Murphy USA Inc

Previous wording

•Results of Operations— This section provides an analysis of our results of operations, including the results of our operating segment for the three months ended March 31, 2024 and 2023.

Current wording

•Results of Operations— This section provides an analysis of our results of operations, including the results of our operating segment for the three and six months ended June 30, 2024 and 2023.

Previous wording

•Capital Resources and Liquidity— This section provides a discussion of our financial condition and cash flows as of and for the three months ended March 31, 2024 and 2023. It also includes a discussion of our capital structure and available sources of liquidity.

Current wording

•Capital Resources and Liquidity— This section provides a discussion of our financial condition and cash flows as of and for the three and six months ended June 30, 2024 and 2023. It also includes a discussion of our capital structure and available sources of liquidity.

Previous wording

The Company owns and operates a chain of retail stores that market gasoline and other merchandise under the brand names of Murphy USA®and Murphy Express, most of which are located in close proximity to Walmart stores, principally in the Southeast, Midwest and Southwest areas of the United States. We also have a mix of convenience stores and retail gasoline stores located in New Jersey and New York that operate under the brand name of QuickChek®. At March 31, 2024, we had a total of 1,733 Company stores in 27 states, of which 1,579 were Murphy branded and 154 were under the QuickChek brand. We also market petroleum products to unbranded wholesale customers through a mixture of Company-owned and third-party terminals.

Current wording

The Company owns and operates a chain of retail stores that market gasoline and other merchandise under the brand names of Murphy USA®and Murphy Express, most of which are located in close proximity to Walmart stores, principally in the Southeast, Midwest and Southwest areas of the United States. We also have a mix of convenience stores and retail gasoline stores located in New Jersey and New York that operate under the brand name of QuickChek®. At June 30, 2024, we had a total of 1,736 Company stores in 27 states, of which 1,582 were Murphy branded and 154 were under the QuickChek brand. We also market petroleum products to unbranded wholesale customers through a mixture of Company-owned and third-party terminals.

Previous wording

Murphy USA was incorporated in March 2013, and until the separation from Murphy Oil Corporation was completed on August 30, 2013, it had not commenced operations and had no material assets, liabilities or commitments. The financial information presented in this Management’s Discussion and Analysis is derived from the consolidated financial statements of Murphy USA Inc. and its subsidiaries for all periods presented. Our QuickChek subsidiaries use a weekly retail calendar where each quarter typically has 13 weeks. For Q1 2024, the QuickChek results cover the period December 30, 2023 to March 29, 2024. For Q1 2023, the QuickChek

Current wording

Murphy USA was incorporated in March 2013, and until the separation from Murphy Oil Corporation was completed on August 30, 2013, it had not commenced operations and had no material assets, liabilities or commitments. The financial information presented in this Management’s Discussion and Analysis is derived from the consolidated financial statements of Murphy USA Inc. and its subsidiaries for all periods presented. Our QuickChek subsidiaries use a weekly retail calendar where each quarter typically has 13 weeks. For Q2 2024, the QuickChek results cover the period March 30, 2024 to June 28, 2024, and the 2024 year-to-date period began

Previous wording

results cover the period December 31, 2022 to March 31, 2023. The difference in the timing of the period ends is immaterial to the overall consolidated results.

Current wording

December 30, 2023. For Q2 2023, the QuickChek results cover the period April 1, 2023 to June 30, 2023, and the 2023 year-to-date period began December 31, 2022. The difference in the timing of the period ends is immaterial to the overall consolidated results.

Previous wording

The cost of our main fuel products, gasoline and diesel, is greatly impacted by the cost of crude oil in the United States. Historically, a rising price environment for crude oil increases the Company’s cost for wholesale fuel products purchased and increases retail fuel prices. Rising prices can cause consumers to reduce discretionary fuel consumption, however our low-price model can also serve as a hedge to draw new customers which can offset the potential loss of discretionary volumes. In Q1 2024, crude oil prices were relatively stable with prices ranging from $71 per barrel to $84 per barrel with an average price in Q1 2024 of $78 per barrel, compared to a average price of $76 per barrel in Q1 2023. Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results which include Renewable Identification Numbers ("RINs")) was 24.8 cents per gallon ("cpg") in Q1 2024, compared to 28.9 cpg in Q1 2023. Retail fuel margin dollars decreased 5.6% in the current quarter while retail fuel volumes improved 1.0% when compared to Q1 2023.

Current wording

The cost of our main fuel products, gasoline and diesel, is greatly impacted by the cost of crude oil in the United States. Historically, a rising price environment for crude oil increases the Company’s cost for wholesale fuel products purchased and increases retail fuel prices. Rising prices can cause consumers to reduce discretionary fuel consumption, however our low-price model can also serve as a hedge to draw new customers which can offset the potential loss of discretionary volumes. In Q2 2024, crude oil prices were relatively stable with prices ranging from $74 per barrel to $88 per barrel with an average price of $82 per barrel in Q2 2024, compared to a average price of $74 per barrel in Q2 2023. Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results which include Renewable Identification Numbers ("RINs")) was 31.7 cents per gallon ("cpg") in Q2 2024, compared to 29.5 cpg in Q2 2023. Retail fuel margin dollars increased 9.1% in the current quarter while retail fuel volumes decreased 0.6% when compared to Q2 2023.

Previous wording

Our revenues are impacted by the ability to leverage our diverse supply infrastructure in pursuit of obtaining the lowest cost of fuel supply available; for example, activities such as blending bulk fuel with renewable fuels (ethanol and bio-diesel) to capture and subsequently sell RINs. Under the Energy Policy Act of 2005, the Environmental Protection Agency (“EPA”) is authorized to set annual quotas establishing the percentage of motor fuels consumed in the United States that must be attributable to renewable fuels. Obligated parties are required to demonstrate that they have met any applicable quotas by submitting a certain amount of RINs to the EPA. RINs in excess of the set quota can be sold in a market for RINs at then-prevailing prices. The market price for RINs fluctuates based on a variety of factors, including but not limited to governmental and regulatory action. There are other market related factors that can impact the revenue received for RINs on a company-wide basis either favorably or unfavorably. The Renewable Fuel Standard ("RFS") program continues to be unpredictable and prices received by us for ethanol RINs averaged $0.57 per RIN in Q1 2024 compared to $1.60 per RIN in Q1 2023. Our business model does not depend on our ability to generate revenues from RINs, and we have historically observed that changes in revenue are typically coupled with offsetting changes in cost of goods that minimizes the majority of any revenue movement. Revenue from the sales of RINs is included in “Other operating revenues” in the Consolidated Statements of Income.

Current wording

Our revenues are impacted by the ability to leverage our diverse supply infrastructure in pursuit of obtaining the lowest cost of fuel supply available; for example, activities such as blending bulk fuel with renewable fuels (ethanol and bio-diesel) to capture and subsequently sell RINs. Under the Energy Policy Act of 2005, the Environmental Protection Agency (“EPA”) is authorized to set annual quotas establishing the percentage of motor fuels consumed in the United States that must be attributable to renewable fuels. Obligated parties are required to demonstrate that they have met any applicable quotas by submitting a certain amount of RINs to the EPA. RINs in excess of the set quota can be sold in a market for RINs at then-prevailing prices. The market price for RINs fluctuates based on a variety of factors, including but not limited to governmental and regulatory action. There are other market related factors that can impact the revenue received for RINs on a company-wide basis either favorably or unfavorably. The Renewable Fuel Standard ("RFS") program continues to be unpredictable and prices received by us for ethanol RINs averaged $0.52 per RIN in Q2 2024 compared to $1.49 per RIN in Q2 2023. Our business model does not depend on our ability to generate revenues from RINs, and we have historically observed that changes in revenue are typically coupled with offsetting changes in cost of goods that minimizes the majority of any revenue movement. Revenue from the sales of RINs is included in “Other operating revenues” in the Consolidated Statements of Income.

Previous wording

As of March 31, 2024, we had $1.3 billion of Senior Notes and a $389 million term loan outstanding. We believe that we will generate sufficient cash from operations to fund our ongoing operating requirements and service our debt obligations. At March 31, 2024, we had additional available capacity under the committed $350 million cash flow revolving credit facility, with none drawn. We expect to use the credit facilities to provide us with available financing to meet any short-term ongoing cash needs in excess of internally generated cash flows. To the extent necessary, we will borrow under these facilities to fund our ongoing operating requirements and other corporate initiatives. There can be no assurances, however, that we will generate sufficient cash from operations or be able to draw on the credit facilities, obtain commitments for our incremental facility, or obtain and draw upon other credit facilities. For additional information, see Significant Sources of Capital in the Capital Resources and Liquidity section.

Current wording

As of June 30, 2024, we had $1.3 billion of Senior Notes and a $388 million term loan outstanding. We believe that we will generate sufficient cash from operations to fund our ongoing operating requirements and service our debt obligations. At June 30, 2024, we had additional available capacity under the committed $350 million cash flow revolving credit facility, with none drawn. We expect to use the credit facilities to provide us with available financing to meet any short-term ongoing cash needs in excess of internally generated cash flows. To the extent necessary, we will borrow under these facilities to fund our ongoing operating requirements and other corporate initiatives. There can be no assurances, however, that we will generate sufficient cash from operations or be able to draw on the credit facilities, obtain commitments for our incremental facility, or obtain and draw upon other credit facilities. For additional information, see Significant Sources of Capital in the Capital Resources and Liquidity section.

Previous wording

Our business has inherent seasonality due to the concentration of our retail stores in certain geographic areas, as well as customer behaviors during different seasons. In general, sales volumes and operating incomes are typically highest in the second and third quarters during the summer-activity months and lowest during the winter months. As a result, operating results for the three months ended March 31, 2024, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2024.

Current wording

Our business has inherent seasonality due to the concentration of our retail stores in certain geographic areas, as well as customer behaviors during different seasons. In general, sales volumes and operating incomes are typically highest in the second and third quarters during the summer-activity months and lowest during the winter months. As a result, operating results for the three and six months ended June 30, 2024, may not necessarily be indicative of the results that may be expected for the remainder of the year ending December 31, 2024.

Previous wording

The Company has one operating segment which is Marketing. The Marketing segment includes our retail marketing stores and product supply and wholesale assets. For additional operating segment information, see Note 22 “Business Segments” in the audited combined financial statements for the year ended December 31, 2023 included with our Annual Report on Form 10-K and Note 16 “Business Segments” in the accompanying unaudited consolidated financial statements for the three months ended March 31, 2024.

Current wording

The Company has one operating segment which is Marketing. The Marketing segment includes our retail marketing stores and product supply and wholesale assets. For additional operating segment information, see Note 22 “Business Segments” in the audited combined financial statements for the year ended December 31, 2023 included with our Annual Report on Form 10-K and Note 16 “Business Segments” in the accompanying unaudited consolidated financial statements for the three and six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2024, the Company reported net income of $66.0 million, or $3.12 per diluted share, on revenue of $4.8 billion. Net income was $106.3 million for the same period in 2023, or $4.80 per diluted share, on $5.1 billion of revenue. The decrease in net income was primarily due to lower total fuel contribution combined with increases in store operating expenses, general and administrative expenses, and depreciation and amortization expense, which were partially offset by higher fuel sales volumes, higher overall merchandise contributions, and lower income tax expense.

Current wording

For the six months ended June 30, 2024, the Company reported net income of $210.8 million, or $10.02 per diluted share, on revenue of $10.3 billion. Net income for the same period in 2023 was $239.1 million, or $10.82 per diluted share, on $10.7 billion of revenue. The decrease in net income is primarily due to lower total fuel contribution combined with increases in store operating expenses, general and administrative expenses, and depreciation and amortization expense, which were partially offset by higher overall merchandise contributions, slightly higher fuel sales volumes, and lower income tax expense.

Previous wording

Revenues for Q1 2024 decreased $0.3 billion, or 4.6%, compared to the same quarter in 2023. The decrease in revenues was due to 5.4% lower retail fuel sales prices and PS&W revenues which were partially offset by 1.0% higher fuel sales volumes and an increase in merchandise sales prices and units.

Current wording

Revenues for Q2 2024 decreased $0.1 billion, or 2.4%, compared to the same quarter in 2023. The decrease in revenues was due to 0.3% lower retail fuel sales prices, 0.6% lower fuel sales volumes and lower PS&W revenues, which were partially offset by a 3.0% increase in merchandise sales revenue.

Previous wording

Total cost of sales in Q1 2024 decreased $0.2 billion, or 4.3%, when compared to Q1 2023. In the current-year quarter, the decrease was primarily due to lower fuel cost and was partially offset by higher fuel volumes sold and higher merchandise costs.

Current wording

Cost of sales in Q2 2024 decreased $0.2 billion, or 3.4%, when compared to Q2 2023. In the current-year quarter, the decrease was primarily due to lower fuel cost and lower fuel volumes sold and was partially offset by higher merchandise costs.

Previous wording

Store and other operating expenses increased $13.8 million, or 5.8%, in Q1 2024 from Q1 2023, primarily due to higher employee related expenses and maintenance costs at existing stores combined with net new store operating expenses.

Current wording

Store and other operating expenses increased $13.2 million, or 5.1%, in Q2 2024 from Q2 2023, primarily due to higher employee related expenses and maintenance costs at existing stores combined with increases from net new store operating expenses.

Previous wording

Selling, general and administrative ("SG&A") expenses for Q1 2024 increased $3.1 million, or 5.3%, from Q1 2023. The increase in SG&A costs is primarily due to higher employee costs incurred in Q1 2024.

Current wording

Selling, general and administrative ("SG&A") expenses for Q2 2024 decreased $0.3 million, or 0.5%, from Q2 2023. The decrease in SG&A costs is primarily due to lower employee related costs incurred in Q2 2024.

Previous wording

Depreciation and amortization expense increased $2.3 million in Q1, or 4.1%, when compared to the same period of 2023, primarily due to higher cost for the new larger store formats for Murphy USA stores and raze-and-rebuild activity in the period.

Current wording

Depreciation and amortization expense increased $1.5 million in Q2, or 2.6%, when compared to the same period of 2023, primarily due to the increased number of Murphy branded stores with larger formats and raze-and-rebuild activity in the period.

Previous wording

The effective income tax rate was approximately 19.4% for Q1 2024 compared to approximately 23.5% in Q1 2023. The Q1 2024 effective tax rate is lower due primarily to excess tax benefits on equity awards that vested during the quarter.

Current wording

The effective income tax rate was approximately 25.1% for Q2 2024 compared to approximately 24.4% in Q2 2023.

Previous wording

Marketing segment net income for the three months ended March 31, 2024 was lower compared to the same period in 2023 primarily due to:

Current wording

Marketing segment net income for the three months ended June 30, 2024 was higher compared to the same period in 2023 primarily due to:

Previous wording

The items below partially offset the decrease in net income in the current period:

Current wording

The items below partially offset the increase in net income in the current period:

Previous wording

Net income in the Marketing segment for Q1 2024 decreased $40.4 million, to $85.5 million when compared to the Q1 2023 period. The decrease was primarily due to lower total fuel contribution and increases in store operating expenses and SG&A expenses partially offset by higher fuel sales volumes and higher merchandise contribution.

Current wording

Net income in the Marketing segment for Q2 2024 increased $12.1 million, to $163.8 million when compared to the Q2 2023 period. The increase was primarily due to higher total fuel and merchandise contribution, which were partially offset by lower fuel sales volumes and increased store operating expenses.

Previous wording

Total merchandise sales were $1.0 billion in both Q1 2024 and 2023. Total merchandise contribution in Q1 2024 improved 2.4% compared to Q1 2023 due to higher unit sales volumes and retail prices, up 0.5% and 1.9%, respectively. Total SSS merchandise contribution dollars grew 2.2%, which included an increase of 6.2% in tobacco products and a 1.3% decrease in non-tobacco products.

Current wording

Total merchandise sales were $1.1 billion in Q2 2024 and $1.0 billion in Q2 2023. Total merchandise contribution in Q2 2024 improved 4.7% compared to Q2 2023 primarily due to higher retail prices, up 3.5%, and net increased number of larger format stores. Total SSS merchandise contribution dollars grew 5.0%, which included an increase of 12.1% in tobacco products and was partially offset by a 0.5% decrease in non-tobacco products.

Previous wording

Store and other operating expenses increased $13.9 million in Q1 2024 compared to Q1 2023, primarily due to higher employee related expenses and maintenance costs at existing stores combined with net new store operating expenses. On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were 6.8% higher, primarily attributable to increased employee related expenses, maintenance, and property taxes.

Current wording

Store and other operating expenses increased $13.0 million in Q2 2024 compared to Q2 2023, primarily due to higher employee related expenses and maintenance costs at existing stores combined with net new store operating expenses. On an APSM basis, expenses applicable to store OPEX excluding payment fees and rent were 6.0% higher, primarily attributable to increased employee related expenses and maintenance costs.

Previous wording

SG&A expenses increased $3.1 million in Q1 2024 compared to Q1 2023, due primarily to higher salaries and related benefits, partially offset by lower professional fees.

Current wording

SG&A expenses decreased $0.3 million in Q2 2024 compared to Q2 2023, due primarily to lower employee incentive costs, partially offset by higher salaries and related benefits.

Previous wording

Depreciation and amortization expense increased $2.5 million, or 4.8%, in Q1 2024 compared to Q1 2023 due to new larger store formats for Murphy USA stores and raze-and-rebuild activity in the quarter.

Current wording

Depreciation and amortization expense increased $2.5 million, or 4.7%, in Q2 2024 compared to Q2 2023 due to the increased number of larger format Murphy branded stores and raze-and-rebuild activity in the quarter.

Previous wording

Total fuel contribution for Q1 2024, was $286.1 million, a decrease of $43.8 million or 13.3%, compared to Q1 2023. This reduction was due to lower retail fuel contribution, combined with lower contribution from PS&W margins, and was partially offset by slightly higher fuel volumes sold in the period when compared to Q1 of 2023. Retail fuel margins on a cpg basis decreased 6.5% in Q1 2024 to 21.7 cpg, compared to 23.2 cpg in the prior year period. Total retail fuel volumes increased 1.0%, while fuel sales volumes on an SSS basis decreased 0.9% to 227.3 thousand gallons per store in Q1 2024 when compared to Q1 2023. Total product supply and wholesale contribution dollars, including RINs, decreased $29.1 million in Q1 2024 when compared to Q1 2023, primarily due to timing of transactions during the quarter and lower RIN sales volume, partially offset by the favorable impact of a rising price environment.

Current wording

Total fuel contribution for the six-month period ended June 30, 2024, was $676.4 million, a decrease of $19.3 million or 2.8%, compared to the first six months of 2023. This decrease was primarily due to lower contribution from PS&W margins, and was partially offset by higher retail fuel contribution and fuel volumes sold in the period when compared to the first six months of 2023. Retail fuel margins on a cpg basis increased 2.4%, to 25.8 cpg, for the six-month period ended June 30, 2024, compared to 25.2 cpg in the same period of 2023. Total retail fuel sales volumes increased 0.2%, while volumes on an SSS basis decreased 1.1% to 235.7 thousand gallons per store, in the six-month period ended June 30, 2024 when compared to the same six-month period of 2023. Total product supply and wholesale contribution dollars, including RINs, decreased $35.1 million compared to the first six months of 2023, primarily due to timing of transactions, supply imbalances at the end of the period, and lower RIN sales volumes.

Previous wording

Loss from continuing operations for Corporate and other assets for Q1 2024 was $19.5 million, compared to a loss of $19.6 million in Q1 2023. Investment income in the current year quarter was $0.4 million higher but was offset by $0.5 million of slightly higher interest expense.

Current wording

Loss from continuing operations for Corporate and other assets for Q2 2024 was $19.0 million, compared to a loss of $18.9 million in Q2 2023. The increase in loss was primarily due to a reduction in investment income and higher interest expense but was offset by a reduction in depreciation expense.

Previous wording

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three months ended March 31, 2024 and 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 acquisition, 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).

Current wording

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2024 and 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 acquisition, 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).

Previous wording

As of March 31, 2024, we had $56.7 million of cash and cash equivalents and total marketable securities of $10.6 million. Our cash management policy provides that cash balances in excess of a certain threshold may be reinvested in certain types of low-risk investments. We have a committed cash flow revolving credit facility (the "revolving facility”) of $350 million, which was undrawn at March 31, 2024, which can be utilized for working capital and other general corporate purposes, including supporting our operating model as described herein. Additional borrowing capacity under the revolving facility may be extended at our request and with the consent of the participating lenders.

Current wording

As of June 30, 2024, we had $79.8 million of cash and cash equivalents and total marketable securities of $7.5 million. Our cash management policy provides that cash balances in excess of a certain threshold may be reinvested in certain types of low-risk investments. We have a committed cash flow revolving credit facility (the "revolving facility”) of $350 million, which was undrawn at June 30, 2024, which can be utilized for working capital and other general corporate purposes, including supporting our operating model as described herein. Additional borrowing capacity under the revolving facility may be extended at our request and with the consent of the participating lenders.

Previous wording

Net cash provided by operating activities was $136.0 million for the three months ended March 31, 2024 and was $149.7 million for the same period of 2023, a decrease of $13.7 million, or 9.2%. The decrease for the three months ended March 31, 2024 is mainly due to a decrease in net income of $40.3 million, an increase in the amount of cash provided from changes in noncash working capital of $34.6 million, and lower deferred and noncurrent tax changes of $7.1 million partially offset by increased depreciation of $2.3 million compared to the same period in 2023.

Current wording

Net cash provided by operating activities was $396.8 million for the six months ended June 30, 2024 compared to $320.9 million for the same period of 2023, an increase of $75.9 million, or 23.7%. The increase for the six months ended June 30, 2024 is mainly due to an increase in the amount of cash provided from changes in noncash working capital of $117.4 million and increased depreciation of $3.8 million, partially offset by a decrease in net income of $28.3 million and lower deferred and noncurrent tax changes of $15.9 million when compared to the same period in 2023.

Previous wording

For the three months ended March 31, 2024, operating cash provided by changes in non-cash operating working capital of $4.2 million was due to a decrease in inventory of $48.6 million due to higher merchandise prices and volumes, an increase of $16.3 million in income taxes payable due in part to phase-out of federal bonus depreciation resulting in higher current tax expense, and was partially offset by an increase in accounts receivable of $45.7 million due to the timing of receipts, a decrease in accounts payable and accrued liabilities of $9.3 million which was related to the timing of payments, and an increase in prepaid expenses of $5.7 million.

Current wording

For the six months ended June 30, 2024, operating cash provided by changes in non-cash operating working capital of $55.8 million was due to an increase in accounts payable and accrued liabilities of $80.9 million which was related to the timing of payments, a decrease in inventory of $25.4 million due to lower prices and volumes, an increase of $8.0 million in income taxes payable due in part to phase-out of federal bonus depreciation resulting in higher current tax expense, and was partially offset by an increase in accounts receivable of $51.9 million due to the timing of receipts and an increase in prepaid expenses of $6.6 million.

Previous wording

For the three months ended March 31, 2024, cash required by investing activities was $74.9 million compared to $69.0 million in 2023. The $5.9 million increase in cash required by investing activities in 2024 compared to the prior year was primarily due to an increase of $3.5 million in capital expenditures due to the timing of projects and a reduction of $3.5 million in the amount of maturities of marketable securities, partially offset by net cash provided of $1.0 million from proceeds from the sale of assets.

Current wording

For the six months ended June 30, 2024, cash required by investing activities was $189.4 million compared to $142.3 million in 2023. The $47.1 million increase in cash required by investing activities in 2024 compared to the prior year was primarily due to an increase of $49.0 million in capital expenditures due to the timing of projects partially offset by net cash received of $1.9 million from the amount of maturities of marketable securities.

Previous wording

Financing activities in the three months ended March 31, 2024 required cash of $122.2 million compared to cash of $39.1 million in the three months ended March 31, 2023, an increase of $83.1 million. The first three months of 2024 included payments of $86.4 million for the repurchase of common shares, which was an increase of $72.7 million compared to repurchases of $13.7 million in the 2023 period. Amounts related to share-based compensation required $9.6 million more in cash during 2024 than in 2023. Dividend payments increased $0.7 million in 2024 compared to amounts paid in the first three months of 2023. Net repayments of debt required $3.9 million in 2024 compared to $3.8 million in 2023.

Current wording

Financing activities in the six months ended June 30, 2024 required cash of $245.4 million compared to cash of $146.2 million in the six months ended June 30, 2023, an increase of $99.2 million. The first six months of 2024 included payments of $192.5 million for the repurchase of common shares, which was an increase of $84.6 million compared to repurchases of $107.9 million in the 2023 period. Amounts related to share-based compensation required $12.9 million more in cash during 2024 than in 2023. Dividend payments increased $1.6 million in 2024 compared to amounts paid in the first six months of 2023. Net repayments of debt required $7.8 million in 2024 compared to $7.7 million in 2023.

Previous wording

During the three months ended March 31, 2024, the Company paid cash dividend payments of $0.42 per common share, for a total of $8.8 million, compared to the period ended March 31, 2023, in which dividends of $0.37 per common share were paid for total cash dividend payments of $8.1 million. As a part of our capital allocation strategy, the Company's intention is to deliver targeted double-digit growth in the per share dividend over time.

Current wording

During the six months ended June 30, 2024, the Company paid cash dividend payments of $0.86 per common share, for a total of $17.9 million, compared to the period ended June 30, 2023, in which dividends of $0.75 per common share were paid for total cash dividend payments of $16.3 million. As a part of our capital allocation strategy, the Company's intention is to deliver targeted double-digit growth in the per share dividend over time.

Previous wording

On May 2, 2023, our Board of Directors approved a share repurchase authorization of up to $1.5 billion. The authorization value excludes any excise tax that may be incurred. During the three months ended March 31, 2024, a total of 216,036 shares were repurchased for $86.9 million, including excise tax under the 2023 program. As of March 31, 2024, we had approximately $1.3 billion remaining under the 2023 authorization.

Current wording

On May 2, 2023, our Board of Directors approved a share repurchase authorization of up to $1.5 billion. The authorization value excludes any excise tax that may be incurred. During the six months ended June 30, 2024, a total of 454,454 shares were repurchased for $194.0 million, including excise tax under the 2023 program. As of June 30, 2024, we had approximately $1.2 billion remaining under the 2023 authorization.

Previous wording

The credit agreement provides for a senior secured term loan in an aggregate principal amount of $400 million (the “Term Facility”) (which was borrowed in full on January 29, 2021) and revolving credit commitments in an aggregate amount equal to $350 million (the “Revolving Facility”, and together with the Term Facility, the “Credit Facilities”). The outstanding balance of the term loan was $389 million at March 31, 2024 and $390 million at December 31, 2023. The term loan is due January 2028, and we are required to make quarterly principal payments of $1 million, which began on July 1, 2021. As of March 31, 2024, we had no outstanding borrowings under the Revolving Facility and had $6.2 million in outstanding letters of credit (which reduces the amount available to borrow under the Revolving Facility).

Current wording

The credit agreement provides for a senior secured term loan in an aggregate principal amount of $400 million (the “Term Facility”) (which was borrowed in full on January 29, 2021) and revolving credit commitments in an aggregate amount equal to $350 million (the “Revolving Facility”, and together with the Term Facility, the “Credit Facilities”). The outstanding balance of the term loan was $388 million at June 30, 2024 and $390 million at December 31, 2023. The term loan is due January 2028, and we are required to make quarterly principal payments of $1 million, which began on July 1, 2021. As of June 30, 2024, we had no outstanding borrowings under the Revolving Facility and had $6.2 million in outstanding letters of credit (which reduces the amount available to borrow under the Revolving Facility).

Previous wording

The credit agreement contains certain covenants that limit, among other things, the ability of the Company and certain of its subsidiaries to incur additional indebtedness or liens, to make certain investments, to enter into sale-leaseback transactions, to make certain restricted payments, to enter into consolidations, mergers or sales of material assets and other fundamental changes, to transact with affiliates, to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends, or to make certain accounting changes. The Revolving Facility credit agreement also impose total leverage ratio and secured net leverage ratio financial maintenance covenants which are tested quarterly. Pursuant to the total leverage ratio financial maintenance covenant, the Company must maintain a total leverage ratio of not more than 5.0 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 5.5 to 1.0 and a maximum secured net leverage ratio of not more than 3.75 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 4.25 to 1.0. The Credit Agreement also contains customary events of default.

Current wording

The credit agreement contains certain covenants that limit, among other things, the ability of the Company and certain of its subsidiaries to incur additional indebtedness or liens, to make certain investments, to enter into sale-leaseback transactions, to make certain restricted payments, to enter into consolidations, mergers or sales of material assets and other fundamental changes, to transact with affiliates, to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends, or to make certain accounting changes. The Revolving Facility credit agreement also imposes total leverage ratio and secured net leverage ratio financial maintenance covenants which are tested quarterly. Pursuant to the total leverage ratio financial maintenance covenant, the Company must maintain a total leverage ratio of not more than 5.0 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 5.5 to 1.0 and a maximum secured net leverage ratio of not more than 3.75 to 1.0 with an ability in certain circumstances to temporarily increase that limit to 4.25 to 1.0. The Credit Agreement also contains customary events of default.

Previous wording

Pursuant to the credit agreement's covenant limiting certain restricted payments, certain payments in respect of our equity interests, including dividends, when the total leverage ratio, calculated on a pro forma basis, is greater than 3.0 to 1.0, could be limited. At March 31, 2024, our total leverage ratio was 1.76 to 1.0 which meant our ability at that date to make restricted payments was not limited. If our total leverage ratio, on a pro forma basis, exceeds 3.0 to 1.0, any restricted payments made following that time until the ratio is once again, on a pro forma basis, below 3.0 to 1.0 would be limited by the covenant, which contains certain exceptions, including an ability to make restricted payments in cash in an aggregate amount not to exceed the greater of $113.6 million or 4.5% of consolidated net tangible assets over the life of the credit agreement.

Current wording

Pursuant to the credit agreement's covenant limiting certain restricted payments, certain payments in respect of our equity interests, including dividends, when the total leverage ratio, calculated on a pro forma basis, is greater than 3.0 to 1.0, could be limited. At June 30, 2024, our total leverage ratio was 1.72 to 1.0 which meant our ability at that date to make restricted payments was not limited. If our total leverage ratio, on a pro forma basis, exceeds 3.0 to 1.0, any restricted payments made following that time until the ratio is once again, on a pro forma basis, below 3.0 to 1.0 would be limited by the covenant, which contains certain exceptions, including an ability to make restricted payments in cash in an aggregate amount not to exceed the greater of $114.8 million or 4.5% of consolidated net tangible assets over the life of the credit agreement.

Previous wording

The combined assets, liabilities and results of operations of MOUSA and the guarantors are not materially different from corresponding amounts presented in the consolidated financial statements included herein. MOUSA is our primary operating subsidiary and generated the vast majority of our revenues for the three months ended March 31, 2024, and accounted for the vast majority of our total assets as of March 31, 2024. In the event MOUSA itself were unable to service the Company's consolidated debt obligations, our business and financial condition would be materially adversely impacted.

Current wording

The combined assets, liabilities and results of operations of MOUSA and the guarantors are not materially different from corresponding amounts presented in the consolidated financial statements included herein. MOUSA is our primary operating subsidiary and generated the vast majority of our revenues for the three and six months ended June 30, 2024, and accounted for the vast majority of our total assets as of June 30, 2024. In the event MOUSA itself were unable to service the Company's consolidated debt obligations, our business and financial condition would be materially adversely impacted.

Previous wording

The following table outlines our capital spending and investments by segment for the three month periods ended March 31, 2024 and 2023:

Current wording

The following table outlines our capital spending and investments by segment for the three and six month periods ended June 30, 2024 and 2023: