Good day, ladies and gentlemen, and welcome to the Murphy Oil USA Third Quarter 2013 Earnings Conference Call. At this time all participants are in a listen only mode. Later we will conduct a question-and-answer session and instructions will follow at the time. (Operator Instructions). As a reminder this conference call is being recorded I would now like to introduce your host for today’s conference Tammy Taylor, Senior Manager of Investor Relations and Corporate Communications. Ma’am, you may begin.

Good morning everyone, and thank you for joining us again on our call today. With me here 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 a few opening remarks from Andrew, Mindy will provide an overview of the financial results. Andrew will then give an operational update and we’ll open up the call for questions. 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, see Murphy USA’s Form 10-K and other 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 reported results on the 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 Tammy and good morning everyone and we sincerely apologize for the technical difficulties experienced at the beginning of the call. Murphy USA completed its inaugural quarter as a standalone company and we couldn’t be more pleased with our results and our progress. In terms of key financial results, we generated nearly $42 million in net income for the quarter, or $0.89 per share compared to $11 million last year. Gross margin from retail fuel totaled $144 million which was up $45 million with total volume up 1.1% and higher unit margins of $0.148 per gallon. Merchandise gross margin was $73 million, down $6 million, reflecting lower cigarette sales. However, the decline was made up in part by an 8.5% increase in total non-tobacco sales per-site as we realized or 54th successive increase in same quarter on same quarter per-site growth in non-tobacco sale. We held total site operating cost essentially flat at $135 million despite adding 34 sites since this time last year. Our financial position remains solid. We ended the quarter with over $262 million in cash and investments, six new sites were open in the quarter bringing the year-to-date total to 21, another eight have been opened since quarter end and another 22 where in construction. We also completed the first of a handful of non-core asset sales generating over $6 million from the sales of our North Dakota crude gathering system. In addition, we signed a purchase and sale agreement for the sale of our Tampa terminal during the quarter. The separation from our former parent Murphy Oil Corporation has been seamless. We executed the IT systems and accounting separation without any major hiccups. The transition services agreement between the two companies are working as planned and we’re completing our 2014 budget in developing a baseline of our new corporate cost structure as well as identifying areas for future improvement. Since the quarter ended we have made significant further progress on our commitment to exit certain non-core assets. We entered into a purchase and sales agreement covering our Hankinson ethanol plant which we expect to close before year-end. We also elected to pay down 10% of our $150 million term loan. As a standalone company, we remain very bullish about or outlook and future potential. Planning and permitting has ramped up on the Walmart carve out locations and we expect the number of sites and the cycle time to improve in 2014. The early results of our newly redesigned 1200 square-foot format have been very impressive creating a high return model, less dependent on tobacco. We have the financial strength and flexibility even further accelerate this growth. In summary, we feel great about the quarter and even more excited about our future. I’ll now turn things over to Mindy to review our financial results and then I’ll provide a deeper dive into our operational performance. Mindy?

Thank you and good morning. Murphy USA reported net income of $41.7 million or $0.89 per diluted share for the third quarter of 2013, compared to $11 million or $0.24 per diluted share for the third quarter of 2012. The improvement in the current quarter was primarily driven by higher retail fuel margin, increased values received from the sale of renewable identification numbers commonly known as RINs, and improved results from our two ethanol manufacturing facility. Adjusted earnings before interest, taxes, depreciation and amortization or EBITDA with $85.5 million, which was an increase of 118% over the prior year quarter. Net income in the marketing segment for the third quarter for 2013 increased $20.4 million over the same period in 2012 to $40.9 million compared to $20.5 million. Retail fuel margin increased 44% in the 2013 period to $0.148 per gallon compared to $0.103 per gallon in the comparable prior year period. The higher fuel margins in the current period were attributable to periods of decreasing wholesale gasoline prices which caused margins to expand from prior year level. Retail fuel volumes on a per store basis were 2.1% lower in the third quarter of 2013 compared to the third quarter of 2012 while they were up 1.1% on a total volume basis. Merchandise margins in 2013 were slightly lower than the 2012 period with the decrease in merchandise sales revenues per store month of 1.5% which was mostly offset by an increased number of stores in the current period. The decrease in margins is due primarily to lower margins on tobacco products which is partially offset by growth and our non-tobacco products group in the current period. Also impacting net income positively in the third quarter 2013 was the sale of RINs of $31.8 million compared to only $5 million…

Thanks Mindy. I would like to take a moment to go to our few areas of our operational performance for the quarter and year-to-date. And since this is our first quarter and as our business models are bit different from some of the peers, we thought it would be helpful to provide some additional context in this first call. So, let’s start with retail fuel performance. We sold 971 million gallons this quarter which his up 1.1% compared to 960 million gallons last year. On an average per-site month basis, we 274,000 gallons in Q3 which is down 2% compared to the 280,000 gallons last Q3. Year-to-date, we’ve averaged 268,000 per-site month which is down just 0.8% compared to 270,000 gallons in 2012. Several factors influence this absolute fuel volume performance; first at the macro level, the best data we have seen, suggests that vehicle miles traveled have been relatively flat year-to-date due to the ongoing uncertainly in the economy and some regional weather issues. So, we believe that real efficiency games in the auto fleet have caused macro motor fuel demand to decline somewhat in 2013 year-to-date compared to last year. Second, as we look at market specific factors like price volatility; compared to the pricing environment we experience in 2012 the same periods in 2013 have been less volatile and therefore now is beneficial for us. We also look at competitive entry around our sites and then impact on fuel volume which is offset by the higher average volume performance of the new sites we’re opening. Last, we evaluate Murphy specific factors like our special fuel promotions. We ran the $0.10, $0.15 seasonal discount program with Walmart for four months in 2012 from September to December compared to a three month program this year from April to early…

Thank you sir. (Operator Instructions) Our first question comes from John Lawrence of Stephens. Your line is now open.

Andrew, congratulations on the quarter. The first one out of the box, can you talk about a couple -- I’ve got a few questions. Number one is on the retail, can you give us one more at the end there I appreciate that sort of clarity on the new box. Can you explain a little bit between when you talk about the carve out locations versus the other ones and that time constraint of getting that done a little bit.

Yes John, the out lots were parcels that Walmart had installed to us that were outside of their main pad. And so they were easier to plat permit and convey to us. The carve out locations are sections of their parking lots that are part of their original plat. And so you have to go through an additional platting, permitting surveying process that simply takes more time on average and some municipalities requires even more time. So we front loaded the process with the out lots while getting the carve out process started, we’re accelerating the process and we’ll be able to improve that cycle time significantly in 2014.

Secondly, your comments about more promotions. I mean has this been something that you focused on a lot more since the spin, the Coca Cola and with Pepsi and we’ll see a lot more of those?

Yes John, I mean we have always had attractive promotions to target the value seeking customer. Those have been in the works. We trialed them before the spin. We actually got the coke promotion in July and August before the spin. But we believe in today’s environment to be competitive you have got to continue to offer value on beverages and fuel and we think this is a unique way to do that.

Just a couple of housekeeping. Mindy on the expense side, the 14.5 million that you referred to as non-recurring sort of spin related expenses, we were looking for another I guess line item of G&A corporate. So, the way you have reported that as a clean number as far as what we will see going forward?

Hi. We have incurred here on the third quarter $14 million of what we categories as one-time and spin related charges. So, just our number for that, that would be $34 million versus $28 reported for the prior quarter and that gives us a year-to-date number of 94 on an adjusted basis which keeps us on track for our forecasted number in the 130-ish range for the year.

Ok, great, thanks. And why were there, just a tax rate expectations for the year?

Tax rate expectation, you might have noticed that the tax rate for this quarter versus prior period quarter is a little off. And that is due to the ethanol segment which incurred a lower state tax rate and therefore the loss that we had in the third quarter of last year of $5 million produced to reduce the benefit to the overall rate. So, if you look at our ethanol as a segment, the typical tax rates there in the 34% to 35% range versus retail in the 39% to 40%. So, our tax rate should trend towards the retail side especially as we add the Hankinson business.

Great, thanks a lot. Congratulations.

Thank you, John.

Yes, John and thanks also being the first to initiate coverage and giving us a target to shoot for. We appreciate it.

(Operator Instructions) Our next question comes from Damian Witkowski of Gabelli & Co. Your line is now open.

Good morning. Damian Witkowski with Gabelli.

Good morning.

Question on where is the RINs, are they in your gross margin on the per gallon basis, there were I find them so I have to adjust that?

No, they are not. We report those separately as other revenue, so if you turn to our marketing segment, you will see that separated as a separate line item under other revenue.

Okay. And once you sell your ethanol plant, do you still benefit from RINs or I mean depending on their price in the market but would you still be selling RINs or no?

Yeah, so the benefit we get from the RINs is from blending product not for manufacturing ethanol. So, the RINs attached as the manufacturing facility, we do not buy any of our ethanol from the two plants. The RIN sales come from separating the RIN at the point time we blend, so when we blend product, we capture the RIN at that point and we sell that. So, we expect to continue to do that in the future.

And our oil states land right space for ethanol or is it just a few of them?

Given that we have a wholesale business, I think the blend right states that provision applies more to standalone retailers who do not have the bulk blending capability. So, we are not impacted that to the same extent I believe as a standalone retailer that doesn’t have the product supply and wholesale capabilities we do.

And then how should we think about your annual capacity for generating RINs?

So, what we have talked about before is on average over the course of the year we will generate about 12 million RINs per month. It’s higher in the summer when demand is higher; we’re typically blending a little higher. It’s lower in the first and fourth quarters and so that’s the volume of RINs, the absolute price of RINs we have seen it go from $0.03 in the last year to a $1.40 back to the high 20s this week. So, that’s a lot harder to put a number on. As we have talked about in investor and analyst presentations, our business model, our economics, our growth, our financial position is not dependent on the RINs. And so as we earn those, we will apply those proceeds to growth or returns to shareholders.

And then lastly just how should we, I mean if I look at your gross margin for merchandise sales, I guess the 80-20 split with cigarette being 80% of you sales but on the gross margin basis how much do cigarettes account for, have you actually said that publicly or you don’t disclose that?

Yeah, I don’t think we have released that in the earnings, the separation between the margins between the two.

Thank you. Our next question comes from Badal Pandhi of FrontFour Capital Group. Your line is now open.

Hi, good morning Andre, Mindy and Tammy. Congrats again on the first quarter of the gate. Question I have is pro-forma for this ethanol plant sale, it looks like the company will be under levered compared to peers. Based on the cost of building a 1200 square foot store, it looks like comfortably you'll be able to fund that with cash flow from operations. So with additional asset sales, how do you out in the future, how do you think about returning capital to shareholders?

So I would say in the following way. First, we do have some debt covenants that we maintained so certain amount of proceeds will definitely repay debt, reduce our net debt position and we set up our $150 million term loan anticipating having proceeds from asset sales of that magnitude. And because of our tax re-spends status that is now doing wanting to do anything that might jeopardize that over the next two years. When we think about our growth, we have opportunities for growth out of the free cash flow. We have opportunities to accelerate growth beyond that and ramp up sites beyond the 60 to 80 sites that we’ve got pro-forma for next year. Beyond growth, we can then begin to think about tax efficient returns to share holders either share repurchases or dividends. Our parent company had a strong history of doing both and we’ll take up those conversations in due course so with our Board but we’ve not made any determinations on those sorts of shareholder returns at this time.

Thank you. Our next question comes from Carla Casella of JPMorgan. Your line is now open.

Some of my questions have already been answered but on the midstream business, what percentage of your midstream volume now is going through your stores in the quarter and how does that vary from quarter-to-quarter?

I think it’s ranged in this quarter anywhere from 40% to 50%. I don’t know the precise average Carla. It buries on a number of factors. One is, we look at just a pure economics of shipping product versus buying at the rack. We look at the nature of the contracts we have whether we can capture additional RINs by blending ourselves versus getting the benefit of the RINs in the contract price, we negotiate, we certainly want to preserve our shipper status by actually shipping the barrels through the pipelines. So those numbers will change month-to-month, week-to-week, quarter-to-quarter but that’s a pretty consistent range that allows us to achieve that low cost secured ratable supply that’s key to our retail business.

Okay. And then how far out do you have a view or a look into the promotional environment in the CSDs? Do you think -- is this something where you’ve got your plan set through fourth quarter and early next year and is it going to remain promotional? It sounds like it really helped you in that area.

It really did. There are kind of two levels of promotions. We have our promotions calendar that we’ve already established for all of next year we call it our Circle of Stars promotion but it’s what we do on site where we work with our vendors to identify what would be great selling items to promote in that quarter and it’s actually a competition amongst our site staff to encourage up selling which our vendors tell us we do better than anyone in the industry. So that promotion calendar has been laid out largely for all of 2014 Special promotions like the one we’ve described with Coke and Pepsi, we’re working to finalize best schedule but certainly we enjoyed the benefits of it, they enjoyed the benefits of the uplifts, so we expect to do more those in 2014. We haven’t finalized the calendars on those yet.

Thank you. And our final question comes from Damian Witkowski of Gabelli. Your line is now open.

I just wanted to follow up on tobacco sales. The statement you made that you have a 5% decrease industry wide on the volume side, if that continues as you expect it to and you go with the category, can we still have a turn in terms of what you earn on a gross margin basis on the merchandise side within the store? Or you don’t think you can offset that with either smokeless, e-cigs or other non-tobacco merchandise?

Absolutely and that’s exactly what we’ve focused on. So you’ll see the decline in the volume depending on the price increases and the competitive dynamics will determine how much of that you can actually translate into gross margin dollar sustainability or improvement on the cigarette side. We do see continued growth in smokeless sales and margins. We see continued significant growth on e-cigs sales and margin and as we said we went back 14 to 15 years we’re able to see same quarter on same quarter per-site growth in non-tobacco items and so we’re looking at that point in time specifically with our next 1200 square foot redesign format when we actually turn the corner from a net down and contribution due to the cigarette to positive increases on an overall basis because of the improvement on cigarette areas.

And then any way to think about the proceeds from the ethanol, the Hankinson plant? What do you think your taxes will be? What is your tax cost basis that remains?

The tax book value on the Hankinson plant is a little over $47 million.

Okay. And in terms of timing for the second plant and in terms of proceeds, should we think about the same range or just because it's smaller you won't get as much as you hope to get here?

Yes, two things, on the proceeds; Hankinson is an ICM plant and the cost for those typically have been between $1 and $1.40; there are some recent transaction comps on the Delta T plants that's more comparable to our assets. Those have been more of the $0.40 - $0.50 range. Some of those plants are actually located near to the corn. We are a destination market for corn at Hereford. Our advantage is the wet solubles -- wet distillers grain and the low carbon market in California, the upside on that plant. So it will be significantly lower than what you would expect from an ICM plant. In terms of timing, we did put it out for bid with Hankinson. The indicative bids were not that attractive. For Hereford, at its current yields we’d had some production issues earlier in the year. With the outlook on the crush spread we are very content to continue to operate it. We’ve got a yield improvement program in place and we basically look at that as an option to realize significantly higher proceeds than we would have realized by selling it right away. We got a small team focused on that and it’s not taking a lot of management’s focus. So we hope that at least by this time next year, if not sooner, to have sold that at a better realized value while making some money in this very attractive crush spread environment. As we said before we are a patient seller and we got of financial position to be so.

We thank everybody for your time. Again we apologize for the earlier technical difficulties. If folks did have to drop-off because of that, please feel to reach out to Tammy or any of us, we’ll be able to follow up with your questions.

Thank you Sir. Ladies and gentlemen thank you for participating in today’s conference. This does conclude today’s program, you may all disconnect. Everyone have a wonderful day.