MURPHY USA INC., 10-Q filed on 4/29/2021
Quarterly Report
v3.21.1
Cover Page
3 Months Ended
Mar. 31, 2021
shares
Cover [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Mar. 31, 2021
Document Transition Report false
Entity File Number 001-35914
Entity Registrant Name MURPHY USA INC.
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 46-2279221
Entity Address, Address Line One 200 Peach Street
Entity Address, City or Town El Dorado,
Entity Address, State or Province AR
Entity Address, Postal Zip Code 71730-5836
City Area Code 870
Local Phone Number 875-7600
Title of 12(b) Security Common Stock, $0.01 Par Value
Trading Symbol MUSA
Security Exchange Name NYSE
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Large Accelerated Filer
Entity Small Business false
Entity Emerging Growth Company false
Entity Shell Company false
Entity Common Stock, Shares Outstanding 26,924,264
Amendment Flag false
Entity Central Index Key 0001573516
Current Fiscal Year End Date --12-31
Document Fiscal Year Focus 2021
Document Fiscal Period Focus Q1
v3.21.1
Consolidated Balance Sheets - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Current assets    
Cash and cash equivalents $ 304.1 $ 163.6
Accounts receivable—trade, less allowance for doubtful accounts of $0.1 at 2021 and 2020 182.1 168.8
Inventories 283.0 279.1
Prepaid expenses and other current assets 24.2 13.7
Total current assets 793.4 625.2
Property, plant and equipment, at cost less accumulated depreciation and amortization of $1,233.6 at 2021 and $1,191.4 at 2020 2,301.4 1,867.6
Operating lease right of use assets, net [1] 395.6 147.7
Intangible assets, net of amortization [1] 141.3 34.6
Goodwill 336.4 0.0
Other assets [1] 12.5 10.6
Total assets 3,980.6 2,685.7
Current liabilities    
Current maturities of long-term debt 13.2 51.2
Trade accounts payable and accrued liabilities 638.4 471.1
Income taxes payable 23.4 8.8
Total current liabilities 675.0 531.1
Long-term debt, including capitalized lease obligations 1,796.8 951.2
Deferred income taxes 281.4 218.4
Asset retirement obligations 36.7 35.1
Non current operating lease liabilities [1] 382.3 142.5
Deferred credits and other liabilities [1] 27.8 23.3
Total liabilities 3,200.0 1,901.6
Stockholders' Equity    
Preferred Stock, par $0.01, (authorized 20,000,000 shares, none outstanding) 0.0 0.0
Common Stock, par $0.01, (authorized 200,000,000 shares, 46,767,164 shares issued at 2020 and 2019, respectively) 0.5 0.5
Treasury stock (18,199,448 and 16,307,048 shares held at 2020 and 2019, respectively) (1,535.3) (1,490.9)
Additional paid in capital (APIC) 525.6 533.3
Retained earnings 1,791.5 1,743.1
Accumulated other comprehensive income (loss) (AOCI) (1.7) (1.9)
Total stockholders' equity 780.6 784.1
Total liabilities and stockholders' equity $ 3,980.6 $ 2,685.7
[1] *Prior year amounts have been revised to conform with current period presentation
v3.21.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Mar. 31, 2020
Current assets      
Allowance for doubtful accounts $ 0.1   $ 0.1
Property, plant and equipment, accumulated depreciation and amortization $ 1,233.6 $ 1,191.4  
Stockholders' Equity      
Preferred stock par value (in dollars per share) $ 0.01 $ 0.01  
Preferred stock shares authorized (in shares) 20,000,000 20,000,000  
Preferred stock shares outstanding (in shares) 0 0  
Common stock par value (in dollars per share) $ 0.01 $ 0.01  
Common stock shares authorized (in shares) 200,000,000 200,000,000  
Common stock shares issued (in shares) 46,767,164 46,767,164  
Treasury stock, shares held (in shares) 19,842,900 19,518,551  
v3.21.1
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Operating Revenues    
Total operating revenues $ 3,537.1 $ 3,184.8
Operating Expenses    
Depreciation and amortization 51.0 39.4
Selling, general and administrative 44.3 39.2
Accretion of asset retirement obligations 0.6 0.6
Acquisition related costs 8.8 0.0
Total operating expenses 3,442.7 3,054.1
Gain (loss) on sale of assets 0.2 0.1
Income (loss) from operations 94.6 130.8
Other income (expense)    
Interest income 0.0 0.8
Interest expense (21.3) (13.3)
Other nonoperating income (expense) 0.0 (1.0)
Total other income (expense) (21.3) (13.5)
Income (loss) before income taxes 73.3 117.3
Income tax expense (benefit) 18.0 28.0
Net Income $ 55.3 $ 89.3
Basic and Diluted Earnings Per Common Share    
Basic (in dollars per share) $ 2.04 $ 2.95
Diluted (in dollars per share) $ 2.01 $ 2.92
Weighted-Average Common Shares Outstanding (in thousands):    
Basic (in shares) 27,131 30,235
Diluted (in shares) 27,488 30,541
Supplemental information:    
Excise taxes $ 469.6 $ 473.5
Petroleum product    
Operating Revenues    
Total operating revenues [1] 2,635.8 2,480.2
Operating Expenses    
Operating expenses [1] 2,476.1 2,259.8
Merchandise sales    
Operating Revenues    
Total operating revenues 833.2 687.5
Operating Expenses    
Operating expenses 684.8 580.0
Other operating revenues    
Operating Revenues    
Total operating revenues 68.1 17.1
Operating Expenses    
Operating expenses $ 177.1 $ 135.1
[1] Includes excise taxes of $469.6 million for the three months ended March 31, 2021, $473.5 million for the three months ended March 31, 2020, $469.6 million for the three months ended March 31, 2021 and $473.5 million the three months ended March 31, 2020.
v3.21.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Statement of Comprehensive Income [Abstract]    
Net income $ 55.3 $ 89.3
Interest rate swap:    
Realized gain (loss) (0.1) 0.1
Unrealized gain (loss) 0.1 (3.6)
Reclassifications:    
Realized (gain) loss reclassified to interest expense 0.1 (0.1)
Amortization of unrealized (gain) loss to interest expense 0.2 0.0
Total 0.3 (3.6)
Deferred income tax (benefit) expense 0.1 (0.9)
Other comprehensive income (loss) 0.2 (2.7)
Comprehensive income $ 55.5 $ 86.6
v3.21.1
Consolidated Statements of Cash Flows - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Operating Activities      
Net income $ 55.3 $ 89.3  
Adjustments to reconcile net income (loss) to net cash provided by (required by) operating activities      
Depreciation and amortization 51.0 39.4  
Deferred and noncurrent income tax charges (credits) 3.7 5.9  
Accretion of asset retirement obligations 0.6 0.6 $ 2.3
Pretax (gains) losses from sale of assets (0.2) (0.1)  
Net (increase) decrease in noncash operating working capital 108.0 (25.7)  
Other operating activities - net 11.4 4.3  
Net cash provided by (required by) operating activities 229.8 113.7  
Investing Activities      
Property additions (53.6) (46.6)  
Payments for acquisition, net of cash acquired (642.1) 0.0  
Proceeds from sale of assets 0.3 0.2  
Other investing activities - net (0.9) (0.8)  
Net cash provided by (required by) investing activities (696.3) (47.2)  
Financing Activities      
Purchase of treasury stock (50.0) (140.6)  
Dividends paid (6.8) 0.0  
Borrowings of debt 892.8 0.0  
Repayments of debt (214.4) (0.3)  
Debt issuance costs (8.8) 0.0  
Amounts related to share-based compensation (5.8) (5.6)  
Net cash provided by (required by) financing activities 607.0 (146.5)  
Net increase (decrease) in cash, cash equivalents, and restricted cash 140.5 (80.0)  
Cash, cash equivalents, and restricted cash at beginning of period 163.6 280.3 280.3
Cash, cash equivalents, and restricted cash at end of period $ 304.1 $ 200.3 $ 163.6
v3.21.1
Consolidated Statements of Changes in Equity - USD ($)
$ in Millions
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Treasury Stock
APIC
Retained Earnings
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
AOCI
Beginning balance (in shares) at Dec. 31, 2019     46,767,164          
Beginning balance at Dec. 31, 2019 $ 803.0 $ 1.1 $ 0.5 $ (1,099.8) $ 538.7 $ 1,362.9 $ 1.1 $ 0.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 89.3         89.3    
Gain on interest rate hedge, net of tax (2.7)             (2.7)
Purchase of treasury stock (140.6)     (140.6)        
Issuance of treasury stock (0.5)     5.2 (5.7)      
Amounts related to share-based compensation (5.6)       (5.6)      
Share-based compensation expense 2.8       2.8      
Ending balance (in shares) at Mar. 31, 2020     46,767,164          
Ending balance at Mar. 31, 2020 746.8   $ 0.5 (1,235.2) 530.2 1,453.3   (2.0)
Beginning balance (in shares) at Dec. 31, 2020     46,767,164          
Beginning balance at Dec. 31, 2020 784.1   $ 0.5 (1,490.9) 533.3 1,743.1   (1.9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 55.3         55.3    
Gain on interest rate hedge, net of tax 0.2             0.2
Cash dividends declared ($0.25 per share) (6.8)         (6.8)    
Dividend equivalent units accrued 0.0       0.1 (0.1)    
Purchase of treasury stock (50.0)     (50.0)        
Issuance of treasury stock 0.0     5.6 (5.6)      
Amounts related to share-based compensation (5.8)       (5.8)      
Share-based compensation expense 3.6       3.6      
Ending balance (in shares) at Mar. 31, 2021     46,767,164          
Ending balance at Mar. 31, 2021 $ 780.6   $ 0.5 $ (1,535.3) $ 525.6 $ 1,791.5   $ (1.7)
v3.21.1
Consolidated Statements of Changes in Equity (Parenthetical)
3 Months Ended
Mar. 31, 2021
$ / shares
Statement of Stockholders' Equity [Abstract]  
Dividends declared (in dollars per share) $ 0.25
v3.21.1
Description of Business and Basis of Presentation
3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Basis of Presentation Description of Business and Basis of Presentation
 
