HF Sinclair Corp

RESULTS OF OPERATIONS

Financial Data

(2) Exclusive of Lower of cost or market inventory valuation adjustments.

Balance Sheet Data

Other Financial Data

(1)Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as Net income (loss) 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 (loss) or Income (loss) 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 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 (loss) 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 17 “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.

(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.

(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 renewable diesel produced at our renewable diesel units.

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.

(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:

Midstream Segment Operating Data

The following table sets forth information about our midstream operations:

(1)Certain volumetric non-financial information has been recast to conform to current year presentation.

Results of Operations – Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Summary

Net loss attributable to HF Sinclair stockholders for the three months ended March 31, 2025, was $4 million ($(0.02) per basic and diluted share), a $319 million decrease compared to Net income attributable to HF Sinclair stockholdersof $315 million ($1.57 per basic and diluted share) for the three months ended March 31, 2024. The decrease in net income was principally driven by lower adjusted refinery gross margins in both the West and Mid-Continent regions and lower refined product sales volumes. Lower of cost or market inventory valuation adjustments related to our refining and renewables Inventories increased pre-tax earnings by $117 million and $219 million for the three months ended March 31, 2025 and 2024, respectively. Adjusted refinery gross margins for the three months ended March 31, 2025 decreased to $9.12 per produced barrel sold as compared to $12.70 for the three months ended March 31, 2024.

Sales and Other Revenues

Sales and other revenues decreased 9.3% from $7,027 million for the three months ended March 31, 2024, to $6,370 million for the three months ended March 31, 2025, principally due to lower refined product sales prices and volumes. Sales and other revenues included $94 million, $686 million, $638 million and $29 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended March 31, 2025. Sales and other revenues included $179 million, $776 million, $676 million and $23 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended March 31, 2024.

Cost of Materials and Other

Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 8% from $5,927 million for the three months ended March 31, 2024, to $5,476 million for the three months ended March 31, 2025, principally due to lower crude oil costs and lower refined product sales volumes.

During the first quarter of 2025, we recognized a Lower of cost or market inventory valuation adjustment benefit of $117 million compared to $219 million during the first quarter of 2024. Within our Lubricants & Specialties segment, the FIFO impact was a benefit of $8 million for the three months ended March 31, 2025 compared to a charge of $1 million for the three months ended March 31, 2024.

Adjusted Refinery Gross Margins

Adjusted refinery gross margin per produced barrel sold decreased 28% from $12.70 for the three months ended March 31, 2024, to $9.12 for the three months ended March 31, 2025. The decrease was due to lower average sales prices per barrel, partially offset by lower crude oil and feedstock prices during the three months ended March 31, 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 2% from $607 million for the three months ended March 31, 2024, to $596 million for the three months ended March 31, 2025, primarily due to lower maintenance costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses remained relatively flat and were $104 million and $103 million for the three months ended March 31, 2025 and 2024, respectively.

Depreciation and Amortization Expenses

Depreciation and amortization increased 14% from $198 million for the three months ended March 31, 2024, to $225 million for the three months ended March 31, 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 $9 million for the three months ended March 31, 2025, compared to $22 million for the three months ended March 31, 2024. The decrease in Interest income was primarily due to the decrease in average cash balance.

Interest Expense

Interest expense was $49 million for the three months ended March 31, 2025, compared to $41 million for the three months ended March 31, 2024. This increase was primarily due to unrealized losses on precious metal financing arrangements in the first quarter of 2025.

Other Income (Expense), Net

During the three months ended March 31, 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 three months ended March 31, 2025, we recognized an early extinguishment loss on debt of $15 million, inclusive of unamortized discount and debt issuance costs, as a result of the tendering and redemption of certain debt (see Note 12 “Debt” in the Notes to the Consolidated Financial Statements for additional information).

Income Taxes

For the three months ended March 31, 2025, we recorded income tax expense of $1 million compared to $85 million for the three months ended March 31, 2024. This decrease was principally due to lower pre-tax income during the three months ended March 31, 2025, compared to the same period of 2024. Our effective tax rates were (205.2)% and 21.3% for the three months ended March 31, 2025 and 2024, respectively. Due to rounding of reported numbers, some amounts may not calculate exactly. The difference between the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2025 is primarily due to the relationship between pre-tax results, taxable permanent differences and discrete tax adjustments. The difference between the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2024 is primarily due to the relationship between pre-tax results and non-taxable permanent differences.