What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 144 added, 90 removed, 280 unchanged (46% 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, 2026 and 2025.

• 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, 2026 and 2025.

• 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, 2026 and 2025.

• 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, 2026 and 2025.

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 in New Jersey and New York that operate under the QuickChek ® brand, comprising our Northeast region.

At March 31, 2026, we had a total of 1,803 Company stores in 27 states, of which 1,655 were Murphy branded and 148 were under the QuickChek brand.

At June 30, 2026, we had a total of 1,806 Company stores in 27 states, of which 1,659 were Murphy branded and 147 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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While we generally expect our volumes 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 including the impact of potential tariffs, 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 nicotine products 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.

These factors include, but are not limited to, the price of refined products, geopolitical events that disrupt the global supply including the impact of potential tariffs, 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 nicotine products 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.

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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, 2026, we had $1.3 billion of Senior Notes, $160.0 million outstanding under our revolving credit facility and a $598.5 million term loan outstanding.

As of June 30, 2026, we had $1.5 billion of Senior Notes and a $597.0 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 provides for up to $750 million of borrowings.

At June 30, 2026, we had additional available capacity under our revolving credit facility, which provides for up to $750 million of borrowings, which is currently undrawn.

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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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, 2026, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2026.

As a result, operating results for the three and six months ended June 30, 2026, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2026.

Business Segment

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

For additional operating segment information, see Note 22 “Business Segments” in the audited consolidated financial statements for the year ended December 31, 2025 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, 2026.

Results of Operations

Consolidated Results

For the three months ended March 31, 2026, the Company reported net income of $136.3 million, or $7.28 per diluted share, on revenue of $4.8 billion.

For the three months ended June 30, 2026, the Company reported net income of $209.1 million, or $11.27 per diluted share, on revenue of $6.8 billion.

Net income was $145.6 million for the same period in 2025, or $7.36 per diluted share, on $5.0 billion of revenue.

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

These benefits were partially offset by higher income taxes, increased store and other operating expenses including payment fees, higher depreciation and amortization and higher interest expense period over period.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

In the current year quarter, the Company experienced higher total fuel and merchandise contribution compared to the prior year period.

This strong performance was partially offset by increased store and other operating expenses including payment fees, higher income taxes, increased general and administrative expenses, higher depreciation and amortization and higher interest expense period over period.

For the six months ended June 30, 2026, the Company reported net income of $345.4 million, or $18.54 per diluted share, on revenue of $11.6 billion.

Net income for the same period in 2025 was $198.8 million, or $9.95 per diluted share, on $9.5 billion of revenue.

For the year-to-date period, the Company generated higher total fuel and merchandise contribution compared to the same period in 2025.

Higher income tax expense, higher payment fees, increased store operating expenses, greater depreciation and amortization, increased general and administrative expenses and higher interest expense partially offset these benefits resulting in higher net income for the 2026 year-to-date period.

Three Months Ended June 30, 2026 versus Three Months Ended June 30, 2025

Revenues for Q2 2026 increased $1.8 billion, or 36.0%, compared to the same quarter in 2025.

The increase in revenues was primarily due to a 3.3% increase in the average retail fuel sales price during the quarter, an increase of 2.1% in fuel sales volumes and a 5.0% increase in merchandise sales revenue.

The increase in revenues was primarily due to a 37.4% increase in the average retail fuel sales price during the quarter in addition to an increase of 3.9% in retail fuel volumes and a 3.6% increase in merchandise sales revenue.

Cost of sales in Q2 2026 increased $1.7 billion, or 37.9%, when compared to Q2 2025.

In the current-year quarter, the increase was primarily due to higher fuel cost coupled with higher fuel volumes sold and higher merchandise costs.

Store and other operating expenses increased $13.7 million, or 5.1%, in Q1 2026 compared to Q1 2025, primarily due to increases from net new store operating expenses combined with higher employee related expenses at existing stores.

Selling, general and administrative ("SG&A") expenses for Q1 2026 decreased $3.5 million, or 5.8%, versus Q1 2025.

