Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA Fourth Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star, one. Thank you. It is now my pleasure to turn today's call over to Mr. Christian Pikul. Sir, please go ahead. Hey. Thank you, Brent. Good morning, everyone. With me today are Andrew Clyde, President and Chief Executive Officer, Mindy West, Executive Vice President and Chief Financial Officer, and Donnie Smith, Vice President and Controller. After some opening comments from Andrew, including a discussion of our 2023 annual guidance, Mindy will provide an overview of the financial results. After a few closing comments from Andrew, we will then open up the call to Q&A. Please keep in mind that some of the comments made during this call, including the Q&A portion, will be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. As such, no assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. For further discussion of risk factors, please see the latest Murphy USA Form 10-K, Form 10-Q, Form 8-K, and other recent SEC filings. Murphy USA takes no duty to publicly update or revise any forward-looking statements. During today's call, we may also provide certain performance measures that do not conform to generally accepted accounting principles or GAAP. We have provided schedules to reconcile these non-GAAP measures with the reported results on a GAAP basis as part of our earnings press release, which can be found on the investor section of our website. With that, I'll turn the call over to Andrew. Thank you, Christian. Good morning, and welcome to everyone joining us today. In reviewing the company's outstanding 2022 results in preparing for this call, I was really struck by how last year's performance reflected so many of the improvements we have made to the business since our spin in 2013. These results reflect a lot of hard work over the past decade, executing against the key elements of the strategies we established as spin to create a sustainable and advantaged business. We prioritized organic growth, adding over 500 stores to the network since 2012. We improved store productivity, optimizing cost while improving per store merchandise contribution. In addition to substantially reducing our fuel break-even metric, we enhanced employee engagement and customer satisfaction, a Trifecta any retailer would be especially proud of. These actions improved our already low-cost position on the industry supply curve, while our relative advantage increased further as costs for the broader industry rose. We also leveraged our fuel infrastructure assets and capabilities to lower our supply cost, and maximize our fuel contribution dollars through our retail pricing excellence campaign. Other significant capability investments like Murphy Drive Rewards further heightened our advantage, and differentiated positioning with customers and consumers on our core merchandise offer, while the QuickChek acquisition significantly enhanced our food and beverage capabilities while introducing a new advantage format for growth. Perhaps the most telling statistic reflects our commitment to disciplined capital allocation. As a result of our balanced 50/50 capital allocation strategy, showcasing steady unit growth with a consistent, and opportunistic share repurchase, we have grown our store count by nearly 50% and repurchased more than 50% of our original shares outstanding. We are proud of these milestone achievements that created significant shareholder value for our long-term investors. These investments, coupled with our relentless focus on operational excellence, helped lay the groundwork for the company's outstanding 2022 results. Importantly, 2022 performance wasn't just about fuel margins. We leveraged our scale and overall cost advantage, including the benefits from PS&W in a tight supply market, to grow per- store volumes and gain market share. We also leveraged Murphy Drive Rewards to generate continued tobacco outperformance that also led to share gains, which along with stronger fuel traffic, helped to grow non-tobacco categories. We grew food and beverage contribution by $9 million, growing legacy Murphy contribution by nearly 50% to $8 million. We've extracted further synergies from QuickChek, making excellent progress on our integration as our internal focus transitions in 2023, to enterprise-wide initiatives that will benefit the combined network. We've been very pleased with QuickChek's performance, and are equally excited about the future opportunities we see across both brands. Looking at OpEx, we took substantial cost out of the business leading up to COVID. While we are certainly not immune to the wider inflationary pressures on the industry, our advantage format and low- cost position afforded us the opportunity in 2022 to allocate incentives, and employee appreciation programs without permanently impacting our cost structure. This program helped to financially reward our employees and drive store-level engagement, which resulted in strong merchandise sales and higher customer satisfaction. In closing out the 2022 performance discussion, it's clear to us that our financial and operational results were the product of intentional actions we have taken as a management team. Our relentless efforts to improve the business have positioned us at the right place at the right time, with the right capabilities, and with the right team in place to extract the most value from the opportunity the market provided in 2022. At a time when affordability matters more to more people, Murphy USA is also very well positioned for the future. Looking out over the next decade, we are poised to continue delivering results and making investments that we believe better prepare the company to compete and win in 2023 and beyond. First, we are preparing for more new store growth, building better stores in strong markets. Looking at the network plan in 10 years, we would anticipate at least another 500 high-performing stores providing material contributions to the future earnings potential of the company. That is in addition to ongoing efforts to improve the current network through our raise, and rebuild program and other investments. Second, we