Guarantor Subsidiaries | Guarantor Subsidiaries 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 6.00% senior notes due 2023 and the 5.625% senior notes due 2027. 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) June 30, 2019 Assets Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Current assets Cash and cash equivalents $ — $ 178.0 $ 0.6 $ — $ — $ 178.6 Accounts receivable—trade, less allowance for doubtful accounts of $1.1 in 2019 — 236.3 — — — 236.3 Inventories, at lower of cost or market — 211.3 — — — 211.3 Prepaid expenses and other current assets — 29.8 0.3 — — 30.1 Total current assets — 655.4 0.9 — — 656.3 Property, plant and equipment, at cost less accumulated depreciation and amortization of $1,040.4 in 2019 — 1,753.4 5.5 — — 1,758.9 Investments in subsidiaries 2,475.0 144.1 — — (2,619.1 ) — Other assets — 156.1 — — — 156.1 Total assets $ 2,475.0 $ 2,709.0 $ 6.4 $ — $ (2,619.1 ) $ 2,571.3 Liabilities and Stockholders' Equity Current liabilities Current maturities of long-term debt $ — $ 21.3 $ — $ — $ — $ 21.3 Inter-company accounts payable 30.0 169.2 (44.9 ) (154.3 ) — — Trade accounts payable and accrued liabilities — 557.5 — — — 557.5 Total current liabilities 30.0 748.0 (44.9 ) (154.3 ) — 578.8 Long-term debt, including capitalized lease obligations — 833.6 — — — 833.6 Deferred income taxes — 194.9 — — — 194.9 Asset retirement obligations — 31.7 — — — 31.7 Deferred credits and other liabilities — 116.0 — — — 116.0 Total liabilities 30.0 1,924.2 (44.9 ) (154.3 ) — 1,755.0 Stockholders' Equity Preferred Stock, par $0.01 (authorized 20,000,000 shares, none outstanding) — — — — — — Common Stock, par 0.01 (authorized 200,000,000 shares, 46,767,164 shares issued at June 30, 2019) 0.5 — 0.1 — (0.1 ) 0.5 Treasury Stock (14,796,973 shares held at June 30, 2019) (964.7 ) — — — — (964.7 ) Additional paid in capital (APIC) 1,189.4 573.9 52.0 87.5 (1,368.4 ) 534.4 Retained earnings 2,219.8 210.9 (0.8 ) 66.8 (1,250.6 ) 1,246.1 Total stockholders' equity 2,445.0 784.8 51.3 154.3 (2,619.1 ) 816.3 Total liabilities and stockholders' equity $ 2,475.0 $ 2,709.0 $ 6.4 $ — $ (2,619.1 ) $ 2,571.3 CONSOLIDATING BALANCE SHEET (Millions of dollars, except share amounts) December 31, 2018 Assets Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Current assets Cash and cash equivalents $ — $ 184.0 $ 0.5 $ — $ — $ 184.5 Accounts receivable—trade, less allowance for doubtful accounts of $1.1 in 2018 — 138.8 — — — 138.8 Inventories, at lower of cost or market — 221.5 — — — 221.5 Prepaid expenses and other current assets — 25.1 0.2 — — 25.3 Total current assets — 569.4 0.7 — — 570.1 Property, plant and equipment, at cost less accumulated depreciation and amortization of $974.2 in 2018 — 1,745.9 2.3 — — 1,748.2 Investments in subsidiaries 2,437.0 144.4 — — (2,581.4 ) — Other assets — 42.5 — — — 42.5 Total assets $ 2,437.0 $ 2,502.2 $ 3.0 $ — $ (2,581.4 ) $ 2,360.8 Liabilities and Stockholders' Equity Current liabilities Current maturities of long-term debt $ — $ 21.2 $ — $ — $ — $ 21.2 Inter-company accounts payable (0.1 ) 203.0 (48.6 ) (154.3 ) — — Trade accounts payable and accrued liabilities — 456.9 — — — 456.9 Total current liabilities (0.1 ) 681.1 (48.6 ) (154.3 ) — 478.1 Long-term debt, including capitalized lease obligations — 842.1 — — — 842.1 Deferred income taxes — 192.2 — — — 192.2 Asset retirement obligations — 30.7 — — — 30.7 Deferred credits and other liabilities — 10.4 — — — 10.4 Total liabilities (0.1 ) 1,756.5 (48.6 ) (154.3 ) — 1,553.5 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, 2018) 0.5 — 0.1 — (0.1 ) 0.5 Treasury Stock (14,505,681 shares held at December 31, 2018) (940.3 ) — — — — (940.3 ) Additional paid in capital (APIC) 1,195.1 572.8 52.0 87.5 (1,368.4 ) 539.0 Retained earnings 2,181.8 172.9 (0.5 ) 66.8 (1,212.9 ) 1,208.1 Total stockholders' equity 2,437.1 745.7 51.6 154.3 (2,581.4 ) 807.3 Total liabilities and stockholders' equity $ 2,437.0 $ 2,502.2 $ 3.0 $ — $ (2,581.4 ) $ 2,360.8 CONSOLIDATING INCOME STATEMENT (Millions of dollars) Three Months Ended June 30, 2019 Operating Revenues Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Petroleum product sales $ — $ 3,129.7 $ — $ — $ — $ 3,129.7 Merchandise sales — 658.8 — — — 658.8 Other operating revenues — 11.9 — — — 11.9 Total operating revenues — 3,800.4 — — — 3,800.4 Operating Expenses Petroleum product cost of goods sold — 2,973.7 — — — 2,973.7 Merchandise cost of goods sold — 553.3 — — — 553.3 Station and other operating expenses — 145.6 — — — 145.6 Depreciation and amortization — 36.5 — — — 36.5 Selling, general and administrative — 35.1 — — — 35.1 Accretion of asset retirement obligations — 0.5 — — — 0.5 Total operating expenses — 3,744.7 — — — 3,744.7 Net settlement proceeds — — — — — — Gain (loss) on sale of assets — — — — — — Income (loss) from operations — 55.7 — — — 55.7 Other income (expense) Interest income — 0.9 — — — 0.9 Interest expense — (13.2 ) — — — (13.2 ) Other nonoperating income — 0.1 (0.2 ) — — (0.1 ) Total other income (expense) — (12.2 ) (0.2 ) — — (12.4 ) Income (loss) before income taxes — 43.5 (0.2 ) — — 43.3 Income tax expense — 10.7 (0.1 ) — — 10.6 Income (loss) — 32.8 (0.1 ) — — 32.7 Equity earnings in affiliates, net of tax 32.7 (0.1 ) — — (32.6 ) — Net Income (Loss) $ 32.7 $ 32.7 $ (0.1 ) $ — $ (32.6 ) $ 32.7 CONSOLIDATING INCOME STATEMENT (Millions of dollars) Three Months Ended June 30, 2018 Operating Revenues Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Petroleum product sales $ — $ 3,193.7 $ — $ — $ — $ 3,193.7 Merchandise sales — 616.1 — — — 616.1 Other operating revenues — 19.2 — — — 19.2 Total operating revenues — 3,829.0 — — — 3,829.0 Operating Expenses Petroleum product cost of goods sold — 3,032.5 — — — 3,032.5 Merchandise cost of goods sold — 513.8 — — — 513.8 Station and other operating expenses — 134.8 — — — 134.8 Depreciation and amortization — 33.0 — — — 33.0 Selling, general and administrative — 35.2 — — — 35.2 Accretion of asset retirement obligations — 0.5 — — — 0.5 Total operating expenses — 3,749.8 — — — 3,749.8 Net settlement proceeds — 3.4 — — — 3.4 Gain (loss) on sale of assets — (0.5 ) — — — (0.5 ) Income (loss) from operations — 82.1 — — — 82.1 Other income (expense) Interest income — 0.3 — — — 0.3 Interest expense — (13.4 ) — — — (13.4 ) Other nonoperating income — 0.1 — — — 0.1 Total other income (expense) — (13.0 ) — — — (13.0 ) Income (loss) before income taxes — 69.1 — — — 69.1 Income tax expense — 17.3 — — — 17.3 Income (loss) — 51.8 — — — 51.8 Equity earnings in affiliates, net of tax 51.8 — — — (51.8 ) — Net Income (Loss) $ 51.8 $ 51.8 $ — $ — $ (51.8 ) $ 51.8 CONSOLIDATING INCOME STATEMENT (Millions of dollars) Six Months Ended June 30, 2019 Operating Revenues Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Petroleum product sales $ — $ 5,629.5 $ — $ — $ — $ 5,629.5 Merchandise sales — 1,265.0 — — — 1,265.0 Other operating revenues — 22.3 — — — 22.3 Total operating revenues — 6,916.8 — — — 6,916.8 Operating Expenses Petroleum product cost of goods sold — 5,355.2 — — — 5,355.2 Merchandise cost of goods sold — 1,062.0 — — — 1,062.0 Station and other operating expenses — 278.4 — — — 278.4 Depreciation and amortization — 76.2 — — — 76.2 Selling, general and administrative — 69.7 — — — 69.7 Accretion of asset retirement obligations — 1.0 — — — 1.0 Total operating expenses — 6,842.5 — — — 6,842.5 Net settlement proceeds — 0.1 — — — 0.1 Gain (loss) on sale of assets — (0.1 ) — — — (0.1 ) Income (loss) from operations — 74.3 — — — 74.3 Other income (expense) Interest income — 1.6 — — — 1.6 Interest expense — (26.8 ) — — — (26.8 ) Other nonoperating income — 0.5 (0.4 ) — — 0.1 Total other income (expense) — (24.7 ) (0.4 ) — — (25.1 ) Income (loss) before income taxes — 49.6 (0.4 ) — — 49.2 Income tax expense — 11.3 (0.1 ) — — 11.2 Income (loss) — 38.3 (0.3 ) — — 38.0 Equity earnings in affiliates, net of tax 38.0 (0.3 ) — — (37.7 ) — Net Income (Loss) $ 38.0 $ 38.0 $ (0.3 ) $ — $ (37.7 ) $ 38.0 CONSOLIDATING INCOME STATEMENT (Millions of dollars) Six Months Ended June 30, 2018 Operating Revenues Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Petroleum product sales $ — $ 5,831.3 $ — $ — $ — $ 5,831.3 Merchandise sales — 1,183.8 — — — 1,183.8 Other operating revenues — 58.1 — — — 58.1 Total operating revenues — 7,073.2 — — — 7,073.2 Operating Expenses Petroleum product cost of goods sold — 5,593.6 — — — 5,593.6 Merchandise cost of goods sold — 990.0 — — — 990.0 Station and other operating expenses — 262.2 — — — 262.2 Depreciation and amortization — 64.8 — — — 64.8 Selling, general and administrative — 69.7 — — — 69.7 Accretion of asset retirement obligations — 1.0 — — — 1.0 Total operating expenses — 6,981.3 — — — 6,981.3 Net settlement proceeds — 50.4 — — — 50.4 Gain (loss) on sale of assets — (0.2 ) — — — (0.2 ) Income (loss) from operations — 142.1 — — — 142.1 Other income (expense) Interest income — 0.6 — — — 0.6 Interest expense — (26.4 ) — — — (26.4 ) Other nonoperating income — 0.2 (0.1 ) — — 0.1 Total other income (expense) — (25.6 ) (0.1 ) — — (25.7 ) Income (loss) before income taxes — 116.5 (0.1 ) — — 116.4 Income tax expense — 25.3 — — — 25.3 Income (loss) — 91.2 (0.1 ) — — 91.1 Equity earnings in affiliates, net of tax 91.1 (0.1 ) — — (91.0 ) — Net Income (Loss) $ 91.1 $ 91.1 $ (0.1 ) $ — $ (91.0 ) $ 91.1 CONSOLIDATING STATEMENT OF CASH FLOW (Millions of dollars) Six Months Ended June 30, 2019 Operating Activities Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 38.0 $ 38.0 $ (0.3 ) $ — $ (37.7 ) $ 38.0 Adjustments to reconcile net income (loss) to net cash provided by (required by) operating activities Depreciation and amortization — 76.2 — — — 76.2 Deferred and noncurrent income tax charges (credits) — 2.7 — — — 2.7 Accretion of asset retirement obligations — 1.0 — — — 1.0 (Gain) loss on sale of assets — 0.1 — — — 0.1 Net (increase) decrease in noncash operating working capital — (0.4 ) (0.1 ) — — (0.5 ) Equity in earnings of affiliates (38.0 ) 0.3 — — 37.7 — Other operating activities - net — 7.4 — — — 7.4 Net cash provided by (required by) operating activities — 125.3 (0.4 ) — — 124.9 Investing Activities Property additions — (83.4 ) (3.2 ) — — (86.6 ) Proceeds from sale of assets — 1.4 — — — 1.4 Other investing activities - net — (0.5 ) — — — (0.5 ) Net cash provided by (required by) investing activities — (82.5 ) (3.2 ) — — (85.7 ) Financing Activities Purchase of treasury stock (30.1 ) — — — — (30.1 ) Repayments of debt — (10.7 ) — — — (10.7 ) Amounts related to share-based compensation — (4.3 ) — — — (4.3 ) Net distributions to parent 30.1 (33.8 ) 3.7 — — — Net cash provided by (required by) financing activities — (48.8 ) 3.7 — — (45.1 ) Net increase (decrease) in cash and cash equivalents — (6.0 ) 0.1 — — (5.9 ) Cash, cash equivalents, and restricted cash at January 1 — 184.0 0.5 — — 184.5 Cash, cash equivalents, and restricted cash at June 30 $ — $ 178.0 $ 0.6 $ — $ — $ 178.6 Reconciliation of Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents at beginning of period $ — $ 184.0 $ 0.5 $ — $ — $ 184.5 Restricted cash at beginning of period — — — — — — Cash, cash equivalents, and restricted cash at beginning of period $ — $ 184.0 $ 0.5 $ — $ — $ 184.5 Cash and cash equivalents at end of period $ — $ 178.0 $ 0.6 $ — $ — $ 178.6 Restricted cash at end of period — — — — — — Cash, cash equivalents, and restricted cash at end of period $ — $ 178.0 $ 0.6 $ — $ — $ 178.6 CONSOLIDATING STATEMENT OF CASH FLOW (Millions of dollars) Six Months Ended June 30, 2018 Operating Activities Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 91.1 $ 91.1 $ (0.1 ) $ — $ (91.0 ) $ 91.1 Adjustments to reconcile net income (loss) to net cash provided by (required by)operating activities Depreciation and amortization — 64.8 — — — 64.8 Deferred and noncurrent income tax charges (credits) — 11.4 — — — 11.4 Accretion of asset retirement obligations — 1.0 — — — 1.0 Pretax (gains) losses from sale of assets — 0.2 — — — 0.2 Net (increase) decrease in noncash operating working capital — (4.6 ) — — — (4.6 ) Equity in earnings of affiliates (91.1 ) 0.1 — — 91.0 — Other operating activities - net — 2.4 — — — 2.4 Net cash provided by (required by) operating activities — 166.4 (0.1 ) — — 166.3 Investing Activities Property additions — (101.5 ) (0.8 ) — — (102.3 ) Proceeds from sale of assets — 1.2 — — — 1.2 Other investing activities - net — (4.9 ) — — — (4.9 ) Net cash provided by (required by) investing activities — (105.2 ) (0.8 ) — — (106.0 ) Financing Activities Purchase of treasury stock (144.4 ) — — — — (144.4 ) Repayments of debt — (10.6 ) — — — (10.6 ) Amounts related to share-based compensation — (3.4 ) — — — (3.4 ) Net distributions to parent 144.4 (145.6 ) 1.2 — — — Net cash provided by (required) by financing activities — (159.6 ) 1.2 — — (158.4 ) Net increase (decrease) in cash and cash equivalents — (98.4 ) 0.3 — — (98.1 ) Cash, cash equivalents, and restricted cash at January 1 — 169.9 0.1 — — 170.0 Cash, cash equivalents, and restricted cash at June 30 $ — $ 71.5 $ 0.4 $ — $ — $ 71.9 Reconciliation of Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents at beginning of period $ — $ 169.9 $ 0.1 $ — $ — $ 170.0 Restricted cash at beginning of period — — — — — — Cash, cash equivalents, and restricted cash at beginning of period $ — $ 169.9 $ 0.1 $ — $ — $ 170.0 Cash and cash equivalents at end of period $ — $ 71.5 $ 0.4 $ — $ — $ 71.9 Restricted cash at end of period — — — — — — Cash, cash equivalents, and restricted cash at end of period $ — $ 71.5 $ 0.4 $ — $ — $ 71.9 CONSOLIDATING STATEMENT OF CHANGES IN EQUITY (Millions of dollars) Six Months Ended June 30, 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 Issuance of common stock — — — — — — Balance as of June 30, 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 ) Issuance of treasury stock 0.1 — — — — 0.1 Repurchase of treasury stock (16.8 ) — — — — (16.8 ) Balance as of June 30, 2019 $ (964.7 ) $ — $ — $ — $ — $ (964.7 ) 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 Issuance of treasury stock (0.1 ) $ — $ — $ — $ — (0.1 ) Amounts related to share-based compensation — (0.2 ) — — — (0.2 ) Share-based compensation expense — 2.8 — — — 2.8 Balance as of June 30, 2019 $ 1,189.4 $ 573.9 $ 52.0 $ 87.5 $ (1,368.4 ) $ 534.4 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 Net income (loss) 32.7 32.7 $ (0.1 ) — (32.6 ) 32.7 Balance as of June 30, 2019 $ 2,219.8 $ 210.9 $ (0.8 ) $ 66.8 $ (1,250.6 ) $ 1,246.1 CONSOLIDATING STATEMENT OF CHANGES IN EQUITY (Millions of dollars) Six Months Ended June 30, 2018 Statement of Stockholders' Equity Parent Company Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Common Stock Balance as of December 31, 2017 $ 0.5 $ — $ 0.1 $ — $ (0.1 ) $ 0.5 Issuance of common stock — — — — — — Balance as of March 31, 2018 $ 0.5 $ — $ 0.1 $ — $ (0.1 ) $ 0.5 Issuance of common stock — — $ — — — — Balance as of June 30, 2018 $ 0.5 $ — $ 0.1 $ — $ (0.1 ) $ 0.5 Treasury Stock Balance as of December 31, 2017 $ (806.5 ) $ — $ — $ — $ — $ (806.5 ) Issuance of treasury stock 4.4 — — — — 4.4 Repurchase of treasury stock (71.7 ) — — — — (71.7 ) Balance as of March 31, 2018 $ (873.8 ) $ — $ — $ — $ — (873.8 ) Issuance of treasury stock 0.6 $ — $ — $ — $ — 0.6 Repurchase of treasury stock (72.7 ) $ — $ — $ — $ — (72.7 ) Balance as of June 30, 2018 $ (945.9 ) $ — $ — $ — $ — $ (945.9 ) APIC Balance as of December 31, 2017 $ 1,205.7 $ 573.1 $ 52.0 $ 87.5 $ (1,368.4 ) $ 549.9 Issuance of treasury stock (4.4 ) — — — — (4.4 ) Amounts related to share-based compensation — (2.9 ) — — — (2.9 ) Share-based compensation expense — 2.2 — — — 2.2 Balance as of March 31, 2018 $ 1,201.3 $ 572.4 $ 52.0 $ 87.5 $ (1,368.4 ) $ 544.8 Issuance of treasury stock (0.6 ) — — — — (0.6 ) Amounts related to share-based compensation — (0.5 ) — — — (0.5 ) Share-based compensation expense — 2.4 — — — 2.4 Balance as of June 30, 2018 $ 1,200.7 $ 574.3 $ 52.0 $ 87.5 $ (1,368.4 ) $ 546.1 Retained Earnings Balance as of December 31, 2017 $ 994.5 $ 933.0 $ — $ 66.8 $ (999.8 ) $ 994.5 Net income (loss) 39.3 39.3 — — (39.3 ) 39.3 Balance as of March 31, 2018 $ 1,033.8 $ 972.3 $ — $ 66.8 $ (1,039.1 ) 1,033.8 Net income (loss) 51.8 51.8 (0.1 ) — (51.7 ) 51.8 Balance as of June 30, 2018 $ 1,085.6 $ 1,024.1 $ (0.1 ) $ 66.8 $ (1,090.8 ) $ 1,085.6 |