HF Sinclair Corp
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
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Jun 30, 2026 · Filed Jul 30, 2026
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Item 2. Results of Operations
RESULTS OF OPERATIONS
Financial Data
| Three Months Ended June 30, · Change from 2025 | ||||
|---|---|---|---|---|
| 2026 | 2025 | Change | Percent | |
| (In millions, except share and per share data) | ||||
| Sales and other revenues | $10,390 | $6,784 | $3,606 | 53% |
| Operating costs and expenses: | ||||
| Cost of sales: (1) | ||||
| Cost of materials and other (2) | 8,133 | 5,440 | 2,693 | 50% |
| Lower of cost or market inventory valuation adjustments | 30 | 148 | (118) | (80)% |
| Operating expenses | 654 | 572 | 82 | 14% |
| 8,817 | 6,160 | 2,657 | 43% | |
| Selling, general and administrative expenses (1) | 130 | 114 | 16 | 14% |
| Depreciation and amortization | 228 | 226 | 2 | 1% |
| Other operating expenses, net | 47 | 9 | 38 | 422% |
| Total operating costs and expenses | 9,222 | 6,509 | 2,713 | 42% |
| Income from operations | 1,168 | 275 | 893 | 325% |
| Other income (expense): | ||||
| Earnings of equity method investments | 6 | 10 | (4) | (40)% |
| Interest income | 15 | 7 | 8 | 114% |
| Interest expense | (20) | (53) | 33 | (62)% |
| Other income, net | 3 | 7 | (4) | (57)% |
| 4 | (29) | 33 | NM | |
| Income before income taxes | 1,172 | 246 | 926 | 376% |
| Income tax expense: | ||||
| Current | 249 | 32 | 217 | 678% |
| Deferred | 30 | 4 | 26 | 650% |
| 279 | 36 | 243 | 675% | |
| Net income | 893 | 210 | 683 | 325% |
| Less: net income attributable to noncontrolling interests | 1 | 2 | (1) | (50)% |
| Net income attributable to HF Sinclair stockholders | $892 | $208 | $684 | 329% |
| Earnings per share attributable to HF Sinclair stockholders: | ||||
| Basic | $4.93 | $1.10 | $3.83 | 348% |
| Diluted | $4.93 | $1.10 | $3.83 | 348% |
| Average number of common shares outstanding (in thousands): | ||||
| Basic | 179,417 | 188,110 | (8,693) | (5)% |
| Diluted | 179,417 | 188,110 | (8,693) | (5)% |
| Six Months Ended June 30, 2026 · Change from 2025 | ||||
|---|---|---|---|---|
| 2026 | 2025 | Change | Percent | |
| (In millions, except per share data) | ||||
| Sales and other revenues | $17,513 | $13,154 | $4,359 | 33% |
| Operating costs and expenses: | ||||
| Cost of sales: (1) | ||||
| Cost of materials and other (2) | 14,113 | 10,916 | 3,197 | 29% |
| Lower of cost or market inventory valuation adjustments | (642) | 31 | (673) | NM |
| Operating expenses | 1,278 | 1,168 | 110 | 9% |
| 14,749 | 12,115 | 2,634 | 22% | |
| Selling, general and administrative expenses (1) | 245 | 218 | 27 | 12% |
| Depreciation and amortization | 457 | 451 | 6 | 1% |
| Other operating expenses, net | 47 | 14 | 33 | 236% |
| Total operating costs and expenses | 15,498 | 12,798 | 2,700 | 21% |
| Income from operations | 2,015 | 356 | 1,659 | 466% |
| Other income (expense): | ||||
| Earnings of equity method investments | 14 | 21 | (7) | (33)% |
| Interest income | 25 | 16 | 9 | 56% |
| Interest expense | (61) | (102) | 41 | (40)% |
| Other income (expense), net | 18 | (46) | 64 | NM |
| (4) | (111) | 107 | (96)% | |
| Income before income taxes | 2,011 | 245 | 1,766 | 721% |
| Income tax expense: | ||||
| Current | 345 | 32 | 313 | 978% |
| Deferred | 123 | 5 | 118 | 2,360% |
| 468 | 37 | 431 | 1,165% | |
| Net income | 1,543 | 208 | 1,335 | 642% |
| Less: net income attributable to noncontrolling interests | 3 | 4 | (1) | (25)% |
| Net income attributable to HF Sinclair stockholders | $1,540 | $204 | $1,336 | 655% |
| Earnings per share attributable to HF Sinclair stockholders: | ||||
| Basic | $8.48 | $1.07 | $7.41 | 693% |
| Diluted | $8.48 | $1.07 | $7.41 | 693% |
| Average number of common shares outstanding (in thousands): | ||||
| Basic | 180,032 | 188,298 | (8,266) | (4)% |
| Diluted | 180,032 | 188,298 | (8,266) | (4)% |
(2) Exclusive of Lower of cost or market inventory valuation adjustments.