will remain focused on improving same-store productivity, increasing efficiency across all aspects of the business, and maintaining an ultra-low cost structure, which supports our everyday low price strategy. We are embarking on a comprehensive set of new investments that will help extend, and ultimately widen our competitive advantage in the industry. The first of these, digital transformation will help evolve the reach and effectiveness of our Murphy Drive Rewards loyalty platform, leveraging customer shopping habits to customize more impactful offers at scale and trigger point- of- sale upselling opportunities. In addition to customer-facing opportunities, transaction data will help inform pricing and assortment optimization at the local and store level. These learnings and capabilities will inform a redesign of the QuickChek loyalty program, to increase brand awareness and attract new customers. These are just a few early examples of what we look to deliver from our digital transformation campaign. Another new campaign, in-store experience, involves a comprehensive redesign of the inside of new and existing Murphy stores, leveraging critical insights from consumer research, QuickChek's food and beverage expertise, and analysis of subcategory performance. This effort goes beyond routine category resets, where resets represents a fundamentally different experience for our customer, that will better showcase the breadth and accessibility of our product offerings and drive higher in-store sales. In turn, we will take full advantage of these combined learnings, and synergies in the imagination and design of our store of the future, which we expect will enhance new store performance and returns over the next decade. Importantly, these initiatives go beyond technology and capital investments, but involve investments in people with new skills, and experience sets in the home office as we build new muscles in data science and data analysis. Like prior capability building investments such as MDR, retail pricing, and our zero breakeven campaigns, success wasn't realized overnight. As we have seen from our 2022 results, the tangible benefits we realized were achieved from seeds planted in prior years. Similarly, we expect these new investments to deliver significant tangible benefits in the coming years. With that context in mind, let me take you through the elements of our 2023 guidance. Starting with organic growth, which remains the centerpiece of our growth strategy, we completed a total of 36 new stores in 2022, including two QuickChek stores, and completed 32 raise and rebuilds, a notable improvement compared to the 23 new stores opened in 2021. While new store additions fell short of our internal target of 45 new stores, we were able to backfill with a few more raise and rebuilds, and enter 2023 with nine stores scheduled to open in the first quarter. Putting new stores into service remains challenging, from sourcing electric panels and concrete to local delays in hooking up to permanent power. Nonetheless, we maintain a robust inventory of high-quality new store locations, and expect 2023 activity to eclipse that of 2022. As such, our guidance remains up to 45 new store additions, and up to 30 raise and rebuilds. Moving on to fuel contribution, we are pleased to report 2022 average per store month fuel volumes were in line with the high end of guidance, just under 245,000 APSM, representing 7% growth versus 2021, as our everyday low price value proposition attracted more customers to our stores. Looking ahead, we don't expect the same level of market share gains in 2023, given we are not expecting a once in every six to eight years mega price drop in our forecast. We do expect to hold on to many of the new customers that came to our stores looking for value. As a result, we are forecasting a slightly tighter range of volume guidance between 240 and 245,000 gallons per store month in 2023. Looking at store profitability, we delivered $767 million of merchandise margin in 2022, above the guided range of $740 million-$760 million due to strong performance from categories attached to fuel that benefited from higher customer traffic, and in highly impactful promotional events in the tobacco category. In 2023, we expect to continue to take share, and deliver growth for merchandising initiatives, driving contribution dollars to a range between $795 million and $815 million, or an increase of about 5% at the midpoint. This growth is primarily attributable to increases in the non-tobacco merchandise, and continued growth in food and beverage categories. Operating expenses, excluding payment fees and rent, came in at 31, 700 APSM in 2022, within our adjusted guided range of 31.5-32.5 APSM, which included the impact of our Way Pay supplemental incentive program we provided our employees over the summer of 2022. Many of the factors impacting OpEx growth in 2022 will persist into 2023, including labor and service cost inflation, which are stickier in nature, not all of last year's cost increases are built into our structural base. As a result, we expect a range of 2.6%-7.4% increase in operating expenses, excluding credit card fees and rent, or 32.5-34,000 on a per- store- month basis. This forecast does not assume a repeat of the special incentive program we implemented in 2022. For corporate cost, general and administrative expense, adjusted for the $25 million contribution to the Murphy USA Charitable Foundation, was $208 million within the guided range of $200 million-$210 million. 