31, 2025 and 2024.

• 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, 2025 and 2024.

• Results of Operations — This section provides an analysis of our results of operations, including the results of our operating segment for the three and six months ended June 30, 2025 and 2024.

• Capital Resources and Liquidity — This section provides a discussion of our financial condition and cash flows as of and for the three and six months ended June 30, 2025 and 2024.

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

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

At March 31, 2025, we had a total of 1,761 Company stores in 27 states, of which 1,607 were Murphy branded and 154 were under the QuickChek brand.

At June 30, 2025, we had a total of 1,766 Company stores in 27 states, of which 1,612 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.

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

the QuickChek results cover the period December 28, 2024 to March 28, 2025.

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

the QuickChek results cover the period March 29, 2025 to June 27, 2025, and the 2025 year-to-date period began December 28, 2024.

For Q2 2024, the QuickChek results cover the period March 30, 2024 to June 28, 2024, and the 2024 year-to-date period began December 30, 2023.

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

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Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results which include Renewable Identification Numbers ("RINs")) was 32.0 cents per gallon ("cpg") in Q2 2025, compared to 31.7 cpg in Q2 2024.

Retail fuel margin dollars increased 7.1% in the current quarter while retail fuel volumes decreased 1.9% when compared to Q1 2024.

Retail fuel margin dollars decreased 1.7% in the current quarter and retail fuel volumes decreased 0.2% when compared to Q2 2024.

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

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

As of March 31, 2025, we had $1.3 billion of Senior Notes, $200.0 million outstanding under our revolving credit facility and a $385 million term loan outstanding.

As of June 30, 2025, we had $1.3 billion of Senior Notes, $88.0 million outstanding under our revolving credit facility and a $600 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.

We had additional available capacity under our revolving credit facility, which, following a refinancing effective as of April 7, 2025, provides for up to $750 million of borrowings.

We had additional available capacity under our revolving credit facility, which provides for up to $750 million of borrowings.

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.

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We currently estimate our ongoing effective tax rate to be between 23% and 25% for the remainder of the year.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions.

The Company is currently evaluating OBBBA;

however, it is not expected to have a material impact on the Company's effective tax rate or consolidated financial statements.

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 months ended March 31, 2025, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2025.

As a result, operating results for the three and six months ended June 30, 2025, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2025.

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 22 “Business Segments” in the audited combined financial statements for the year ended December 31, 2024 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, 2025.

Results of Operations

Consolidated Results

For the three months ended March 31, 2025, the Company reported net income of $53.2 million, or $2.63 per diluted share, on revenue of $4.5 billion.

For the three months ended June 30, 2025, the Company reported net income of $145.6 million, or $7.36 per diluted share, on revenue of $5.0 billion.

Net income was $144.8 million for the same period in 2024, or $6.92 per diluted share, on $5.5 billion of revenue.

In the current year quarter, the Company experienced higher total fuel contribution and higher overall merchandise contribution compared to the prior year period, coupled with lower general and administrative expenses and lower income taxes.

These benefits were more than offset by higher store operating expenses, higher depreciation and amortization and higher interest expense, resulting in lower net income for Q1 2025 compared to Q1 2024.

Three Months Ended March 31, 2025 versus Three Months Ended March 31, 2024

These benefits were partially offset by higher depreciation and amortization, higher store operating expenses and higher interest expense period over period.

For the six months ended June 30, 2025, the Company reported net income of $198.8 million, or $9.95 per diluted share, on revenue of $9.5 billion.

Net income for the same period in 2024 was $210.8 million, or $10.02 per diluted share, on $10.3 billion of revenue.

For the year-to-date period, the Company generated higher total fuel contribution and higher overall merchandise contribution compared to the same period in 2024, while also benefiting from lower general and administrative expenses, lower income tax expense and lower payment fees.

Increases in depreciation and amortization, higher store operating expenses and higher interest expense more than offset these benefits resulting in lower net income for the 2025 year-to-date period.