Balance Sheet Data
| June 30, 2026 | December 31, 2025 | |
|---|---|---|
| (In millions) | ||
| Cash and cash equivalents | $2,262 | $978 |
| Working capital | $3,639 | $2,327 |
| Total assets | $18,994 | $16,510 |
| Total debt | $2,772 | $2,769 |
| Total equity | $10,350 | $9,249 |
Other Financial Data
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| (In millions) | ||||
| Net cash provided by operating activities | $1,510 | $587 | $1,967 | $498 |
| Net cash used for investing activities | $(119) | $(108) | $(280) | $(193) |
| Net cash used for financing activities | $(275) | $(159) | $(400) | $(239) |
| Capital expenditures | $118 | $111 | $220 | $197 |
| EBITDA (1) | $1,404 | $516 | $2,501 | $778 |
(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 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 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 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.
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Mid-Continent Region | ||||
| Crude charge (BPD) (1) | 272,430 | 252,690 | 268,180 | 256,630 |
| Refinery throughput (BPD) (2) | 287,200 | 269,850 | 284,800 | 273,150 |
| Sales of produced refined products (BPD) (3) | 266,690 | 259,220 | 269,730 | 257,300 |
| Refinery utilization (4) | 104.8% | 97.2% | 103.1% | 98.7% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $9.64 | $2.29 | $9.22 | $1.76 |
| Adjusted refinery gross margin (7) | $19.00 | $15.52 | $11.24 | $11.61 |
| Less: operating expenses (8) | 7.23 | 6.28 | 7.22 | 6.69 |
| Adjusted refinery gross margin, less operating expenses | $11.77 | $9.24 | $4.02 | $4.92 |
| Operating expenses per throughput barrel (9) | $6.72 | $6.03 | $6.83 | $6.31 |
| Feedstocks: | ||||
| Sweet crude oil | 54% | 50% | 52% | 50% |
| Sour crude oil | 26% | 25% | 26% | 25% |
| Heavy sour crude oil | 15% | 19% | 16% | 19% |
| Other feedstocks and blends | 5% | 6% | 6% | 6% |
| Total | 100% | 100% | 100% | 100% |
| Sales of produced refined products: | ||||
| Gasolines | 49% | 51% | 50% | 52% |
| Diesel fuels | 33% | 32% | 32% | 31% |
| Jet fuels | 7% | 7% | 7% | 7% |
| Fuel oil | 1% | 1% | 1% | 1% |
| Asphalt | 4% | 3% | 4% | 3% |
| 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, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| West Region | ||||
| Crude charge (BPD) (1) | 367,250 | 363,240 | 358,260 | 354,430 |
| Refinery throughput (BPD) (2) | 393,950 | 390,790 | 384,300 | 380,500 |
| Sales of produced refined products (BPD) (3) | 401,980 | 389,990 | 387,740 | 378,280 |
| Refinery utilization (4) | 87.9% | 86.9% | 85.7% | 84.8% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $19.33 | $4.89 | $15.13 | $2.53 |
| Adjusted refinery gross margin (7) | $30.57 | $17.15 | $22.93 | $13.80 |
| Less: operating expenses (8) | 8.65 | 8.23 | 8.65 | 8.63 |
| Adjusted refinery gross margin, less operating expenses | $21.92 | $8.92 | $14.28 | $5.17 |
| Operating expenses per throughput barrel (9) | $8.82 | $8.21 | $8.72 | $8.58 |
| Feedstocks: | ||||
| Sweet crude oil | 29% | 30% | 29% | 31% |
| Sour crude oil | 49% | 47% | 49% | 45% |
| Heavy sour crude oil | 10% | 11% | 10% | 11% |
| Wax crude oil | 5% | 5% | 5% | 6% |
| Other feedstocks and blends | 7% | 7% | 7% | 7% |
| Total | 100% | 100% | 100% | 100% |
| Sales of produced refined products: | ||||
| Gasolines | 51% | 52% | 51% | 53% |
| Diesel fuels | 30% | 31% | 30% | 32% |
| Jet fuels | 7% | 6% | 7% | 6% |
| Fuel oil | 3% | 2% | 3% | 2% |
| Asphalt | 3% | 3% | 2% | 2% |
| LPG and other | 6% | 6% | 7% | 5% |
| Total | 100% | 100% | 100% | 100% |
| Consolidated | ||||
| Crude charge (BPD) (1) | 639,680 | 615,930 | 626,440 | 611,060 |
| Refinery throughput (BPD) (2) | 681,150 | 660,640 | 669,100 | 653,650 |
| Sales of produced refined products (BPD) (3) | 668,670 | 649,210 | 657,470 | 635,580 |
| Refinery utilization (4) | 94.3% | 90.8% | 92.4% | 90.1% |
| Average per produced barrel sold: (5) | ||||
| Gross margin (6) | $15.46 | $3.85 | $12.70 | $2.22 |
| Adjusted refinery gross margin (7) | $25.95 | $16.50 | $18.13 | $12.91 |
| Less: operating expenses (8) | 8.08 | 7.45 | 8.06 | 7.85 |
| Adjusted refinery gross margin, less operating expenses | $17.87 | $9.05 | $10.07 | $5.06 |
| Operating expenses per throughput barrel (9) | $7.93 | $7.32 | $7.92 | $7.63 |
| Feedstocks: | ||||
| Sweet crude oil | 40% | 38% | 39% | 39% |
| Sour crude oil | 39% | 38% | 39% | 37% |
| Heavy sour crude oil | 12% | 14% | 13% | 14% |
| Wax crude oil | 3% | 3% | 3% | 3% |
| Other feedstocks and blends | 6% | 7% | 6% | 7% |
| Total | 100% | 100% | 100% | 100% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Consolidated | ||||
| Sales of produced refined products: | ||||
| Gasolines | 51% | 52% | 51% | 52% |
| Diesel fuels | 31% | 31% | 31% | 31% |
| Jet fuels | 7% | 6% | 7% | 7% |
| Fuel oil | 2% | 2% | 2% | 2% |
| Asphalt | 3% | 2% | 3% | 2% |
| Base oils | 2% | 2% | 2% | 2% |
| LPG and other | 4% | 5% | 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, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Renewables | ||||
| Sales of produced renewables products (in thousand gallons) | 59,905 | 54,786 | 112,353 | 99,250 |
| Average per produced gallon sold: (1) | ||||
| Gross margin (2) | $1.31 | $(0.05) | $2.32 | $(0.42) |
| Adjusted renewables gross margin (3) | $2.46 | $0.36 | $2.69 | $0.27 |
| Less: operating expenses (4) | 0.37 | 0.39 | 0.40 | 0.45 |
| Adjusted renewables gross margin, less operating expenses | $2.09 | $(0.03) | $2.29 | $(0.18) |
(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, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Marketing | ||||
| Number of branded sites at period end (1) | 1,832 | 1,719 | 1,832 | 1,719 |
| Sales of refined products (in thousand gallons) | 386,656 | 337,147 | 711,279 | 631,012 |
| Average per gallon sold: (2) | ||||
| Gross margin (3) | $0.08 | $0.08 | $0.08 | $0.09 |
| Adjusted marketing gross margin (4) | $0.10 | $0.10 | $0.11 | $0.11 |
(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, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Lubricants & Specialties | ||||
| Sales of produced refined products (BPD) | 39,847 | 31,963 | 36,480 | 30,460 |
| Sales of produced refined products: | ||||
| Finished products | 44% | 51% | 46% | 52% |
| Base oils | 29% | 24% | 27% | 25% |
| Other | 27% | 25% | 27% | 23% |
| 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, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Midstream | ||||
| Volumes (BPD) | ||||
| Pipelines: | ||||
| Affiliates—refined product pipelines | 149,081 | 145,940 | 162,217 | 154,916 |
| Affiliates—intermediate pipelines | 136,780 | 133,296 | 144,060 | 135,835 |
| Affiliates—crude pipelines | 469,267 | 383,374 | 458,573 | 404,018 |
| 755,128 | 662,610 | 764,850 | 694,769 | |
| Third parties—refined product pipelines | 33,313 | 42,458 | 29,900 | 41,113 |
| Third parties—crude pipelines | 180,580 | 189,918 | 181,316 | 194,445 |
| 969,021 | 894,986 | 976,066 | 930,327 | |
| Terminals and loading racks: | ||||
| Affiliates | 1,026,169 | 969,791 | 1,031,184 | 980,271 |
| Third parties | 27,608 | 41,258 | 26,827 | 38,104 |
| 1,053,777 | 1,011,049 | 1,058,011 | 1,018,375 | |
| Total for pipelines and terminal assets (BPD) | 2,022,798 | 1,906,035 | 2,034,077 | 1,948,702 |
Results of Operations – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Summary
Net income attributable to HF Sinclair stockholders for thethree months ended June 30, 2026, was $892 million ($4.93 per basic and diluted share), a $684 million increase compared to $208 million ($1.10 per basic and diluted share) for thethree months ended June 30, 2025. The increase in Net income attributable to HF Sinclair stockholders was primarily driven by stronger product demand and higher sales prices which resulted in an increase in adjusted refinery gross margins and higher refined products sales volumes. Lower of cost or market inventory valuation adjustments decreased $118 million from a $148 million charge related to our Refining and Renewables segment inventories forthe three months ended June 30, 2025, to a $30 million charge related to Renewables segment inventories for the three months ended June 30, 2026. Adjusted refinery gross margins for the three months ended June 30, 2026 increased to $25.95 per produced barrel sold as compared to $16.50 for the three months ended June 30, 2025, primarily due to higher crude oil and feedstock prices and higher average sales prices per barrel during the three months ended June 30, 2026. Adjusted renewables gross margins reflect higher RINs pricing and PTC benefits during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. These favorable impacts were partially offset by a$243 million increase in Income tax expense.
Sales and Other Revenues
Sales and other revenues increased $3,606 million, or 53%, from $6,784 million for thethree months ended June 30, 2025, to $10,390 million for thethree months ended June 30, 2026, principally due to higher average refined product sales prices and sales volumes of refined products. Revenues from external customers included $243 million, $1,370 million, $998 million and $32 million related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for thethree months ended June 30, 2026. Revenues from external customers included $131 million, $826 million, $641 million and $28 million related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments for thethree months ended June 30, 2025.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, increased $2,693 million, or 50%, from $5,440 million for thethree months ended June 30, 2025, to $8,133 million for thethree months ended June 30, 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 $46 million and a charge of $20 million for the three months ended June 30, 2026 and 2025, respectively.
During the second quarter of 2026, we recognized a lower of cost or market inventory valuation adjustment charge of $30 million compared to a charge of $148 million during the second quarter of 2025.
Adjusted Refinery Gross Margin
Adjusted refinery gross margin per barrel sold increased$9.45, or 57%, from$16.50 for thethree months ended June 30, 2025, to$25.95 for thethree months ended June 30, 2026. The increase was primarily driven by improved market crack spreads and volumes of refined products in both the Mid-Continent and West regions for thethree months ended June 30, 2026.
Adjusted refinery gross margin per barrel excludes the cash effects of Lower of cost or market inventory valuation adjustments, Operating expenses 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 $82 million, or 14%, from $572 million for the three months ended June 30, 2025, to $654 million for the three months ended June 30, 2026, primarily due to higher employee benefits, environmental remediation, maintenance and other miscellaneous costs, partially offset by lower natural gas expenses.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $16 million, or 14%, from $114 million for the three months ended June 30, 2025, to $130 million for the three months ended June 30, 2026, primarily due to higher employee and professional services costs, partially offset by foreign currency gains.
Earnings of Equity Method Investments
Earnings of equity method investments decreased $4 million, or 40% from $10 million for thethree months ended June 30, 2025, to $6 million for thethree months ended June 30, 2026, primarily due to the divestiture of our investment in Cheyenne Pipeline, LLC in June 2025.
Depreciation and Amortization Expenses
Depreciation and amortization remained relatively consistent and was $228 million and $226 million for thethree months ended June 30, 2026 and 2025, respectively.
Other Operating Expenses, Net
Other operating expenses, net increased$38 million, or 422% from$9 million for the three months ended June 30, 2025, to$47 million for the three months ended June 30, 2026, primarily due to impairment charges related to the abandonment of certain assets under construction in our Renewables segment. For thethree months ended June 30, 2025 Other operating expenses, netprimarily relates to decommissioning and closure costs of $8 million in our Refining segment.
Interest Income
Interest income increased from$7 million for thethree months ended June 30, 2025, to $15 million for thethree months ended June 30, 2026, primarily due to higher cash balances.
Interest Expense
Interest expense decreased$33 million, or 62%, from$53 million for thethree months ended June 30, 2025, to $20 million for the three months ended June 30, 2026, primarily due to unrealized gains on precious metals financing arrangements during the period.
Income Taxes
For thethree months ended June 30, 2026, Income tax expense of $279 million was recorded on pre-tax income of $1,172 million, compared to Income tax expense of $36 million on pre-tax income of $246 million for the three months ended June 30, 2025. Theincrease was primarily due to higher pre-tax earnings year-over-year. For the three months ended June 30, 2026, our effective tax rate of 23.9% was higher than the statutory rate of 21.0%, primarily due to state and local income taxes on pre-tax earnings, partially offset from the benefits of nontaxable renewable fuel incentives. For the three months ended June 30, 2025, our effective tax rate of 14.5% was lower than the statutory rate of 21.0% 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 law changes enacted in the second quarter of 2025. Due to rounding of reported numbers, some amounts may not calculate exactly.
Results of Operations – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Summary
Net income attributable to HF Sinclair stockholders for the six months ended June 30, 2026, was $1,540 million ($8.48 per basic and diluted share), a $1,336 million increase compared to $204 million ($1.07 per basic and diluted share) for the six months ended June 30, 2025. The increase in Net income attributable to HF Sinclair stockholders was principally driven by higher adjusted refinery gross margins and higher refined product sales volumes. Lower of cost or market inventory valuation adjustments related to our Refining and Renewables segments’ inventories decreased by $673 million, from a $31 million charge for the six months ended June 30, 2025, to a $642 million benefit for the six months ended June 30, 2026. Adjusted refinery gross margins for the six months ended June 30, 2026 increased to $18.13 per produced barrel sold as compared to $12.91 for the six months ended June 30, 2025, primarily due to higher crude oil and feedstock prices and higher average sales prices per barrel during the six months ended June 30, 2026. Adjusted renewables gross margins reflect higher RINs pricing and PTC benefits during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These favorable impacts were partially offset by a$431 million increase in Income tax expense.
Sales and Other Revenues
Sales and other revenues increased 33% from $13,154 million for the six months ended June 30, 2025, to $17,513 million for the six months ended June 30, 2026, principally due to higher average refined product sales prices and higher refined product sales volumes. Revenues from external customers included $451 million, $2,162 million, $1,651 million, and $63 million related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the six months ended June 30, 2026. Revenues from external customers included $225 million, $1,512 million, $1,278 million, and $58 million related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the six months ended June 30, 2025.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, increased 29% from $10,916 million for the six months ended June 30, 2025, to $14,113 million for the six months ended June 30, 2026, principally due to higher crude oil and feedstock costs and higher refined product sales volumes. Within our Lubricants & Specialties segment, the FIFO impact was a benefit of $99 million and a charge of $12 million for the six months ended June 30, 2026 and 2025, respectively.
During the six months ended June 30, 2026, we recognized a lower of cost or market inventory valuation adjustment benefit of $642 million compared to a charge of $31 million during the six months ended June 30, 2025.
Adjusted Refinery Gross Margins
Adjusted refinery gross margin per produced barrel sold increased 40% from $12.91 for the six months ended June 30, 2025, to $18.13 for the six months ended June 30, 2026. The increasewas primarily driven by improved market crack spreads and volumes of refined products in both the Mid-Continent and West during the six months ended June 30, 2026.
Adjusted refinery gross margin per barrel excludes the cash effects of Lower of cost or market inventory valuation adjustments, Operating expenses 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 9% from $1,168 million for the six months ended June 30, 2025, to $1,278 million for the six months ended June 30, 2026, primarily due to higher employee benefits, environmental remediation and miscellaneous costs, partially offset by lower natural gas costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 12% from $218 million for the six months ended June 30, 2025, to $245 million for the six months ended June 30, 2026 primarily due to higher employee benefits and professional service costs, partially offset by foreign currency gains.
Depreciation and Amortization Expenses
Depreciation and amortization increased 1% from $451 million for the six months ended June 30, 2025, to $457 million for the six months ended June 30, 2026, principally due to depreciation and amortization attributable to additional capitalized refinery turnaround costs and capitalized improvement projects as compared to the prior period.
Other Operating Expenses, Net
Other operating expenses, netincreased $33 million, or 236% from $14 millionfor thesix months ended June 30, 2025, to $47 millionfor thesix months ended June 30, 2026, primarily due to impairment charges related to the abandonment of certain assets under construction in our Renewables segment. For thesix months ended June 30, 2025 Other operating expenses, netprimarily relates to decommissioning and closure costs of $8 million in our Refining segment.
Interest Income
Interest income was $25 million for the six months ended June 30, 2026, compared to $16 million for the six months ended June 30, 2025. The increase in Interest income was primarily due to the increase in average cash balance.
Interest Expense
Interest expense decreased $41 million, or 40%, from $102 million for the six months ended June 30, 2025, to $61 million for the six months ended June 30, 2026, primarily due to unrealized gains on precious metals financing arrangements during the period.
Other Income (Expense), Net
Other income (expense), net was $18 million of income for the six months ended June 30, 2026, compared to $46 million of expense for the six months ended June 30, 2025. The income for the six months ended June 30, 2026 was primarily due to a $14 million gain on settlement of precious metals. The expense for the six months ended June 30, 2025, was primarily due to a $40 million loss on sale of equity method investment in Cheyenne Pipeline, LLC, and a $15 million loss on the early extinguishment of debt.
Income Taxes
For the six months ended June 30, 2026, Income tax expense of $468 million was recorded on pre-tax income of $2,011 million, compared to Income tax expense of $37 million on pre-tax income of $245 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, our effective tax rate of 23.3% was higher than the statutory rate of 21% primarily due to state and local income taxes on pre-tax earnings, partially offset from the benefits of nontaxable renewable fuel incentives. For the six months ended June 30, 2025, our effective tax rate of 15.1% was lower than the statutory rate of 21.0% 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 law changes enacted in the second quarter of 2025. Due to rounding of reported numbers, some amounts may not calculate exactly.
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