Description of business — Murphy USA Inc. and its consolidated subsidiaries (“Murphy USA” or the “Company”) markets refined products through a network of retail gasoline stations and to unbranded wholesale customers. In addition, it operates non-fuel convenience stores in select markets in the Northeast. Murphy USA operates a chain of owned retail stations under the brand name of Murphy USA® which are almost all located in close proximity to Walmart stores in 25 states, markets gasoline and other products at standalone stations under the Murphy Express brand, and Quick Chek Corporation ("QuickChek") has convenience stores located in New Jersey and New York. At March 31, 2021, Murphy USA had a total of 1,660 Company stations of which 1,151 were Murphy USA, 353 were Murphy Express and 156 were QuickChek.
 
Basis of Presentation — Murphy USA was incorporated in March 2013 and, in connection with its incorporation, Murphy USA issued 100 shares of common stock, par value $0.01 per share, to Murphy Oil Corporation (“Murphy Oil”) for $1.00. On August 30, 2013, Murphy USA was separated from Murphy Oil through the distribution of 100% of the common stock of Murphy USA to holders of Murphy Oil stock. Murphy USA Inc., Murphy Oil USA, and certain of its subsidiaries operate on a calendar year basis, while the subsidiary QuickChek uses a weekly retail calendar where each quarter has 13 weeks and its historical fiscal year end was the Friday nearest to October 31. For the Q1 2021 period, the results provided include the period from January 29, 2021 to April 2, 2021. The impact of the two additional days are immaterial to the overall consolidated results.
 
In preparing the financial statements of Murphy USA in conformity with accounting principles generally accepted in the United States, management has made a number of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results may differ from these estimates.

Accounting policies related to the acquisition of QuickChek

Business combinations — The purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred.

Goodwill and intangible assets — Goodwill represents the excess of the aggregate of the consideration transferred over the net assets acquired and liabilities assumed and is tested annually for impairment, or more frequently if there are indicators of impairment. Acquired finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, and are reviewed for impairment when events or circumstances indicate that the asset group to which the intangible assets belong might be impaired. The Company revises the estimated remaining useful life of these assets when events or changes in circumstances warrant a revision. If the Company revises the useful life, the unamortized balance is amortized over the use life on a prospective basis. Indefinite-lived intangibles are tested annually for impairment, or more often if indicators warrant.

Interim Financial Information — The interim period financial information presented in these consolidated financial statements is unaudited and includes all known accruals and adjustments, in the opinion of management, necessary for a fair presentation of the consolidated financial position of Murphy USA and its results of operations and cash flows for the periods presented. All such adjustments are of a normal and recurring nature.
 
These interim consolidated financial statements should be read together with our audited financial statements for the years ended December 31, 2020, 2019 and 2018, included in our Annual Report on Form 10-K (File No. 001-35914), as filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934 on February 19, 2021.
 
Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting". This standard included optional guidance for a limited period of time to help ease the burden in accounting for the effects of reference rate reform. The new standard is effective for all entities through December 31, 2022. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements.
v3.21.1
Revenues
3 Months Ended
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Revenue Recognition

Revenue is recognized when obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our petroleum products, convenience merchandise, Renewable Identification Numbers ("RINs") and other assets to our third-party customers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Excise and sales tax that we collect where we have determined we are the principal in the transaction have been recorded as revenue on a jurisdiction-by-jurisdiction basis.

The Company enters into buy/sell and similar arrangements when petroleum products are held at one location but are needed at a different location. The Company often pays or receives funds related to the buy/sell arrangements based on location or quality differences. The Company continues to account for these transactions as non-monetary exchanges under existing accounting guidance and typically reports these on a net basis in the Consolidated Statements of Income.

The following tables disaggregate our revenues by major source for the three months ended March 31, 2021 and 2020, respectively:

Three Months Ended March 31, 2021Three Months Ended March 31, 2020
(Millions of dollars)MarketingCorporate and Other AssetsConsolidatedMarketingCorporate and Other AssetsConsolidated
Petroleum product sales (at retail) 1
$2,384.8 — $2,384.8 $2,246.2 $— $2,246.2 
Petroleum product sales (at wholesale)251.0 — 251.0 234.0 — 234.0 
Total petroleum product sales2,635.8 — 2,635.8 2,480.2 — 2,480.2 
Merchandise sales833.2 — 833.2 687.5 — 687.5 
Other operating revenues:
RINs66.7 — 66.7 15.5 — 15.5 
Other revenues 2
1.4 — 1.4 1.5 0.1 1.6 
Total revenues$3,537.1 $— $3,537.1 $3,184.7 $0.1 $3,184.8 


1 Includes excise and sales taxes that remain eligible for inclusion under Topic 606
2 Primarily includes collection allowance on excise and sales taxes and other miscellaneous items
Marketing segment

Petroleum product sales (at retail). For our retail store locations, the revenue related to petroleum product sales is recognized as the fuel is pumped to our customers. The transaction price at the pump typically includes some portion of sales or excise taxes as levied in the respective jurisdictions. Those taxes that are collected for remittance to governmental entities on a pass through basis are not recognized as revenue and they are recorded to a liability account until they are paid. Our customers typically use a mixture of cash, checks, credit cards and debit cards to pay for our products as they are received. We have accounts receivable from the various credit/debit card providers at any point in time related to product sales made on credit cards and debit cards. These receivables are typically collected in two to seven days, depending on the terms with the particular credit/debit card providers. Payment fees retained by the credit/debit card providers are recorded as station and other operating expenses.

Petroleum product sales (at wholesale). Our sales of petroleum products at wholesale are generally recorded as revenue when the deliveries have occurred and legal ownership of the product has transferred to the customer. Title transfer for bulk refined product sales typically occurs at pipeline custody points and upon trucks loading at product terminals. For bulk pipeline sales, we record receivables from customers that are generally collected within a week from custody transfer date. For our rack product sales, the majority of our customers' accounts are drafted by us within 10 days from product transfer.