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

Revenues for Q2 2025 decreased $0.5 billion, or 8.2%, compared to the same quarter in 2024.

The decrease in revenues was primarily due to 6.0% lower retail fuel sales prices and a decrease of 1.9% in fuel sales volumes.

The decrease in revenues was primarily due to a 12.2% reduction in the average retail fuel sales price during the quarter and a decrease of 0.2% in fuel sales volumes, which was partially offset by a 1.1% increase in merchandise sales revenue.

Cost of sales in Q2 2025 decreased $0.5 billion, or 9.3%, when compared to Q2 2024.

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

Store and other operating expenses increased $14.0 million, or 5.6%, in Q1 2025 from Q1 2024, primarily due to higher employee related expenses and maintenance costs at existing stores combined with increases from net new store operating expenses, partially offset by a reduction in payment fees.

Selling, general and administrative ("SG&A") expenses for Q1 2025 decreased $2.0 million, or 3.2%, compared to Q1 2024.

The decrease in SG&A costs is primarily due to lower professional fees and employee related costs, partially offset by higher incentive costs in the current quarter.

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

Store and other operating expenses increased $5.3 million, or 2.0%, in Q2 2025 compared to Q2 2024, primarily due to increases from net new store operating expenses combined with higher employee related expenses and maintenance costs at existing stores, partially offset by a reduction in payment fees.

Selling, general and administrative ("SG&A") expenses for Q2 2025 decreased $8.2 million, or 13.9%, versus Q2 2024.

The decrease in SG&A costs is primarily due to lower professional fees, decreased incentive costs and lower employee related costs in the current quarter.

Depreciation and amortization expense increased $6.7 million in Q2, or 11.3%, when compared to the same period of 2024, primarily due to the increased number of Murphy branded stores with larger formats, raze-and-rebuild activity in the quarter and strategic investments related to technology improvement initiatives in recent years.

The effective income tax rate was approximately 24.4% for Q2 2025 compared to 25.1% in Q2 2024.

The rate for the quarter is lower due to excess tax benefits related to share-based compensation and recognition of purchased Federal energy tax credits.

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

Year-to-date revenues decreased $0.8 billion, or 7.4%, compared to the same period in 2024.

The decrease in revenues was due to a 9.4% decrease in the average retail fuel sales prices and a 1.0% decrease in retail fuel sales volumes, which was partially offset by a 0.5% increase in merchandise sales revenue.

Year-to-date cost of sales decreased $0.8 billion, or 8.4%, compared to the same period in 2024.

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

Year-to-date store and other operating expenses increased $19.3 million, or 3.7%, compared to the same period in 2024, primarily due to increases in net new store operating expenses combined with higher employee related expenses and maintenance costs at existing stores, partially offset by lower payment fees.

SG&A expenses for the first six months of 2025 decreased $10.2 million, or 8.4%, compared to the first six months of 2024.

The decrease in SG&A costs is primarily due to lower professional fees, lower employee related costs and decreased incentive costs versus the same period of 2024.

Depreciation and amortization expense increased $16.2 million, or 13.7%, year-to-date from the same period of 2024 primarily due to the increased number of Murphy branded stores with larger formats, raze-and-rebuild activity in the quarter and strategic investments related to technology improvement initiatives in recent years.

The effective income tax rate was approximately 21.9% for the six months ended June 30, 2025 versus approximately 23.4% for the same period of 2024.

The year-to-date rate is lower due to excess tax benefits related to share-based compensation and recognition of purchased Federal energy tax credits.

Segment Results

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Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2025 2024 2025 2024

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Net Income $ 145.6 $ 144.8 $ 198.8 $ 210.8

Three Months Ended March 31, 2025 versus Three Months Ended March 31, 2024

Marketing segment net income for the three months ended March 31, 2025 was lower compared to the same period in 2024 primarily due to:

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

Marketing segment net income for the three months ended June 30, 2025 was higher compared to the same period in 2024 primarily due to:

• Higher total fuel contribution;

• Higher merchandise contribution;

• Lower SG&A expenses;

• Lower income tax expense

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

• Lower retail fuel sales volumes;

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• Higher depreciation and amortization expenses

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

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

Marketing segment net income for the six months ended June 30, 2025 was lower compared to the same six-month period in 2024 primarily due to:

• Lower fuel sales volumes

• Higher store and other operating expenses

• Higher depreciation and amortization expenses

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

• Higher total fuel contribution

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

June 30, Six Months Ended

Marketing Segment 2025 2024 2025 2024

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

June 30, Six Months Ended

Marketing Segment 2025 2024 2025 2024

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

77.4 76.3 73.4 72.7

Total merchandise sales revenue same store sales 1,2

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Three Months Ended

June 30, Six Months Ended

Key Operating Metrics 2025 2024 2025 2024

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Total PS&W contribution ($ Millions) (25.9) (3.8) (41.2) 2.9

RINs (included in Other operating revenues on Consolidated Statements of Income) ($ Millions) 34.9 29.4

RINs (included in Other operating revenues on Consolidated Statements of Income)

($ Millions) 59.8 28.9 94.7 58.3

Total fuel contribution ($ Millions) $ 393.0 $ 390.3 $ 680.3 $ 676.4

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

241.6 247.2 231.4 238.6

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

239.3 244.3 229.7 235.7

Total fuel contribution (cpg) 32.0 31.7 28.8 28.4

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Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2025 2024 2025 2024

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Three Months Ended

June 30, Six Months Ended

Key Operating Metrics 2025 2024 2025 2024

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Same store sales information compared to APSM metrics:

Variance from prior year

Three months ended

March 31, 2025

Variance from prior year Variance from prior year

Three months ended Six months ended

June 30, 2025 June 30, 2025

Fuel gallons per month (3.2) % (2.3) % (3.7) % (3.0) %

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2 Includes all activity associated with our loyalty program(s)

Three Months Ended March 31, 2025 versus Three Months Ended March 31, 2024

Net income in the Marketing segment for Q1 2025 decreased $6.4 million, to $79.1 million when compared to the Q1 2024 period.

Contributions from both fuel and merchandise were higher in the current quarter compared to the prior year period coupled with lower general and administrative expenses and lower income taxes.

These benefits were more than offset by higher store operating expenses, higher depreciation and amortization and higher interest expense, resulting in lower net income in Q1 2025 compared to the Q1 2024 period.

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

Net income in the Marketing segment for Q2 2025 increased $4.1 million, to $167.9 million when compared to the Q2 2024 period.

Contributions from both fuel and merchandise were higher in the current quarter compared to the prior year period coupled with lower general and administrative expenses, lower payment fees and lower income taxes.

These benefits were partially offset by higher depreciation and amortization, higher store operating expenses and higher interest expense, resulting in higher net income in Q2 2025 compared to the Q2 2024 period.

Total fuel contribution for Q2 2025, was $393.0 million, an increase of $2.7 million, or 0.7%, compared to Q2 2024.

This increase was due to higher retail fuel contribution, which was partially offset by lower contribution from PS&W margins and lower fuel volumes sold in the period when compared to Q1 of 2024.

Retail fuel margins on a cpg basis increased 9.2% in Q1 2025 to 23.7 cpg, compared to 21.7 cpg in the prior year period.

This increase was due to higher retail fuel contribution and higher contribution from PS&W margins, which was partially offset by lower fuel volumes sold in the period when compared to Q2 of 2024.

Retail fuel margins on a cpg basis decreased 1.7% in Q2 2025 to 29.2 cpg, compared to 29.7 cpg in the prior year period.

Total retail fuel volumes decreased 0.2% and fuel sales volumes on an SSS basis declined 3.2% in Q2 2025 when compared to Q2 2024.

Total product supply and wholesale contribution dollars, including RINs, decreased $16.5 million in Q1 2025 when compared to Q1 2024, primarily due to timing and pricing impacts related to market conditions.

Total merchandise sales were $1.3 million lower in Q1 2025 vs Q1 2024, coming in at approximately $1.0 billion in both quarters.

Total merchandise contribution in Q1 2025 improved 2.2% compared to Q1 2024, primarily due to favorable sales mix and higher retail prices, combined with increased store count year-over-year.

Total SSS merchandise contribution dollars grew 1.0%, which included an increase of 2.8% in nicotine products, partially offset by a 0.6% decrease in non-nicotine products.

Store and other operating expenses increased $13.9 million in Q1 2025 compared to Q1 2024, primarily due to higher employee related expenses and maintenance costs at existing stores combined with net new store operating expenses, partially offset by a reduction in payment fees.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were 5.7% higher, primarily attributable to increased employee related expenses and maintenance costs.

SG&A expenses in Q1 2025 were $2.0 million lower compared to Q1 2024, due primarily to lower professional fees and employee related costs, partially offset by higher incentive costs in the current quarter.

Total product supply and wholesale contribution dollars, including RINs, increased $8.8 million in Q2 2025 when compared to Q2 2024, primarily due to timing of inventory movements and pricing impacts related to market conditions.

Total merchandise sales were $12.0 million, or 1.1%, higher in Q2 2025 vs Q2 2024, coming in at approximately $1.1 billion in both quarters.

Total merchandise contribution in Q2 2025 improved 1.0% compared to Q2 2024, primarily due to favorable sales mix and higher retail prices, combined with increased store count compared to the prior year period.

Total SSS merchandise contribution dollars were lower by 0.9%, which included an increase of 0.9% in nicotine products, more than offset by a 2.4% decrease in non-nicotine products.

Store and other operating expenses increased $5.4 million in Q2 2025 compared to Q2 2024, primarily due to increases in net new store operating expenses combined with higher employee related expenses and maintenance costs at existing stores, partially offset by a reduction in payment fees.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were 1.7% higher, primarily attributable to increased employee related expenses.

SG&A expenses in Q2 2025 were $8.2 million lower compared to Q2 2024, due primarily to lower professional fees, lower incentive costs and lower employee related costs in the current quarter.

Depreciation and amortization expense increased $3.9 million, or 7.0%, in Q2 2025 compared to Q2 2024 due to the increased number of larger format Murphy branded stores and raze-and-rebuild activity in the quarter.

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

Net income in the Marketing segment for the six months ended June 30, 2025 decreased $2.3 million compared to the six months ended June 30, 2024.

The decrease was primarily due to increased store operating expenses, increased depreciation and amortization and lower fuel sales volumes, , which were partially offset by higher total fuel contribution, higher overall merchandise contributions, lower SG&A expenses and lower income tax expense.

Total fuel contribution for the six-month period ended June 30, 2025 was $680.3 million, an increase of $3.9 million, or 0.6%, compared to the first six months of 2024.

This increase was primarily due to higher retail fuel contribution and lower contribution from PS&W margins, partially offset by lower fuel volumes sold in the period when compared to the first six months of 2024.

Retail fuel margins on a cpg basis increased 3.1%, to 26.6 cpg, for the six-month period ended June 30, 2025, compared to 25.8 cpg in the same period of 2024.

Total retail fuel sales volumes decreased 1.0%, and volumes on an SSS basis decreased 3.7% in the six-month period ended June 30, 2025 when compared to the same six-month period of 2024.

Total product supply and wholesale contribution dollars, including RINs, decreased $7.7 million compared to the first six months of 2024, primarily due to timing and pricing impacts related to market conditions.

Total merchandise sales increased 0.5% to $2.1 billion in the six months ended June 30, 2025 compared to $2.1 billion in the first six months of 2024.

Year-to-date 2025 total merchandise contribution increased 1.6% compared to the same period of 2024, primarily due to favorable sales mix and higher retail prices, combined with increased store count compared to the prior year period.

Total year-to-date SSS merchandise contribution dollars were flat compared to the same period of 2024 with an increase of 1.8% in nicotine products being offset by a 1.6% decrease in non-nicotine products.

