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 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 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 relate 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 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.

(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.

Results of Operations – Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Summary

Net income attributable to HF Sinclair stockholders for thethree months ended March 31, 2026, was $648 million ($3.56 per basic and diluted share), a $652 million increase compared to the Net loss attributable to HF Sinclair stockholdersof $4 million ($(0.02) per basic and diluted share) for thethree months ended March 31, 2025. The increase in Net income attributable to HF Sinclair stockholders was primarily driven by the Lower of cost or market inventory valuation adjustments in addition to improved adjusted refinery gross margins and adjusted renewables gross margins during the three months ended March 31, 2026. Lower of cost or market inventory valuation adjustments related to our Refining and Renewables segment inventories increased pre-tax earnings by $672 million forthe three months ended March 31, 2026 and increased pre-tax earnings by $117 million for the three months ended March 31, 2025. Adjusted renewables gross margins reflected narrower BOHO spreads and significant PTC benefits during the three months ended March 31, 2026, while no comparable benefit was recognized during the three months ended March 31, 2025. These favorable impacts were partially offset by a$188 million increase in Income tax expense.

Sales and Other Revenues

Sales and other revenues increased $753 million, or 12%, from $6,370 million for thethree months ended March 31, 2025, to $7,123 million for thethree months ended March 31, 2026, principally due to higher average refined product sales prices and higher sales volumes of refined products. Sales and other revenues included $208 million, $792 million, $653 million and $31 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for thethree months ended March 31, 2026. 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 thethree months ended March 31, 2025.

Cost of Materials and Other

Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, increased $504 million, or 9%, from $5,476 million for thethree months ended March 31, 2025, to $5,980 million for thethree months ended March 31, 2026, principally due to higher crude oil and feedstock costs and higher sales volumes of refined products. Within our Lubricants & Specialties segment, the FIFO impact was a benefit of $53 million and $8 million for the three months ended March 31, 2026 and 2025, respectively.

During the first quarter of 2026, we recognized a lower of cost or market inventory valuation adjustment benefit of $672 million compared to a benefit of $117 million during the first quarter of 2025.

Adjusted Refinery Gross Margin

Adjusted refinery gross margin per barrel sold increased$0.83, or 9%, from$9.12 for thethree months ended March 31, 2025, to$9.95 for thethree months ended March 31, 2026. The year-over-year increase was primarily driven by higher refinery margins in the West region.

Adjusted refinery gross margin per barrel excludes the cash effects of Lower of cost or market inventory valuation adjustments and Depreciation and amortization. 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 increased $28 million, or 5%, from $596 million for thethree months ended March 31, 2025, to $624 million for thethree months ended March 31, 2026, primarily due to a fuel-contamination incident at one of our product terminals in Colorado during the three months ended March 31, 2026 and higher contractor and other miscellaneous costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $11 million, or 11%, from $104 million for thethree months ended March 31, 2025, to $115 million for thethree months ended March 31, 2026, primarily due to an increase in professional services and other miscellaneous costs.

Earnings of Equity Method Investments

Earnings of equity method investments decreased $3 million, or 27% from $11 million for thethree months ended March 31, 2025, to $8 million for thethree months ended March 31, 2026, primarily due to the divestiture of our investment in Cheyenne Pipeline, LLC in thethree months ended March 31, 2025.

Depreciation and Amortization Expenses

Depreciation and amortization remained relatively consistent and was $229 million and $225 million for thethree months ended March 31, 2026 and 2025, respectively.

Interest Income

Interest income remained relatively flat and was $10 million and $9 million for thethree months ended March 31, 2026 and 2025, respectively.

Interest Expense

Interest expense was $41 million for the three months ended March 31, 2026, compared to $49 million for the three months ended March 31, 2025. This decrease was primarily due to unrealized losses on precious metals financing arrangements during the period.

Other Income (Expense), net

Other income (expense), netwas $15 million for three months ended March 31, 2026 compared to $(53) million for the three months ended March 31, 2025. During the three months ended March 31, 2026, we recognized a $14 million gain on settlement of precious metals. 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.

Income Taxes

For the three months ended March 31, 2026, Income tax expense of $189 million was recorded on pre-tax income of $839 million, compared to Income tax expense of $1 million on pre-tax loss of $1 million for the three months ended March 31, 2025. Theincrease was primarily due to higher pre-tax earnings year-over-year.