Murphy USA Inc.MUSA
Murphy USA Inc. Leases Disclosure
Lease Accounting
The Company determines if an arrangement is a lease or contains a lease at inception. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The
Company's leases have remaining lease terms of approximately 1 years or less to 34 years, which may include the option to extend the lease when it is reasonably certain the Company will exercise the option. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 5 to 20 years or more. The exercise of lease renewal options is at the Company's sole discretion. Due to the uncertainties of future markets, economic factors, technology changes, demographic shifts and behavior, environmental regulatory requirements and other information that impacts decisions as to store location, management has determined that it was not reasonably certain to exercise contract options and they are not included in the lease term. Additionally, short-term leases and leases with variable lease costs are immaterial. The Company reviews all options to extend, terminate, or otherwise modify its lease agreements to determine if changes are required to the right-of-use assets and liabilities.
As the implicit interest rate is not readily determinable in most of the Company's lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
Lessor — We have various arrangements for certain spaces for food service and vending equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is immaterial. We also have certain areas where we sublease building and land space to others. This lease income is immaterial.
Lessee — We lease land for 481 stores, one terminal, and various equipment. Our lease agreements do not contain any material residual value guarantees and approximately 103 sites leased from Walmart contain restrictive covenants, though the restrictions are deemed to have an immaterial impact.
Leases are reflected in the following balance sheet accounts:
| (Millions of dollars) | Classification | December 31, 2025 | December 31, 2024 | ||||||||||||||
| Assets | |||||||||||||||||
| Operating (Right-of-use) | Operating lease right-of-use assets, net | $ | 526.3 | $ | 492.9 | ||||||||||||
| Finance | Property, plant, and equipment, at cost, less accumulated depreciation of $69.0 in 2025 and $56.3 in 2024 | 100.2 | 103.9 | ||||||||||||||
| Total leased assets | $ | 626.5 | $ | 596.8 | |||||||||||||
| Liabilities | |||||||||||||||||
| Current | |||||||||||||||||
| Operating | $ | 25.8 | $ | 23.7 | |||||||||||||
| Finance | 13.0 | 11.7 | |||||||||||||||
| Noncurrent | |||||||||||||||||
| Operating | Non-current operating lease liabilities | 534.6 | 496.3 | ||||||||||||||
| Finance | 105.5 | 108.0 | |||||||||||||||
| Total lease liabilities | $ | 678.9 | $ | 639.7 | |||||||||||||
| Lease Cost: | Years Ended December 31, | ||||||||||||||||||||||
| (Millions of dollars) | Classification | 2025 | 2024 | 2023 | |||||||||||||||||||
| Operating lease cost | Store and other operating expenses | $ | 66.7 | $ | 59.6 | $ | 55.1 | ||||||||||||||||
| Finance lease cost | |||||||||||||||||||||||
| Amortization of leased assets | Depreciation & amortization expense | 14.6 | 14.6 | 15.0 | |||||||||||||||||||
| Interest on lease liabilities | Interest expense | 8.0 | 8.3 | 8.9 | |||||||||||||||||||
| Net lease costs | $ | 89.3 | $ | 82.5 | $ | 79.0 | |||||||||||||||||
| Cash Flow Information: | Years Ended December 31, | ||||||||||||||||||||||
| (Millions of dollars) | 2025 | 2024 | 2023 | ||||||||||||||||||||
| Cash paid for amounts included in the measurement of liabilities | |||||||||||||||||||||||
| Operating cash flows required by operating leases | $ | 61.0 | $ | 53.8 | $ | 50.6 | |||||||||||||||||
| Operating cash flows required by finance leases | $ | 8.0 | $ | 8.3 | $ | 8.9 | |||||||||||||||||
| Financing cash flows required by finance leases | $ | 12.4 | $ | 11.7 | $ | 11.4 | |||||||||||||||||
| Maturity of Lease Liabilities: | ||||||||||||||
| (Millions of dollars) | Operating leases | Finance leases | ||||||||||||
| 2026 | $ | 66.6 | $ | 20.6 | ||||||||||
| 2027 | 66.6 | 19.5 | ||||||||||||
| 2028 | 65.6 | 18.5 | ||||||||||||
| 2029 | 64.0 | 16.4 | ||||||||||||
| 2030 | 62.4 | 14.1 | ||||||||||||
| After 2030 | 661.0 | 84.4 | ||||||||||||
| Total lease payments | 986.2 | 173.5 | ||||||||||||
| Less: interest | 425.8 | 55.0 | ||||||||||||
| Present value of lease liabilities | $ | 560.4 | $ | 118.5 | ||||||||||
| Lease Term and Discount Rate: | Year Ended December 31, | ||||||||||
| 2025 | |||||||||||
| Weighted-average remaining lease term (years) | |||||||||||
| Finance leases | 10.8 | ||||||||||
| Operating leases | 14.6 | ||||||||||
| Weighted-average discount rate | |||||||||||
| Finance leases | 6.9 | % | |||||||||
| Operating leases | 7.3 | % | |||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 18, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.