2023 guidance of $235 million-$245 million reflects the aforementioned investments in people, and technology around digital transformation and in-store experience, in addition to higher plan costs to extend a richer package of retirement benefits deeper into the organizations, as we sunset QuickChek retirement programs and fold them into Murphy USA. Similar to the early stages of developing and launching Murphy Drive Rewards, which laid the groundwork for significantly improved long-term performance from our merchandising business, these new investments come with significant upfront costs, but they are critical to maintaining our competitive advantage in the marketplace and further monetizing the benefits of our advantage model over the next decade. At this time, I will hand it over to Mindy to cover the capital allocation portion of the guidance, along with her normal review of the financial component of our results. Mindy? Thank you, Andrew. Good morning, everyone. I'll begin with CapEx, which for the fourth quarter and full year was $82 million and $306 million respectively at the low end of the adjusted guided range of $300 million-$350 million, primarily due to the new store delays and also timing around certain IT projects, and ongoing improvement initiatives. Looking into 2023, given a higher level of expected new store and raise and rebuild activities, coupled with investments in some of our transformational campaigns, we expect total spending to be in a range of $375 million-$425 million. Turning to financial results, revenue for the fourth quarter and full year 2022 was $5.4 billion and $23.4 billion respectively, compared to $4.8 billion and $17.4 billion in the year ago periods. EBITDA for the fourth quarter and full year 2022 was $230 million and $1.2 billion respectively, compared to $216 million and $828 million in the year ago periods. Net income for the quarter, $117.7 million versus $108.8 million in 2021, resulting in reported earnings per share of $5.21 versus $4.23 in the year ago period. Net income and earnings per share for the full year was $673 million, and $28.10 respectively versus $397 million and $14.92 per share in the year ago period. Average retail gasoline prices in the fourth quarter were $3.19 per gallon versus $3.05 per gallon in the fourth quarter of 2021, and for the full year average, $3.63 in 2022 and $2.77 in 2021. The effective tax rate for the fourth quarter was 22.3% and 23.9% for the full year. For forecasting purposes, our 2023 guidance remains within a range of $0.24-$0.26. As mentioned in the earnings release, we repurchased $240 million worth of shares in the fourth quarter, which left us with $61 million of cash and cash equivalents at year-end. You may have noticed that the balance sheet reflects two new categories, marketable securities of $17.9 million under current assets and non-current marketable securities of $4.4 million in long-term assets, which collectively are comprised of T-bills and high-quality corporate bonds, which can be converted to cash in one to two days if needed. These investments of course help us to earn a higher rate of return with any excess cash balances, given the upward move in interest rates over the past year. Total debt on the balance sheet as of December 31st, 2022 remained at approximately $1.8 billion, of which approximately $15 million is captured in current liabilities, representing our 1% per annum amortization of the term loan, and the remainder is a reduction in long-term lease obligations as they are paid through operating expense. Our $350 million revolving credit facility had a zero balance at year-end, and remains undrawn currently. These figures result in gross adjusted leverage ratio that we report to our lenders, of approximately 1.5x. With that, I will turn it back over to Andrew. Thanks, Mindy. In closing, I do want to remind investors of the rationale behind our decision to discontinue fuel margin and consequently, EBITDA guidance since 2019. This choice was the outcome of our intent to refocus investor conversations away from short-term fuel margins, and to emphasize the long-term potential of the business. We believe shifting this conversation has helped investors become better informed, about the true performance drivers that impact our valuation over time. Nevertheless, we have typically supplemented our guidance with an EBITDA marker for investors, primarily to assist with buy-side and sell-side modeling, which suggests a single EBITDA outcome at a specific fuel margin assumption. This year, we have opted to provide a range of margins, with the bookends of that range representing 26 and 30 cents per gallon, or about a 2- cent swing around the midpoint, which is representative of the historical annual margin volatility of the business prior to 2020. To avoid zeroing in on a single reference point that elicits disproportional consideration, and undue emphasis from investors, for modeling purposes only, using the midpoint of the official guidance metrics we discussed and attaching 26 cents and 30 cents all-in fuel margins to these forecasts, the outcomes should approximate $800 million and $1 billion, respectively, of adjusted EBITDA. I appreciate you do not have a crystal ball. We don't either. The biggest determinant of how much margin, and volume we generate in any given calendar year is a function of a number of factors, the shape of the price curve, the magnitude and amplitude of the curve, which measure volatility, how different competitors behave in those environments, along with geopolitical events and other externalities that impact demand, restrict supply, and shift the actual and forecasted supply-demand balances of the relevant commodities. As we have noted, the magnitude and volatility of last year's price curve created significant opportunities as input costs changed dramatically on a daily basis, likely influencing how competitors responded. Where we do have a high level of confidence and do not need a crystal ball, is how we are going to perform in the different environments that we are presented with. In looking at January 2023 results, they reflect what we would expect in a rising price environment. We have seen prices increase about $0.60 per gallon since mid-December, which typically results in depressed retail margins and a more difficult environment to grow volumes, and capture share. While this kind of environment may be interpreted as disappointing to investors, I can tell you January volumes were up about 4% versus prior year January, and retail-only margins were in the neighborhood of $0.19 per gallon, before adding the typical benefits we see in PS&W when prices rise. As a result, total integrated contribution looks to be running ahead of January 2022, and w e all know what kind of year 2022 turned out to be. In short, we are carrying over the momentum realized in 2022 across our business, generated from the essential advantages we built over the past decade. We feel great about how the year is starting off, and t here's still 11 months to go. With that, operator, let's open up the call to questions. At this time, I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from the line of Bonnie Herzog with Goldman Sachs. Your line is open. Thank you. Hi, Andrew and everyone. My first question, I guess, is on your station OpEx guidance. I mean, I think, you know, you highlighted a lower increase that you expect this year than, you know, maybe what you reported last year. First, I just want to make sure I heard that correctly. Then maybe you could walk through some of the key puts and takes regarding this. Then could you give us a sense of how this dynamic is possibly, you know, impacting break-even margins, especially for the smaller or marginal operator right now? You know, I guess, is it possible that as inflation, you know, peaks and pressures start to ease, cost pressures that is, you know, is it such that these marginal players may not be forced to price so high at the pump, which could start to squeeze, you know, fuel margins a bit for the industry? Sure. Let's start with OpEx. You know, one of the most transformational things that we're doing is building bigger stores, both at QuickChek and at Murphy USA, and then raising and rebuilding, you know, 25-35+ stores a year. One of the big drivers of cost is the fact that we're building bigger stores that have a higher labor component, but have higher fuel volumes, merchandise contribution, very attractive returns, even more attractive in the current environment. You know, that is one of the big drivers there. You know, the labor, you know, component as we noted, we didn't build permanently into our cost structure, with higher, you know, salary or hourly increases, but had the Way Pay appreciation bonus over the summer, many other competitive competitions, et c, that allowed our staff to earn more and sell more. One of the changes with the QuickChek acquisition is from a benefit standpoint, that we are extending, you know, deeper into the organization as our IRS transition period, you know, has us consolidate those plans and some of that in G&A. You know, with respect to other costs, we certainly had some favorable contracts. Some of those will be renewing in 2023 versus 2022, and so there may be some upward pressure there. You know, if there's one area of deflation, it might be in areas where hydrocarbons are consumed, like garbage bags, et c, but those typically make up a smaller portion of the expenses. You know, how does this really impact ultimately break- even margins for the industry, for the marginal player and for us? You know, yeah, I think your point is, you know, inflation, the year-over-year rate of change is peaking. I don't think anyone is out there forecasting that we're going to see deflation. We are not going to see year-over-year changes go negative. I think we'd be happy to see those changes get down to the 3%-4%. We have a long way to go just to get it down to the Fed's target rate of 2%. While I see some of the cost pressure increases easing, we're starting from a base. I mean, if you want to do a one, two-year, three or four-year stack, you're just going to have smaller increases on significant increases from prior year. I really don't see anything from a cost pressure easing that is going to help, you know, this marginal operator. You know, let me tell you what we're seeing. In January, merchandise transactions are accelerating. Food and beverage transactions after a challenging fourth quarter accelerating. We just talked about the OpEx rate increases year-over-year is going to be lower. Yeah. Our fuel volume is sustaining it at 4%. The result of that is our business is getting better. When I look across the industry, some of the other reported numbers by firm or across the industry, we're not seeing those trends at the same level. That would suggest to me that the industry break- even is probably continuing to go up. I'm not seeing anything that's suggesting for the entire industry, merchandise and food, and beverages accelerating data points to the opposite, and the same with fuel volume. One of the proof points we would look at is, well, what are we seeing in January year-over-year margins? They're actually increasing versus a year ago. I hope that answers your question. I understand, you know, cost pressures might ease, but there's still going to be smaller increases on a significantly higher cost base that's built up over the last two to three years. Right. No, that's super helpful, Andrew. I know this is incredibly complex. There's this dynamic of, you know, the structural change that you're kind of talking through, you know, within the industry. I guess that's, you know, maybe a little bit on my second question and final question, that is, you know, just in terms of the fuel margin range you provided for modeling purposes. I guess first, I'm a little curious why you chose to provide a range this year. Then second, I guess it does beg the question about, you know, what gives you maybe the confidence that your margins will be in that range? You know, just even given the dynamic we're seeing play out so far this year with, I think, you know, industry margins down 57% in January versus December. You just kind of touched on where your margins are trending. Again, I know it's one month so far, but just trying to think through how the rest of the year may play out. You know, again, how much confidence do you have in sort of that modeling purpose range? Thank you. Yeah. First of all, I would encourage you and everyone else not to make judgments based on sequential margin changes. I mean, if you'd done that back in September to October, and you see the huge margin when prices fall off significantly, you would come to just an erroneous perspective. I would say look at the broader trends. Look, prior to COVID in 2019, we were having a discussion at Murphy about sustaining 16 cent margins. There was probably as much disbelief around that, as there is around current levels. What have we seen over the last three years? Structurally, when we do our analysis, looking at sort of the NACS fourth quartile and adding cost inflation, volume reduction, merchandise changes, I mean, there's at least a 10 cent per gallon increase that sustains itself. The NACS survey doesn't represent the entire industry, especially the smaller players. $0.26, actually $0.264, was our 2021 result. It's a solid $0.10 above 2019 and kind of that three-year average. I think the stake we're putting in the ground today is, we believe that represents kind of the new floor for us from a margin standpoint that has persisted, and shows up in every way in which we can kind of triangulate the industry supply curve, the marginal players' cost structure, et c. You book in that with the $0.34, again actually $0.343 or $0.344 for 2022. I think you have to walk that back $0.04 for the unique once in every six to eight year price falloff that we had that, we frankly hadn't seen, except in 2014 and 2008. That gets you under that $0.30 range, r ight? There are plenty of people that are saying crude prices stay between $70 and $85. There are others we talk to that say they're going to be north of $100. I believe that $0.26-$0.30 range provides a nice set of bookends based on what we've seen, what we can back into as a base case, and where frankly, when we look at sort of the trends we're seeing and the trends it means for others, given we're gaining share, once again there may be more upside than downside within that range. Anyway, that's how we got to the range. It's kind of a 21 base case, 22 actual minus kind of a once in every six to eight year effects and provides a nice range versus a single point. Thank you, and we'll move on to the next question. Thank you. Appreciate it. Your next question comes from the line of Anthony Bonadio with Wells Fargo. Your line is open. Yeah, hey. Goo d morning, guys. Thanks for taking my question. I want to start with the gallon guidance number suggests flat, I think to slightly down on per store gallons. I realize you're lapping some potential benefit from elevated prices last summer, and we've obviously seen quite a bit of share move around. We think trade down and general consumer softness sort of help you offset that to some extent. Can you just elaborate a little bit more on your assumptions there? Sure. You know, you go to the price structure, w e don't expect a big falling price environment that allows us to really differentiate our positioning. I think there is a question around total demand, and how much sensitivity we might see. We don't predict recessions, you know, downtrends, et c. You know, recognizing there's some pressure there. The flip side of that is, when there's pressure there, we gain customers because more people need affordability, and that's what we deliver. You know, those are probably a couple of the biggest factors. The biggest single one is just not expecting that repeat of the price fall off. Okay. Then on merchandise and margins, that 19.1% you put up in Q4, looks quite a bit below what we've been running at, say the last five quarters or effectively since you acquired QuickChek. Seems like cost inflation on the food side is playing a part. Can you just dig in a little bit more on what drove that, and talk about how you're expecting that to trend as we move into 2023? Sure. I mean, we absolutely saw cost pressure, including outages on eggs, lettuce, some other commodities at QuickChek, and that certainly impacted that. You know, the good news is, that's improving. The second thing is, you know, we are really establishing, QuickChek is the high quality value brand for the product it serves. From a price pressure standpoint, we held price longer than the broader market, and it showed up in transaction results. I'll give you an example. Breakfast represents about 37% of our transactions. In Q4, where we were down 1.7%, the broader QSR industry was down 7.3%. That has paid off not only in that differential, but January food services transactions at QuickChek were up 6%, and that is after making strategic price decisions as well. We felt the cost pressure. We maintained our price longer in the broader market. It paid off in establishing that brand position that showed up in transactions, and that momentum's continuing over into 2023. Helpful. Thanks, guys. Thank you. Your next question comes from the line of Bobby Griffin with Raymond James. Your line is open. Good morning, everybody. Thanks for taking my questions. Andrew and the team, congrats on another solid year. Great. Thanks, Bobby. I guess first off, just, you gave some details about the step-up in the SG&A. I think it applies probably 15%-16% growth year-over-year versus 7% this year or in 2022 ex, the donation. Is that the right way to think about just a one-time step-up, or is this kind of a multiyear investment that's going to take place on the wage, on the benefits side as you talked about? Yeah, so t wo components there. One, these capability building investments. You know, you remember back in the Murphy Drive Rewards, you know, days, there were some peak costs, right, in terms of the build required to stand up the capability that then goes away as you move into operate mode. There are some peak costs in here, but as we build up a deeper bench around data science, data analytics, and the like, on top of some of the great capabilities we've already built, you know, some of that will sustain. Certainly, on some of the in-store experience, there's some one-time costs there, as we leverage some third-party support. You know, benefits is an interesting one. It does go into G&A, where we had to align some of the retirement plans. In the early years, over a five to 10-year period, the costs are higher. As you think about just normal attrition and where we set the benefit for new employees, you know, by the time you get to the outer years, our actual G&A cost on those line items go down as a result of the new plan design. You know, hopefully those two examples, you know, give you some sense. They're both kind of investments to the future. One is just a peak that goes into operating mode. The other one's an alignment, but it shifts over time just with normal attrition, retirement, et c. Okay. Thank you. That's very helpful. Secondly, maybe just to touch on, I think in the prepared remarks, you mentioned a new store design. Maybe just touch or expand a little bit on that. Is there a remodel program that's going to take place on the existing stores, or is this kind of a new store of the future that you're going to start rolling out for the 2,800 sq ft stores? Just anything, how to think about that and timing wise and you know, as retail analysts, we typically like to get pretty excited about any type of new store designs that could be rolling out. Yeah. Think about the 2,800 ± some square footage, right? Not jump in that chasm to QuickChek, which is then prepared food and beverage, right? We're not adding a kitchen at the Murphy stores. If you think about how consumers want to engage with brands like ours, where do we have the right to win on packaged, prepared food and beverage? What kind of innovation are we already implementing at QuickChek on dispensed beverage, and frozen dispensed beverage? What are the things when we, you know, survey 10,000 Murphy USA customers, that they say about our store in terms of how it's laid out, the lighting, all the different things they're looking for? We've taken a huge body of work, and now we're translating into that. Within that box, plus or minus some square footage, how would you optimally lay that out for the customer experience, for the employer experience, to drive higher sales in the growing categories where maybe we're not participating as much, but doing it all in the context of where we have the right to win versus where we don't? I think as I've mentioned before, we're out of roller grills, right? The customer did not give us sort of the right to win in that space or even the right to play. We are known as the retail brand with the best value on regional and national packaged brands. As we think about our open air cooler, grab and go, grab and reheat and go, how to re-imagine how the customer wants to interact with that, and some of the results that we're already seeing from some of the resets? The team has gotten incredibly good at resets within the same fixture layout, but how might you lay things out differently in terms of traffic flow, while making it easier for the store operator and the like? That kind of gives you a broader sense. The big opportunity's around the new 2,800s, but there'll also be lessons that we translate into our 1,400 sq ft raise and rebuild stores as well. Thank you. Best of luck here in 2023. Thank you. Your next question comes from the line of Ben Bienvenu with Stephens. Your line is open. Hey, good morning. Morning, Ben. I was hoping to revisit fourth quarter results a little bit on the in-store. To the extent you could, I'd love to hear commentary on cadence during the quarter. Then you talked about the initial start to 1Q. You know, as we contended with weather in the fourth quarter and now weather across the southeast in the first quarter, is that creating variability in the results month-to-month or is that a non-factor? Yeah. Look, weather ultimately becomes a non-factor because you got pre-buying, you got post-buying, and the like. Unless you have a much more extended event, it's usually not a big factor. Look, certainly from a gallon standpoint, October started off stronger because of where it was and the price fall off, you know, versus December. You know, that in turn impacts the traffic inside the store, you know, over that same period as well. You know, there's probably some deceleration within the three months. I think what has really, you know, got us excited about the start to the year, if I look at January then, on the Murphy side, merchandise transactions in total are up 10% leading to sales and merchandise margin up 9.5% and 10.3%. You know, double- digit trip growth on top of the 4% volume growth is really impactful. Looking at QuickChek, we're seeing transactions up 5%, and some of that's still being weighed down by nicotine products, and our Murphy centralized team has been, you know, working within some of the state minimum constraints that we deal with in New Jersey. You know, certainly, a little deceleration within the quarter, but as we start the new year, we're seeing nice acceleration across the board. Okay, great. Shifting gears a little bit to the cash flow statement. CapEx is up. You talked about new investments in SG&A. You also talked about kind of long-lived investments in the CapEx side of things. Is this kind of $400 million CapEx midpoint the new normal? Would you expect this to continue to grow? Is it the peak? Kind of give us some sense as we look out several years from now, for what your CapEx spend might look like. Yeah, I think it's probably more in line with the new normal. What I would expect if I look across, you know, the buckets Mindy went over between growth, sustaining corporate and initiatives. Some peak around some of the IT capitalized around some of the initiatives like digital, you know, transformation. Those things tend to be a little bit more episodic, like Murphy Drive Rewards. We also have our, we call it our common systems, environment, project, where we're looking across both QuickChek and Murphy USA, and making, you know, the choices for the future about the systems environment. You know, some of that corporate and initiatives, could come down as we get some of that one-time work done. You know, from a sustaining standpoint, you know, the more new stores and raze and rebuilds, we have, you know, those, you know, programs, you know, that are in, you know, growth, reduce some of the programmatic things, you know, from a sustaining standpoint. You know, as you continue to build the network, there's some puts and takes there. From an overall growth standpoint, you know, we're still not at, I think what our true potential is, in terms of new store opportunities. Fortunately, we've had the opportunity to backfill that gap and maintain the productivity of our modular building partner, our general contractors, through raze and rebuilds. For us, even with the cost inflation that we're having, this is an attractive time to build stores. You know, one thing we talked about on the last call was, we may be seeing inflation of $400,000-$600,000 for our raze and rebuilds, and our new builds. For every $100,000 of capital, you need about $0.004 per gallon margin to cover that. Maybe you need another $0.02-$0.025, but we've consistently seen well over $0.10 margin. Our capital return projects look even more attractive. Raze and rebuilds that were below an economic threshold, even though they had the land and the economics, are now above that threshold. That is the one area that I think we could continue to see that cadence, you know, play ou. As we grow more stores, we get some of the bottlenecks that we talked about behind us, and we continue to evaluate the opportunities on our raze and rebuild, going forward. Okay, thank you. Your next question is from the line of John Royall with JPMorgan. Your line is open. Hi, guys. Good morning. Thanks for taking my question. My first one's on capital allocation. Then you've drawn down cash in the past three quarters, as you've been buying back stock in excess of your free cash flow. Your balance sheet is certainly in good shape, but should we think about 2023 as another year where you might buy back more stock than your free cash, and particularly in light of the higher CapEx budget? As you pointed out, there's actually a good return on holding cash right now. Just looking for thoughts on if this current pace of buybacks can be maintained. Sure. Well, look, we certainly front-loaded the $1 billion authorization we got from the board. Frankly, no different than the $500 million authorization we'd gotten before that. You know, we're confident buying at $280 for the long term, and part of that's evidenced by the fact that our weighted average cost of treasury stock's about $103. We are focused on the long term. You know, as we think about free cash flow, we talk about the margin, where is there more, you know, upside than downside on that? We've typically seen, you know, events that are adding more pressure to the marginal retailer, not less. More volatility versus less. There's a number of wild cards there, you know, that can continue to generate excess free cash flow above and beyond, you know, what our base case plan might be. As we've said in the past. You know, our number one priority for allocating excess free cash flow when we get it, is share repurchase. That is what we did in 2022. When we earned it, when we received it, when we put it in the bank, we allocated that. You should look for that same cadence going forward. Look, I would also say leverage is part of our long-term algorithm. You know, Mindy highlighted our ratios that are very conservative. The business is still a free cash flow machine. We have a conservative balance sheet with a lot of free board. You know, we always think about, you know, our entire balance sheet and you know, how we want to, you know, manage our growth algorithm for both new stores and the balance part around share repurchase. Hope that provides some insight into how we're thinking about it. Yeah, that's helpful. Thank you, Andrew. Just wanted to go back to the fuel volume side. You've maintained a very healthy same store comps on the fuel side, I think you noted when you're looking sort of mid-year last year, you picked up some market share from people trading down to lower price players. The 4.2 comps would suggest, I think Andrew mentioned it in his comments, that you haven't given that share back as fuel prices have come back down. Maybe you can talk about those dynamics a little, just holding onto that share and the strength in the fuel comp. Yeah. Lo ok, I mean, one of the things that we pay very close attention to is our consumer. You know, we're just blessed through Murphy Drive Rewards to have great insights into them, and we've talked about this panel of close to 100,000 consumers who have bought something from us every month since 2019. Their basket of goods that they buy at Murphy USA doesn't cost as much as it did during the peak, which is good. We're not seeing any significant changes in their behavior, you know, in terms of buying from us. As we noted that, you know, the fact that we're holding them steady and growing volume means we're bringing on new consumers, y ou know, I think we have a target consumer that continues to be under pressure. They feel inflation more so than higher income consumers. They feel the gap between the wages they earn, and inflation more than the higher-end consumer. These are the consumers that really don't have a lot of alternatives for how they get to work, et c. I think as we think about the economic outlook, you know, we feel very confident that we're going to be there from an affordability standpoint for both these, you know, current consumers, but continue to grow them like we did in January, even with the lower prices. Because, you know, John, while prices are lower versus the peak, they're still significantly elevated, you know, from the low price environments we saw in 2015, 2016, and 2017. I think you raise all those factors in, higher interest rates, that are impacting rents and the like. This consumer is going to need us more than ever, and I think there are going to be more consumers like that out there, that we're going to be having the opportunity to serve with our affordable model. Thank you. Your next question is from the line of Rob Dickerson with Jefferies. Your line is open. Great. Thanks so much. I just have kind of, I guess a follow-up question just in terms of the comparative activity component, and kind of how that might flow through into the CPG rate this year. You know, like I remember you had said this was maybe a year or so ago, right, when we had, costs were materially inflating. There's kind of feel like coming out of COVID, maybe it's some of these other independent players on a national basis, were sort of increasing prices maybe at a kind of an accelerated rate maybe relative to history. Now we're seeing prices come down a little bit, but I guess some of the data that we see, it also looks like rack, you know, has maybe gone up a little bit more quickly than some of the retail prices have gone up over the past month or so. I'm just curious, like, if you think about the competitive dynamic right now, you know, kind of vis-à-vis a year ago, like would you say maybe the market isn't as quick to move those prices back up, right, if, you know, wholesale goes back up, because everybody, you know, kind of wants to try to hold some share, and the consumer obviously is not maybe in the best spot? Thanks. Yeah. Look, there's always a lot of moving pieces. There's also a lot of different markets, and different actors out there. It's kind of hard, you know, to generalize. You know, I would say one, and we've talked about it from the very first question, you know, the rate of cost inflation, the rate of the industry break- even requirement for the marginal player, you know, it's gone up significantly. The rate of increase probably isn't going to go up at the same rate. You wouldn't expect it to. All the pressures on that retailer, y ou know, it continues to go up, but at a, you know, more normal pace. We have lower prices, but the consumer health isn't really that much better, at least the consumer that we serve. One of the things that you do see is, versus say the peak prices is credit card fees are down. That's largely a pass-through. I would say that we've got some advantage there, because of the debit routing investments the team have made over the last three years, where, you know, we've saved several million dollars as a result of that, and there's more work that we're doing, you know, on that front that our scale affords us versus the other player. That's largely a pass-through. If you say, well, margins are down a little bit, you know, compare the year-over-year pricing and the credit card fee impact of that. You know, there's always some competitive promotional activity out there where someone may wake up, and say, "Hey, I've lost some share. Let me try to go, grab it." What I would say is, if I look at January, you know, we're up 4% year-over-year. Margins all in from a contribution basis is higher, and so while you might see that episodically, I think you continue to see rational behavior across the board. Rob, something else I would add to Andrew's comments, particularly with January from a retail pricing perspective, n ot only has the pricing environment been relentlessly upward with essentially the market's been in restoration mode for five weeks, but it's also similar to what we saw in May of 2022. It's also a function of when prices are rising during the week. If you start with the last week of December and go through January, in those five weeks, three of the five had price jumps of double digits heading into the weekend. That essentially trolls your intended margining position and freezes a lower margin in place, sometimes multiple days until the following week when the market begins to restore and you can get back on the right track. We saw that same dynamic occur last May, leading many to worry that margins had peaked and structural pressures were alleviating versus what it really was, which was just end of week price jumps. Our May margin, for example, on the retail side was below $0.20 a gallon that month, but it rebounded to above $0.30 in June. As Andrew said, you know, ironically, it's Groundhog Day, and we have seen this pattern before, so we're not really concerned with the January results or even the rest of year, as it's really a logical function of the pricing and timing dynamic that's just occurring right now. Okay, th at's extremely helpful. That's kind of where I was headed. You summed it up. I guess just kind of for clarification and maybe my own ignorance, I think you had said, you know, kind of so far in January, you're seeing kind of the all-in fuel margin do a little bit better than last year, despite the retail coming down because then PSW and RINs got to have, you know, a different relationship, and maybe they go up some. Like, maybe just simplistically just kind of explain quickly kind of, you know, how PSW and kind of RINs might be a little bit higher, which is obviously a separate piece than you just explained. That's still helpful. Thank you. That's it. Yeah. The timing impact on PSW in a rising price environment is typically positive, so we would expect any pressure that we're seeing on the margin side to be made up for within product supply. Also, RINs prices are elevated over what they were at least at the end of the fourth quarter. We would expect on balance that our first quarter results again, we're just looking at January, but we would expect those first quarter results to be comparable to what it was last year. Got it. Certainly January's results should be comparable to what they were last year or a little higher. Perfect. Thank you so much. The retail-only margin is slightly higher than a year ago as well. Yep, g ot it. Perfect. Thank you. There are no further questions at this time. It's now my pleasure to turn the call back over to Mr. Andrew Clyde. Great. Great call. Great questions. I feel like, you know, we spent a lot of time talking about kind of short-term, near-term margins and you know, I think as we talk about, the January environment and the acceleration we've seen across the business, that, you know, it's further reinforcement as to why we think about the long term of this business. You know, as Mindy highlighted wonderfully, one month doesn't make a quarter, one month doesn't make a year. You know, kind of the comparison of January and May, I think is a great example because of what follows that. I do think this longer-term view of where the fuel break even requirement is going for the marginal player, for the industry as a whole, for advantage players like Murphy USA and other advantage retailers, is really the area to be focused on. You know, we feel really good about 2022 as a year and the outlook that we have, not just for 2023, but the investments that we're making on top of the last decade of investments gets us really excited about the next decade ahead. With that, we'll look forward to any follow-up calls from people, and have a great rest of your day. Take care. Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect.