Murphy USA (US:MUSA)2022-10-27 20:43Financial Performance - For Q3 2022, the company reported net income of $219.5 million, or $9.28 per diluted share, on revenue of $6.2 billion, compared to net income of $104.0 million, or $3.98 per diluted share, on $4.6 billion of revenue in Q3 2021[148]. - Year-to-date revenues for 2022 increased by $5.5 billion, or 43.6%, compared to the same period in 2021, driven by higher retail fuel sales prices and volumes, increased merchandise sales, and the inclusion of QuickChek sales results[157]. - Net income for the three months ended September 30, 2022, increased to $236.8 million, up from $121.1 million in the same period of 2021, primarily due to higher retail fuel and merchandise contributions[172]. - Net income in the Marketing segment for the nine months ended September 30, 2022 increased by $257.9 million compared to the same period in 2021, attributed to improved fuel and merchandise contributions[179]. Revenue and Sales - Total revenues for the Marketing segment were approximately $6.2 billion in Q3 2022, compared to $4.6 billion in Q3 2021, driven by a 27.0% increase in retail fuel sales prices and a 13.2% increase in gallons sold[173]. - Total revenues for the Marketing segment were approximately $18.1 billion for the nine-month period ended September 30, 2022, a 43.5% increase from $12.6 billion in the same period of 2021[180]. - Total merchandise sales for the nine months ended September 30, 2022, were $2,913.8 million, compared to $2,750.0 million in the same period of 2021[171]. - Total merchandise sales increased 7.7% to $1.0 billion in Q3 2022 compared to $953.4 million in Q3 2021, driven by higher sales across most categories[176]. Fuel and Margin Analysis - Total fuel contribution for Q3 2022 was 37.6 cents per gallon, compared to 26.6 cents per gallon in Q3 2021, with retail fuel margin dollars increasing by 85.1% and retail fuel volumes improving by 13.2%[139]. - Retail fuel margin increased by 85.1% in Q3 2022, with a margin rate of 39.3 cents per gallon compared to 24.0 cents per gallon in Q3 2021[174]. - Total fuel contribution for the nine months ended September 30, 2022, was $1,260.7 million, up from $836.8 million in the same period of 2021[170]. - Retail fuel margin dollars increased 59.7% in the nine-month period ended September 30, 2022, with a retail margin rate of 30.0 cpg compared to 20.6 cpg in the same period of 2021[181]. Expenses and Costs - Store and other operating expenses increased by $33.4 million, or 15.1%, in Q3 2022, primarily due to increased payment fees and higher employee-related costs, including a non-recurring special bonus of $4.0 million[154]. - Total cost of sales in Q3 2022 increased by $1.4 billion, or 34.0%, compared to Q3 2021, primarily due to higher wholesale fuel prices and fuel volumes sold[153]. - Store and other operating expenses increased $122.4 million in 2022 compared to the same period in 2021, primarily due to an additional month of QuickChek results[184]. Capital Expenditures and Debt - The company anticipates total capital expenditures for the full year 2022 to range from approximately $300 million to $350 million, primarily funded through operating cash flow[142]. - The total capital spending for the nine months ended September 30, 2022, was $229.2 million, compared to $218.6 million for the same period in 2021[221]. - The long-term debt as of September 30, 2022, was $1,794.0 million, a slight decrease from $1,800.1 million as of December 31, 2021[202]. - The company issued $300 million of 5.625% Senior Notes due 2027, $500 million of 4.75% Senior Notes due 2029, and $500 million of 3.75% Senior Notes due 2031, all fully guaranteed by Murphy USA[203][204][205]. Share Repurchase and Dividends - A total of 2,482,804 shares were repurchased for $566.9 million during the nine months ended September 30, 2022, completing the $500 million share repurchase program approved in November 2020[201]. - The company paid cash dividends of $0.92 per common share for a total of $22.1 million during the nine months ended September 30, 2022, compared to $0.75 per share totaling $19.9 million in the same period of 2021[199]. - The company has approximately $453.1 million remaining under the $1 billion share repurchase program authorized in December 2021[201]. Market Risks and Hedging - The company is exposed to market risks related to the volatility in the price of refined products, primarily gasoline and diesel, which can affect revenues and operating costs[226]. - As of September 30, 2022, the company had short-term commodity derivative contracts in place to hedge the purchase price of refined products, with a 10% change in benchmark prices being immaterial to the company[227]. - The company has a floating rate term loan of $395 million and an undrawn Revolving Facility, both tied to LIBOR interest rates, which can cause fluctuations in interest expenses[228]. - An interest rate swap hedges exposure to one-month LIBOR for $90.5 million of the outstanding term loan amount as of September 30, 2022, with a 10% change in interest rates having an immaterial impact on financial statements[229].