The decrease in SG&A costs is primarily due to lower employee related expenses in the current quarter.

Depreciation and amortization expense increased $3.9 million in Q1 2026, or 5.7%, when compared to the same period of 2025, primarily due to the increased number of Murphy branded stores with larger formats and raze-and-rebuild activity in the quarter.

In the current-year quarter, the increase was primarily the result of higher fuel cost coupled with higher fuel volumes sold and higher merchandise costs.

Store and other operating expenses increased $33.5 million, or 12.2%, in Q2 2026 compared to Q2 2025, primarily due to increases in payment fees, driven by increased retail fuel prices, which accounted for approximately two-thirds of the increase and higher employee related expenses at existing stores combined with increases from net new store operating expenses.

Selling, general and administrative ("SG&A") expenses for Q2 2026 increased $9.6 million, or 18.9%, versus Q2 2025.

The increase in SG&A costs is primarily due to higher employee related expenses and incentive accruals in the current quarter.

Depreciation and amortization expense increased $6.2 million in Q2 2026, or 9.4%, when compared to the same period of 2025, primarily due to the increased number of Murphy branded stores with larger formats in the quarter.

The effective income tax rate was approximately 24.7% for Q2 2026 compared to 24.4% in Q2 2025.

The rate for the quarter is higher due to lower excess tax benefits related to share-based compensation in the period, partially offset by greater benefits associated with Federal energy tax credits in the current year.

Six Months Ended June 30, 2026 versus Six Months Ended June 30, 2025

Year-to-date revenues increased $2.1 billion, or 22.0%, compared to the same period in 2025.

The increase in revenues was due to a 21.4% increase in the average retail fuel sales prices, which increased 60 cpg, a 3.0% increase in retail fuel volumes, a 4.3% increase in merchandise sales revenue and higher fuel supply revenues.

Year-to-date cost of sales increased $1.8 billion, or 21.7%, compared to the same period in 2025.

In the current-year period, the higher costs were primarily due to higher fuel cost, which increased 26.1%, and a 4.0% increase in merchandise cost of goods sold.

Year-to-date store and other operating expenses increased $47.2 million, or 8.7%, compared to the same period in 2025, primarily due to increases in payment fees, which accounts for over 60% of the increase, and higher employee related expenses at existing stores combined with increase in net new store operating expenses.

SG&A expenses for the first six months of 2026 increased $6.1 million, or 5.5%, compared to the first six months of 2025.

The increase in SG&A costs is primarily due to higher incentive accruals versus the same period of 2025.

Depreciation and amortization expense increased $10.1 million, or 7.5%, year-to-date from the same period of 2025 primarily due to the increased number of Murphy branded stores with larger formats in the period.

The effective income tax rate was approximately 23.9% for the six months ended June 30, 2026 versus approximately 21.9% for the same period of 2025.

Segment Results

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Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2026 2025 2026 2025

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Net Income $ 209.1 $ 145.6 $ 345.4 $ 198.8

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Marketing segment net income for the three months ended March 31, 2026 was higher compared to the same period in 2025 primarily due to:

Three Months Ended June 30, 2026 versus Three Months Ended June 30, 2025

Marketing segment net income for the three months ended June 30, 2026 was higher compared to the same period in 2025 primarily due to:

• Higher total fuel contribution;

• Higher retail fuel sales volumes;

• Higher retail fuel volumes;

• Higher merchandise contribution;

• Lower SG&A expenses

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

• Higher store and other operating expenses including payment fees;

• Higher income tax expense;

• Higher store and other operating expenses;

• Higher SG&A expenses;

• Higher depreciation and amortization expenses

Six Months Ended June 30, 2026 versus Six Months Ended June 30, 2025

Marketing segment net income for the six months ended June 30, 2026 was higher compared to the same six-month period in 2025 primarily due to:

• Higher total fuel contribution;

• Higher retail fuel volumes;

• Higher merchandise contribution;

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

• Higher income tax expense;

• Higher store and other operating expenses including payment fees;

• Higher depreciation and amortization expenses;

• Higher SG&A expenses

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

June 30, Six Months Ended

Marketing Segment 2026 2025 2026 2025

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Total other income (expense) (1.9) (2.0) (3.9) (3.9)

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

Marketing Segment 2026 2025

Income (loss) before income taxes 309.4 223.6 518.8 316.4

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Net income (loss) from operations $ 232.8 $ 167.9 $ 394.7 $ 247.0

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

June 30, Six Months Ended

Marketing Segment 2026 2025 2026 2025

Total nicotine sales revenue same store sales 1,2

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

76.1 77.4 72.3 73.4

Total merchandise sales revenue same store sales 1,2

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Three Months Ended

June 30, Six Months Ended

Key Operating Metrics 2026 2025 2026 2025

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Total fuel supply contribution ($ Millions) (54.9) (25.9) (15.9) (41.2)

RINs (included in Other operating revenues on Consolidated Statements of Income) ($ Millions) 71.9 34.9

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

($ Millions) 124.8 59.8 196.7 94.7

Total fuel contribution ($ Millions) $ 518.8 $ 393.0 $ 922.7 $ 680.3

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Retail fuel volume - (K gal APSM) 1,3

242.4 241.6 230.8 231.4

Retail fuel volume - (K gal SSS) 2,3

242.6 239.3 231.1 229.7

Total fuel contribution (cpg) 40.6 32.0 37.9 28.8

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Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2026 2025 2026 2025

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Three Months Ended

June 30, Six Months Ended

Key Operating Metrics 2026 2025 2026 2025

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$ 22.7 $ 22.8 $ 21.2 $ 21.3

Total merchandise contribution ($K SSS) 1,2,3

Total merchandise contribution

($K SSS) 1,2,3

$ 43.3 $ 42.8 $ 41.6 $ 40.6

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Same store sales information compared to APSM metrics:

Variance from prior year

Three months ended

March 31, 2026

Variance from prior year Variance from prior year

Three months ended Six months ended

June 30, 2026 June 30, 2026

Fuel gallons per month 0.5 % 0.3 % (0.1) % (0.2) %

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

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 versus Three Months Ended June 30, 2025

Net income in the Marketing segment for Q2 2026 increased $64.9 million, to $232.8 million when compared to the Q2 2025 period.

Contributions from fuel and merchandise were higher in the current quarter combined with lower general and administrative expenses.

These benefits were partially offset by higher income taxes, increased store and other operating expenses including payment fees, and higher depreciation and amortization in Q1 2026 compared to the Q1 2025 period.

Contributions from both fuel and merchandise were higher in the current quarter, driven by increased total fuel contribution margins, higher total fuel volumes and improved merchandise sales and unit margins.

The exceptional performance in these areas was partially offset by increased store and other operating expenses including payment fees, higher income taxes, increased general and administrative expenses and greater depreciation and amortization in Q2 2026 compared to the Q2 2025 period.

Total fuel contribution for Q2 2026, was $518.8 million, an increase of $125.8 million, or 32.0%, compared to Q2 2025.

This increase was due to higher retail fuel contribution and fuel volumes sold coupled with higher fuel

supply margins in the period when compared to Q1 of 2025.

This increase was due to higher retail fuel contribution and fuel volumes sold coupled with higher fuel supply margins in the period when compared to Q2 of 2025.

Retail fuel margins on a cpg basis increased 20.2% in Q2 2026 to 35.1 cpg, compared to 29.2 cpg in the prior year period.

Total retail fuel volumes increased 2.1% and fuel sales volumes on an SSS basis declined 0.8% in Q1 2026 when compared to Q1 2025.

Total fuel supply contribution dollars, including RINs, increased $91.3 million in Q1 2026 when compared to Q1 2025, primarily due to market-driven pricing effects and timing of inventory movements during the period.

Total retail fuel volumes increased 3.9% and fuel sales volumes on an SSS basis increased 0.5% in Q2 2026 when compared to Q2 2025.

Total fuel supply contribution dollars, including RINs, increased $36.0 million in Q2 2026 when compared to Q2 2025, primarily due to the impact of market-driven pricing and the timing of inventory activity during the period.

Total merchandise sales increased $39.7 million, or 3.6%, in Q2 2026 vs Q2 2025, coming in at approximately $1.1 billion in both quarters.

Total merchandise contribution in Q2 2026 improved 4.0% compared to Q2 2025, primarily due to favorable sales mix and unit growth, combined with increased store count compared to the prior year period.

Total SSS merchandise contribution dollars grew by 4.9%, which included an increase of 10.4% in nicotine products, partially offset by a 0.1% decrease in non-nicotine products.

Store and other operating expenses increased $13.8 million in Q1 2026 compared to Q1 2025, primarily due to increases in net new store operating expenses combined with higher employee related expenses at existing stores.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were 0.3% higher, primarily attributable to increased employee related expenses tied to the new store growth (an increase of 1.9% on a same store basis).

SG&A expenses in Q1 2026 were $3.5 million lower compared to Q1 2025, due primarily to lower incentive costs and employee related expenses in the current quarter.

Depreciation and amortization expense increased $4.4 million, or 7.2%, in Q1 2026 compared to Q1 2025 due to the increased number of larger format Murphy branded stores and raze-and-rebuild activity in the quarter.

Total SSS merchandise contribution dollars grew by 2.2%, which included an increase of 4.6% in nicotine products and a 0.2% increase in non-nicotine products.

Store and other operating expenses increased $33.4 million in Q2 2026 compared to Q2 2025, primarily due to increases in payment fees driven by increased retail fuel prices, higher employee related expenses at existing stores combined with increases from net new store operating expenses.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were 1.1% higher (2.4% higher on a same store APSM basis), primarily attributable to increased employee related expenses.

SG&A expenses in Q2 2026 were $9.6 million higher compared to Q2 2025, due primarily to higher employee related expenses and incentive accruals in the current quarter.

Depreciation and amortization expense increased $6.2 million, or 10.4%, in Q2 2026 compared to Q2 2025 due to the increased number of larger format Murphy branded stores in the quarter.

Six Months Ended June 30, 2026 versus Six Months Ended June 30, 2025

Net income in the Marketing segment for the six months ended June 30, 2026 increased $147.7 million compared to the six months ended June 30, 2025.

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

Total fuel contribution for the six-month period ended June 30, 2026 was $922.7 million, an increase of $242.4 million, or 35.6%, compared to the first six months of 2025.

This was primarily due to higher retail fuel contribution and higher fuel volumes sold coupled with higher contribution from fuel supply margins in the period when compared to the first six months of 2025.

Retail fuel margins on a cpg basis increased 14.7%, to 30.5 cpg, for the six-month period ended June 30, 2026, compared to 26.6 cpg in the same period of 2025.

Total retail fuel sales volumes increased 3.0%, and volumes on an SSS basis decreased 0.1% in the six-month period ended June 30, 2026 when compared to the same six-month period of 2025.

Total fuel supply contribution dollars, including RINs, increased $127.3 million compared to the first six months of 2025, primarily due to pricing impacts related to market conditions and timing of inventory movements.

Total merchandise sales were up 4.3% in the six months ended June 30, 2026 to approximately $2.2 billion compared to $2.1 billion in the first six months of 2025.

Year-to-date 2026 total merchandise contribution increased 5.5% compared to the same period of 2025, primarily due to favorable sales mix, higher retail prices and promotional activity, combined with increased store count compared to the prior year period.

Total year-to-date SSS merchandise contribution dollars improved 3.5% compared to the same period of 2025 with an increase of 7.4% in nicotine products margins and a flat performance to the prior year period in non-nicotine product margins.

Store and other operating expenses increased $47.2 million, or 8.7%, in the current year compared to the same six-month period of 2025, primarily due to increases in payment fees, higher employee related expenses at existing stores combined with increases from net new store operating expenses.

On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent increased 0.8%, primarily due to employee related expenses.

SG&A expenses increased $6.1 million in 2026 compared to the same six-month period of 2025 due primarily to higher incentive accruals.

Depreciation and amortization expense increased $10.6 million, or 8.8%, in the first six months of 2026 due to new larger store formats for Murphy branded stores.

Corporate and Other Assets

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 versus Three Months Ended June 30, 2025

Loss from continuing operations for Corporate and other assets for Q2 2026 was $23.7 million, compared to a loss of $22.3 million in Q2 2025.

The decrease from the prior year quarter was primarily due to a $2.6 million increase in the income tax benefit, a $0.5 million decrease in depreciation and amortization expense, a $0.4 million increase in investment income, and a $0.3 million decrease in other nonoperating expenses, partially offset by a $3.5 million increase in net interest expense compared to the prior year quarter.

The increase from the prior year quarter was primarily due to a $1.5 million increase in net interest expense and a $0.8 million decrease in the income tax benefits, partially offset by a $0.9 million increase in investment income.

Six Months Ended June 30, 2026 versus Six Months Ended June 30, 2025

Loss from continuing operations for Corporate and other assets was $49.3 million for the six months ended June 30, 2026, compared to a loss of $48.2 million in the same period of 2025.

The year-over-year increase was primarily due to $5.1 million increase in net interest expense, partially offset by a $1.8 million increase in the income tax benefit, a $1.3 million increase in investment income, a $0.7 million increase in other nonoperating income and a $0.5 million reduction in depreciation and amortization expense 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, 2026 and 2025.

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025.

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, restructuring expenses, and other non-operating (income) expense).

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Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2026 2025 2026 2025

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Significant Sources of Capital

As of March 31, 2026, we had $118.6 million of cash and cash equivalents.

As of June 30, 2026, we had $175.4 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.

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, 2026, there was $160.0 million of outstanding borrowings under our Revolving Facility reported in Long-term debt in the Consolidated Balance Sheet.

As of June 30, 2026, there were no outstanding borrowings under our Revolving Facility reported in Long-term debt in the Consolidated Balance Sheet.

The Revolving Facility had $183.0 million of outstanding borrowings at December 31, 2025.

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Operating Activities

Net cash provided by operating activities was $320.0 million for the three months ended March 31, 2026 and was $128.5 million for the same period of 2025, an increase of $191.5 million, or 149.0%.

The increase for the three months ended March 31, 2026 is mainly due to an increase in the amount of cash provided from changes in non-cash working capital of $94.8 million, an increase in net income of $83.1 million, higher deferred and noncurrent tax charges of $10.7 million and increased depreciation of $3.9 million compared to the same period in 2025.

For the three months ended March 31, 2026, operating cash provided by changes in non-cash operating working capital of $95.1 million was due to an increase in accounts payable and accrued liabilities of $161.5 million which was related to the timing of payments and a decrease in inventory of $49.7 million due to lower volume levels, partially offset by an increase in accounts receivable of $78.0 million due to the timing of collecting receipts, an increase in prepaid expenses of $5.2 million, and a decrease of $32.9 million in income taxes payable due to changes in accrued income tax liabilities and timing of income tax payments in the current year period.

Net cash provided by operating activities was $555.0 million for the six months ended June 30, 2026 and was $383.6 million for the same period of 2025, an increase of $171.4 million, or 44.7%.

The increase for the six months ended June 30, 2026 is mainly due to an increase in net income of $146.6 million, higher deferred and noncurrent tax charges of $15.8 million, increased depreciation of $10.1 million and an increase in the amount of cash provided from changes in non-cash working capital of $7.3 million, partially offset by a decrease in other operating activities of $6.1 million compared to the same period in 2025.

For the six months ended June 30, 2026, operating cash provided by changes in non-cash operating working capital of $44.4 million was due to an increase in accounts payable and accrued liabilities of $147.2 million which was related to the timing of payments and an increase of $10.7 million in income taxes payable due to changes in accrued income tax liabilities and timing of income tax payments, partially offset by an increase in accounts receivable of $103.3 million due to the timing of collecting receipts, an increase in prepaid expenses of $5.8 million and an increase in inventory of $4.4 million due to higher volume levels in the current year period.

Investing Activities

For the three months ended March 31, 2026, cash required by investing activities was $98.5 million compared to $87.7 million in 2025.

The $10.8 million increase in cash required by investing activities in the current year period was primarily due to an increase of $10.5 million in capital expenditures due to the timing of payments for projects.

For the six months ended June 30, 2026, cash required by investing activities was $199.8 million compared to $204.3 million in 2025.

The $4.5 million decrease in cash required by investing activities in the current year period was primarily due to other investing activities providing $9.8 million, which was partially offset by an

increase of $4.2 million in capital expenditures due to the timing of payments for projects and lower proceeds from the sale of assets of $1.1 million.

Financing Activities

Financing activities in the three months ended March 31, 2026 required cash of $131.8 million compared to cash of $38.4 million in the three months ended March 31, 2025, an increase of $93.4 million.

The first three months of 2026 included payments of $70.5 million for the repurchase of common shares, which was a decrease of $79.5 million compared to repurchases of $150.0 million in the 2025 period.

Dividend payments increased $1.9 million in 2026 compared to amounts paid in the first three months of 2025.

Net repayments of debt required $27.8 million in 2026 compared to net borrowings of debt providing $140.0 million in 2025.

Financing activities in the six months ended June 30, 2026 required cash of $208.7 million compared to cash of $172.2 million in the six months ended June 30, 2025, an increase of $36.5 million.

The first six months of 2026 included payments of $152.8 million for the repurchase of common shares, which was a decrease of $211.0 million compared to repurchases of $363.8 million in the 2025 period.

Dividend payments increased $3.9 million in 2026 compared to amounts paid in the first six months of 2025.

Net borrowings of debt provided $2.4 million in 2026 compared to net borrowings of debt providing $239.3 million in 2025.

Debt issuance cost related to financing activities decreased $7 million.

Amounts related to share-based compensation required $13.7 million more in cash during 2026 than in 2025.

During the three months ended March 31, 2026, the Company paid cash dividend payments of $0.63 per common share, for a total of $11.7 million, compared to the period ended March 31, 2025, in which dividends of $0.49 per common share were paid for total cash dividend payments of $9.8 million.

During the six months ended June 30, 2026, the Company paid cash dividend payments of $1.27 per common share, for a total of $23.5 million, compared to the period ended June 30, 2025, in which dividends of $0.99 per common share were paid for total cash dividend payments of $19.6 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 7, 2026, the Company announced that the Board of Directors had declared a quarterly cash dividend of $0.64 per common share, or $2.56 per share on an annualized basis.

The dividend is payable on June 1, 2026, to stockholders of record as of May 18, 2026.

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, 2026, the Company repurchased a total of 168,963 common shares for approximately $70.9 million, at an average price of $419.87 per share, including accrued excise taxes.

As of March 31, 2026, we had approximately $221.4 million remaining under our 2023 authorization.

During the six months ended June 30, 2026, the Company repurchased a total of 312,087 common shares for approximately $147.7 million, at an average price of $473.40 per share, including accrued excise taxes.

As of June 30, 2026, we had approximately $145.1 million remaining under our 2023 authorization.

On October 29, 2025, the Company announced that the Board of Directors approved a share repurchase authorization of up to $2.0 billion to be executed by December 31, 2030.

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We may use cash from operations as well as draws under our credit facilities to effect purchases.

Our long-term debt at March 31, 2026 and December 31, 2025 was as set forth below:

(Millions of dollars) March 31,

Our long-term debt at June 30, 2026 and December 31, 2025 was as set forth below:

(Millions of dollars) June 30,

2026 December 31,

5.625% senior notes due 2027 (net of unamortized discount of $0.4 at March 31, 2026 and $0.5 at December 31, 2025)

$ 299.6 $ 299.5

4.75% senior notes due 2029 (net of unamortized discount of $2.2 at March 31, 2026 and $2.3 at December 31, 2025)

3.75% senior notes due 2031 (net of unamortized discount of $3.0 at March 31, 2026 and $3.2 at December 31, 2025)

Term loan due 2032 (effective interest rate of 5.43% at March 31, 2026) net of unamortized discount of $1.0 at March 31, 2026 and December 31, 2025

Revolving credit facility, due 2030 (weighted average interest rate of 5.27% at March 31, 2026)

5.625% senior notes due 2027 (net of unamortized discount of zero at June 30, 2026 and $0.5 at December 31, 2025)

4.75% senior notes due 2029 (net of unamortized discount of $2.0 at June 30, 2026 and $2.3 at December 31, 2025)

3.75% senior notes due 2031 (net of unamortized discount of $2.9 at June 30, 2026 and $3.2 at December 31, 2025)

5.875% senior notes due 2034 (net of unamortized discount of $4.9 at June 30, 2026)

Term loan due 2032 (effective interest rate of 5.39% at June 30, 2026) net of unamortized discount of $0.9 at June 30, 2026 and $1.0 at December 31, 2025

Revolving credit facility, due 2030 (weighted average interest rate of —% at June 30, 2026)

Capitalized lease obligations, autos and equipment, due through 2031

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Total long-term debt, net of current $ 2,167.0 $ 2,163.6

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.

On September 13, 2019, Murphy Oil USA, Inc.

("MOUSA"), our primary operating subsidiary, 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 the Company and by the Company's subsidiaries that guarantee our Credit Facilities (as defined below).

The indenture governing the 2029 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.

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

On May 27, 2026, MOUSA issued $500 million of 5.875% Senior Notes due 2034 (the "2034 Senior Notes" and, together with the 2029 Senior Notes and the 2031 Senior Notes, the "Senior Notes").

The net proceeds from the issuance of the 2034 Senior Notes were used to fund the redemption in full of the $300 million of 5.625% Senior Notes due 2027 (the "2027 Senior Notes") and to pay down outstanding amounts on its revolving credit facility.

The 2034 Senior Notes are fully and unconditionally guaranteed by the Company and by the Company's subsidiaries that guarantee our Credit Facilities.

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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 outstanding balance of the term loan was $598.5 million at March 31, 2026 and $600.0 million at December 31, 2025.

The outstanding balance of the term loan was $597.0 million at June 30, 2026 and $600.0 million at December 31, 2025.

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

As of March 31, 2026, we had $160.0 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).

As of June 30, 2026, we had no 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.

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

At March 31, 2026, our total leverage ratio was 1.87 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 (a) $400.0 million or (b) 15.0% of consolidated net tangible assets, estimated at $427.8 million as of March 31, 2026, over the life of the credit agreement.

At June 30, 2026, 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 (a) $400.0 million or (b) 15.0% of consolidated net tangible assets, estimated at $457.4 million as of June 30, 2026, 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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See also Note 6 "Long Term Debt" in the accompanying consolidated financial statements.

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.

The Senior Notes and related guarantees 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 notes.

securing such indebtedness.

The Senior Notes and related guarantees 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 notes.

All obligations under the Credit Facilities are guaranteed by the Company and the same subsidiary guarantors that guarantee the Senior Notes.

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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 months ended March 31, 2026, and accounted for the vast majority of our total assets as of March 31, 2026.

MOUSA is our primary operating subsidiary and generated the vast majority of our revenues for the three and six months ended June 30, 2026, and accounted for the vast majority of our total assets as of June 30, 2026.

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.

Capital Spending

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

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

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

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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 month periods ended March 31, 2026 and 2025:

The following table outlines our capital spending and investments for the three and six month periods ended June 30, 2026 and 2025:

Three Months Ended

June 30, Six Months Ended

(Millions of dollars) 2026 2025 2026 2025

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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 and associated capital expenditures, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, and share repurchases.

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 risks and uncertainties, including, but not limited to our 2026 financial and operating performance, 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.

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

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

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

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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