HF Sinclair Corp
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
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Jun 30, 2025 · Filed Jul 31, 2025
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Item 2. Results of Operations
RESULTS OF OPERATIONS
Financial Data
| Three Months Ended June 30, · Change from 2024 | ||||
|---|---|---|---|---|
| 2025 | 2024 | Change | Percent | |
| (In millions, except share and per share data) | ||||
| Sales and other revenues | $6,784 | $7,846 | $(1,062) | (14)% |
| Operating costs and expenses: | ||||
| Cost of sales: (1) | ||||
| Cost of materials and other (2) | 5,440 | 6,751 | (1,311) | (19)% |
| Lower of cost or market inventory valuation adjustments | 148 | (3) | 151 | (5,033)% |
| Operating expenses | 572 | 591 | (19) | (3)% |
| 6,160 | 7,339 | (1,179) | (16)% | |
| Selling, general and administrative expenses (1) | 114 | 104 | 10 | 10% |
| Depreciation and amortization | 226 | 206 | 20 | 10% |
| Other operating expenses, net | 9 | — | 9 | (100)% |
| Total operating costs and expenses | 6,509 | 7,649 | (1,140) | (15)% |
| Income from operations | 275 | 197 | 78 | 40% |
| Other income (expense): | ||||
| Earnings of equity method investments | 10 | 8 | 2 | 25% |
| Interest income | 7 | 19 | (12) | (63)% |
| Interest expense | (53) | (45) | (8) | 18% |
| Other income (expense), net | 7 | (1) | 8 | (800)% |
| (29) | (19) | (10) | 53% | |
| Income before income taxes | 246 | 178 | 68 | 38% |
| Income tax expense: | ||||
| Current | 32 | 28 | 4 | 14% |
| Deferred | 4 | (4) | 8 | (200)% |
| 36 | 24 | 12 | 50% | |
| Net income | 210 | 154 | 56 | 36% |
| Less: net income attributable to noncontrolling interest | 2 | 2 | — | —% |
| Net income attributable to HF Sinclair stockholders | $208 | $152 | $56 | 37% |
| Earnings per share attributable to HF Sinclair stockholders: | ||||
| Basic | $1.10 | $0.79 | $0.31 | 39% |
| Diluted | $1.10 | $0.79 | $0.31 | 39% |
| Average number of common shares outstanding (in thousands): | ||||
| Basic | 188,110 | 191,510 | (3,400) | (2)% |
| Diluted | 188,110 | 191,510 | (3,400) | (2)% |
| Six Months Ended June 30, · Change from 2024 | ||||
|---|---|---|---|---|
| 2025 | 2024 | Change | Percent | |
| (In millions, except share and per share data) | ||||
| Sales and other revenues | $13,154 | $14,873 | $(1,719) | (12)% |
| Operating costs and expenses: | ||||
| Cost of sales: (1) | ||||
| Cost of materials and other (2) | 10,916 | 12,677 | (1,761) | (14)% |
| Lower of cost or market inventory valuation adjustments | 31 | (223) | 254 | (114)% |
| Operating expenses | 1,168 | 1,199 | (31) | (3)% |
| 12,115 | 13,653 | (1,538) | (11)% | |
| Selling, general and administrative expenses (1) | 218 | 208 | 10 | 5% |
| Depreciation and amortization | 451 | 403 | 48 | 12% |
| Other operating expenses, net | 14 | — | 14 | (100)% |
| Total operating costs and expenses | 12,798 | 14,264 | (1,466) | (10)% |
| Income from operations | 356 | 609 | (253) | (42)% |
| Other income (expense): | ||||
| Earnings of equity method investments | 21 | 15 | 6 | 40% |
| Interest income | 16 | 41 | (25) | (61)% |
| Interest expense | (102) | (87) | (15) | 17% |
| Other income (expense), net | (46) | 2 | (48) | (2,400)% |
| (111) | (29) | (82) | 283% | |
| Income before income taxes | 245 | 580 | (335) | (58)% |
| Income tax expense: | ||||
| Current | 32 | 99 | (67) | (68)% |
| Deferred | 5 | 11 | (6) | (55)% |
| 37 | 110 | (73) | (66)% | |
| Net income | 208 | 470 | (262) | (56)% |
| Less: net income attributable to noncontrolling interest | 4 | 4 | — | —% |
| Net income attributable to HF Sinclair stockholders | $204 | $466 | $(262) | (56)% |
| Earnings per share attributable to HF Sinclair stockholders: | ||||
| Basic | $1.07 | $2.38 | $(1.31) | (55)% |
| Diluted | $1.07 | $2.38 | $(1.31) | (55)% |
| Average number of common shares outstanding (in thousands): | ||||
| Basic | 188,298 | 195,110 | (6,812) | (3)% |
| Diluted | 188,298 | 195,110 | (6,812) | (3)% |
(2) Exclusive of Lower of cost or market inventory valuation adjustments.
Balance Sheet Data
| June 30, 2025 | December 31, 2024 | |
|---|---|---|
| (In millions) | ||
| Cash and cash equivalents | $874 | $800 |
| Working capital | $2,332 | $1,971 |
| Total assets | $16,843 | $16,643 |
| Total debt | $2,677 | $2,638 |
| Total equity | $9,348 | $9,346 |
Other Financial Data
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| (In millions) | ||||
| Net cash provided by operating activities | $587 | $225 | $498 | $541 |
| Net cash used for investing activities | $(108) | $(82) | $(193) | $(173) |
| Net cash used for financing activities | $(159) | $(516) | $(239) | $(851) |
| Capital expenditures | $111 | $84 | $197 | $173 |
| EBITDA (1) | $516 | $408 | $778 | $1,025 |
(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 June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Mid-Continent Region | ||||
| Crude charge (BPD) (1) | 252,690 | 265,810 | 256,630 | 262,420 |
| Refinery throughput (BPD) (2) | 269,850 | 281,540 | 273,150 | 277,710 |
| Sales of produced refined products (BPD) (3) | 259,220 | 283,190 | 257,300 | 277,830 |
| Refinery utilization (4) | 97.2% | 102.2% | 98.7% | 100.9% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $2.29 | $0.66 | $1.76 | $3.98 |
| Adjusted refinery gross margin (7) | $15.52 | $8.39 | $11.61 | $9.41 |
| Less: operating expenses (8) | 6.28 | 5.90 | 6.69 | 6.15 |
| Adjusted refinery gross margin, less operating expenses | $9.24 | $2.49 | $4.92 | $3.26 |
| Operating expenses per throughput barrel (9) | $6.03 | $5.93 | $6.31 | $6.15 |
| Feedstocks: | ||||
| Sweet crude oil | 50% | 56% | 50% | 53% |
| Sour crude oil | 25% | 20% | 25% | 23% |
| Heavy sour crude oil | 19% | 19% | 19% | 19% |
| Other feedstocks and blends | 6% | 5% | 6% | 5% |
| Total | 100% | 100% | 100% | 100% |
| Sales of produced refined products: | ||||
| Gasolines | 51% | 54% | 52% | 53% |
| Diesel fuels | 32% | 30% | 31% | 31% |
| Jet fuels | 7% | 5% | 7% | 5% |
| Fuel oil | 1% | 1% | 1% | 1% |
| Asphalt | 3% | 4% | 3% | 4% |
| Base oils | 4% | 4% | 4% | 4% |
| LPG and other | 2% | 2% | 2% | 2% |
| Total | 100% | 100% | 100% | 100% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| West Region | ||||
| Crude charge (BPD) (1) | 363,240 | 368,920 | 354,430 | 357,410 |
| Refinery throughput (BPD) (2) | 390,790 | 395,070 | 380,500 | 382,240 |
| Sales of produced refined products (BPD) (3) | 389,990 | 383,060 | 378,280 | 371,030 |
| Refinery utilization (4) | 86.9% | 88.3% | 84.8% | 85.5% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $4.89 | $2.83 | $2.53 | $4.07 |
| Adjusted refinery gross margin (7) | $17.15 | $13.50 | $13.80 | $13.93 |
| Less: operating expenses (8) | 8.23 | 8.52 | 8.63 | 9.04 |
| Adjusted refinery gross margin, less operating expenses | $8.92 | $4.98 | $5.17 | $4.89 |
| Operating expenses per throughput barrel (9) | $8.21 | $8.26 | $8.58 | $8.77 |
| Feedstocks: | ||||
| Sweet crude oil | 30% | 37% | 31% | 35% |
| Sour crude oil | 47% | 41% | 45% | 42% |
| Heavy sour crude oil | 11% | 10% | 11% | 11% |
| Wax crude oil | 5% | 6% | 6% | 6% |
| Other feedstocks and blends | 7% | 6% | 7% | 6% |
| Total | 100% | 100% | 100% | 100% |
| Sales of produced refined products: | ||||
| Gasolines | 52% | 51% | 53% | 52% |
| Diesel fuels | 31% | 32% | 32% | 32% |
| Jet fuels | 6% | 6% | 6% | 6% |
| Fuel oil | 2% | 2% | 2% | 2% |
| Asphalt | 3% | 3% | 2% | 2% |
| LPG and other | 6% | 6% | 5% | 6% |
| Total | 100% | 100% | 100% | 100% |
| Consolidated | ||||
| Crude charge (BPD) (1) | 615,930 | 634,730 | 611,060 | 619,830 |
| Refinery throughput (BPD) (2) | 660,640 | 676,610 | 653,650 | 659,950 |
| Sales of produced refined products (BPD) (3) | 649,210 | 666,250 | 635,580 | 648,860 |
| Refinery utilization (4) | 90.8% | 93.6% | 90.1% | 91.4% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $3.85 | $1.90 | $2.22 | $4.03 |
| Adjusted refinery gross margin (7) | $16.50 | $11.33 | $12.91 | $11.99 |
| Less: operating expenses (8) | 7.45 | 7.41 | 7.85 | 7.80 |
| Adjusted refinery gross margin, less operating expenses | $9.05 | $3.92 | $5.06 | $4.19 |
| Operating expenses per throughput barrel (9) | $7.32 | $7.29 | $7.63 | $7.67 |
| Feedstocks: | ||||
| Sweet crude oil | 38% | 46% | 39% | 42% |
| Sour crude oil | 38% | 32% | 37% | 34% |
| Heavy sour crude oil | 14% | 13% | 14% | 14% |
| Wax crude oil | 3% | 3% | 3% | 4% |
| Other feedstocks and blends | 7% | 6% | 7% | 6% |
| Total | 100% | 100% | 100% | 100% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Consolidated | ||||
| Sales of produced refined products: | ||||
| Gasolines | 52% | 52% | 52% | 52% |
| Diesel fuels | 31% | 32% | 31% | 32% |
| Jet fuels | 6% | 6% | 7% | 6% |
| Fuel oil | 2% | 1% | 2% | 1% |
| Asphalt | 2% | 3% | 2% | 3% |
| Base oils | 2% | 2% | 2% | 2% |
| LPG and other | 5% | 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 June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Renewables | ||||
| Sales of produced renewables products (in thousand gallons) | 54,786 | 63,557 | 99,250 | 124,729 |
| Average per produced gallon sold: (1) | ||||
| Gross margin (2) | $(0.05) | $(0.21) | $(0.42) | $(0.42) |
| Adjusted renewables gross margin (3) | $0.36 | $0.44 | $0.27 | $0.30 |
| Less: operating expenses (4) | 0.39 | 0.39 | 0.45 | 0.41 |
| Adjusted renewables gross margin, less operating expenses | $(0.03) | $0.05 | $(0.18) | $(0.11) |
(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 June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Marketing | ||||
| Number of branded sites at period end (1) | 1,719 | 1,564 | 1,719 | 1,564 |
| Sales of refined products (in thousand gallons) | 337,147 | 357,137 | 631,012 | 678,147 |
| Average per gallon sold: (2) | ||||
| Gross margin (3) | $0.08 | $0.05 | $0.09 | $0.05 |
| Adjusted marketing gross margin (4) | $0.10 | $0.06 | $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 June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Lubricants & Specialties | ||||
| Sales of produced refined products (BPD) | 31,963 | 34,915 | 30,460 | 33,009 |
| Sales of produced refined products: | ||||
| Finished products | 51% | 48% | 52% | 48% |
| Base oils | 24% | 26% | 25% | 26% |
| Other | 25% | 26% | 23% | 26% |
| Total | 100% | 100% | 100% | 100% |
Midstream Segment Operating Data
The following table sets forth information about our midstream operations:
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Midstream | ||||
| Volumes (BPD) | ||||
| Pipelines: | ||||
| Affiliates—refined product pipelines | 145,940 | 175,824 | 154,916 | 170,226 |
| Affiliates—intermediate pipelines | 133,296 | 151,894 | 135,835 | 144,982 |
| Affiliates—crude pipelines | 383,374 | 426,036 | 404,018 | 433,745 |
| 662,610 | 753,754 | 694,769 | 748,953 | |
| Third parties—refined product pipelines | 42,458 | 41,596 | 41,113 | 39,159 |
| Third parties—crude pipelines | 189,918 | 200,348 | 194,445 | 181,420 |
| 894,986 | 995,698 | 930,327 | 969,532 | |
| Terminals and loading racks: (1) | ||||
| Affiliates | 969,791 | 1,031,238 | 980,271 | 800,448 |
| Third parties | 41,258 | 39,602 | 38,104 | 36,356 |
| 1,011,049 | 1,070,840 | 1,018,375 | 836,804 | |
| Total for pipelines and terminals assets (BPD) | 1,906,035 | 2,066,538 | 1,948,702 | 1,806,336 |
(1)Certain volumetric non-financial information has been recast to conform to current year presentation.
Results of Operations – Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Summary
Net income attributable to HF Sinclair stockholders for the three months ended June 30, 2025, was $208 million ($1.10 per basic and diluted share), a $56 million increase compared to Net income attributable to HF Sinclair stockholdersof $152 million ($0.79 per basic and diluted share) for the three months ended June 30, 2024. The increase in net income was principally driven by higher adjusted refinery gross margins in both the West and Mid-Continent regions, partially offset by lower refined product sales volumes. Lower of cost or market inventory valuation adjustments related to our Refining and Renewables segment inventories decreased pre-tax earnings by $148 million for the three months ended June 30, 2025 and increased pre-tax earnings by $3 million for the three months ended June 30, 2024. Adjusted refinery gross margins for the three months ended June 30, 2025 increased to $16.50 per produced barrel sold as compared to $11.33 for the three months ended June 30, 2024.
Sales and Other Revenues
Sales and other revenues decreased 14% from $7,846 million for the three months ended June 30, 2024, to $6,784 million for the three months ended June 30, 2025, principally due to lower refined product sales prices and volumes. Sales and other revenues included $131 million, $826 million, $641 million and $28 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended June 30, 2025. Sales and other revenues included $180 million, $943 million, $726 million and $27 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended June 30, 2024.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 19% from $6,751 million for the three months ended June 30, 2024, to $5,440 million for the three months ended June 30, 2025, principally due to lower crude oil costs and lower refined product sales volumes. Within our Lubricants & Specialties segment, the FIFO impact was a charge of $20 million and $14 million for the three months ended June 30, 2025 and 2024, respectively.
During the second quarter of 2025, we recognized a lower of cost or market inventory valuation adjustment charge of $148 million compared to a benefit of $3 million during the second quarter of 2024.
Adjusted Refinery Gross Margins
Adjusted refinery gross margin per produced barrel sold increased 46% from $11.33 for the three months ended June 30, 2024, to $16.50 for the three months ended June 30, 2025. The increase was due to lower crude oil and feedstock prices, partially offset by lower average sales prices per barrel during the three months ended June 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 3% from $591 million for the three months ended June 30, 2024, to $572 million for the three months ended June 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 increased 10% from $104 million for the three months ended June 30, 2024 to $114 million for the three months ended June 30, 2025, primarily due to changes in foreign currency exchange rates and higher costs related to information technology, partially offset by other miscellaneous costs.
Depreciation and Amortization Expenses
Depreciation and amortization increased 10% from $206 million for the three months ended June 30, 2024, to $226 million for the three months ended June 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 $7 million for the three months ended June 30, 2025, compared to $19 million for the three months ended June 30, 2024. The decrease in Interest income was primarily due to the decrease in average cash balance.
Interest Expense
Interest expense was $53 million for the three months ended June 30, 2025, compared to $45 million for the three months ended June 30, 2024. This increase was primarily due to unrealized losses on precious metals financing arrangements in the second quarter of 2025.
Income Taxes
For the three months ended June 30, 2025, Income tax expense of $36 million was recorded on pre-tax income of $246 million, compared to Income tax expense of $24 million on pre-tax income of $178 million for the three months ended June 30, 2024. For the three months ended June 30, 2025, our effective tax rate of 14.5% was lower than the statutory rate of 21%, primarily due to the relationship between pre-tax results and a discrete tax benefit associated with the revaluation of deferred tax liabilities from state tax changes enacted in the second quarter of 2025. For the three months ended June 30, 2024, our effective tax rate of 13.5% was lower than the statutory rate of 21%, primarily due to the relationship between pre-tax results and non-taxable permanent differences. Due to rounding of reported numbers, some amounts may not calculate exactly.
Results of Operations – Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Summary
Net income attributable to HF Sinclair stockholders for the six months ended June 30, 2025 was $204 million ($1.07 per basic and diluted share), a $262 million decrease compared to $466 million ($2.38 per basic and diluted share) for the six months ended June 30, 2024. The decrease in Net income attributable to HF Sinclair stockholders was principally driven by Lower of cost or market inventory adjustments. Lower of cost or market inventory adjustments related to our Refining and Renewables segments’ inventories decreased pre-tax earnings by $31 million for the six months ended June 30, 2025 and increased pre-tax earnings by $223 million for the six months ended June 30, 2024. Adjusted refinery gross margins for the six months ended June 30, 2025 increased to $12.91 per produced barrel sold as compared to $11.99 for the six months ended June 30, 2024.
Sales and Other Revenues
Sales and other revenues decreased 12% from $14,873 million for the six months ended June 30, 2024 to $13,154 million for the six months ended June 30, 2025, principally due to decreased refined product sales prices and lower refined product sales volumes. Sales and other revenues included $225 million, $1,512 million, $1,278 million, and $58 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the six months ended June 30, 2025. Sales and other revenues included $360 million, $1,718 million, $1,402 million, and $50 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the six months ended June 30, 2024.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 14% from $12,677 million for the six months ended June 30, 2024 to $10,916 million for the six months ended June 30, 2025, principally due to lower crude oil costs and lower refined product sales volumes. Within our Lubricants & Specialties segment, the FIFO impact was a charge of $12 million and $16 million for the six months ended June 30, 2025 and 2024, respectively.
During the six months ended June 30, 2025, we recognized a lower of cost or market inventory valuation adjustment charge of $31 million compared to a benefit of $223 million during the six months ended June 30, 2024.
Adjusted Refinery Gross Margins
Adjusted refinery gross margin per produced barrel sold increased 8% from $11.99 for the six months ended June 30, 2024 to $12.91 for the six months ended June 30, 2025. The increase was due to lower crude oil and feedstock prices, partially offset by lower average sales prices per barrel during the six months ended June 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 3% from $1,199 million for the six months ended June 30, 2024, to $1,168 million for the six months ended June 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 increased 5% from $208 million for the six months ended June 30, 2024, to $218 million for the six months ended June 30, 2025, primarily due to changes in foreign currency exchange rates and higher costs related to information technology, partially offset by other miscellaneous costs.
Depreciation and Amortization Expenses
Depreciation and amortization increased 12% from $403 million for the six months ended June 30, 2024, to $451 million for the six months ended June 30, 2025, principally due to additional capitalized refinery turnaround costs and capitalized improvement projects as compared to the prior period.
Interest Income
Interest income was $16 million for the six months ended June 30, 2025, compared to $41 million for the six months ended June 30, 2024. The decrease in Interest income was primarily due to the decrease in average cash balance.
Interest Expense
Interest expense was $102 million for the six months ended June 30, 2025, compared to $87 million for the six months ended June 30, 2024. This increase was primarily due to unrealized losses on precious metals financing arrangements during the period.
Other Income (Expense), Net
During the six months ended June 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 six months ended June 30, 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 11 “Debt” in the Notes to the Consolidated Financial Statements for additional information).
Income Taxes
For the six months ended June 30, 2025, Income tax expense of $37 million was recorded on pre-tax income of $245 million, compared to Income tax expense of $110 million on pre-tax income of $580 million for the six months ended June 30, 2024. For the six months ended June 30, 2025, our effective tax rate of 15.1% was lower than the statutory rate of 21%, primarily due to the relationship between pre-tax results and a discrete tax benefit associated with the revaluation of deferred tax liabilities from state tax changes enacted in the second quarter of 2025. For the six months ended June 30, 2024, our effective tax rate of 18.9% 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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