HF Sinclair Corp
For the period ended Sep 30, 2025. Filed Oct 30, 2025.
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Sep 30, 2025 · Filed Oct 30, 2025
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Item 2. Results of Operations
RESULTS OF OPERATIONS
Financial Data
| Three Months Ended September 30, · Change from 2024 | ||||
|---|---|---|---|---|
| 2025 | 2024 | Change | Percent | |
| (In millions, except share and per share data) | ||||
| Sales and other revenues | $7,251 | $7,207 | $44 | 1% |
| Operating costs and expenses: | ||||
| Cost of sales: (1) | ||||
| Cost of materials and other (2) | 5,692 | 6,158 | (466) | (8)% |
| Lower of cost or market inventory valuation adjustments | 66 | 202 | (136) | (67)% |
| Operating expenses | 590 | 630 | (40) | (6)% |
| 6,348 | 6,990 | (642) | (9)% | |
| Selling, general and administrative expenses (1) | 105 | 118 | (13) | (11)% |
| Depreciation and amortization | 230 | 210 | 20 | 10% |
| Other operating expenses, net | 4 | 10 | (6) | (60)% |
| Total operating costs and expenses | 6,687 | 7,328 | (641) | (9)% |
| Income (loss) from operations | 564 | (121) | 685 | (566)% |
| Other income (expense): | ||||
| Earnings of equity method investments | 6 | 8 | (2) | (25)% |
| Interest income | 11 | 18 | (7) | (39)% |
| Interest expense | (51) | (40) | (11) | 28% |
| Other income (expense), net | (2) | 4 | (6) | (150)% |
| (36) | (10) | (26) | 260% | |
| Income (loss) before income taxes | 528 | (131) | 659 | (503)% |
| Income tax expense (benefit): | ||||
| Current | 74 | 8 | 66 | 825% |
| Deferred | 49 | (65) | 114 | (175)% |
| 123 | (57) | 180 | (316)% | |
| Net income (loss) | 405 | (74) | 479 | (647)% |
| Less: net income attributable to noncontrolling interest | 2 | 2 | — | —% |
| Net income (loss) attributable to HF Sinclair stockholders | $403 | $(76) | $479 | (630)% |
| Earnings (loss) per share attributable to HF Sinclair stockholders: | ||||
| Basic | $2.15 | $(0.40) | $2.55 | (638)% |
| Diluted | $2.15 | $(0.40) | $2.55 | (638)% |
| Average number of common shares outstanding (in thousands): | ||||
| Basic | 186,499 | 189,840 | (3,341) | (2)% |
| Diluted | 186,499 | 189,840 | (3,341) | (2)% |
| Nine Months Ended September 30, · Change from 2024 | ||||
|---|---|---|---|---|
| 2025 | 2024 | Change | Percent | |
| (In millions, except share and per share data) | ||||
| Sales and other revenues | $20,405 | $22,080 | $(1,675) | (8)% |
| Operating costs and expenses: | ||||
| Cost of sales: (1) | ||||
| Cost of materials and other (2) | 16,608 | 18,835 | (2,227) | (12)% |
| Lower of cost or market inventory valuation adjustments | 97 | (20) | 117 | (585)% |
| Operating expenses | 1,758 | 1,828 | (70) | (4)% |
| 18,463 | 20,643 | (2,180) | (11)% | |
| Selling, general and administrative expenses (1) | 323 | 327 | (4) | (1)% |
| Depreciation and amortization | 681 | 613 | 68 | 11% |
| Other operating expenses, net | 18 | 10 | 8 | 80% |
| Total operating costs and expenses | 19,485 | 21,593 | (2,108) | (10)% |
| Income from operations | 920 | 487 | 433 | 89% |
| Other income (expense): | ||||
| Earnings of equity method investments | 27 | 24 | 3 | 13% |
| Interest income | 27 | 59 | (32) | (54)% |
| Interest expense | (153) | (127) | (26) | 20% |
| Other income (expense), net | (48) | 5 | (53) | (1,060)% |
| (147) | (39) | (108) | 277% | |
| Income before income taxes | 773 | 448 | 325 | 73% |
| Income tax expense (benefit): | ||||
| Current | 106 | 106 | — | —% |
| Deferred | 54 | (54) | 108 | (200)% |
| 160 | 52 | 108 | 208% | |
| Net income | 613 | 396 | 217 | 55% |
| Less: net income attributable to noncontrolling interest | 6 | 5 | 1 | 20% |
| Net income attributable to HF Sinclair stockholders | $607 | $391 | $216 | 55% |
| Earnings per share attributable to HF Sinclair stockholders: | ||||
| Basic | $3.21 | $2.01 | $1.20 | 60% |
| Diluted | $3.21 | $2.01 | $1.20 | 60% |
| Average number of common shares outstanding (in thousands): | ||||
| Basic | 187,688 | 193,341 | (5,653) | (3)% |
| Diluted | 187,688 | 193,341 | (5,653) | (3)% |
(2) Exclusive of Lower of cost or market inventory valuation adjustments.
Balance Sheet Data
| September 30, 2025 | December 31, 2024 | |
|---|---|---|
| (In millions) | ||
| Cash and cash equivalents | $1,451 | $800 |
| Working capital | $2,694 | $1,971 |
| Total assets | $17,264 | $16,643 |
| Total debt | $2,768 | $2,638 |
| Total equity | $9,495 | $9,346 |
Other Financial Data
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| (In millions) | ||||
| Net cash provided by operating activities | $809 | $709 | $1,307 | $1,250 |
| Net cash used for investing activities | $(148) | $(122) | $(341) | $(295) |
| Net cash used for financing activities | $(84) | $(228) | $(323) | $(1,079) |
| Capital expenditures | $121 | $124 | $318 | $297 |
| EBITDA (1) | $796 | $99 | $1,574 | $1,124 |
(1)Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as Net income attributable to HF Sinclair stockholders plus (i)Income tax expense, (ii)Interest expense, net of Interest income, and (iii)Depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to Net income or Income from operations as an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a financial indicator widely used by investors and analysts to measure our operating performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants. EBITDA presented above is reconciled to Net Income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Supplemental Segment Operating Data
Our operations are organized into five reportable segments, Refining, Renewables, Marketing, Lubricants & Specialties and Midstream. See Note 16 “Segment Information” in the Notes to Consolidated Financial Statements for additional information on our reportable segments.
Refining Segment Operating Data
The disaggregation of our refining geographic operating data is presented in two regions, Mid-Continent and West, to best reflect the economic drivers of our refining operations. The Mid-Continent region is comprised of the El Dorado and Tulsa refineries. The West region is comprised of the Puget Sound, Navajo, Woods Cross, Parco and Casper refineries. The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations. Adjusted refinery gross margin per produced barrel sold is total Refining segment gross margin plus Lower of cost or market inventory valuation adjustments, Depreciation and amortization and Operating expenses, divided by sales volumes of produced refined products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relates to inventory held at the end of the period. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Mid-Continent Region | ||||
| Crude charge (BPD) (1) | 280,240 | 263,170 | 264,580 | 262,670 |
| Refinery throughput (BPD) (2) | 296,220 | 279,210 | 280,920 | 278,210 |
| Sales of produced refined products (BPD) (3) | 281,040 | 274,870 | 265,300 | 276,830 |
| Refinery utilization (4) | 107.8% | 101.2% | 101.8% | 101.0% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $8.08 | $(3.91) | $4.01 | $1.35 |
| Adjusted refinery gross margin (7) | $17.50 | $9.38 | $13.71 | $9.40 |
| Less: operating expenses (8) | 6.20 | 6.56 | 6.52 | 6.28 |
| Adjusted refinery gross margin, less operating expenses | $11.30 | $2.82 | $7.19 | $3.12 |
| Operating expenses per throughput barrel (9) | $5.88 | $6.45 | $6.15 | $6.25 |
| Feedstocks: | ||||
| Sweet crude oil | 52% | 54% | 51% | 53% |
| Sour crude oil | 27% | 24% | 25% | 23% |
| Heavy sour crude oil | 16% | 16% | 18% | 18% |
| Other feedstocks and blends | 5% | 6% | 6% | 6% |
| Total | 100% | 100% | 100% | 100% |
| Sales of produced refined products: | ||||
| Gasolines | 50% | 50% | 51% | 52% |
| Diesel fuels | 32% | 31% | 32% | 31% |
| Jet fuels | 7% | 7% | 7% | 6% |
| Fuel oil | 1% | 1% | 1% | 1% |
| Asphalt | 4% | 5% | 3% | 4% |
| Base oils | 4% | 3% | 4% | 4% |
| LPG and other | 2% | 3% | 2% | 2% |
| Total | 100% | 100% | 100% | 100% |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| West Region | ||||
| Crude charge (BPD) (1) | 358,810 | 343,840 | 355,910 | 352,860 |
| Refinery throughput (BPD) (2) | 384,860 | 370,540 | 381,960 | 378,310 |
| Sales of produced refined products (BPD) (3) | 380,100 | 379,530 | 378,890 | 373,890 |
| Refinery utilization (4) | 85.8% | 82.3% | 85.1% | 84.4% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $9.30 | $(1.67) | $4.82 | $2.11 |
| Adjusted refinery gross margin (7) | $20.38 | $11.82 | $16.02 | $13.21 |
| Less: operating expenses (8) | 8.18 | 9.15 | 8.48 | 9.08 |
| Adjusted refinery gross margin, less operating expenses | $12.20 | $2.67 | $7.54 | $4.13 |
| Operating expenses per throughput barrel (9) | $8.08 | $9.37 | $8.41 | $8.97 |
| Feedstocks: | ||||
| Sweet crude oil | 33% | 34% | 32% | 34% |
| Sour crude oil | 44% | 44% | 45% | 43% |
| Heavy sour crude oil | 11% | 9% | 11% | 10% |
| Wax crude oil | 5% | 6% | 5% | 6% |
| Other feedstocks and blends | 7% | 7% | 7% | 7% |
| Total | 100% | 100% | 100% | 100% |
| Sales of produced refined products: | ||||
| Gasolines | 51% | 53% | 52% | 52% |
| Diesel fuels | 32% | 31% | 33% | 32% |
| Jet fuels | 6% | 6% | 6% | 6% |
| Fuel oil | 2% | 1% | 2% | 2% |
| Asphalt | 3% | 3% | 2% | 2% |
| LPG and other | 6% | 6% | 5% | 6% |
| Total | 100% | 100% | 100% | 100% |
| Consolidated | ||||
| Crude charge (BPD) (1) | 639,050 | 607,010 | 620,490 | 615,530 |
| Refinery throughput (BPD) (2) | 681,080 | 649,750 | 662,880 | 656,520 |
| Sales of produced refined products (BPD) (3) | 661,140 | 654,400 | 644,190 | 650,720 |
| Refinery utilization (4) | 94.3% | 89.5% | 91.5% | 90.8% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $8.78 | $(2.62) | $4.49 | $1.79 |
| Adjusted refinery gross margin (7) | $19.16 | $10.79 | $15.07 | $11.59 |
| Less: operating expenses (8) | 7.34 | 8.06 | 7.67 | 7.89 |
| Adjusted refinery gross margin, less operating expenses | $11.82 | $2.73 | $7.40 | $3.70 |
| Operating expenses per throughput barrel (9) | $7.12 | $8.12 | $7.45 | $7.82 |
| Feedstocks: | ||||
| Sweet crude oil | 42% | 42% | 40% | 42% |
| Sour crude oil | 36% | 36% | 37% | 34% |
| Heavy sour crude oil | 13% | 12% | 14% | 14% |
| Wax crude oil | 3% | 3% | 3% | 4% |
| Other feedstocks and blends | 6% | 7% | 6% | 6% |
| Total | 100% | 100% | 100% | 100% |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Consolidated | ||||
| Sales of produced refined products: | ||||
| Gasolines | 51% | 52% | 52% | 52% |
| Diesel fuels | 31% | 31% | 31% | 32% |
| Jet fuels | 7% | 7% | 7% | 6% |
| Fuel oil | 2% | 1% | 2% | 1% |
| Asphalt | 3% | 4% | 2% | 3% |
| Base oils | 2% | 1% | 2% | 2% |
| LPG and other | 4% | 4% | 4% | 4% |
| Total | 100% | 100% | 100% | 100% |
(1)Crude charge represents the barrels per day of crude oil processed at our refineries.
(2)Refinery throughput represents the barrels per day of crude and other refinery feedstocks input to the crude units and other conversion units at our refineries.
(3)Represents barrels sold of refined products produced at our refineries (including Asphalt and intersegment sales) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.
(4)Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 678,000 BPSD.
(5)Represents the average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(6)Gross margin represents total Refining segment Sales and other revenues less Cost of materials and other, Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization, divided by sales volumes of produced refined products.
(7)Adjusted refinery gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(8)Represents total Refining segment Operating expenses, exclusive of Depreciation and amortization, divided by sales volumes of produced refined products.
(9)Represents total Refining segment Operating expenses, exclusive of Depreciation and amortization, divided by refinery throughput.
Renewables Segment Operating Data
The following table sets forth information, including non-GAAP performance measures, about our renewables operations. Adjusted renewables gross margin per produced gallon sold is total Renewables segment gross margin plus Lower of cost or market inventory valuation adjustments, Depreciation and amortization and Operating expenses, divided by sales volumes of produced renewables products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to volumes in inventory at the end of the period. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Renewables | ||||
| Sales of produced renewables products (in thousand gallons) | 57,159 | 68,755 | 156,408 | 193,484 |
| Average per produced gallon sold: (1) | ||||
| Gross margin (2) | $(0.94) | $(0.32) | $(0.61) | $(0.38) |
| Adjusted renewables gross margin (3) | $0.18 | $0.41 | $0.24 | $0.34 |
| Less: operating expenses (4) | 0.39 | 0.36 | 0.43 | 0.39 |
| Adjusted renewables gross margin, less operating expenses | $(0.21) | $0.05 | $(0.19) | $(0.05) |
(1)Represents the average amount per produced gallon sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(2)Gross margin represents total Renewables segment Sales and other revenues less Cost of materials and other, Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization, divided by sales volumes of produced renewables products.
(3)Adjusted renewables gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(4)Represents total Renewables segment Operating expenses, exclusive of Depreciation and amortization, divided by sales volumes of produced renewables products.
Marketing Segment Operating Data
The following table sets forth information, including non-GAAP performance measures, about our marketing operations and includes our Sinclair branded fuel business. Adjusted marketing gross margin per gallon sold is total Marketing segment gross margin plus Depreciation and amortization, divided by sales volumes of marketing products. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Marketing | ||||
| Number of branded sites at period end (1) | 1,705 | 1,586 | 1,705 | 1,586 |
| Sales of refined products (in thousand gallons) | 360,482 | 365,036 | 991,494 | 1,043,183 |
| Average per gallon sold: (2) | ||||
| Gross margin (3) | $0.09 | $0.07 | $0.09 | $0.06 |
| Adjusted marketing gross margin (4) | $0.11 | $0.09 | $0.11 | $0.07 |
(1)Includes certain non-Sinclair branded sites.
(2)Represents the average amount per gallon sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(3)Gross margin represents total Marketing segment Sales and other revenues less Cost of materials and other and Depreciation and amortization, divided by sales volumes of marketing products.
(4)Adjusted marketing gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Lubricants & Specialties Segment Operating Data
The following table sets forth information about our lubricants and specialties operations.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Lubricants & Specialties | ||||
| Sales of produced refined products (BPD) | 32,008 | 32,914 | 30,981 | 32,977 |
| Sales of produced refined products: | ||||
| Finished products | 49% | 45% | 51% | 47% |
| Base oils | 26% | 27% | 25% | 27% |
| Other | 25% | 28% | 24% | 26% |
| Total | 100% | 100% | 100% | 100% |
Midstream Segment Operating Data
The following table sets forth information about our midstream operations.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Midstream | ||||
| Volumes (BPD) | ||||
| Pipelines: | ||||
| Affiliates—refined product pipelines | 141,617 | 156,346 | 150,434 | 165,566 |
| Affiliates—intermediate pipelines | 139,868 | 145,236 | 137,194 | 145,068 |
| Affiliates—crude pipelines | 464,323 | 459,273 | 424,426 | 442,317 |
| 745,808 | 760,855 | 712,054 | 752,951 | |
| Third parties—refined product pipelines | 37,754 | 39,190 | 39,981 | 39,170 |
| Third parties—crude pipelines | 195,994 | 240,496 | 194,882 | 201,256 |
| 979,556 | 1,040,541 | 946,917 | 993,377 | |
| Terminals and loading racks: (1) | ||||
| Affiliates | 1,045,066 | 1,019,229 | 1,002,107 | 1,030,624 |
| Third parties | 39,705 | 40,124 | 38,643 | 37,621 |
| 1,084,771 | 1,059,353 | 1,040,750 | 1,068,245 | |
| Total for pipelines and terminal assets (BPD) | 2,064,327 | 2,099,894 | 1,987,667 | 2,061,622 |
(1)Certain volumetric non-financial information has been recast to conform to current year presentation.
Results of Operations – Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Summary
Net income attributable to HF Sinclair stockholders for the three months ended September 30, 2025, was $403 million ($2.15 per basic and diluted share), a $479 million increase compared to Net loss attributable to HF Sinclair stockholdersof $76 million ($(0.40) per basic and diluted share) for the three months ended September 30, 2024. The increase in net income was principally driven by higher adjusted refinery gross margins in both the West and Mid-Continent regions. Adjusted refinery gross margins for the three months ended September 30, 2025 increased to $19.16 per produced barrel sold as compared to $10.79 for the three months ended September 30, 2024, primarily due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the three months ended September 30, 2025, partially offset by lower average sales prices per barrel during the three months ended September 30, 2025. Lower of cost or market inventory valuation adjustments related to our Refining and Renewables segment inventories decreased pre-tax earnings by $66 million and $202 million for the three months ended September 30, 2025 and 2024, respectively.
Sales and Other Revenues
Sales and other revenues increased 1% from $7,207 million for the three months ended September 30, 2024, to $7,251 million for the three months ended September 30, 2025, principally due to higher refined product sales volumes. Sales and other revenues included $163 million, $898 million, $654 million and $29 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended September 30, 2025. Sales and other revenues included $160 million, $950 million, $683 million and $27 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended September 30, 2024.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 8% from $6,158 million for the three months ended September 30, 2024 to $5,692 million for the three months ended September 30, 2025, principally due to lower crude oil costs and the grant of small refinery RINs waivers during the three months ended September 30, 2025, partially offset by higher refined product sales volumes. Within our Lubricants & Specialties segment, the FIFO impact was a benefit of $2 million and a charge of $27 million for the three months ended September 30, 2025 and 2024, respectively.
During the third quarter of 2025, we recognized a lower of cost or market inventory valuation adjustment charge of $66 million compared to a charge of $202 million during the third quarter of 2024.
Adjusted Refinery Gross Margin
Adjusted refinery gross margin per produced barrel sold increased 78% from $10.79 for the three months ended September 30, 2024, to $19.16 for the three months ended September 30, 2025. The increase was due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the three months ended September 30, 2025, partially offset by lower average sales prices per barrel during the three months ended September 30, 2025. Adjusted refinery gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Operating Expenses
Operating expenses decreased 6% from $630 million for the three months ended September 30, 2024, to $590 million for the three months ended September 30, 2025, primarily due to lower maintenance and other miscellaneous costs, partially offset by higher natural gas costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased 11% from $118 million for the three months ended September 30, 2024, to $105 million for the three months ended September 30, 2025, primarily due to a decrease in professional services and other miscellaneous costs.
Depreciation and Amortization Expenses
Depreciation and amortization increased 10% from $210 million for the three months ended September 30, 2024, to $230 million for the three months ended September 30, 2025, principally due to amortization attributable to additional capitalized refinery turnaround costs as compared to the prior period.
Interest Income
Interest income was $11 million for the three months ended September 30, 2025, compared to $18 million for the three months ended September 30, 2024. The decrease in Interest income was primarily due to the decrease in average cash balance.
Interest Expense
Interest expense was $51 million for the three months ended September 30, 2025, compared to $40 million for the three months ended September 30, 2024. This increase was primarily due to unrealized losses on precious metals financing arrangements in the third quarter of 2025.
Income Taxes
For the three months ended September 30, 2025, Income tax expense of $123 million was recorded on pre-tax income of $528 million, compared to an Income tax benefit of $57 million on pre-tax loss of $131 million for the three months ended September 30, 2024. For the three months ended September 30, 2025, our effective tax rate of 23.3% was higher than the statutory rate of 21%, primarily due to the relationship between pre-tax results and the effects of state and local income tax. For the three months ended September 30, 2024, our effective tax rate of 43.6% was higher than the statutory rate of 21% primarily due to the benefit of non-taxable permanent differences relative to the pre-tax loss for the quarter. Due to rounding of reported numbers, some amounts may not calculate exactly.
Results of Operations – Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Summary
Net income attributable to HF Sinclair stockholders for the nine months ended September 30, 2025, was $607 million ($3.21 per basic and diluted share), a $216 million increase compared to $391 million ($2.01 per basic and diluted share) for the nine months ended September 30, 2024. The increase in Net income attributable to HF Sinclair stockholders was principally driven by higher adjusted refinery gross margins in both the West and Mid-Continent regions. Adjusted refinery gross margins for the nine months ended September 30, 2025 increased to $15.07 per produced barrel sold as compared to $11.59 for the nine months ended September 30, 2024, primarily due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the nine months ended September 30, 2025, partially offset by lower average sales prices per barrel during the nine months ended September 30, 2025. Lower of cost or market inventory valuation adjustments related to our Refining and Renewables segments’ inventories decreased pre-tax earnings by $97 million for the nine months ended September 30, 2025 and increased pre-tax earnings by $20 million for the nine months ended September 30, 2024.
Sales and Other Revenues
Sales and other revenues decreased 8% from $22,080 million for the nine months ended September 30, 2024, to $20,405 million for the nine months ended September 30, 2025, principally due to decreased refined product sales prices and lower refined product sales volumes. Sales and other revenues included $388 million, $2,410 million, $1,932 million, and $87 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the nine months ended September 30, 2025. Sales and other revenues included $520 million, $2,668 million, $2,084 million, and $78 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the nine months ended September 30, 2024.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 12% from $18,835 million for the nine months ended September 30, 2024, to $16,608 million for the nine months ended September 30, 2025, principally due to lower crude oil costs, lower refined product sales volumes and the grant of small refinery RINs waivers during the nine months ended September 30, 2025. Within our Lubricants & Specialties segment, the FIFO impact was a charge of $10 million and $42 million for the nine months ended September 30, 2025 and 2024, respectively.
During the nine months ended September 30, 2025, we recognized a lower of cost or market inventory valuation adjustment charge of $97 million compared to a benefit of $20 million during the nine months ended September 30, 2024.
Adjusted Refinery Gross Margins
Adjusted refinery gross margin per produced barrel sold increased 30% from $11.59 for the nine months ended September 30, 2024, to $15.07 for the nine months ended September 30, 2025. The increase was due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the nine months ended September 30, 2025, partially offset by lower average sales prices per barrel during the nine months ended September 30, 2025. Adjusted refinery gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Operating Expenses
Operating expenses decreased 4% from $1,828 million for the nine months ended September 30, 2024, to $1,758 million for the nine months ended September 30, 2025, primarily due to lower maintenance and other miscellaneous costs, partially offset by higher natural gas costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased 1% from $327 million for the nine months ended September 30, 2024, to $323 million for the nine months ended September 30, 2025.
Depreciation and Amortization Expenses
Depreciation and amortization increased 11% from $613 million for the nine months ended September 30, 2024, to $681 million for the nine months ended September 30, 2025, principally due to depreciation and amortization attributable to additional capitalized refinery turnaround costs and capitalized improvement projects as compared to the prior period.
Interest Income
Interest income was $27 million for the nine months ended September 30, 2025, compared to $59 million for the nine months ended September 30, 2024. The decrease in Interest income was primarily due to the decrease in average cash balance.
Interest Expense
Interest expense was $153 million for the nine months ended September 30, 2025, compared to $127 million for the nine months ended September 30, 2024. This increase was primarily due to unrealized losses on precious metals financing arrangements during the period.
Other Income (Expense), Net
During the nine months ended September 30, 2025, we assigned our 50% ownership interest in Cheyenne Pipeline, LLC to our joint venture partner in exchange for the cancellation of certain future commitments, resulting in a loss on sale of equity method investment of $40 million. Additionally, during the nine months ended September 30, 2025, we recognized an early extinguishment loss on debt of $24 million, inclusive of unamortized discount and debt issuance costs, as a result of the tendering and redemption of certain debt, and the termination of certain credit agreements (see Note 11 “Debt” in the Notes to the Consolidated Financial Statements for additional information).
Income Taxes
For the nine months ended September 30, 2025, Income tax expense of $160 million was recorded on pre-tax income of $773 million, compared to Income tax expense of $52 million on pre-tax income of $448 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, our effective tax rate of 20.7% was lower than the statutory rate of 21% primarily due to the relationship between pre-tax results and permanent differences and a discrete benefit associated with the revaluation of deferred tax liabilities from state tax law changes enacted in the second quarter of 2025. For the nine months ended September 30, 2024, our effective tax rate of 11.6% was lower than the statutory rate of 21% primarily due to the relationship between pre-tax results and non-taxable permanent differences.
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