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Murphy USA Inc. Reports First Quarter 2023 Results

Murphy USA Inc. (NYSE: MUSA), a leading marketer of retail motor fuel products and convenience merchandise, today announced preliminary financial results for the three months ended March 31, 2023.

Key Highlights:

  • Net income was $106.3 million, or $4.80 per diluted share, in Q1 2023 compared to net income of $152.4 million, or $6.08 per diluted share, in Q1 2022.
  • Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results including RINs) for Q1 2023 was 28.9 cpg, compared to 34.0 cpg in Q1 2022.
  • Total retail gallons increased 4.9% in Q1 2023 compared to Q1 2022, while volumes on a same store sales ("SSS") basis increased 1.4%.
  • Merchandise contribution dollars for Q1 2023 increased 6.5% to $187.1 million on average unit margins of 19.4%, compared to the prior-year quarter contribution dollars of $175.7 million on unit margins of 19.7%.
  • During Q1 2023, the Company repurchased approximately 48.8 thousand common shares for $13.7 million at an average price of $279.67 per share.
  • Announced earlier today the Board's authorization of a new share repurchase authorization of up to $1.5 billion to begin upon the completion of the current $1 billion authorization and to be executed by December 31, 2028.
  • The Company recently published its initial Greenhouse Gas Emissions (GHG) report for 2022 on the Investor Relations website.

“Murphy USA performance was exceptional during the first quarter, delivering results aligned with our high expectations and future value creation potential,” said President and CEO Andrew Clyde. “All-in fuel margins of 28.9 cents per gallon support our view of structurally higher industry margins, and were complemented by continued volume growth and share gains. Strong fuel performance and robust customer traffic drove meaningful year-over-year growth inside the stores, translating to strong merchandise performance. With new investments underway to help better serve our customers and grow future earnings, we believe the next five years of high-return organic growth, strong fundamentals and resulting free cash flow make a compelling case for continued share repurchase, as evidenced by our announcement of a new up to $1.5 billion authorization following the completion of our $1 billion program, which we expect to finish in 2023.”

Consolidated Results

 

 

Three Months Ended

March 31,

Key Operating Metrics

 

 

2023

 

 

2022

Net income (loss) ($ Millions)

 

$

106.3

 

$

152.4

Earnings per share (diluted)

 

$

4.80

 

$

6.08

Adjusted EBITDA ($ Millions)

 

$

220.2

 

$

277.0

Net income and Adjusted EBITDA for Q1 2023 were lower versus the prior-year period, due primarily to lower total fuel contribution and increases in store operating expenses, general and administrative expenses, and payment fees, which were partially offset by higher overall merchandise contribution margins.

Fuel

 

 

Three Months Ended

March 31,

Key Operating Metrics

 

 

2023

 

 

 

2022

Total retail fuel contribution ($ Millions)

 

$

264.7

 

 

$

253.6

Total PS&W contribution ($ Millions)

 

 

(50.1

)

 

 

39.6

RINs (included in Other operating revenues on Consolidated

Income Statement) ($ Millions)

 

115.3

 

 

 

76.6

Total fuel contribution ($ Millions)

 

$

329.9

 

 

$

369.8

Retail fuel volume - chain (Million gal)

 

 

1,141.8

 

 

 

1,088.3

Retail fuel volume - per store (K gal APSM)1

 

 

230.2

 

 

 

224.9

Retail fuel volume - per store (K gal SSS)2

 

 

227.8

 

 

 

222.8

Total fuel contribution (including retail, PS&W and RINs) (cpg)

 

28.9

 

 

 

34.0

Retail fuel margin (cpg)

 

 

23.2

 

 

 

23.3

PS&W including RINs contribution (cpg)

 

 

5.7

 

 

 

10.7

 

1Average Per Store Month ("APSM") metric includes all stores open through the date of calculation

22022 amounts not revised for 2023 raze-and-rebuild activity

Total fuel contribution dollars of $329.9 million decreased $39.9 million, or 10.8%, in Q1 2023 compared to Q1 2022 due to lower margins partially offset by higher retail volumes sold during the period. Retail fuel contribution dollars increased $11.1 million, or 4.4%, to $264.7 million compared to Q1 2022 due to higher volumes and sustained retail fuel margins. The increase was driven by higher APSM retail volumes of 2.4% in Q1 2023 compared to Q1 2022 while retail margins were similar to prior quarter at 23.2 cpg in Q1 2023. PS&W margins (including RINs) decreased $51.0 million when compared to Q1 2022, reflecting lower timing and inventory pricing adjustments, higher RINs revenue, and an increase in negative spot-to-rack margins.

Merchandise

 

 

Three Months Ended

March 31,

Key Operating Metrics

 

 

2023

 

 

 

2022

 

Total merchandise contribution ($ Millions)

 

$

187.1

 

 

$

175.7

 

Total merchandise sales ($ Millions)

 

$

966.2

 

 

$

892.0

 

Total merchandise sales ($K SSS)1,2

 

$

189.2

 

 

$

173.2

 

Merchandise unit margin (%)

 

 

19.4

%

 

 

19.7

%

Tobacco contribution ($K SSS)1,2

 

$

17.5

 

 

$

16.9

 

Non-tobacco contribution ($K SSS)1,2

 

$

19.5

 

 

$

16.0

 

Total merchandise contribution ($K SSS)1,2

 

$

37.0

 

 

$

32.9

 

 

12022 amounts not revised for 2023 raze-and-rebuild activity

2Includes store-level discounts for Murphy Drive Reward ("MDR") redemptions and excludes change in value of unredeemed MDR points

Total merchandise contribution increased $11.4 million, or 6.5%, to $187.1 million in Q1 2023 compared to the prior-year quarter due primarily to higher unit sales volumes and retail prices. Total tobacco contribution dollars in Q1 2023 increased 4.9% and non-tobacco contribution dollars increased 9.0% compared to Q1 2022.

Other Areas

 

 

Three Months Ended

March 31,

Key Operating Metrics

 

 

2023

 

 

2022

Total store and other operating expenses ($ Millions)

$

238.3

 

$

222.7

Store OPEX excluding payment fees and rent ($K APSM)

$

31.1

 

$

29.5

Total SG&A cost ($ Millions)

 

$

59.0

 

$

46.2

Total store and other operating expenses were $15.6 million higher in Q1 2023 versus Q1 2022, mainly due to employee related expenses, store maintenance costs, and payment fees. Store OPEX excluding payment fees and rent on an APSM basis were 5.4% higher versus Q1 2022, primarily attributable to increased employee related expenses, maintenance, and inventory shrink costs. Total SG&A costs for Q1 2023 were $12.8 million higher than Q1 2022 primarily due to higher professional fees from business improvement initiatives and increased employee incentive expenses.

Store Openings

The tables below reflect changes in our store portfolio in Q1 2023:

Net Change in Q1 2023

 

Murphy

USA / Express

 

QuickChek

 

Total

New-to-industry ("NTI")

 

7

 

1

 

8

Closed

 

 

 

Net change

 

7

 

1

 

8

 

 

 

 

 

 

 

Raze-and-rebuilds reopened in Q1*

 

2

 

 

2

 

 

 

 

 

 

 

Under Construction at End of Q1

 

 

 

 

 

 

NTI

 

4

 

4

 

8

Raze-and-rebuilds*

 

3

 

 

3

Total under construction at end of Q1

 

7

 

4

 

11

 

 

 

 

 

 

 

Store count at March 31, 2023*

 

1,562

 

158

 

1,720

 

 

 

 

 

 

 

*Store counts include raze-and-rebuild stores

 

 

In April 2023, the Company completed and opened 4 of the 11 stores that were under construction at March 31, 2023.

Financial Resources

 

 

As of March 31,

Key Financial Metrics

 

 

2023

 

 

2022

Cash and cash equivalents ($ Millions)

 

$

102.1

 

$

356.2

Marketable securities, current ($ Millions)

 

$

13.5

 

$

Marketable securities, non-current ($ Millions)

 

$

4.4

 

$

Long-term debt, including capital lease obligations ($ Millions)

$

1,789.4

 

$

1,797.4

Cash balances as of March 31, 2023 totaled $102.1 million, and the Company also had total marketable securities of $17.9 million. Long-term debt consisted of approximately $298.0 million in carrying value of 5.625% senior notes due in 2027, $495.2 million in carrying value of 4.75% senior notes due in 2029, $494.0 million in carrying value of 3.75% senior notes due in 2031, and $382.0 million of term debt. In addition, the Company has approximately $120.2 million in long-term capital leases. The revolving cash flow facility was undrawn as of March 31, 2023.

 

 

Three Months Ended

March 31,

Key Financial Metric

 

2023

 

2022

Average shares outstanding (diluted) (in thousands)

22,133

 

25,074

At March 31, 2023, the Company had common shares outstanding of 21,783,237. Common shares repurchased during the quarter were approximately 48.8 thousand shares for $13.7 million, which were purchased under the 2021 share repurchase plan. As of March 31, 2023, approximately $200.0 million remained available under the $1 billion 2021 plan.

As announced earlier today, the Company's Board of Directors recently authorized a new share repurchase authorization of up to $1.5 billion to begin upon completion of the current $1 billion authorization and to be executed by December 31, 2028. The new authorization reaffirms the Company's commitment to supplement organic growth initiatives with shareholder distributions, including our dividend growth plan, to maximize value creation over time.

The effective income tax rate for Q1 2023 was 23.5% compared to 24.0% in Q1 2022.

The Company paid a quarterly cash dividend on March 1, 2023 of $0.37 per share, or $1.48 per share on an annualized basis, a 5.7% increase from the previous quarter for a total cash payment of $8.1 million.

2022 GHG Emissions Report

In keeping with the commitment we made to measure and report our Scope 1 and Scope 2 greenhouse gas emissions, we are pleased to announce that our 2022 GHG Emissions Report has been published and is available on the Investor Relations website.

* * * * *

Earnings Call Information

The Company will host a conference call on May 3, 2023 at 10:00 a.m. Central Time to discuss first quarter 2023 results. The conference call number is 1 (888) 330-2384 and the conference number is 6680883. 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). Approximately one hour after the conclusion of the conference, the webcast will be available for replay. Shortly thereafter, a transcript will be available.

Source: Murphy USA Inc. (NYSE: MUSA)

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 our M&A activity, anticipated store openings, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, and share repurchases. 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: The Company's ability to successfully expand our food and beverage offerings; 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; geopolitical events, that impact the supply and demand and price of crude oil; the impact of severe weather events, such as hurricanes, floods and earthquakes; the impact of a global health pandemic, the impact of any systems failures, cybersecurity and/or security breaches of the company or its vendor partners, 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; reduced demand for our products due to the implementation of more stringent fuel economy and greenhouse gas reduction requirements, or increasingly widespread adoption of electric vehicle technology; 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; changes to the Company's capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the Company's share repurchases, or management of operating cash; the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, and general economic conditions; compliance with debt covenants; availability and cost of credit; and changes in interest rates. Our SEC reports, including our most recent annual Report on Form 10-K and quarterly report on Form 10-Q, 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.

Murphy USA Inc.

Consolidated Statements of Income

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

March 31,

(Millions of dollars, except share and per share amounts)

 

 

2023

 

 

 

2022

 

Operating Revenues

 

 

 

 

Petroleum product sales1

 

$

3,994.2

 

 

$

4,148.4

 

Merchandise sales

 

 

966.2

 

 

 

892.0

 

Other operating revenues

 

 

116.8

 

 

 

78.0

 

Total operating revenues

 

 

5,077.2

 

 

 

5,118.4

 

 

 

 

 

 

Operating Expenses

 

 

 

 

Petroleum product cost of goods sold1

 

 

3,780.6

 

 

 

3,856.2

 

Merchandise cost of goods sold

 

 

779.1

 

 

 

716.3

 

Store and other operating expenses

 

 

238.3

 

 

 

222.7

 

Depreciation and amortization

 

 

56.4

 

 

 

55.4

 

Selling, general and administrative

 

 

59.0

 

 

 

46.2

 

Accretion of asset retirement obligations

 

 

0.8

 

 

 

0.7

 

Acquisition and integration related costs

 

 

 

 

 

0.2

 

Total operating expenses

 

 

4,914.2

 

 

 

4,897.7

 

 

 

 

 

 

Gain (loss) on sale of assets

 

 

(0.2

)

 

 

 

Income (loss) from operations

 

 

162.8

 

 

 

220.7

 

 

 

 

 

 

Other income (expense)

 

 

 

 

Investment income

 

 

0.8

 

 

 

 

Interest expense

 

 

(24.9

)

 

 

(19.6

)

Other nonoperating income (expense)

 

 

0.3

 

 

 

(0.7

)

Total other income (expense)

 

 

(23.8

)

 

 

(20.3

)

Income before income taxes

 

 

139.0

 

 

 

200.4

 

Income tax expense (benefit)

 

 

32.7

 

 

 

48.0

 

Net Income

 

$

106.3

 

 

$

152.4

 

 

 

 

 

 

Basic and Diluted Earnings Per Common Share

 

 

 

 

Basic

 

$

4.89

 

 

$

6.18

 

Diluted

 

$

4.80

 

 

$

6.08

 

Weighted-average Common shares outstanding (in thousands):

 

 

 

 

Basic

 

 

21,739

 

 

 

24,655

 

Diluted

 

 

22,133

 

 

 

25,074

 

Supplemental information:

 

 

 

 

1Includes excise taxes of:

 

$

544.8

 

 

$

514.1

 

Murphy USA Inc.

Segment Operating Results

(Unaudited)

 

 

 

 

 

(Millions of dollars, except revenue per same store sales (in thousands) and store counts)

 

Three Months Ended

March 31,

Marketing Segment

 

 

2023

 

 

 

2022

 

 

 

 

 

 

Operating Revenues

 

 

 

 

Petroleum product sales

 

$

3,994.2

 

 

$

4,148.4

 

Merchandise sales

 

 

966.2

 

 

 

892.0

 

Other operating revenues

 

 

116.7

 

 

 

77.9

 

Total operating revenues

 

 

5,077.1

 

 

 

5,118.3

 

 

 

 

 

 

Operating expenses

 

 

 

 

Petroleum products cost of goods sold

 

 

3,780.6

 

 

 

3,856.2

 

Merchandise cost of goods sold

 

 

779.1

 

 

 

716.3

 

Store and other operating expenses

 

 

238.2

 

 

 

222.7

 

Depreciation and amortization

 

 

52.4

 

 

 

51.7

 

Selling, general and administrative

 

 

59.0

 

 

 

46.2

 

Accretion of asset retirement obligations

 

 

0.8

 

 

 

0.7

 

Total operating expenses

 

 

4,910.1

 

 

 

4,893.8

 

 

 

 

 

 

Gain (loss) on sale of assets

 

 

(0.2

)

 

 

 

Income (loss) from operations

 

 

166.8

 

 

 

224.5

 

 

 

 

 

 

Other income (expense)

 

 

 

 

Interest expense

 

 

(2.3

)

 

 

(2.2

)

Total other income (expense)

 

 

(2.3

)

 

 

(2.2

)

 

 

 

 

 

Income (loss) before income taxes

 

 

164.5

 

 

 

222.3

 

Income tax expense (benefit)

 

 

38.6

 

 

 

53.2

 

Net income (loss) from operations

 

$

125.9

 

 

$

169.1

 

 

 

 

 

 

Total tobacco sales revenue same store sales1,2

 

$

119.6

 

 

$

113.9

 

Total non-tobacco sales revenue same store sales1,2

 

69.6

 

 

 

59.3

 

Total merchandise sales revenue same store sales1,2

$

189.2

 

 

$

173.2

 

12022 amounts not revised for 2023 raze-and-rebuild activity

2Includes store-level discounts for Murphy Drive Reward ("MDR") redemptions and excludes change in value of unredeemed MDR points

 

 

 

 

 

Store count at end of period

 

 

1,720

 

 

 

1,686

 

Total store months during the period

 

 

5,141

 

 

 

5,031

 

Same store sales information compared to APSM metrics

 

 

Variance from prior year period

 

 

Three months ended

 

 

March 31, 2023

 

 

SSS1

 

APSM2

Fuel gallons per month

 

1.4

%

 

2.4

%

 

 

 

 

 

Merchandise sales

 

6.0

%

 

6.0

%

Tobacco sales

 

5.4

%

 

4.7

%

Non tobacco sales

 

7.2

%

 

8.6

%

 

 

 

 

 

Merchandise margin

 

5.0

%

 

4.2

%

Tobacco margin

 

4.2

%

 

2.7

%

Non tobacco margin

 

5.6

%

 

6.7

%

1Includes store-level discounts for MDR redemptions and excludes change in value of unredeemed MDR points

2Includes all MDR activity

 

 

 

 

Notes

Average Per Store Month (APSM) metric includes all stores open through the date of the calculation, including stores acquired during the period.

Same store sales (SSS) metric includes aggregated individual store results for all stores open throughout both periods presented. For all periods presented, the store must have been open for the entire calendar year to be included in the comparison. Remodeled stores that remained open or were closed for just a very brief time (less than a month) during the period being compared remain in the same store sales calculation. If a store is replaced either at the same location (raze-and-rebuild) or relocated to a new location, it will be excluded from the calculation during the period it is out of service. Newly constructed stores do not enter the calculation until they are open for each full calendar year for the periods being compared (open by January 1, 2022 for the stores being compared in the 2023 versus 2022 comparison). Acquired stores are not included in the calculation of same store sales for the first 12 months after the acquisition. When prior period same store sales volumes or sales are presented, they have not been revised for current year activity for raze-and-rebuilds and asset dispositions.

QuickChek uses a weekly retail calendar where each quarter has 13 weeks. For Q1 2023, the QuickChek results cover the period from December 31, 2022 to March 31, 2023. For Q1 2022, the QuickChek results cover the period from January 1, 2022 to April 1, 2022. The difference in the timing of the period ends is immaterial to the overall consolidated results.

Murphy USA Inc.

Consolidated Balance Sheets

 

 

 

 

 

(Millions of dollars, except share amounts)

 

March 31,

2023

 

December 31,

2022

 

 

(unaudited)

 

 

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

102.1

 

 

$

60.5

 

Marketable securities, current

 

 

13.5

 

 

 

17.9

 

Accounts receivable—trade, less allowance for doubtful

accounts of $0.3 in 2023 and 2022, respectively

 

 

264.7

 

 

 

281.7

 

Inventories, at lower of cost or market

 

 

303.6

 

 

 

319.1

 

Prepaid expenses and other current assets

 

 

27.4

 

 

 

47.6

 

Total current assets

 

 

711.3

 

 

 

726.8

 

Marketable securities, non-current

 

 

4.4

 

 

 

4.4

 

Property, plant and equipment, at cost less accumulated depreciation

and amortization of $1,602.5 and $1,553.1 at 2023 and 2022, respectively

 

 

2,476.0

 

 

 

2,459.3

 

Operating lease right of use assets, net

 

 

443.5

 

 

 

449.6

 

Intangible assets, net of amortization

 

 

140.3

 

 

 

140.4

 

Goodwill

 

 

328.0

 

 

 

328.0

 

Other assets

 

 

15.7

 

 

 

14.7

 

Total assets

 

$

4,119.2

 

 

$

4,123.2

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities

 

 

 

 

Current maturities of long-term debt

 

$

14.7

 

 

$

15.0

 

Trade accounts payable and accrued liabilities

 

 

754.2

 

 

 

839.2

 

Income taxes payable

 

 

3.1

 

 

 

 

Total current liabilities

 

 

772.0

 

 

 

854.2

 

 

 

 

 

 

Long-term debt, including capitalized lease obligations

 

 

1,789.4

 

 

 

1,791.9

 

Deferred income taxes

 

 

334.1

 

 

 

327.4

 

Asset retirement obligations

 

 

43.9

 

 

 

43.3

 

Non-current operating lease liabilities

 

 

439.2

 

 

 

444.2

 

Deferred credits and other liabilities

 

 

23.8

 

 

 

21.5

 

Total liabilities

 

 

3,402.4

 

 

 

3,482.5

 

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 2023 and 2022, respectively)

 

 

0.5

 

 

 

0.5

 

Treasury stock (24,983,927 and 25,017,324 shares held at

 

 

 

 

2023 and 2022, respectively)

 

 

(2,638.3

)

 

 

(2,633.3

)

Additional paid in capital (APIC)

 

 

501.7

 

 

 

518.9

 

Retained earnings

 

 

2,853.2

 

 

 

2,755.1

 

Accumulated other comprehensive income (loss) (AOCI)

 

 

(0.3

)

 

 

(0.5

)

Total stockholders' equity

 

 

716.8

 

 

 

640.7

 

Total liabilities and stockholders' equity

 

$

4,119.2

 

 

$

4,123.2

 

Murphy USA Inc.

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

March 31,

(Millions of dollars)

 

 

2023

 

 

 

2022

 

Operating Activities

 

 

 

 

Net income

 

$

106.3

 

 

$

152.4

 

Adjustments to reconcile net income (loss) to net cash provided by

operating activities

 

 

 

 

Depreciation and amortization

 

 

56.4

 

 

 

55.4

 

Deferred and noncurrent income tax charges (benefits)

 

 

6.6

 

 

 

7.5

 

Accretion of asset retirement obligations

 

 

0.8

 

 

 

0.7

 

(Gains) losses from sale of assets

 

 

0.2

 

 

 

 

Net (increase) decrease in noncash operating working capital

 

 

(30.4

)

 

 

118.9

 

Other operating activities - net

 

 

9.8

 

 

 

4.3

 

Net cash provided (required) by operating activities

 

 

149.7

 

 

 

339.2

 

Investing Activities

 

 

 

 

Property additions

 

 

(72.7

)

 

 

(64.0

)

Redemptions of marketable securities

 

 

4.5

 

 

 

 

Other investing activities - net

 

 

(0.8

)

 

 

(0.4

)

Net cash provided (required) by investing activities

 

 

(69.0

)

 

 

(64.4

)

Financing Activities

 

 

 

 

Purchase of treasury stock

 

 

(13.7

)

 

 

(151.8

)

Dividends paid

 

 

(8.1

)

 

 

(7.2

)

Borrowings of debt

 

 

8.0

 

 

 

 

Repayments of debt

 

 

(11.8

)

 

 

(3.8

)

Amounts related to share-based compensation

 

 

(13.5

)

 

 

(12.2

)

Net cash provided (required) by financing activities

 

 

(39.1

)

 

 

(175.0

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

41.6

 

 

 

99.8

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

60.5

 

 

 

256.4

 

Cash, cash equivalents, and restricted cash at end of period

 

$

102.1

 

 

$

356.2

 

Supplemental Disclosure Regarding Non-GAAP Financial Information

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three months ended March 31, 2023. EBITDA means net income (loss) plus net interest expense, plus income tax expense, depreciation and amortization, and Adjusted EBITDA adds 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, net settlement proceeds, (gain) loss on sale of assets, loss on early debt extinguishment, transaction and integration costs related to acquisitions, and other non-operating (income) expense). EBITDA and Adjusted EBITDA are not measures that are prepared in accordance with U.S. generally accepted accounting principles (GAAP).

We use Adjusted EBITDA in our operational and financial decision-making, believing that the 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. We believe that the presentation of Adjusted EBITDA provides useful information to investors because it allows understanding of a key measure that we evaluate internally when making operating and strategic decisions, preparing our annual plan, and evaluating our overall performance. However, non-GAAP measures are not a substitute for GAAP disclosures, and EBITDA and Adjusted EBITDA may be prepared differently by us than by other companies using similarly titled non-GAAP measures.

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

 

 

 

 

 

 

 

Three Months Ended

March 31,

(Millions of dollars)

 

 

2023

 

 

 

2022

 

 

 

 

 

Net income

 

$

106.3

 

 

$

152.4

 

 

 

 

 

Income tax expense (benefit)

 

 

32.7

 

 

 

48.0

Interest expense, net of investment income

 

 

24.1

 

 

 

19.6

Depreciation and amortization

 

 

56.4

 

 

 

55.4

EBITDA

 

$

219.5

 

 

$

275.4

 

 

 

 

 

Accretion of asset retirement obligations

 

 

0.8

 

 

 

0.7

(Gain) loss on sale of assets

 

 

0.2

 

 

 

Acquisition related costs

 

 

 

 

 

0.2

Other nonoperating (income) expense

 

 

(0.3

)

 

 

0.7

Adjusted EBITDA

 

$

220.2

 

 

$

277.0

 

 

 

 

 

 

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