Merchandise sales. For our retail store locations, the revenue related to merchandise sales is recognized as the customer completes their purchase at our locations. The transaction price typically includes some portion of sales tax as levied in the respective jurisdictions. Those taxes that are collected for remittance to governmental entities on a pass through basis are not recognized as revenue and they are recorded to a liability account until they are paid. As noted above, a mixture of payment types are used for these revenues and the same terms for credit/debit card receivables are realized.

The most significant judgment with respect to merchandise sales revenue is determining whether we are the principal or agent for some categories of merchandise such as lottery tickets, lotto tickets, newspapers and other small categories of merchandise. For scratch-off lottery tickets, we have determined we are the principal in the majority of the jurisdictions and therefore we record those sales on a gross basis. We have some categories of merchandise (such as lotto tickets) where we are the agent and the revenues recorded for those transactions are our net commission only.

The Company offers a loyalty program through its Murphy USA, Murphy Express, and QuickChek branded retail locations. The customers earn rewards based on their spending or other promotional activities. This program creates a performance obligation which requires us to defer a portion of sales revenue to the loyalty program participants until they redeem their rewards. The rewards may be redeemed for free or discounted merchandise or cash discounts at all stores and on fuel purchases only at Murphy USA and Murphy Express stores. Earned rewards expire after an account is inactive for a period of 90 days at Murphy USA and Murphy Express, while certain QuickChek rewards require use within the month. We recognize loyalty revenue when a customer redeems an earned reward. Deferred revenue associated with both rewards program are included in Trade accounts payable and accrued liabilities in our Consolidated Balance Sheet. The deferred revenue balances at March 31, 2021 and December 31, 2020 were immaterial.

RINs sales. For the sale of RINs, we recognize revenue when the RIN is transferred to the counter-party and the sale is completed. Receivables from our counter-parties related to the RIN sales are typically collected within five days of the sale.

Other revenues. Items reported as other operating revenues include collection allowances for excise and sales tax and other miscellaneous items and are recognized as revenue when the transaction is completed.

Accounts receivable

Trade accounts receivable on the balance sheet represents both receivables related to contracts with customers and other trade receivables. At March 31, 2021 and December 31, 2020, we had $111.1 million and $88.3 million of receivables, respectively, related to contracts with customers recorded. All of the trade accounts receivable related
to contracts with customers outstanding at the end of each period were collected during the succeeding quarter. These receivables were generally related to credit and debit card transactions along with short term bulk and wholesale sales to our customers, which have a very short settlement window.
v3.21.1
Inventories
3 Months Ended
Mar. 31, 2021
Inventory Disclosure [Abstract]  
Inventories Inventories
 
Inventories consisted of the following:
(Millions of dollars)March 31,
2021
December 31,
2020
Finished products - First-In, First-Out ("FIFO") basis$300.0 $223.0 
Less: Last-In, First-Out ("LIFO") reserve - finished products(192.2)(101.3)
Finished products - LIFO basis107.8 121.7 
Store merchandise for resale169.0 152.0 
Materials and supplies6.2 5.4 
Total inventories$283.0 $279.1 
 
At March 31, 2021 and December 31, 2020, the replacement cost (market value) of LIFO inventories exceeded the LIFO carrying value by $192.2 million and $101.3 million, respectively. The QuickChek subsidiary values its general merchandise inventory utilizing the LIFO method and values the inventory of gasoline and certain other merchandise items using the FIFO method. The QuickChek LIFO reserve balance for the period was immaterial.
v3.21.1
Business Acquisition
3 Months Ended
Mar. 31, 2021
Business Combinations [Abstract]  
Business Acquisition Business Acquisition
On January 29, 2021, MUSA completed the previously announced transaction to acquire 100% of QuickChek, a privately-held convenience store chain with a regional brand consisting of 156 sites located in New Jersey and New York, in an all-cash transaction. The acquisition was made to expand the MUSA network into the Northeast by adding stores that had an existing food and beverage model and is consistent with the Company's stated strategic priorities of developing enhanced food and beverage capabilities and accelerating its growth plans.

The excess of the purchase price over the preliminary estimated fair value of the net, identifiable assets acquired was recorded as goodwill. The factors contributing to the recognition of goodwill are a mixture of direct and reverse synergies that are expected to be realized by both QuickChek and Murphy USA as a result of this acquisition. The direct synergies include additional margin capture on the retail fuel side from the tactical pricing decisions and improved benefits from increased scale on the product acquisition side combined with other cost savings in both merchandise and store operations. The reverse synergies reflect management's ability to leverage QuickChek's product pricing and operational capabilities related to food and beverage sales to Murphy's existing store footprint.

The Company has determined that the trade name has an indefinite life, as there is no economic, contractual, or other factors that limit its useful life and expects to generate value as long as the trade name is utilized, and therefore is not subject to amortization. The fair value of intangible assets was based on widely-accepted valuation techniques, including discounted cash flows.

The following table summarizes the preliminary fair value of the consideration transferred at the date of the acquisition, as well as the calculation of preliminary goodwill based on the excess of consideration over the provisional fair value of net assets acquired:

(Millions of dollars)
Cash paid to shareholders$642.9 
 Less cash and cash equivalents acquired0.8
Fair value of consideration transferred, net of cash acquired$642.1 
(Millions of dollars)
Assets acquired:
Accounts receivable$8.0 
Inventories24.3 
Prepaid expenses and other current assets5.6 
Property and equipment429.1 
Right of use assets238.1 
Other assets5.4 
Identified intangible assets106.8 
Liabilities assumed:
Accounts payable and accrued expenses(68.5)
Deferred income tax liabilities(59.5)
Asset retirement obligation(1.2)
Long term debt, including finance lease obligations(136.5)
Deferred credits and other liabilities(7.4)
Operating lease liabilities(238.5)
Net assets acquired305.7 
Goodwill336.4 
Fair value of consideration transferred, net of cash and cash equivalents acquired$642.1 


Due to the timing of the acquisition, the allocation of the purchase price to assets acquired and liabilities assumed is preliminary pending finalization of management's analysis and is expected to be completed prior to December 31, 2021.

The Company has not disclosed pro forma information of the combined business as the transaction is not material to revenue or net earnings.
In connection with the acquisition, the Company recognized certain acquisition-related expenses which were expensed as incurred. These expenses, recognized within acquisition related costs in the consolidated statements of operations, include amounts related to transaction and integration costs, including fees for advisory and professional services incurred as part of the acquisition and integration costs subsequent to the acquisition in the amount of $8.8 million for the three months ended March 31, 2021.
v3.21.1
Goodwill and Intangible Assets
3 Months Ended
Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
The Company's goodwill is assigned to its Marketing segment and none of the goodwill is deductible for tax purposes.


(Millions of dollars)March 31,
2021
Balance as of January 1, 2021$— 
QuickChek acquisition336.4 
Ending balance as of March 31, 2021$336.4 


We amortize intangible assets subject to amortization on a straight-line or accelerated basis based on the period for which the economic benefits of the asset or liability are expected to be realized. In connection with our acquisition
of QuickChek on January 29, 2021, we recorded the following amounts of intangible assets in addition to one prior intangible asset.

Remaining Useful Life
(Millions of dollars)Carrying Value(in years)
Intangible assets subject to amortization:
Pipeline space$34.4 34.4
Intangible lease liability(9.0)15.3
Intangible assets not subject to amortization:
Tradename 115.4n/a
Liquor licenses0.5n/a
Total intangible assets$141.3 


Intangible assets subject to amortization at March 31, 2021 and December 31, 2020 consisted of the following:

March 31, 2021December 31, 2020
(Millions of dollars)CostNetCostNet
Pipeline space$39.6 $34.4 $39.6 $34.6 
Intangible lease liability(9.1)(9.0)— — 
$30.5 $25.4 $39.6 $34.6 
v3.21.1
Long-Term Debt
3 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
 
Long-term debt consisted of the following:
(Millions of dollars)March 31,
2021
December 31,
2020
3.75% senior notes due 2031 (net of unamortized discount of $6.1 at March 31, 2021)
$493.9 $— 
5.625% senior notes due 2027 (net of unamortized discount of $2.3 at March 31, 2021 and $2.4 at December 2020)
297.7 297.6 
4.75% senior notes due 2029 (net of unamortized discount of $5.3 at March 31, 2021 and $5.4 at December 31, 2020)
494.7 494.6 
Term loan due 2023 (effective interest rate of n/a at March 31, 2021 and 2.67% at December 31, 2020)
— 212.5 
Term loan due 2028 (effective interest rate of 2.27% at March 31, 2021) net of unamortized discount of $1.0 at March 31, 2021
399.0 — 
Capitalized lease obligations, autos and equipment, due through 20253.2 2.1 
Capitalized lease obligations, buildings, due through 2055134.2 — 
Less unamortized debt issuance costs(12.7)(4.4)
Total long-term debt1,810.0 1,002.4 
Less current maturities13.2 51.2 
Total long-term debt, net of current$1,796.8 $951.2 
Senior Notes

On April 25, 2017, Murphy Oil USA, Inc., our primary operating subsidiary, issued $300 million of 5.625% Senior Notes due 2027 (the "2027 Senior Notes") under its existing shelf registration statement. The 2027 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our credit facilities. The indenture governing the 2027 Senior Notes contains restrictive covenants that limit, among other things, the ability of Murphy USA, Murphy Oil USA, Inc. and the restricted subsidiaries to incur additional indebtedness or liens, dispose of assets, make certain restricted payments or investments, enter into transactions with affiliates or merge with or into other entities.

On September 13, 2019, Murphy Oil USA, Inc., issued $500 million of 4.75% Senior Notes due 2029 (the “2029 Senior Notes”). The net proceeds from the issuance of the 2029 Senior Notes were used to fund, in part, the tender offer and redemption of the $500 million aggregate principal amount of its senior notes due 2023. The 2029 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our credit facilities. The indenture governing the 2029 Senior Notes contains restrictive covenants that are essentially identical to the covenants for the 2027 Senior Notes.

On January 29, 2021, Murphy Oil USA, Inc., issued $500 million of 3.75% Senior Notes due 2031 (the “2031 Senior Notes” and, together with the 2027 Senior Notes and the 2029 Senior Notes, the "Senior Notes"). The net proceeds from the issuance of the 2031 Senior Notes were used to fund the acquisition of QuickChek and for other general corporate purposes. The 2031 Senior Notes are fully and unconditionally guaranteed by Murphy USA, and are guaranteed by certain 100% owned subsidiaries that guarantee our credit facilities. The indenture governing the 2031 Senior Notes contains restrictive covenants that are essentially identical to the covenants for the 2027 and 2029 Senior Notes.

The Senior Notes and the guarantees rank equally with all of our and the guarantors’ existing and future senior unsecured indebtedness and effectively junior to our and the guarantors’ existing and future secured indebtedness (including indebtedness with respect to the credit facilities) to the extent of the value of the assets securing such indebtedness.  The Senior Notes are structurally subordinated to all of the existing and future third-party liabilities, including trade payables, of our existing and future subsidiaries that do not guarantee the notes.

Credit Facilities and Term Loan

On January 29, 2021, the Company entered into a new credit agreement that consists of both a cash flow revolving credit facility and a senior unsecured term loan that replaced the Company's prior ABL facility and term loan contained in the credit facility that was last renewed in 2019, respectively.

The credit agreement provides for a senior secured term loan in an aggregate principal amount of $400 million 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").

Interest payable on the credit facilities is based on either:
 
the London interbank offered rate, adjusted for statutory reserve requirements (the “Adjusted LIBO Rate”);

or

the Alternate Base Rate, which is defined as the highest of (a) the rate of interest last quoted by The Wall Street Journal as the "Prime Rate", (b) the greater of the federal funds effective rate and the overnight bank funding rate determined by the Federal Reserve Bank of New York from time to time plus 0.50% per annum and (c) the one-month Adjusted LIBO Rate plus 1.00% per annum,
 
plus, (A) in the case of Adjusted LIBO Rate borrowings, (i) with respect to the Revolving Facility, spreads ranging from 1.75% to 2.25% per annum depending on a total debt to EBITDA ratio or (ii) with respect to the Term Facility, a spread of 1.75% per annum and (B) in the case of Alternate Base Rate borrowings (i) with respect to the Revolving
Facility, spreads ranging from 0.75% to 1.25% per annum depending on a total debt to EBITDA ratio or (ii) with respect to the Term Facility, a spread of 1.75% per annum.

The Term Facility amortizes in quarterly installments starting with the first amortization payment being due on July 1, 2021 at a rate of 1.00% per annum. Murphy USA is also required to prepay the Term Facility with a portion of its excess cash flow, a portion of the net cash proceeds of certain asset sales, casualty events (subject to certain reinvestment rights) and issuances of indebtedness not permitted under the Credit Agreement and with designated proceeds received from certain asset sales, issuances of indebtedness and sale-leaseback transactions, subject to certain exceptions. The Credit Agreement allows Murphy USA to prepay, in whole or in part, the Term Facility outstanding thereunder, together with any accrued and unpaid interest, with prior notice but without premium or penalty other than breakage and redeployment costs.

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 Credit Agreement also contains 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. In conformance to the secured net leverage ratio financial maintenance covenant, the Company must maintain a maximum secured net leverage ratio of 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.

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, 2021, our total leverage ratio was 2.41 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 $100 million in any fiscal year and an additional ability to make restricted payments in an aggregate amount not to exceed the greater of $105 million or 4.5% of consolidated net tangible assets over the life of the credit agreement.
v3.21.1
Asset Retirement Obligations (ARO)
3 Months Ended
Mar. 31, 2021
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations (ARO) Asset Retirement Obligations (ARO)
The majority of the ARO recognized by the Company at March 31, 2021 and December 31, 2020 is related to the estimated costs to dismantle and abandon certain of its retail gasoline stations. The Company has not recorded an ARO for certain of its marketing assets because sufficient information is presently not available to estimate a range of potential settlement dates for the obligation. These assets are consistently being upgraded and are expected to be operational into the foreseeable future. In these cases, the obligation will be initially recognized in the period in which sufficient information exists to estimate the obligation.
A reconciliation of the beginning and ending aggregate carrying amount of the ARO is shown in the following table.
 
(Millions of dollars)March 31,
2021
December 31,
2020
Balance at beginning of period$35.1 $32.8 
Addition for acquisition1.2 — 
Accretion expense0.6 2.3 
Settlements of liabilities(0.2)(0.8)
Liabilities incurred— 0.8 
Balance at end of period$36.7 $35.1 
 
The estimation of future ARO is based on a number of assumptions requiring professional judgment. The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the lack of availability of additional information.
v3.21.1
Income Taxes
3 Months Ended
Mar. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
 
The effective tax rate is calculated as the amount of income tax expense (benefit) divided by income before income tax expense (benefit). For the three month periods ended March 31, 2021 and 2020, the Company’s approximate effective tax rates were as follows:
 
 20212020
Three months ended March 31,24.6%23.9%

In the three months ended March 31, 2021, the Company recognized approximately $0.9 million of excess tax benefits related to stock compensation for employees and $1.0 million in expense for other discrete tax items related to state deferred tax rate adjustments due to the QuickChek acquisition. For the three months ended March 31, 2020, the Company recognized a tax benefit of approximately $0.6 million of excess tax benefits related to stock compensation and $0.4 million for other discrete tax items.
 
As of March 31, 2021, the earliest year remaining open for federal and state audit and/or settlement is 2017 and 2015, respectively.  Although the Company believes that recorded liabilities for uncertain tax positions are adequate, additional gains or losses could occur in future periods from resolution of outstanding unsettled matters.
v3.21.1
Incentive Plans
3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Incentive Plans Incentive Plans
2013 Long-Term Incentive Plan
Effective August 30, 2013, certain of our employees participate in the Murphy USA 2013 Long-Term Incentive Plan which was subsequently amended and restated effective as of February 8, 2017 (the “MUSA 2013 Plan”). The MUSA 2013 Plan authorizes the Executive Compensation Committee of our Board of Directors (“the Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unit awards), cash awards, and performance awards to our employees. No more than 5.5 million shares of MUSA common stock may be delivered under the MUSA 2013 Plan and no more than 1 million shares of common stock may be awarded to any one employee, subject to adjustment for changes in capitalization. The maximum cash amount payable pursuant to any “performance-based” award to any participant in any calendar year is $5.0 million.
 
STOCK OPTIONS – The Committee fixes the option price of each option granted at no less than fair market value (FMV) on the date of the grant and fixes the option term at no more than 7 years from such date. In February 2021, the Committee granted nonqualified stock options to certain employees of the Company. The Black-Scholes valuation for these awards was $32.00 per option.

Assumptions used to value awards:
Dividend yield0.79 %
Expected volatility32.3 %
Risk-free interest rate0.4 %
Expected life (years)4.6
Stock price at valuation date$126.00
Changes in options outstanding for Company employees during the period from December 31, 2020 to March 31, 2021 are presented in the following table:

OptionsNumber of SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual Term (Years)Aggregate Intrinsic Value (Millions of Dollars)
Outstanding at 12/31/2020322,700 $79.60 
Granted81,300 $126.00 
Outstanding at 3/31/2021404,000 $88.94 4.9$22.5 
Exercisable at 3/31/2021194,200 $69.92 3.6$14.5 


RESTRICTED STOCK UNITS (MUSA 2013 Plan) – The Committee has granted time based restricted stock units (RSUs) as part of the compensation plan for its executives and certain other employees since its inception. The awards granted in the current year were under the MUSA 2013 Plan, are valued at the grant date fair value, and vest over 3 years. 

Changes in restricted stock units outstanding for Company employees during the period from December 31, 2020 to March 31, 2021 are presented in the following table:

Employee RSUsNumber of unitsWeighted Average Grant Date Fair ValueTotal Fair Value (Millions of Dollars)
Outstanding at 12/31/2020182,795 $77.38 
Granted55,074 $132.63 
Vested and issued(45,917)$71.95 $6.6 
Forfeited(1,013)$80.06 
Outstanding at 3/31/2021190,939 $94.61 $27.6 
 

PERFORMANCE-BASED RESTRICTED STOCK UNITS (MUSA 2013 Plan) – In February 2021, the Committee awarded performance-based restricted stock units (performance units) to certain employees.  Half of the performance units vest based on a 3-year return on average capital employed (ROACE) calculation and the other half vest based on a 3-year total shareholder return (TSR) calculation that compares MUSA to a group of 18 peer companies.  The portion of the awards that vest based on TSR qualify as a market condition and must be valued using a Monte Carlo valuation model. For the TSR portion of the awards, the fair value was determined to be $168.42 per unit.  For the ROACE portion of the awards, the valuation will be based on the grant date fair value of $126.00 per unit and the number of awards will be periodically assessed to determine the probability of vesting. 

Changes in performance-based restricted stock units outstanding for Company employees during the period from December 31, 2020 to March 31, 2021 are presented in the following table:
Employee PSU'sNumber of UnitsWeighted Average Grant Date Fair ValueTotal Fair Value (Millions of Dollars)
Outstanding at 12/31/2020129,340 $97.01 
Granted64,600 $145.91 
Vested and issued(58,302)$76.78 $7.3 
Outstanding at 3/31/2021135,638 $117.42 $19.6 
2013 Stock Plan for Non-employee Directors
 
Effective August 8, 2013, Murphy USA adopted the 2013 Murphy USA Stock Plan for Non-employee Directors (the “Directors Plan”).  The directors for Murphy USA are compensated with a mixture of cash payments and equity-based awards.  Awards under the Directors Plan may be in the form of restricted stock, restricted stock units, stock options, or a combination thereof.  An aggregate of 500,000 shares of common stock shall be available for issuance of grants under the Directors Plan. 
 
RESTRICTED STOCK UNITS (Directors Plan) – The Committee has also granted time based RSUs to the non-employee directors of the Company as part of their overall compensation package for being a member of the Board of Directors.  These awards typically vest at the end of three years.

Changes in restricted stock units outstanding for Company non-employee directors during the period from December 31, 2020 to March 31, 2021 are presented in the following table:

Director RSU'sNumber of UnitsWeighted Average Grant Date Fair ValueTotal Fair Value (Millions of Dollars)
Outstanding at 12/31/202031,004 $83.31 
Granted8,692 $125.04 
Vested and issued(9,589)$69.37 $1.2 
Outstanding at 3/31/202130,107 $99.79 $4.4 

 
For the three months ended March 31, 2021 and 2020, share-based compensation was $3.6 million and $2.8 million, respectively.
v3.21.1
Financial Instruments and Risk Management
3 Months Ended
Mar. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments and Risk Management Financial Instruments and Risk Management
 
DERIVATIVE INSTRUMENTS — The Company makes limited use of derivative instruments to manage certain risks related to commodity prices and interest rates. The use of derivative instruments for risk management is covered by operating policies and is closely monitored by the Company’s senior management. The Company does not hold any derivatives for speculative purposes and it does not use derivatives with leveraged or complex features. Derivative instruments are traded primarily with credit worthy major financial institutions or over national exchanges such as the New York Mercantile Exchange (“NYMEX”). For accounting purposes, the Company has not designated commodity derivative contracts as hedges, and therefore, it recognizes all gains and losses on these derivative contracts in its Consolidated Statement of Income. Certain interest rate derivative contracts were accounted for as hedges and gain or loss associated with recording the fair value of these contracts was deferred in AOCI until the anticipated transactions occur. As of March 31, 2021, all current commodity derivative activity is immaterial.
 
At March 31, 2021 there was $0.9 million cash deposit and at December 31, 2020 the cash deposit was $0.6 million related to commodity derivative contracts reported in Prepaid expenses and other current assets in the Consolidated Balance Sheets. These cash deposits have not been used to increase the reported net assets or reduce the reported net liabilities on the derivative contracts at March 31, 2021 or December 31, 2020.

Interest Rate Risks

Under hedge accounting rules, the Company deferred the net charge or benefit associated with the interest rate swap entered into to manage the variability in interest payments for the variable-rate debt in association with $150.0 million of our outstanding term loan dated August 27, 2019 until the debt was repaid on January 29, 2021. At that time the hedge was de-designated and hedge accounting no longer applies as mark-to-market gains and losses were recognized in the Consolidated Statement of income in interest expense. For the three months ended March 31, 2021 there were unrealized gains of $0.4 million and realized losses of $0.2 million.The balance of the unrealized gain in accumulated comprehensive income (loss) is being amortized out of accumulated comprehensive
income (loss) to interest expense over the remaining term of the initial loan and for the three months ended March 31, 2021 the amount amortized was $0.2 million, leaving a remaining balance of $2.3 million at March 31, 2021.
v3.21.1
Earnings Per Share
3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share
 
Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average of common shares outstanding during the period.  Diluted earnings per common share adjusts basic earnings per common share for the effects of stock options and restricted stock in the periods where such items are dilutive. 
 
On October 28, 2020, the Board of Directors approved an up to $500 million share repurchase program to be in effect through December 2023. For the three months ended March 31, 2021, the Company repurchased 397,882 shares of common stock for an average price of $125.67 per share including brokerage fees. For the three months ended March 31, 2020, 1,362,400 shares were repurchased for an average price of $103.17 per share under previous board authorizations.
 
The following table provides a reconciliation of basic and diluted earnings per share computations for the three months ended March 31, 2021 and 2020:

 Three Months Ended
March 31,
(Millions of dollars, except share and per share amounts)20212020
Earnings per common share:
Net income per share - basic
Net income attributable to common stockholders$55.3 $89.3 
Weighted average common shares outstanding (in thousands)27,131 30,235 
Earnings per common share$2.04 $2.95 
 
Earnings per common share - assuming dilution:
Net income per share - diluted
Net income attributable to common stockholders$55.3 $89.3 
Weighted average common shares outstanding (in thousands)27,131 30,235 
Common equivalent shares:
Dilutive share-based awards357 306 
Weighted average common shares outstanding - assuming dilution (in thousands)27,488 30,541 
Earnings per common share assuming dilution$2.01 $2.92 
We have excluded from the earnings-per-share calculation certain stock options and shares that are considered to be anti-dilutive under the treasury stock method and reported in the table below.

Three Months Ended
March 31,
Potentially dilutive shares excluded from the calculation as their inclusion would be anti-dilutive20212020
Stock Options81,30075,600
Restricted share units20,49170,887
Total anti-dilutive shares101,791146,487
v3.21.1
Other Financial Information
3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Other Financial Information Other Financial Information
  
CASH FLOW DISCLOSURES — There were no cash income taxes paid, net of refunds and refunds of $0.5 million for the three month periods ended March 31, 2021 and 2020, respectively. Interest paid, net of amounts capitalized, was $18.4 million and $14.7 million for the three month periods ended March 31, 2021 and 2020, respectively.  

CHANGES IN WORKING CAPITAL:
 Three Months Ended
March 31,
(Millions of dollars)20212020
Accounts receivable$(5.3)$37.3 
Inventories20.5 (16.7)
Prepaid expenses and other current assets(3.3)13.7 
Accounts payable and accrued liabilities81.6 (66.1)
Income taxes payable14.5 6.1 
Net (increase) decrease in noncash operating working capital$108.0 $(25.7)
v3.21.1
Assets and Liabilities Measured at Fair Value
3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measure at Fair Value Assets and Liabilities Measured at Fair Value
 
The Company carries certain assets and liabilities at fair value in its Consolidated Balance Sheets. The fair value hierarchy is based on the quality of inputs used to measure fair value, with Level 1 being the highest quality and Level 3 being the lowest quality. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included within Level 1. Level 3 inputs are unobservable inputs which reflect assumptions about pricing by market participants.

At the balance sheet date, the fair value of derivative contracts was determined using NYMEX quoted values but was immaterial.
 
The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at March 31, 2021 and December 31, 2020. The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The table excludes Cash and cash equivalents, Accounts receivable-trade, Restricted cash, and Trade accounts payable and accrued liabilities, all of which had fair values approximating carrying amounts. The fair value of Current and Long-term debt was estimated based on rates offered to the Company at that time for debt of the same maturities. The Company has off-balance sheet exposures relating to certain financial guarantees and letters of credit. The fair value of these, which represents fees associated with obtaining the instruments, was nominal.  
 At March 31, 2021At December 31, 2020
 Carrying Carrying 
(Millions of dollars)AmountFair ValueAmountFair Value
Financial liabilities    
Current and long-term debt$(1,672.6)$(1,710.6)$(1,002.4)$(1,029.9)
v3.21.1
Contingencies
3 Months Ended
Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Contingencies Contingencies 
 
The Company’s operations and earnings have been and may be affected by various forms of governmental action. Examples of such governmental action include, but are by no means limited to: tax increases and retroactive tax claims; import and export controls; price controls; allocation of supplies of crude oil and petroleum products and other goods; laws and regulations intended for the promotion of safety and the protection and/or remediation of the environment; governmental support for other forms of energy; and laws and regulations affecting the Company’s relationships with employees, suppliers, customers, stockholders and others. Because governmental actions are often motivated by political considerations, may be taken without full consideration of their consequences, and may be taken in response to actions of other governments, it is not practical to attempt to predict the likelihood of such actions, the form the actions may take or the effect such actions may have on the Company.
 
ENVIRONMENTAL MATTERS AND LEGAL MATTERS — Murphy USA is subject to numerous federal, state and local laws and regulations dealing with the environment. Violation of such environmental laws, regulations and permits can result in the imposition of significant civil and criminal penalties, injunctions and other sanctions. A discharge of hazardous substances into the environment could, to the extent such event is not insured, subject the Company to substantial expense, including both the cost to comply with applicable regulations and claims by neighboring landowners and other third parties for any personal injury, property damage and other losses that might result.
 
The Company currently owns or leases, and has in the past owned or leased, properties at which hazardous substances have been or are being handled. Although the Company believes it has used operating and disposal practices that were standard in the industry at the time, hazardous substances may have been disposed of or released on or under the properties owned or leased by the Company or on or under other locations where they have been taken for disposal. In addition, many of these properties have been operated by third parties whose management of hazardous substances was not under the Company’s control. Under existing laws, the Company could be required to remediate contaminated property (including contaminated groundwater) or to perform remedial actions to prevent future contamination. Certain of these contaminated properties are in various stages of negotiation, investigation, and/or cleanup, and the Company is investigating the extent of any related liability and the availability of applicable defenses. With the sale of the U.S. refineries in 2011, Murphy Oil retained certain liabilities related to environmental matters. Murphy Oil also obtained insurance covering certain levels of environmental exposures. The Company believes costs related to these sites will not have a material adverse effect on Murphy USA’s net income, financial condition or liquidity in a future period.

Certain environmental expenditures are likely to be recovered by the Company from other sources, primarily environmental funds maintained by certain states. Since no assurance can be given that future recoveries from other sources will occur, the Company has not recorded a benefit for likely recoveries at March 31, 2021, however certain jurisdictions provide reimbursement for these expenses which have been considered in recording the net exposure.
 
The U.S. Environmental Protection Agency (EPA) currently considers the Company a Potentially Responsible Party (PRP) at one Superfund site. The potential total cost to all parties to perform necessary remedial work at this site may be substantial. However, based on current negotiations and available information, the Company believes that it is a de minimis party as to ultimate responsibility at the Superfund site. Accordingly, the Company has not recorded a liability for remedial costs at the Superfund site at March 31, 2021. The Company could be required to bear a pro rata share of costs attributable to nonparticipating PRPs or could be assigned additional responsibility for remediation at this site or other Superfund sites. The Company believes that its share of the ultimate costs to clean-up this site will be immaterial and will not have a material adverse effect on its net income, financial condition or liquidity in a future period.
Based on information currently available to the Company, the amount of future remediation costs to be incurred to address known contamination sites is not expected to have a material adverse effect on the Company’s future net income, cash flows or liquidity. However, there is the possibility that additional environmental expenditures could be required to address contamination, including as a result of discovering additional contamination or the imposition of new or revised requirements applicable to known contamination.
 
Other than as noted above, Murphy USA is engaged in a number of other legal proceedings, all of which the Company considers routine and incidental to its business. Based on information currently available to the Company, the ultimate resolution of those other legal matters is not expected to have a material adverse effect on the Company’s net income, financial condition or liquidity in a future period.

INSURANCE — The Company maintains insurance coverage at levels that are customary and consistent with industry standards for companies of similar size. Murphy USA maintains statutory workers compensation insurance with a deductible of $1.0 million per occurrence, general liability insurance with a self-insured retention of $3.0 million per occurrence, and auto liability insurance with a deductible of $0.3 million per occurrence. As of March 31, 2021, there were a number of outstanding claims that are of a routine nature. The estimated incurred but unpaid liabilities relating to these claims are included in Trade account payables and accrued liabilities on the Consolidated Balance Sheets. While the ultimate outcome of these claims cannot presently be determined, management believes that the accrued liability of $37.0 million will be sufficient to cover the related liability for all insurance claims and that the ultimate disposition of these claims will have no material effect on the Company’s financial position and results of operations.
 
The Company has obtained insurance coverage as appropriate for the business in which it is engaged, but may incur losses that are not covered by insurance or reserves, in whole or in part, and such losses could adversely affect our results of operations and financial position.
 
TAX MATTERS — Murphy USA is subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, indirect taxes (excise/duty, sales/use and gross receipts taxes), payroll taxes, franchise taxes, withholding taxes and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future. Many of these liabilities are subject to periodic audits by the respective taxing authority. Subsequent changes to our tax liabilities because of these audits may subject us to interest and penalties.

OTHER MATTERS — In the normal course of its business, the Company is required under certain contracts with various governmental authorities and others to provide financial guarantees or letters of credit that may be drawn upon if the Company fails to perform under those contracts. At March 31, 2021, the Company had contingent liabilities of $13.8 million on outstanding letters of credit. The Company has not accrued a liability in its balance sheet related to these financial guarantees and letters of credit because it is believed that the likelihood of having these drawn is remote.
v3.21.1
Lease Accounting
3 Months Ended
Mar. 31, 2021
Leases [Abstract]  
Lease Accounting Lease AccountingThe 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 year to 35 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 station 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 as well as subleases under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is immaterial.

Lessee —We lease land for 392 stations, one terminal, an office building, a hangar and various equipment. Our lease agreements do not contain any material residual value guarantees and approximately 102 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)ClassificationMarch 31,
2021
December 31,
2020
Assets
Operating (Right-of-use)Operating lease right-of-use assets$395.6 $147.7 
Finance
Property, plant, and equipment, at cost, less accumulated depreciation of $5.0 at March 31, 2021 and $2.8 at December 31, 2020
137.3 2.6 
Total leased assets$532.9 $150.3 
Liabilities
Current
     OperatingTrade accounts payable and accrued liabilities$17.0 $7.8 
     FinanceCurrent maturities of long-term debt 10.2 1.2 
Noncurrent
     OperatingNon current operating lease liabilities382.3 142.5 
     FinanceLong-term debt, including capitalized lease obligations127.2 0.9 
Total lease liabilities$536.7 $152.4 

Lease Cost:
Three Months Ended
March 31,
(Millions of dollars)Classification20212020
Operating lease costStation and other operating expenses$8.9 $3.9 
Finance lease cost
Amortization of leased assetsDepreciation & amortization expense2.6 0.3 
Interest on lease liabilitiesInterest expense1.4 — 
Net lease costs$12.9 $4.2 
Cash flow information:
Three Months Ended
March 31,
(Millions of dollars)20212020
Cash paid for amounts included in the measurement of liabilities
   Operating cash flows from operating leases$8.2 $3.7 
   Operating cash flows from finance leases$1.4 $— 
   Financing cash flows from finance leases$1.8 $0.4 


Maturity of Lease Liabilities at March 31, 2021:
(Millions of dollars)Operating leasesFinance leases
2021$30.9 $14.1 
202241.0 18.0 
202340.0 16.7 
202439.7 15.2 
202539.3 14.5 
After 2025468.0 148.9 
Total lease payments658.9 227.4 
 less: interest259.6 90.0 
Present value of lease liabilities$399.3 $137.4 

Lease Term and Discount Rate:
Three Months Ended
March 31,
2021
Weighted average remaining lease term (years)
   Finance leases14.9
   Operating leases18.0
Weighted average discount rate
    Finance leases5.2 %
   Operating leases6.0 %
Lease Accounting Lease AccountingThe 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 year to 35 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 station 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 as well as subleases under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is immaterial.

Lessee —We lease land for 392 stations, one terminal, an office building, a hangar and various equipment. Our lease agreements do not contain any material residual value guarantees and approximately 102 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)ClassificationMarch 31,
2021
December 31,
2020
Assets
Operating (Right-of-use)Operating lease right-of-use assets$395.6 $147.7 
Finance
Property, plant, and equipment, at cost, less accumulated depreciation of $5.0 at March 31, 2021 and $2.8 at December 31, 2020
137.3 2.6 
Total leased assets$532.9 $150.3 
Liabilities
Current
     OperatingTrade accounts payable and accrued liabilities$17.0 $7.8 
     FinanceCurrent maturities of long-term debt 10.2 1.2 
Noncurrent
     OperatingNon current operating lease liabilities382.3 142.5 
     FinanceLong-term debt, including capitalized lease obligations127.2 0.9 
Total lease liabilities$536.7 $152.4 

Lease Cost:
Three Months Ended
March 31,
(Millions of dollars)Classification20212020
Operating lease costStation and other operating expenses$8.9 $3.9 
Finance lease cost
Amortization of leased assetsDepreciation & amortization expense2.6 0.3 
Interest on lease liabilitiesInterest expense1.4 — 
Net lease costs$12.9 $4.2 
Cash flow information:
Three Months Ended
March 31,
(Millions of dollars)20212020
Cash paid for amounts included in the measurement of liabilities
   Operating cash flows from operating leases$8.2 $3.7 
   Operating cash flows from finance leases$1.4 $— 
   Financing cash flows from finance leases$1.8 $0.4 


Maturity of Lease Liabilities at March 31, 2021:
(Millions of dollars)Operating leasesFinance leases
2021$30.9 $14.1 
202241.0 18.0 
202340.0 16.7 
202439.7 15.2 
202539.3 14.5 
After 2025468.0 148.9 
Total lease payments658.9 227.4 
 less: interest259.6 90.0 
Present value of lease liabilities$399.3 $137.4 

Lease Term and Discount Rate:
Three Months Ended
March 31,
2021
Weighted average remaining lease term (years)
   Finance leases14.9
   Operating leases18.0
Weighted average discount rate
    Finance leases5.2 %
   Operating leases6.0 %
Lease Accounting Lease AccountingThe 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 year to 35 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 station 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 as well as subleases under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is immaterial.

Lessee —We lease land for 392 stations, one terminal, an office building, a hangar and various equipment. Our lease agreements do not contain any material residual value guarantees and approximately 102 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)ClassificationMarch 31,
2021
December 31,
2020
Assets
Operating (Right-of-use)Operating lease right-of-use assets$395.6 $147.7 
Finance
Property, plant, and equipment, at cost, less accumulated depreciation of $5.0 at March 31, 2021 and $2.8 at December 31, 2020
137.3 2.6 
Total leased assets$532.9 $150.3 
Liabilities
Current
     OperatingTrade accounts payable and accrued liabilities$17.0 $7.8 
     FinanceCurrent maturities of long-term debt 10.2 1.2 
Noncurrent
     OperatingNon current operating lease liabilities382.3 142.5 
     FinanceLong-term debt, including capitalized lease obligations127.2 0.9 
Total lease liabilities$536.7 $152.4 

Lease Cost:
Three Months Ended
March 31,
(Millions of dollars)Classification20212020
Operating lease costStation and other operating expenses$8.9 $3.9 
Finance lease cost
Amortization of leased assetsDepreciation & amortization expense2.6 0.3 
Interest on lease liabilitiesInterest expense1.4 — 
Net lease costs$12.9 $4.2 
Cash flow information:
Three Months Ended
March 31,
(Millions of dollars)20212020
Cash paid for amounts included in the measurement of liabilities
   Operating cash flows from operating leases$8.2 $3.7 
   Operating cash flows from finance leases$1.4 $— 
   Financing cash flows from finance leases$1.8 $0.4 


Maturity of Lease Liabilities at March 31, 2021:
(Millions of dollars)Operating leasesFinance leases
2021$30.9 $14.1 
202241.0 18.0 
202340.0 16.7 
202439.7 15.2 
202539.3 14.5 
After 2025468.0 148.9 
Total lease payments658.9 227.4 
 less: interest259.6 90.0 
Present value of lease liabilities$399.3 $137.4 

Lease Term and Discount Rate:
Three Months Ended
March 31,
2021
Weighted average remaining lease term (years)
   Finance leases14.9
   Operating leases18.0
Weighted average discount rate
    Finance leases5.2 %
   Operating leases6.0 %
v3.21.1
Business Segment
3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Business Segment Business Segment
 
The Company's operations have one reportable segment which is Marketing.  The operations include the sale of retail motor fuel products and convenience merchandise along with the wholesale and bulk sale capabilities of our Product Supply and Wholesale ("PS&W") group. As the primary purpose of the PS&W group is to support our retail operations and provide fuel for their daily operation, the bulk and wholesale fuel sales are secondary to the support functions performed by these groups. As such, they are all treated as one segment for reporting purposes as they sell the same products. This Marketing segment contains essentially all of the revenue generating functions of the Company. Results not included in the reportable segment include Corporate and Other Assets. Net settlement proceeds from litigation are included in Corporate and other assets operating income. The reportable segment was determined based on information reviewed by the Chief Operating Decision Maker (CODM).
 
  Three Months Ended
  March 31, 2021March 31, 2020
 Total Assets atExternal RevenuesIncome (Loss)External RevenuesIncome (Loss)
(Millions of dollars)March 31, 2021
Marketing$3,567.3 $3,537.1 $80.4 $3,184.7 $100.9 
Corporate and other assets413.3 — (25.1)0.1 (11.6)
Total$3,980.6 $3,537.1 $55.3 $3,184.8 $89.3 
v3.21.1
Description of Business and Basis of Presentation (Policies)
3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation In preparing the financial statements of Murphy USA in conformity with accounting principles generally accepted in the United States, management has made a number of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results may differ from these estimates.
Accounting Policies Related to the Acquisition of QuickChek, Business Combinations The purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred.
Accounting Policies Related to the Acquisition of QuickChek, Goodwill and Intangible Assets Goodwill represents the excess of the aggregate of the consideration transferred over the net assets acquired and liabilities assumed and is tested annually for impairment, or more frequently if there are indicators of impairment. Acquired finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, and are reviewed for impairment when events or circumstances indicate that the asset group to which the intangible assets belong might be impaired. The Company revises the estimated remaining useful life of these assets when events or changes in circumstances warrant a revision. If the Company revises the useful life, the unamortized balance is amortized over the use life on a prospective basis. Indefinite-lived intangibles are tested annually for impairment, or more often if indicators warrant.
Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting". This standard included optional guidance for a limited period of time to help ease the burden in accounting for the effects of reference rate reform. The new standard is effective for all entities through December 31, 2022. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements.
Revenue Recognition
Revenue is recognized when obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our petroleum products, convenience merchandise, Renewable Identification Numbers ("RINs") and other assets to our third-party customers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Excise and sales tax that we collect where we have determined we are the principal in the transaction have been recorded as revenue on a jurisdiction-by-jurisdiction basis.

The Company enters into buy/sell and similar arrangements when petroleum products are held at one location but are needed at a different location. The Company often pays or receives funds related to the buy/sell arrangements based on location or quality differences. The Company continues to account for these transactions as non-monetary exchanges under existing accounting guidance and typically reports these on a net basis in the Consolidated Statements of Income.
Petroleum product sales (at retail). For our retail store locations, the revenue related to petroleum product sales is recognized as the fuel is pumped to our customers. The transaction price at the pump typically includes some portion of sales or excise taxes as levied in the respective jurisdictions. Those taxes that are collected for remittance to governmental entities on a pass through basis are not recognized as revenue and they are recorded to a liability account until they are paid. Our customers typically use a mixture of cash, checks, credit cards and debit cards to pay for our products as they are received. We have accounts receivable from the various credit/debit card providers at any point in time related to product sales made on credit cards and debit cards. These receivables are typically collected in two to seven days, depending on the terms with the particular credit/debit card providers. Payment fees retained by the credit/debit card providers are recorded as station and other operating expenses.

Petroleum product sales (at wholesale). Our sales of petroleum products at wholesale are generally recorded as revenue when the deliveries have occurred and legal ownership of the product has transferred to the customer. Title transfer for bulk refined product sales typically occurs at pipeline custody points and upon trucks loading at product terminals. For bulk pipeline sales, we record receivables from customers that are generally collected within a week from custody transfer date. For our rack product sales, the majority of our customers' accounts are drafted by us within 10 days from product transfer.

Merchandise sales. For our retail store locations, the revenue related to merchandise sales is recognized as the customer completes their purchase at our locations. The transaction price typically includes some portion of sales tax as levied in the respective jurisdictions. Those taxes that are collected for remittance to governmental entities on a pass through basis are not recognized as revenue and they are recorded to a liability account until they are paid. As noted above, a mixture of payment types are used for these revenues and the same terms for credit/debit card receivables are realized.

The most significant judgment with respect to merchandise sales revenue is determining whether we are the principal or agent for some categories of merchandise such as lottery tickets, lotto tickets, newspapers and other small categories of merchandise. For scratch-off lottery tickets, we have determined we are the principal in the majority of the jurisdictions and therefore we record those sales on a gross basis. We have some categories of merchandise (such as lotto tickets) where we are the agent and the revenues recorded for those transactions are our net commission only.

The Company offers a loyalty program through its Murphy USA, Murphy Express, and QuickChek branded retail locations. The customers earn rewards based on their spending or other promotional activities. This program creates a performance obligation which requires us to defer a portion of sales revenue to the loyalty program participants until they redeem their rewards. The rewards may be redeemed for free or discounted merchandise or cash discounts at all stores and on fuel purchases only at Murphy USA and Murphy Express stores. Earned rewards expire after an account is inactive for a period of 90 days at Murphy USA and Murphy Express, while certain QuickChek rewards require use within the month. We recognize loyalty revenue when a customer redeems an earned reward. Deferred revenue associated with both rewards program are included in Trade accounts payable and accrued liabilities in our Consolidated Balance Sheet. The deferred revenue balances at March 31, 2021 and December 31, 2020 were immaterial.

RINs sales. For the sale of RINs, we recognize revenue when the RIN is transferred to the counter-party and the sale is completed. Receivables from our counter-parties related to the RIN sales are typically collected within five days of the sale.

Other revenues. Items reported as other operating revenues include collection allowances for excise and sales tax and other miscellaneous items and are recognized as revenue when the transaction is completed.
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 year to 35 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 station 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 as well as subleases under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is immaterial.
Lessee —We lease land for 392 stations, one terminal, an office building, a hangar and various equipment. Our lease agreements do not contain any material residual value guarantees and approximately 102 sites leased from Walmart contain restrictive covenants, though the restrictions are deemed to have an immaterial impact.
v3.21.1
Revenues (Tables)
3 Months Ended
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following tables disaggregate our revenues by major source for the three months ended March 31, 2021 and 2020, respectively:

Three Months Ended March 31, 2021Three Months Ended March 31, 2020
(Millions of dollars)MarketingCorporate and Other AssetsConsolidatedMarketingCorporate and Other AssetsConsolidated
Petroleum product sales (at retail) 1
$2,384.8 — $2,384.8 $2,246.2 $— $2,246.2 
Petroleum product sales (at wholesale)251.0 — 251.0 234.0 — 234.0 
Total petroleum product sales2,635.8 — 2,635.8 2,480.2 — 2,480.2 
Merchandise sales833.2 — 833.2 687.5 — 687.5 
Other operating revenues:
RINs66.7 — 66.7 15.5 — 15.5 
Other revenues 2
1.4 — 1.4 1.5 0.1 1.6 
Total revenues$3,537.1 $— $3,537.1 $3,184.7 $0.1 $3,184.8 


1 Includes excise and sales taxes that remain eligible for inclusion under Topic 606
2 Primarily includes collection allowance on excise and sales taxes and other miscellaneous items
v3.21.1
Inventories (Tables)
3 Months Ended
Mar. 31, 2021
Inventory Disclosure [Abstract]  
Summary of Inventory
Inventories consisted of the following:
(Millions of dollars)March 31,
2021
December 31,
2020
Finished products - First-In, First-Out ("FIFO") basis$300.0 $223.0 
Less: Last-In, First-Out ("LIFO") reserve - finished products(192.2)(101.3)
Finished products - LIFO basis107.8 121.7 
Store merchandise for resale169.0 152.0 
Materials and supplies6.2 5.4 
Total inventories$283.0 $279.1 
v3.21.1
Business Acquisition (Tables)
3 Months Ended
Mar. 31, 2021
Business Combinations [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table summarizes the preliminary fair value of the consideration transferred at the date of the acquisition, as well as the calculation of preliminary goodwill based on the excess of consideration over the provisional fair value of net assets acquired:

(Millions of dollars)
Cash paid to shareholders$642.9 
 Less cash and cash equivalents acquired0.8
Fair value of consideration transferred, net of cash acquired$642.1 
(Millions of dollars)
Assets acquired:
Accounts receivable$8.0 
Inventories24.3 
Prepaid expenses and other current assets5.6 
Property and equipment429.1 
Right of use assets238.1 
Other assets5.4 
Identified intangible assets106.8 
Liabilities assumed:
Accounts payable and accrued expenses(68.5)
Deferred income tax liabilities(59.5)
Asset retirement obligation(1.2)
Long term debt, including finance lease obligations(136.5)
Deferred credits and other liabilities(7.4)
Operating lease liabilities(238.5)
Net assets acquired305.7 
Goodwill336.4 
Fair value of consideration transferred, net of cash and cash equivalents acquired$642.1 
v3.21.1
Goodwill and Intangible Assets (Tables)
3 Months Ended
Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill