Guarantor Subsidiaries

3 Months Ended

Mar. 31, 2020

Murphy USA Inc. ("Parent Company") and certain of the Company’s 100% owned, domestic subsidiaries (the “Guarantor Subsidiaries”) fully and unconditionally guarantee, on a joint and several basis, certain of the outstanding indebtedness of Murphy Oil USA, Inc. (the "Issuer"), including the 5.625% senior notes due 2027 and the 4.75% senior notes due 2029. The following consolidating schedules present financial information on a consolidated basis in conformity with the SEC’s Regulation S-X Rule 3-10(d):

CONSOLIDATING BALANCE SHEET


(Millions of dollars, except share amounts)	March 31, 2020
Assets	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Current assets
Cash and cash equivalents	$	—	$	199.0	$	1.3	$	—	$	—	$	200.3
Accounts receivable—trade, less allowance for doubtful accounts of $0.1 in 2020	—		136.4		(0.1)		—		—		136.3
Inventories, at lower of cost or market	—		243.5		—		—		—		243.5
Prepaid expenses and other current assets	—		22.5		—		—		—		22.5

Total current assets	—		601.4		1.2		—		—		602.6
Property, plant and equipment, at cost less accumulated depreciation and amortization of $1,107.3 in 2020	—		1,799.3		9.0		—		—		1,808.3

Investments in subsidiaries	2,681.1		143.8		—		—		(2,824.9)		—
Other assets	—		172.5		—		—		—		172.5


Total assets	$	2,681.1	$	2,717.0	$	10.2	$	—	$	(2,824.9)	$	2,583.4
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt	$	—	$	51.2	$	—	$	—	$	—	$	51.2
Inter-company accounts payable	141.0		53.6		(40.3)		(154.3)		—		—
Trade accounts payable and accrued liabilities	—		400.7		(0.1)		—		—		400.6
Income taxes payable	—		6.5		(0.4)		—		—		6.1


Total current liabilities	141.0		512.0		(40.8)		(154.3)		—		457.9
Long-term debt, including capitalized lease obligations	—		987.4		—		—		—		987.4
Deferred income taxes	—		221.8		—		—		—		221.8
Asset retirement obligations	—		33.2		—		—		—		33.2
Deferred credits and other liabilities	—		136.3		—		—		—		136.3

Total liabilities	141.0		1,890.7		(40.8)		(154.3)		—		1,836.6
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 March 31, 2020)	0.5		—		0.1		—		(0.1)		0.5
Treasury Stock (17,589,526 shares held at March 31, 2020)	(1,235.2)		—		—		—		—		(1,235.2)
Additional paid in capital (APIC)	1,183.1		576.0		52.0		87.5		(1,368.4)		530.2
Retained earnings	2,591.7		252.3		(1.1)		66.8		(1,456.4)		1,453.3
Accumulated other comprehensive income (loss) (AOCI)	—		(2.0)		—		—		—		(2.0)
Total stockholders' equity	2,540.1		826.3		51.0		154.3		(2,824.9)		746.8
Total liabilities and stockholders' equity	$	2,681.1	$	2,717.0	$	10.2	$	—	$	(2,824.9)	$	2,583.4

CONSOLIDATING BALANCE SHEET


(Millions of dollars, except share amounts)	December 31, 2019
Assets	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Current assets
Cash and cash equivalents	$	—	$	279.4	$	0.9	$	—	$	—	$	280.3
Accounts receivable—trade, less allowance for doubtful accounts of $1.2 in 2019	—		173.0		(0.1)		—		—		172.9
Inventories, at lower of cost or market	—		227.6		—		—		—		227.6
Prepaid expenses and other current assets	—		29.6		0.4		—		—		30.0

Total current assets	—		709.6		1.2		—		—		710.8
Property, plant and equipment, at cost less accumulated depreciation and amortization of $1,079.2 in 2019	—		1,799.1		8.2		—		—		1,807.3

Investments in subsidiaries	2,591.8		143.9		—		—		(2,735.7)		—
Other assets	—		169.1		—		—		—		169.1


Total assets	$	2,591.8	$	2,821.7	$	9.4	$	—	$	(2,735.7)	$	2,687.2
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt	$	—	$	38.8	$	—	$	—	$	—	$	38.8
Inter-company accounts payable	(0.1)		196.1		(41.7)		(154.3)		—		—
Trade accounts payable and accrued liabilities	—		466.2		—		—		—		466.2



Total current liabilities	(0.1)		701.1		(41.7)		(154.3)		—		505.0
Long-term debt, including capitalized lease obligations	—		999.3		—		—		—		999.3
Deferred income taxes	—		216.7		—		—		—		216.7
Asset retirement obligations	—		32.8		—		—		—		32.8
Deferred credits and other liabilities	—		130.4		—		—		—		130.4

Total liabilities	(0.1)		2,080.3		(41.7)		(154.3)		—		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 December 31, 2019)	0.5		—		0.1		—		(0.1)		0.5
Treasury Stock (16,307,048 shares held at December 31, 2019 )	(1,099.8)		—		—		—		—		(1,099.8)
Additional paid in capital (APIC)	1,188.8		578.8		52.0		87.5		(1,368.4)		538.7
Retained earnings	2,502.4		161.9		(1.0)		66.8		(1,367.2)		1,362.9
Accumulated other comprehensive income (AOCI)	—		0.7		—		—		—		0.7
Total stockholders' equity	2,591.9		741.4		51.1		154.3		(2,735.7)		803.0
Total liabilities and stockholders' equity	$	2,591.8	$	2,821.7	$	9.4	$	—	$	(2,735.7)	$	2,687.2

CONSOLIDATING INCOME STATEMENT AND COMPREHENSIVE INCOME


(Millions of dollars)	Three Months Ended March 31, 2020
Operating Revenues	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Petroleum product sales	$	—	$	2,480.2	$	—	$	—	$	—	$	2,480.2
Merchandise sales	—		687.5		—		—		—		687.5
Other operating revenues	—		17.1		—		—		—		17.1
Total operating revenues	—		3,184.8		—		—		—		3,184.8

Operating Expenses
Petroleum product cost of goods sold	—		2,259.8		—		—		—		2,259.8
Merchandise cost of goods sold	—		580.0		—		—		—		580.0

Station and other operating expenses	—		135.1		—		—		—		135.1
Depreciation and amortization	—		39.4		—		—		—		39.4
Selling, general and administrative	—		39.2		—		—		—		39.2
Accretion of asset retirement obligations	—		0.6		—		—		—		0.6
Total operating expenses	—		3,054.1		—		—		—		3,054.1


Gain (loss) on sale of assets	—		0.1		—		—		—		0.1
Income (loss) from operations	—		130.8		—		—		—		130.8

Other income (expense)
Interest income	—		0.8		—		—		—		0.8
Interest expense	—		(13.3)		—		—		—		(13.3)

Other nonoperating income	—		(0.9)		(0.1)		—		—		(1.0)
Total other income (expense)	—		(13.4)		(0.1)		—		—		(13.5)
Income (loss) before income taxes	—		117.4		(0.1)		—		—		117.3
Income tax expense	—		28.0		—		—		—		28.0
Income (loss)	—		89.4		(0.1)		—		—		89.3

Equity earnings in affiliates, net of tax	89.3		(0.1)		—		—		(89.2)		—
Net Income (Loss)	$	89.3	$	89.3	$	(0.1)	$	—	$	(89.2)	$	89.3
Other comprehensive loss	—		(2.7)		—		—		—		(2.7)
Comprehensive income (loss)	$	89.3	$	86.6	$	(0.1)	$	—	$	(89.2)	$	86.6

CONSOLIDATING INCOME STATEMENT AND COMPREHENSIVE INCOME


(Millions of dollars)	Three Months Ended March 31, 2019
Operating Revenues	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Petroleum product sales	$	—	$	2,499.8	$	—	$	—	$	—	$	2,499.8
Merchandise sales	—		606.2		—		—		—		606.2
Other operating revenues	—		10.4		—		—		—		10.4
Total operating revenues	—		3,116.4		—		—		—		3,116.4

Operating Expenses
Petroleum product cost of goods sold	—		2,381.5		—		—		—		2,381.5
Merchandise cost of goods sold	—		508.7		—		—		—		508.7

Station and other operating expenses	—		132.8		—		—		—		132.8
Depreciation and amortization	—		39.7		—		—		—		39.7
Selling, general and administrative	—		34.6		—		—		—		34.6
Accretion of asset retirement obligations	—		0.5		—		—		—		0.5
Total operating expenses	—		3,097.8		—		—		—		3,097.8

Net settlement proceeds	—		0.1		—		—		—		0.1
Gain (loss) on sale of assets	—		(0.1)		—		—		—		(0.1)
Income (loss) from operations	—		18.6		—		—		—		18.6

Other income (expense)
Interest income	—		0.7		—		—		—		0.7
Interest expense	—		(13.6)		—		—		—		(13.6)
Other nonoperating income	—		0.4		(0.2)		—		—		0.2
Total other income (expense)	—		(12.5)		(0.2)		—		—		(12.7)
Income (loss) before income taxes	—		6.1		(0.2)		—		—		5.9
Income tax expense	—		0.6		—		—		—		0.6
Income (loss)	—		5.5		(0.2)		—		—		5.3

Equity earnings in affiliates, net of tax	5.3		(0.2)		—		—		(5.1)		—
Net Income (Loss)	$	5.3	$	5.3	$	(0.2)	$	—	$	(5.1)	$	5.3
Other comprehensive income (loss)	—		—		—		—		—		—
Comprehensive income (loss)	$	5.3	$	5.3	$	(0.2)	$	—	$	(5.1)	$	5.3

CONSOLIDATING STATEMENT OF CASH FLOW


(Millions of dollars)	Three Months Ended March 31, 2020
Operating Activities	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net income (loss)	$	89.3	$	89.3	$	(0.1)	$	—	$	(89.2)	$	89.3
Adjustments to reconcile net income (loss) to net cash provided by (required by) operating activities

Depreciation and amortization	—		39.4		—		—		—		39.4

Deferred and noncurrent income tax charges (credits)	—		5.9		—		—		—		5.9
Accretion of asset retirement obligations	—		0.6		—		—		—		0.6
(Gain) loss on sale of assets	—		(0.1)		—		—		—		(0.1)
Net (increase) decrease in noncash operating working capital	—		(25.7)		—		—		—		(25.7)
Equity in earnings of affiliates	(89.3)		0.1		—		—		89.2		—

Other operating activities - net	—		4.3		—		—		—		4.3


Net cash provided by (required by) operating activities	—		113.8		(0.1)		—		—		113.7
Investing Activities
Property additions	—		(45.8)		(0.8)		—		—		(46.6)
Proceeds from sale of assets	—		0.2		—		—		—		0.2

Other investing activities - net	—		(0.8)		—		—		—		(0.8)



Net cash provided by (required by) investing activities	—		(46.4)		(0.8)		—		—		(47.2)
Financing Activities
Purchase of treasury stock	(140.6)		—		—		—		—		(140.6)
Borrowings of debt	—		—		—		—		—		—
Repayments of debt	—		(0.3)		—		—		—		(0.3)


Amounts related to share-based compensation	—		(5.6)		—		—		—		(5.6)
Net distributions to parent	140.6		(141.9)		1.3		—		—		—
Net cash provided by (required by) financing activities	—		(147.8)		1.3		—		—		(146.5)
Net increase (decrease) in cash and cash equivalents	—		(80.4)		0.4		—		—		(80.0)
Cash, cash equivalents, and restricted cash at January 1	—		279.4		0.9		—		—		280.3
Cash, cash equivalents, and restricted cash at March 31	$	—	$	199.0	$	1.3	$	—	$	—	$	200.3

CONSOLIDATING STATEMENT OF CASH FLOW


(Millions of dollars)	Three Months Ended March 31, 2019
Operating Activities	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net income (loss)	$	5.3	$	5.3	$	(0.2)	$	—	$	(5.1)	$	5.3
Adjustments to reconcile net income (loss) to net cash provided by (required by)operating activities

Depreciation and amortization	—		39.7		—		—		—		39.7

Deferred and noncurrent income tax charges (credits)	—		(2.4)		—		—		—		(2.4)
Accretion of asset retirement obligations	—		0.5		—		—		—		0.5
Pretax (gains) losses from sale of assets	—		0.1		—		—		—		0.1
Net (increase) decrease in noncash operating working capital	—		1.7		—		—		—		1.7
Equity in earnings of affiliates	(5.3)		0.2		—		—		5.1		—
Other operating activities - net	—		3.2		—		—		—		3.2


Net cash provided by (required by) operating activities	—		48.3		(0.2)		—		—		48.1
Investing Activities
Property additions	—		(28.8)		(1.7)		—		—		(30.5)
Proceeds from sale of assets	—		1.1		—		—		—		1.1


Other investing activities - net	—		(0.1)		—		—		—		(0.1)



Net cash provided by (required by) investing activities	—		(27.8)		(1.7)		—		—		(29.5)
Financing Activities
Purchase of treasury stock	(13.3)		—		—		—		—		(13.3)

Repayments of debt	—		(5.4)		—		—		—		(5.4)

Amounts related to share-based compensation	—		(4.0)		—		—		—		(4.0)
Net distributions to parent	13.3		(15.2)		1.9		—		—		—
Net cash provided by (required) by financing activities	—		(24.6)		1.9		—		—		(22.7)
Net increase (decrease) in cash and cash equivalents	—		(4.1)		—		—		—		(4.1)
Cash, cash equivalents, and restricted cash at January 1	—		184.0		0.5		—		—		184.5
Cash, cash equivalents, and restricted cash at March 31	$	—	$	179.9	$	0.5	$	—	$	—	$	180.4

CONSOLIDATING STATEMENT OF CHANGES IN EQUITY


(Millions of dollars)	Three Months Ended March 31, 2020
Statement of Stockholders' Equity	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Common Stock
Balance as of December 31, 2019	$	0.5	$	—	$	0.1	$	—	$	(0.1)	$	0.5
Issuance of common stock	—		—		—		—		—		—
Balance as of March 31, 2020	0.5		—		0.1		—		(0.1)		0.5




Treasury Stock
Balance as of December 31, 2019	$	(1,099.8)	$	—	$	—	$	—	$	—	$	(1,099.8)
Issuance of treasury stock	5.2		—		—		—		—		5.2
Repurchase of treasury stock	(140.6)		—		—		—		—		(140.6)
Balance as of March 31, 2020	$	(1,235.2)	$	—	$	—	$	—	$	—	(1,235.2)






APIC
Balance as of December 31, 2019	$	1,188.8	$	578.8	$	52.0	$	87.5	$	(1,368.4)	$	538.7
Issuance of treasury stock	(5.7)		—		—		—		—		(5.7)
Amounts related to share-based compensation	—		(5.6)		—		—		—		(5.6)
Share-based compensation expense	—		2.8		—		—		—		2.8
Balance as of March 31, 2020	$	1,183.1	$	576.0	$	52.0	$	87.5	$	(1,368.4)	530.2








Retained Earnings
Balance as of December 31, 2019	$	2,502.4	$	161.9	$	(1.0)	$	66.8	$	(1,367.2)	$	1,362.9
Cumulative effect of a change in accounting principle	—		1.1		—		—		—		1.1
Net income (loss)	89.3		89.3		(0.1)		—		(89.2)		89.3
Balance as of March 31, 2020	$	2,591.7	$	252.3	$	(1.1)	$	66.8	$	(1,456.4)	1,453.3




AOCI
Balance as of December 31, 2019	$	—	$	0.7	$	—	$	—	$	—	$	0.7
Other comprehensive income (loss)	—		(2.7)		—		—		—		(2.7)
Balance as of March 31, 2020	$	—	$	(2.0)	$	—	$	—	$	—	$	(2.0)

CONSOLIDATING STATEMENT OF CHANGES IN EQUITY


(Millions of dollars)	Three Months Ended March 31, 2019
Statement of Stockholders' Equity	Parent Company		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Common Stock
Balance as of December 31, 2018	$	0.5	$	—	$	0.1	$	—	$	(0.1)	$	0.5
Issuance of common stock	—		—		—		—		—		—




Balance as of March 31, 2019	$	0.5	$	—	$	0.1	$	—	$	(0.1)	$	0.5
Treasury Stock
Balance as of December 31, 2018	$	(940.3)	$	—	$	—	$	—	$	—	$	(940.3)
Issuance of treasury stock	5.6		—		—		—		—		5.6
Repurchase of treasury stock	(13.3)		—		—		—		—		(13.3)






Balance as of March 31, 2019	$	(948.0)	$	—	$	—	$	—	$	—	$	(948.0)
APIC
Balance as of December 31, 2018	$	1,195.1	$	572.8	$	52.0	$	87.5	$	(1,368.4)	$	539.0
Issuance of treasury stock	(5.6)		—		—		—		—		(5.6)
Amounts related to share-based compensation	—		(4.1)		—		—		—		(4.1)
Share-based compensation expense	—		2.6		—		—		—		2.6








Balance as of March 31, 2019	$	1,189.5	$	571.3	$	52.0	$	87.5	$	(1,368.4)	$	531.9
Retained Earnings
Balance as of December 31, 2018	$	2,181.8	$	172.9	$	(0.5)	$	66.8	$	(1,212.9)	$	1,208.1
Net income (loss)	5.3		5.3		(0.2)		—		(5.1)		5.3




Balance as of March 31, 2019	$	2,187.1	$	178.2	$	(0.7)	$	66.8	$	(1,218.0)	$	1,213.4
AOCI
Balance as of December 31, 2018	$	—	$	—	$	—	$	—	$	—	$	—
Other comprehensive income (loss)	—		—		—		—		—		—
Balance as of March 31, 2019	$	—	$	—	$	—	$	—	$	—	$	—