UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 28, 2020

MURPHY USA INC.
(Exact name of registrant as specified in its charter)

			
Delaware	001-35914	46-2279221	
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)	
			
200 Peach Street			
El Dorado, Arkansas		71730-5836	
 
(870) 875-7600
(Registrant's telephone number, including area code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 Value	MUSA	New York Stock Exchange	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.   Results of Operations and Financial Condition
 
On October 28, 2020, Murphy USA Inc. issued a news release announcing its financial results for the three and nine months ended September 30, 2020. The full text of this news release is attached hereto as Exhibit 99.1.
 
The information in this Item 2.02, Item 7.01 and Item 9.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.

Item 7.01.   Regulation FD Disclosures
 
On October 28, 2020, Murphy USA Inc. issued a news release announcing an updated capital allocation strategy for the Company including a new $500 million share repurchase program to begin upon completion of the current $400 million authorization and available to be executed by December 31, 2023, and the institution of a quarterly dividend to common shareholders. The dividend of $0.25 per share, or $1.00 per share on an annualized basis, will be paid on December 1, 2020, to shareholders of record as of November 13, 2020. The capital allocation strategy also includes reaffirmation of the Company's commitment to organic growth, a new focus on food and beverage capabilities and potential involvement in mergers and acquisitions. The full text of this news release is attached hereto as Exhibit 99.2.

Item 9.01.  Financial Statements and Exhibits
 
(d) Exhibits
 
99.1   News release issued by Murphy USA Inc., dated October 28, 2020, announcing financial results for the three and nine months ended September 30, 2020.

99.2 News release issued by Murphy USA Inc., dated October 28, 2020, announcing its updated capital allocation strategy.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

Signature
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

												

		
		MURPHY USA INC.	
			
Date: 	October 28, 2020	By:  /s/  Donald R. Smith, Jr.	
		Donald R. Smith, Jr.	
		Vice President and Controller	

Exhibit Index

	
Exhibit No.  			Description	
99.1		News release issued by Murphy USA Inc., dated October 28, 2020, announcing earnings for the three and nine months ended September 30, 2020	
					
99.2		News release issued by Murphy USA Inc., dated October 28, 2020, announcing its updated capital allocation strategy	
	
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)	

Exhibit 99.1

Murphy USA Inc. Reports Third Quarter 2020 Results

El Dorado, Arkansas, October 28, 2020 (GLOBE NEWSWIRE) – Murphy USA Inc. (NYSE: MUSA), a leading marketer of retail motor fuel products and convenience merchandise, today announced financial results for the three and nine months ended September 30, 2020.
Key Highlights:
•Net income was $66.9 million, or $2.27 per diluted share, in Q3 2020 compared to net income of $69.2 million, or $2.18 per diluted share, in Q3 2019. The current quarter included a $10 million increase to SG&A expense related to a donation to the Company's charitable foundation while Q3 2019 included a loss on early debt extinguishment of $14.8 million

•Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results including     RINs) for Q3 2020 was 22.3 cpg compared to 20.1 cpg in Q3 2019

•Total retail gallons decreased 11.9% in Q3 2020 compared to Q3 2019, while volumes on a same store sales ("SSS") basis decreased 12.7%

•Merchandise contribution dollars increased 6.2% to $118.1 million compared to the prior-year quarter, on average unit margins of 15.6% in the current quarter

•During Q3 2020, 4 new stores opened and 5 raze-and-rebuilds reopened, while 1 store closed. Since the quarter end 1 additional new site and 6 raze-and-rebuilds have opened; there are 13 new retail sites and 14 raze-and-rebuild sites currently under construction
•Common shares repurchased during the third quarter of 2020 were approximately 0.7 million for $89.9 million at an average price of $136.98 per share

“Murphy USA delivered strong third quarter performance as continued improvements in customer traffic, sustained gains and double digit sales growth in key merchandise categories, along with higher total fuel margins in a rising price environment shaped performance for the past three months," said President and CEO Andrew Clyde. “These trends have continued into October where traffic continues to rebound and same store fuel gallons have recovered to 94% of prior year. As we begin to put 2020 in the rear view mirror, we are excited about our accelerated 2021 growth plans and our enhanced shareholder friendly capital allocation strategy.”

Consolidated Results

		Three Months Ended
September 30,		Nine Months Ended
September 30,	
Key Operating Metrics		2020		2019		2020		2019	
Net income (loss) ($ Millions)		$	66.9 			$	69.2 			$	325.1 			$	107.2 		
Earnings per share (diluted)		$	2.27 			$	2.18 			$	10.88 			$	3.33 		
Adjusted EBITDA ($ Millions)		$	141.5 			$	158.7 			$	586.4 			$	310.2 		

Net income and Adjusted EBITDA in Q3 2020 were lower than Q3 2019 primarily due to lower all-in fuel contribution and higher SG&A expense, partially offset by higher merchandise contribution, lower payment fees and lower interest and debt extinguishment expenses. The increase in SG&A was primarily due to a charitable donation of $10.0 million announced during the current year quarter. Additionally, the prior-year quarter included a loss on early debt extinguishment of $14.8 million.

Fuel

		Three Months Ended
September 30,		Nine Months Ended
September 30,	
Key Operating Metrics		2020		2019		2020		2019	
Total retail fuel contribution ($ Millions)		$	187.7 			$	206.4 			$	739.5 			$	446.3 		
Total PS&W contribution ($ Millions)		6.9 			10.7 			(21.5)			46.6 		
RINs and other (included in Other operating revenues on Consolidated Income Statement) ($ Millions)		25.2 			8.5 			63.3 			28.6 		
Total fuel contribution ($ Millions)		$	219.8 			$	225.6 			$	781.3 			$	521.5 		
Retail fuel volume - chain (Million gal)		987.3 			1,120.6 			2,888.2 			3,302.6 		
Retail fuel volume - per site (K gal APSM)1		224.0 			254.8 			216.9 			250.5 		
Retail fuel volume - per site (K gal SSS)2		220.3 			249.5 			213.7 			245.9 		
Total fuel contribution (including retail, PS&W and RINs) (cpg)		22.3 			20.1 			27.1 			15.8 		
Retail fuel margin (cpg)		19.0 			18.4 			25.6 			13.5 		
PS&W including RINs contribution (cpg)		3.3 			1.7 			1.5 			2.3 		
1Average Per Store Month ("APSM") metric includes all stores open through the date of calculation	
22019 amounts not revised for 2020 raze-and-rebuild activity									

Total fuel contribution dollars decreased 2.6%, or $5.8 million, in Q3 of 2020 compared to Q3 of 2019. Retail fuel margins of 19.0 cpg were 3.3% higher than Q3 2019. Lower fuel volumes sold, however, created an overall decrease in total retail fuel contribution dollars of $18.7 million to $187.7 million. Retail fuel volumes were lower during the quarter compared to prior year volumes primarily due to the effects of pandemic-related decreases in travel. PS&W contribution including RINs increased $12.9 million when compared to Q3 2019 due primarily to higher RIN prices and volumes in Q3 2020.

Merchandise

		Three Months Ended
September 30,		Nine Months Ended
September 30,	
Key Operating Metrics		2020		2019		2020		2019	
Total merchandise contribution ($ Millions)		$	118.1 			$	111.2 			$	344.0 			$	314.2 		
Total merchandise sales ($ Millions)		$	756.8 			$	681.1 			$	2,211.4 			$	1,946.1 		
Total merchandise sales ($K SSS)1,2		$	171.2 			$	154.3 			$	165.8 			$	147.3 		
Merchandise unit margin (%)		15.6% 			16.3% 			15.6% 			16.1 	%	
Tobacco contribution ($K SSS)1,2		$	16.7 			$	15.5 			$	16.4 			$	14.4 		
Non-tobacco contribution ($K SSS)1,2		$	10.7 			$	10.2 			$	10.1 			$	9.8 		
Total merchandise contribution ($K SSS)1,2		$	27.4 			$	25.7 			$	26.5 			$	24.2 		
12019 amounts not revised for 2020 raze-and-rebuild activity									
2Includes site-level discounts for Murphy Drive Reward ("MDR") redemptions and excludes change in value of unredeemed MDR points	

Total merchandise contribution increased 6.2% to $118.1 million in the Q3 2020 from $111.2 million in Q3 2019, due to higher sales across the chain. Q3 2020 total merchandise contribution dollars per store on a SSS basis increased 6.2% when compared to Q3 2019. Tobacco contribution increased 9.0% on a SSS basis due to higher unit volumes, generating higher sales dollars and margin during the current period. Non-tobacco contribution improved 2.2% on a SSS basis, primarily due to strong performance in the lottery and general merchandise categories when compared to the prior-year quarter.

Other Areas

		Three Months Ended
September 30,		Nine Months Ended
September 30,	
Key Operating Metrics		2020		2019		2020		2019	
Total station and other operating expense ($ Millions)		$	142.9 			$	143.4 			$	409.8 			$	421.8 		
Station OPEX excluding credit card fees and rent ($K APSM)		$	22.1 			$	21.2 			$	21.1 			$	20.9 		
Total SG&A cost ($ Millions)		$	53.7 			$	36.0 			$	130.0 			$	105.7 		

Station OPEX excluding payment fees and rent increased 4.2% from the same period of 2019, on an APSM basis, and was primarily attributable to increased employee-related expenses. Without COVID-related operating expenses of $1.4 million, station OPEX would have only increased 3% quarter-over-quarter. As noted in our 2020 guidance, we have removed rent from station OPEX on an APSM basis for both periods presented. Total SG&A costs were $17.7 million higher in Q3 2020 when compared to 2019, primarily due to a $10 million charitable contribution in Q3 2020 as well as increased employee-related expenses.

Station Openings
Murphy USA opened 4 new retail locations, reopened 5 raze-and-rebuild site, and closed 1 location in Q3 2020, bringing the store count to 1,488, consisting of 1,151 Murphy USA sites and 337 Murphy Express sites. Since the quarter end an additional 1 new site and 6 raze-and-rebuilds have opened. A total of 27 stores are currently under construction which includes 13 new retail locations and 14 kiosks undergoing raze-and-rebuild that will return to operation as 1400 sq. ft. stores. We expect to end the year with more than 1,500 stores in operation.

Financial Resources

		As of September 30,	
Key Financial Metrics		2020		2019	
Cash and cash equivalents ($ Millions)		$	317.5 			$	247.7 		
Long-term debt ($ Millions)		$	963.2 			$	966.4 		

Cash balances as of September 30, 2020 totaled $317.5 million. Long-term debt consisted of approximately $493 million in carrying value of 4.75% senior notes due in 2029, $297 million in carrying value of 5.625% senior notes due in 2027 and $225 million of term debt less $50 million of current maturities, which is reflected in current liabilities. The asset-based revolving facility was undrawn and had a borrowing capacity of $197 million as of September 30, 2020.

																											
		Three Months Ended
September 30,		Nine Months Ended
September 30,	
Key Financial Metric		2020		2019		2020		2019	
Average shares outstanding (diluted) (in thousands)		29,499 			31,704 			29,887 			32,189 		

Common shares repurchased under the $400 million share repurchase program approved in July 2019 during the current quarter were approximately 0.7 million for $89.9 million, and total share repurchases for the nine months of 2.0 million for $230.5 million, with approximately $44.5 million remaining in the plan at September 30, 2020. At September 30, 2020, the Company had common shares outstanding of 28,567,716. The effective income tax rate for Q3 2020 was 24.1% compared to 24.2% in Q3 2019.

* * * * *

Earnings Call Information
The Company will host a conference call on October 29, 2020 at 10:00 a.m. Central Time to discuss third quarter 2020 results. The conference call number is 1 (833) 968-2218 and the conference number is 4728178. The earnings and investor related materials, including reconciliations of any non-GAAP financial measures to GAAP financial measures and any other applicable disclosures, will be available on that same day on the investor section of the Murphy USA website (http://ir.corporate.murphyusa.com). Approximately one hour after the conclusion of the conference, the webcast will be available for replay. Shortly thereafter, a transcript will be available.

Source: Murphy USA Inc. (NYSE: MUSA)

Forward-Looking Statements
Certain statements in this news release contain or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainties, including, but not limited to anticipated store openings, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, share repurchases and M&A activity. Such statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. Actual future results may differ materially from historical results or current expectations depending upon factors including, but not limited to: our ability to continue to maintain a good business relationship with Walmart; successful execution of our growth strategy, including our ability to realize the anticipated benefits from such growth initiatives, and the timely completion of construction associated with our newly planned stores which may be impacted by the financial health of third parties; our ability to effectively manage our inventory, disruptions in our supply chain and our ability to control costs; the impact of severe weather events, such as hurricanes, floods and earthquakes; the impact of a global health pandemic, such as COVID-19 including the impact on our fuel volumes if the gradual recoveries experienced in Q2 2020 stall or reverse as a result of any resurgence in COVID-19 infection rates and government reaction in response thereof; the impact of any systems failures, cybersecurity and/or security breaches, including any security breach that results in theft, transfer or unauthorized disclosure of customer, employee or company information or our compliance with information security and privacy laws and regulations in the event of such an incident; successful execution of our information technology strategy; future tobacco or e-cigarette legislation and any other efforts that make purchasing tobacco products more costly or difficult could hurt our revenues and impact gross margins; changes to the company's capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the company's share repurchases, or management of operating cash; 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. Our SEC reports, including our most recent annual Report on Form10-K and quarterly report on Form 10-Q, contain other information

on these and other factors that could affect our financial results and cause actual results to differ materially from any forward-looking information we may provide. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

			
Investor Contact:
Christian Pikul (870) 875-7683
Vice President, Investor Relations and Financial Planning and Analysis
christian.pikul@murphyusa.com	

Murphy USA Inc.
Consolidated Statements of Income
(Unaudited)

									
		Three Months Ended
September 30,		Nine Months Ended
September 30,	
(Millions of dollars, except share and per share amounts)		2020		2019		2020		2019	
Operating Revenues									
   Petroleum product sales (a)		$	2,056.0 			$	2,965.5 			$	6,125.1 			$	8,595.0 		
   Merchandise sales		756.8 			681.1 			2,211.4 			1,946.1 		
   Other operating revenues		26.2 			11.0 			66.9 			33.3 		
Total operating revenues		2,839.0 			3,657.6 			8,403.4 			10,574.4 		
									
Operating Expenses									
   Petroleum product cost of goods sold (a)		1,862.2 			2,749.6 			5,409.8 			8,104.8 		
   Merchandise cost of goods sold		638.7 			569.9 			1,867.4 			1,631.9 		
	
   Station and other operating expenses		142.9 			143.4 			409.8 			421.8 		
   Depreciation and amortization		40.6 			37.6 			119.5 			113.8 		
   Selling, general and administrative		53.7 			36.0 			130.0 			105.7 		
   Accretion of asset retirement obligations		0.6 			0.6 			1.7 			1.6 		
Total operating expenses		2,738.7 			3,537.1 			7,938.2 			10,379.6 		
									
Net settlement proceeds		— 			— 			— 			0.1 		
Gain (loss) on sale of assets		— 			0.2 			1.4 			0.1 		
Income (loss) from operations		100.3 			120.7 			466.6 			195.0 		
									
Other income (expense)									
Interest income		— 			0.8 			1.0 			2.4 		
Interest expense		(12.4)			(15.3)			(38.7)			(42.1)		
Loss on early debt extinguishment		— 			(14.8)			— 			(14.8)		
Other nonoperating income (expense)		0.2 			(0.1)			(0.5)			— 		
Total other income (expense)		(12.2)			(29.4)			(38.2)			(54.5)		
Income (loss) before income taxes		88.1 			91.3 			428.4 			140.5 		
Income tax expense (benefit)		21.2 			22.1 			103.3 			33.3 		

Net Income		$	66.9 			$	69.2 			$	325.1 			$	107.2 		
									
Basic and Diluted Earnings Per Common Share									

Basic		$	2.30 			$	2.20 			$	11.00 			$	3.35 		
Diluted		$	2.27 			$	2.18 			$	10.88 			$	3.33 		
Weighted-average Common shares outstanding (in thousands):									
Basic		29,111 			31,447 			29,546 			31,961 		
Diluted		29,499 			31,704 			29,887 			32,189 		
Supplemental information:									
(a) Includes excise taxes of:		$	447.0 			$	498.9 			$	1,300.7 			$	1,452.5 		

Murphy USA Inc.
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)

(Millions of dollars)	Three Months Ended
September 30,	Nine Months Ended
September 30,	
	2020		2019		2020		2019	
Net income	$	66.9 			$	69.2 			$	325.1 			$	107.2 		
								
Other comprehensive income (loss), net of tax								
Interest rate swap:								
	
Realized gain (loss)	(0.4)			— 			(0.5)			— 		
Unrealized gain (loss)	0.5 			— 			(3.7)			— 		
Reclassified to interest expense	0.4 			— 			0.5 			— 		
	0.5 			— 			(3.7)			— 		
Deferred income tax (benefit) expense	0.1 			— 			(0.9)			— 		
Other comprehensive income (loss)	0.4 			— 			(2.8)			— 		
Comprehensive income (loss)	$	67.3 			$	69.2 			$	322.3 			$	107.2 		

Murphy USA Inc.
Segment Operating Results
(Unaudited)

																											
									
(Millions of dollars, except revenue per same store sales (in thousands) and store counts)		Three Months Ended
September 30,		Nine Months Ended
September 30,	
Marketing Segment		2020		2019		2020		2019	
									
Operating Revenues									
Petroleum product sales		$	2,056.0 			$	2,965.5 			$	6,125.1 			$	8,595.0 		
Merchandise sales		756.8 			681.1 			2,211.4 			1,946.1 		
Other operating revenues		26.3 			11.0 			66.9 			33.2 		
Total operating revenues		2,839.1 			3,657.6 			8,403.4 			10,574.3 		
									
Operating expenses									
Petroleum products cost of goods sold		1,862.2 			2,749.6 			5,409.8 			8,104.8 		
Merchandise cost of goods sold		638.7 			569.9 			1,867.4 			1,631.9 		
Station and other operating expenses		142.8 			143.4 			409.7 			421.8 		
Depreciation and amortization		36.9 			34.2 			108.6 			104.0 		
Selling, general and administrative		53.7 			36.0 			130.0 			105.7 		
Accretion of asset retirement obligations		0.6 			0.6 			1.7 			1.6 		
Total operating expenses		2,734.9 			3,533.7 			7,927.2 			10,369.8 		

	
Gain (loss) on sale of assets		(0.1)			0.2 			1.3 			0.1 		
	
Income (loss) from operations		104.1 			124.1 			477.5 			204.6 		
									
Other income (expense)									
Interest expense		— 			— 			(0.1)			(0.1)		
	
Total other income (expense)		— 			— 			(0.1)			(0.1)		

Income (loss) before income taxes		104.1 			124.1 			477.4 			204.5 		
Income tax expense (benefit)		22.4 			30.1 			115.2 			49.8 		
Income (loss) from operations		$	81.7 			$	94.0 			$	362.2 			$	154.7 		

Total tobacco sales revenue same store sales1,2		$	123.5 			$	112.3 			$	119.8 			$	106.0 		
Total non-tobacco sales revenue same store sales1,2		47.7 			42.0 			46.0 			41.3 		
Total merchandise sales revenue same store sales1,2		$	171.2 			$	154.3 			$	165.8 			$	147.3 		
12019 amounts not revised for 2020 raze-and-rebuild activity									
2Includes site-level discounts for Murphy Drive Reward ("MDR") redemptions and excludes change in value of unredeemed MDR points	

Store count at end of period		1,488 			1,479 			1,488 			1,479 		
Total store months during the period		4,407 			4,398 			13,317 			13,185 		

			

Same store sales information compared to APSM metrics

		Variance from prior year period	
		Three months ended		Nine months ended	
		September 30, 2020		September 30, 2020	
		SSS1		APSM2		SSS1		APSM2	
Fuel gallons per month		(12.7)	%		(12.1)	%		(14.1)	%		(13.4)	%	
									
Merchandise sales		10.5 	%		10.9 	%		12.3 	%		12.5 	%	
Tobacco sales		10.2 	%		10.1 	%		13.5 	%		13.1 	%	
Non tobacco sales		11.4 	%		13.2 	%		9.1 	%		11.1 	%	
									
Merchandise margin		6.2 	%		6.0 	%		9.3 	%		8.4 	%	
Tobacco margin		9.0 	%		8.1 	%		15.1 	%		13.0 	%	
Non tobacco margin		2.2 	%		4.2 	%		1.0 	%		2.9 	%	
1Includes site-level discounts for MDR redemptions and excludes change in value of unredeemed MDR points	
2Includes all MDR activity									

	

Notes

Average Per Store Month (APSM) metric includes all stores open through the date of the calculation.

Same store sales (SSS) metric includes aggregated individual store results for all stores open throughout both periods presented. For all periods presented, the store must have been open for the entire calendar year to be included in the comparison. Remodeled stores that remained open or were closed for just a very brief time (less than a month) during the period being compared remain in the same store sales calculation. If a store is 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 service. Newly constructed sites do not enter the calculation until they are open for each full calendar year for the periods being compared (open by January 1, 2019 for the sites being compared in the 2020 versus 2019 comparison). When prior period same store sales volumes or sales are presented, they have not been revised for current year activity for raze-and-rebuilds and asset dispositions.

Murphy USA Inc.
Consolidated Balance Sheets

															

					
(Millions of dollars, except share amounts)		September 30,
2020		December 31, 2019	
		(unaudited)			
Assets					
Current assets					
Cash and cash equivalents		$	317.5 			$	280.3 		
Accounts receivable—trade, less allowance for doubtful
accounts of $0.1 in 2020 and $1.2 in 2019		142.7 			172.9 		
Inventories, at lower of cost or market		268.1 			227.6 		
Prepaid expenses and other current assets		14.9 			30.0 		
	
Total current assets		743.2 			710.8 		
Property, plant and equipment, at cost less accumulated depreciation and amortization of $1,151.3 in 2020 and $1,079.2 in 2019		1,854.0 			1,807.3 		
	
Other assets		191.0 			169.1 		
	
Total assets		$	2,788.2 			$	2,687.2 		
Liabilities and Stockholders' Equity					
Current liabilities					
Current maturities of long-term debt		$	51.2 			$	38.8 		
Trade accounts payable and accrued liabilities		442.8 			466.2 		
Income taxes payable		19.4 			— 		
	
Total current liabilities		513.4 			505.0 		
					
Long-term debt, including capitalized lease obligations		963.2 			999.3 		
Deferred income taxes		217.5 			216.7 		
Asset retirement obligations		34.0 			32.8 		
Deferred credits and other liabilities		164.4 			130.4 		
	
Total liabilities		1,892.5 			1,884.2 		
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 2020 and 2019, respectively)		0.5 			0.5 		
Treasury stock (18,199,448 and 16,307,048 shares held at					
2020 and 2019, respectively)		(1,321.8)			(1,099.8)		
Additional paid in capital (APIC)		530.0 			538.7 		
Retained earnings		1,689.1 			1,362.9 		
   Accumulated other comprehensive income (loss) (AOCI)		(2.1)			0.7 		
Total stockholders' equity		895.7 			803.0 		
Total liabilities and stockholders' equity		$	2,788.2 			$	2,687.2 		

Murphy USA Inc.
Consolidated Statement of Cash Flows
(Unaudited)

									
		Three Months Ended
September 30,		Nine Months Ended
September 30,	
(Millions of dollars)		2020		2019		2020		2019	
Operating Activities									
Net income		$	66.9 			$	69.2 			$	325.1 			$	107.2 		
Adjustments to reconcile net income (loss) to net cash provided by operating activities									
Depreciation and amortization		40.6 			37.6 			119.5 			113.8 		
	
Deferred and noncurrent income tax charges (credits)		(7.7)			4.2 			1.7 			6.9 		
Accretion of asset retirement obligations		0.6 			0.6 			1.7 			1.6 		
Pretax (gains) losses from sale of assets		— 			(0.2)			(1.4)			(0.1)		
Net (increase) decrease in noncash operating working capital		(25.4)			(3.2)			(2.2)			(3.7)		
       Loss on early debt extinguishment		— 			14.8 			— 			14.8 		
Other operating activities - net		10.9 			3.7 			23.4 			11.1 		
Net cash provided by operating activities		85.9 			126.7 			467.8 			251.6 		
Investing Activities									
Property additions		(63.7)			(67.1)			(169.4)			(153.7)		
Proceeds from sale of assets		0.1 			1.0 			7.7 			2.4 		

Other investing activities - net		(0.5)			(0.2)			(1.6)			(0.7)		
Net cash required by investing activities		(64.1)			(66.3)			(163.3)			(152.0)		
Financing Activities									
Purchase of treasury stock		(89.9)			(109.0)			(230.5)			(139.1)		
Borrowings of debt		— 			693.7 			— 			693.7 		
Repayments of debt		(12.9)			(562.4)			(26.1)			(573.1)		
Debt issuance costs		— 			(3.1)			— 			(3.1)		
Early debt extinguishment costs		— 			(10.4)			— 			(10.4)		
Amounts related to share-based compensation		(5.1)			(0.1)			(10.7)			(4.4)		
	
Net cash provided (required) by financing activities		(107.9)			8.7 			(267.3)			(36.4)		
Net increase (decrease) in cash, cash equivalents, and restricted cash		(86.1)			69.1 			37.2 			63.2 		
Cash, cash equivalents, and restricted cash at beginning of period		403.6 			178.6 			280.3 			184.5 		
Cash, cash equivalents, and restricted cash at end of period		$	317.5 			$	247.7 			$	317.5 			$	247.7 		

	

	

Supplemental Disclosure Regarding Non-GAAP Financial Information
The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2020 and 2019. EBITDA means net income (loss) plus net interest expense, plus income tax expense, depreciation and amortization, and Adjusted EBITDA adds back (i) other non-cash items (e.g., impairment of properties and accretion of asset retirement obligations) and (ii) other items that management does not consider to be meaningful in assessing our operating performance (e.g., (income) from discontinued operations, net settlement proceeds, (gain) loss on sale of assets, loss on early debt extinguishment, 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 (GAAP).
We use Adjusted EBITDA in our operational and financial decision-making, believing that the measure is useful to eliminate certain items in order to focus on what we deem to be a more reliable indicator of ongoing operating performance 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 performance. We believe that the presentation of Adjusted EBITDA provides useful information 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 performance. However, non-GAAP measures are not a substitute for GAAP disclosures, and EBITDA and Adjusted EBITDA may be prepared differently by us than by other companies using similarly titled non-GAAP measures.
The reconciliation of net income (loss) to EBITDA and Adjusted EBITDA is as follows:

																											
									
		Three Months Ended
September 30,		Nine Months Ended
September 30,	
(Millions of dollars)		2020		2019		2020		2019	
									
Net income		$	66.9 			$	69.2 			$	325.1 			$	107.2 		
									
Income tax expense (benefit)		21.2 			22.1 			103.3 			33.3 		
Interest expense, net of interest income		12.4 			14.5 			37.7 			39.7 		
Depreciation and amortization		40.6 			37.6 			119.5 			113.8 		
EBITDA		$	141.1 			$	143.4 			$	585.6 			$	294.0 		
									
Net settlement proceeds		— 			— 			— 			(0.1)		
Accretion of asset retirement obligations		0.6 			0.6 			1.7 			1.6 		
(Gain) loss on sale of assets		— 			(0.2)			(1.4)			(0.1)		
   Loss on early debt extinguishment		— 			14.8 			— 			14.8 		
Other nonoperating (income) expense		(0.2)			0.1 			0.5 			— 		
Adjusted EBITDA		$	141.5 			$	158.7 			$	586.4 			$	310.2 		

    

Exhibit 99.2    

Murphy USA Announces Updated Capital Allocation Strategy

EL DORADO, Arkansas, October 28, 2020 – Murphy USA, Inc. (NYSE:MUSA) announced today an update to its capital allocation strategy including the approval by its Board of Directors of two programs designed to return value to shareholders. The successful execution of the Company’s current strategic initiatives and its outsized earnings leverage to the most recent operating environment has enabled the Company to make significant progress against a number of its financial goals, including a target of $500 million of Adjusted EBITDA in 2021 and the expected completion of its most recent $400 million share repurchase authorization of which approximately $7 million remains for repurchase.

Given the Company’s robust cash balances and low balance sheet leverage, the Board of Directors recently authorized a new share repurchase authorization of up to $500 million to begin upon completion of the current $400 million authorization and to be executed by December 31, 2023. The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. Repurchases may be conducted through open market transactions, privately negotiated transactions, pursuant to accelerated share repurchase programs, or otherwise. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s stock plans and for other corporate purposes.

With ongoing volatility and increasing uncertainty impacting equity markets, coupled with potential regulatory action or fiscal policy changes, the Company is diversifying its shareholder distribution mechanisms to provide consistent and meaningful returns of capital to shareholders, independent of the timing and magnitude of potential share repurchases. As such, the Board also authorized the initiation of a quarterly $0.25 per share dividend, or $1.00 per share annualized, with an initial quarterly dividend payable December 1, 2020 to shareholders of record as of November 13, 2020. The initial dividend rate reflects a small portion of the Company’s historical cash balances and a yield consistent with its peer dividend paying retailers.

In addition to these value-creating shareholder distributions, the Company has reaffirmed its accelerated organic growth objectives to build up to 50 New-To-Industry (NTI) locations per year beginning in 2021 of the larger 2,800 sq. ft. formats and Raze and Rebuild (R&R) 25 existing kiosks into its 1,400 sq. ft. small store format on Walmart parking lots. An NTI pipeline of over 100 locations has been developed over the past two years to be able to deliver this level of growth on a sustainable basis. Key to achieving the highest potential returns from its large and small format stores is the development and execution of enhanced food and beverage (F&B) capabilities, with several recent hires along with

the upcoming renewal of the Company’s supply chain contract with Core-Mark reflecting early steps in this strategic capability building effort.

In order to accelerate the development of these critical capabilities, the Company is open to pursuing targeted M&A activity in addition to organic growth. Targets could include chains with at-scale F&B capabilities where an acquisition could deliver immediate benefits versus solely building the capabilities internally. Such an acquisition could not only be accretive, whether near term or longer term, based on synergies leveraging MUSA’s scale but also could create reverse synergies as the F&B capabilities and platforms acquired could upgrade MUSA’s existing offerings. Whether the Company builds or buys these capabilities, it intends to develop a fit-for-purpose F&B model for its portfolio of stores and a differentiated offer to its customers to enable it to achieve the highest possible returns from its organic and inorganic growth plans. The Company may also explore the potential acquisition of mid-sized regional chains where there is a strong strategic fit and that complement its organic growth strategy.

The combination of these capital allocation choices takes advantage of MUSA’s strong financial position and flexibility, accelerating organic growth plans, scale and capabilities to win in today’s challenging COVID environment, and focus on delivering exceptional and sustained value to long-term shareholders. Based on the Company’s long-term outlook, we expect to execute and deliver on our plans while maintaining a conservative balance sheet at or near 2.5-times debt-to-EBITDA ratio or lower. The updated strategy reflects a continued refinement to the capital allocation strategy and discipline that has been a hallmark of the Company since its 2013 spinoff.

Non-GAAP Financial Information

An itemized reconciliation between projected Net Income and Adjusted EBITDA for the full year 2021 is as follows:

												
(Millions of dollars)			Calendar Year 2021	
Net Income			$204	
				
Income taxes			$70	
Interest expense, net of interest income			$48	
Depreciation and amortization			$180	
Other operating and nonoperating, net			$(2)	
				
Adjusted EBITDA			$500	

For purposes of this reconciliation, the midpoint of a range for each reconciling item was used, and therefore actual results for each of these reconciling items is expected to be higher or lower than the amounts shown above. The size of the ranges varies based on the individual reconciling item and assumptions made. See the Company’s most recent Form 10-K or Form 10-Q for rationale for providing non-GAAP financial metrics.

About Murphy USA
Murphy USA (NYSE: MUSA) is a leading retailer of gasoline and convenience merchandise with nearly 1,500 sites located primarily in the Southwest, Southeast and Midwest United States. The company and its team of nearly 10,000 employees serve an estimated 1.7 million customers each day through its network of retail gasoline stations in 25 states. The majority of Murphy USA's sites are located in close proximity to Walmart stores. The company also markets gasoline and other products at standalone stores under the Murphy Express brand. Murphy USA ranks 262 among Fortune 500 companies.

Certain statements in this news release contain or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainties, including, but not limited to anticipated store openings, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, share repurchases and M&A activity. Such statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. Actual future results may differ materially from historical results or current expectations depending upon factors including, but not limited to: our ability to continue to maintain a good business relationship with Walmart; successful execution of our growth strategy, including our ability to realize the anticipated benefits from such growth initiatives, and the timely completion of construction associated with our newly planned stores which may be impacted by the financial health of third parties; our ability to effectively manage our inventory, disruptions in our supply chain and our ability to control costs; the impact of severe weather events, such as hurricanes, floods and earthquakes; the impact of a global health pandemic, such as COVID-19 including the impact on our fuel volumes if the gradual recoveries experienced in Q2 2020 stall or reverse as a result of any resurgence in COVID-19 infection rates and government reaction in response thereof; the impact of any systems failures, cybersecurity and/or security breaches, including any security breach that results in theft, transfer or unauthorized disclosure of customer, employee or company information or our compliance with information security and privacy laws and regulations in the event of such an incident; successful execution of our information technology strategy; future tobacco or e-cigarette legislation and any other efforts that make purchasing tobacco products more costly or difficult could hurt our revenues and impact gross margins; changes to the company's capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the company's share repurchases, or management of operating cash; 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. Our SEC reports, including our most recent annual Report on Form10-K and quarterly report on Form 10-Q, contain other information on these and other factors that could affect our financial results and cause actual results to differ materially from any forward-looking information we may provide. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

Source: Murphy USA Inc. (NYSE: MUSA)

Investor Contact:
Christian Pikul – Vice President of Investor Relations and FP&A
Christian.Pikul@murphyusa.com

Mitchell Freer – Investor Relations Analyst
Mitchell.Freer@murphyusa.com