Store and other operating expenses increased $19.3 million, or 3.7%, in the current year compared to the same six-month period of 2024, primarily due to increases in net new store operating expenses combined with higher employee related expenses and maintenance costs at existing stores.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent increased 3.5%, primarily due to employee related expenses and maintenance costs.

SG&A expenses decreased $10.2 million in 2025 compared to the same six-month period of 2024 due primarily to lower professional fees, lower employee related costs and decreased incentive costs.

Depreciation and amortization expense increased $10.5 million, or 9.5%, in the first six months of 2025 due to new larger store formats for Murphy branded stores combined with raze-and-rebuild activities.

Corporate and Other Assets

Three Months Ended March 31, 2025 versus Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

Loss from continuing operations for Corporate and other assets for Q2 2025 was $22.3 million, compared to a loss of $19.0 million in Q2 2024.

The increase from the prior year quarter was primarily due to a $2.9 million increase in depreciation and amortization expense, a $1.3 million reduction in investment income, a $1.0 million reduction in other nonoperating income, a $0.6 million increase in net interest expense and a $0.5 million decrease in gain on sale of assets.

The increase from the prior year quarter was primarily due to a $3.1 million increase in net interest expense, a $2.8 million increase in depreciation and amortization expense and a $0.8 million reduction in investment income, partially offset by a $2.0 million increase in the income tax benefit, a $1.0 million increase in other nonoperating income and a $0.4 million increase in gain on sale of assets.

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

Loss from continuing operations for Corporate and other assets was $48.2 million for the six months ended June 30, 2025, compared to a loss of $38.5 million in the same period of 2024.

The year-over-year increase was primarily due to a $5.7 million increase in depreciation and amortization expense, a $3.7 million increase in net interest expense and a $2.1 million reduction in investment income, partially offset by a $2.0 million increase in the income tax benefit period over period.

Non-GAAP Measures

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three months ended March 31, 2025 and 2024.

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024.

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 acquisitions, and other non-operating (income) expense).

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Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2025 2024 2025 2024

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Significant Sources of Capital

As of March 31, 2025, we had $49.4 million of cash and cash equivalents.

As of June 30, 2025, we had $54.1 million of cash and cash equivalents.

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

Following the refinancing effective as of April 7, 2025, we have a committed cash flow revolving credit facility providing for aggregate borrowings of $750 million, which can be utilized for working capital and other general corporate purposes, including supporting our operating model as described herein.

As of March 31, 2025, there was $200.0 million of outstanding borrowings under our Revolving Facility reported in Long-term debt in the Consolidated Balance Sheet.

As of June 30, 2025, there was $88.0 million of outstanding borrowings under our Revolving Facility reported in Long-term debt in the Consolidated Balance Sheet.

The Revolving Facility had $56.0 million of outstanding borrowings at December 31, 2024.

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Operating Activities

Net cash provided by operating activities was $128.5 million for the three months ended March 31, 2025 and was $136.0 million for the same period of 2024, a decrease of $7.5 million, or 5.5%.

The decrease for the three months ended March 31, 2025 is mainly due to a decrease in net income of $12.8 million and a decrease in the amount of cash required from changes in noncash working capital of $3.9 million partially offset by increased depreciation of $9.5 million compared to the same period in 2024.

For the three months ended March 31, 2025, operating cash provided by changes in non-cash operating working capital of $0.3 million was due to a decrease in inventory of $37.2 million due to lower retail prices and volumes, an increase in accounts payable and accrued liabilities of $2.9 million which was related to the timing of payments and a decrease in prepaid expenses of $1.1 million, which was partially offset by a decrease of $37.2 million in income taxes payable due in part to the recognition of Federal energy tax credits in the current year period and the timing of estimated tax payments and an increase in accounts receivable of $3.7 million due to the timing of receipts.

Net cash provided by operating activities was $383.6 million for the six months ended June 30, 2025 and was $396.8 million for the same period of 2024, a decrease of $13.2 million, or 3.3%.

The decrease for the six months ended June 30, 2025 is mainly due to a decrease in the amount of cash required from changes in noncash working capital of $18.7 million and a decrease in net income of $12.0 million, partially offset by increased depreciation of $16.2 million and higher deferred and noncurrent tax charges of $6.4 million compared to the same period in 2024.

For the six months ended June 30, 2025, operating cash provided by changes in non-cash operating working capital of $37.1 million was due to an increase in accounts payable and accrued liabilities of $69.5 million which was related to the timing of payments, a decrease in inventory of $4.1 million due to lower retail prices and volumes and a decrease in prepaid expenses of $3.6 million, which was partially offset by an increase in accounts receivable of $28.0 million due to slower timing of collecting receipts and a decrease of $12.1 million in income taxes payable due in part to the recognition of Federal energy tax credits in the current year period.

Investing Activities

For the three months ended March 31, 2025, cash required by investing activities was $87.7 million compared to $74.9 million in 2024.

For the six months ended June 30, 2025, cash required by investing activities was $204.3 million compared to $189.4 million in 2024.

The $14.9 million increase in cash required by investing activities in the current year period was primarily due to an increase of $11.6 million in capital expenditures due to the timing of payments for projects and a reduction of $4.0 million in the amount of maturities of marketable securities.

Financing Activities

Financing activities in the three months ended March 31, 2025 required cash of $38.4 million compared to cash of $122.2 million in the three months ended March 31, 2024, a decrease of $83.8 million.

The first three months of 2025 included payments of $150.0 million for the repurchase of common shares, which was an increase of $63.6 million compared to repurchases of $86.4 million in the 2024 period.

Dividend payments increased $1.0 million in 2025 compared to amounts paid in the first three months of 2024.

Financing activities in the six months ended June 30, 2025 required cash of $172.2 million compared to cash of $245.4 million in the six months ended June 30, 2024, a decrease of $73.2 million.

The first six months of 2025 included payments of $363.8 million for the repurchase of common shares, which was an increase of $171.3 million compared to repurchases of $192.5 million in the 2024 period.

Dividend payments increased $1.7 million in 2025 compared to amounts paid in the first six months of 2024.

Net borrowings of debt provided $239.3 million in 2025 compared to net repayments of debt requiring $7.8 million in 2024.

Debt issuance cost related to financing activities increased $8.9 million in 2025.

Amounts related to share-based compensation required $8.0 million less in cash during 2025 than in 2024.

During the three months ended March 31, 2025, the Company paid cash dividend payments of $0.49 per common share, for a total of $9.8 million, compared to the period ended March 31, 2024, in which dividends of $0.42 per common share were paid for total cash dividend payments of $8.8 million.

During the six months ended June 30, 2025, the Company paid cash dividend payments of $0.99 per common share, for a total of $19.6 million, compared to the period ended June 30, 2024, in which dividends of $0.86 per common share were paid for total cash dividend payments of $17.9 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 May 1, 2025, the Board of Directors declared a quarterly cash dividend of $0.50 per common share, or $2.00 per share on an annualized basis.

The dividend is payable on June 2, 2025, to shareholders of record as of May 12, 2025.

Share Repurchase Program

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

During the three months ended March 31, 2025, the Company repurchased a total of 321,119 common shares for approximately $151.2 million, at an average price of $470.80 per share, including accrued excise taxes.

As of March 31, 2025, we had approximately $787.8 million remaining under our 2023 authorization.

Our long-term debt at March 31, 2025 and December 31, 2024 was as set forth below:

(Millions of dollars) March 31,

During the six months ended June 30, 2025, the Company repurchased a total of 791,827 common shares for approximately $211.9 million, at an average price of $450.25 per share, including accrued excise taxes.

As of June 30, 2025, we had approximately $578.0 million remaining under our 2023 authorization.

Our long-term debt at June 30, 2025 and December 31, 2024 was as set forth below:

(Millions of dollars) June 30,

2025 December 31,

5.625% senior notes due 2027 (net of unamortized discount of $0.8 at March 31, 2025 and $0.9 at December 31, 2024)

5.625% senior notes due 2027 (net of unamortized discount of $0.7 at June 30, 2025 and $0.9 at December 31, 2024)

$ 299.3 $ 299.1

4.75% senior notes due 2029 (net of unamortized discount of $2.8 at March 31, 2025 and $3.0 at December 31, 2024)

3.75% senior notes due 2031 (net of unamortized discount of $3.7 at March 31, 2025 and $3.8 at December 31, 2024)

Term loan due 2028 (effective interest rate of 6.21% at March 31, 2025 and 6.44% at December 31, 2024) net of unamortized discount of $0.4 at March 31, 2025 and $0.4 at December 31, 2024

Revolving credit facility, due 2026 (weighted average interest rate of 6.59% at March 31, 2025)

4.75% senior notes due 2029 (net of unamortized discount of $2.6 at June 30, 2025 and $3.0 at December 31, 2024)

3.75% senior notes due 2031 (net of unamortized discount of $3.5 at June 30, 2025 and $3.8 at December 31, 2024)

Term loan due 2028 (effective interest rate of n/a at June 30, 2025 and 6.44% at December 31, 2024)

Term loan due 2032 (effective interest rate of 6.09% at June 30, 2025) net of unamortized discount of $1.1 at June 30, 2025

Revolving credit facility, due 2030 (weighted average interest rate of 5.99% at June 30, 2025)

Capitalized lease obligations, autos and equipment, due through 2028

21 unchanged sentences

Following a refinancing effective as of April 7, 2025, the credit agreement provides for a senior secured term loan in an aggregate principal amount of $600.0 million (the "Term Facility") (which was borrowed in full on April 7, 2025) and revolving credit commitments in an aggregate amount equal to $750.0 million (the "Revolving Facility", and together with the Term Facility, the "Credit Facilities").

The Term Facility amortizes in quarterly installments at a rate of 1.00% per annum.

The term loan is due April 2032, and we are required to make quarterly principal payments of $1.5 million, which are due to begin on January 1, 2026.

The outstanding balance of the term loan was $600 million at June 30, 2025 and at December 31, 2024, prior to refinancing, the outstanding balance of our term loan was $386 million.

As of June 30, 2025, we had $88.0 million of outstanding borrowings under the Revolving Facility and $6.2 million of outstanding letters of credit (which reduces the amount available to borrow under the Revolving Facility).

The Term Facility amortizes in quarterly installments, with the first amortization payment being due on January 1, 2026, at a rate of 1.00% per annum.

Pursuant to the credit agreement, the applicable margin, (A) in the case of Adjusted SOFR Rate borrowings, (i) with respect to the Revolving Facility, ranges from 1.25% to 2.00% per annum depending on a total debt to EBITDA ratio and (ii) with respect to the Term Facility, is 1.75% per annum and (B) in the case of Alternate Base Rate borrowings (i) with respect to the Revolving Facility, ranges from 0.25% to 1.00% per annum depending on a total debt to EBITDA ratio or (ii) with respect to the Term Facility, is 0.75% per annum..

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 credit agreement also imposes 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 consolidated cash interest coverage ratio of not less than 2.50 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 June 30, 2025, our total leverage ratio was 2.04 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 $400.0 million or 15.0% 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.

9 unchanged sentences

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 months ended March 31, 2025, and accounted for the vast majority of our total assets as of March 31, 2025.

MOUSA is our primary operating subsidiary and generated the vast majority of our revenues for the three and six months ended June 30, 2025, and accounted for the vast majority of our total assets as of June 30, 2025.

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.

3 unchanged sentences

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, 2025 and 2024:

The remainder of our capital spending and investment activity, which is primarily technology related, is attributable to Corporate and other assets.

The following table outlines our capital spending and investments for the three and six month periods ended June 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2025 2024 2025 2024

11 unchanged sentences

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.

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

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:

18 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis