Murphy Usa Inc
Our business consists primarily of marketing of retail motor fuel products
and convenience merchandise through a large chain of 1,203 (as of December 31,
2013) retail stations operated by us, almost all of which are in close proximity
to Walmart stores. Our retail stations are located in 23 states, primarily in
the Southwest, Southeast and Midwest United States. Of these stations, 1,021
are branded Murphy USA and 182 are standalone Murphy Express locations (as of
December 31, 2013). Our retail stations under the brand name Murphy USA®
participate in the Walmart discount program that we offer at most locations.
The Walmart discount program offers a cents-off per gallon purchased for fuel
when using specific payment methods as decided by Walmart and us. The amount
of the discount offered can vary based on many factors, including state laws.
Our Murphy Express branded stations are not connected to the Walmart discount
program but are otherwise similar to the Murphy USA sites, including the types
of fuel and merchandise offerings available to our customers.
Our business also includes certain product supply and wholesale assets, including
product distribution terminals and pipeline positions. As an independent publicly
traded company, we believe we are a low-price, high volume fuel retailer selling
convenience merchandise through low cost kiosks with key strategic relationships
and experienced management.
Murphy USA was incorporated in Delaware on March 1, 2013 and holds, through
its subsidiaries, the U.S. retail marketing business that was separated (the
“Separation”) from its former parent company, Murphy Oil Corporation
(“Murphy Oil”), plus certain ethanol production facilities and other
assets and liabilities of Murphy Oil that supported the activities of the U.S.
retail marketing operations. The Separation was approved by the Murphy Oil board
of directors on August 7, 2013, and was completed on August 30, 2013 through
the distribution of 100% of the outstanding capital stock of Murphy USA to holders
of Murphy Oil common stock on the record date of August 21, 2013. Murphy Oil
stockholders of record received one share of Murphy USA common stock for every
four shares of Murphy Oil common stock. The spin-off was completed in accordance
with a separation and distribution agreement (the “Separation and Distribution
Agreement”) entered into between Murphy Oil and Murphy USA. Murphy USA
is now an independent, publicly traded company, and Murphy Oil retains no ownership
interest in Murphy USA.
Of our network of retail gasoline stations, more than 1,000 are situated on
prime locations in close proximity to Walmart stores. We believe our proximity
to Walmart stores generates significant traffic to our retail stations while
our competitively priced gasoline and convenience offerings appeal to our shared
customers. We also collaborate with Walmart on a fuel discount program which
we believe enhances the customer value proposition as well as the competitive
position of both Murphy USA and Walmart with respect to our peers. We began
our relationship with Walmart in 1996 and in December 2012 we signed an agreement
that allows us to build approximately 200 new sites on Walmart locations, which
we expect to complete over the next few years. We believe Walmart will continue
to serve as a strategic partner as we pursue further organic growth opportunities
on existing and new Walmart locations in both our core and adjacent geographies.
We operate within the large and growing U.S. retail fueling store industry,
which is highly fragmented. We believe we will continue to benefit from several
key industry trends and characteristics, including:
Increased sensitivity to gas prices among price conscious consumers, and increasing
demand for low-priced fuel sellers;
Highly fragmented nature of the industry providing larger chain operators with
significant scale advantage; and
Increasing consumer traffic around supermarkets and large format hypermarkets,
supporting complementary consumer demand at nearby retail fueling and convenience
stores.