Murphy USA
Annual Report 2022

Plain-text annual report

BUILT TO LAST 2022 ANNUAL REPORT AND 2023 PROXY STATEMENT FINANCIAL HIGHLIGHTS FUEL METRICS Total retail gallons sold (in billions) Retail fuel gallons sold (per store month) Total fuel contribution (cents per gallon) MERCHANDISE METRICS Total merchandise sales ($ billions) Total merchandise margin dollars (per store month) Merchandise unit margins (%) Non-tobacco margin dollars (per store month) Total non-tobacco unit margins (%) FINANCIAL METRICS (cid:904)(cid:936)(cid:3)(cid:68)(cid:47)(cid:62)(cid:62)(cid:47)(cid:75)(cid:69)(cid:94)(cid:905) Net income from continuing operations Adjusted EBITDA(1) Cash and cash equivalents Capital spending Long-term debt Market capitalization Ending share price ($ per share) 2018 2019 2020 2021 2022 4.232 244,033 16.2 $ 2.423 $ 23,086 16.5% $ 9,615 24.4% $ 213.6 $ 411.8 $ 184.5 $ 193.8 $ 842.1 $ 2,472.5 $ 76.64 4.374 248,258 16.1 $ 2.620 $ 23,798 16.0% $ 9,753 23.4% $ 154.8 $ 422.6 $ 280.3 $ 214.6 $ 999.3 $ 3,563.8 $ 117.00 3.901 219,520 25.2 4.352 229,404 26.3 4.752 244,582 34.3 $ 2.955 $ 25,850 15.6% $ 10,159 22.0% $ 386.1 $ 722.7 $ 163.6 $ 227.1 $ 951.2 $ 3,566.0 $ 130.87 $ 3.678 $ 35,607 19.1% $ 19,218 28.5% $ 396.9 $ 828.0 $ 256.4 $ 277.5 $ 1,800.1 $ 4,968.1 $ 199.24 $ 3.903 $ 38,025 19.7% $ 21,055 29.4% $ 672.9 $ 1,190.9 $ 60.5 $ 305.8 $ 1,791.9 $ 6,080.0 $ 279.54 Murphy USA Stock Performance Indexed from December 31, 2017 to December 31, 2022 Based on Ending Price of Each Period MURPHY USA INC. S&P 500 INDEX S&P Retail Select Index Total Shareholder Return, Annualized From December 31, 2019 to December 31, 2022 Based on 10-Day Average Price at End of Each Period ) 7 1 0 2 / 2 1 f o s a 0 0 1 ( x e d n I 350 300 250 200 150 100 50 7 1 0 2 / 1 3 / 2 1 8 1 0 2 / 1 3 / 2 1 9 1 0 2 / 1 3 / 2 1 0 2 0 2 / 1 3 / 2 1 1 2 0 2 / 1 3 / 2 1 2 2 0 2 / 1 3 / 2 1 (1) Please refer to the reconciliation in Appendix A of the Notice of 2023 Annual Meeting of Stockholders and Proxy Statement included herein. 348 144 136 45 40 35 30 25 20 15 10 5 0 34.7% . C N I A S U Y H P R U M 7.7% X E D N I 0 0 5 P & S 11.3% X E D N I Y R T S U D N I T C E L E S L I A T E R P & S A N N U A L R E P O R T 2 0 2 2 P A G E 1 Letter To Shareholders - Built To Last Ten years ago, Murphy USA was busy preparing itself to be spun off as a stand-alone public company. Rather than penning an annual letter to our shareholders, my thoughts as a new CEO were focused instead on articulating in our formation documents the underlying strengths that would underpin our strategy: to win with customers; to engage our team members and other stakeholders on our journey; and, importantly, to build confidence and ultimately trust with our future shareholders. While strategy is nuanced, with one foot grounded in the reality of the present and another in aspirations for the future, the focus then was—and continues to be now— about building a sustainable strategy for the long term, where we truly have the right to win and where the coherent elements of our strategy reinforce each other in a manner that builds and reinforces a competitive advantage. In short, building a strategy to endure; a strategy that is built to last. Our starting point was just that, a new point in time to be measured against down the road, under the added scrutiny of being a public company. Our work had just begun, leveraging what had been built before us, with new tactics and initiatives to achieve our ultimate potential yet to be defined. Our future: uncertain, given the challenging market and competitive dynamics that have resulted in significant industry consolidation. To be sure, within the first four years of our spin, half our publicly- traded c-store peers were sold to larger firms whose core strategy focused on consolidation. Ten years later, Murphy USA’s differentiated strategy has stood the test of time. While no one could have predicted all the challenges that came before us as a company, as leaders and members of communities, it is clear we have built a business that has thrived through a variety of economic cycles, including a global pandemic and, most recently, high inflation. Continuing the track record since our spin, 2022 results clearly demonstrate the improvements we have made to the business and the sustaining benefits of our advantaged model. While we don’t have a crystal ball to guide us for the next decade, we have something even more valuable—the clarity of the five key elements of our business strategy that have served us well since 2013 and will continue to differentiate Murphy USA in the future. We prioritized organic growth, adding over 500 stores to the network since 2012 and rebuilding 177 legacy kiosks. We diversified our merchandise mix to grow merchandise contribution while enhancing our low-cost operating model, which together lowered our fuel breakeven requirement, resulting in higher per store profitability and a more competitive business. Given our low cost position, we created advantage from fuel market volatility, growing fuel contribution dollars significantly, to more than $1.6 billion in 2022, gaining leverage from improvements in the execution of our unique supply and every-day low price positions. These elements are further reinforced through our mindset and focus on investing for the long-term, which underpinned our store growth, network evolution, productivity improvements, expanded capabilities, and enhanced employee engagement and customer satisfaction. Significant capability investments like Murphy Drive Rewards continue to extend our differentiated positioning with consumers on our core merchandise offer while the QuickChek acquisition significantly enhances our food and beverage capabilities and introduced a new advantaged format for growth. Taken together, the cumulative investments over the past decade improved our relative position on the industry supply curve as costs for the broader industry rose, increasing our competitiveness and ability to appeal to more and more value-conscious consumers, while capturing disproportionate benefits from the structural shift in industry fuel margins. In addition to what we accomplished, I am even more proud of how we achieved these results. Our enduring business strategy is grounded in five sustainability pillars which continue to be reinforced and set Murphy USA apart: Affordable, Responsible, Engaged, Committed and Aligned. Affordability matters to our customers, more than ever before. We cannot continue to serve our customers without building trust through responsible retailing practices and engaging our workforce of around 15,000 team members who distinctly embody the Murphy USA spirit and represent the communities we serve. As our business results have improved, so too has our commitment to support others, as demonstrated by our $25 million donation to the Murphy USA Foundation, that supports local communities with an emphasis on South Arkansas, and through our ongoing national partnership with the Boys and Girls Club of America. r Our approach to business strategy and sustainability addresses our key stakeholders while building trust and alignment with investors. Perhaps the most tangible outcome for investors is represented by our total shareholder return of 620% since spin through year-end 2022. As a result of our balanced 50/50 capital allocation strategy showcasing steady unit growth with consistent and opportunistic share repurchase, we grew our store count by nearly 50%, and repurchased more than 50% of our original shares outstanding, including over $800 million in 2022. We are proud of these milestone achievements that created significant shareholder value for our long-term investors. Looking forward, we are poised to continue delivering exceptional results and making investments we believe better prepare the company to compete and win, in 2023 and beyond. First, we are preparing for more new store growth, building better stores in strong markets, and could grow the network by another 500 high-performing stores over the next decade, providing material contributions to our future earnings potential. Second, we will remain focused on improving same store productivity, increasing efficiency across all aspects of the business, and maintaining an ultra-low cost structure which supports our everyday low price strategy. This includes a comprehensive set of new investments that will help extend and ultimately widen our competitive advantage in the industry, including Digital Transformation which will help evolve the reach and effectiveness of our loyalty platforms and data analytics capabilities, and the In-Store Experience, which involves a comprehensive redesign of the inside of new and existing Murphy stores, representing a fundamentally different experience for our customer that will better showcase the breadth and accessibility of our product offering. Third, we will continue our track record of disciplined capital allocation through shareholder friendly distributions. While a lot has changed in the past ten years, our relentless focus to win at our game the right way remains the same. We will continue to adapt and evolve, while staying true to the needs of our customers and stakeholders. Change is inevitable. Success isn’t guaranteed. Even the rules of the game aren’t certain. However, we are confident in Murphy USA’s enduring strategy and ability to win in any host of future scenarios. We are, Built to Last! R. Andrew Clyde President and Chief Executive Officer Murphy USA Markets QuickChek Markets A N N U A L R E P O R T 2 0 2 2 P A G E 3 1. STRATEGY GROW ORGANICALLY Growth of Murphy Retail Stores Murphy USA, Murphy Express, and QuickChek Loca(cid:2)ons MURPHY EXPRESS MURPHY USA QUICKCHEK 1,472 1,489 1,503 1,679 158 312 328 352 370 1,712 157 404 1,160 1,161 1,151 1,151 1,151 2018 2019 2020 2021 2022 Building new stores in attractive markets remains Murphy USA’s top priority for growth. Our commitment to organic growth since our 2013 spin has helped enhance the quality and attractiveness of our network, improve the customer experience, and further diversify our merchandise mix. In 2022, 36 new-to-industry stores were added, growing the network by about 2%. We added 34 new 2,800 square-foot Murphy branded stores, two new 5,400+ square-foot QuickChek stores, while closing three older QuickChek stores without a fuel offer. With a multi-year development pipeline in place, we plan to build up to 45 new stores in 2023, including up to five new QuickChek locations. Complementing new store growth is our raze and rebuild program, which replaces high- performing kiosks near Walmart Supercenters with 1,400 square-foot walk-in stores with a broader merchandise assortment. In converting 177 kiosks since 2013, the network has evolved from nearly 70% kiosks to less than 40% in 2022. We plan to continue improving the network with up to 30 raze and rebuilds in 2023. In addition, our relationship with Walmart continues through Murphy’s participation in Walmart+ which provides additional value in the form of fuel discounts to our shared customer base. Raze & Rebuilds by Year 33 32 45 NEW STORES IN 2023 WE PLAN TO BUILD UP TO 27 27 27 2018 2019 2020 2021 2022 AND REPLACE UP TO 30 KIOSKS WITH SMALL WALK-IN STORES A N N U A L R E P O R T 2 0 2 2 P A G E 5 2. STRATEGY DIVERSIFY MERCHANDISE MIX The strategic acquisition of QuickChek in 2021 continues to generate synergies for the enterprise while upgrading our food and beverage capabilities, increasing our exposure to higher-margin growth opportunities, and improving the quality and sustainability of our future earnings. Accordingly, per-store non-tobacco margin contribution grew 10% in 2022 to $21.1K, driven by a 9% increase in food and beverage contribution dollars. Importantly, higher margin non-tobacco categories now constitute 56% of total merchandise contribution dollars, which combined with continued share gains in tobacco, led to total margin contribution growth of 9.3%. As a result, total merchandise unit margins expanded by 60 basis points to 19.7%. To sustain this momentum, several initiatives have been launched to drive future productivity improvements, including the evolution of our loyalty platform and data analytics capabilities and the redesign of Murphy branded stores to improve the customer’s in-store experience. Merchandise Margin $K Average Per Store Month NON-TOBACCO TOBACCO $25.9* 10.2 $23.1 $23.8* 9.6 9.8 $38.0* $35.6* 21.1 19.2 13.5 14.4 16.2 16.9 17.7 2018 2019 2020 2021 2022 *2019 - 2022 totals reflect the impact of MDR discounts and deferrals Merchandise Unit Margin % 16.5% 16.0% 15.6% 19.1% 19.7% 2018 2019 2020 2021 2022 Merchandise Sales ($ in millions) Merchandise GM ($ in millions) 2018 2,423 400 2019 2,620 419 2020 2,955 459 2021 3,678 702 2022 3,903 767 Y-O-Y Change 6.1% 9.3% (cid:69)(cid:381)(cid:410)(cid:286)(cid:855)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1005)(cid:3)(cid:302)(cid:336)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:3)(cid:1005)(cid:1005)(cid:3)(cid:373)(cid:381)(cid:374)(cid:410)(cid:346)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:89)(cid:437)(cid:349)(cid:272)(cid:364)(cid:18)(cid:346)(cid:286)(cid:364)(cid:854)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1006)(cid:3)(cid:302)(cid:336)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:3)(cid:258)(cid:3)(cid:296)(cid:437)(cid:367)(cid:367)(cid:882)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:381)(cid:296)(cid:3)(cid:89)(cid:437)(cid:349)(cid:272)(cid:364)(cid:18)(cid:346)(cid:286)(cid:364) P A G E 6 B U I L T T O L A S T 3. STRATEGY SUSTAIN COST LEADERSHIP Store Opera(cid:2)ng Expenses Versus Industry Average Store Opera(cid:2)ng Expenses,* $K Average Per Store Month MURPHY USA QUICKCHEK IMPACT INDUSTRY** 2018 2019 2020 2021 2022 $21.0 $21.4 $22.1 $23.3 $7.7 $31.0 $25.8 $8.4 $34.2 $49.0 $52.5 $51.0 $63.1 *Store Opera(cid:2)ng Expense excludes SG&A, Field Admin cost and payment fees. **2022 Industry Store Opera(cid:2)ng Expense data not yet available, NACS store set differs from PY. Coverage Ra(cid:2)o* 92.1% 93.4% 98.0% 102.1% 100.1% 2018 2019 2020 2021 2022 *Merchandise Margin/Store Opera(cid:2)ng Expense plus allocated G&A and other expenses Affordability matters to more and more customers as high prices take their toll. To successfully execute our everyday low- price strategy, we must carefully control the inflationary impacts on our business and maintain a low-cost structure. While the addition of larger QuickChek and Murphy stores to the network come with higher costs per store, our low-cost structure remains advantaged relative to the industry average. Importantly, the coverage ratio, which measures merchandise margin over and above store operating expense, reflects that strong merchandise performance at Murphy and QuickChek offset much of the higher costs to serve our customers, especially as a higher number of new larger stores ramp up. In 2022, we experienced a 10% increase in our per-store operating expenses, which reflected broader inflationary pressures and included a one-time appreciation bonus for our employees. While not immune to cost pressures, our relative position in the industry allows Murphy USA to be more competitive as weaker retailers pass on higher costs through higher prices. WE BELIEVE OUR LOW-COST STRUCTURE RELATIVE TO THE INDUSTRY AVERAGE CONTINUES TO BE A COMPETITIVE ADVANTAGE P A G E 8 B U I L T T O L A S T 4. STRATEGY CREATE ADVANTAGE FROM MARKET VOLATILITY Fuel margins continue to increase as post-Covid and inflationary pressures force weaker retailers to make up their loss in profitability from higher costs and lower volumes. With an advantaged cost structure and EDLP position, Murphy and QuickChek stores are well positioned to gain market share profitably. In 2022, price volatility increased significantly, exacerbated by geopolitical factors, and the resulting uncertainty continued to exert pressure across segments of the industry. Coupled with a significant fall-off in product prices during the third quarter, total fuel margins were exceptionally strong in 2022, climbing to 34.3 cents per gallon. The robust margin environment, coupled with our low-cost fuel supply advantage, allowed us to further discount prices, helping to attract new customers and grow market share, resulting in 6.6% per-store volume growth in 2022. These share gains, along with 4.7 cents per gallon of contribution from our product supply and wholesale positions, resulted in a record $1.6 billion of total fuel contribution. TOTAL FUEL MARGINS WERE EXCEPTIONALLY STRONG IN 2022, CLIMBING TO 34.3 CENTS PER GALLON Total Fuel Margin (cents per gallon)* PRODUCT SUPPLY AND WHOLESALE + RINS RETAIL 34.3 4.7 25.2 2.3 26.3 4.4 16.2 1.5 14.7 16.1 2.3 13.8 22.9 21.9 29.6 2018 2019 2020 2021 2022 *Cents per gallon based on retail volumes, before corporate overhead Total Fuel Contribu(cid:2)on (in millions) PRODUCT SUPPLY AND WHOLESALE + RINS RETAIL $1,630 225 $1,144 193 $982 87 $686 624 $705 99 606 895 951 1,405 2018 2019 2020 2021 2022 (cid:69)(cid:381)(cid:410)(cid:286)(cid:855)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1005)(cid:3)(cid:302)(cid:336)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:3)(cid:1005)(cid:1005)(cid:3)(cid:373)(cid:381)(cid:374)(cid:410)(cid:346)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:89)(cid:437)(cid:349)(cid:272)(cid:364)(cid:18)(cid:346)(cid:286)(cid:364)(cid:854)(cid:3) (cid:1006)(cid:1004)(cid:1006)(cid:1006)(cid:3)(cid:302)(cid:336)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:3)(cid:258)(cid:3)(cid:296)(cid:437)(cid:367)(cid:367)(cid:882)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:381)(cid:296)(cid:3)(cid:89)(cid:437)(cid:349)(cid:272)(cid:364)(cid:18)(cid:346)(cid:286)(cid:364) A N N U A L R E P O R T 2 0 2 2 P A G E 11 5. STRATEGY INVEST FOR THE LONG TERM Since our spin, Murphy USA has maintained a disciplined and return-focused approach to capital allocation, balancing new store growth with meaningful share repurchase, resulting in higher earnings per share over time. We are dedicated to optimizing our returns on invested capital, working relentlessly to improve returns at the store-level and opportunistically utilizing excess free cash flow to repurchase our shares, creating enduring benefits for long-term shareholders. In 2022, we completed nearly $800M of share repurchases, which has helped reduce our share count more than 50% since spin. In addition to store growth and share repurchase, we began in 2020 to return capital to shareholders in a more ratable manner through a quarterly dividend, which has grown from $0.25 per share to $0.37 per share in the first quarter of 2023, or a 48% increase since inception. Earnings Per Share Income from Con(cid:2)nuing Opera(cid:2)ons—Diluted $28.10 $14.92 $13.08 $6.48 $4.86 Annual Capital Expenditures (in millions) CORPORATE AND OTHER ASSETS MAINTENANCE GROWTH $227 26 23 $194 25 34 $215 61 20 $306 27 33 $278 32 22 135 134 178 224 246 2018 2019 2020 2021 2022 Total Shares Outstanding Fiscal Year End Since Spinoff (in millions) 46.8 32.3 30.5 27.2 24.9 21.7 2018 2019 2020 2021 2022 2013 Spin 2018 2019 2020 2021 2022 (cid:69)(cid:381)(cid:410)(cid:286)(cid:855)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1005)(cid:3)(cid:302)(cid:336)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:3)(cid:1005)(cid:1005)(cid:3)(cid:373)(cid:381)(cid:374)(cid:410)(cid:346)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:89)(cid:437)(cid:349)(cid:272)(cid:364)(cid:18)(cid:346)(cid:286)(cid:364)(cid:854)(cid:3)(cid:1006)(cid:1004)(cid:1006)(cid:1006)(cid:3)(cid:302)(cid:336)(cid:437)(cid:396)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:3)(cid:258)(cid:3)(cid:296)(cid:437)(cid:367)(cid:367)(cid:882)(cid:455)(cid:286)(cid:258)(cid:396)(cid:3)(cid:381)(cid:296)(cid:3)(cid:89)(cid:437)(cid:349)(cid:272)(cid:364)(cid:18)(cid:346)(cid:286)(cid:364) SUSTAINABLE GROWTH UNDERPINNED BY FIVE PILLARS At Murphy USA, our strategy is reinforced by the resiliency and sustainability of our business and is anchored by five pillars connecting our business strategy to our foundation as an affordable, responsible retailer. Every day we endeavor to serve our customers and earn their trust through our actions. Our business is dependent on the enthusiasm of our engaged associates and a commitment to the communities we serve in order to remain aligned with all our stakeholders, including our investors. We know an effective and impactful ESG program will evolve and change over time. We are continuing our ESG journey in 2023 with updated metrics and additional disclosures through a Summary Report expected later this year. This summary report represents a continued evolution of our progress in preserving the sustainability of our business strategy and other important ESG topics. We plan to report our 2022 Scope 1 and Scope 2 greenhouse gas emissions (GHG), along with continued disclosure of our EEO-1 report on our website. For more information about our ESG program, please visit our website, https://ir.corporate.murphyusa.com. AFFORDABLE (cid:94)(cid:286)(cid:396)(cid:448)(cid:286)(cid:3)(cid:272)(cid:437)(cid:400)(cid:410)(cid:381)(cid:373)(cid:286)(cid:396)(cid:400)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:286)(cid:448)(cid:286)(cid:396)(cid:455)(cid:282)(cid:258)(cid:455)(cid:3)(cid:367)(cid:381)(cid:449)(cid:3)(cid:393)(cid:396)(cid:349)(cid:272)(cid:286)(cid:400)(cid:3) (cid:296)(cid:381)(cid:396)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:296)(cid:437)(cid:286)(cid:367)(cid:400)(cid:853)(cid:3)(cid:373)(cid:286)(cid:396)(cid:272)(cid:346)(cid:258)(cid:374)(cid:282)(cid:349)(cid:400)(cid:286)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:296)(cid:381)(cid:381)(cid:282)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3) (cid:271)(cid:286)(cid:448)(cid:286)(cid:396)(cid:258)(cid:336)(cid:286)(cid:3)(cid:393)(cid:396)(cid:381)(cid:282)(cid:437)(cid:272)(cid:410)(cid:400)(cid:3)(cid:410)(cid:346)(cid:286)(cid:455)(cid:3)(cid:374)(cid:286)(cid:286)(cid:282) RESPONSIBLE (cid:17)(cid:437)(cid:349)(cid:367)(cid:282)(cid:3)(cid:410)(cid:396)(cid:437)(cid:400)(cid:410)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:272)(cid:381)(cid:374)(cid:400)(cid:437)(cid:373)(cid:286)(cid:396)(cid:400)(cid:853)(cid:3)(cid:396)(cid:286)(cid:336)(cid:437)(cid:367)(cid:258)(cid:410)(cid:381)(cid:396)(cid:400)(cid:3) (cid:258)(cid:374)(cid:282)(cid:3)(cid:393)(cid:258)(cid:396)(cid:410)(cid:374)(cid:286)(cid:396)(cid:400)(cid:3)(cid:271)(cid:455)(cid:3)(cid:286)(cid:454)(cid:272)(cid:286)(cid:286)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3)(cid:286)(cid:454)(cid:393)(cid:286)(cid:272)(cid:410)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3) (cid:349)(cid:374)(cid:3)(cid:258)(cid:396)(cid:286)(cid:258)(cid:400)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3)(cid:282)(cid:258)(cid:410)(cid:258)(cid:3)(cid:393)(cid:396)(cid:381)(cid:410)(cid:286)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:853)(cid:3) (cid:258)(cid:336)(cid:286)(cid:3)(cid:448)(cid:286)(cid:396)(cid:349)(cid:296)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:400)(cid:258)(cid:296)(cid:286)(cid:410)(cid:455) ENGAGED (cid:28)(cid:373)(cid:393)(cid:381)(cid:449)(cid:286)(cid:396)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:393)(cid:286)(cid:381)(cid:393)(cid:367)(cid:286)(cid:3)(cid:410)(cid:346)(cid:396)(cid:381)(cid:437)(cid:336)(cid:346)(cid:3)(cid:258)(cid:374)(cid:3) (cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:400)(cid:349)(cid:448)(cid:286)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:282)(cid:349)(cid:448)(cid:286)(cid:396)(cid:400)(cid:286)(cid:3)(cid:272)(cid:437)(cid:367)(cid:410)(cid:437)(cid:396)(cid:286)(cid:853)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:286)(cid:410)(cid:349)(cid:410)(cid:349)(cid:448)(cid:286)(cid:3) (cid:410)(cid:381)(cid:410)(cid:258)(cid:367)(cid:3)(cid:396)(cid:286)(cid:449)(cid:258)(cid:396)(cid:282)(cid:400)(cid:3)(cid:393)(cid:396)(cid:381)(cid:336)(cid:396)(cid:258)(cid:373)(cid:400)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:296)(cid:437)(cid:367)(cid:296)(cid:349)(cid:367)(cid:367)(cid:349)(cid:374)(cid:336)(cid:3) (cid:272)(cid:258)(cid:396)(cid:286)(cid:286)(cid:396)(cid:3)(cid:381)(cid:393)(cid:393)(cid:381)(cid:396)(cid:410)(cid:437)(cid:374)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400) COMMITTED (cid:47)(cid:374)(cid:448)(cid:286)(cid:400)(cid:410)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:396)(cid:286)(cid:400)(cid:381)(cid:437)(cid:396)(cid:272)(cid:286)(cid:400)(cid:3)(cid:410)(cid:381)(cid:3)(cid:400)(cid:410)(cid:396)(cid:286)(cid:374)(cid:336)(cid:410)(cid:346)(cid:286)(cid:374)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3)(cid:272)(cid:381)(cid:373)(cid:373)(cid:437)(cid:374)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)(cid:449)(cid:286)(cid:3)(cid:400)(cid:286)(cid:396)(cid:448)(cid:286)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3) (cid:410)(cid:346)(cid:286)(cid:349)(cid:396)(cid:3)(cid:286)(cid:374)(cid:448)(cid:349)(cid:396)(cid:381)(cid:374)(cid:373)(cid:286)(cid:374)(cid:410) ALIGNED (cid:28)(cid:374)(cid:400)(cid:437)(cid:396)(cid:286)(cid:3)(cid:381)(cid:437)(cid:396)(cid:3)(cid:272)(cid:396)(cid:286)(cid:282)(cid:349)(cid:271)(cid:349)(cid:367)(cid:349)(cid:410)(cid:455)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:349)(cid:374)(cid:448)(cid:286)(cid:400)(cid:410)(cid:381)(cid:396)(cid:400)(cid:3)(cid:410)(cid:346)(cid:396)(cid:381)(cid:437)(cid:336)(cid:346)(cid:3) (cid:400)(cid:410)(cid:396)(cid:381)(cid:374)(cid:336)(cid:3)(cid:271)(cid:437)(cid:400)(cid:349)(cid:374)(cid:286)(cid:400)(cid:400)(cid:3)(cid:286)(cid:410)(cid:346)(cid:349)(cid:272)(cid:400)(cid:853)(cid:3)(cid:336)(cid:381)(cid:381)(cid:282)(cid:3)(cid:272)(cid:381)(cid:396)(cid:393)(cid:381)(cid:396)(cid:258)(cid:410)(cid:286)(cid:3) (cid:336)(cid:381)(cid:448)(cid:286)(cid:396)(cid:374)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:286)(cid:296)(cid:296)(cid:286)(cid:272)(cid:410)(cid:349)(cid:448)(cid:286)(cid:3)(cid:272)(cid:258)(cid:393)(cid:349)(cid:410)(cid:258)(cid:367)(cid:3)(cid:258)(cid:367)(cid:367)(cid:381)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374) FORM 10-K [THIS PAGE INTENTIONALLY LEFT BLANK] UNITED STATT TAA ES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ to ____ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Commission File Number 001-35914 MURPHY USA INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No. Delaware 46-2279221 200 Peach Street El Dorado, Arkansas (Address of principal executive offff ices) 71730-5836 (Zip Code) (870) 875-7600 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 Par VaVV lue MUSA New YoYY rk Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☑ YeYY s ☐ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ YeYY s ☑ No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or foff r such shorter period that the registrant was required to file such reports), and (2) has been subjb ect to such filing requirements foff r the past 90 days. ☑ YeYY s ☐ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or foff r such shorter period that the registrant was required to submit such files). ☑ YeYY s ☐ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange act. Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period fof r complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effff ectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis on incentive-based compensation received by any of the registrant's executive offff icers during the relevant recovery period pursuant to §240.10D-1(b)). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ YeYY s ☑ No The aggregate market value of the voting and non-voting common equity held by non-affff iliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (as of June 30, 2022), based on the closing price on that date of $232.87 was $5,438,737,000. Number of shares of Common Stock, $0.01 par value, outstanding at January 31, 2023 was 21,700,941. Documents incorporated by reference: Portions of the Registrant’s definitive Proxy Statement relating to the Annual Meeting of Stockholders on May 4, 2023 will be incorporated by reference in Part III herein. [THIS PAGE INTENTIONALLY LEFT BLANK] MURPHY USA INC. TATT BLE OF CONTENTS – 2022 Form 10-K PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staffff Comments Item 2. Properties Item 3. Legal Proceedings Supplemental Infoff rmation. Infoff rmation About our Executive Offff icers Item 4. Mine Safety Disclosures PART II Item 5. Market foff r Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Securities Item 6. Reserverr d Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Infoff rmation Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III Item 10. Directors, Executive Offff icers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accountant Fees and Servirr ces Item 15. Exhibits, Financial Statement Schedules PART IV Item 16. Form 10-K Summary Signatures Pageg 2 13 26 26 26 27 28 29 31 32 48 48 49 49 49 49 50 50 50 50 50 51 54 55 1 Item 1. BUSINESS Part I Murphy USA Inc. ("Murphy USA", the "Company", "we", or "our") was incorporated in Delaware on March 1, 2013 and holds, through its subsidiaries, the foff rmer U.S. retail marketing business of its foff rmer parent company, Murphy Oil Corporation (“Murphy Oil”), plus other assets and liabilities of Murphy Oil that supported the activities of the U.S. retail marketing operations. In addition, on January 29, 2021, the Company acquired Quick Chek Corporation ("QuickChek"), a privately held convenience store chain. Our business consists primarily of the marketing of retail motor fuel products and convenience merchandise through a network of 1,712 (as of December 31, 2022) retail stores located in 27 states, of which, 1,151 were branded as Murphy USA, 404 were branded as Murphy Express, and 157 were branded as QuickChek stores. The maja ority of our existing and new-to-industry ("NTI") retail gasoline stores operate under the brand names of Murphy USA and Murphy Express. Plans are under development to transition all Murphy Express branded stores to the Murphy USA brand name. These locations operate within close proximity to Walmart stores or within preferred markets across 25 states in the Southeast, Southwest, and Midwest areas of the United States. We also operate a combination of convenience stores and convenience stores with retail gasoline under the brand name of QuickChek, which are located in New Jersey and New YoYY rk. In addition, we market fuel to unbranded wholesale customers through a mixture of Company owned and third-party product distribution terminals and pipeline positions. We are an independent publicly traded company, with low-price, high volume fuel retail outlets selling convenience merchandise through low-cost small store foff rmats and kiosks, as well as larger foff rmat stores that have a broader range of merchandise and foff od and beverage offff erings which are driven by key strategic relationships and experienced management. Our business is subjb ect to various risks. For a description of these risks, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. Infoff rmation about our operations, properties and business segments, including revenues by class of products and financial infoff rmation by geographic area, are provided on pages 32 through 48, F-12, F-13, F-15, and F-38 through F-39 of this Annual Report on Form 10-K. Our Competitive Strengths Our business foff undation is built around five reinfoff rcing strengths which we believe provide us a competitive advantage over our peers. These strengths support our Company vision which is to “Deliver every day the quickest, most friendly servirr ce and a low-price value proposition to our growing customer base foff r the products and markets we serverr .” Strtt arr tegic prorr ximii ityt to and complementatt ryr rerr latitt onshipii wiww thtt WaWW lmll artrr Of our network of 1,712 retail stores (as of December 31, 2022), the maja ority are situated on prime locations located near Walmart stores. We believe our proximity to Walmart stores generates significant traffff ic to our existing retail stores while our competitively priced gasoline and convenience offff erings appeal to our shared customers. We continue to collaborate with Walmart on fuel discount programs, mainly Walmart+, which we believe enhances the customer value proposition as well as the competitive position of both Murphy USA and Walmart. WiWW nii ninii g prorr posititt on wiww thtt value-conscious consumersrr Our competitively priced fuel is a compelling offff ering foff r value-conscious consumers. Despite a flat long-term outlook in overall gasoline demand (increased vehicle miles traveled in a normal economy essentially tting increased fuel effff iciency), we believe value-conscious consumers that prefer convenience and servirr ce offff seff In combination with our high traffff ic locations, our competitive gasoline prices are a growing demand segment. In addition, we believe we are an industry leader in per-store tobacco drive high fuel volumes and gross profit. sales with our low-priced tobacco products and in total store sales per square foff ot as we also sell a growing 2 /immediate consumption items. We continue to provide value opportunities to our assortment of single-serverr customers through our Murphy Drive Rewards and QuickChek Rewards loyalty programs which reward customers with discounted and free items based on purchases of qualifyiff ng fuel and merchandise, as applicable. Low cost rerr tat ilii operarr titt nii g model We operate our Murphy USA and Murphy Express retail gasoline stores with a strong emphasis on fuel sales complemented by a foff cused convenience offff ering that allows foff r a smaller store foff otprint than most of our competitors. We build a mix of raze-and-rebuild 1,400 square foff ot stores and NTI 2,800 square foff ot Murphy stores which we believe have low capital expenditure, maintenance and utility requirements relative to our competitors. Many of our Murphy stores require only one or two associates to be present during business hours and 76% of our stores are located on Company-owned property and do not incur any rent expense. The combination of a foff cused convenience offff ering and standardized smaller foff otprint stores of our Murphy USA and Express brands allow us to achieve lower overhead costs and on-site costs compared to competitors with a much larger store foff rmat. Our low cost operating model translates into a low cash fuel breakeven requirement that allows us to weather extended periods of low fuel margins and which has improved by more than 3 cents per gallon ("cpg") since our spin-offff in 2013. Distii itt nii ctitt ve fuff el supu plyl chainii capabilii ill titt es We source fuel at competitive industry benchmark prices due to the diversity of fuel options available to us in the bulk and rack product markets, our shipper status on maja or pipeline systems, and our access to numerous terminal locations. In addition, we have a strong distribution system in which we leverage our scale and ratability to deliver the most favorably priced products foff r our Murphy stores and QuickChek stores with gasoline, further reducing our fuel product costs. By participating in the broader fuel supply chain, we believe our business model provides additional upside exposure to opportunities to enhance margins and volume, such as shiftff ing non-contractual wholesale volumes to protect retail fuel supply during periods of constrained supply and elevated margins. These activities demonstrate our belief that participating in the broader fuel supply chain provides us with added flexibility to ensure reliable low-cost fuel supply in various market conditions especially It would take substantial time and investment, during periods of significant price volatility or delivery diffff iculties. both in expertise and assets, foff r a competitor to replicate our existing position, and we believe this continues to be a significant barrier to any attempt to emulate our business model. Resilii ill ent fiff nii anciaii l prorr fiff lii e and engaged team Our predominantly fee-simple asset base, ability to generate attractive gross margins through our low- price, high-volume strategy, and our low overhead costs should help us endure prolonged periods of unfavorable commodity price movements and compressed fuel margins. We also believe our conservarr tive financial structure further protects us from the inherently volatile fuel environment. We expect that our strong cash position combined with availability under our credit facility will continue to provide us with a significant level of liquidity to help maintain a disciplined capital expenditure program foff cused on growing ratably through periods of both high and low fuel margins. We have acquired through share repurchases approximately $2.7 billion of our common stock in a little more than nine years of operation. During the year 2022, we repurchased a total of 3,328,795 common shares foff r $806.4 million, foff r an average price of $242.24 per share. Repurchases in 2022 were made pursuant to our now completed $500 million 2020 authorization and our $1 billion 2021 authorization. As of December 31, 2022, we had approximately $213.7 million remaining under our 2021 authorization. Additionally, in order to provide a consistent and meaningful return of capital to shareholders independent of share repurchases, we raised our quarterly dividend three times during 2022 from $0.29 per share in Q1 2022 to $0.35 cents per share, or $1.40 per share on an annualized basis as of Q4 2022. We have over 15,100 dedicated and hardworking employees as of December 31, 2022, that are actively engaged to serverr the customer, whether it is the external retail consumer or their internal co-workers. We believe our sustainable business model and organic growth opportunities support an employee value proposition that makes Murphy USA an attractive place to work. 3 Our Business Strategy Our business strategy reflects a set of coherent choices that leverage our diffff erentiated strengths and capabilities. Grorr w orgrr anicallll yl We intend foff r our independent growth plan to be a key driver of our organic growth over the next several years, which is demonstrated by the 404 standalone Murphy Express locations (as of December 31, from Murphy Oil Corporation. We expect to 2022), the maja ority of which were developed aftff er our 2013 spin-offff build up to 45 NTI locations and up to 30 raze-and-rebuilds in 2023 and are targeting up to 55 NTI and up to 25 raze-and-rebuilds per year in future periods, foff cusing on high-return locations either in high traffff ic areas, near Walmart Supercenters as a complement to higher perfrr off rming existing stores in smaller markets, or by strategic in our core market areas complemented by our supply chain capabilities. While we were previously infill foff cused on smaller store size, we now expect to build more Murphy branded NTI stores that are 2,800 square feet or larger, as well as our NTI QuickChek branded locations in their existing foff otprint, which average between 5,000 to 7,000 square feet in size. Our real estate development team works to maintain a multi-year pipeline of projo ects that supports continued ratable expansion in these high-return locations. Diversirr fii yff merchrr andidd seii mixii We plan to continuously evaluate our remaining kiosk strategy in an effff off rt to maximize our store economics and return on investment. Complementary to that strategy, we are continually refining Murphy branded 1,400 square foff ot and 2,800 square foff ot designs to create a foff undation foff r increasing higher-margin non-tobacco sales and diversifyiff ng our merchandise offff erings. Key to achieving the highest potential returns from our large and small foff rmat stores is the development and execution of enhanced foff od and beverage to further expand merchandise ("F&B") capabilities by leveraging QuickChek's F&B offff ering. We expect revenue and margins through our primary supplier relationship with Core-Mark Holding Company, Inc. ("Core- Mark") and in addition, to optimize our promotional planning, merchandise assortment, and pricing effff ectiveness, in order to help boost overall store returns. Sustatt inii cost leadershrr ipii posititt on We believe that sustaining our low cost position is a strategic advantage as a retailer of commodity products. We are undertaking several initiatives foff r the purpose of increasing effff iciency which should allow us to continue to beat inflation on per-store operating costs to help sustain low store-level costs. We also believe that through our planned growth and effff iciency initiatives, we can control overhead costs to support an overall improvement in store returns and keep costs properly scaled as we grow organically. In order to do this successfully, we will foff cus on the continued development of our employees and foff ster an operating culture aligned with business perfrr off rmance, including cost leadership. Crerr ate advantat ge frff orr m markerr t volatitt lii ill tyt We plan to continue to foff cus our product supply and wholesale effff off rts on activities that enhance our ability to be a low-price retail fuel leader and our ability to take advantage of fuel price volatility. We will continue to invest in capabilities and asset positions that support our supply chain strategy. Our distinctive business model and supply chain advantage allows us to deliver consistent margins over time and withstand periods of volatility and uncertainty. Invest foff r thtt e long termrr We maintain a portfoff lio of predominantly fee-simple assets and utilize what we believe to be an appropriate debt structure that will allow us to be resilient during times of volatility in fuel demand, price, and margin. We believe our strong financial position should allow us to profitably execute our low-cost, high volume retail strategy through periods of both high and low fuel margins while preservirr ng the ability to re-invest in and grow our existing stores, brand image and supporting capabilities such as enhancing our foff od and beverage offff erings. Furthermore, in addition to our store-development capital and investments in new capabilities, we 4 have diversified our shareholder distribution mechanism to provide consistent return of capital through quarterly cash dividends and meaningful share repurchase programs as we continue to foff cus on maximizing shareholder value. Industryrr Trends We operate within the large, growing, competitive and highly fragmented U.S. retail fuel and convenience store industry. Several key industry trends and characteristics, include: • • • • Sensitivity to gas prices among cost conscious consumers, and increasing customer demand foff r low-priced fuel; Highly fragmented nature of the industry providing larger chain operators like Murphy USA with significant scale advantage; Significantly increased fuel capacity in the marketplace by the addition of new-to-industry retail fuel and convenience stores, and High levels of consumer traffff ic around supermarkets and large foff rmat hypermarkets, supporting complementary demand at nearby and cross-promoted retail fuel stores. Corporate Information Murphy USA was incorporated in Delaware on March 1, 2013 and our business consists of U.S. retail marketing operations. Our Murphy USA headquarters is located at 200 Peach Street, El Dorado, Arkansas 71730 is is www.murphyusa.com. Our website and the infoff rmation contained on that site, or connected to that site, are not incorporated by reference into this Annual Report on Form 10-K. Shares of Murphy USA common stock are traded on the NYSE under the ticker symbol “MUSA”. Internet website 875-7600. telephone number general (870) and Our our Description of Our Business We market fueling products and convenience merchandise through a network of Company retail stores. We also market to unbranded wholesale customers through a mixture of Company owned and third-party terminals. During 2022, the Company sold approximately 4.8 billion gallons of motor fuel through our retail outlets. Below is a table that lists the states where we operate our stores at December 31, 2022 and the number of stores in each state. State New YoYY rk North Carolina No. of stores 48 80 27 Ohio 50 Oklahoma 55 5 4 138 21 South Carolina TeTT nnessee TeTT xas Utah Virginia ToTT tal No. of stores 19 91 44 55 70 93 354 5 23 1,712 State Alabama Arkansas Colorado Florida Georgia Iowa Illinois Indiana Kansas State No. of stores Kentucky 81 Louisiana 69 33 Michigan 137 Missouri 99 Mississippi 22 43 39 7 Nebraska Nevada New Jersey New Mexico 5 The foff llowing table provides a history of our store count during the three-year period ended December 31, 2022: Start of period Acquired New construction Closed or sold End of period YeYY ars Ended December 31, 2022 2021 2020 1,679 — 36 (3) 1,712 1,503 156 23 (3) 1,679 1,489 — 24 (10) 1,503 The foff llowing table present the numbers of our owned and leased stores at December 31, 2022: Murphy USA Leased from Walmart1,2 Leased from others2 Murphy Express2 QuickChek3,4,5 Stores with leased land Stores with leased land and buildings ToTT tal stores operated Located on Owned land Located on Leased Property3,5 ToTT tal Stores 1,047 — — 239 8 — — 1,294 — 99 5 165 — 44 105 418 1,047 99 5 404 8 44 105 1,712 1This table excludes 3 locations that were disposed of in prior years but remain subleased from Walmart to the buyer 2Leases foff r Murphy branded stores are operating leases 3Operating leases have an average remaining term, including renewals of 25 years 4Leases foff r QuickChek land are operating leases and Quick Chek store buildings are finance leases 5Finance leases have an average remaining term, including renewals, of 20 years Since 2007, we have purchased from Walmart the properties underlying many of our stores. Each of our owned properties that were purchased from Walmart are also subjb ect to Easements and Covenants with Restrictions Affff ecting Land (“ECRs”), which impose customary restrictions on the use of such properties, which Walmart has the right to enfoff rce. In addition, pursuant to the ECRs, certain transfers involving these properties are subjb ect to Walmart’s right of first refusal or right of first offff er. Also, pursuant to the ECRs, we are prohibited from transferring such properties to a competitor of Walmart. For risks related to our agreements with Walmart, including the ECRs, see “Risk Factors—Risks Relating to Our Business—Walmart retains certain rights in its agreements with us, which may adversely impact our ability to conduct our business.” For the remaining stores located on or adjacent to Walmart property that are not owned, we have a master lease agreement that allows us to rent land from Walmart. The master lease agreement contains general terms applicable to all rental stores on Walmart property in the United States. The term of the leases is ten years at each store, with us holding foff ur successive five-year extension options at each site. Approximately half of the leased sites have over 11 years of term remaining, including renewals, should the Company decide to exercise the renewal options. The agreement permits Walmart to terminate it in its entirety, or only as to its option under customary circumstances (including in certain events of bankruptcy or affff ected sites, at In addition, the insolvency), or if we improperly transfer the rights under the agreements to another party. 6 master lease agreement prohibits us from selling a leased store or allowing a third party to operate a leased store without written consent from Walmart. For more infoff rmation about our operating leases, see Note 21 "Leases" to the accompanying audited consolidated financial statements foff r the three years ended December 31, 2022. from oil companies, We have numerous sources foff r our retail fuel supply, including nearly all of the maja or and large oil companies operating in the U.S. We purchase fuel independent refiners, and other marketers at rates that fluctuate with market prices and generally are reset daily, and we sell fuel to our customers at prices that we establish daily. All fuel is delivered by the truckload as needed to replenish supply at our Company stores. Our inventories of fuel on site turn approximately once daily. By establishing motor fuel supply relationships with several alternate suppliers foff r most locations, we believe we are able to effff ectively create competition foff r our purchases among various fuel suppliers. We also believe that purchasing arrangements with multiple fuel suppliers may help us avoid product outages during times of motor fuel supply disruptions. At some locations, however, there are limited suppliers foff r fuel in that market and we may have only one supplier. Our refined products are distributed through a few product distribution terminals that are wholly owned and operated by us and from numerous terminals owned by others. About half of our wholly owned terminals are supplied by marine transportation and the rest are supplied by pipeline. We also receive products at terminals owned by others either in exchange foff r deliveries from our terminals or by outright purchase. In addition to the motor fuel sold at our Company stores, our stores carry a broad selection of snacks, beverages, tobacco products and non-foff od merchandise, as well as a greater foff od and beverage offff ering at our QuickChek locations. In 2022, we purchased more than 74% of our merchandise from a single vendor, Core- Mark, with whom we renewed a new five-year supply agreement in January 2021. A statistical summary of key operating and financial indicators foff r each of the five years ended December 31, 2022 are reported below. Branded retail outlets: Murphy USA®AA Murphy Express QuickChek® ToTT tal Retail marketing: ToTT tal fuel contribution (including retail, PS&W and RINs) (cpg)1 Retail fuel margin per gallon (cpg) (1) Gallons sold per store month (in thousands) Merchandise sales revenue per store month (in thousands) Merchandise margin as a percentage of merchandise sales 2022 2021 2020 2019 2018 As of December 31, 1,151 404 157 1,712 34.3 29.6 1,151 370 158 1,679 26.3 21.9 1,151 352 — 1,503 25.2 22.9 1,161 328 — 1,489 16.1 13.8 1,160 312 — 1,472 16.2 14.7 244.6 229.4 219.5 248.3 244.0 $ 193.5 $ 186.7 $ 166.3 $ 148.7 $ 139.7 19.7% 19.1% 15.6% 16.0% 16.5% 1 Represents net sales prices foff r fuel less purchased cost of fuel. Our business is organized into one reporting segment (Marketing). The Marketing segment includes our retail marketing stores and product supply and wholesale assets. For operating segment infoff rmation, see Note 23 “Business Segments” in the accompanying audited consolidated financial statements foff r the three-year period ended December 31, 2022. 7 Competition The U.S. petroleum business is highly competitive, particularly with regard to accessing and marketing petroleum and other refined products. We compete with other chains of retail fuel stores foff r fuel supply and in the retail sale of refined products to end consumers, primarily on the basis of price, but also on convenience In addition, we may also face competition from other retail fueling stores that adopt and consumer appeal. marketing strategies similar to ours by associating with non-traditional retailers, such as quick servirr ce restaurants, supermarkets, discount club stores and hypermarkets, particularly in the geographic areas in which we operate. We expect that our industry will continue to trend toward this model, resulting in increased competition to us over time. Moreover, because we do not produce or refine any of the petroleum or other refined products that we market, we compete with retail gasoline companies that have ongoing supply relationships with affff iliates or foff rmer affff iliates that manufacture refined products. We also compete with integrated companies that have their own production and/or refining operations that are at times able to offff seff t losses from marketing operations with profits from producing or refining operations, and may be better positioned to withstand periods of depressed retail margins or supply shortages. In addition, we compete with other retail and wholesale gasoline marketing companies that have more extensive retail outlets and greater brand name recognition. Some of our competitors have been in existence longer than we have and have greater financial, marketing and other resources than we do. As a result, these competitors may have a greater ability to bear the economic risks inherent in all phases of our business and may be able to respond better to changes in the economy and new opportunities within the industry. 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 offff ering similar products and servirr ces. With respect to merchandise, our retail stores compete with other convenience store chains, independently owned convenience stores, supermarkets, drugstores, discount clubs, gasoline servirr ce stores, mass merchants, fast foff od operations and other similar retail outlets. Non-traditional retailers, including supermarkets, discount club stores and mass merchants, now compete directly with retail gasoline stores. These non-traditional gasoline retailers have obtained a significant share of the gasoline market, and their market share is expected to grow, and these retailers may use promotional pricing or discounts, both at the fuel pump and in the convenience store, to encourage in-store merchandise sales and gasoline sales. In addition, some large retailers and supermarkets are adjusting their store layouts and product prices in an attempt to appeal to convenience store customers. Maja or competitive factors are: location, ease of access, product and servirr ce selection, gasoline brands, pricing, customer servirr ce, store appearance, cleanliness and safety. Market Conditions and Seasonality Market conditions in the oil and gas industry are cyclical and subjb ect to global economic and political events, such as Russia's invasion of Ukraine, that upset global supply and demand and impact the price of crude oil and to new and changing governmental regulations. Our operating results are affff ected by price changes in crude oil, natural gas and refined products, pandemics that may lead to travel restrictions or changed customer behavior, and changes in competitive conditions in the markets we serverr . to seasonal Oil prices, wholesale motor fuel costs, motor fuel sales volumes, motor fuel gross margins and typically merchandise sales can be subjb ect 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 foff r motor fuel and merchandise that we sell. Therefoff re, our revenues and 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 affff ect our motor fuel and merchandise volumes, motor fuel gross profit and overall customer traffff ic, which in turn could have a material adverse effff ect on our business, financial condition, results of operations and cash flows. fluctuations. Consumer demand foff r motor fuel Trademarks In the highly competitive business in which we operate, our trade names, servirr ce marks and trademarks are important to distinguish our products and servirr ces from those of our competitors. We sell gasoline primarily under the Murphy USA®AA and Murphy Express brands, which we acquired from Murphy Oil. We acquired 8 ownership of the QuickChek® trademark and others as a result of the QuickChek acquisition. We are not aware of any facts which would negatively impact our continuing use of any of the above trade names, servirr ce marks or trademarks. Technology Systems All of our Company stores use a standard hardware and softff ware platfoff rm foff r point-of-ff sale (“POS”) that facilitates item level scanning of merchandise foff r sales and inventory, and the secure acceptance of all maja or payment methods – cash, check, credit, debit, fleet and mobile. In addition, our QuickChek stores have self-ff third-party delivery servirr ces. Our standard approach to large scale and servirr ce checkouts and support geographically dispersed deployments reduces total technology cost of ownership foff r the POS and inherently makes the system easier to use, support, and replace. This POS technology strategy reflects close alignment with our growth plan. We use a combination of softff ware as a servirr ce, commercial offff the shelf softff ware, and custom softff ware applications developed using modern industry standard tools and methodologies to manage and run our business. For our financial systems, we use enterprise class systems which provide significant flexibility in managing corporate and store operations, as well as scalability foff r growth. We invest in disaster recovery, system backups, redundancy, firewall, remote access security and virus and spam protection to ensure a high level of system security and availability. We have systems, business policies and processes around access controls, password expirations and file retention to ensure a high level of control within our technology network. Environmental We are subjb ect to numerous federal, state and local environmental laws, regulations and permit requirements. Such environmental requirements have historically been subjb ect to frequent change and have tended to become more stringent over time. While we strive to comply with these environmental requirements, any violation of such requirements can result in litigation, increased costs or the imposition of significant civil and criminal penalties, injunctions or other sanctions. Compliance with these environmental requirements affff ects our overall cost of business, including capital costs to construct, maintain and upgrade equipment and facilities, and ongoing operating expenditures. We maintain sophisticated leak detection and remote monitoring systems foff r underground storage tanks at most of our retail fueling stores and install up-to-date tank, piping, and monitoring systems at our new stores. We operate above ground bulk petroleum tanks at our terminal locations and have upgraded certain product lines and conduct annual monitoring to help mitigate the risk of potential soil and groundwater contamination. We allocate a portion of our capital expenditure program to comply with environmental laws and regulations, and such capital expenditures are projo ected to be approximately $6.7 million in 2023. We could be subjb ect to joint and several as well as strict liability foff r environmental contamination. Some of our current and foff rmer properties have been operated by third parties whose handling and management of hazardous materials were not under our control, and substantially all of them have or previously had motor fuel or petroleum product storage tanks. Pursuant to certain environmental laws and regulations, we could be responsible foff r investigating and remediating contamination relating to such stores, including impacts attributable to prior site occupants or other third parties, and foff r implementing remedial measures to mitigate the risk of future contamination. We may also have liability foff r contamination and violations of environmental laws and regulations under contractual arrangements with third parties, such as landlords and foff rmer owners of our sites, including at our sites in close proximity to Walmart stores. Contamination has been identified at certain of our current and foff rmer terminals and retail fueling stores, and we are continuing to conduct investigation and remediation activities in relation to such properties. The discovery of additional contamination or the imposition of further investigation or remediation obligations at these or other properties could result in significant costs. In some cases, we may be eligible to receive money from state “leaking petroleum storage tank” trust funds to help fund remediation. However, receipt of such payments is subjb ect to stringent eligibility requirements and other limitations that can significantly reduce the availability of such trust fund payments and may delay or increase the duration of associated cleanups. We could also be held responsible foff r contamination relating to third-party sites to which we or our predecessors have sent hazardous materials foff r recycling or disposal. We 9 are currently identified as a potentially responsible party ("PRP") in connection with one such disposal site. Any such contamination, leaks from storage tanks or other releases of regulated materials could result in claims against us by governmental authorities and other third parties foff r fines or penalties, natural resource damages, personal to legal and administrative proceedings governing the investigation and remediation of contamination or spills from current and past operations, including from our terminal operations and leaking petroleum storage tanks. From time to time, we are subjb ect injury, and property damage. Consumer demand foff r our products may be adversely impacted by fuel economy standards as well as greenhouse gas (“GHG”) vehicle emission reduction measures. The U.S. Environmental Protection Agency (“EPAPP ”) and the National Highway Traffff ic Safety Administration (“NHTSA”) issued Corporate AveAA rage Fuel Economy ("CAFE") standards in 2012 that set fuel economy standards and regulated emissions of GHGs foff r In 2016, the NHTSA finalized a rule imposing stricter fleets of 2017-2025 model year cars and light duty trucks. penalties against those who exceed CAFE standards. In December 2021, the EPAPP finalized standards foff r In March 2022 NHTSA 2023-2026 model years that are more stringent than those in prior standards from 2020. finalized CAFE standards addressing the 2024-2026 model years that are more stringent than those in prior standards from 2020. The EPAPP and NHTSA also regulate GHG emission and fuel effff iciency standards foff r medium and heavy-duty vehicles and in August 2016, jointly finalized "Phase 2" vehicle and engine perfrr off rmance standards covering model years 2021 through 2027, which apply to semi-trucks, large pick-up trucks and vans, and all types and sizes of buses and work trucks. In December 2022, the EPAPP finalized a rule that sets more stringent standards to reduce pollution from heavy duty vehicles and engines beginning with model year 2027; this was the first rulemaking under the EPAPP 's Clean Trucks Plan, which is an EPAPP regulatory initiative to reduce GHG emissions and other harmful air pollutants from heavy-duty trucks via various rulemakings. These and any future increases in or changes to fuel economy standards or GHG emission reduction requirements could decrease demand foff r our products. Air emissions from our facilities are also subjb ect to regulation. For example, certain of our fueling stores may be required to install and maintain vapor recovery systems to control emissions of volatile organic compounds to the air during the vehicle fueling process. Although the EPAPP declined to revise national ambient air quality standards foff r ground level ozone in December 2020, the EPAPP under a President Biden administration may revise such standards, which could require additional equipment upgrades and operating controls that could increase our capital and operating expenses. Any other future environmental regulatory changes applicable to our business or operations may also result in increased compliance costs. Our business is also subjb ect to increasingly stringent laws and regulations governing the content and characteristics of fuel. For example, the gasoline we sell generally must meet increasingly rigorous sulfur and benzene standards. In addition, renewable fuel standards generally require refiners and gasoline blenders to meet certain volume quotas or obtain representative trading credits foff r renewable fuels that are established as a percentage of their finished product production. Such fuel requirements and renewable fuel standards may adversely affff ect our wholesale fuel purchase costs. Sale of Regulated Products In certain areas where our retail stores are located, state or local laws limit the hours of operation foff r the sale of alcoholic beverages and restrict the sale of alcoholic beverages and tobacco products to persons younger than a certain age. State and local regulatory agencies have the authority to approve, revoke, suspend or deny applications foff r and renewals of permits and licenses relating to the sale of alcoholic beverages, as well as to issue fines to convenience stores foff r the improper sale of alcoholic beverages and tobacco products. Failure to comply with these laws may result in the loss of necessary licenses and the imposition of fines and penalties on us. Such a loss or imposition could have a material adverse effff ect on our business, liquidity and results of operations. In many states, retailers of alcoholic beverages have been held responsible foff r damages caused by intoxicated individuals who purchased alcoholic beverages from them. While the potential exposure foff r damage claims as a seller of alcoholic beverages and tobacco products is substantial, we have adopted procedures intended to minimize such exposure. We also adhere to the rules governing lottery sales as determined by state lottery commissions in each state in which we make such sales. 10 Safety We are subjb ect to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state statutes that regulate the protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that certain infoff rmation be maintained about hazardous materials used or produced in our operations and that this infoff rmation be provided to employees, state and local government authorities and citizens. Other Regulatoryrr Matters Our retail stores are also subjb ect to regulation by federal agencies and to licensing and regulations by state and local health, sanitation, fire and other departments relating to the development and operation of retail stores, including regulations relating to zoning and building requirements and the preparation and sale of foff od. Diffff iculties in obtaining or failures to obtain the required licenses or approvals could delay or prevent the development of a new retail store in a particular area. Our operations are also subjb ect to federal and state laws governing such matters as wage rates, overtime and citizenship requirements. At the federal and state levels, there are proposals under consideration Increases in wages, from time to time to increase minimum wage rates and periods of protected leaves. overtime pay, or benefits due to changes in the statutory minimum salary requirements or minimum wage rates or mandated health benefits would result in an increase in our labor costs. Such cost increases, or the penalties foff r failing to comply, could adversely affff ect our business, financial condition, and results of operations. We monitor such changes to ensure our continued compliance with these ever-changing regulations. Human Capital At Murphy USA, we know that the strength of our workfoff rce is critical to our long-term success and we strive to build upon this through the foff undation laid by our Principles. As of December 31, 2022, Murphy USA had over 15,100 employees, including 6,000 full-time employees, and 9,100 part-time employees working at our stores, support centers, and corporate headquarters. Murphy USA is committed to the attraction, development, retention, and safety of our employees. Our initiatives foff r fiscal year 2022 addressed, among other things, (i) Our Principles, (ii) Inclusion and Diversity, (iii) TaTT lent Management, (iv) ToTT tal Rewards, and (v) Workfoff rce Safety. Our Principles are the heart of our rich culture, creating the foff undation of how we operate at Murphy USA. They are the values that shape the strong character of our company. The basis foff r our human capital management foff cus is driven by our core Principles of Integrity, Respect, Citizenship, and Spirit. Integrity Be persistently ethical and honest to foster trust. We carry ourselves with a quiet confidence because we know that – in the long run — our character will speak foff r itself. We always do the right thing, even when no one is watching. Respect Citizenship Value and appreciate others. We encourage and promote diverse approaches in all our thoughts, ideas and actions. We understand the value gained through embracing the strengths, experiences, and perspectives of others. Believe in the power of good actions. We are committed to the greater good foff r our employees, company, customers, suppliers and other stakeholders. We are responsible and involved in the communities in which we live and work as ambassadors of Murphy USA. Spirit Strive to be the best. We are highly engaged and truly care about what we do and how we are perceived. We have a strong desire to exceed our customers’ expectations. We work closely with each other to drive our success through reliable and consistent execution. 11 We are committed to living our Principles, specifically, the principle of "Respect" as it relates to inclusion and diversity. We are intentional about working towards increasing visible and invisible diversity throughout Murphy USA through several talent initiatives: • We partner with universities to attract diverse talent. • We identifyff critical roles and potential successors with our succession management program. • We strive to liftff up talent through diffff erentiated and personalized development opportunities. We employ thoughtful talent management strategies, including annual succession planning, semi- annual people reviews, promotion review committees, mid-year and annual perfrr off rmance reviews, and cohort perfrr off rmance review calibrations. We are dedicated to helping our employees succeed professionally by offff ering a robust suite of learning and development opportunities. • Our field teams have comprehensive functional training programs at each level. • We have individual development plans (IDPs) and an eLearning platfoff rm to support employee- driven development. • We offff er a foff rmal stretch role and assignment process to support development at all levels. • We have a mentorship process. • Leadership development opportunities are available foff r all leaders. • We provide tuition reimbursement foff r home offff ice employees, store managers, and assistant store managers. • We sponsor employees seeking to earn their GED. We have demonstrated a history of investing in our employees by offff ering competitive salaries and wages. We offff er comprehensive benefit packages designed to support employees' overall well-being. We have benefit packages available at all levels of the organization. The benefits package offff ered to our full-time employees includes: • Comprehensive health, dental, vision, and life insurance. • • • • Parental leave available to all new parents foff r birth, adoption or foff ster placement. An Employee Assistance Program. 401K program with company match. Paid time offff including: vacation, sick, parental, bereavement, and holidays. A thoughtful and well-planned approach has been taken to evaluate and execute benefits consolidation between Murphy USA and QuickChek, where appropriate. At present, several QuickChek benefit programs and vendors have been consolidated with Murphy USA's, including medical, dental, vision, flexible spending, and retirement. We continue to evaluate QuickChek's benefit plans, and such evaluation could lead to additional consolidation with the Murphy USA plans in the future. We are committed to keeping our employees and customers safe through foff stering and maintaining a strong safety culture and emphasizing the importance of our employees’ role in identifyiff ng, mitigating and communicating safety risks. We have continued to build our rapid response program to ensure safety events (i.e., slip and falls, medical emergencies, and vehicle accidents) are escalated quickly and responded to effff iciently. 12 Properties Our headquarters of approximately 120,000 square feet is located at 200 Peach Street, El Dorado, Arkansas. We also own and operate two other offff ice buildings in El Dorado, Arkansas that house our store support center and technology servirr ces personnel, and we own and operate an offff ice building and training center in Whitehouse Station, New Jersey foff r our QuickChek store support personnel. We have numerous owned and leased properties foff r our retail fueling stores as described under “Description of Our Business,” as well as wholly-owned product distribution terminals. Website access to SEC Reports Interested parties may obtain the Company’s public disclosures filed with the Securities and Exchange Commission (SEC), including Form 10-K, Form 10-Q, Form 8-K and other documents, by accessing the Investor Relations section of Murphy USA Inc.’s website at ir.corporate.murphyusa.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 are available on our website, free of charge, as soon as reasonably practicable aftff er such reports are filed with, or furnished to, the SEC. Alternatively, you may access these reports at the SEC’s website at http:/// www.sec.gov. The infoff rmation contained on these websites referenced herein is not incorporated by reference into this filing. Item 1A. RISK FACTORS YoYY u should carerr fuff llll yl consider each of thtt e foff llll owiww nii g rirr sksii and allll of thtt e othtt er inii foff rmrr atitt on contat inii ed inii thtt isii Annual Reportrr on FoFF rmrr 10-K.KK Our businii ess, prorr spects,tt fiff nii anciaii l condidd titt on, rerr sultstt of operarr titt ons or cash flff owsww could be materirr aii llll yl and adverserr lyl affff eff cted by any of thtt ese rirr sks, ii and,d as a rerr sult,t thtt e trtt arr didd nii g prirr ce of our common stock could declill nii e. Risks Relating to our Company Our operations present hazards and risks, which may not be fully covered by insurance, if If a significant accident or event occurs for which we are not adequately insured, our insured. operations and financial results could be adversely affff ected. The scope and nature of our operations present a variety of operational hazards and risks, including explosions, fires, toxic emissions, and natural catastrophes that must be managed through continual 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 foff r capital and investment spending and could have a material adverse effff ect 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; our leverage could increase the overall cost of debt funding and decrease the overall debt capacity and commercial credit available to us in the future. We have debt obligations that could restrict our business and adversely impact our financial condition, results of operations or cash flows. This outstanding indebtedness could have significant consequences to our future operations, including: • making it more diffff icult foff r us to meet our payment and other obligations under our outstanding debt; 13 • • • • resulting in an event of default if we fail to comply with the financial and other restrictive covenants contained in our debt agreements, which event of default could result in all of our debt becoming immediately due and payable; reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing foff r these purposes; limiting our flexibility in planning foff r, or reacting to, and increasing our vulnerability to, changes in our business, the industry in which we operate and the general economy; and placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged. Any of the above-listed factors could have an adverse effff ect on our business, financial condition and results of operations. In addition, our credit facilities and the indentures that govern the notes include restrictive covenants that, subjb ect to certain exceptions and qualifications, restrict or limit our ability and the ability of our restricted subsidiaries to, among other things, incur additional indebtedness, pay dividends, make certain investments, sell certain assets and enter into certain strategic transactions, including mergers and acquisitions. These covenants and restrictions could affff ect our ability to operate our business, and may limit our ability to react to market conditions or take advantage of potential business opportunities as they arise. 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. We have below investment-grade ratings on our notes from Moody’s and S&P while our credit facilities are rated investment grade. Our credit ratings could be lowered or withdrawn entirely by a ise ratings agency if, in its judgment, the circumstances warrant. we do not obtain an investment grade rating in the future foff r the notes, or if we do and a rating agency were to downgrade us again to below investment grade, our borrowing costs would increase and our funding sources could decrease. Actual or anticipated changes or downgrades in our ratings, including any announcement that our ratings are under review foff r a downgrade, could adversely affff ect our business, cash flows, financial condition and operating results. If our existing ratings are lowered, or otherwrr The interest rates on our credit facilities may be impacted by the phase-out of the London Interbank Offff ered Rate ("LIBOR") and the transition to the Secured Overnight Financing Rate ("SOFR"). Interest rates on borrowings under our credit agreement may be based on LIBOR. Following announcements by the United Kingdom Financial Conduct Authority (“FCA”) and ICE Benchmark Administration Limited, the FCA-regulated LIBOR administrator, publication of the one-week and two-month United States Dollar (“USD”)-LIBOR tenors ceased aftff er December 31, 2021. While publication of all other USD-LIBOR tenors is expected to cease aftff er June 30, 2023, U.S. regulators and the FCA have published guidance instructing banks to cease entering into new contracts referencing USD-LIBOR no later than December 31, 2021, with limited exceptions. In March 2020, the Federal Reserverr As of the date hereof, the current recommended replacement foff r USD-LIBOR is the Secured Overnight Financing Rate (“SOFR”). Bank of New YoYY rk began publishing 30-, 90- and 180-day tenor SOFR AveAA rages and a SOFR Index. In addition, foff rwrr ard-looking SOFR term rates are being published. However, the composition and characteristics of SOFR are not the same as those of LIBOR. As a result, there can be no assurance that SOFR or any rate based on SOFR will perfrr off rm in the same way as LIBOR would have at any time. For example, since publication of SOFR began on April 3, 2018, daily changes in SOFR have, on occasion, been more volatile than daily changes in comparable benchmark or other market rates. Any transition away from LIBOR as a benchmark foff r establishing the applicable interest rate is complex and may affff ect the cost of servirr cing our debt under our credit agreement. Although these borrowing arrangements provide foff r alternative base rates, the composition and characteristics of such alternative base rates are not the same as those of LIBOR, and the consequences of the phase-out of LIBOR cannot be entirely 14 predicted at this time. We expect to address the transition of all our LIBOR based contracts prior to June 30, 2023. Our ability to meet our payment obligations under the notes and our other debt depends on our ability to generate significant cash flow in the future. Our ability to meet our payment and other obligations under our debt instruments, including the notes, depends on our ability to generate significant cash flow in the future. This, to some extent, is subjb ect 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 otherwrr ise, in an amount suffff icient 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 suffff icient cash flow to servirr ce 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. 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. Despite our current indebtedness levels, we may be able to incur substantially more debt. This could exacerbate further the risks associated with our leverage. indebtedness, We and our subsidiaries may incur substantial additional including secured indebtedness, in the future, subjb ect to the terms of the indentures governing the notes and our credit agreement that limit our ability to do so. Such additional indebtedness may include additional notes, which will also be guaranteed by the guarantors, to the extent permitted by the indentures and our credit agreement. Although the indentures limit our ability and the ability of our subsidiaries to create liens securing indebtedness, there are significant exceptions to these limitations that will allow us and our subsidiaries to secure significant amounts of If we or our subsidiaries incur secured indebtedness without equally and ratably securing the notes. indebtedness and such secured indebtedness is either accelerated or becomes subjb ect to a bankruptcy, liquidation or reorganization, our and our subsidiaries' assets would be used to satisfyff obligations with respect to the indebtedness secured thereby befoff re any payment could be made on the notes that are not similarly In addition, the indentures governing the Senior Notes will not prevent us or our subsidiaries from secured. incurring other liabilities that do not constitute indebtedness. If new debt or other liabilities are added to our current debt levels, the related risks that we now face could intensifyff . In connection with our Separation from Murphy Oil, Murphy Oil has agreed to indemnifyff us for certain liabilities and we have agreed to indemnifyff 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 suffff icient to insure us against the full amount of liabilities for which it will be allocated responsibility, and Murphy Oil may not be able to satisfyff 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 indemnifyff us foff r certain liabilities, and we have agreed to indemnifyff Indemnities that we may be required to provide Murphy Oil are not subjb ect to Murphy Oil foff r certain liabilities. 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 foff r any of the liabilities that Murphy Oil has agreed to retain, and under certain circumstances, we may be subjb ect to continuing contingent liabilities of Murphy Oil foff llowing the Separation. Further, Murphy Oil may not be able to fully satisfyff its indemnification obligations. Moreover, even if we ultimately succeed in recovering from Murphy Oil any amounts foff r which we are held liable, we may be temporarily required to bear these losses ourselves. Each of these risks could negatively affff ect our business, results of operations and financial condition. 15 Risks Relating to Our Business Volatility in the global prices of oil and petroleum products and general economic conditions that are largely out of our control, as well as seasonal variations in fuel pricing, can significantly affff ect our operating results. Our net income is significantly affff ected by changes in the margins on retail and wholesale gasoline marketing operations. Oil and domestic wholesale gasoline markets are volatile. General political conditions, acts of war or terrorism, such as Russia's invasion of Ukraine, instability in oil producing regions, particularly in the Middle East and South America, and the value of U.S. dollars relative to other foff reign currencies, particularly those of oil producing nations, have significantly affff ected and in the future could significantly affff ect oil supplies and wholesale gasoline costs. In addition, the supply of gasoline and our wholesale purchase costs can be adversely affff ected in the event of a shortage, which could result from, among other things, lack of capacity at oil refineries, sustained increase in global demand or the fact that our gasoline contracts do not guarantee an uninterrupted, unlimited supply of gasoline. Our wholesale purchase costs could also be adversely affff ected by increasingly stringent regulations regarding the content and characteristics of fuel products. Significant increases and volatility in wholesale gasoline costs could result in lower gasoline gross margins per gallon. This volatility makes it extremely diffff icult to predict the effff ect that future wholesale cost fluctuations will have on our operating results and financial condition in future periods. Except in limited cases, we typically do not seek to hedge any significant portion of our exposure to the effff ects of changing prices of commodities. Dramatic increases in oil prices reduce retail gasoline gross margins, because wholesale gasoline costs typically increase faster than retailers are able to pass them along to customers. We purchase refined products, particularly gasoline, needed to supply our retail stores. Therefoff re, our most significant costs are subjb ect to volatility of prices foff r these commodities. 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 foff r oil and gasoline. Furthermore, oil prices, wholesale motor fuel costs, motor fuel sales volumes, motor fuel gross margins and merchandise sales can be subjb ect to seasonal fluctuations. For example, consumer demand foff r motor fuel typically increases during the summer driving season, and typically falls during the winter months. Travel, recreation and construction are typically higher in increasing the demand foff r motor fuel and these months in the geographic areas in which we operate, merchandise that we sell. Therefoff re, 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 fuel and merchandise volumes, motor fuel gross profit and overall customer traffff ic, which in turn could have a material adverse effff ect on our business, financial condition, results of operations and cash flows. than typical seasonal variations), could materially affff ect our motor 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 affff ect consumer spending or buying habits, and could adversely affff ect the demand foff r products we sell at our retail stores. Unfavorable economic conditions, higher gasoline prices and unemployment levels can affff ect consumer confidence, spending patterns and vehicle miles driven. These factors can lead to sales declines in both gasoline and general merchandise, and in turn have an adverse impact on our business, financial condition, results of operations and cash flows. Walmart continues to be a key relationship with regard to our Murphy USA network. At December 31, 2022, most of our Murphy branded stores were located in close proximity to Walmart Supercenter stores. Therefoff re, 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 foff r our business. Any deterioration in our relationship with Walmart could have an adverse effff ect on operations of the stores that are In addition, our competitive posture could be weakened by branded Murphy USA and participate in a discount. negative changes at Walmart. Many of our Company stores benefit from customer traffff ic generated by Walmart retail stores, and if the customer traffff ic through these host stores decreases due to the economy or foff r any other reason, our sales could be materially and adversely affff ected. 16 The current level of revenue that is generated from RINs may not be sustainable. Murphy USA's business is impacted by its ability to generate revenues from capturing and subsequently selling Renewable Identification Numbers ("RINs"), a practice enabled through the blending of petroleum-based fuels with renewable fuels. RIN prices also have an impact on our cost of goods sold foff r petroleum products, which can be positive or negative depending on the movement of RIN prices. The market price foff r RINs fluctuates based on a variety of factors, including but not limited to governmental and regulatory action and market dynamics. In 2022, RIN prices continued to fluctuate but were higher on average due to uncertainty of future regulations. Although a decline in RIN prices could have a material impact on the Company's revenues, Murphy USA's business model is not dependent on its ability to generate revenues from the sale of RINs. Current litigation and future rule making could impact the Renewable Fuel Standard ("RFS") program. The RFS program is the regulatory means by which the federal government requires the introduction of an increasing amount of renewable fuel into the fuel supply. 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 satisfyff their individual obligations. On December 1, 2022, the EPAPP announced a proposed rule to establish blending mandates foff r 2023, 2024, and 2025. This is the EPAPP 's first RFS proposal since the statutory volumetric blending mandates that Congress established in 2007 have expired. We are exposed to risks associated with the interruption of supply and increased costs as a result of our reliance on third-party supply and transportation of refined products. We utilize key product supply and wholesale assets, including our pipeline positions and product distribution terminals, to supply our retail fueling stores. Much of our competitive advantage arises out of these proprietary arrangements which, when disrupted, have in the past and could in the future adversely affff ect us, and such effff ects could be material. The lasting effff ects of the coronavirus ("COVID-19") pandemic continues to In addition to our own operational risks discussed above, we cause disruptions in supply chains into 2023. could experience interruptions of supply or increases in costs to deliver refined products to market if the ability of the pipelines or vessels to transport petroleum or refined products is disrupted because of weather events, accidents, governmental regulations or third-party actions. Furthermore, at some of our locations there are very few suppliers foff r fuel in that market. Changes in credit card expenses could reduce our profitability, especially on gasoline. A significant portion of our retail sales involve payment using credit cards. We are assessed credit card fees as a percentage of transaction amounts and not as a fixed dollar amount or percentage of our gross margins. Higher gasoline prices result in higher credit card expenses, and an increase in credit card use or an increase in credit card fees would have a similar effff ect. Therefoff re, credit card fees charged on gasoline purchases that are more expensive as a result of higher gasoline prices are not necessarily accompanied by In fact, such fees may cause lower profitability. Lower income on gasoline sales caused higher gross margins. by higher credit card fees may decrease our overall profitability and could have a material adverse effff ect on our business, financial condition, results of operations and cash flows. Failure to maintain the quality and safety of our food products could adversely impact our reputation and business. As we continue to foff cus on enhancing our foff od and beverage offff erings, concerns regarding the quality or safety of our foff od products or our foff od supply chain, even if factually incorrect or based on isolated incidents, could hurt our sales of prepared foff od products and possibly lead to product liability and personal injury claims, litigation, government agency investigations and damages. Walmart retains certain rights in its agreements with us, which may adversely impact our ability to conduct our business. Our owned properties that were purchased from Walmart are subjb ect to Easements with Covenants and Restrictions Affff ecting Land (the “ECRs”) between us and Walmart. The ECRs impose customary restrictions on the use of our properties, which Walmart has the right to enfoff rce. The ECRs also provide that if we propose to 17 sell a fueling store property or any portion thereof (other than in connection with the sale of all or substantially all of our properties that were purchased from Walmart or in connection with a bona fide financing), Walmart has a right of first refusal to purchase such property or portion thereof on similar terms. Subjb ect to certain exceptions (including a merger in which we participate, the transfer of any of our securities or a change in control of us), if we market foff r sale to a third party all or substantially all of our properties that were purchased from Walmart, or if we receive an unsolicited offff er to purchase such properties that we intend to accept, we are required to notifyff Walmart. Walmart then has the right, within 90 days of receipt of such notice, to make an offff er to purchase such properties. If Walmart makes such an offff er, foff r a period of one year we will generally only be permitted to accept third-party offff ers where the net consideration to us would be greater than that offff ered by Walmart. The ECRs also prohibit us from transferring all or substantially all of our fueling store properties that were purchased from Walmart to a “competitor” of Walmart, as reasonably determined by Walmart. The term “competitor” is generally defined in the ECRs as an entity that owns, operates or controls grocery stores or supermarkets, wholesale club operations similar to that of a Sam’s Club, discount department stores or other discount retailers similar to any of the various Walmart store prototypes or pharmacy or drug stores. if Murphy Oil USA, Similarly, some of our leased properties are subjb ect to certain rights retained by Walmart. Our master is acquired or becomes party to any merger or Inc. lease agreement states that consolidation that results in a material change in the management of the stores, Walmart will have the option to purchase the stores at fair market value. The master lease also prohibits us from selling all or any portion of a store without first offff ering to sell all or such portion to Walmart on the same terms and conditions. These provisions may restrict our ability to conduct our business on the terms and in the manner we consider most favorable and may adversely affff ect our future growth. An inability to maintain a multi-year new store projo ect pipeline may cause our Company's growth to slow in 2023 and beyond. Our ability to grow by up to 45 new stores and up to 30 raze-and-rebuild stores in 2023 and by up to 55 NTI stores and 25 raze-and-rebuild stores in future years relies on the continued growth of our projo ect pipeline and the building material supply chain. We have a very active Asset Development group that works to foff cus on If the Asset Development our key target areas to locate suitable traffff ic count locations foff r this future growth. group is unable to locate suitable locations or is unable to close the purchase foff r those locations in a timely fashion, the Company could find that it does not have suffff icient 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 projo ect pipeline. We currently have one primaryrr supplier for over 74% of our merchandise. A disruption in supply could have a material effff ect on our business. In 2022, over 74% of our merchandise, including most tobacco products and grocery items, was In January 2021, we renewed and extended foff r another purchased from a single wholesale grocer, Core-Mark. five years a supply contract with Core-Mark. If Core-Mark is unable to fulfill its obligations under our contract, alternative suppliers that we could use in the event of a disruption may not be immediately available or offff er merchandise on similar commercial terms. A disruption in supply could have a material effff ect on our business, financial condition, results of operations and cash flows. Capital financing may not always be available to fund our activities. We usually must spend and risk a significant amount of capital to fund our activities. Although most capital needs are funded from operating cash flow, the timing of cash flows from operations and capital funding needs may not always coincide, and the levels of cash flow may not fully cover capital funding requirements. From time to time, we may need to supplement our cash generated from operations with proceeds from financing activities. We have entered into a credit facility to provide us with available financing foff r working capital and other general corporate purposes. This credit facility is intended to meet any ongoing cash needs in excess of internally generated cash flows. Uncertainty and volatility in financial markets may materially impact institutions to fund their commitments to us under our credit facility. the ability of the participating financial 18 Accordingly, we may not be able to obtain the full amount of the funds available under our credit facility to satisfyff our cash requirements, and our failure to do so could have a material adverse effff ect on our operations and financial position. We could be adversely affff ected if we are not able to attract and retain qualified personnel. We are dependent on our ability to attract and retain qualified personnel. If, foff r any reason, we are not able to attract and retain qualified personnel, our business, financial condition, results of operations and cash flows could be adversely affff ected. Risks Relating to the QuickChek Acquisition 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 foff recasted 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 effff iciency that we and QuickChek have achieved to-date, or might have achieved separately. Many factors affff ecting 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 In addition, even upon fully integrating impact our business, financial condition, and results of operations. QuickChek into our operations, the full benefits of our acquisition may not be realized, including the synergies, cost savings, or sales or growth opportunities as originally anticipated. An inability to realize the full extent of, or any of, the anticipated benefits of the QuickChek acquisition could have an adverse effff ect on our financial condition, results of operations, and cash flows. We may need to recognize impairment charges related to goodwill, identified intangible assets and fixed assets. We have balances of goodwill and intangible assets as a result of the QuickChek acquisition. We are required to test goodwill and any other intangible assets with an indefinite life foff r possible impairment on the same date each year and on an interim basis if there are indicators of a possible impairment. We are also required to evaluate amortizable intangible assets and fixed assets foff r impairment if there are indicators of a possible impairment. There is significant judgement required in the analysis of a potential impairment of goodwill, identified intangible assets and fixed assets. If, as a result of a general economic slowdown, deterioration in one or more of the markets in which we operate or impairment in our financial perfrr off rmance and/or future outlook, the estimated fair value of our long–lived assets decreases, we may determine that one or more of our long–lived assets is impaired. 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 effff ect on our business, financial condition and results of operations. Risks Relating to Our Industryrr Pandemics or disease outbreaks, such as COVID-19, may disrupt consumption and trade patterns, supply chains and normal business activities, which could materially affff ect our operations and results of operations. Pandemics or disease outbreaks, such as COVID-19, have in the past and may in the future cause depressed demand foff r our fuel and convenience merchandise products because quarantines may inhibit the ability or need foff r our customers to shop with us. We also may experience disruptions of logistics necessary to obtain and deliver products to our stores and our customers as we rely on third parties to perfrr off rm these vital functions to our business. 19 In addition, we could again experience issues with our workfoff rce that limit our ability to continue to operate our stores at their normal hours of operations or experience government interverr ntion that requires us to reduce hours or close certain locations. If a significant percentage of our workfoff rce is unable to work, including because of illness or travel or government restrictions in connection with pandemics or disease outbreaks, our In addition, pandemics or disease outbreaks could result in an operations may be negatively impacted. economic downturn that could adversely affff ect the economies and financial markets, resulting in an economic downturn that could affff ect customers' demand foff r our products and servirr ces. We have had to reduce hours of operation in some stores temporarily, but this has not had a material impact on our financial results. We operate in a highly competitive industryrr , which could adversely affff ect us in many ways, including our profitability, our ability to grow, and our ability to manage our businesses. We operate in the oil and gas industry and experience intense competition from other independent retail and wholesale gasoline marketing companies. The U.S. petroleum marketing business is highly competitive, particularly with regard to accessing and marketing petroleum and other refined products. We compete with other chains of retail fuel stores foff r fuel supply and in the retail sale of refined products to end consumers, primarily on the basis of price, but also on the basis of convenience and consumer appeal. In addition, we may fueling stores that adopt marketing strategies similar to ours by also face competition from other retail associating with non-traditional retailers, such as supermarkets, discount club stores and hypermarkets, particularly in the geographic areas in which we operate. We expect that our industry will continue to trend toward this model, resulting in increased competition to us over time. Moreover, because we do not produce or refine any of the petroleum or other refined products that we market, we compete with retail gasoline companies that have ongoing supply relationships with affff iliates or foff rmer affff iliates that manufacture refined products. We also compete with integrated companies that have their own production and/or refining operations that are at t losses from marketing operations with profits from producing or refining operations, and may times able to offff seff In addition, we be better positioned to withstand periods of depressed retail margins or supply shortages. compete with other retail and wholesale gasoline marketing companies that have more extensive retail outlets and greater brand name recognition. Some of our competitors have been in existence longer than we have and have greater financial, marketing and other resources than we do. As a result, these competitors may have a greater ability to bear the economic risks inherent in all phases of our business and may be able to respond better to changes in the economy and new opportunities within the industry. Such competition could adversely affff ect us, including our profitability, our ability to grow and our ability to manage our business. 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 offff ering similar products and servirr ces. With respect to merchandise, our retail stores compete with other convenience store chains, independently owned convenience stores, supermarkets, drugstores, discount clubs, gasoline servirr ce stores, mass merchants, fast foff od operations and other similar retail outlets. Non-traditional retailers, including supermarkets, discount club stores and mass merchants, now compete directly with retail gasoline stores. These non-traditional gasoline retailers have obtained a significant share of the gasoline market, and their market share is expected to grow, and these retailers may use promotional pricing or discounts, both at the fuel pump and in the convenience store, to encourage in-store merchandise sales and gasoline sales. In addition, some large retailers and supermarkets are adjusting their store layouts and product prices in an attempt to appeal to convenience store customers. Maja or competitive factors include: location, ease of access, product and servirr ce selection, gasoline brands, pricing, customer servirr ce, store appearance, cleanliness and safety. 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, potential court rulings affff ecting the tobacco industryrr , 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 foff r 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, 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 effff ect on the demand foff r tobacco products, and therefoff re reduce our revenues and profits. Also, increasing regulations, 20 t some of the recent gains we have experienced including those foff r e-cigarettes and vapor products could offff seff from selling these products. Governing bodies continue to consider banning flavored tobacco products and have done so in some instances. If such effff off rts continue to be successful, it could have a further negative impact on our tobacco sales. These factors could materially and adversely affff ect our retail price of cigarettes, tobacco unit volume and sales, merchandise gross margin and overall customer traffff ic. Reduced sales of tobacco products or smaller gross margins on the sales we make could have a material adverse effff ect on our business, financial condition, results of operations and cash flows. Currently, maja or cigarette manufacturers offff er substantial rebates to retailers. We include these rebates In the event these rebates are no longer offff ered, or decreased, our profit as a component of our gross margin. from cigarette sales will decrease accordingly. In addition, reduced retail display allowances on cigarettes offff ered by cigarette manufacturers would negatively affff ect gross margins. These factors could materially affff ect our retail price of cigarettes, cigarette unit volume and revenues, merchandise gross margin and overall customer traffff ic, which could in turn have a material adverse effff ect 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 otherwrr ise could affff ect our business. In the retail gasoline industry, customer traffff ic is generally driven by consumer preferences and spending trends, growth rates foff r commercial truck traffff ic and trends in travel and weather. Changes in economic conditions generally, or in the regions in which we operate, could adversely affff ect consumer spending patterns and travel in our markets. In particular, weakening economic conditions may result in decreases in miles driven and discretionary consumer spending and travel, which affff ect spending on gasoline and convenience items. In addition, changes in the types of products and servirr ces demanded by consumers may adversely affff ect our merchandise sales and gross margin. Additionally, negative publicity or perception surrounding gasoline suppliers could adversely affff ect their reputation and brand image, which may negatively affff ect our gasoline sales and gross margin. Our success depends on our ability to anticipate and respond in a timely manner to changing consumer demands and preferences while continuing to sell products and servirr ces that remain relevant to the consumer and thus will positively impact overall retail gross margin. ise change our customers' shopping habits or lead to new foff rms of Similarly, advanced technology, improved fuel effff iciency 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 foff r gasoline and could otherwrr fueling destinations or new competitive pressures. Developments regarding climate change and the effff ects of greenhouse gas emissions on climate change and the environment have led to increased use of “green” automobiles. 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. Other market and social initiatives such as public and private initiatives that aim to subsidize the development of non-foff ssil fuel energy sources may also reduce the competitiveness of gasoline. Consequently, the increased adoption of "green" automobiles and general attitudes toward gasoline and its relationship to the environment may significantly affff ect our sales and ability to market our products. Reduced consumer demand foff r gasoline could have a material adverse effff ect on our business, financial condition, results of operations and cash flows. Our operations and earnings have been and will continue to be affff ected by worldwide political developments. Many governments, including those that are members of the Organization of Petroleum Exporting Countries (“OPEC”), unilaterally interverr ne 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. Other governmental actions that could affff ect our operations and earnings include tax changes, royalty increases and regulations concerning: currency fluctuations, protection and remediation of the environment, concerns over the possibility of global warming being affff ected by human activity including the production and use of hydrocarbon energy, restraints and controls on imports and exports, safety, and relationships between employers and employees. As a retail gasoline marketing company, we are significantly 21 affff ected by these factors. Because these and other factors are subjb ect to changes caused by governmental and political considerations and are oftff en made in response to changing internal and worldwide economic conditions and to actions of other governments or specific events, it is not practical to attempt to predict the effff ects of such factors on our future operations and earnings. Our business is subjb ect to operational hazards and risks normally associated with the marketing of petroleum products. We operate in many diffff erent 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 foff rms of severe weather, and mechanical equipment terrorist attacks could result in damage to our facilities, and the resulting interruption and loss of associated revenues; environmental pollution or contamination; and personal injury, including death, foff r which we could be deemed to be liable, and which could subjb ect us to substantial fines and/or claims foff r punitive damages. fires, explosions, acts of war and intentional industrial accidents, failures, We store gasoline in storage tanks at our retail stores. Our operations are subjb ect to significant hazards and risks inherent in storing gasoline. These hazards and risks include, but are not limited to, fires, explosions, spills, discharges and other releases, any of which could result in distribution diffff iculties and disruptions, environmental pollution, fines imposed by governmental agencies or cleanup obligations, personal injury or wrongful death claims and other damage to our properties and the properties of others. Any such event could have a material adverse effff ect on our business, financial condition, results of operations and cash flows. Certain of our assets such as gasoline terminals and certain retail fueling stores lie near the U.S. coastline and are vulnerable to hurricane and tropical storm damages, which may result in shutdowns. The U.S. hurricane season runs from June through November, but the most severe storm activities usually occur in late summer. Moreover, it should be noted that some scientists have predicted that increasing concentrations of greenhouse gases in the earth's atmosphere may produce climate changes that have significant physical effff ects, such as increased frequency and severity of storms, droughts, and floods and other climatic events, which could adversely impact our operations. Although we maintain insurance foff r certain of these risks as described below, due to policy deductibles and possible coverage limits, weather-related risks are not fully insured. We are subjb ect to various environmental laws, regulations and permit requirements, which could expose us to significant expenditures, liabilities or obligations and reduce product demand. We are subjb ect to stringent federal, state and local environmental laws and regulations governing, among other things, the generation, storage, handling, use and transportation of petroleum products and hazardous materials; the emission and discharge of such substances into the environment; the content and characteristics of fuel products; the process safety of our facilities; and human health and safety. Pursuant to such environmental laws and regulations, we are also required to obtain permits from governmental authorities foff r certain of our operations. While we strive to abide by these requirements, we cannot assure you that we have been or will be at all times in compliance with such laws, regulations and permits. If we violate or fail to comply with these requirements, we could be subjb ect to litigation, costs, fines or other sanctions. Environmental requirements, and the enfoff rcement and interpretation thereof, change frequently and have generally become more stringent over time. Compliance with existing and future environmental laws, regulations and permits may require significant expenditures. In addition, to the extent fuel content and characteristic standards increase our wholesale purchase costs, we may be adversely affff ected if we are unable to recover such costs in our pricing. We could be subjb ect to joint and several as well as strict liability foff r environmental contamination, without regard to fault or the legality of our conduct. In particular, we could be liable foff r 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. Leaks from such tanks may impact soil or groundwater and could result in substantial costs. We could also be held responsible foff r contamination relating to third-party sites to which we or our predecessors have sent regulated materials. In addition to potentially significant investigation and remediation costs, any such contamination, leaks from storage tanks or other releases of regulated materials can give rise to 22 claims from governmental authorities and other third parties foff r fines or penalties, natural resource damages, personal injury and property damage. Our business is also affff ected by fuel economy standards and GHG vehicle emission reduction measures. As such fuel economy and GHG reduction requirements become more stringent over time, demand foff r our products may be adversely affff ected. In addition, some of our facilities are subjb ect to GHG regulation. We are currently required to report annual GHG emissions from certain of our operations, and additional GHG emission-related requirements that may affff ect our business have been finalized or are in various phases of discussion or implementation. Any existing or future GHG emission requirements could result in increased operating costs and additional compliance expenses. Our expenditures, liabilities and obligations relating to environmental matters could have a material adverse effff ect on our business, product demand, reputation, results of operations and financial condition. Our retail operations are subjb ect to extensive government laws and regulations, and the cost of compliance with such laws and regulations can be material. Our retail operations are subjb ect 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. The cost of compliance with these laws and regulations can have a material adverse effff ect 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 subjb ect may result in penalties and costs that could adversely affff ect 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. Failure to comply with these laws could adversely affff ect our revenues and results of operations because these state and local regulatory agencies have the power to revoke, suspend or deny applications foff r 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. Regulations related to wages also affff ect our business. Any appreciable increase in the statutory minimum wage or changes in overtime rules would result in an increase in our labor costs and such cost increase, or the penalties foff r failing to comply with such statutory minimums, could adversely affff ect our business, financial condition, results of operations and cash flows. Any changes in the laws or regulations described above that are adverse to us and our properties could affff ect our operating and financial perfrr off rmance. In addition, new regulations are proposed from time to time which, if adopted, could have a material adverse effff ect on our business, financial condition, results of operations and cash flows. Future consumer or other litigation could adversely affff ect our business, financial condition, results of operations and cash flows. Our retail operations are characterized by a high volume of customer traffff ic and by transactions involving a wide array of product selections. These operations carry a higher exposure to consumer litigation risk when compared to the operations of companies operating in many other industries. Consequently, we have been, and may in the future be from time to time, involved in lawsuits seeking cash settlements foff r alleged personal injuries, property damages and other business-related matters, as well as energy content, offff -ff specification gasoline, products liability and other legal actions in the ordinary course of our business. While these actions are generally routine in nature and incidental to the operation of our business, if our assessment of any action or actions should prove inaccurate, our business, financial condition, results of operations and cash flows could be adversely affff ected. For more infoff rmation about our legal matters, see Note 20 “Contingencies” to the consolidated historical financial statements foff r the three years ended December 31, 2022 included in this Annual Report on Form 10-K. Further, adverse publicity about consumer or other litigation may negatively affff ect us, regardless of whether the allegations are true, by discouraging customers from purchasing gasoline or merchandise at our retail stores. 23 We rely on our technology systems and network infrastructure to manage numerous aspects of our business, and a disruption of these systems could adversely affff ect our business. We depend on our technology systems and network infrastructure to manage numerous aspects of our business and provide analytical infoff rmation to management. These systems are an essential component of our business and growth strategies, and a serious disruption to them could significantly limit our ability to manage and operate our business effff iciently. These systems are vulnerable to, among other things, damage and interruption from power loss of telecommunications servirr ces, physical and electronic loss of data, security breaches and computer viruses, which could result in a loss of sensitive personal data, including credit and debit card infoff rmation from our customers, sensitive business infoff rmation, systems interruption or the disruption of our business operations. ToTT protect against unauthorized access or attacks, we have implemented infrastructure protection technologies such as theftff and disaster recovery plans, but there can be no assurance that a technology systems breach or systems failure, which may occur and go undetected, will not have a material adverse effff ect on our financial condition or results of operations. loss or natural disasters, computer system and network failures, Our business and our reputation could be adversely affff ected by the failure to protect sensitive customer, employee or vendor data or to comply with applicable regulations relating to data security and privacy. In the normal course of our business as a gasoline and merchandise retailer, we obtain large amounts of personal data, including credit and debit card infoff rmation from our customers. We also engage third-party vendors that provide technology, systems, and servirr ces to facilitate our collection, retention, processing and transmission of this infoff rmation. While we have invested significant amounts in the protection of our technology systems and maintain what we believe are adequate security controls over individually identifiable customer, employee and vendor data provided to us, a breakdown or a breach in our systems that results in the unauthorized release of individually identifiable customer or other sensitive data could nonetheless occur and have a material adverse effff ect on our reputation, operating results and financial condition. Such a breakdown or breach could also materially increase the costs we incur to protect against such risks. Also, a material failure on our part, or the part of our vendors, to comply with regulations relating to our obligation to protect such sensitive data or the privacy rights of our customers, employees and others could subjb ect us to fines or other regulatory sanctions and potentially to lawsuits and adversely affff ect our brand name. Compliance with and changes in tax laws could adversely affff ect our perfr ormance. We are subjb ect to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, indirect taxes (excise/duty, sales/use and gross receipts taxes), payroll taxes, franchise taxes, withholding taxes and ad valorem taxes. TaTT x laws and regulations are dynamic and subjb ect to change as new laws are passed and new interpretations of existing laws are issued and applied. This activity could result in increased expenditures foff r tax liabilities in the future. Many of these liabilities are subjb ect to periodic audits by the respective taxing authority. Subsequent changes to our tax liabilities as a result of these audits may subjb ect us to interest and penalties. Risks Relating to Our Common Stock The price of our common stock may fluctuate significantly and if securities or industryrr analysts publish unfavorable research reports about our business or if they downgrade their rating on our common stock, the price of our common stock could decline. The price at which our common stock trades may fluctuate significantly. The trading price of our common stock could be subjb ect to wide fluctuations in response to a number of factors, including, but not limited to: • • fluctuations in quarterly or annual results of operations, especially if previously announced guidance or foff recasts made by analysts; they diffff er from our announcements by us of anticipated future revenues or operating results, or by others concerning us, our competitors, our customers, or our industry; 24 • • • • our ability to execute our business plan; competitive environment; regulatory developments; and changes in overall stock market conditions, including the stock prices of our competitors. Provisions in our Certificate of Incorporation and Bylaws and certain provisions of Delaware law could delay or prevent a change in control of us. The existence of some provisions of our Certificate of Incorporation and Bylaws and Delaware law could discourage, delay or prevent a change in control of us that a stockholder may consider favorable. These include provisions: • • • • • • providing foff r a classified board of directors; providing that our directors may be removed by our stockholders only foff r cause; establishing super maja ority vote requirements foff r 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; prohibiting stockholders from calling special meetings of stockholders or taking action by written consent; and establishing advance notice requirements foff r nominations of candidates foff r election to our board of directors or foff r proposing matters that can be acted on by stockholders at the annual stockholder meetings. In addition, we are subjb ect to Section 203 of the Delaware General Corporation Law, which may have an anti-takeover effff ect 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 foff r shares of our common stock. These provisions apply even if a takeover offff er 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. We may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock. Our Certificate of Incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, powers, preferences and relative, participating, optional and other rights, and such qualifications, limitations or restrictions as our board of directors generally may determine. 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. Similarly, the repurchase or redemption rights or dividend, distribution or liquidation preferences we could assign to holders of preferred stock could affff ect the residual value of the common stock. Our Bylaws designate a state or federal court located within the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a preferred judicial forum for disputes with us or our directors, offff icers or other employees. 25 Our Bylaws provide that, unless we consent in writing to the selection of an alternative foff rum, the sole and exclusive foff rum foff r (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, offff icer or other employee to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of Delaware General Corporation Law, our Certificate of Incorporation (including any certificate of designations foff r any class or series of our preferred stock) or our Bylaws, in each case, as amended from time to time, or (iv) any action asserting a claim governed by the internal affff airs doctrine shall be a state or federal court located within the State of Delaware, in all cases subjb ect to the court’s having personal jurisdiction over the indispensable parties named as defendants. Unless we consent in writing to the selection of an alternative foff rum, the sole and exclusive foff rum foff r the resolution of any action asserting a cause of action arising under the Securities Act will be the federal district courts of the United States of America, to the fullest extent permitted by law. Any person or entity purchasing or otherwrr ise acquiring any interest in shares of our capital stock is deemed to have received notice of and consented to the foff regoing provision. This foff rum selection provision may limit a stockholder’s ability to bring a claim in a judicial foff rum that it finds favorable or cost-effff ective foff r disputes with us or our directors, offff icers or other employees, which may discourage such lawsuits against us and our directors, offff icers and employees. Conversely, if a court were to find our choice of foff rum provision inapplicable to, or unenfoff rceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions and we may not obtain the benefits of limiting jurisdiction to the courts selected. Item 1B. UNRESOLVED STAFF COMMENTS The Company had no unresolved comments from the staffff of the U.S. Securities and Exchange Commission as of December 31, 2022. Item 2. PROPERTIES See Item 1 "Description of the Business" and "Properties" foff r this infoff rmation in this Annual Report on Form 10-K beginning on page 2. Item 3. LEGAL PROCEEDINGS Murphy USA and its subsidiaries are engaged in a number of legal proceedings, all of which have arisen in the ordinary course of business. See Note 20 “Contingencies” in the accompanying consolidated financial statements foff r the three years ended December 31, 2022. Based on infoff rmation currently available to the Company, the ultimate resolution of matters referred to in this item is not expected to have a material adverse effff ect on the Company’s net income, financial condition or liquidity in a future period. Litigation The City of Charleston, South Carolina and the state of Delaware have filed lawsuits against energy companies, including the Company. These lawsuits allege damages as a result of climate change and the plaintiffff sff are seeking unspecified damages and abatement under various tort theories. 26 SUPPLEMENTAL INFORMATION; Information About our Executive Offff icers The age at January 1, 2023, present corporate offff ice and length of servirr ce in offff ice of each of the Company’s executive offff icers, as of December 31, 2022, are reported in the foff llowing listing. Executive offff icers are elected annually but may be removed from offff ice at any time by the Board of Directors. R. Andrdd err w Clydl e – Age 59; President and Chief Executive Offff icer, Director and Member of the Executive Committee since August 2013. Mr. Clyde has led Murphy USA's successful value-creation strategy since its spin-offff in 2013. Mr. Clyde serverr d Booz & Company (and prior to August 2008, Booz Allen Hamilton) in its global energy practice. He joined the firm in 1993, was elected vice president in 2000 and held leadership roles as North American Energy Practice Leader and Dallas offff ice Managing Partner and serverr d on the firm’s Board Nominating Committee. Mr. Clyde received a master’s degree in Management with Distinction from the Kellogg Graduate School of Management at Northwestern University. He received a BBA in Accounting and a minor in Geology from Southern Methodist University. MiMM nii dyd K.KK WeWW st – Age 53; Executive Vice President, Fuels, Chief Financial Offff icer, and Treasurer since August 2013. Ms. West joined Murphy Oil in 1996 and has held positions in Accounting, Employee Benefits, Planning and Investor Relations. In 2007, she was promoted to Vice President & Treasurer foff r Murphy Oil. She holds a bachelor’s degree in Finance from the University of Arkansas and a bachelor’s degree in Accounting from Southern Arkansas University. She is a Certified Public Accountant and a Certified Treasury Professional. Robertrr J. Chumley – Age 58; Senior Vice President, Chief Digital Offff icer, since June 2022, and was Senior Vice President of Merchandising and Marketing from September 2016. Mr. Chumley joined the Company from 7-Eleven Inc., where he serverr d as Senior Product Director, Vice President of Merchandising and Senior Vice President of Innovation. His previous experience includes Sales and Marketing leadership roles with Procter and Gamble, Coca-Cola, Kellogg's and Gillette. Mr. Chumley graduated from the Royal Military College of Canada with a Bachelors of Engineering degree. Aftff er graduation he serverr d as a commissioned offff icer in the Royal Canadian Navy. Mr. Chumley also holds an MBA from Dalhousie University. Renee M. Bacon – Age 53; Senior Vice President, Sales and Operations and Chief Merchandising Offff icer, since June 2022. Ms. Bacon joined Murphy USA in 2016 as Regional Vice president, Sales and Operations. In 2018, she was promoted to National Vice President, Sales and Operations and in 2019 was promoted to Senior Vice President, Sales and Operations. She holds a Bachelor of Business Administration degree from the University of TeTT xas--Austin. Ms. Bacon also holds a Master of Business Administration from the University of Houston and a Doctorate of Jurisprudence from the University of TeTT nnessee. Chrirr stii opher A. Clill ck – Age 50; Senior Vice President, Strategy and Development since December 2020. Mr. Click joined the Company from KPMG LLP where he serverr d as a Principal in the firm's Energy and Infrastructure Strategy practice. His previous experience includes ten years with Booz & Company (and prior to August 2008, Booz Allen Hamilton) where he serverr d in its global energy practice and was elected Vice President in 2011. Mr. Click received a Master's degree in Management from the Kellogg Graduate School of Management at Northwestern University. He holds a bachelor of arts degree from TeTT xas A & M University. Blake Segal – Age 42; Senior Vice President, QuickChek since September 2021. Mr. Segal joined the Company from Caesars Entertainment Inc., where he serverr d as Senior Vice President of Operations. His previous roles within Caesars included Vice President of Operations and Vice President of Analytics. He also has experience as an independent advisor to Apollo Global Management's private equity unit and has serverr d on the boards of Opportunity Village, Laughlin (NV) ToTT urism Commission and Mohave (AZ) Airport Authority. Mr. Segal holds a Bachelor of Science degree in Management from the A. B. Freeman School of Business at Tulane University. Jennifi eff r R. Brirr dgd es – Age 54; Senior Vice President, Asset Development since February 2022. Ms. Bridges joined the Company in 2017 as Vice President, Asset Development and was promoted to Senior Vice President, Asset Development in 2022. Her previous experience includes 14 years in planning, store development, and property management at 7-Eleven, including 5 years at Vice President. Prior to retail, she was a management consultant in the Energy practice of Booz Allen Hamilton. Ms. Bridges holds a Masters of 27 Public Affff airs and a Masters of Business Administration, both from the University of TeTT xas at Austin, and a Bachelor of Arts degree from Stanfoff rd University. Item 4. MINE SAFETY DISCLOSURES Not applicable 28 Part II Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the New YoYY rk Stock Exchange using “MUSA” as the trading symbol. There were 1,561 stockholders of record as of December 31, 2022. The declaration and amount of any dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, cash flows, capital requirements of our business, covenants associated with our debt obligations, legal requirements, regulatory constraints, industry practice and other factors the board of directors deem relevant. We are a holding company and have no direct operations. As a result, we are able to pay dividends on our common stock only from available cash on hand and distributions received from our subsidiaries. We declared and paid dividends of $1.27 per share during 2022, $1.04 per share 2021, $0.25 per share in 2020, and we expect to continue quarterly dividend payments in the future. The indenture governing the Senior Notes and the credit agreement governing our credit facilities and term loan contain restrictive covenants that limit, among other things, the ability of Murphy USA and the restricted subsidiaries to make certain restricted payments, which as defined under both agreements, include the declaration or payment of any dividends of any sort in respect of its capital stock and repurchase of shares of our common stock. See “Management's Discussion and Analysis of Financial Condition and Operating Results—Capital Resources and Liquidity—Debt” and Note 10 “Long-TeTT rm Debt” to the accompanying audited consolidated financial statements foff r the three years ended December 31, 2022 foff r additional infoff rmation. On December 1, 2021, our Board of Directors approved a share repurchase authorization of up to $1 billion that we began to utilize upon the completion of our 2020 $500 million share repurchase authorization. The 2021 authorization expires December 31, 2026 unless utilized in full befoff re such time. Purchases may be effff ected in the open market, through privately negotiated transactions, through one or more accelerated stock repurchase programs, through a combination of the foff regoing or in any other manner in the discretion of management. Purchases will be made subjb ect to available cash, market conditions and compliance with our financing arrangements at any time during the period of authorization. We may use cash from operations as well as draws under our credit facilities to effff ect purchases. During the year 2022, we repurchased a total of 3,328,795 common shares foff r $806.4 million, foff r an average price of $242.24 per share. Repurchases in 2022 were made pursuant to our now completed 2020 authorization and our 2021 authorization. As of December 31, 2022, we had approximately $213.7 million remaining under our 2021 authorization. 29 Below is detail of the company's common share repurchases during the foff urth quarter of 2022. Issuer Purchases of Equity Securities ToTT tal Number of Shares Purchased AveAA rage Price Paid Per Share ToTT tal Number of Shares Approximate Dollar VaVV lue of Purchased as Shares That May Part of Publicly YeYY t Be Purchased Announced Plans Under the Plans or Programs or Programs 1 October 1, 2022 to October 31, 2022 November 1, 2022 to November 30, 2022 December 1, 2022 to December 31, 2022 Three Months Ended December 31, 2022 371,671 $ 277.44 371,671 $ 349,999,922 100,082 374,238 290.57 286.60 100,082 320,918,746 374,238 213,661,734 845,991 $ 283.05 845,991 $ 213,661,734 1TeTT rms of the repurchase plan authorized by the Murphy USA Inc. Board of Directors and announced on December 1, 2021 include authorization foff r the Company to acquire up to $1 billion of its common shares by December 31, 2026. All common shares repurchased in the foff urth quarter of 2022 were made pursuant to the 2021 authorization. Equity Compensation Plan Information The table below contains infoff rmation about securities authorized foff r issuance under equity compensation plans. The features of these plans are discussed further in Note 13 “Incentive Plans” to our audited consolidated financial statements. Plan categoryrr Equity compensation plans approved by security holders Equity compensation plans not approved by security holders ToTT tal Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (2) (c) 596,240 — 596,240 $112.06 — $112.06 3,044,241 — 3,044,241 (1) Amounts in this column include outstanding restricted stock units. (2) Number of shares available fof r issuance includes 2,694,914 available shares under the 2013 Long-TeTT rm Incentive Plan as of December 31, 2022 plus 349,327 available shares under the 2013 Stock Plan fof r Non-Employee Directors as of December 31, 2022. Assumes each restricted stock unit is equivalent to one share and each perfrr of rmance unit is equal to two shares. 30 SHAREHOLDER RETURN PERFORMANCE PRESENTATION The foff llowing graph presents a comparison of cumulative total shareholder returns (including the reinvestment of dividends) as if a $100 investment was made on December 31, 2017 foff r the Company, the Index. This Standard and Poor’s 500 Stock Index Fund (S&P 500 Index) and the S&P Retail Select perfrr off rmance infoff rmation is “furnished” by the Company and is not considered as “filed” with this Annual Report on Form 10-K and is not incorporated into any document that incorporates this Annual Report on Form 10-K by reference. Murphy USA Inc. Comparison of Cumulative Shareholder Returns ) 7 1 0 2 / 1 3 / 2 1 f o s a 0 0 1 ( x e d n I 350 300 250 200 150 100 50 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 Murphy USA Inc. S&P 500 Index S&P Retail Select Index Shareholder Return Perfrr ormance Table Murphy USA Inc. S&P 500 Index S&P Retail Select Index December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 Item 6. RESERVED $ $ $ $ $ $ 100 95 146 163 248 348 $ $ $ $ $ $ 31 100 94 121 140 178 144 $ $ $ $ $ $ 100 91 102 142 202 136 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overvrr iew l l ssion and Analysi sii ssion and Analysi Management’s’ Discuii l stat tementstt and notes inii cluded inii of Resultstt thtt e Company’s’ analysi l Condidd titt on l perfrr off rmrr ance and of thtt e consolill dated 10-K sses 2022 and 2021 items and thtt e year-rr to-ye- ar comparirr soii n betweww en 2022 and 2021. thtt isii 10-K foff r thtt e year ended December 31, 2021 fiff lii ed on Februrr aryr 17,7 (“M“ anagement’s’ Discuii sigi nifii iff cant trtt err ndsdd thtt at may affff eff ct fuff turerr perfrr off rmrr ance. fiff nii anciaii generarr llll yl Discuii FoFF rmrr 2022. ssions of 2020 items and thtt e year-rr to-ye- ar comparirr sii ons betweww en 2021 and 2020 arerr not inii cluded inii 10-K and can be foff und inii sii of itstt It should be rerr ad inii conjn unctitt on wiww thtt 10-K.KK ThTT isii sectitt on of thtt isii FoFF rmrr of OpO erarr titt ons and FiFF nii anciai thtt isii Annual Reportrr on FoFF rmrr thtt e FoFF rmrr fiff nii anciai didd scuii )” s”ii isii l FoFF r purprr oses of thtt isii Management’s’ Discuii ssion and Analysi l s,ii rerr feff rerr nces to “M“ urprr hy USASS ”, thtt e “Company”, “w““ eww ”, and “o“ ur” rerr feff r to Murprr hy USASS Inc. and itstt subsididd aii rirr es on a consolill dated basis.ii Management’s Discussion and Analysis is organized as foff llows: • • • • ExeEE cutitt ve Overvirr ew—ww this section provides an overvirr ew of our business and the results of operations and financial condition foff r the periods presented. It includes infoff rmation on the basis of presentation with respect to the amounts presented in the Management’s Discussion and Analysis and a discussion of the trends affff ecting our business. Resultstt of OpO erarr titt ons—this section provides an analysis of our results of operations, including the results of our business segments foff r the two years ended December 31, 2022. Capitat l Resourcerr this section provides a discussion of our financial condition and cash flows as of and foff r the two years ended December 31, 2022. It also includes a discussion of our capital structure and available sources of liquidity. s and Liquididd ty—t Crirr titt cal Accountitt nii g Polill cies—this section describes the accounting policies and estimates that we consider most important foff r our business and that require significant judgment. ExEE ecutitt vevv Ovevv rvrr ivv ew On January 29, 2021, MUSA acquired 100% of Quick Chek Corporation ("QuickChek"), a privately held convenience store chain with a strong regional brand that consisted of 156 stores at the time of acquisition, located in New Jersey and New YoYY rk, in an all-cash transaction. The acquisition expanded the MUSA network into the Northeast by adding high-perfrr off rmance stores that had an existing best-in-class foff od and beverage model and is consistent with the Company's stated strategic priorities of developing enhanced foff od and beverage capabilities. For additional infoff rmation concerning the acquisition, see Note 6, "Business Acquisition" in the accompanying audited consolidated financial statements. QuickChek uses a weekly retail calendar where each quarter has 13 weeks. Current year QuickChek results cover the period from January 1, 2022 to December 30, 2022 and in the prior year covered January 29, 2021 (the date of acquisition) to December 31, 2021. The diffff erence in the timing of the period ends is immaterial to the overall consolidated results. Our Businii ess The Company owns and operates a chain of retail stores that market gasoline and other merchandise under the brand names of Murphy USA®AA , Murphy Express, and QuickChek. Murphy USA®AA branded stores are almost all located in close proximity to Walmart stores, principally in the Southeast, Midwest and Southwest areas of the United States. Our standalone stores operate under the Murphy Express brand and market 32 gasoline and other products. We also have a mix of convenience stores and retail gasoline stores located in New Jersey and New YoYY rk that operate under the brand name of QuickChek®. At December 31, 2022, we had a total of 1,712 Company stores in 27 states, of which 1,151 were Murphy USA, 404 were Murphy Express and 157 were QuickChek. We also market to unbranded wholesale customers through a mixture of Company owned and third-party terminals. TrTT err ndsdd Affff eff ctitt nii g Our Businii ess Our operations are significantly impacted by the gross margins we receive on our fuel and merchandise sales. The fuel gross margins are commodity-based, change daily and are volatile. While we generally expect our total fuel and merchandise sales volumes to grow over time and the gross margins to remain strong in a normalized environment, these sales and gross margins can change rapidly due to many factors. These factors include, but are not limited to, the price of refined products, interruptions in our fuel and merchandise supply caused by severe weather or pandemics, the effff ects from pandemics such as travel restrictions and stay-at- home orders, severe refinery mechanical failures foff r an extended period of time, cyber-attacks against the Company or our vendors, changing economic conditions such as inflation, and competition in the local markets in which we operate. The cost of our main fuel products, gasoline and diesel, is greatly impacted by the cost of crude oil in the United States. Historically, a rising price environment foff r crude oil increases the Company’s cost foff r wholesale fuel products purchased and increases the price of retail fuel sales. Rising prices tend to cause as a hedge to consumers to reduce discretionary fuel consumption, however our low-price model can serverr draw in new customers which can offff seff t the potential loss of discretionary volumes. When wholesale fuel costs rise, the Company is not able to pass these price increases immediately on to retail customers at the pump, which in turn can negatively impact the Company’s margins. In recent periods, however, we have noticed a structural change in the industry's breakeven costs that has driven marginal retailers to preserverr margins which, in turn, has allowed the Company to adjust retail prices in a more timely manner. Crude oil prices in 2022 continued to be volatile during the year with prices ranging from $71 per barrel to $124 per barrel, with an average price of $95 per barrel, compared to prices in 2021 that ranged from $47 per barrel to $86 per barrel with an average of $68 per barrel. ToTT tal fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results including Renewable Identification Numbers ("RINs")) was 34.3 cpg in 2022, compared to 26.3 cpg in 2021. Our revenues are impacted by our ability to leverage our diverse supply infrastructure in pursuit of obtaining the lowest cost of fuel supply available; foff r example, activities such as blending bulk fuel with ethanol and biodiesel to capture and subsequently sell Renewable Identification Numbers (“RINs”). Under the Energy Policy Act of 2005, the Environmental Protection Agency ("EPAPP ") is authorized to set annual quotas establishing the percentage of motor fuels consumed in the United States that must be attributable to renewable fuels. Obligated parties are required to demonstrate that they have met any applicable quotas by submitting a certain amount of RINs to the EPAPP . RINs in excess of the set quota can then be sold in a market foff r RINs at then- prevailing prices. The market price foff r RINs fluctuates based on a variety of factors, including but not limited to governmental and regulatory action. There are other market related factors that can impact the net benefit we receive foff r RINs on a company-wide basis either favorably or unfavorably. The Renewable Fuel Standard ("RFS") program continues to be unpredictable and prices received foff r ethanol RINs averaged $1.42 per RIN foff r the year 2022 compared to $1.31 in 2021. Our business model does not depend on our ability to generate revenues from RINs. Revenue from the sales of RINs is included in “Other operating revenues” in the Consolidated Income Statements. As of December 31, 2022, we had $1.3 billion of Senior Notes and a $394 million term loan outstanding. We believe that we will generate suffff icient cash from operations to fund our ongoing operating requirements and servirr ce our debt obligations. At December 31, 2022, we had additional available capacity under the committed $350 million cash flow revolving credit facility, with none drawn. We expect to use the credit facilities to provide us with available financing to meet any short-term ongoing cash needs in excess of internally generated cash flows. ToTT the extent necessary, we will borrow under these facilities to fund our ongoing operating requirements. There can be no assurances, however, that we will generate suffff icient cash from operations or be able to draw on the credit facilities, obtain commitments foff r our incremental facility and/or 33 obtain and draw upon other credit facilities. For additional infoff rmation, see Significant Sources of Capital in the Capital Resources and Liquidity section. The Company currently anticipates total capital expenditures (including land foff r future development) foff r the full year 2023 to range from approximately $375 million to $425 million depending on how many new stores are completed. We intend to fund our capital program in 2023 primarily using operating cash flow, but will supplement funding where necessary using borrowings under available credit facilities. We believe that our business will continue to grow in the future as we expand the foff od and beverage capabilities within our network. We have an active real estate development team that maintains a pipeline of desirable future store locations foff r development. The pace of this growth is continually monitored by our management, and these plans can be altered based on operating cash flows generated and the availability of debt facilities. Seasonalill tyt Our business has inherent seasonality due to the concentration of our retail stores in certain geographic In general, sales volumes and operating areas, as well as customer behaviors during diffff erent seasons. incomes are highest in the second and third quarters during the summer activity months and lowest during the winter months. In 2020 and 2021, we saw disruptions to typical seasonal patterns due to the COVID-19 pandemic resulting in fuel volumes sold falling below our historical average. Beginning in 2021 a more normal seasonal pattern emerged and in 2022 fuel volumes approached and sometimes exceeded pre-pandemic levels. Businii ess Segmentstt Our business is organized into one operating segment which is Marketing. The Marketing segment includes our retail marketing stores and product supply and wholesale assets. For operating segment infoff rmation, see Note 23 “Business Segments” in the accompanying audited consolidated financial statements foff r the three-year period ended December 31, 2022. Results of Operations Consolidated Results or the year ended December 31, 2022, the Company reported net income of $672.9 million or $28.10 per diluted share on revenue of $23.4 billion. Net income was $396.9 million foff r 2021 or $14.92 per diluted share on revenue of $17.4 billion. The consolidated financial results foff r 2022 include full year QuickChek results from January 1, 2022 to December 30, 2022 and foff r 2021 include QuickChek results from January 29, 2021 (date of acquisition) to December 31, 2021. The diffff erence in timing of the period ends is immaterial to the overall consolidated results. A summary of the Company’s earnings by business segment foff llows: ilii lll ill ons of dollll ars)rr (m(( Marketing Corporate and other assets Net income Year ended December 31, 2022 2021 2020 $ $ 740.9 $ (68.0) 672.9 $ 472.8 $ (75.9) 396.9 $ 442.2 (56.1) 386.1 Net income foff r 2022 increased compared to 2021, primarily due to: • • • • Higher all-in fuel contribution; Higher retail fuel sales volumes; Higher merchandise contribution; Lower acquisition and integration related costs 34 The items below partially offff seff t the increase in earnings in the current period: • • • • Higher store and other operating expenses; Higher depreciation and amortization expense; Higher selling, general and administrative ("SG&A") expenses; Higher income tax expense Financial Summary of 2022 Compared to 2021 Revenues foff r the year ended December 31, 2022 increased $6.1 billion, or 35.1%, compared to 2021. The increase was due to higher average retail fuel prices which increased 86 cpg, or 31.0%, retail fuel volumes which increased 9.2%, merchandise sales which increased 6.1%, improved PS&W revenues including RINs, and the inclusion of QuickChek results foff r 12 months in 2022 compared to 11 months in 2021. Cost of sales increased $5.5 billion, or 35.7%, compared to 2021, due to the higher average cost of fuel, which increased 42.9%, the increase of 9.2% in retail fuel volumes sold, and 5.4% higher merchandise cost of goods sold. Store and other operating expenses increased $149.2 million, or 18.0%, in 2022 due primarily to higher payment fees (42% of the increase), higher employee related costs in part due to a non-recurring special bonus of $7.0 million, rent expense, increased store maintenance expenses and the inclusion of one additional month of QuickChek expense. On an average per store month ("APSM") basis, store operating expenses excluding credit card fees and rent increased 10.0% in 2022 when compared to 2021. The Company incurred $1.5 million in integration costs foff r QuickChek in 2022 compared to acquisition In 2021 these included transaction-specific costs to close the and integration costs of $10.4 million in 2021. acquisition and costs related to integrating technology and systems. Depreciation and amortization expense in 2022 increased $7.8 million due primarily to the increased number of Murphy branded stores with larger foff rmats and an additional month of QuickChek depreciation in 2022. Selling, general and administrative expenses foff r 2022 were higher by $38.9 million primarily due to a $25 million charitable pledge in Q4 2022, increased employee incentive expense, and the inclusion of an additional month of expense foff r QuickChek. Interest expense in 2022 increased by $2.9 million compared to 2021 due to an increase in interest rates on the term loan during the year. The effff ective income tax expense rate in 2022 was 23.9% compared to 24.0% foff r 2021. Segment Results MaM rkrr ekk titt nii g Income befoff re income taxes in the Marketing segment foff r 2022 increased $351.7 million, or 56.6%, t by from 2021 due primarily to higher all-in fuel margin, increased merchandise margins and was partially offff seff higher store and other operating costs, selling, general and administrative costs, depreciation, and interest expense. QuickChek uses a weekly retail calendar where each quarter has 13 weeks. For 2022, the QuickChek results cover the period from January 1, 2022, to December 30, 2022 and foff r 2021 the QuickChek results cover the period from January 29, 2021 (the date of acquisition) to December 31, 2021. The diffff erence in the timing of the period ends is immaterial to the overall consolidated results. 35 The tables below show the results foff r the Marketing segment foff r the three years ended December 31, 2022 along with certain key metrics foff r the segment. (M(( iMM lii lll ill ons of dollll ars,rr except rerr venue per storerr monthtt thtt ousands)dd and storerr counts)tt Marketing Segment (i(( nii Years Ended December 31, 2022 2021 2020 Operating revenues Petroleum product sales Merchandise sales Other operating revenue ToTT tal operating revenues Operating expenses Petroleum product cost of goods sold Merchandise cost of goods sold Store and other operating expenses Depreciation and amortization Selling, general and administrative Accretion of asset retirement obligations ToTT tal operating expenses Gain (loss) on sale of assets Income (loss) from operations Other income (expense) Interest expense ToTT tal other income (expense) Income (loss) befoff re income taxes Income tax expense (benefit) $ 19,230.1 $ 13,410.8 $ 3,903.2 312.1 23,445.4 17,910.1 3,136.1 976.5 204.8 232.5 2.7 22,462.7 (0.7) 982.0 (9.0) (9.0) 973.0 232.1 3,677.7 271.4 17,359.9 12,535.5 2,976.1 827.1 197.3 193.6 2.5 16,732.1 1.6 629.4 (8.1) (8.1) 621.3 148.5 Net Income (loss) from operations $ 740.9 $ 472.8 $ 8,208.6 2,955.1 100.3 11,264.0 7,325.7 2,495.7 549.0 146.3 171.1 2.3 10,690.1 1.3 575.2 (0.1) (0.1) 575.1 132.9 442.2 ToTT tal tobacco sales revenue per same store sales1,2 $ 123.3 $ 120.2 $ 120.6 ToTT tal non-tobacco sales revenue per same store sales1,2 ToTT tal merchandise sales revenue per same store sales1,2 $ 69.7 48.6 45.5 193.0 $ 168.8 $ 166.1 12021 and 2020 amounts not revised foff r 2022 raze-and-rebuild activity (see SSS definition below) 2Includes store-level discounts fof r Murphy Drive Reward ("MDR") redemptions and excludes change in value of unredeemed MDR points Store count at end of period ToTT tal store months during the period 1,712 20,172 1,679 19,702 1,503 17,770 AveAA rage Per Store Month ("APSM") metric includes all stores open through the date of the calculation, including stores acquired during the period. Same store sales ("SSS") metric includes aggregated individual store results foff r all stores open throughout both periods presented. For all periods presented, the store must have been open foff r the entire calendar year to be included in the comparison. Remodeled stores that remained open or were closed foff r just a very brief time 36 If a store is (less than a month) during the period being compared remain in the same store sales calculation. replaced either at the same location (raze-and-rebuild) or relocated to a new location, it will be excluded from the calculation during the period it is out of servirr ce. Newly constructed stores do not enter the calculation until they are open foff r each full calendar year foff r the periods being compared (open by January 1, 2021 foff r the included in the stores being compared in the 2022 versus 2021 comparison). Acquired stores are not calculation of same stores foff r the first 12 months aftff er the acquisition. When prior period SSS volumes or sales are presented, they have not been revised foff r current year activity foff r raze-and-rebuilds and asset dispositions. FuFF el Key Operating Metrics 2022 2021 2020 Twelve Months Ended December 31, $ $ ToTT tal retail fuel contribution ($ Millions) ToTT tal PS&W contribution ($ Millions) RINs and other (included in Other operating revenues on Consolidated Income Statement) ($ Millions) ToTT tal fuel contribution ($ Millions) Retail fuel volume - chain (Million gal) Retail fuel volume - per store (K gals APSM)1 Retail fuel volume - per store (K gal SSS)2 ToTT tal fuel contribution (including retail, PS&W and RINs) (cpg) Retail fuel margin (cpg) PS&W including RINs contribution (cpg) 1APSM metric includes all stores open through the date of calculation 22021 and 2020 amounts not revised foff r 2022 raze-and-rebuild activity 1,405.0 $ (80.8) 951.3 $ (72.3) 895.0 (8.5) 305.8 265.3 1,630.0 $ 1,144.3 $ 4,751.5 244.6 240.9 34.3 29.6 4.7 4,352.2 229.4 225.8 26.3 21.9 4.4 95.6 982.1 3,900.9 219.5 216.2 25.2 22.9 2.3 The reconciliation of the total fuel contribution to the Consolidated Income Statements is as foff llows: Twelve Months Ended December 31, 2022 2021 2020 19,230.1 $ 13,410.8 $ (17,910.1) (12,535.5) 8,208.6 (7,325.7) 310.0 1,630.0 $ 269.0 1,144.3 $ 99.2 982.1 (Millions of dollars) Petroleum product sales Less Petroleum product cost of goods sold Plus RINs and other (included in Other Operating Revenues line) ToTT tal fuel contribution $ $ 37 Mercrr handidd sii e Key Operating Metrics ToTT tal merchandise contribution ($ Millions) ToTT tal merchandise sales ($ Millions) ToTT tal merchandise sales ($K SSS)1,2 Merchandise unit margin (%) ToTT bacco contribution ($K SSS)1,2 Non-tobacco contribution ($K SSS)1,2 ToTT tal merchandise contribution ($K SSS)1,2 Twelve Months Ended December 31, 2022 767.1 3,903.2 193.0 19.7% 17.7 20.2 37.9 $ $ $ $ $ $ 2021 701.6 3,677.7 168.8 19.1% 16.7 10.8 27.5 $ $ $ $ $ $ 2020 459.4 2,955.1 166.1 15.6% 16.5 10.0 26.5 $ $ $ $ $ $ 12021 and 2020 amounts not revised foff r 2022 raze-and-rebuild activity 2Includes store-level discounts fof r MDR redemptions and excludes change in value of unredeemed MDR points Same store sales infoff rmation compared to APSM metrics: Variance from prior year periods Fuel gallons per month 5.4 % 6.6 % 3.0 % 4.5 % December 31, 2022 APSM2 SSS1 December 31, 2021 APSM2 SSS1 Merchandise sales ToTT bacco sales Non tobacco sales Merchandise margin ToTT bacco margrr inii Non tobacco margrr inii 2.9 % 2.9 % 3.1 % 5.1 % 5.5 % 4.7 % 3.7 % 2.3 % 6.3 % 6.8 % 4.2 % 9.6 % 1.0 % (0(( .4)4 % 4.5 % 3.5 % 2.3 % 5.4 % 12.2 % (0(( .8)8 % 46.2 % 37.7 % 4.3 % 89.2 % December 31, 2020 APSM2 SSS1 (11.6)% (12.3)% 11.7 % 12.8 % 8.7 % 9.6 % 14.9 % 2.0 % 11.8 % 12.4 % 10.8 % 8.6 % 13.0 % 4.2 % 1Includes store-level discounts fof r MDR redemptions and excludes change in value of unredeemed MDR points 2Includes all MDR activity Financial Summary of 2022 Compared to 2021 The Marketing segment had total revenues of $23.4 billion in 2022 compared to $17.4 billion in 2021, an increase of $6.0 billion, due primarily to a higher average retail fuel sales price, increased retail fuel volumes sold, higher merchandise sales and the inclusion of QuickChek results foff r an additional month. Revenue amounts included excise taxes collected and remitted to government authorities of $2.2 billion in 2022 and $2.0 billion in 2021. ToTT tal fuel contribution foff r the year ended December 31, 2022 was $1.6 billion, an increase of $485.7 million, or 42.4% over 2021. This contribution improvement was due to higher retail fuel contribution, increased fuel volumes sold foff r the year, and an improved contribution from PS&W margin (including RINs). Retail fuel margin on a cpg basis increased 35.2% in 2022 to 29.6 cpg, compared to 21.9 cpg in the prior year. Fuel volumes increased 9.2%, primarily due to the return of pre-pandemic trends and to new customers seeking lower prices. ToTT tal fuel sales volumes on an SSS basis were 240,940 gallons per month in 2022, an increase 38 from 225,792 gallons per month in the prior year. ToTT tal product supply and wholesale margin dollars befoff re RINs decreased in the current year due to timing and price-related impacts and lower spot-to-rack margins. Additionally, there was an increase in the contribution from sales of RINs. During 2022, other operating income included $305.8 million from the sale of 215.6 million RINs at an average selling price of $1.42 per RIN compared to $265.3 million from the sale of 202.0 million RINs at an average price of $1.31 per RIN in 2021. Merchandise sales were up 6.1% in 2022 to $3.9 billion due to higher sales across the chain in most categories and the inclusion of QuickChek results foff r an additional month in 2022. ToTT tal merchandise contribution in 2022 increased $65.5 million, or 9.3%, to $767.1 million compared to 2021. Merchandise unit margins increased to 19.7% in 2022 from 19.1% in 2021. On an SSS basis, total merchandise sales were up 2.9%, due to a 3.1% increase in non-tobacco sales and an increase of 2.9% in tobacco products. ToTT tal margins on a SSS basis foff r 2022 were up 5.1%, tobacco margins were higher by 5.5%, and non-tobacco margins increased 4.7%, mainly from increased beverage and snack categories. Store and other operating expenses increased $149.4 million in 2022 compared to 2021 levels, an increase of 18.1%. This increase in total dollars was due primarily to higher payment fees, employee related expenses (due in part to a $7.0 million non-recurring special bonus), maintenance expenses, and to the inclusion of QuickChek stores foff r an additional month. Excluding credit card fees and rent on an APSM basis, store and other operating expenses at the retail level were 10.0% higher in 2022 compared to 2021 levels. Depreciation and amortization increased $7.5 million in 2022, an increase of 3.8%. This increase was due primarily to more stores with larger foff rmats operating in the 2022 period and an additional month of depreciation foff r QuickChek assets. Selling, general and administrative expenses ("SG&A") increased $38.9 million in 2022 compared to 2021, primarily due to a charitable pledge of $25.0 million, higher employee incentive expense, and an additional month of QuickChek expenses. Corporate and Other Assets Loss from continuing operations foff r Corporate and other assets in 2022 was $68.0 million, compared to a loss of $75.9 million in 2021. The $7.9 million improvement from the previous year was mainly due to $8.9 million less in acquisition and integration costs, a $2.9 increase in investment income, and was partially offff seff t by $2.0 million in higher interest expense and an increase of $2.5 million in other nonoperating expenses. Non-GAGG AP Measurerr s The foff llowing table sets foff rth the Company’s EBITDA and Adjusted EBITDA foff r the three years ended December 31, 2022. 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 in assessing our operating perfrr off rmance (e.g., (income) from discontinued operations, net to be meaningful settlement proceeds, (gain) loss on sale of assets, transaction and integration costs related to acquisitions, and other non-operating (income) expense). EBITDA and Adjusted EBITDA are not measures that are prepared in accordance with U.S. generally accepted accounting principles (GAAAA P). loss on early debt extinguishment, We use Adjusted EBITDA in our operational and financial decision-making, believing that the measure is useful to eliminate certain items in order to foff cus on what we deem to be an indicator of ongoing operating perfrr off rmance and our ability to generate cash flow from operations. Adjusted EBITDA is also used by many of our investors, research analysts, investment bankers, and lenders to assess our operating perfrr off rmance. We believe that the presentation of Adjusted EBITDA provides useful infoff rmation to investors because it allows understanding of a key measure that we evaluate internally when making operating and strategic decisions, preparing our annual plan and evaluating our overall perfrr off rmance. However, non-GAAAA P measures are not a 39 substitute foff r GAAAA P disclosures, and EBITDA and Adjusted EBITDA may be prepared diffff erently by us than by other companies using similarly titled non-GAAAA P measures. The reconciliation of net income to EBITDA and Adjusted EBITDA is as foff llows: iMM lii lll ill ons of dollll ars)rr (M(( Net income Income tax expense (benefit) Interest expense, net of interest income Depreciation and amortization EBITDA Accretion of asset retirement obligations (Gain) loss on sale of assets Acquisition related costs Other nonoperating (income) expense Years Ended December 31, 2022 2021 2020 $ 672.9 $ 396.9 $ 210.9 82.3 220.4 1,186.5 2.7 (2.1) 1.5 2.3 125.0 82.3 212.6 816.8 2.5 (1.5) 10.4 (0.2) 386.1 123.0 50.2 161.0 720.3 2.3 (1.3) 1.7 (0.3) Adjusted EBITDA $ 1,190.9 $ 828.0 $ 722.7 Capital Resources and Liquidity Sigi nififf cant Sourcrr es of Capitatt l As of December 31, 2022, we had $60.5 million of cash and cash equivalents and total marketable securities of $22.3 million. Our cash management policy provides that cash balances in excess of a certain threshold are reinvested in certain types of low-risk investments. We have a committed cash flow revolving credit facility (the "revolving facility") of $350 million, which was undrawn at December 31, 2022, which can be utilized foff r working capital and other general corporate purposes, including supporting our operating model as described herein. Additional borrowing capacity under the revolving facility may be extended at our request and with the consent of the participating lenders. We also have a shelf registration on file with the SEC foff r an indeterminate amount of debt and equity securities foff r future issuance, subjb ect to our internal limitations on the amount of debt to be issued under this shelf registration statement. We believe our short-term and long-term liquidity is adequate to fund not only our operations, but also our anticipated near-term and long-term funding requirements, including capital spending programs, execution of announced share repurchase programs, dividend payments, repayment of debt maturities and other amounts that may ultimately be paid in connection with contingencies. Operating Activities Net cash provided by operating activities was $994.7 million foff r the year ended December 31, 2022 and $737.4 million foff r the comparable period in 2021, an increase of $257.3 million, or 34.9%, mainly due to an increase in net income of $276.0 million in 2022, increased depreciation of $7.8 million, and increased deferred and noncurrent tax changes of $12.5 million, partially offff seff t by a decrease in the amount of cash provided in 2022 of $38.0 million. For the current year, cash provided by from changes in noncash working capital changes in noncash operating working capital of $44.8 million was due to an increase of $180.1 million in accounts payable and accrued liabilities, offff seff t by increases of $84.7 million in accounts receivable, $26.9 million in inventories, and $23.7 million in prepaid expenses and other current assets. The changes in accounts receivable and accounts payable were due to timing of invoicing, billing, payments, and receipts and were further affff ected by increased fuel and merchandise inventory prices which affff ected inventories and accounts payable. See also Note 17 "Other financial infoff rmation" in the accompanying audited consolidated financial statements foff r the three-year period ended December 31, 2022. 40 Investing Activities For the year ended December 31, 2022, cash required by investing activities was $319.3 million compared to cash required by investing activities of $914.2 million in 2021. The decrease in cash required by investing activities of $594.9 million compared to the previous year was primarily due to the $641.1 million cash purchase of QuickChek in 2021, an increase in cash from the sale of assets of $5.4 million and other investing activities which were lower by $1.2 million. These decreases were partially offff seff t by higher capital expenditures which required cash of $305.3 million in 2022 compared to $274.7 million in 2021 primarily due to new store openings, and an investment in marketable securities of $22.2 million. Financing Activities Financing activities in the year ended December 31, 2022 required net cash of $871.3 million compared to net cash provided of $269.6 million in the year ended December 31, 2021. The $1.1 billion change in financing cash required was due to a decrease in net borrowings of $683.7 million, an increase of $451.4 million in share repurchases, an increase of $13.1 million in amounts related to share-based compensation, an increase of $2.6 million in cash dividends paid, partially offff seff t by lower debt issuance costs of $9.9 million. Borrowings of debt in 2021 were related to the QuickChek acquisition and there were no net borrowings in 2022. Dividends The Company paid dividends of $1.27 per common share during 2022 foff r total payments of $29.9 As part of our capital allocation million, compared to $1.04 per common share, or $27.3 million in 2021. strategy, the Company's intention is to deliver targeted double-digit growth in the per share dividend over time. Sharerr Repe urcrr hase prorr grarr m On December 1, 2021, our Board of Directors approved a share repurchase authorization of up to $1 billion that we began to utilize upon the completion of our 2020 $500 million share repurchase authorization. The 2021 authorization expires December 31, 2026, unless utilized in full befoff re such time. Purchases may be effff ected in the open market, through privately negotiated transactions, through one or more accelerated stock repurchase programs, through a combination of the foff regoing or in any other manner in the discretion of management. Purchases will be made subjb ect to available cash, market conditions and compliance with our financing arrangements at any time during the period of authorization. We may use cash from operations as well as draws under our credit facilities to effff ect purchases. During the year 2022, we repurchased a total of 3,328,795 common shares foff r $806.4 million, at an average price of $242.24 per share. Repurchases in 2022 were made pursuant to our now completed 2020 authorization and our 2021 authorization. As of December 31, 2022, we had approximately $213.7 million remaining under our 2021 authorization. 41 Debt Our long-term debt at December 31, 2022 and 2021 was as set foff rth below: (Millions of dollars) 5.625% senior notes due 2027 (net of unamortized discount of $1.6 at 2022 and $2.0 at 2021) 4.75% senior notes due 2029 (net of unamortized discount of $4.2 at 2022 and $4.8 at 2021) 3.75% senior notes due 2031 (net of unamortized discount of $5.1 at 2022 and $5.7 at 2021) TeTT rm loan due 2028 (effff ective interest rate of 5.95% at 2022 and 2.27% at 2021) net of unamortized discount of $0.7 at 2022 and $0.9 at 2021 Capitalized lease obligations, vehicles, due through 2026 Capitalized lease obligations, buildings, due through 2059 Unamortized debt issuance costs ToTT tal long-term debt Less current maturities December 31, 2022 2021 $ 298.4 $ 495.8 494.9 393.3 2.3 131.3 (9.1) 1,806.9 15.0 ToTT tal long-term debt, net of current $ 1,791.9 $ 298.0 495.2 494.3 397.1 2.7 138.9 (11.1) 1,815.1 15.0 1,800.1 Senior Notes On April 25, 2017, Murphy Oil USA, Inc. ("MOUSA"), our primary operating subsidiary, issued $300 million of 5.625% Senior Notes due 2027 (the "2027 Senior Notes") under its existing shelf registration statement. The 2027 Senior Notes are fully and unconditionally guaranteed by the Company and by the Company's subsidiaries that guarantee our Credit Facilities (as defined below). The indenture governing the 2027 Senior Notes contains restrictive covenants that limit, among other things, the ability of the Company, MOUSA, and the restricted subsidiaries to incur additional indebtedness or liens, dispose of assets, make certain restricted payments or investments, enter into transactions with affff iliates 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 offff er and redemption of MOUSA's senior notes due 2023. The 2029 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by the Company and by the Company's subsidiaries that guarantee our Credit Facilities. The indenture governing the 2029 Senior Notes contains restrictive covenants that are essentially identical to the covenants foff r the 2027 Senior Notes. On January 29, 2021, MOUSA issued $500 million of 3.75% Senior Notes due 2031 (the "2031 Senior Notes" and, together with the 2027 Senior Notes and the 2029 Senior Notes, the "Senior Notes"). The net proceeds from the issuance of the 2031 Senior Notes were used, in part, to fund the acquisition of QuickChek and other obligations related to that transaction. The 2031 Senior Notes are fully and unconditionally guaranteed by the Company and by the Company's subsidiaries that guarantee our Credit Facilities. The indenture governing the 2031 Senior Notes contains restrictive covenants that are essentially identical to the covenants foff r the 2027 and 2029 Senior Notes. The Senior Notes and related guarantees rank equally with all of our and the guarantors’ existing and future senior unsecured indebtedness and effff ectively junior to our and the guarantors’ existing and future secured indebtedness (including indebtedness with respect to the Credit Facilities) to the extent of the value of the assets securing such indebtedness. The Senior Notes are structurally subordinated to all of the existing and future third-party liabilities, including trade payables, of our existing and future subsidiaries that do not guarantee the notes. 42 Revolving Credit Facility and Term Loan On January 29, 2021, the Company entered into a new credit agreement that consists of both a cash flow revolving credit facility and a senior secured term loan and that replaced the Company’s prior ABL facility and term loan. The credit agreement provides foff r a senior secured term loan in an aggregate principal amount of $400 million (the “TeTT rm Facility”) (which was borrowed in full on January 29, 2021) and revolving credit commitments in an aggregate amount equal to $350.0 million (the “Revolving Facility”, and together with the TeTT rm Facility, the “Credit Facilities”). The outstanding balance of the term loan was $394.0 million at December 31, 2022. The revolving facility expires January 2026 while the term loan is due January 2028 and requires quarterly principal payments of $1.0 million beginning July 1, 2021. As of December 31, 2022, we had none outstanding under the revolving facility while there were $4.7 million in outstanding letters of credit, which reduces the amount available to borrow. Interest payable on the Credit Facilities is based on either: • • the London interbank offff ered rate, adjusted foff r statutory reserverr Rate”); or requirements (the “Adjusted LIBO the Alternate Base Rate, which is defined as the highest of (a) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate”, (b) the greater of federal funds effff ective rate and the overnight bank funding rate determined by the Federal Reserverr Bank of New YoYY rk from time to time plus 0.50% per annum and (c) the one-month Adjusted LIBO Rate plus 1.00% per annum, plus, (A) in the case of Adjusted LIBO Rate borrowings, (i) with respect to the Revolving Facility, spreads ranging from 1.75% to 2.25% per annum depending on a total debt to EBITDA ratio or (ii) with respect to the TeTT rm Facility, a spread of 1.75% per annum and (B) in the case of Alternate Base Rate borrowings (i) with respect to the Revolving Facility, spreads ranging from 0.75% to 1.25% per annum depending on a total debt to EBITDA ratio or (ii) with respect to the TeTT rm Facility, a spread of 1.75% per annum. The TeTT rm Facility amortizes in quarterly installments starting with the first amortization payment being due on July 1, 2021 at a rate of 1.00% per annum. Murphy USA is also required to prepay the TeTT rm Facility with a portion of its excess cash flow, a portion of the net cash proceeds of certain asset sales, and casualty events (subjb ect to certain reinvestment rights) and the net cash proceeds of issuances of indebtedness not permitted under the Credit Agreement. The Credit Agreement allows Murphy USA to prepay, in whole or in part, the TeTT rm Facility outstanding thereunder, together with any accrued and unpaid interest, with prior notice but without premium or penalty other than breakage and redeployment costs. The credit agreement contains certain covenants that limit, among other things, the ability of the Company and certain of its subsidiaries to incur additional indebtedness or liens, to make certain investments, to enter into sale-leaseback transactions, to make certain restricted payments, to enter into consolidations, mergers or sales of material assets and other fundamental changes, to transact with affff iliates, to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends, or to make certain accounting changes. The credit agreement also contains total leverage ratio and secured net leverage ratio financial maintenance covenants solely foff r the benefit of the revolving facility which are tested quarterly. Pursuant to the total leverage ratio financial maintenance covenant, the Company must maintain a total leverage ratio of not more than 5.0 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 5.5 to 1.0 and a maximum secured net leverage ratio of not more than 3.75 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 4.25 to 1.0. The Credit Agreement also contains customary events of default. 43 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 foff rma basis, is greater than 3.0 to 1.0, could be limited. At December 31, 2022, our total leverage ratio was 1.51 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 foff rma basis, exceeds 3.0 to 1.0, any restricted payments made foff llowing that time until the ratio is once again, on a pro foff rma 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 $100 million in any fiscal year and an additional ability to make restricted payments in an aggregate not to exceed the greater of $106.7 million, or 4.5% of consolidated net tangible assets over the life of the credit agreement. Supplemental Guarantor Financial Information The foff llowing is a description of the guarantees with respect to the Senior Notes and the Credit foff r which MOUSA is primary obligor, and foff r which the Company and certain 100% owned Facilities, subsidiaries provide full and unconditional guarantees on a joint and several basis. See "—Debt" above foff r additional infoff rmation concerning the Company's outstanding indebtedness, all of which is guaranteed as described below. See also Note 10 "Long TeTT rm Debt" in the accompanying consolidated financial statements foff r the three years ended December 31, 2022. The Senior Notes and related guarantees rank equally with all of our and the guarantors’ existing and future senior unsecured indebtedness and effff ectively 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. All obligations under the Credit Facilities are guaranteed by the Company and the same subsidiary guarantors that guarantee the Senior Notes. All obligations under the Credit Facilities, including the guarantees of those obligations, are secured by certain assets of the Company, MOUSA, and the other guarantors. The combined assets, liabilities and results of operations of MOUSA and the guarantors are not materially diffff erent from corresponding amounts presented in the consolidated financial statements included herein. MOUSA is our primary operating subsidiary and generated the vast maja ority of our revenues foff r the year ended December 31, 2022 and accounted foff r the vast maja ority of our total assets as of December 31, 2022. In the event MOUSA itself were unable to servirr ce the Company's consolidated debt obligations, our business and financial condition would be materially adversely impacted. 44 Contractual Obligations The foff llowing table summarizes our aggregate contractual fixed and variable obligations as of December 31, 2022. (Millions of dollars) Debt obligations 1 Operating lease obligations Purchase obligations 2 Asset retirement obligations Other long-term obligations, including interest on long-term debt ToTT tal $ $ ToTT tal Less than 1 year 1-3 years 4-5 years More than 5 years 1,827.6 $ 773.7 497.0 163.7 15.0 $ 49.8 339.1 — 27.4 $ 98.3 132.6 — 26.7 $ 95.0 13.5 — 1,758.5 530.6 11.8 163.7 544.0 3,806.0 $ 83.7 487.6 $ 164.7 423.0 $ 151.0 286.2 $ 144.6 2,609.2 1For additional infof rmation, see Note 10 “Long-TeTT rm Debt” in the accompanying audited consolidated financial statements. 2Primarily includes ongoing new retail store construction in progress at December 31, 2022, commitments to purchase land, take-or-pay supply contracts and other servirr ces. See Note 19 “Commitments” in the audited consolidated financial statements foff r the year ended December 31, 2022. Capitatt l SpS endidd nii g Capital spending and investments in our Marketing segment relate primarily to the acquisition of land and the construction of new Company stores. Our Marketing capital is also deployed to improve our existing stores, which we refer to as sustaining capital. We use sustaining capital in this business as needed to ensure reliability and continued perfrr off rmance of our stores. We also invest in our Corporate and other assets segment which is primarily technology related. The foff llowing table outlines our capital spending and investments by category foff r the three years ended December 31, 2022: iMM lii lll ill ons of dollll ars)rr (M(( Marketing: Company stores TeTT rminals Sustaining capital Corporate and other assets ToTT tal Years Ended December 31, 2022 2021 2020 $ $ 245.7 $ — 33.4 26.7 305.8 $ 221.2 $ 2.5 21.8 32.0 277.5 $ 175.9 2.0 22.9 26.3 227.1 We currently expect capital expenditures foff r the full year 2023 to range from approximately $375 million to $425 million, including $285 million to $315 million foff r retail growth, approximately $50 million to $60 million foff r maintenance capital, with the remaining funds earmarked foff r other corporate investments and other strategic initiatives. See Note 19 “Commitments” in the audited consolidated financial statements foff r the three years ended December 31, 2022 included in this Annual Report on Form 10-K. Crirr titt cal Accountitt nii g Polill cies Goodwiww lii lll and inii tatt ngibii le assetstt Goodwill represents the excess of the aggregate of the consideration transferred over the net assets acquired and liabilities assumed and is tested annually foff r impairment, or more frequently if there are indicators 45 of impairment. Acquired finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives and are reviewed foff r impairment when events or circumstances indicate that the asset group to which the intangible assets belong might be impaired. The Company revises the estimated remaining useful life If the Company revises the useful of these assets when events or changes in circumstances warrant a revision. Indefinite-lived intangibles life, the unamortized balance is amortized over the use life on a prospective basis. are tested annually foff r impairment, or more oftff en if indicators warrant. Impairii mrr ent of Long-Lived Assetstt Individual retail stores are reviewed foff r impairment periodically or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Our primary indicator that operating store assets may not be recoverable is consistent negative cash flow over a twenty-foff ur month period foff r those retail stores that have been open in the same location foff r a suffff icient period to allow foff r meaningful analysis of ongoing results. We also monitor other factors when evaluating retail stores foff r impairment, including individual store execution of operating plans and local market conditions. When an evaluation is required, the projo ected future undiscounted cash flows to be generated from each retail store over its remaining economic life are compared to the carrying value of the long-lived assets of that store to determine if a write-down of the carrying value to fair value is required. When determining future cash flows associated with an individual retail store, we make assumptions about key variables such as sales volume, gross margins and expenses. Cash flows vary foff r each retail store year to year. Changes in market demographics, traffff ic patterns, competition and other factors impact the overall operations of certain of our individual retail store locations. Similar changes may occur in the future that will require us to record impairment charges. We have not made any material change in the methodology used to estimate future cash flows of retail store locations during the past three years. Our impairment evaluations are based on assumptions we deem to be reasonable. If the actual results of our retail stores are not consistent with the estimates and judgments we have made in estimating future cash flows and determining fair values, our actual impairment losses could vary positively or negatively from our estimated impairment losses. Providing sensitivity analysis if other assumptions were used in perfrr off rming the impairment evaluations is not practical due to the significant number of assumptions involved in the estimates. TaTT x Mattersrr We are subjb ect to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, indirect taxes (excise/duty, sales/use, and gross receipts taxes), payroll taxes, franchise taxes, withholding taxes and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures foff r tax liabilities that cannot be predicted at this time. In addition, we have received claims from various jurisdictions related to certain tax matters. TaTT x liabilities include potential assessments of penalty and interest amounts. We record tax liabilities based on our assessment of existing tax laws and regulations. A contingent loss related to a transactional tax claim is recorded if the loss is both probable and estimable. The recording of our tax liabilities requires significant judgments and estimates. Actual tax liabilities can vary from our estimates foff r a variety of reasons, including diffff erent interpretations of tax laws and regulations and diffff erent assessments of the amount of tax due. In addition, in determining our income tax provision, we must assess the likelihood that our deferred tax assets will be recovered through future taxable income. Significant judgment is required in estimating the amount of valuation allowance, if any, that should be recorded against those deferred income tax assets. If our actual results of operations diffff er from such estimates or our estimates of future taxable income change, the valuation allowance may need to be revised. However, an estimate of the sensitivity to earnings that would result from changes in the assumptions and estimates used in determining our tax liabilities is not practicable due to the number of assumptions and tax laws involved, the various potential interpretations of the tax laws, and the wide range of possible outcomes. The Company is occasionally challenged by taxing authorities over the amount and/or timing of recognition of revenues and deductions in its various income tax returns. Although the Company believes it has adequate accruals foff r matters not resolved with various taxing authorities, gains or losses could occur in future years from changes in estimates or resolution of outstanding 46 matters. See Note 12 “Income TaTT xes” in the accompanying audited consolidated financial statements foff r the three-year period ended December 31, 2022 foff r a further discussion of our tax liabilities. Asset Retitt rii err ment Oblill gi atitt ons We operate above ground and underground storage tanks at our facilities. We recognize the estimated future cost to remove these underground storage tanks (“USTs”TT ) over their estimated useful lives. We record a discounted liability foff r the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long-lived asset at the time a UST is installed. We depreciate the amount added to cost of the property and recognize accretion expense in connection with the discounted liability over the remaining life of the UST. We have not made any material changes in the methodology used to estimate future costs foff r removal of a UST during the past three years. We base our estimates of such future costs on our prior experience with removal and normal and customary costs we expect to incur associated with UST removal. We compare our cost estimates with our actual removal cost experience, if any, on an annual basis, and if the actual costs we experience exceed our original estimates, we will recognize an additional liability foff r estimated future costs to Because these estimates are subjb ective and are currently based on historical costs with remove the USTs.TT adjustments foff r estimated future changes in the associated costs, the dollar amount of these obligations could change as more infoff rmation is obtained. There were no material changes in our asset retirement obligation estimates during 2022, 2021, or 2020. See also Note 11 “Asset Retirement Obligation” in the accompanying audited consolidated financial statements foff r the three-year period ended December 31, 2022. Businii ess combinii atitt ons We account foff r business combinations using the purchase method of accounting. The purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed at date of acquisition, with any excess recorded as goodwill. These fair value determinations require management to make estimates which are based on all available infoff rmation, and may involve the use of assumptions with respect to the timing and amount of future revenues and expenses, the weighted average cost of capital, and royalty rates associated with the transaction and the assets or liabilities acquired. This judgment and determination affff ects the amount of consideration paid that is allocable to assets and liabilities acquired in the business purchase transaction. The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the infoff rmation necessary to identifyff and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred. FORWARD-LOOKING STATEMENTS that including, but not limited to our M&A activity, anticipated store openings, This Annual Report on Form 10-K contains certain statements or may suggest “foff rwrr ard-looking” involve risk and infoff rmation (as defined in the Private Securities Litigation Refoff rm Act of 1995) uncertainties, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, and share repurchases. Such statements are based upon the current beliefsff and expectations of the Company’s management and are subjb ect to significant risks and uncertainties. Actual future results may diffff er materially from historical results or current expectations depending upon factors including, but not limited to: the Company's ability to realize projo ected synergies from the acquisition of QuickChek and successfully expand our foff od and beverage offff erings; 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 effff ectively manage our inventory, manage disruptions in our supply chain and our ability to control costs; geopolitical events, such as Russia's invasion of Ukraine, that impact the supply and demand and prices of crude oil; the impact of severe weather events, such as hurricanes, floods and earthquakes; the impact of a global health pandemic, and the government reaction in response thereof; the 47 impact of any systems failures, cybersecurity and/or security breaches of the company or its vendor partners, including any security breach that results in theftff , transfer or unauthorized disclosure of customer, employee or company infoff rmation or our compliance with infoff rmation security and privacy laws and regulations in the event of such an incident; successful execution of our infoff rmation technology strategy; reduced demand foff r our fuel economy and greenhouse gas reduction products due to the implementation of more stringent requirements, or increasingly widespread adoption of electric vehicle technology; future tobacco or e-cigarette legislation and any other effff off rts that make purchasing tobacco products more costly or diffff icult could hurt our revenues and impact gross margins; effff icient and proper allocation of our capital resources, including the timing, declaration, amount and payment of any future dividends or levels of the company's share repurchases, or management of operating cash; the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, and general economic conditions; compliance with debt covenants; availability and cost of credit; and changes in interest rates. The Company undertakes no obligation to update or revise any foff rwrr ard-looking statements to reflect subsequent events, new infoff rmation or future circumstances. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Commodity Price Risk e are exposed to market risks related to the volatility in the price of crude oil and refined products (primarily gasoline and diesel) used in our operations. These fluctuations can affff ect our revenues and purchases, as well as the cost of operating, investing, and financing activities. We make limited use of derivative of derivative instruments foff r risk management is covered by operating policies and is closely monitored by our middle-offff ice function and the Company’s senior management. prices. The to manage instruments commodity related certain risks use to As described in Note 15 “Financial Instruments and Risk Management” in the accompanying audited consolidated financial statements, there were short-term commodity derivative contracts in place at December 31, 2022 to hedge the purchase price of refined products. A 10% increase or decrease in the respective benchmark price of the commodities underlying these derivative contracts would have been immaterial to the t the changes in the value foff r Company. Changes in the fair value of these derivative contracts generally offff seff an equivalent volume of these products. InII tererr st Rate Risii k We have exposure to interest rate risks related to volatility of our floating rate term loan with a balance as of December 31, 2022 of $394 million and to our cash flow revolver facility which currently is undrawn. Both of these loans are tied to LIBOR interest rates which can move in either direction and cause fluctuations in our interest expense recognized in any period and in our cash flows related to interest payments made. We make limited use of interest rate swaps to hedge a portion of our exposure to these rate movements. The acquisition of any interest rate derivatives is undertaken by senior management when appropriate with delegated authority from the appropriate Board level committee. As described in Note 15 “Financial Instruments and Risk Management” in the accompanying audited consolidated financial statements, we currently have an interest rate swap that hedges exposure to one-month LIBOR foff r $67.5 million of our outstanding term loan amount at December 31, 2022. A 10% increase or decrease in the underlying interest rate would have an immaterial impact on the financial statements of the Company at December 31, 2022. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Infoff rmation required by this item appears on Pages F-1 through F-40, which foff llow the exhibit index of the Annual Report on Form 10-K. 48 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None Item 9A. CONTROLS AND PROCEDURES Evaluatitt on of Discl ii osurerr Contrtt orr lsll and Prorr cedurerr s. Our management has evaluated, with the participation of our principal executive and financial offff icers, the effff ectiveness of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934) as of the end of the period covered by this report, and has concluded that our disclosure controls and procedures were effff ective and appropriately allowed foff r timely decisions regarding required disclosures as of December 31, 2022. Internrr al Contrtt orr l over FiFF nii anciaii l Reportrr itt nii g The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules that generally require every company that files reports with the SEC to evaluate its effff ectiveness of internal controls over financial reporting. Management has conducted an evaluation of the effff ectiveness of the Company's internal control over financial reporting based on the criteria set foff rth in Internrr al Contrtt orr l-ll Integrarr ted FrFF arr mewoww rkrr (2(( 013)3 issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of this evaluation, management concluded that the Company’s internal control over financial reporting was effff ective as of December 31, 2022. Management’s report is included on page F-1 of this Annual Report on Form 10-K. KPMG LLP,P an independent the effff ectiveness of the Company’s internal control over financial reporting as of December 31, 2022 and their report is included on page F-4 of this Annual Report on Form 10-K. registered public accounting firm, has made an independent assessment of There were no changes in the Company’s internal controls over financial reporting that occurred during the foff urth quarter of 2022 that have affff ected, or are reasonably likely to materially affff ect, the Company’s internal control over financial reporting. Item 9B. OTHER INFORMATION None Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None 49 Part III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Certain infoff rmation regarding executive offff icers of the Company is included under the caption “Executive Offff icers of the Registrant” in Part I of this Annual Report on Form 10-K. Other infoff rmation required by this item is incorporated by reference to the Registrant’s definitive Proxy Statement foff r the Annual Meeting of Stockholders on May 4, 2023 under the captions “Election of Directors” and “Committees”. Murphy USA has adopted a Code of Business Conduct and Ethics, which can be foff und under the Corporate Governance tab at http:/// ir.corporate.murphyusa.com. Stockholders may also obtain free of charge a copy of the Code of Business Conduct and Ethics by writing to the Company’s Secretary at P.O. Box 7300, El Dorado, AR 71730-5836. Any future amendments to or waivers of the Company’s Code of Business Conduct and Ethics will be posted on the Company’s Internet Web site. Item 11. EXECUTIVE COMPENSATION Infoff rmation required by this item is incorporated by reference to Murphy USA’AA s definitive Proxy foff r the Annual Meeting of Stockholders on May 4, 2023 under the captions “Compensation Statement Discussion and Analysis” and “Compensation of Directors” and in various compensation schedules. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Infoff rmation required by this item is incorporated by reference to Murphy USA’AA s definitive Proxy Statement foff r the Annual Meeting of Stockholders on May 4, 2023 under the captions “Security Ownership of Certain Beneficial Owners,” “Security Ownership of Management,” and “Equity Compensation Plan Infoff rmation.” Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Infoff rmation required by this item is incorporated by reference to Murphy USA’AA s definitive Proxy Statement foff r the Annual Meeting of Stockholders on May 4, 2023 under the caption “Review, Approval or Ratification of Transactions with Related Persons.” Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Infoff rmation required by this item is incorporated by reference to Murphy USA’AA s definitive Proxy Statement foff r the Annual Meeting of Stockholders on May 4, 2023 under the caption “Audit Committee Report.” 50 Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Part IV (a) 1. Financial Statements – The consolidated financial statements of Murphy USA Inc. and consolidated subsidiaries are located or begin on the pages of this Annual Report on Form 10-K as indicated below. INDEX TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Report of Management - Financial Statements Report of Management - Internal Controls Report of Independent Registered Public Accounting Firm (PCAOB ID 185) Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Income Statements Consolidated Statements of Comprehensive Income Consolidated Statements of Cash Flows Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Note 1 - Description of Business and Basis of Presentation Note 2 - Significant Accounting Policies Note 3 - Revenues Note 4 - Inventories Note 5 - Marketable Securities Note 6 - Business Acquisition Note 7 - Property, Plant and Equipment Note 8 - Goodwill and Intangibles Note 9 - Accounts Payable and Accrued Liabilities Note 10 - Long-TeTT rm Debt Note 11 - Asset Retirement Obligation (ARO) Note 12 - Income TaTT xes Note 13 - Incentive Plans Note 14 - Employee and Retiree Benefits Note 15 - Financial Instruments and Risk Management Note 16 - Earnings Per Share Note 17 - Other Financial Infoff rmation Note 18 - Assets and Liabilities Measured at Fair VaVV lue Note 19 - Commitments Note 20 - Contingencies Note 21 - Leases Note 22 - Recent Accounting and Reporting Rules Note 23 - Business Segments 51 Page No. 1 1 2 4 6 7 8 9 10 11 11 11 15 16 17 18 19 19 21 21 23 24 25 28 29 29 30 31 33 33 35 37 38 2. Financial Statement Schedules Schedule II – VaVV luation Accounts and Reserverr s 40 All other financial statement schedules are omitted because they are either not applicable or the required infoff rmation is included in the consolidated financial statements or notes thereto. 3. Exhibits – The foff llowing is an index of exhibits that are hereby filed as indicated by asterisk (*), that are considered furnished rather than filed, or that are incorporated by reference. Exhibits other than those listed have been omitted since they either are not required or are not applicable. Exhibit Number 2.1 2.2 2.3 3.1 3.2 4.1 4.2 4.3 4.4* 10.1 10.2 10.3 10.4 Descriptionp Separation and Distribution Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc. (incorporated by reference to Murphy USA’AA s Current Report on Form 8-K filed September 5, 2013) Agreement and Plan of Merger by and amount Quick Chek Corporation, Murphy USA NJ, Inc., Murphy USA Inc. and Fortis Advisors LLC, a Shareholder Representative, dated December 12, 2020 (incorporated by reference to Exhibit 2.1 to Murphy USA's Current Report on Form 8-K filed February 1, 2021) Amendment to Agreement and Plan of Merger, dated as of January 29, 2021, by and among Murphy USA Inc., Quick Chek Corporation, Murphy USA NJ, Inc. and Fortis Advisors LLC (incorporated by reference to Exhibit 2.2 to Murphy USA's Current Report on Form 8-K filed February 1, 2021) Murphy USA Inc. Amended and Restated Certificate of Incorporation (incorporated by reference to Murphy USA’AA s Quarterly Report on Form 10-Q filed November 8, 2013) Murphy USA Inc. Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 Murphy USA’AA s Current Report on Form 8-K filed March 18, 2022) Indenture (including foff rm of notes) dated as of April 25, 2017 among Murphy Oil USA, Inc., Murphy USA Inc., as a guarantor, the other guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Murphy USA's Current Report on Form 8-K filed April 25, 2017) Indenture dated as of September 13, 2019 among Murphy Oil USA, Inc., Murphy USA Inc., as a guarantor, the other guarantor party thereto and UMB Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Murphy USA's Current Report on Form 8-K filed September 13, 2019) Indenture dated as of January 29, 2021, by and among Murphy Oil USA, Inc., Murphy USA Inc., as a guarantor, the other guarantors party thereto and UMB Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Murphy USA's Current Report on Form 8-K filed February 1, 2021) Description of Registrant's Securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 TaTT x Matters Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc. (incorporated by reference to Murphy USA’AA s Current Report on Form 8-K filed September 5, 2013) Severance Protection Agreement dated as of August 20, 2013 between Murphy USA and R. Andrew Clyde, (incorporated by reference to Murphy USA’AA s Current Report on Form 8-K filed August 22, 2013)† Murphy USA Inc. 2013 Long-TeTT rm Incentive Plan, as amended and restated effff ective as of February 9, 2017)† (incorporated by reference to Murphy USA Inc's Annual Report on Form 10-K filed February 22, 2017) Murphy USA Inc. 2013 Stock Plan foff r Non-Employee Directors (incorporated by reference to Murphy USA’AA s Registration Statement on Form S-8 (File No. 333-191131) filed September 12, 2013)† 52 10.5 10.6 10.7 10.8 10.9 10.10 10.11 Murphy USA Inc. Supplemental Executive Retirement Plan, as amended and restated, on October 1, 2018 and effff ective January 1, 2019 (incorporated by reference to Exhibit 10.11 to Murphy USA's Annual Report on Form 10-K filed February 19, 2019) † Form of Murphy USA 2013 Long-TeTT rm Incentive Plan Option Grant Agreement (incorporated by reference to Exhibit 10.10 to Murphy USA Inc's Annual Report on Form 10-K filed February 19, 2021)† Form of Murphy USA 2013 Long-TeTT rm Incentive Plan RSU Agreement (incorporated by reference to Exhibit 10.11 to Murphy USA Inc's Annual Report on Form 10-K filed February 19, 2021)† Form of Murphy USA 2013 Long-TeTT rm Incentive Plan Perfrr off rmance Share Agreement (incorporated by reference to Exhibit 10.12 to Murphy USA Inc's Annual Report on Form 10-K filed on February 19 2021)† Form of Murphy USA 2013 Non-Employee Director AwAA ard (incorporated by reference to Exhibit 10.13 to Murphy USA Inc's Annual Report on Form 10-K file February 19, 2021)† Murphy USA Inc. 2019 Annual Incentive Plan, as amended and restated, on February 7, 2019 and effff ective as of January 1, 2019 (incorporated by reference to Exhibit 10.20 to Murphy USA's Annual Report on Form 10-K filed February 19, 2019)† Credit Agreement, dated as of January 29, 2021, by and among Murphy USA Inc., Murphy Oil USA, Inc., Royal Bank of Canada, as term administrative agent, JPMorgan Chase Bank, N.A., as revolving administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to Murphy USA's Current Report on Form 8-K as filed February 1, 2021) 10.12* Form of Murphy USA 2013 Long-TeTT rm Incentive Plan Option Agreement (February 2023 grants) 10.13* Form of Murphy USA 2013 Long-TeTT rm Incentive Plan RSU Agreement (February 2023 grants) 10.14* Form of Murphy USA 2013 Long-TeTT rm Incentive Plan Perfrr off rmance Stock Unit Agreement (February 2023 grants) 10.15* Form of Murphy USA 2013 Non-Employee Director Equity Grant (February 2023 grants) 10.16* Form of Murphy USA 2013 Non-Employee Director Cash Deferral Equity Grant (February 2023 grants) 21* 22* 23.1* 31.1* 31.2* 32.1* 32.2* List of Subsidiaries of Murphy USA List of Subsidiary Guarantors and Issuers of Guaranteed Debt Consent of KPMG LLP,P Independent Registered Public Accounting Firm Certification required by Rule 13a-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Principal Executive Offff icer Certification required by Rule 13a-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Principal Financial Offff icer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Principal Executive Offff icer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Principal Financial Offff icer 101. INS 101. SCH* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documents Inline XBRL TaTT xonomy Extension Schema Document 101. CAL* Inline XBRL TaTT xonomy Extension Calculation Linkbase Document 101. DEF* Inline XBRL TaTT xonomy Extension Definition Linkbase Document 101. LAB* Inline XBRL TaTT xonomy Extension Labels Linkbase Document 53 101. PRE* Inline XBRL TaTT xonomy Extension Presentation Linkbase 104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document * Filed herewith † Management contract or compensatory plan or arrangement Item 16. Form 10-K Summaryrr None 54 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MURPHY USA, Inc. By: /s/ R. Andrew Clyde Date: February 15, 2023 R. Andrew Clyde, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 15, 2023 by the foff llowing persons on behalf of the registrant and in the capacities indicated. /s/ R. Madison Murphy R. Madison Murphy, Chairman and Director /s/ David B. Miller David B. Miller, Director /s/ R. Andrew Clyde R. Andrew Clyde, President and Chief Executive Offff icer and Director (Principal Executive Offff icer) /s/ Jeanne L. Phillips Jeanne L. Phillips, Director /s/ Claiborne P. Deming Claiborne P. Deming, Director /s/ Jack T. TaTT ylor Jack T. TaTT ylor, Director /s/ David L. Goebel David L. Goebel, Director /s/ Rosemary Turner Rosemary Turner, Director /s/ Fred L. Holliger Fred L. Holliger, Director /s/ James W. Keyes James W. Keyes, Director /s/ Diane N. Landen Diane N. Landen, Director /s/ Mindy K. West Mindy K. West, Executive Vice President, Fuels, Treasurer, and Chief Financial Offff icer (Principal Financial Offff icer) /s/ Donald R. Smith, Jr. Donald R. Smith, Jr. Vice President and Controller (Principal Accounting Offff icer) 55 [THIS PAGE INTENTIONALLY LEFT BLANK] REPORT OF MANAGEMENT- CONSOLIDATED FINANCIAL STATEMENTS The management of Murphy USA Inc. is responsible foff r the preparation and integrity of the accompanying consolidated financial statements and other financial data. The statements were prepared in confoff rmity with U.S. generally accepted accounting principles appropriate in the circumstances and include some amounts based on infoff rmed estimates and judgments, with consideration given to materiality. An independent, registered public accounting firm, KPMG LLP,P has audited the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board and provides an objb ective, independent opinion about the Company’s consolidated financial statements. The Audit Committee of the Board of Directors appoints the independent registered public accounting firm; ratification of the appointment is solicited annually from the shareholders. KPMG LLP’s opinion covering the Company’s consolidated financial statements can be foff und on page F-2. The Board of Directors appoints an Audit Committee annually to implement and to support the Board’s oversight function of the Company’s financial reporting, accounting policies, internal controls and independent registered public accounting firm. This Committee is composed solely of directors who are not employees of the Company. The Committee meets routinely with representatives of management, the Company’s internal audit team and the independent registered public accounting firm to review and discuss the adequacy and effff ectiveness of the Company’s internal controls, the quality and clarity of its financial reporting, the scope and results of independent and internal audits, and to fulfill other responsibilities included in the Committee’s Charter. The independent registered public accounting firm and the Company’s internal audit team have unrestricted access to the Committee, without management presence, to discuss audit findings and other financial matters. REPORT OF MANAGEMENT – INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible foff r establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). The Company’s internal controls have been designed to provide reasonable assurance regarding the reliability of reporting and the preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles. All internal control systems have inherent limitations, and therefoff re, can provide only reasonable assurance with respect to the reliability of financial reporting and preparation of consolidated financial statements. financial Management has conducted an evaluation of the effff ectiveness of the Company’s internal control over financial issued by the Committee of reporting based on the criteria set foff rth in Internrr al Contrtt orr l – Integrarr ted FrFF arr mewoww rkrr Sponsoring Organizations of the Treadway Commission in 2013. Based on the results of this evaluation, management concluded that the Company’s internal control over financial reporting was effff ective as of December 31, 2022. KPMG LLP has perfrr off rmed an audit of the Company’s internal control over financial reporting and their opinion thereon can be foff und on page F-4. F-1 Report of Independent Registered Public Accounting Firm ToTT the Stockholders and Board of Directors Murphy USA Inc.: OpO inii ion on thtt e Consolill dated FiFF nii anciaii l Statt tementstt We have audited the accompanying consolidated balance sheets of Murphy USA Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated income statements, statements of comprehensive income, statements of cash flows, and statements of changes in equity foff r each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows foff r each of the years in the three-year period ended December 31, 2022, in confoff rmity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, (2(( 013)3 issued by the Committee of based on criteria established in Internrr al Contrtt orr l – Integrarr ted FrFF arr mewoww rkrr Sponsoring Organizations of the Treadway Commission, and our report dated February 15, 2023 expressed an unqualified opinion on the effff ectiveness of the Company’s internal control over financial reporting. Basisii foff r OpO inii ion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perfrr off rm the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included perfrr off rming procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and perfrr off rming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis foff r our opinion. Crirr titt cal Audidd t Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjb ective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Assessment of imii pairii mrr ent trtt irr gi gerirr nii g eventstt rerr lated to prorr pertrr y,t plant and equipii ment As discussed in Note 2 to the consolidated financial statements, the Company assesses its property, plant and equipment foff r potential impairment whenever events or changes in circumstances indicate that the carrying value of the asset or asset group may not be recoverable. The property, plant and equipment balance, at cost less accumulated depreciation, as of December 31, 2022 was $2,459.3 million. Some retail sites may generate negative cash flow or experience events that indicate carrying values might not be recovered, indicating a higher risk that these retail sites might be impaired. This requires the F-2 Company to consider profitability and retail site specific factors when evaluating its retail sites foff r impairment in order to determine whether or not an impairment triggering event has occurred. We identified the assessment of impairment triggering events related to property, plant and equipment as a critical audit matter. The determination of the asset group level, the evaluation of retail site profitability, and the assessment of retail site specific factors involved challenging auditor judgment, as changes to those factors could have a significant impact on the Company’s assessment of an impairment triggering event. The foff llowing are the primary procedures we perfrr off rmed to address this critical audit matter. We evaluated the design and tested the operating effff ectiveness of certain internal controls related to the Company’s triggering events assessment process over property, plant and equipment, including controls related to the identification of impairment triggers. We evaluated the asset group level at which the Company’s analysis was perfrr off rmed. We assessed the Company’s methodology of identifyiff ng retail site specific factors to be considered in the triggering events analysis, including length of the time period used by the Company to evaluate retail site profitability to identifyff historical cash flows by asset group to the general ledger infoff rmation to assess the reliability of the infoff rmation used. triggering events. We also compared the /s/ KPMG LLP We have serverr d as the Company’s auditor since 2013. Dallas, TeTT xas February 15, 2023 F-3 Report of Independent Registered Public Accounting Firm ToTT the Stockholders and Board of Directors Murphy USA Inc.: OpO inii ion on Internrr al Contrtt orr l Over FiFF nii anciai l Reportrr itt nii g We have audited Murphy USA Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internrr al Contrtt orr l – Integrarr ted FrFF arr mewoww rkrr the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effff ective internal control over financial reporting as of December 31, 2022, based on criteria established in Internrr al Contrtt orr l – Integrarr ted FrFF arr mewoww rkrr Sponsoring Organizations of the Treadway Commission. (2(( 013)3 issued by the Committee of (2(( 013)3 issued by We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated income statements, statements of comprehensive income, statements of cash flows, and statements of changes in equity foff r each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement schedule II (collectively, the consolidated financial statements), and our report dated February 15, 2023 expressed an unqualified opinion on those consolidated financial statements. Basisii foff r OpO inii ion The Company’s management is responsible foff r maintaining effff ective internal control over financial reporting and foff r its assessment of the effff ectiveness of internal control over financial reporting, included in the accompanying Report of Management – Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perfrr off rm the audit to obtain reasonable assurance about whether effff ective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effff ectiveness of internal control based on the assessed risk. Our audit also included perfrr off rming such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis foff r our opinion. Defiff nii ititt on and Limii itat titt ons of Internrr al Contrtt orr l Over FiFF nii anciaii l Reportrr itt nii g A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements foff r external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effff ect on the financial statements. F-4 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projo ections of any evaluation of effff ectiveness to future periods are subjb ect to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Dallas, TeTT xas February 15, 2023 F-5 Murphy USA Inc. Consolidated Balance Sheets iMM lii lll ill ons of dollll ars,rr except sharerr amounts)tt (M(( Assets Current assets Cash and cash equivalents Marketable securities, current Accounts receivable—trade, less allowance foff r doubtful accounts of $0.3 in 2022 and $0.1 in 2021, respectively Inventories, at lower of cost or market Prepaid expenses and other current assets ToTT tal current assets Marketable securities, non-current Property, plant and equipment, at cost less accumulated depreciation and amortization of $1,553.1 in 2022 and $1,373.4 in 2021, respectively Operating lease right of use assets, net Intangible assets, net of amortization Goodwill Other assets ToTT tal assets Liabilities and Stockholders' Equity Current liabilities Current maturities of long-term debt Trade accounts payable and accrued liabilities ToTT tal current liabilities Long-term debt, including capitalized lease obligations Deferred income taxes Asset retirement obligations Non-current operating lease liabilities Deferred credits and other liabilities ToTT tal liabilities $ $ $ December 31, 2022 2021 60.5 $ 17.9 281.7 319.1 47.6 726.8 4.4 256.4 — 195.7 292.3 23.4 767.8 — 2,459.3 2,378.4 449.6 140.4 328.0 14.7 419.2 140.7 328.0 14.1 4,123.2 $ 4,048.2 15.0 $ 839.2 854.2 1,791.9 327.4 43.3 444.2 21.5 15.0 660.3 675.3 1,800.1 295.9 39.2 408.9 21.6 3,482.5 3,241.0 Stockholders' Equity Preferred Stock, par $0.01, (authorized 20,000,000 shares, none outstanding) Common Stock, par $0.01, (authorized 200,000,000 shares, 46,767,164 shares issued at December 31, 2022 and 2021, respectively) Treasury stock (25,017,324 and 21,831,904 shares held at December 31, 2022 and 2021, respectively) Additional paid in capital (APIC) Retained earnings Accumulated other comprehensive income (AOCI) ToTT tal stockholders' equity — 0.5 (2,633.3) 518.9 2,755.1 (0.5) 640.7 ToTT tal liabilities and stockholders' equity $ 4,123.2 $ See accompanying notes to consolidated financial statements. — 0.5 (1,839.3) 534.8 2,112.4 (1.2) 807.2 4,048.2 F-6 iMM lii lll ill ons of dollll arsrr except per sharerr amounts)tt (M(( 2022 2021 2020 Murphy USA Inc. Consolidated Income Statements YeYY ars Ended December 31, Operating Revenues Petroleum product sales 1 Merchandise sales Other operating revenues ToTT tal operating revenues Operating Expenses Petroleum product cost of goods sold 1 Merchandise cost of goods sold Store and other operating expenses Depreciation and amortization Selling, general and administrative Accretion of asset retirement obligations Acquisition related costs $ 19,230.1 $ 13,410.8 $ 3,903.2 312.8 23,446.1 17,910.1 3,136.1 976.5 220.4 232.5 2.7 1.5 3,677.7 272.0 17,360.5 12,535.5 2,976.1 827.3 212.6 193.6 2.5 10.4 8,208.6 2,955.1 100.6 11,264.3 7,325.7 2,495.7 549.1 161.0 171.1 2.3 1.7 ToTT tal operating expenses 22,479.8 16,758.0 10,706.6 Gain (loss) on sale of assets Income (loss) from operations Other income (expense) Investment income Interest expense Other nonoperating income (expense) ToTT tal other income (expense) Income befoff re income taxes Income tax expense (benefit) Net Income Basic and Diluted Earnings Per Common Share: Basic Diluted Weighted-average shares outstanding (in thousands): Basic Diluted Supplemental infoff rmation: 1 Includes excise taxes of: 2.1 968.4 3.0 (85.3) (2.3) (84.6) 883.8 210.9 1.5 604.0 0.1 (82.4) 0.2 (82.1) 521.9 125.0 $ $ $ 672.9 $ 396.9 $ 28.63 $ 28.10 $ 15.14 $ 14.92 $ 1.3 559.0 1.0 (51.2) 0.3 (49.9) 509.1 123.0 386.1 13.25 13.08 23,506 23,950 26,210 26,604 29,132 29,526 $ 2,180.2 $ 2,041.7 $ 1,760.0 See accompanying notes to consolidated financial statements. F-7 Murphy USA Inc. Consolidated Statements of Comprehensive Income (Millions of dollars) Net income YeYY ars Ended December 31, 2022 2021 2020 $ 672.9 $ 396.9 $ 386.1 Other comprehensive income (loss), net of tax Interest rate swap: Realized gain (loss) Unrealized gain (loss) Reclassified to interest expense (interest rate swap): Realized (gain) loss reclassified to interest expense Amortization of unrealized gain to interest expense Deferred income tax expense (benefit) Other comprehensive income (loss) Comprehensive income $ See accompanying notes to consolidated financial statements. — — — 0.9 0.9 0.2 0.7 673.6 $ (0.1) 0.1 0.1 0.9 1.0 0.3 0.7 397.6 $ (0.9) (3.4) 0.9 — (3.4) (0.8) (2.6) 383.5 F-8 Murphy USA Inc. Consolidated Statements of Cash Flows YeYY ars Ended December 31, 2022 2021 2020 $ 672.9 $ 396.9 $ 386.1 220.4 212.6 161.0 iMM lii lll ill ons of dollll ars)rr (M(( Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Deferred and noncurrent income tax charges (benefits) Accretion of asset retirement obligations Amortization of discount on marketable securities Pretax (gains) losses from sale of assets Net (increases) decrease in noncash operating working capital Other operating activities - net Net cash provided (required) by operating activities Investing Activities Property additions Payments foff r acquisition, net of cash acquired Proceeds from sale of assets Investment in marketable securities Other investing activities - net Net cash provided (required) by investing activities Financing Activities Purchase of treasury stock Dividends paid Repayments of debt Borrowings of debt Debt issuance costs Amounts related to share-based compensation Net cash provided (required) by financing activities Net change in cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash at January 1 Cash, cash equivalents, and restricted cash at December 31 31.5 2.7 (0.1) (2.1) 44.8 24.6 19.0 2.5 — (1.5) 82.8 25.1 994.7 737.4 (305.3) — 8.8 (22.2) (0.6) (319.3) (806.4) (29.9) (20.2) 5.0 — (19.8) (871.3) (195.9) 256.4 (274.7) (641.1) 3.4 — (1.8) (355.0) (27.3) (224.3) 892.8 (9.9) (6.7) 269.6 92.8 163.6 2.5 2.3 — (1.3) (13.1) 26.2 563.7 (230.7) — 8.1 — (1.7) (399.6) (6.9) (38.9) — — (10.7) (456.1) (116.7) 280.3 163.6 (914.2) (224.3) $ 60.5 $ 256.4 $ See accompanying notes to consolidated financial statements. F-9 (M(( iMM lii lll ill ons of dollll ars,rr except sharerr amounts)tt Balance as of December 31, 2019 Net income Cumulative effff ect of a change in accounting principle Loss on interest rate hedge, net of tax Cash dividends declared, ($0.25 per share) Dividend equivalent units accrued Purchase of treasury stock Issuance of treasury stock Amounts related to share-based compensation Share-based compensation expense Balance as of December 31, 2020 Net income Gain on interest rate hedge, net of tax Cash dividends declared, ($1.04 per share) Dividend equivalent units accrued Purchase of treasury stock Issuance of treasury stock Amounts related to share-based compensation Share-based compensation expense Balance as of December 31, 2021 Net income Gain on interest rate hedge, net of tax Cash dividends declared, ($1.27 per share) Dividend equivalent units accrued Purchase of treasury stock Issuance of treasury stock Amounts related to share-based compensation Share-based compensation expense Balance as of December 31, 2022 Murphy USA Inc. Consolidated Statements of Changes in Equity Common Stock Shares Par Treasury Stock APIC Retained Earnings AOCI ToTT tal 46,767,164 $ 0.5 $ (1,099.8) $ 538.7 $ 1,362.9 $ 0.7 $ — — — — — — — — — 46,767,164 — — — — — — — — 46,767,164 — — — — — — — — — — — — — — — — — 0.5 — — — — — — — — 0.5 — — — — — — — — — — — — — (399.6) — — — — 0.1 — 8.5 (9.0) — — (10.7) 14.2 386.1 1.1 — (6.9) (0.1) — — — — — — (2.6) — — — — — — (1,490.9) 533.3 1,743.1 (1.9) — — — — (355.0) 6.6 — — — — — 0.3 — (6.5) (6.7) 14.4 396.9 — (27.3) (0.3) — — — — — 0.7 — — — — — — (1,839.3) 534.8 2,112.4 (1.2) — — — — (806.4) — — — 0.3 — 12.4 (12.4) — — (19.8) 16.0 672.9 — (29.9) (0.3) — — — — — 0.7 — — — — — — 803.0 386.1 1.1 (2.6) (6.9) — (399.6) (0.5) (10.7) 14.2 784.1 396.9 0.7 (27.3) — (355.0) 0.1 (6.7) 14.4 807.2 672.9 0.7 (29.9) — (806.4) — (19.8) 16.0 46,767,164 $ 0.5 ) $ (2,633.3) $ 518.9 ) ( ( $ 2,755.1 $ ) (0.5) $ ( ) ( 640.7 See accompanying notes to consolidated financial statements. F-10 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 1 — Description of Business and Basis of Presentation The business of Murphy USA Inc. and its subsidiaries (“Murphy USA”, "we", or the “Company”) primarily consists of the U.S. retail marketing business that was separated from its foff rmer parent company, Murphy Oil Corporation (“Murphy Oil”), plus other assets, liabilities and operating expenses of Murphy Oil that were associated with supporting the activities of the U.S. retail marketing operations. Murphy USA was incorporated in March 2013. The separation was approved by the Murphy Oil board of directors on August 7, 2013, and was completed on August 30, 2013 through the distribution of 100% of the outstanding capital stock of Murphy USA to holders of Murphy Oil common stock on the record date of August 21, 2013. Following the separation, Murphy USA is an independent, publicly traded company, and Murphy Oil retains no ownership interest in Murphy USA. On January 29, 2021, MUSA acquired 100% of Quick Chek Corporation ("QuickChek"), a privately held convenience store chain with a strong regional brand that consisted of 156 stores at the time of infoff rmation acquisition, concerning the acquisition, see Note 6, "Business Acquisition". in an all-cash transaction. For additional located in New Jersey and New YoYY rk, Murphy USA markets refined products through a network of retail gasoline stores and unbranded wholesale customers and in addition, we operate non-fuel convenience stores in select markets. The Company owns and operates a chain of retail stores under the brand name of Murphy USA®AA which are almost all located in close proximity to Walmart stores, markets gasoline and other products at standalone stores under the Murphy Express brand, and also has a mix of convenience stores and convenience stores with retail gasoline that operate under the name of QuickChek®. At December 31, 2022, Murphy USA had a total of 1,712 Company stores in 27 states, of which 1,151 were Murphy USA, 404 were Murphy Express and 157 were QuickChek. The Company also has certain product supply and wholesale assets, including product distribution terminals and pipeline positions. Note 2 – Significant Accounting Policies PRINCIPLES OF CONSOLIDATAA ION – These consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAAA P”) and include the accounts of Murphy USA Inc. and its subsidiaries foff r all periods presented. All significant intercompany accounts and transactions within the consolidated financial statements have been eliminated. REVENUE RECOGNITION – Revenue is recognized when obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our petroleum products, convenience merchandise, Renewable Identification Numbers ("RINs") and other assets to our third-party customers. Revenue is measured as the amounts of consideration we expect to receive in exchange foff r transferring goods or providing servirr ces. Excise and sales tax that we collect where we have determined we are the principal in the transaction have been recorded as revenue on a jurisdiction-by-j- urisdiction basis. The Company enters into buy/sell and similar arrangements when petroleum products are held at one location but are needed at a diffff erent location. The Company oftff en pays or receives funds related to the buy/sell arrangement based on location or quality diffff erences. The Company accounts foff r such transactions as non- monetary exchanges under existing accounting guidance and typically reports these on a net basis in its Consolidated Income Statements. See Note 3 "Revenues" foff r additional infoff rmation. SHIPPING AND HANDLING COSTS – Costs incurred foff r the shipping and handling of motor fuel are included in Petroleum product cost of goods sold in the Consolidated Income Statements. Costs incurred foff r the shipping and handling of convenience store merchandise are included in Merchandise cost of goods sold in the Consolidated Income Statements. TATT XES COLLECTED FROM CUSTOMERS AND REMITTED TO GOVERNMENT AUTHORITIES – Excise and other taxes collected on sales of refined products and remitted to governmental agencies are included in operating revenues and operating expenses in the Consolidated Income Statements. Excise taxes on F-11 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS petroleum products collected and remitted were $2.2 billion in 2022, $2.0 billion in 2021, and $1.8 billion in 2020. CASH EQUIVAVV LENTS – Short-term investments, which include government securities, money market funds and other instruments with government securities as collateral, that have a maturity of three months or less from the date of purchase are classified as cash equivalents. MARKETATT BLE SECURITIES – The Company considers highly liquid treasury notes, corporate debt securities, and other funds with original maturities of more than three months to be marketable securities. Securities with less than one year to maturity are included in short-term marketable securities, and all other securities are classified as long-term marketable securities. Marketable securities are classified as held-to-maturity when the Company has both the positive intent and ability to hold the securities to maturity and are carried at amortized cost. Marketable securities are classified as available-foff r-sale when the Company does not have the intent to hold securities to maturity to allow flexibility in response to liquidity needs and are carried at fair value. The Company records securities at fair value on its consolidated balance sheets, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss). See Note 5 "Marketable Securities" and Note 18 "Assets and Liabilities Measured at Fair VaVV lue" foff r additional infoff rmation on our policy and the fair value measurement of the Company's marketable securities. ACCOUNTS RECEIVAVV BLE – The Company’s accounts receivable are recorded at the invoiced amount and do not bear interest. The accounts receivable primarily consists of amounts owed to the Company from credit card companies and by customers foff r wholesale sales of refined petroleum products. The allowance foff r doubtful accounts is the Company’s best estimate of the amount of probable credit losses on these receivables. The Company reviews this allowance foff r adequacy at least quarterly and bases its assessment on a combination of current infoff rmation about its customers and historical write-offff experience. Any trade accounts receivable The Company has not balances written offff are charged against experienced any significant credit-related losses in the past three years. the allowance foff r doubtful accounts. INVENTORIES – Inventories of petroleum products located at Murphy branded stores are valued at the lower of cost, generally applied on a last-in, first-out (“LIFO”) basis, or market, while petroleum products located at QuickChek branded stores are valued at weighted average cost. Any increments to LIFO inventory volumes are valued based on the first purchase price foff r these volumes during the year. Merchandise inventories held foff r resale at Murphy branded stores are carried at average cost. Certain merchandise inventories at QuickChek stores are on a LIFO basis while all other items are valued on average cost. Materials and supplies are valued at the lower of average cost or net realizable value. VENDOR ALLOWAWW NCES AND REBATAA ES – Murphy USA receives payments foff r vendor allowances, volume rebates and other related payments from various suppliers of its convenience store merchandise. VeVV ndor allowances foff r price markdowns are credited to merchandise cost of goods sold during the period the related markdown is recognized. VoVV lume rebates of merchandise are recorded as reductions to merchandise cost of goods sold when the merchandise qualifyiff ng foff r the rebate is sold. Slotting and stocking allowances received from a vendor are recorded as a reduction to cost of sales over the period covered by the agreement. BUSINESS COMBINATAA IONS – The Company accounts foff r business combinations under the purchase method of accounting. The purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the infoff rmation necessary to identifyff and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred. PROPERTY,YY PLANT AND EQUIPMENT – Additions to property, plant and equipment, including renewals and betterments, are capitalized and recorded at cost. Certain marketing facilities are primarily depreciated using the composite straight-line method with depreciable lives ranging from 16 to 25 years. Gasoline stores, F-12 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS improvements to gasoline stores and other assets are depreciated over 3 to 50 years by individual unit on the straight-line method. The Company capitalizes interest costs as a component of construction in progress on individually significant projo ects based on the weighted average interest rates incurred on its long-term borrowings. ToTT tal interest cost capitalized was $1.1 million in 2022, $2.1 million in 2021 and $1.4 million in 2020. The Company has undertaken like-kind exchange ("LKE") transactions under the Federal tax code in an effff off rt to acquire and sell real property in a tax effff icient manner. The Company generally enters into foff rwrr ard transactions, in which property is sold and the proceeds are reinvested by acquiring similar property; and reverse transactions, in which property is acquired and similar property is subsequently sold. A qualified LKE intermediary is used to facilitate these LKE transactions. Proceeds from foff rwrr ard LKE transactions are held by the intermediary and are classified as restricted cash on the Company's balance sheet because the funds must be reinvested in similar properties. If the acquisition of suitable LKE properties is not completed within 180 days of the sale of the Company-owned property, the proceeds are distributed to the Company by the intermediary and are reclassified as available cash and applicable income taxes are determined. An exchange accommodation titleholder, a type of variable interest entity, is used to facilitate reverse like-kind exchanges. The acquired assets are held by the exchange accommodation titleholder until the exchange transactions are If the Company determines that it is the primary beneficiary of the exchange accommodation complete. titleholder, the replacements assets held by the exchange accommodation titleholder are consolidated and recorded in Property, Plant and Equipment on the Consolidated Balance Sheets. The unspent proceeds that are held in trust with the intermediary are recorded as noncurrent assets in the Consolidated Balance Sheet as the cash was restricted foff r the acquisition of similar properties. At December 31, 2022 and 2021, the Company had no open LKE transactions with an intermediary. GOODWILL AND INTATT NGIBLE ASSETS – Goodwill the consideration transferred over the net assets acquired and liabilities assumed and is tested annually foff r impairment, or more frequently if there are indicators of impairment. Acquired finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, and are reviewed foff r impairment when events or circumstances indicate that the asset group to which the intangible assets belong might be impaired. these assets when events or changes in The Company revises the estimated remaining useful circumstances warrant a revision. If the Company revises the useful life, the unamortized balance is amortized over the useful life on a prospective basis. represents the excess of the aggregate of life of IMPAPP IRMENT OF ASSETS – Long-lived assets, which include property and equipment and finite-lived assets, are tested foff r recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Indefinite-lived intangible assets are tested annually. A long-lived asset is not recoverable if its carrying amount exceeds the sum of the undiscounted cash flows expected to result from If a long-lived asset is not recoverable, an impairment loss is recognized foff r its use and eventual disposition. the long-lived asset exceeds its fair value, with fair value the amount by which the carrying amount of determined based on discounted estimated net cash flows or other appropriate methods. ASSET RETIREMENT OBLIGATAA IONS – The Company records a liability foff r asset retirement obligations (“ARO”) equal to the fair value of the estimated cost to retire an asset. The ARO liability is initially recorded in the period in which the obligation meets the definition of a liability, which is generally when the asset is placed in servirr ce. The ARO liability is estimated using existing regulatory requirements and anticipated future inflation rates. When the liability is initially recorded, the Company increases the carrying amount of the related long- lived asset by an amount equal to the original liability. The liability is increased over time to reflect the change in its present value, and the capitalized cost is depreciated over the useful life of the related long-lived asset. The Company reevaluates the adequacy of its recorded ARO liability at least annually. Actual costs of asset retirements such as dismantling servirr ce stores and site restoration are charged against the related liability. Any diffff erence between costs incurred upon settlement of an asset retirement obligation and the recorded liability is recognized as a gain or loss in the Company’s Consolidated Income Statements. ENVIRONMENTATT L LIABILITIES – A liability foff r environmental matters is established when it is probable that an environmental obligation exists and the cost can be reasonably estimated. If there is a range of reasonably estimated costs, the most likely amount will be recorded, or if no amount is most likely, the minimum of the F-13 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS range is used. Related expenditures are charged against the liability. Environmental remediation liabilities have not been discounted foff r the time value of future expected payments. Environmental expenditures that have future economic benefit are capitalized. INCOME TATT XES – The Company accounts foff r income taxes using the asset and liability method. Under this method, income taxes are provided foff r amounts currently payable and foff r amounts deferred as tax assets and liabilities based on diffff erences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred income taxes are measured using the enacted tax rates that are assumed will be in effff ect when the diffff erences reverse. The Company routinely assesses the realizability of deferred tax assets based on available positive and negative evidence including assumptions of future taxable income, tax planning strategies and other pertinent factors. A deferred tax asset valuation allowance is recorded when evidence indicates that it is more likely than not that all or a portion of these deferred tax assets will not be realized in a future period. The accounting principles foff r income tax uncertainties permit recognition of income tax benefits only when they are more likely than not to be realized. The Company has elected to classifyff any interest expense and penalties related to the underpayment of income taxes in Income tax expense in the Consolidated Income Statements. DERIVAVV TAA IVE INSTRUMENTS AND HEDGING ACTIVITIES – The fair value of a derivative instrument is recognized as an asset or liability in the Company’s Consolidated Balance Sheets. Upon entering into a derivative contract, the Company may designate the derivative as either a fair value hedge or a cash flow hedge, or decide that the contract is not a hedge, and therefoff re, recognize changes in the fair value of the contract in earnings. The Company documents the relationship between the derivative instrument designated as a hedge and the hedged items as well as its objb ective foff r risk management and strategy foff r use of the hedging instrument to manage the risk. Derivative instruments designated as fair value or cash flow hedges are linked to specific assets and liabilities or to specific firm commitments or foff recasted transactions. The Company assesses at inception and on an ongoing basis whether a derivative instrument accounted foff r as a hedge is tting changes in the fair value or cash flows of the hedged item. A derivative that is not a highly effff ective in offff seff highly effff ective hedge does not qualifyff foff r hedge accounting. The change in the fair value of a qualifyiff ng fair value hedge is recorded in earnings along with the gain or loss on the hedged item. The effff ective portion of the change in the fair value of a qualifyiff ng cash flow hedge is recorded in Accumulated other comprehensive income (AOCI) in the consolidated Balance Sheets until the hedged item is recognized currently in earnings. If a derivative instrument no longer qualifies as a cash flow hedge and the underlying foff recasted transaction is no longer probable of occurring, hedge accounting is discontinued and the gain or loss recorded in Accumulated If a hedge is de-designated, hedge other comprehensive income is recognized immediately in earnings. accounting will no longer apply and from that time the gain and losses will be recognized in earnings and any accumulated amounts in other comprehensive income will be amortized to earnings over the remaining life of the underlying instrument. See Note 15 "Financial Instruments and Risk Management" and Note 18 "Assets and Liabilities Measured at Fair VaVV lue" foff r further infoff rmation about the Company’s derivatives. STOCK-BASED COMPENSATAA ION – The fair value of awarded stock options, restricted stock, restricted stock units and perfrr off rmance stock units is determined based on a combination of management assumptions foff r awards issued. The Company uses the Black-Scholes option pricing model foff r computing the fair value of stock options. The primary assumptions made by management included the expected life of the stock option award and the expected volatility of the Company’s common stock prices. The Company uses both historical data and current infoff rmation to support its assumptions. Stock option expense is recognized on a straight-line basis over the requisite servirr ce period of three years. The Company uses a Monte Carlo valuation model to determine the fair value of perfrr off rmance-based stock units that are based on perfrr off rmance compared against a peer group and the related expense is recognized over the three-year requisite servirr ce period. Management estimates the number of all awards that will not vest and adjusts its compensation expense accordingly. Diffff erences between estimated and actual vested amounts are accounted foff r as an adjustment to expense when known. See Note 13 "Incentive Plans" foff r a discussion of the basis of allocation of such costs. USE OF ESTIMATAA ES – In preparing the financial statements of the Company in confoff rmity with U.S. GAAAA P,P management has made a number of estimates and assumptions related to the reporting of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. Actual results may diffff er from F-14 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS the estimates. On an ongoing basis, we review our estimates based on currently available infoff rmation. Changes in facts and circumstances may result in revised estimates. Note 3 – Revenues Revenue Recognititt on The foff llowing table disaggregates our revenue by maja or source foff r the years ended December 31, 2022, 2021, and 2020. (M(( iMM lii lll ill ons of dollll ars)rr Marketing Segment Petroleum product sales (at retail) 1 Petroleum product sales (at wholesale) 1 ToTT tal petroleum product sales Merchandise sales Other operating revenues: RINs Other revenues 2 ToTT tal marketing segment revenues Corporate and Other Assets ToTT tal revenues YeYY ars Ended December 31, 2022 2021 2020 $ 17,198.9 $ 12,022.7 $ 2,031.2 19,230.1 3,903.2 305.8 6.3 23,445.4 0.7 1,388.1 13,410.8 3,677.7 265.3 6.1 17,359.9 0.6 7,444.6 764.0 8,208.6 2,955.1 95.5 4.8 11,264.0 0.3 $ 23,446.1 $ 17,360.5 $ 11,264.3 1 Includes excise and sales taxes that remain eligible foff r inclusion under ToTT pic 606 2 Primarily includes collection allowance on excise and sales taxes and other miscellaneous items Marketing segment Petrtt orr leum prorr duct sales (a(( t rerr tat ilii )l . For our retail store locations, the revenue related to petroleum product sales is recognized as the fuel is pumped to our customers. The transaction price at the pump typically includes some portion of sales or excise taxes as levied in the respective jurisdictions. Those taxes that are collected foff r remittance to governmental entities on a pass through basis are not recognized as revenue and they are recorded to a liability account until they are paid. Our customers typically use a mixture of cash, checks, credit cards and debit cards to pay foff r our products as they are received. We have accounts receivable from the various credit/debit card providers at any point in time related to product sales made on credit cards and debit cards. These receivables are typically collected in two to seven days, depending on the terms with the particular credit/debit card providers. Payment fees retained by the credit/debit card providers are recorded as store and other operating expenses. Petrtt orr leum prorr duct sales (a(( t whww olesale)e . Our sales of petroleum products at wholesale are generally recorded as revenue when the deliveries have occurred and legal ownership of the product has transferred to the customer. Title transfer foff r bulk refined product sales typically occurs at pipeline custody points and upon trucks loading at product terminals. For bulk pipeline sales, we record receivables from customers that are generally collected within a week from custody transfer date. For our rack product sales, the maja ority of our customers' accounts are draftff ed by us within 10 days from product transfer. sales. For our retail store locations, the revenue related to merchandise sales is recognized as Merchrr andidd seii the customer completes their purchase at our locations. The transaction price typically includes some portion of sales tax as levied in the respective jurisdictions. Those taxes that are collected foff r remittance to governmental entities on a pass through basis are not recognized as revenue and they are recorded to a liability account until they are paid. As noted above, a mixture of payment types are used foff r these revenues and the same terms foff r credit/debit card receivables are realized. F-15 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS The most significant judgment with respect to merchandise sales revenue is determining whether we are the principal or agent foff r some categories of merchandise such as lottery tickets, lotto tickets, newspapers and other small categories of merchandise. For scratch-offff lottery tickets, we have determined we are the principal in the maja ority of the jurisdictions and therefoff re we record those sales on a gross basis. We have some categories of merchandise (such as lotto tickets) where we are the agent and the revenues recorded foff r those transactions are our net commission only. The Company offff ers loyalty programs through its Murphy USA, Murphy Express, and QuickChek branded retail locations. The customers earn rewards based on their spending or other promotional activities. These programs create a perfrr off rmance obligation which requires us to defer a portion of sales revenue to the loyalty program participants until they redeem their rewards. The rewards may be redeemed foff r free or discounted merchandise or cash discounts at all stores and on fuel purchases at Murphy USA and Murphy Express stores. Earned rewards expire aftff er an account is inactive foff r a period of 90 days at Murphy USA and Murphy Express, while certain QuickChek rewards require use within the month. We recognize loyalty revenue when a customer redeems an earned reward. Deferred revenue associated with both rewards programs are included in Trade accounts payable and accrued liabilities in our Consolidated Balance Sheet. The deferred revenue balances at December 31, 2022 and 2021 were immaterial. RINs sales. For the sale of RINs, we recognize revenue when the RIN is transferred to the counter-party and the sale is completed. Receivables from our counter-parties related to the RIN sales are typically collected within five days of the sale. Othtt er rerr venues. tax and other miscellaneous items and are recognized as revenue when the transaction is completed. Items reported as other operating revenues include collection allowances foff r excise and sales Accounts receivable Trade accounts receivable on the balance sheet represents both receivables related to contracts with customers and other trade receivables. At December 31, 2022 and December 31, 2021, we had $164.1 million and $111.8 million of receivables, respectively, related to contracts with customers recorded. All of the trade accounts receivable related to contracts with customers outstanding at the end of each period were collected during the succeeding quarter. These receivables were generally related to credit and debit card transactions along with short term bulk and wholesale sales from our customers, which have a very short settlement window. Note 4 — Inventories Inventories consisted of the foff llowing: (M(( iMM lii lll ill ons of dollll ars)rr Petroleum products - FIFO basis Store merchandise foff r resale - FIFO basis Less LIFO reserverr ToTT tal petroleum products and store merchandise inventory Materials and supplies ToTT tal inventories December 31, 2022 2021 $ $ 367.0 $ 192.1 (250.7) 308.4 10.7 319.1 $ 339.8 173.1 (228.0) 284.9 7.4 292.3 Murphy USA and Murphy Express branded petroleum products are valued using the last-in, first-out (LIFO) method and certain QuickChek store merchandise foff r resale is valued using the LIFO method. At December 31, 2022 and 2021, the replacement cost (market value) of LIFO inventories exceeded the LIFO carrying value foff r petroleum products by $249.1 million and $227.5 million, respectively, and store merchandise foff r resale by $1.6 million and $0.5 million, respectively. F-16 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 5 — Marketable Securities The Company invests a portion of its excess operational cash in marketable securities. The goal of the Company's investment policy, in order of priority, are as foff llows: (1) preservarr tion of principal, (2) maintaining a high degree of liquidity to meet cash flow requirements, and (3) deliver competitive returns subjb ect to prevailing market conditions and the Company's stated objb ectives related to safety and liquidity. Nothing in the policy is intended to indicate that management must invest excess operational cash; it merely allows it subject to specific limitations. Securities are generally required to have a final maturity of 24 months or less with a weighted average maturity foff r the portfoff lio of no longer than 12 months and must have an active secondary market. Investments may include U.S. Treasury bills, notes and bond, U.S. Agency securities, repurchase agreements, certificates of deposit, institutional, government money market funds that maintain a stable $1.00 net asset value, domestic and foff reign commercial paper, municipal securities, domestic and foff reign debt issued by corporations or financial institutions with the primary objb ective of minimizing the potential risk of principal loss. The Company determines the classification of its marketable securities based on its investment strategy at the time of purchase. All marketable securities in the periods presented have been classified as available-foff r-sale. The carrying values of marketable securities within cash and cash equivalents and marketable securities consist of the foff llowing: (M(( iMM lii lll ill ons of dollll ars)rr AvaAA ilable-foff r-sale debt securities: Marketable securities current Amortized Cost December 31, 2022 Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents $ — $ — $ — $ U S Govt Bonds Corporate bonds Non U S Corporate bonds Investment income receivable Marketable securities non-current Corporate bonds 8.8 6.0 3.0 0.1 17.9 4.4 — — — — — — — — — — — — ToTT tal Marketable Securities $ 22.3 $ — $ — $ — 8.8 6.0 3.0 0.1 17.9 4.4 22.3 The amortized cost basis and fair value of the Company's available-foff r-sale marketable securities at December 31, 2022, by contractual maturity, are as foff llows: (Millions of dollars) Less than 1 year 1 to 2 years ToTT tal Amortized Cost Fair Value $ $ 19.3 3.0 22.3 $ $ 19.3 3.0 22.3 There was no impairment on any available-foff r-sale marketable securities as of December 31, 2022, while there were none at December 31, 2021. F-17 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 6 — Business Acquisition On January 29, 2021, MUSA acquired 100% of QuickChek, a privately-held convenience store chain with a regional brand which consisted of 156 stores located in New Jersey and New YoYY rk, in an all-cash transaction. The acquisition was made to expand the MUSA network into the Northeast by adding stores that had an existing foff od and beverage model and is consistent with the Company's stated strategic priorities of developing enhanced foff od and beverage capabilities and accelerating its growth plans. The excess of the purchase price over the estimated fair value of the net, identifiable assets acquired was recorded as goodwill. The factors contributing to the recognition of goodwill are a mixture of direct and reverse synergies that are expected to be realized as a result of this acquisition. The direct synergies include additional margin capture on the retail fuel side from the tactical pricing decisions and improved benefits from increased scale on the product acquisition side combined with other cost savings in both merchandise and store operations. The reverse synergies reflect management's ability to leverage QuickChek's product pricing and operational capabilities related to foff od and beverage sales to Murphy branded stores. All fair values were final as of December 31, 2021. The Company has determined that the trade name has an indefinite life, as there is no economic, contractual, or other factors that limit its useful life and expects to generate value as long as the trade name is utilized, and therefoff re is not subjb ect to amortization. The fair value of intangible assets was based on widely-accepted valuation techniques, including discounted cash flows. The foff llowing table summarizes the fair value of the consideration transferred at the date of the acquisition, as well as the calculation of goodwill based on the excess of consideration over the fair value of net assets acquired: iMM lii lll ill ons of dollll ars)rr (M(( Cash paid to shareholders Less: cash and cash equivalents acquired Fair value of consideration transferred, net of cash acquired Assets acquired: Accounts receivable Inventories Prepaid expenses and other current assets Property and equipment Right of use assets Other assets Identified intangible assets Liabilities assumed: Accounts payable and accrued expenses Deferred income tax liabilities Asset retirement obligation Current and long term debt, including finance lease obligations Deferred credits and other liabilities Operating lease liabilities Net assets acquired F-18 $ $ $ Januaryrr 29, 2021 641.9 0.8 641.1 8.0 24.3 5.5 447.1 237.6 5.4 106.8 (68.4) (58.5) (1.2) (148.5) (7.4) (237.6) 313.1 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS iMM lii lll ill ons of dollll ars)rr (M(( Januaryrr 29, 2021 Goodwill Fair value of consideration transferred, net of cash and cash equivalents acquired $ 328.0 641.1 In connection with the acquisition, the Company recognized certain acquisition-related expenses which were expensed as incurred. These expenses, recognized within acquisition related costs in the consolidated statements of operations, include amounts related to transaction and integration costs, including fees foff r advisory and professional servirr ces incurred as part of the acquisition and integration costs subsequent to the acquisition in the amount of $1.5 million, $10.4 million, and $1.7 million foff r the years ended December 31, 2022, 2021, and 2020, respectively. Note 7 – Property, Plant and Equipment iMM lii lll ill ons of dollll ars)rr (M(( Land Real estate finance lease Pipeline and terminal facilities Retail gasoline stores Buildings Other $ Estimated Useful Life 1 to 40 years 16 to 25 years 3 to 50 years 20 to 45 years 3 to 20 years December 31, 2022 December 31, 2021 Cost Net Cost Net 645.2 $ 147.7 83.7 2,897.7 71.0 167.1 645.2 $ 122.2 42.5 1,536.4 47.2 65.8 639.4 $ 147.1 83.2 2,657.8 70.7 153.6 639.4 134.3 44.5 1,451.1 49.7 59.4 $ 4,012.4 $ 2,459.3 $ 3,751.8 $ 2,378.4 Depreciation expense of $219.4 million, $211.6 million and $160.0 million was recorded foff r the years ended December 31, 2022, 2021 and 2020, respectively. Note 8 – Goodwill and Intangible Assets The Company's goodwill resides in its Marketing segment and none of the goodwill purposes. is deductible foff r tax iMM lii lll ill ons of dollll ars)rr (M(( Goodwill balance, at beginning of period QuickChek acquisition Goodwill balance, at end of period December 31, 2022 2021 $ $ 328.0 $ — 328.0 $ — 328.0 328.0 F-19 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS In connection with our acquisition of QuickChek on January 29, 2021, we recorded the foff llowing amounts of intangible assets. iMM lii lll ill ons of dollll ars)rr (M(( Intangible assets subjb ect to amortization: Intangible lease liability Intangible assets not subjb ect to amortization: Trade name Liquor licenses ToTT tal intangible assets Remaining Useful Life (in years) Januaryrr 29, 2021 Carrying VaVV lue 13.6 n/a n/a $ $ (9.1) 115.4 0.5 106.8 We amortize intangible assets subjb ect to amortization on a straight-line or accelerated basis based on the period foff r which the economic benefits of the asset or liability are expected to be realized. The intangible assets subjb ect to amortization was in addition to the Company's existing intangible asset pipeline space, which is being amortized over a 40-year life. Intangible assets at December 31, 2022 and 2021 consisted of the foff llowing: Remaining Useful Life (in years) iMM lii lll ill ons of dollll ars)rr (M(( Intangible assets subjb ect to amortization: Pipeline space Intangible lease liability 32.7 11.4 ToTT tal intangible assets subjb ect to amortization Intangible assets not subjb ect to amortization, indefinite lives: Trade name Liquor licenses ToTT tal intangible assets not subjb ect to amortization December 31, 2022 December 31, 2021 Cost Net Cost Net $ 39.6 $ 32.7 $ 39.6 $ 33.7 (9.1) 30.5 115.4 0.2 115.6 (7.9) 24.8 115.4 0.2 115.6 140.4 (9.1) 30.5 115.4 0.2 115.6 $ 146.1 $ (8.6) 25.1 115.4 0.2 115.6 140.7 Intangible assets, net of amortization $ 146.1 $ F-20 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 9 – Accounts Payable and Accrued Liabilities Trade accounts payable and accrued liabilities consisted of the foff llowing: (M(( iMM lii lll ill ons of dollll ars)rr Trade accounts payable Excise taxes/withholdings payable Accrued insurance obligations Accrued taxes other than income Accrued compensation and benefits Current operating lease liabilities Other Accounts payable and accrued liabilities Note 10 — Long-Term Debt Long-term debt consisted of the foff llowing: iMM lii lll ill ons of dollll ars)rr (M(( December 31, 2022 2021 547.6 $ 93.2 51.8 44.6 46.6 20.5 34.9 839.2 $ $ $ December 31, 2022 2021 5.625% senior notes due 2027 (net of unamortized discount of $1.6 at 2022 and $2.0 at 2021) $ 4.75% senior notes due 2029 (net of unamortized discount of $4.2 at 2022 and $4.8 at 2021) 3.75% senior notes due 2031 (net of unamortized discount of $5.1 at 2022 and $5.7 at 2021) TeTT rm loan due 2028 (effff ective interest rate of 5.95% at 2022 and 2.27% at 2021) net of unamortized discount of $0.7 at 2022 and $0.9 at 2021 Capitalized lease obligations, vehicles, due through 2026 Capitalized lease obligations, buildings, due through 2059 Unamortized debt issuance costs ToTT tal long-term debt Less current maturities 298.4 $ 495.8 494.9 393.3 2.3 131.3 (9.1) 1,806.9 15.0 ToTT tal long-term debt, net of current $ 1,791.9 $ Senior Notes 392.5 93.6 46.2 41.4 36.5 18.1 32.0 660.3 298.0 495.2 494.3 397.1 2.7 138.9 (11.1) 1,815.1 15.0 1,800.1 On April 25, 2017, Murphy Oil USA, Inc., our primary operating subsidiary, issued $300 million of 5.625% Senior Notes due 2027 (the "2027 Senior Notes") under its existing shelf registration statement. The 2027 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our credit facilities. The indenture governing the 2027 Senior Notes contains restrictive covenants that limit, among other things, the ability of Murphy USA, Murphy Oil USA, Inc. and the restricted subsidiaries to incur additional indebtedness or liens, dispose of assets, make certain restricted payments or investments, enter into transactions with affff iliates or merge with or into other entities. On September 13, 2019, Murphy Oil USA, Inc., issued $500 million of 4.75% Senior Notes due 2029 (the “2029 Senior Notes”). The net proceeds from the issuance of the 2029 Senior Notes were used to fund, in part, the tender offff er and redemption of the prior notes issuance. The 2029 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our credit F-21 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS facilities. The indenture governing the 2029 Senior Notes contains restrictive covenants that are essentially identical to the covenants foff r the 2027 Senior Notes. On January 29, 2021, Murphy Oil USA, Inc. issued $500 million of 3.75% Senior Notes due 2031 (the "2031 Senior Notes" and, together with the 2027 Senior Notes and the 2029 Senior Notes, the "Senior Notes"). The net proceeds from the issuance of the 2031 Senior Notes were used, in part, to fund the acquisition of QuickChek and other obligations related to that 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 foff r the 2027 and 2029 Senior Notes. transaction. The Senior Notes and related guarantees rank equally with all of our and the guarantors’ existing and future senior unsecured indebtedness and effff ectively junior to our and the guarantors’ existing and future secured indebtedness (including indebtedness with respect to the Credit Facilities) to the extent of the value of the assets securing such indebtedness. The Senior Notes are structurally subordinated to all of the existing and future third-party liabilities, including trade payables, of our existing and future subsidiaries that do not guarantee the notes. Revolvinii g Crerr didd t FaFF cilii ill tyt and TeTT rmrr Loan On January 29, 2021, the Company entered into a new credit agreement that consists of both a cash flow revolving credit facility and a senior secured term loan and that replaced the Company’s prior ABL facility and term loan. The credit agreement provides foff r a senior secured term loan in an aggregate principal amount of $400.0 million (the “TeTT rm Facility”) (which was borrowed in full on January 29, 2021) and revolving credit commitments in an aggregate amount equal to $350.0 million (the “Revolving Facility”, and together with the TeTT rm Facility, the “Credit Facilities”). The outstanding balance of the term loan was $394.0 million at December 31, 2022. The revolving facility expires January 2026 while the term loan is due January 2028 and requires quarterly principal payments of $1.0 million beginning July 1, 2021. As of December 31, 2022, we had none outstanding under the revolving facility, while there were $4.7 million in outstanding letters of credit, which reduces the amount available to borrow. Interest payable on the Credit Facilities is based on either: • • the London interbank offff ered rate, adjusted foff r statutory reserverr Rate”); or requirements (the “Adjusted LIBO the Alternate Base Rate, which is defined as the highest of (a) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate”, (b) the greater of federal funds effff ective rate and the overnight bank funding rate determined by the Federal Reserverr Bank of New YoYY rk from time to time plus 0.50% per annum and (c) the one-month Adjusted LIBO Rate plus 1.00% per annum, plus, (A) in the case of Adjusted LIBO Rate borrowings, (i) with respect to the Revolving Facility, spreads ranging from 1.75% to 2.25% per annum depending on a total debt to EBITDA ratio or (ii) with respect to the TeTT rm Facility, a spread of 1.75% per annum and (B) in the case of Alternate Base Rate borrowings (i) with respect to the Revolving Facility, spreads ranging from 0.75% to 1.25% per annum depending on a total debt to EBITDA ratio or (ii) with respect to the TeTT rm Facility, a spread of 1.75% per annum. The TeTT rm Facility amortizes in quarterly installments starting with the first amortization payment being due on July 1, 2021 at a rate of 1.00% per annum. Murphy USA is also required to prepay the TeTT rm Facility with a portion of its excess cash flow, a portion of the net cash proceeds of certain asset sales and casualty events (subjb ect to certain reinvestment rights) and the net cash proceeds of issuances of indebtedness not permitted under the Credit Agreement. The Credit Agreement allows Murphy USA to prepay, in whole or in part, the TeTT rm Facility outstanding thereunder, together with any accrued and unpaid interest, with prior notice but without premium or penalty other than breakage and redeployment costs. F-22 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS 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 affff iliates, to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends, or to make certain accounting changes. The credit agreement also contains total leverage ratio and secured net leverage ratio financial maintenance covenants solely foff r the benefit of the revolving facility which are tested quarterly. Pursuant to the total leverage ratio financial maintenance covenant, the Company must maintain a total leverage ratio of not more than 5.0 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 5.5 to 1.0 and a maximum secured net leverage ratio of not more than 3.75 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 4.25 to 1.0. The Credit Agreement also contains customary events of default. Pursuant to the credit agreement's covenant limiting certain restricted payments, certain payments in respect of leverage ratio, calculated on a pro foff rma basis, is our equity interests, including dividends, when the total greater than 3.0 to 1.0, could be limited. At December 31, 2022, our total leverage ratio was 1.5 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 foff rma basis, exceeds 3.0 to 1.0, any restricted payments made foff llowing that time until the ratio is once again, on a pro foff rma 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 an aggregate not to exceed the greater of $106.7 million or 4.5% of consolidated net tangible assets over the life of the credit agreement. All obligations under the credit agreement are guaranteed by Murphy USA and the subsidiary guarantors party thereto, and all obligations under the credit agreement, including the guarantees of those obligations, are secured by certain assets of Murphy USA, Murphy Oil USA, Inc. and the guarantors party thereto. Note 11 — Asset Retirement Obligations (ARO) The maja ority of the ARO recognized by the Company at December 31, 2022 and 2021 is related to the estimated costs to dismantle and abandon certain of its retail gasoline stores. The Company has not recorded an ARO foff r certain of its marketing assets because suffff icient infoff rmation is presently not available to estimate a range of potential settlement dates foff r the obligation. These assets are consistently being upgraded and are expected to be operational into the foff reseeable future. In these cases, the obligation will be initially recognized in the period in which suffff icient infoff rmation exists to estimate the obligation. A reconciliation of the beginning and ending aggregate carrying amount of the ARO is shown in the foff llowing table: (M(( iMM lii lll ill ons of dollll ars)rr Balance at beginning of period Addition foff r acquisition Accretion expense Settlement of liabilities Liabilities incurred Balance at end of period December 31, 2022 2021 39.2 $ — 2.7 (2.3) 3.7 43.3 $ 35.1 1.2 2.5 (1.0) 1.4 39.2 $ $ The estimation of future ARO is based on a number of assumptions requiring professional judgment. The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the lack of availability of additional infoff rmation. F-23 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 12 — Income Taxes The components of income befoff re income taxes foff r each of the three years ended December 31, 2022 and income tax expense (benefit) attributable thereto were as foff llows: (M(( iMM lii lll ill ons of dollll ars)rr Income (loss) befoff re income taxes Income tax expense (benefit) Federal - Current Federal - Deferred State - Current and deferred ToTT tal YeYY ars Ended December 31, 2022 2021 2020 883.8 $ 521.9 $ 509.1 143.5 $ 33.0 34.4 86.2 $ 14.4 24.4 210.9 $ 125.0 $ 96.0 4.7 22.3 123.0 $ $ $ The foff llowing table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense (benefit). (M(( iMM lii lll ill ons of dollll ars)rr Income tax expense based on the U.S. statutory tax rate State income taxes, net of federal benefit Federal credits Other, net ToTT tal $ $ YeYY ars Ended December 31, 2022 2021 2020 185.6 $ 28.0 (2.9) 0.2 210.9 $ 109.6 $ 19.2 (2.2) (1.6) 125.0 $ 106.9 17.5 (1.9) 0.5 123.0 An analysis of the Company’s deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021 showing the tax effff ects of significant temporary diffff erences is as foff llows: iMM lii lll ill ons of dollll ars)rr (M(( Deferred tax assets Property costs and asset retirement obligations Net operating loss Employee benefits Operating leases liability Other deferred tax assets ToTT tal gross deferred tax assets Deferred tax liabilities Accumulated depreciation and amortization State deferred taxes Operating leases right of use assets Other deferred tax liabilities ToTT tal gross deferred tax liabilities Net deferred tax liabilities December 31, 2022 2021 $ $ 5.9 $ — 10.7 97.6 13.6 127.8 (316.0) (30.5) (94.4) (14.3) (455.2) ) ( ) ( (327.4) $ 5.2 6.3 8.6 89.7 11.8 121.6 (285.4) (31.7) (88.0) (12.4) (417.5) ) ( ) ( (295.9) In management’s judgment, the deferred tax assets in the preceding table will more likely than not be realized as reductions of future taxable income or utilized by available tax planning strategies. As of December 31, 2022, the earliest year remaining open foff r Federal audits and/or settlement is 2019 and foff r state audits and/or settlement is 2018. Although the Company believes that recorded liabilities foff r unsettled issues are adequate, additional gains or losses could occur in future periods from resolution of outstanding unsettled matters. F-24 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS the criteria foff r recognizing uncertain income The FAFF SB’s rules foff r accounting foff r income tax uncertainties clarifyff tax benefits and require additional disclosures about uncertain tax positions. Under U.S. GAAAA P the financial statement recognition of the benefit foff r a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement. Liabilities associated with uncertain income tax positions are included in Deferred Credits and Other Liabilities in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of the consolidated liability foff r unrecognized income tax benefits during the year ended December 31, 2022 and 2021 is shown in the foff llowing table: (M(( iMM lii lll ill ons of dollll ars)rr Balance at January 1 Additions foff r tax positions related to prior years Expiration of statutes of limitation Balance at December 31 YeYY ar Ended December 31, 2022 2021 $ $ 0.5 $ 0.2 (0.1) 0.6 $ 0.4 0.3 (0.2) 0.5 All additions or reductions to the above liability affff ect the Company’s effff ective tax rate in the respective period of change. The Company accounts foff r any applicable interest and penalties on uncertain tax positions as a Income tax expense foff r the years ended December 31, 2022, 2021 and component of income tax expense. 2020 included immaterial amounts of interest and penalties, associated with uncertain tax positions. Of these amounts shown in the table, $0.5 million and $0.4 million represent the amount of unrecognized tax benefits that, if recognized, would impact our effff ective tax rate foff r the years ended December 31, 2022 and 2021, respectively. During the next twelve months, the Company does not expect a material change to the liability foff r uncertain taxes. Although existing liabilities could be reduced by settlement with taxing authorities or lapse due to statute of limitations, the Company believes that the changes in its unrecognized tax benefits due to these events will not have a material impact on the Consolidated Income Statement during 2023. ToTT tal excess tax benefits foff r equity compensation recognized in the twelve months ended December 31, 2022, 2021 and 2020 were $2.9 million, $4.9 million, and $2.2 million, respectively. Note 13 — Incentive Plans 2013 Long-TeTT rmrr Incentitt ve PlPP an Effff ective August 30, 2013, certain of our employees began to participate in the Murphy USA 2013 Long-TeTT rm Incentive Plan, which was subsequently amended and restated effff ective as of February 8, 2017 (the “MUSA 2013 Plan”). The MUSA 2013 Plan authorizes the Executive Compensation Committee of our Board of Directors (“the Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unit awards), dividend equivalent units, cash awards, and perfrr off rmance awards to our employees. No more than 5.5 million shares of common stock may be delivered under the MUSA 2013 Plan and no more than 1 million shares of common stock may be awarded to any one employee, subjb ect to adjustment foff r changes in capitalization. The maximum cash amount payable pursuant to any “perfrr off rmance-based” award to any participant in any calendar year is $5.0 million. During the period from August 30, 2013 to December 31, 2022, the Company granted a total of 2,805,086 awards from the MUSA 2013 Plan which leaves 2,694,914 remaining shares to be granted in future years (aftff er consideration of the amendments made to the MUSA 2013 Plan in February 2014 by the Board of Directors). At present, the Company expects to issue all shares that vest out of existing treasury shares rather than issuing new common shares. F-25 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS 2013 Stock PlPP an foff r Non-employee Dirii err ctorsrr Effff ective August 8, 2013, Murphy USA adopted the 2013 Murphy USA Stock Plan foff r Non-employee Directors (the “Directors Plan”). The directors foff r Murphy USA are compensated with a mixture of cash payments and equity-based awards. AwAA ards under the Directors Plan may be in the foff rm of restricted stock, restricted stock units, dividend equivalent units, stock options, or a combination thereof. An aggregate of 500,000 shares of common stock shall be available foff r issuance of grants under the Directors Plan. Since 2013, 150,673 time- based restricted stock units have been granted under the terms of the Directors Plan which leaves 349,327 shares available to be granted in the future. Amounts recognized in the financial statements by the Company with respect to all share-based plans are shown in the foff llowing table: (M(( iMM lii lll ill ons of dollll ars)rr Compensation charged against income befoff re income tax benefit Related income tax benefit recognized in income $ $ YeYY ars Ended December 31, 2022 2021 2020 16.0 $ 3.4 $ 14.4 $ 3.0 $ 14.3 3.0 As of December 31, 2022, there was $24.0 million in compensation costs to be expensed over approximately the next 1.8 years related to unvested share-based compensation arrangements granted by the Company. Employees who have stock options are required to net settle their options in shares, aftff er applicable statutory withholding taxes are considered, upon each stock option exercise. Therefoff re, no cash is received upon exercise. ToTT tal income tax benefits realized from tax deductions related to stock option exercises under share-based payment arrangements were $1.0 million, $0.3 million, and $0.7 million foff r the years ended December 31, 2022, 2021, and 2020, respectively. The Company issues dividend equivalent units ("DEU") on all outstanding, unvested equity awards (except stock options) in an amount commensurate with regular quarterly dividends paid on common stock. The terms of the DEU mirror the underlying awards and will only vest if the related award vests. DEU's issued are included with grants in each respective table as applicable. STOTT CK OPTITT ONS (M(( USASS 2013 PlPP an)n – The Committee fixes the option price of each option granted at no less than fair market value (FMV) on the date of the grant and fixes the option term at no more than 7 years from such date. Most of February 2022. the nonqualified stock options granted to certain employees by the Committee were granted in Following are the assumptions used by the Company to value the original awards: Fair value per option grant Assumptions Dividend yield Expected volatility Risk-free interest rate Expected life (years) Stock price at valuation date YeYY ars Ended December 31, 2022 2021 2020 $ 51.46 $ 32.00 $ 28.28 0.6 % 32.2% 1.8% 4.7 181.18 $ 0.8 % 32.3% 0.4% 4.6 126.00 $ — % 28.1% 1.5% 4.7 106.72 $ F-26 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Changes in options outstanding foff r Company employees during the period from December 31, 2021 to December 31, 2022 are presented in the foff llowing table: Weighted AveAA rage Exercise Price Weighted AveAA rage Remaining Contractual TeTT rm (YeYY ars) Aggregate Intrinsic VaVV lue (Millions of Dollars) Number of Shares Options Outstanding at December 31, 2021 Granted Exercised Forfrr eited Outstanding at December 31, 2022 366,100 55,150 (98,200) (9,100) 313,950 $ 90.44 181.80 69.95 119.43 112.06 4.1 $ Exercisable at December 31, 2022 150,450 $ 80.68 2.8 $ Additional infoff rmation about stock options outstanding at December 31, 2022 is shown below: 52.6 29.9 Range of Exercise Prices per Option $60.00 to $89.99 $90.00 to $119.99 $120.00 to $149.99 $180.00 to $209.99 Options Outstanding Options Exercisable No. of Options 120,500 63,800 74,500 55,150 313,950 AvgAA . Life Remaining in YeYY ars 2.6 4.0 5.1 6.1 4.1 No. of Options 118,700 31,750 — — 150,450 AvgAA . Life Remaining in YeYY ars 2.6 3.8 — — 2.8 RESTRTT ICTETT DEE STOTT CK UNITSTT (M(( USASS 2013 PlPP an)n – The Committee has granted time based restricted stock units (RSUs) as part of the compensation plan foff r its executives and certain other employees since its inception. The awards granted in the current year were under the MUSA 2013 Plan, are valued at the grant date fair value, and vest over three years. Changes in restricted stock units outstanding foff r Company employees during the period from December 31, 2021 to December 31, 2022 are presented in the foff llowing table: Employee RSUs Outstanding at December 31, 2021 Granted VeVV sted and issued Forfrr eited Outstanding at December 31, 2022 Number of units Weighted AveAA rage Grant Date Fair VaVV lue ToTT tal Fair VaVV lue (Millions of Dollars) 175,627 42,258 $ $ (60,070) $ (8,449) $ 149,366 $ 95.93 186.55 80.10 $ 138.83 125.51 $ 11.6 41.8 RESTRTT ICTETT DE STOTT CK UNITSTT PERFORMAMM NCE-BABB SEDE the Committee awarded perfrr off rmance-based restricted stock units (perfrr off rmance units) to certain employees. Half of the perfrr off rmance units vest based on a three-year return on average capital employed (ROACE) calculation and the other half vest based on a three-year total shareholder return (TSR) calculation that compares MUSA to a group of 18 peer companies. The portion of the awards that vest based on TSR qualifyff as a market condition and must be valued using a Monte Carlo valuation model. For the TSR portion of the awards, the fair value was determined to be $259.17 per unit. For the ROACE portion of the awards, the valuation was based on the grant 2013 PlPP an)n – In February 2022, (M(( USASS F-27 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS date fair value of $181.18 per unit and the number of awards will be periodically assessed to determine the probability of vesting. Changes in perfrr off rmance-based restricted stock units outstanding foff r Company employees during the period from December 31, 2021 to December 31, 2022 are presented in the foff llowing table: Employee PSU's Outstanding at December 31, 2021 Granted VeVV sted and issued Forfrr eited Outstanding at December 31, 2022 Number of Units Weighted AveAA rage Grant Date Fair VaVV lue ToTT tal Fair VaVV lue (Millions of Dollars) 127,638 78,949 $ $ (94,226) $ (6,360) $ 106,001 $ 117.59 217.81 87.62 $ 133.98 160.03 $ 17.1 29.6 RESTRTT ICTETT DEE STOTT CK UNITSTT (Directors Plan) – The Committee has also granted time based RSUs to the non- employee directors of the Company as part of their overall compensation package foff r being a member of the Board of Directors. These awards typically vest at the end of three years. Changes in restricted stock units outstanding foff r Company non-employee directors during the period from December 31, 2021 to December 31, 2022 are presented in the foff llowing table: Director RSU's Outstanding at December 31, 2021 Granted VeVV sted and issued Outstanding at December 31, 2022 Number of Units Weighted AveAA rage Grant Date Fair VaVV lue ToTT tal Fair VaVV lue (Millions of Dollars) 30,664 $ 7,994 $ (11,735) $ 26,923 $ 100.23 172.88 75.96 $ 132.38 $ 2.1 7.5 Note 14 — Employee and Retiree Benefit Plans THTT RIFT PLAN – Most full-time employees of the Company may participate in defined contribution savings plans by contributing up to a specified percentage of their base pay. The Company matches contributions foff r Murphy USA eligible employees at 100% of each employee’s contribution with a maximum match of 6%. In addition, the Company makes profit sharing contributions on an annual basis foff r Murphy USA employees. Eligible employees receive a stated percentage of their base and incentive pay of 5%, 7%, or 9% determined on a foff rmula that is based on a combination of age and years of servirr ce. The Company maintained the thriftff plan of QuickChek on acquisition, and matches 100% of the first 3% and 50% of the next 2% contributed by eligible employees. The Company’s combined expenses related to these plans were $17.3 million in 2022, $16.9 million in 2021 and $15.3 million in 2020. PROFIT SHAHH RING PLAN – Eligible part-time employees of Murphy USA may participate in the Company’s noncontributory profit sharing plan. Each year, the Company may make a discretionary employer contribution in an amount determined and authorized at the discretion of the Board of Directors. Eligible employees receive an allocation based on their compensation earned foff r the year the contribution is allocated. The Company’s expenses related to this plan were $1.6 million in 2022, $1.1 million in 2021 and $1.8 million in 2020. SUPPLEMEE ENTATT L EXEE EXX CUTITT VEVV RETITT REMEE ENT – The Company provides a Supplemental Executive Retirement Plan ('SERP'), a nonqualified deferred compensation plan foff r Murphy USA employees, to eligible executives and certain members of management. The SERP plan is intended to restore qualified defined contribution plan benefits restricted under the Internal Revenue Code of 1986 to certain highly-compensated individuals. The liability balances, net of associated assets, were $5.5 million and $4.7 million, at December 31, 2022 and 2021, respectfully. F-28 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 15 — Financial Instruments and Risk Management DERIVAVV TAA IVE INSTRUMENTS — The Company makes limited use of derivative instruments to manage certain risks related to commodity prices and interest rates. The use of derivative instruments foff r risk management is covered by operating policies and is closely monitored by the Company’s senior management. The Company does not hold any derivatives foff r speculative purposes and it does not use derivatives with leveraged or complex features. Derivative instruments are traded primarily with creditworthy maja or financial institutions or over national exchanges such as the New YoYY rk Mercantile Exchange (“NYMEX”). For accounting purposes, the Company has not designated commodity derivative contracts as hedges, and therefoff re, it recognizes all gains and losses on these derivative contracts in its Consolidated Statement of Income. Certain interest rate derivative contracts were accounted foff r as hedges and gain or loss associated with recording the fair value of these contracts was deferred in AOCI until the anticipated transactions occur. As of December 31, 2022, all current commodity derivative activity is immaterial. Cash deposits were none at December 31, 2022 and at December 31, 2021 the cash deposit was $0.6 million related to commodity derivative contracts and were reported in Prepaid expenses and other current assets in the Consolidated Balance Sheets. These cash deposits have not been used to reduce the reported net liabilities on the derivative contracts at December 31, 2022 and 2021. Interest Rate Risks Under hedge accounting rules, the Company deferred the net charge or benefit associated with the interest rate swap entered into to manage the variability in interest payments foff r the variable-rate debt in association with $150.0 million of our outstanding term loan dated August 27, 2019 until the debt was repaid on January 29, 2021. At that time the hedge was de-designated and therefoff re hedge accounting is no longer applicable and mark-to-market gains and losses are recognized in the period in which the change occurs in the Consolidated Statement of income in interest expense. The current loan balance subjb ect to the hedge is $67.5 million. The Company is reclassifyiff ng the accumulated other comprehensive loss on the previous interest rate swap, $2.4 million as of the de-designation date, into interest expense using a straight-line approach over the remaining life The amount of pre-tax gains in accumulated other of comprehensive loss that was reclassified into interest expense was $0.9 million foff r the twelve months ended December 31, 2022 and 2021, leaving a balance of $0.6 million at December 31, 2022. Prior to the de- designation, changes in the fair values of the interest rate swaps were recorded as a component of other comprehensive loss. the originally designated hedging relationship. Note 16 – Earnings Per Share Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average of common shares outstanding during the period. Diluted earnings per common share adjusts basic earnings per common share foff r the effff ects of stock options and restricted stock in the periods where such items are dilutive. On December 1, 2021, the Board of Directors approved a share repurchase authorization of up to $1 billion to begin upon completion of the $500 million authorization made in October 2020, and is to be executed by December 31, 2026. During the year 2022, the total number of share repurchases were 3,328,795 common shares foff r $806.4 million, at an average price of $242.24 per share. The 2022 shares repurchased included 3,226,379 common shares foff r $786.3 million, at an average price of $243.72 per share under the 2021 $1 billion authorization, leaving approximately $213.7 million remaining available, as of December 31, 2022, and included 102,416 common shares repurchased foff r $20.0 million, at an average price of $195.45 per share which completed the October 2020 $500 million authorization. Purchases in 2021 and 2020 under the October 2020 authorization were 2,398,477 common shares foff r $355.0 million, at an average price of $148.00 per share and 969,654 common shares foff r $125.0 million, at an average price of $128.91 per share, respectively. F-29 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS The foff llowing table provides a reconciliation of basic and diluted earnings per share computations foff r the years ended December 31, 2022, 2021, and 2020. iMM lii lll ill ons of dollll arsrr except per sharerr amounts)tt (M(( 2022 2021 2020 YeYY ars ended December 31, Earnings per common share: Net income per share - basic Net income attributable to common stockholders Weighted average common shares outstanding (in thousands) Earnings per common share Earnings per common share - assuming dilution: Net income per share - diluted Net income attributable to common stockholders Weighted average common shares outstanding (in thousands) Common equivalent shares: Share-based awards Weighted average common shares outstanding - assuming dilution (in thousands) $ $ $ 672.9 $ 396.9 $ 386.1 23,506 26,210 28.63 $ 15.14 $ 29,132 13.25 672.9 $ 396.9 $ 386.1 23,506 26,210 29,132 444 394 394 23,950 26,604 29,526 Earnings per common share assuming dilution $ 28.10 $ 14.92 $ 13.08 We have excluded from the earnings-per-share calculation certain stock options and shares that are considered to be anti-dilutive under the treasury stock method and are reported in the table below. Potentially dilutive shares excluded from the calculation as their inclusion would be anti-dilutive Stock options Restricted share units ToTT tal anti-dilutive shares YeYY ars ended December 31, 2022 2021 2020 — — — 80,500 1,562 82,062 75,600 20,137 95,737 Note 17 — Other Financial Information CASH FLOW DISCLOSURES — Cash income taxes paid (collected), net of refunds, were $199.7 million, $120.4 million and $96.5 million foff r the three years ended December 31, 2022, 2021 and 2020, respectively. Interest paid, net of amounts capitalized, was $81.6 million, $70.8 million and $49.1 million foff r the years ended December 31, 2022, 2021 and 2020, respectively. F-30 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS CHANGES IN WORKING CAPITATT L - (M(( iMM lii lll ill ons of dollll ars)rr Accounts receivable Inventories Prepaid expenses and other current assets Accounts payable and accrued liabilities Income taxes payable YeYY ars ended December 31, 2022 2021 2020 $ (84.7) $ (18.9) $ (26.9) (23.7) 180.1 — 11.1 (3.6) 102.9 (8.7) 4.9 (51.7) 16.6 8.3 8.8 Net decrease (increase) in noncash operating working capital $ 44.8 $ 82.8 $ ) (13.1) ( ) ( Note 18 — Assets and Liabilities Measured at Fair Value The Company carries certain assets and liabilities at fair value in its Consolidated Balance Sheets. The fair value hierarchy is based on the quality of inputs used to measure fair value, with Level 1 being the highest quality and Level 3 being the lowest quality. Level 1 inputs are quoted prices in active markets foff r identical assets or liabilities. Level 2 inputs are observarr ble inputs other than quoted prices included within Level 1. Level 3 inputs are unobservarr ble inputs which reflect assumptions about pricing by market participants. The Company's available-foff r-sale marketable securities consist of high quality, investment grade securities from diverse issuers. We value these securities at the closing price in the principal active markets as of the last business day of the reporting period. The fair values of the Company's marketable securities by asset class are described in Note 5 "Marketable Securities" in these consolidated financial statements foff r the period ended December 31, 2022. We value the deferred compensation plan assets, which consist of money market and mutual funds, based on quoted prices in active markets at the measurement date. For additional infoff rmation on deferred compensation plans see also Note 14 "Employee and Retirement Benefit Plans" in these consolidated financial statements foff r the period ended December 31, 2022. At the balance sheet date, the fair value of commodity derivatives contracts was determined using NYMEX quoted values and the value of the Interest rate swap derivative was derived by using level 3 inputs. The the Company’s Cash and cash equivalents, Accounts receivable-trade, Trade accounts carrying value of payable, and accrued liabilities approximates fair value. See also Note 15 "Financial Instruments and Risk Management" in these consolidated financial statements foff r the period ended December 31, 2022, foff r more infoff rmation. Financial assets and liabilities measured at fair value on a recurring basis g The foff llowing table presents the Company's financial assets and liabilities measured at fair value on a recurring basis, as of December 31, 2022 and 2021: iMM lii lll ill ons of dollll ars)rr (M(( Financial assets Marketable securities, current U S Govt Bonds Corporate bonds Non U S Govt Bonds Accounts receivable - trade Interest rate swap derivative Level 1 Level 2 Level 3 Fair VaVV lue December 31, 2022 $ — $ 8.8 $ — $ 6.1 3.0 — — — 1.3 — — — F-31 8.8 6.1 3.0 1.3 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS iMM lii lll ill ons of dollll ars)rr (M(( Level 1 Level 2 Level 3 Fair VaVV lue December 31, 2022 Marketable securities, noncurrent Corporate bonds Other assets Deferred compensation plan assets Financial liabilities Deferred credits and other liabilities Deferred compensation plan liabilities — 9.5 4.4 — — — 4.4 9.5 (14.7) ) (5.2) $ ( ) ( — 22.3 $ $ — 1.3 $ (14.7) 18.4 iMM lii lll ill ons of dollll ars)rr (M(( Financial assets Prepaid expenses and other current assets Level 1 Level 2 Level 3 Fair VaVV lue December 31, 2021 Fuel derivative Other assets $ — $ — $ 0.6 $ Deferred compensation plan assets 10.2 Financial liabilities Trade accounts payable and accrued liabilities Interest rate swap derivative — Deferred credits and other liabilities Deferred compensation plan liabilities (13.9) ) (3.7) $ ( ) ( $ Fair value of financial instruments not recognized at fair value g — — — — $ 0.6 10.2 — (0.7) (0.7) — ) (0.1) $ ( ) ( (13.9) ) (3.8) ( ) ( The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The table below excludes Cash and cash equivalents, Accounts receivable- trade, and Trade accounts payable and accrued liabilities, all of which had fair values approximating carrying amounts. The fair value of Current and Long-term debt was estimated based on rates offff ered to the Company at that time foff r debt of the same maturities. The Company has offff -ff balance sheet exposures relating to certain financial guarantees and letters of credit. The fair value of these, which represents fees associated with obtaining the instruments, was nominal. The foff llowing table presents the carrying amounts and estimated fair values of financial instruments held by the Company at December 31, 2022 and 2021. iMM lii lll ill ons of dollll ars)rr (M(( Financial liabilities Current and long-term debt, excluding finance leases December 31, 2022 December 31, 2021 Carrying Amount Fair VaVV lue Carrying Amount Fair VaVV lue $ (1,673.3) $ (1,643.0) $ (1,673.5) $ (1,709.5) F-32 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 19 – Commitments The Company leases land, gasoline stores, and other facilities under operating leases. During the next five years, expected future rental payments under all operating leases are approximately $49.9 million in 2023, $49.6 million in 2024, $48.6 million in 2025, $47.9 million in 2026, and $47.1 million in 2027. Rental expense foff r noncancellable operating leases, including contingent payments when applicable, was $57.6 million in 2022, $48.7 million in 2021 and $24.9 million in 2020. Commitments foff r capital expenditures were approximately $365.9 million at December 31, 2022, including $310.8 million approved foff r potential construction of future stores (including land) at year-end, along with $7.6 million foff r improvements of existing stores, to be financed with our operating cash flow and/or incurrence of indebtedness. The Company has certain take-or-pay contracts primarily to supply terminals with a noncancellable remaining term of 7.8 years. At December 31, 2022, our minimum annual payments under our take-or-pay contracts are estimated to be $8.4 million in 2023 and $6.9 million in 2024, $6.9 million in 2025, $6.9 million in 2026, and $4.3 million in 2027. Note 20 — Contingencies The Company’s operations and earnings have been and may be affff ected by various foff rms of governmental action. Examples of such governmental action include, but are by no means limited to: tax increases and retroactive tax claims; import and export controls; price controls; allocation of supplies of crude oil and petroleum products and other goods; laws and regulations intended foff r the promotion of safety and the protection and/or remediation of the environment; governmental support foff r other foff rms of energy; and laws and regulations affff ecting the Company’s relationships with employees, suppliers, customers, stockholders and others. Because governmental actions are oftff en motivated by political considerations, may be taken without full consideration of their consequences, and may be taken in response to actions of other governments, it is not practical to attempt to predict the likelihood of such actions, the foff rm the actions may take or the effff ect such actions may have on the Company. laws, regulations and permit laws, regulations and permits can result ENVIRONMENTATT L MATAA TERS AND LEGAL MATAA TERS — Murphy USA is subjb ect to numerous federal, state Violation of such and local environmental in the imposition of significant civil and criminal penalties, injunctions, and other sanctions. A discharge of hazardous substances into the environment could, to the extent such event is not adequately insured, subjb ect the Company to substantial expense, including the cost to comply with applicable laws and regulations, claims by neighboring landowners, governmental authorities and other third parties foff r any personal injury, property damage and other losses that might result. requirements dealing with the environment. The Company currently owns or leases, and has in the past owned or leased, properties at which hazardous In connection with these activities, hazardous substances may substances have been or are being handled. have been disposed of or released on or under the properties owned or leased by the Company or on or under other locations where they have been taken foff r disposal. In addition, many of these properties have been operated by third parties whose management of hazardous substances was not under the Company’s control. Under existing laws, the Company could be required to remediate contaminated property (including contaminated groundwater) or to perfrr off rm remedial actions to prevent future contamination. Certain of these contaminated properties are in various stages of negotiation, investigation, and/or cleanup, and the Company is investigating the extent of any related liability and the availability of applicable defenses. With the sale of the U.S. refineries in 2011, Murphy Oil retained certain liabilities related to environmental matters. Murphy Oil also obtained insurance covering certain levels of environmental exposures. With respect to the previously owned refinery properties, Murphy Oil retained those liabilities in the Separation and Distribution agreement that was entered into related to the separation on August 30, 2013. With respect to any remaining potential liabilities, the Company believes costs related to these based on infoff rmation currently available to the Company, F-33 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS properties will not have a material adverse effff ect on Murphy USA’AA s net income, financial position or liquidity in a future period. While it is possible that certain environmental expenditures could be recovered by the Company from other sources, primarily environmental funds maintained by certain states, no assurance can be given that future recoveries from these other sources will occur. As such, the Company has not recorded a benefit foff r likely recoveries at December 31, 2022, however certain jurisdictions provide reimbursement foff r these expenses which have been considered in recording the net exposure. The U.S. EPAPP currently considers the Company a PRP at one Superfrr und site. As to the site, the potential total cost to all parties to perfrr off rm necessary remedial work at this site may be substantial. However, based on current negotiations and available infoff rmation, the Company believes that it is a de minimis party as to ultimate responsibility at the Superfrr und site. Accordingly, the Company has not recorded a liability foff r remedial costs at the Superfrr und site at December 31, 2022. The Company could be required to bear a pro rata share of costs attributable to nonparticipating PRPs or could be assigned additional responsibility foff r remediation at this site or other Superfrr und sites. Based on infoff rmation currently available to the Company, the Company believes that its share of the ultimate costs to clean-up this site will be immaterial and will not have a material adverse effff ect on its net income, financial position or liquidity in a future period. Based on infoff rmation currently available to the Company, the amount of future remediation costs to be incurred to address known contamination sites is not expected to have a material adverse effff ect on the Company’s future net income, cash flows or liquidity. However, there is the possibility that additional environmental including as a result of discovering additional expenditures could be required to address contamination, contamination or the imposition of new or revised requirements applicable to known contamination, and such additional expenditures could be material. Murphy USA is engaged in a number of other legal proceedings, all of which the Company considers routine and incidental to its business. Currently, the City of Charleston, South Carolina and the state of Delaware have filed lawsuits against energy companies, including the Company. These lawsuits allege damages as a result of climate change and the plaintiffff sff are seeking unspecified damages and abatement under various tort theories. At this early stage, the ultimate outcome of these matters remain uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be determined. Based on infoff rmation currently available to the Company, the ultimate resolution of those other legal matters is not expected to have a material adverse effff ect on the Company’s net income, financial condition or liquidity in a future period. INSURANCE — The Company maintains insurance coverage at levels that are customary and consistent with industry standards foff r companies of similar size. Murphy USA maintains statutory workers compensation insurance with a deductible of $1.0 million per occurrence, general liability insurance with a deductible of $3.0 million per occurrence, and auto liability insurance with a deductible of $0.3 million per occurrence. As of December 31, 2022, there were a number of outstanding claims that are of a routine nature. The estimated incurred but unpaid liabilities relating to these claims are included in Trade account payables and accrued liabilities on the Consolidated Balance Sheets. While the ultimate outcome of these claims cannot presently be determined, management believes that the accrued liability of $44.6 million will be suffff icient to cover the related liability and that the ultimate disposition of these claims will have no material effff ect on the Company’s financial position and results of operations. The Company has obtained insurance coverage as appropriate foff r the business in which it is engaged, but may s, in whole or in part, and such losses could adversely incur losses that are not covered by insurance or reserverr affff ect our results of operations and financial position. TATT X MATAA TERS — Murphy USA is subjb ect to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, indirect taxes (excise/duty, sales/use and gross receipts taxes), payroll taxes, franchise taxes, withholding taxes and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures foff r tax liabilities in the future. Many of these liabilities are subjb ect to periodic audits by the respective taxing authority. Subsequent changes to our tax liabilities because of these audits may subjb ect us to interest and penalties. F-34 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS OTHER MATAA TERS — In the normal course of its business, the Company is required under certain contracts with various governmental authorities and others to provide financial guarantees or letters of credit that may be drawn upon if the Company fails to perfrr off rm under those contracts. At December 31, 2022, the Company had contingent liabilities of $9.8 million on outstanding letters of credit. The Company has not accrued a liability in its balance sheet related to these financial guarantees and letters of credit because it is believed that the likelihood of having these drawn is remote. Note 21 — Leases The Company determines if an arrangement is a lease or contains a lease at inception. Operating lease right- of-ff use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense foff r these leases on a straight-line basis over the lease term. The Company's leases have remaining lease terms of approximately 1 year to 38 years, which may include the option to extend the lease when it is reasonably certain the Company will exercise the option. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 5 to 20 years or more. The exercise of lease renewal options is at the Company's sole discretion. Due to the uncertainties of technology changes, demographic shiftff s and behavior, environmental future markets, economic factors, regulatory requirements and other infoff rmation that impacts decisions as to store location, management has determined that it was not reasonably certain to exercise contract options and they are not included in the lease term. Additionally, short-term leases and leases with variable lease costs are immaterial. The Company its lease agreements to determine if changes are ise modifyff reviews all options to extend, terminate, or otherwrr required to the right of use assets and liabilities. As the implicit interest rate is not readily determinable in most of the Company's lease agreements, the Company uses its estimated secured incremental borrowing rate based on the infoff rmation available at commencement date in determining the present value of lease payments. Lessor — We have various arrangements foff r certain spaces foff r foff od servirr ce and vending equipment under which we are the lessor. These leases meet the criteria foff r operating lease classification. Lease income associated with these leases is immaterial. We also have certain areas where we sublease building and land space to others. This lease income is immaterial. Lessee —We lease land foff r 435 stores, one terminal, and various equipment. Our lease agreements do not contain any material residual value guarantees and approximately 102 sites leased from Walmart contain restrictive covenants, though the restrictions are deemed to have an immaterial impact. F-35 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Leases are reflected in the foff llowing balance sheet accounts: (Millions of dollars) Assets Classification Operating (Right-of-ff use) Operating lease right of use assets, net Property, plant, and equipment, at cost, less accumulated depreciation of $30.5 in 2022 and $16.7 in 2021 December 31, 2022 December 31, 2021 $ $ 449.6 $ 419.2 124.6 574.2 $ 137.3 556.5 Trade accounts payable and accrued liabilities $ Current maturities of long-term debt Non-current operating lease liabilities Long-term debt, including capitalized lease obligations $ 20.5 11.0 444.2 122.6 $ 598.3 $ 18.1 11.0 408.9 130.6 568.6 Finance ToTT tal leased assets Liabilities Current Operating Finance Noncurrent Operating Finance ToTT tal lease liabilities Lease Cost: (Millions of dollars) Operating lease cost Finance lease cost Year Ended December 31, 2022 2021 2020 52.2 $ 43.1 $ 16.6 15.9 9.1 14.8 8.2 77.2 $ 66.1 $ 1.3 0.1 18.0 Year Ended December 31, 2022 2021 2020 45.6 9.1 11.2 $ $ $ 38.8 $ 8.2 $ 9.8 $ 15.5 0.1 1.4 $ $ $ $ $ Classification Store and other operating expenses Amortization of leased assets Depreciation & amortization expense Interest on lease liabilities Interest expense Net lease costs Cash Flow Infoff rmation: (Millions of dollars) Cash paid foff r amounts included in the measurement of liabilities Operating cash flows required by operating leases Operating cash flows required by finance leases Financing cash flows required by finance leases F-36 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Maturity of Lease Liabilities: (Millions of dollars) 2023 2024 2025 2026 2027 Aftff er 2027 ToTT tal lease payments less: interest Operating leases Finance leases $ $ 49.9 49.6 48.6 47.9 47.1 530.6 773.7 309.0 19.4 17.8 16.7 15.8 15.5 122.0 207.2 73.6 133.6 Present value of lease liabilities $ 464.7 $ Lease TeTT rm and Discount Rate: Weighted average remaining lease term Finance leases Operating leases Weighted average discount rate Finance leases Operating leases Year Ended December 31, 2022 In YeYY ars 13.0 15.8 6.7 % 6.5 % Note 22 — Recent Accounting and Reporting Rules In August 2021, the FAFF SB issued ASU 2021-08, "Accounting foff r Contract Assets and Contract Liabilities from Contracts with Customers," which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in ToTT pic 606. Under ToTT pic 606, the acquirer applies the revenue model as if it had originated the contracts. This is a departure from the current requirement to measure contract assets and contract liabilities at fair value. This ASU is effff ective foff r the Company foff r the year beginning January 1, 2023, with early adoption permitted. The Company has determined this will not have a material impact on the Company's consolidated financial statements. In December 2022, the FAFF SB issued ASU 2022-06, "Reference Rate Refoff rm (ToTT pic 848): Deferral of the Sunset Date of ToTT pic 848." The amendments in this Update defer the sunset date of ToTT pic 848 from December 31, 2022, to December 31, 2024. These amendments apply to all entities and are effff ective upon issuance of the impact on the Company's Update. The Company has determined this standard has not had a material consolidated financial statements. F-37 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Note 23 — Business Segments Our operations include the sale of retail motor fuel products and convenience merchandise along with the wholesale and bulk sale capabilities of our product supply and wholesale group. As the primary purpose of the product supply and wholesale group is to support our retail operations and provide fuel foff r their daily operation, the bulk and wholesale fuel sales are secondary to the support functions played by these groups. As such, they are all treated as one segment foff r reporting purposes as they sell the same products and have similar economic characteristics. This Marketing segment contains essentially all of the revenue generating activities of the Company. Results not included in the reportable segment include Corporate and Other Assets. The reportable segment was determined based on infoff rmation reviewed by the Chief Operating Decision Maker. Segment Information iMM lii lll ill ons of dollll ars)rr (M(( Year ended December 31, 2022 Segment income (loss) Revenues from external customers Interest income Interest expense Income tax expense (benefit) Significant noncash charges (credits) Depreciation and amortization Accretion of asset retirement obligations Deferred and noncurrent income taxes (benefits) Additions to property, plant and equipment ToTT tal assets at year-end Segment Information iMM lii lll ill ons of dollll ars)rr (M(( Year ended December 31, 2021 Segment income (loss) Revenues from external customers Interest income Interest expense Income tax expense (benefit) Significant noncash charges (credits) Depreciation and amortization Accretion of asset retirement obligations Deferred and noncurrent income taxes (benefits) Additions to property, plant and equipment ToTT tal assets at year-end Marketing Corporate and Other Assets Consolidated 740.9 23,445.4 $ $ — $ (9.0) $ 232.1 $ 204.8 2.7 35.0 279.1 3,794.0 $ $ $ $ $ (68.0) $ 0.7 3.0 $ $ (76.3) $ (21.2) $ 15.6 $ — $ (3.5) $ 26.7 329.2 $ $ 672.9 23,446.1 3.0 (85.3) 210.9 220.4 2.7 31.5 305.8 4,123.2 Marketing Corporate and Other Assets Consolidated 472.8 17,359.9 $ $ — $ (8.1) $ 148.5 $ 197.3 2.5 22.6 245.5 3,569.4 $ $ $ $ $ (75.9) $ 0.6 0.1 $ $ (74.3) $ (23.5) $ 15.3 $ — $ (3.6) $ 32.0 478.8 $ $ 396.9 17,360.5 0.1 (82.4) 125.0 212.6 2.5 19.0 277.5 4,048.2 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ F-38 Murphy USA Inc. NOTES TO CONSOLIDATAA ED FINANCIAL STATT TAA EMENTS Segment Information iMM lii lll ill ons of dollll ars)rr (M(( Year ended December 31, 2020 Segment income (loss) Revenues from external customers Interest income Interest expense Loss on early debt extinguishment Income tax expense (benefit) Significant noncash charges (credits) Depreciation and amortization Accretion of asset retirement obligations Debt extinguishment costs Deferred and noncurrent income taxes (benefits) Additions to property, plant and equipment ToTT tal assets at year-end Marketing Corporate and Other Assets Consolidated $ $ $ $ $ $ $ $ $ $ $ $ 442.2 11,264.0 $ $ — $ (0.1) $ — $ 132.9 $ 146.3 2.3 $ $ — $ 2.8 200.8 2,418.2 $ $ $ (56.1) $ $ 0.3 1.0 $ (51.1) $ — $ (9.9) $ 14.7 $ — $ — $ (0.3) $ $ 26.3 $ 267.5 386.1 11,264.3 1.0 (51.2) — 123.0 161.0 2.3 — 2.5 227.1 2,685.7 F-39 SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS Murphy USA Inc. Valuation Accounts and Reservrr es iMM lii lll ill ons of dollll ars)rr (M(( 2022 Deducted from assets accounts Allowance foff r doubtful accounts 2021 Deducted from assets accounts Allowance foff r doubtful accounts 2020 Deducted from assets accounts Allowance foff r doubtful accounts $ $ $ Balance at January 1, Charged (Credited) to Expense Deductions Balance at December 31, 0.1 0.2 — $ 0.3 0.1 1.2 — — — $ 0.1 ) (1.1) $ ( ) ( 0.1 F-40 OUR BOARD OF DIRECTORS R. Madison Murphy, Chairman Mr. Murphy has been involved in the energy sector for 40+ years. In addition to his executive leadership in finance, Mr. Murphy has served on the boards of three other public companies in the energy, banking, and natural resources sectors, chairing one of these boards from 1994 to 2002. His experience in executive and board leadership positions brings to the Board a unique business and financial perspective. Executive Committee (Chair) and ex-officio of all Committees R. Andrew Clyde, Director (cid:4)(cid:400)(cid:3)(cid:87)(cid:396)(cid:286)(cid:400)(cid:349)(cid:282)(cid:286)(cid:374)(cid:410)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:18)(cid:28)(cid:75)(cid:853)(cid:3)(cid:68)(cid:396)(cid:856)(cid:3)(cid:18)(cid:367)(cid:455)(cid:282)(cid:286)(cid:3)(cid:346)(cid:258)(cid:400)(cid:3)(cid:367)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:381)(cid:393)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:258)(cid:367)(cid:853)(cid:3)(cid:272)(cid:437)(cid:367)(cid:410)(cid:437)(cid:396)(cid:258)(cid:367)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:400)(cid:410)(cid:396)(cid:258)(cid:410)(cid:286)(cid:336)(cid:349)(cid:272)(cid:3)(cid:410)(cid:396)(cid:258)(cid:374)(cid:400)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:381)(cid:296)(cid:3)(cid:68)(cid:437)(cid:396)(cid:393)(cid:346)(cid:455)(cid:3)(cid:104)(cid:94)(cid:4)(cid:3)(cid:400)(cid:349)(cid:374)(cid:272)(cid:286)(cid:3)(cid:349)(cid:410)(cid:400)(cid:3)(cid:393)(cid:437)(cid:271)(cid:367)(cid:349)(cid:272)(cid:3)(cid:349)(cid:374)(cid:272)(cid:286)(cid:393)(cid:410)(cid:349)(cid:381)(cid:374)(cid:853)(cid:3)(cid:367)(cid:286)(cid:448)(cid:286)(cid:396)(cid:258)(cid:336)(cid:349)(cid:374)(cid:336)(cid:3)(cid:346)(cid:349)(cid:400)(cid:3)(cid:1006)(cid:1004)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:400)(cid:3) of management consulting experience serving integrated downstream and midstream energy firms, large independent c-store chains and a variety of small-box retailers on similar engagements. His broad industry knowledge, analogous strategic and transformational experiences and insights into Murphy USA’s customers and markets make Mr. Clyde a valuable member of our Board. Executive Committee Claiborne P. Deming, Director (cid:68)(cid:396)(cid:856)(cid:3)(cid:24)(cid:286)(cid:373)(cid:349)(cid:374)(cid:336)(cid:3)(cid:271)(cid:396)(cid:349)(cid:374)(cid:336)(cid:400)(cid:3)(cid:1008)(cid:1004)(cid:1085)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:286)(cid:454)(cid:393)(cid:286)(cid:396)(cid:349)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:349)(cid:374)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:286)(cid:374)(cid:286)(cid:396)(cid:336)(cid:455)(cid:3)(cid:349)(cid:374)(cid:282)(cid:437)(cid:400)(cid:410)(cid:396)(cid:455)(cid:856)(cid:3)(cid:44)(cid:349)(cid:400)(cid:3)(cid:410)(cid:349)(cid:373)(cid:286)(cid:3)(cid:258)(cid:400)(cid:3)(cid:18)(cid:28)(cid:75)(cid:3)(cid:393)(cid:396)(cid:381)(cid:448)(cid:349)(cid:282)(cid:286)(cid:400)(cid:3)(cid:448)(cid:258)(cid:367)(cid:437)(cid:286)(cid:282)(cid:3)(cid:349)(cid:374)(cid:400)(cid:349)(cid:336)(cid:346)(cid:410)(cid:3)(cid:349)(cid:374)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:18)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:455)(cid:859)(cid:400)(cid:3)(cid:400)(cid:410)(cid:396)(cid:258)(cid:410)(cid:286)(cid:336)(cid:455)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:381)(cid:393)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:856)(cid:3) Mr. Deming has served on the boards of two other public companies in the energy sector. He is the former Chair of an advisory committee to the Secretary of Energy. Mr. Deming has served in an advisory role providing strategic and financial advice to investors, management teams, boards of directors, governmental bodies, and other professionals and participants in the global energy industry. His deep understanding of the energy sector and strategy strengthens the Board’s collective knowledge. Executive Committee and Executive Compensation Committee (Chair) David L. Goebel, Director More than 40 years of experience in retail, food service, and hospitality provides Mr. Goebel with vast knowledge that benefits the Board. He brings unique (cid:364)(cid:374)(cid:381)(cid:449)(cid:367)(cid:286)(cid:282)(cid:336)(cid:286)(cid:3)(cid:296)(cid:396)(cid:381)(cid:373)(cid:3)(cid:346)(cid:349)(cid:400)(cid:3)(cid:400)(cid:286)(cid:396)(cid:448)(cid:349)(cid:272)(cid:286)(cid:3)(cid:349)(cid:374)(cid:3)(cid:448)(cid:258)(cid:396)(cid:455)(cid:349)(cid:374)(cid:336)(cid:3)(cid:272)(cid:258)(cid:393)(cid:258)(cid:272)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:3)(cid:258)(cid:400)(cid:3)(cid:18)(cid:28)(cid:75)(cid:853)(cid:3)(cid:17)(cid:381)(cid:258)(cid:396)(cid:282)(cid:3)(cid:18)(cid:346)(cid:258)(cid:349)(cid:396)(cid:853)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:282)(cid:349)(cid:396)(cid:286)(cid:272)(cid:410)(cid:381)(cid:396)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:410)(cid:346)(cid:396)(cid:286)(cid:286)(cid:3)(cid:449)(cid:286)(cid:367)(cid:367)(cid:882)(cid:364)(cid:374)(cid:381)(cid:449)(cid:374)(cid:853)(cid:3)(cid:393)(cid:437)(cid:271)(cid:367)(cid:349)(cid:272)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:455)(cid:3)(cid:396)(cid:286)(cid:400)(cid:410)(cid:258)(cid:437)(cid:396)(cid:258)(cid:374)(cid:410)(cid:3)(cid:272)(cid:346)(cid:258)(cid:349)(cid:374)(cid:400)(cid:853)(cid:3)(cid:258)(cid:400)(cid:3)(cid:449)(cid:286)(cid:367)(cid:367)(cid:3)(cid:258)(cid:400)(cid:3)(cid:346)(cid:349)(cid:400)(cid:3) service on several private company boards, including QuickChek. His comprehensive experience in food and beverage, supply chain management, risk assessment, risk management, succession planning, executive development, executive compensation, and strategic planning enables him to share valuable insights and perspectives. Audit Committee and Executive Compensation Committee Fred L. Holliger, Director Mr. Holliger’s career in the energy industry spans more than four decades in a variety of engineering, marketing, supply, and management positions, (cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3)(cid:400)(cid:286)(cid:396)(cid:448)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:400)(cid:3)(cid:18)(cid:28)(cid:75)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:18)(cid:346)(cid:258)(cid:349)(cid:396)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:17)(cid:381)(cid:258)(cid:396)(cid:282)(cid:3)(cid:381)(cid:296)(cid:3)(cid:258)(cid:3)(cid:393)(cid:437)(cid:271)(cid:367)(cid:349)(cid:272)(cid:367)(cid:455)(cid:3)(cid:410)(cid:396)(cid:258)(cid:282)(cid:286)(cid:282)(cid:3)(cid:393)(cid:286)(cid:410)(cid:396)(cid:381)(cid:367)(cid:286)(cid:437)(cid:373)(cid:3)(cid:396)(cid:286)(cid:296)(cid:349)(cid:374)(cid:286)(cid:396)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:272)(cid:381)(cid:374)(cid:448)(cid:286)(cid:374)(cid:349)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:400)(cid:410)(cid:381)(cid:396)(cid:286)(cid:3)(cid:381)(cid:393)(cid:286)(cid:396)(cid:258)(cid:410)(cid:381)(cid:396)(cid:856)(cid:3)(cid:44)(cid:349)(cid:400)(cid:3)(cid:271)(cid:396)(cid:381)(cid:258)(cid:282)(cid:3)(cid:364)(cid:374)(cid:381)(cid:449)(cid:367)(cid:286)(cid:282)(cid:336)(cid:286)(cid:3)(cid:381)(cid:296)(cid:3)(cid:258)(cid:367)(cid:367)(cid:3)(cid:258)(cid:400)(cid:393)(cid:286)(cid:272)(cid:410)(cid:400)(cid:3) of the downstream sector from refining to retail, make Mr. Holliger a unique asset for the Board. Executive Compensation Committee and Nominating and Governance Committee James W. Keyes, Director (cid:68)(cid:396)(cid:856)(cid:3)(cid:60)(cid:286)(cid:455)(cid:286)(cid:400)(cid:859)(cid:3)(cid:286)(cid:454)(cid:286)(cid:272)(cid:437)(cid:410)(cid:349)(cid:448)(cid:286)(cid:3)(cid:367)(cid:286)(cid:258)(cid:282)(cid:286)(cid:396)(cid:400)(cid:346)(cid:349)(cid:393)(cid:3)(cid:286)(cid:454)(cid:393)(cid:286)(cid:396)(cid:349)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:286)(cid:400)(cid:3)(cid:400)(cid:286)(cid:396)(cid:448)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:400)(cid:3)(cid:18)(cid:28)(cid:75)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:449)(cid:381)(cid:3)(cid:38)(cid:381)(cid:396)(cid:410)(cid:437)(cid:374)(cid:286)(cid:3)(cid:1009)(cid:1004)(cid:1004)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:258)(cid:374)(cid:349)(cid:286)(cid:400)(cid:856)(cid:3)(cid:116)(cid:346)(cid:349)(cid:367)(cid:286)(cid:3)(cid:367)(cid:286)(cid:258)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3)(cid:1011)(cid:882)(cid:28)(cid:367)(cid:286)(cid:448)(cid:286)(cid:374)(cid:853)(cid:3)(cid:47)(cid:374)(cid:272)(cid:856)(cid:853)(cid:3)(cid:346)(cid:286)(cid:3)(cid:400)(cid:393)(cid:286)(cid:258)(cid:396)(cid:346)(cid:286)(cid:258)(cid:282)(cid:286)(cid:282)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:349)(cid:374)(cid:410)(cid:396)(cid:381)(cid:282)(cid:437)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3) of fresh foods, built a nationwide network of commissaries, and a daily distribution system for fresh product delivery which resulted in the growth of fresh food sales to over 20% of product mix. Mr. Keyes currently serves on two other public company boards and has served on the boards of numerous private companies. His industry knowledge and business expertise are invaluable to our Board. Executive Committee and Executive Compensation Committee Diane N. Landen, Director (cid:116)(cid:349)(cid:410)(cid:346)(cid:3)(cid:381)(cid:448)(cid:286)(cid:396)(cid:3)(cid:1007)(cid:1004)(cid:3)(cid:455)(cid:286)(cid:258)(cid:396)(cid:400)(cid:3)(cid:381)(cid:296)(cid:3)(cid:286)(cid:454)(cid:393)(cid:286)(cid:396)(cid:349)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:349)(cid:374)(cid:3)(cid:272)(cid:381)(cid:373)(cid:373)(cid:437)(cid:374)(cid:349)(cid:272)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:271)(cid:396)(cid:381)(cid:258)(cid:282)(cid:272)(cid:258)(cid:400)(cid:410)(cid:3)(cid:393)(cid:396)(cid:381)(cid:393)(cid:286)(cid:396)(cid:410)(cid:455)(cid:3)(cid:381)(cid:449)(cid:374)(cid:286)(cid:396)(cid:400)(cid:346)(cid:349)(cid:393)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:373)(cid:258)(cid:374)(cid:258)(cid:336)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:853)(cid:3)(cid:68)(cid:400)(cid:856)(cid:3)(cid:62)(cid:258)(cid:374)(cid:282)(cid:286)(cid:374)(cid:3)(cid:271)(cid:396)(cid:349)(cid:374)(cid:336)(cid:400)(cid:3)(cid:258)(cid:3)(cid:400)(cid:393)(cid:286)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:400)(cid:286)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:400)(cid:364)(cid:349)(cid:367)(cid:367)(cid:400)(cid:3)(cid:410)(cid:381)(cid:3)(cid:410)(cid:346)(cid:286)(cid:3)(cid:17)(cid:381)(cid:258)(cid:396)(cid:282)(cid:856)(cid:3) Ms. Landen has been an owner and served on the boards of private companies involved in oil and gas exploration and production and timber. The Board benefits from her asset management experience and unique insights into communications, media, and natural resources industries. Audit Committee and Nominating and Governance Committee (Chair) David B. Miller, Director Mr. Miller provides expertise in banking and finance. His leadership experience includes serving as Managing Partner of a firm he co-founded that is a leading provider of private equity capital to the energy industry. In addition to having served on the boards of four publicly traded companies in the energy sector, Mr. Miller has served on the boards of many private oil/gas exploration and production companies. He is a member of the council that serves as an oil/gas advisory committee to the Secretary of Energy. Mr. Miller’s broad energy industry knowledge and his leadership experience and expertise in business valuation, capital structure and strategic relationships complement the collective strength and leadership of our Board. Executive Compensation Committee and Nominating and Governance Committee Hon. Jeanne L. Phillips, Director The Honorable Ms. Phillips brings unique experience to the Board in the areas of governmental affairs and public policy having served in varying capacities at the state, national, and international levels. In addition, as an executive of one of the largest privately-held family companies in the U.S. and its related affiliates, she has extensive experience in the areas of corporate leadership, media relations, crisis communications, and sustainability which bolsters the Board’s ability to react to an ever-changing business environment. Audit Committee and Nominating and Governance Committee Jack T. Taylor, Director Mr. Taylor has extensive experience with financial and public accounting issues as well as a deep knowledge of the energy industry. He was a partner of KPMG, LLP for 29 years. As an executive leader, Mr. Taylor was responsible for the execution of global strategy within all KPMG member firms in North and South America, encompassing 40,000+ employees and $8B in revenue. He serves on the audit committees of two other publicly traded energy companies, and is Chair of one of these committees. Mr. Taylor lends considerable expertise to our Board in finance, accounting, and energy matters. Audit Committee (Chair) and Executive Compensation Committee Rosemary L. Turner, Director Ms. Turner has an impressive history in the logistics and distribution industry. She served as president of various UPS divisions applying her strengths of business development, relationship management and operational stewardship. Ms. Turner has also served as director of two other publicly traded companies that are leaders in the transport and distribution markets. Through her experience with the Philadelphia Federal Reserve Board and the San Francisco Federal Reserve Board, which she formerly Chaired in 2021, Ms. Turner has an excellent understanding of the macro economy, state of markets and consumers, and evolving (cid:393)(cid:258)(cid:455)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:400)(cid:455)(cid:400)(cid:410)(cid:286)(cid:373)(cid:400)(cid:856)(cid:3)(cid:75)(cid:437)(cid:396)(cid:3)(cid:17)(cid:381)(cid:258)(cid:396)(cid:282)(cid:3)(cid:271)(cid:286)(cid:374)(cid:286)(cid:296)(cid:349)(cid:410)(cid:400)(cid:3)(cid:296)(cid:396)(cid:381)(cid:373)(cid:3)(cid:346)(cid:286)(cid:396)(cid:3)(cid:282)(cid:286)(cid:286)(cid:393)(cid:3)(cid:286)(cid:454)(cid:393)(cid:286)(cid:396)(cid:349)(cid:286)(cid:374)(cid:272)(cid:286)(cid:3)(cid:349)(cid:374)(cid:3)(cid:400)(cid:437)(cid:393)(cid:393)(cid:367)(cid:455)(cid:3)(cid:272)(cid:346)(cid:258)(cid:349)(cid:374)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:367)(cid:381)(cid:336)(cid:349)(cid:400)(cid:410)(cid:349)(cid:272)(cid:400)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:286)(cid:856)(cid:3) Audit Committee and Nominating and Governance Committee Murphy USA Inc. | 200 East Peach Street | El Dorado, AR 71730-5836 | corporate.murphyusa.com 

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