Upgrade to SI Premium - Free Trial

Form 8-K Murphy USA Inc. For: Feb 04

February 4, 2015 5:22 PM

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 EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):� February 4, 2015

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

Registrant’s telephone number, including area code 870-875-7600

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 registrantunder 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))


Item 2.02. �Results of Operations and Financial Condition

OnFebruary 4, 2015, Murphy USA Inc.issued a news release announcing its earnings for thequarter and yearended December �31, 2014. � �The full text of this news release is attached hereto as Exhibit 99.1.

The information in this Item 2.02 and Item 9.01, including Exhibit 99.1, 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 9.01.��Financial Statements and Exhibits

(d)Exhibits

99.1������� News release issued by Murphy USA Inc., datedFebruary4, 2015,announcing earnings for the quarter and yearended December �31, 2014


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.

By:� /s/��Donald R. Smith, Jr.

������������Donald R. Smith, Jr.

����������Vice President and Controller

Date:� February 4, 2015


Exhibit Index

Exhibit No. ����� Description

99.1����������������������� News release issued by Murphy USA Inc., dated February 4, 2015, �announcing earnings for the quarter and yearended December �31, 2014


Exhibit 99.1

Murphy USA Inc. Reports Preliminary Fourth Quarter and Annual 2014Results

El Dorado, Arkansas, February 4, 2015 – Murphy USA Inc. (NYSE: MUSA), a leading marketer of retail motor fuel products and convenience merchandise, announced today financial results for thequarter and year ended December 31, 2014.��Key highlights include:

·

Income from continuing operations of $98.3 million ($2.13 per diluted share) for Q42014 �($29.5 million or $0.63 per diluted share for Q42013) and $243.1 million ($5.24 per diluted share) for the full year 2014 ($156.3 million or $3.34 per diluted share for 2013)

·

Retail fuel margins averaged 24.6 cents per gallon (cpg), the highest quarterly margin since 2008, and retail fuel volumes grew by 2.7% per site for the quarter; on an annual basis retail fuel margins were 15.8 cpg and retail fuel volumes grew by 0.7% per site

·

Total merchandise gross margin dollars grew 11.3% in Q4 2014compared to the prior year quarter and were up nearly 6.4% �on an average per store month (APSM) basis for the current quarter; for the full year, total merchandise gross margin grew $19.8 million or 7.0% (2.9% on an APSM basis)

·

Operating income from the Hereford ethanol plant was $4.1 million in Q4 2014 ($2.8 millionin Q42013) �due to improved efficiency in operations and improved yields; full year 2014 operating income was a record $20.1 million ($2.9 million in 2013) due to a 3% improvement in yield and higher crush spreads

·

New stores added in the quarter totaled 24 to bring the full year count to 60 new stores

Three-month results

For the three month period ended December 31, 2014, the Company reported income from continuing operations of $98.3 million or �$2.13per diluted share on revenues of $3.61 billion.� Income from continuing operations was $29.5 million, or $0.63per diluted share in the same period in 2013on revenues of $4.19 billion.� Average retail fuel prices for the fourth quarter 2014 (including taxes) were $2.67 per gallon versus $3.11 per gallon in the same period of 2013. �Net income for the three month period ended December 31, 2014 was $98.3 million as there were no discontinued operations in the current quarter compared to net income of $93.6 million, or $2.00per diluted share, for the comparable period in 2013, which included $64.2 million of income from discontinued operations. �The improvedresults in continuing operationsfor the current quarter were primarily driven bysignificantly higher retail fuel margins and higher retail fuel volumes along with higher merchandise margin dollars, partially offset by lower product supply and wholesale gross margins.� The current year quarter includes an after-tax benefit of $6.0 million from the settlement of an outstanding legal case and $9.8 million in benefits related totax contingencies and other matters.� Cash and cash equivalents at the end of December 2014were $328.1 million. � �

The fourth quarter topped off an outstanding first year as a standalone company,” said President and CEO Andrew Clyde.��“We set and achieved ambitious goals for the year around site growth, merchandise and fuel margin expansion, and cost leadership.��We look forward to continuing our performance and execution track record in 2015 and returning additional value to our shareholders.” said Mr. Clyde.

Adjusted EBITDA (this non-GAAP measure is described and reconciled to the corresponding GAAP measure in the Supplemental Disclosure section of this release) was $165.7 million for


the three month period ended December �31, 2014, compared to $78.2 million for the same period in 2013.�

Total retail fuel volumes increased 7.5% with 1.04billion gallons sold in the 2014 quarter compared to 0.97billion gallons in the comparable 2013 quarter. � �Retail fuel volumes sold on an APSM basiswere 277,221 gallons in the 2014 period compared to 270,024 gallons in the 2013 period, �an increase of 2.7%. �Retail fuel margins (before credit card expenses) were24.6cpgin the 2014 quarter compared to 10.4cpg in the 2013 period, an increase of 14.2cpg that led to an increase in fuel gross margin dollars of $155 million.� A �significant decline in wholesale priceswas the primary driver behind the improved results.� Total product supply and wholesale margin dollars excluding Renewable Identification Numbers (RINs) �werea �negative $46.1 million in the 2014 period compared toincome of $27.9 million in the same period of 2013.� During periods of sustained price changes, our practice of ratably purchasing bulk supply to replace volumes sold through our retail and wholesale network can result in a market swing that has a financial impact. � �We experienced such a market decline during the fourth quarter of 2014 and this had a negative financial impact.� Also impacting operating income for the three months ended December �31, 2014 was income generated by the sale of RINs of $26.8 million compared to $16.6million in the 2013 period.��During the current period, 54 million RINs were sold at an average selling price of $0.49 per RIN.�

Total merchandise margin dollars increased by 11.3% �in the 2014 quarter compared to the prior year.� Merchandise margins for the quarter ended December31, 2014 was14.4% compared to 13.3% for the same period in 2013.� For the quarter, tobacco products showed the highest increase with cigarette margins improving 6.3% on an APSM basis.��Smokeless and other tobacco products also had strong improvements. � �Non-tobacco products continued to show increases in both margin dollars and total sales as key promotions with beverages and salty snacks among other categories showed favorable results in the current period. For the current quarter, merchandise revenues were $549million compared to$534 million for the 2013 period, an increase of $15.6 million.� For the current quarter, total non-tobacco sales dollars increased 10.7%, with the largest increases shown in dispensed beverages, �salty snacks and lottery/lotto, while margin dollars increased 9.8%.Total merchandise margin dollars on an APSM basis for the quarter were up $1,263 per sitedue to increases in tobacco margin dollars of 7.3%combined with a 4.9% �increase innon-tobacco margin dollars. � �

Total station and other operating expenses were $133.9million for the quarter ended December31, 2014, compared to $125.3million for the same period in 2013.� On an APSM basis, the expenses applicable to retail increased3.3% period over period.� Excluding credit card expenses, station operating expenses on an APSM basis increased 4.4% �in the current quarter compared to the same period in the prior year.� The largest area of increase in site operating expenses during the current quarter was related to maintenanceexpense as the 2014 quarter contained higher charges for site upgrades and repairs to reinvest in our brand image.� Selling, general and administrative (SG&A) expenses in the current quarter were $33.0 million compared to $27.6million in the same period of 2013.��SG&A expense for the current quarter washigher than Q4 2013 primarily due to higher employee and employee benefit related costs.Included in the station and other operating expense and SG&A expense totals above are $5.1 million and $5.2 million of combined operating expense and SG&A costs for the three months ended December 31, 2014 and 2013, respectively, �for product supply and wholesale operations.�


The Company’s ethanol plant in Hereford, Texas, was profitable for the fourthquarter of 2014, generating $4.1million inoperating income compared to operating incomeof $2.8million in �Q4 2013.� The improved results in the current quarter were the result of an 8.4% increase in annual throughput rates and improved yieldscombined with direct cost reductions following the planned maintenance shutdowns during first and third quarter 2014.

Interest expense waslower in the fourthquarter 2014 compared to the prior year quarter by $1.3 million.There was no interest expense on the prior term loan in the current period as it was paid off in May 2014.� � �

Capital expenditures for continuing operations for the quarter ended December �31, 2014 were $54.2 million compared to $42.9 million in 2013.��Of those capital expenditures, in the current quarter,$39.8million were for retail growth and$9.6 million were spent on retail maintenance items.��The remaining balance of the capital expenditures was in our ethanol and corporate areas.� Cash flow from operating activities was �$89.1million in the current quarter compared to a negative $13.3million in the same period in 2013.� Free cash flow (this non-GAAP measure is described and reconciled to the corresponding GAAP measure in the Supplemental Disclosure section of this release) for the period was $34.9 million compared to a negative$56.2 million in the prior year period.��Theincrease in the current period was due to higher net income andchanges in working capital.

Annual results

For the full year ended December 31, 2014, the Company reported income from continuing operations of $243.1 million or $5.24 per diluted share, on revenues of $17.2 billion compared to $156.3 million and $3.34 per diluted share in the same period in 2013on revenues of $18.1 billion.� Average retail fuel prices for the annual 2014 period (including taxes) were $3.15 per gallon versus $3.32 per gallon in 2013, which contributed to the decrease in revenue in the current year.��Net income for the twelve months ended December �31, 2014, was �$243.9 million or $5.26 per diluted share, compared to net income of �$235.0 million, or $5.02 per diluted share, for the same period in 2013.� The higher results in continuing operations for 2014 were primarily driven by higher retail fuel margins and volumes, improved results from the Hereford ethanol plant, and higher merchandise gross margin dollarsin 2014 partially offset by lower contribution from product supply and wholesale operations.� The current year includes an after-tax benefit of $10.9 million from a LIFO decrement in the period, a state tax benefit of $6.8 million,an after-tax benefit of $6.0 million from the settlement of an outstanding legal case and $9.8 million in benefits related to tax contingencies and other matters while 2013 had no comparable adjustments.��Income from discontinued operations in 2014contain the final adjustments to working capital from the sale of the Hankinson plant, resulting in a gain of $0.8 million ($0.02 per diluted share), net of tax, for the current year.

Adjusted EBITDA (this non-GAAP measure is described and reconciled to the corresponding GAAP measure in the Supplemental Disclosure section of this release) was $474.9 million for the year endedDecember �31, 2014, compared to $340.1 million for 2013.�

Total retail fuel volumes increased 4.8% with 3.98 �billion gallons sold in 2014 compared to 3.80billion gallons in the 2013 periodmainly due to 60new sites opening in 2014. � Retail fuel


volumes sold on an APSM basis were 270,416 gallons in the 2014 period compared to 268,458 gallons in the 2013 period.� Retail fuel margins (before credit card expenses) were15.8cpg in 2014 compared to 13.0 cpg in 2013, anincrease of 2.8 cpg.� Year-to-date margins and volumes were impacted during the period by wholesale price volatility as the first six months were relatively flat followed by significantly declining wholesale prices in the latter half of 2014. � �Per site fuel volumes also reflectoneadditional partial month of the Walmart 15 cent/10 cent fuel discount program in 2014 compared to 2013.� Total product supply and wholesale margin dollars excluding RINs were $13.5 million in the 2014 period compared to $54.2 million in the same period of 2013.� We experienced sustained wholesale price declines during the latter half of 2014 that caused a negative financial impact due to our practice of ratably acquiring bulk supply to replace retail and wholesale volumes sold through our network.� The 2014 amount includes a Q1 benefit of $17.8 million related to a LIFO decrement due to a decision to run a leaner fuel supply chain, which caused liquidation of inventories that were not restored at year-end.��Also impacting operating income for the twelve months ended December31, 2014 was income generated by the sale of RINs of $92.9 million compared to $91.4 million in the 2013 period.��During the current period, 195 million RINs were sold at an average selling price of $0.48 per RIN.�

Total merchandise margin dollars increased by $19.8 million or 7.0% �in the twelve months ended December 31, 2014 compared to the prior year.� Merchandisemargins for the twelve months ended December31, 2014 was14.0% compared to 13.1% for the same period in 2013.� Non-tobacco products continuedto show increases in both margin dollars and percentage of total sales as certain promotions with beverages, candy and salty snacksamong other categories showed favorable results in the current year.� For the current year, merchandise revenues of �$2.16 billion were slightly higher than the 2013 period. For the current year, �total non-tobacco sales dollars increased 9.6%, with the largest increases shown in dispensed beverages, alternative snacks and salty snacks,while margin dollars increased 11.1% primarily due to increased margins related todispensed beverage, beer, wine and liquor and general merchandise. �On an APSM basis, total merchandise sales were down 3.8% with tobacco products down 6.0%, partially offset by a 5.4% increase in non-tobacco sales. � �Merchandise margin dollars on an APSM basis for the year were up 2.9% with tobacco margin dollars up0.5%, combined with an increase in non-tobacco margin dollars of 6.9%.��Within the tobacco categories, both smokeless (7.4% increase) and other tobacco products (30.3% increase) were up significantly on a margin basis due to improved execution and a more advantageous product mix.�

Station and other operating expenses were $521.5 million for the twelve months ended December �31, 2014, compared to $493.7 million for the same period in 2013.��On an APSM basis, the expenses applicable to retail increased 1.7% period over period.��Excluding credit card expenses, station operating expenses on an APSM basis increased in the current year by 0.9% compared to the prior year.� The largest area of increase in other operating expenses during the current period was related to maintenance expense, as the 2014 period contained higher charges for site upgrades and repairs to reinvest in our brand image.��SG&A expenses in the current year were $120.9 million compared to $133.0 million in the same period of 2013.��The prior year contained $15.4 million of spin-related and other one-time, nonrecurring costs.� Without the prior year nonrecurring costs, SG&A expense for the current year was 2.8% �higher than the same period in 2013.� The primary reason for the increase other than the nonrecurring


costs is higher employee related charges.� Included in the station and other operating expense and SG&A expense totals above are $19.1 �million and $20.0 million of combined operating expense and SG&A costs for the twelvemonths ended December �31, 2014 and 2013, respectively, for product supply and wholesale operations.�

The Company’s ethanol plant in Hereford, Texas generated a record �$20.1 million in operating income compared to operating income of $2.9 million in 2013. The improved results at Hereford in the current yearwere the result of improved operations with 3% higher yields for the year (2.76 in 2014 versus 2.67 in 2013) and significantly higher crush spreads.The improved efficiencies and higher yields have resulted since the completion of the planned maintenance shutdown during the first and third quartersof 2014.

Interest expense is higher in the full year2014 compared to the prior year period by $22.1 million due to the issuance in mid-August 2013 of the $500 million Senior Notes and the funding of a $150 million term loan under our credit facilities.��As these borrowings did not exist for the full prior period, there is a large increase in interest expense resulting from these transactions partially offset by the early repayment of the term loan in May 2014.� Further, the 2014 period contains a charge of $1.9 million related to a write-off of deferred debt costs for the recently repaid term loan.�

Capital expenditures for continuing operations for the twelve monthsended December �31, 2014 were $138.9 million compared to $172.0million in 2013.��Of those capital expenditures, $112.9 million were for retail growth and $18.3million were spent on retail maintenance items.��The remaining balance of the capital expenditures was in our ethanol and corporate areas.��The 2013 period contained $41.8 million in expenditures related to a deposit on land to be acquired from Walmart as a part of the December 2012 agreement.��Cash flow from operating activities was $305.6 million in the current year compared to $356.7 million in the same period in 2013.��Free cash flow (this non-GAAP measure is described and reconciled to the corresponding GAAP measure in the Supplemental Disclosure section of this release) for the period was $166.7 million compared to $192.2 million in the prior year period.��The decrease in the period was due primarily to lower operating cash flows for the period partially offset by lower capital expenditures due to timing of station builds.�

Station Openings

During the fourthquarter of 2014, Murphy USA opened 24retail locations to bring the 2014 total to 60 new sites.� In 2013, we opened 39 new retail locations.��As of December 31, 2014, Murphy USA has 1,263 total locations in operation that include 1,056Murphy USA sites and 207 Murphy Express sites. �During 2014, 43 of the 60 completed stores were our �new 1,200 sq. ft. or larger format.

Cash Flow and Financial Resources

For thequarter ended December �31, 2014, cash flows provided by operating activities were �$89.1 million, compared to negative $13.3 million in the 2013 period. � �The increase in cash provided by operating activities over 2013of $102.4million was due to higher net income and


lower declines in working capital. �The total cash flow provided by operating activities included no cash flows from discontinued operations in the fourthquarter of 2014 and $13.7million from discontinued operations in 2013. � Cash flows required by investing activities in the fourthquarter of 2014were $54.1million, which consisted primarily of capital expenditures for property additions while the 2013 period generated cash of $129.9million, which was due to the sale of Hankinson in 2013.��Cash flows used in financing activities were �$1.2 million in the fourthquarter of 2014 compared to cash provided by financing activities of $84.4 million in the 2013 period.�

At December �31, 2014, we had no borrowings under our asset-based loan facility, which was put in place with an initial borrowing base limit of $450.0 million in mid-August 2013and remains undrawn.��Total debt at December �31, 2014 of $492.4million (net of unamortized debt discount) consisted solely of the $500.0 million Senior Notes and is not inclusive of the $328.1 million in cash and cash equivalents the Company had at December31, 2014.

The Company’s effective tax rate is lower than normal in the current quarter and twelve months ended December �31, 2014 due to the discrete state income tax benefit of $6.8 million, recorded in the second quarter 2014 and the $9.8 million in tax benefits related to settlement of tax contingencies and other matters that were recorded in the fourth quarter 2014.��However, we currently estimate that our ongoing effective tax rate will be approximately 38.5% for 2015.�

"Record Q4 fuels margins put an exclamation point on what was already outstanding full year results," said Mr. Clyde.� "The challenge for 2015 will be navigating through periods of tight margins when prices rebound.��In this environment, we expect our low cost business model and capital structure to prove its resilience as we continue to execute our strategy of organic growth.

Earnings Call Information

The Company will host a conference call on February 5, 2015, at 10:00a.m.Central time to discuss fourthquarter 2014 results.��The conference call number is �1(877)291-1367 and the conference number is 61597044. A live audio webcast of the conference call and 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).� Online replays of the earnings call will be available through Murphy USA’s website and a recording of the call will be available through February 9, 2015, by dialing 1(855) 859-2056 and referencing conference number61597044. �

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 and trends in our operations.��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 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; efficient and proper allocation of our capital resources; compliance with debt covenants; availability and cost of credit; and changes in interest rates.� Our SEC reports, including our Annual Report on our Form 10-K for the year ended December 31, 2014(when available) �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.�

Contact: Investors/Media

Tammy L. Taylor (870) 881-6853, Sr. Manager Investor Relations and Corporate Communications

[email protected]


I

Murphy USA Inc.

Consolidated and Combined Statements of Income

(Unaudited, except twelve months in 2013)

Three Months Ended

Year�Ended

December 31,

December 31,

(Thousands of dollars except per share amounts)

2014

2013

2014

2013

Revenues

Petroleum product sales (a)

$

2,977,080�

$

3,589,171�

$

14,728,527�

$

15,560,317�

Merchandise sales

549,403�

533,793�

2,161,378�

2,159,466�

Ethanol sales and other

82,378�

72,011�

320,014�

363,552�

Total revenues

3,608,861�

4,194,975�

17,209,919�

18,083,335�

Costs and operating expenses

Petroleum product cost of goods sold (a)

2,764,686�

3,460,195�

14,074,579�

15,009,955�

Merchandise cost of goods sold

470,420�

462,858�

1,859,732�

1,877,630�

Ethanol cost of goods sold

41,055�

40,870�

158,276�

228,899�

Station and other operating expenses

133,939�

125,273�

521,526�

493,703�

Depreciation and amortization

20,259�

19,395�

79,234�

74,130�

Selling, general and administrative

33,027�

27,611�

120,901�

132,999�

Accretion of asset retirement obligations

303�

275�

1,200�

1,096�

Total costs and operating expenses

3,463,689�

4,136,477�

16,815,448�

17,818,412�

Income from operations

145,172�

58,498�

394,471�

264,923�

Other income (expense)

Interest income

203�

11�

244�

1,099�

Interest expense

(8,412)

(9,669)

(36,646)

(14,509)

Gain on sale of assets

24�

15�

194�

5,995�

Other nonoperating income

10,039�

95�

11,160�

169�

Total other income (expense)

1,854�

(9,548)

(25,048)

(7,246)

Income before income taxes

147,026�

48,950�

369,423�

257,677�

Income tax expense

48,679�

19,477�

126,341�

101,351�

Income from continuing operations

98,347�

29,473�

243,082�

156,326�

Income from discontinued operations, net of income taxes

�-

64,156�

781�

78,707�

Net Income and Comprehensive Income

$

98,347�

$

93,629�

$

243,863�

$

235,033�

Earnings per share - basic:

Income from continuing operations

$

2.15�

$

0.63�

$

5.27�

$

3.34�

Income from discontinued operations

�-

1.37�

0.02�

1.68�

Net income - basic

$

2.15�

$

2.00�

$

5.29�

$

5.03�

Earnings per share - diluted:

Income from continuing operations

$

2.13�

$

0.63�

$

5.24�

$

3.34�

Income from discontinued operations

�-

1.37�

0.02�

1.68�

Net income - diluted

$

2.13�

$

2.00�

$

5.26�

$

5.02�

Weighted-average shares outstanding:

Basic

45,724�

46,743�

46,104�

46,743�

Diluted

46,170�

46,879�

46,417�

46,858�

Supplemental information:

(a) Includes excise taxes of:

$

500,262�

$

464,963�

$

1,930,608�

$

1,884,035�


Murphy USA Inc.

Segment Operating Results

(Unaudited)

(Thousands of dollars, except volume per store month, margins and store counts)

Three Months Ended December 31,

Year Ended December 31,

Marketing Segment

2014

2013

2014

2013

Revenues

Petroleum product sales

$

2,977,080�

$

3,589,171�

$

14,728,527�

$

15,560,317�

Merchandise sales

549,403�

533,793�

2,161,378�

2,159,466�

Other

27,515�

17,309�

95,998�

94,298�

Total revenues

$

3,553,998�

$

4,140,273�

$

16,985,903�

$

17,814,081�

Costs and operating expenses

Petroleum products cost of goods sold

2,764,686�

3,460,195�

14,074,579�

15,009,955�

Merchandise cost of goods sold

470,420�

462,858�

1,859,732�

1,877,630�

Station and other operating expenses

125,579�

116,195�

486,761�

460,475�

Depreciation and amortization

19,068�

18,419�

74,906�

71,253�

Selling, general and administrative

32,640�

27,282�

119,266�

129,600�

Accretion of asset retirement obligations

303�

275�

1,200�

1,096�

Total costs and operating expenses

$

3,412,696�

$

4,085,224�

$

16,616,444�

$

17,550,009�

Income from operations

$

141,302�

$

55,049�

$

369,459�

$

264,072�

Other income (expense)

Gain (loss) on sale of assets

25�

15�

194�

5,995�

Other nonoperating income (loss)

117�

95�

438�

169�

Total other income (expense)

$

142�

$

110�

$

632�

$

6,164�

Income from continuing operations

before income taxes

141,444�

55,159�

370,091�

270,236�

Income tax expense

47,020�

22,008�

127,657�

106,223�

Income from continuing operations

$

94,424�

$

33,151�

$

242,434�

$

164,013�

Gallons sold per store month

277,221�

270,024�

270,416�

268,458�

Fuel margin (cpg)

24.6�

10.4�

15.8�

13.0�

Fuel margin $ per store month

$

68,320�

$

28,192�

$

42,821�

$

34,998�

Total tobacco sales revenue per store month

$

114,350�

$

118,603�

$

114,727�

$

122,094�

Total non-tobacco sales revenue per store month

32,256�

30,497�

32,096�

30,455�

Total merchandise sales revenue per store month

$

146,606�

$

149,100�

$

146,823�

$

152,549�


Three Months Ended December 31,

Year Ended December 31,

2014

2013

2014

2013

Merchandise margin $ per store month

$

21,076�

$

19,814�

$

20,491�

$

19,909�

Merchandise margin as a percentage of merchandise sales

14.4%�

13.3%�

14.0%�

13.1%�

Store count at end of period

1,263�

1,203�

1,263�

1,203�

Average retail sites open during the period (store months)

1,249�

1,193�

1,227�

1,180�


Murphy USA Inc.

Consolidated and Combined Balance Sheets

December 31,

(Thousands of dollars)

2014

2013

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

328,105�

$

294,741�

Accounts receivable—trade, less allowance for doubtful accounts of $4,456 in 2014 and $4,456 in 2013

140,091�

193,181�

Inventories, at lower of cost or market

182,914�

179,055�

Prepaid expenses and other current assets

14,772�

15,439�

Total current assets

665,882�

682,416�

Property, plant and equipment, at cost less accumulated depreciation and amortization of $730,203 in 2014 and $655,360 in 2013

1,253,124�

1,190,723�

Other assets

15,251�

8,103�

Total assets

$

1,934,257�

$

1,881,242�

Liabilities and Stockholders' Equity

Current liabilities

Current maturities of long-term debt

$

�—

$

14,000�

Trade accounts payable and accrued liabilities

386,999�

433,228�

Income taxes payable

25,600�

72,146�

Deferred income taxes

481�

7,143�

Total current liabilities

413,080�

526,517�

Long-term debt

492,443�

547,578�

Deferred income taxes

118,609�

114,932�

Asset retirement obligations

22,245�

17,130�

Deferred credits and other liabilities

29,175�

18,749�

Total liabilities

1,075,552�

1,224,906�

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 issued and 46,743,633 shares issued and��

outstanding at 2014 and 2013, respectively)

468�

467�

Treasury stock (1,056,689 shares held at December 31, 2014)

(51,073)

�—

Additional paid in capital (APIC)

557,871�

548,293�

Retained earnings

351,439�

107,576�

Total stockholders' equity

858,705�

656,336�

Total liabilities and stockholders' equity

$

1,934,257�

$

1,881,242�


Murphy USA Inc.

Consolidated and Combined Statement of Cash Flows

(Unaudited, except year ended December 31, 2013)

Three Months Ended

Year Ended

December 31,

December 31,

(Thousands of dollars)

2014

2013

2014

2013

Operating Activities

Net income

$

98,347�

$

93,629�

$

243,863�

$

235,033�

Adjustments to reconcile net income to net cash provided by operating activities

Income from discontinued operations

�-

(64,156)

(781)

(78,707)

Depreciation and amortization

20,259�

19,395�

79,234�

74,130�

Amortization of deferred major repair costs

341�

175�

1,093�

575�

Deferred and noncurrent income tax charges (credits)

9,548�

6,095�

(1,032)

(7,262)

Accretion on discounted liabilities

303�

275�

1,200�

1,096�

Pretax gains from sale of assets

(24)

(15)

(194)

(5,995)

Net decrease in noncash operating working capital

(43,188)

(83,690)

(32,466)

74,865�

Other operating activities-net

3,546�

1,319�

14,530�

13,215�

Net cash provided by (required by) continuing operations

89,132�

(26,973)

305,447�

306,950�

Net cash provided by (required by) discontinued operations

�-

13,715�

134�

49,748�

Net cash provided by (required by) operating activities

89,132�

(13,258)

305,581�

356,698�

Investing Activities

Property additions

(54,201)

(42,941)

(138,888)

(164,536)

Proceeds from sale of assets

97�

39�

376�

6,113�

Expenditures for major repairs

(29)

54�

(1,369)

(726)

Other investing activities-net

�-

�-

(10,631)

52�

Investing activities of discontinued operations

Sales proceeds

�-

173,118�

1,097�

173,118�

Other

�-

(375)

�-

(1,129)

Net cash provided by (required by) investing activities

(54,133)

129,895�

(149,415)

12,892�

Financing Activities

Purchase of treasury stock

(1,327)

�-

(51,348)

�-

Repayments of long-term debt

�-

(81,136)

(70,000)

(81,170)

Additions to long-term debt

�-

�-

�-

641,250�

Cash dividend to former parent

�-

�-

�-

(650,000)

Debt issuance costs

75�

(44)

(875)

(6,693)

Amounts related to share-based compensation

94�

�-

(580)

�-

Net distributions to parent

�-

(3,215)

�-

(35,609)

Net cash provided by (required by) financing activities

(1,158)

(84,395)

(122,803)

(132,222)

Net increase in cash and cash equivalents

33,841�

32,242�

33,363�

237,368�

Cash and cash equivalents at beginning of period

294,264�

262,499�

294,742�

57,373�

Cash and cash equivalents at end of period

$

328,105�

$

294,741�

$

328,105�

$

294,741�


Supplemental Disclosure Regarding Non-GAAP Financial Information

The following table sets forth the Company’s Adjusted EBITDA for the three and twelvemonths endedDecember31, 2014 and 2013.��EBITDA means net income (loss) plus net interest expense, plus income tax expense, depreciation and amortization, and Adjusted EBITDAadds 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, gain (loss) on sale of assets and other non-operating expense (income)).� EBITDA and Adjusted EBITDA are not measures that are prepared in accordance with U.S. generally accepted accounting principles (GAAP).

We use this Adjusted EBITDA in our operational and financial decision-making, believing that such 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.��However, non-GAAP measures are not a substitute for GAAP disclosures, and Adjusted EBITDA may be prepared differently by us than by other companies using similarly titled non-GAAP measures.

The reconciliation of net income to EBITDA and Adjusted EBITDA is as follows:

Three Months Ended December 31,

Years Ended December 31,

(Thousands of dollars)

2014

2013

2014

2013

Net income

$

98,347�

$

93,629�

$

243,863�

$

235,033�

Income taxes

48,679�

19,477�

126,341�

101,351�

Interest expense, net of interest income

8,209�

9,658�

36,402�

13,410�

Depreciation and amortization

20,259�

19,395�

79,234�

74,130�

EBITDA

175,494�

142,159�

485,840�

423,924�

(Income) loss from discontinued operations

�-

(64,156)

(781)

(78,707)

Accretion of asset retirement obligations

303�

275�

1,200�

1,096�

Gain on sale of assets

(24)

(15)

(194)

(5,995)

Other nonoperating income

(10,039)

(95)

(11,160)

(169)

Adjusted EBITDA

$

165,734�

$

78,168�

$

474,905�

$

340,149�

The Company also considers Free Cash Flow in the operation of its business.��Free cash flow is defined as net cash provided by operating activities in a period minus payments for property and equipment made in that period.��Free cash flow is also considered a non-GAAP financial measure.��Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for us in evaluating the Company’s performance.��Free cash flow should be considered in addition to, rather than as a substitute for consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.�


Numerous methods may exist to calculate a company’s free cash flow.��As a result, the method used by our management to calculate our free cash flow may differ from the methods other companies use to calculate their free cash flow.��The following table provides a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow:

Three Months Ended December 31,

Years Ended December 31,

(Thousands of dollars)

2014

2013

2014

2013

Net cash provided by (required by) operating activities

$

89,132�

$

(13,258)

$

305,581�

$

356,698�

Payments for property and equipment

(54,201)

(42,941)

(138,888)

(164,536)

Free cash flow

$

34,931�

$

(56,199)

$

166,693�

$

192,162�


Categories

SEC Filings

Next Articles