Core Insights - HF Sinclair Corporation's stock price has increased nearly 100% since Liberation Day, driven by strong refining performance in the Central and Northwest regions of the US [1] Company Performance - The significant rise in HF Sinclair's stock price is attributed to robust refining operations, indicating a positive trend in the company's financial health and operational efficiency [1] Market Context - The performance of HF Sinclair is reflective of broader trends in the refining sector, particularly in specific geographic regions of the US, suggesting potential growth opportunities within the industry [1]

Core Viewpoint - HF Sinclair Corporation has announced the final results and expiration of its cash tender offer to purchase outstanding notes, indicating a strategic move to manage its debt obligations and optimize its capital structure [1][4]. Summary by Relevant Sections Tender Offer Details - The tender offer was made to purchase all outstanding notes, with specific details provided in the Offer to Purchase dated August 11, 2025 [1][4]. - The aggregate principal amounts of the notes tendered include $36.687 million for the 5.875% Senior Notes due 2026 and $163.843 million for the 6.375% Senior Notes due 2027 [3][2]. Financial Implications - The Corporation expects to accept for payment all validly tendered notes on August 20, 2025, which will include accrued and unpaid interest from the last interest payment date [5]. - The tender offer is contingent upon the completion of a concurrent public offering of senior notes expected to occur on August 18, 2025 [5]. Company Overview - HF Sinclair Corporation is an independent energy company based in Dallas, Texas, producing and marketing high-value light products such as gasoline, diesel fuel, and renewable diesel [9]. - The company operates refineries across several states and provides transportation, storage, and throughput services to the petroleum industry, marketing its refined products primarily in the Southwest U.S. and neighboring regions [9].

Core Viewpoint - HF Sinclair Corporation has announced the pricing terms for its cash tender offer to purchase all outstanding notes, with all other terms remaining unchanged as per the Offer to Purchase dated August 11, 2025 [1][2]. Tender Offer Details - The consideration for each series of notes accepted for purchase is determined by a fixed spread over the yield based on U.S. Treasury Securities [2]. - The tender offer will remain open until 5:00 p.m. New York City time on August 15, 2025, unless extended or terminated [6]. - Settlement for all validly tendered notes is expected on August 20, 2025 [7]. Notes Information - The tender offer includes: - 5.875% Senior Notes due 2026 with an aggregate principal amount of $153,585,000, a reference yield of 4.226%, and a tender offer consideration of $1,004.12 [3]. - 6.375% Senior Notes due 2027 with an aggregate principal amount of $249,875,000, a reference yield of 4.035%, and a tender offer consideration of $1,011.63 [3]. Company Overview - HF Sinclair Corporation is an independent energy company that produces and markets high-value light products, including gasoline, diesel fuel, and renewable diesel [10]. - The company operates refineries in multiple states and provides transportation, storage, and throughput services to the petroleum industry [10]. - HF Sinclair markets its refined products primarily in the Southwest U.S. and has a significant presence in the renewable diesel market [10].

Core Viewpoint - HF Sinclair Corporation has initiated a cash tender offer to purchase all outstanding notes, indicating a strategic move to manage its debt obligations and optimize its capital structure [1][3]. Tender Offer Details - The tender offer includes various series of senior notes, with specific amounts outstanding such as $153.585 million for the 5.875% Senior Notes due 2026 and $249.875 million for the 6.375% Senior Notes due 2027 [2]. - The tender offer will expire at 5:00 p.m. New York City time on August 15, 2025, unless extended or terminated earlier [5]. - Holders of the notes must validly tender their notes before the expiration time to receive the tender offer consideration [5][7]. Financial Considerations - The tender offer consideration will be determined based on the fixed spread over the yield of the applicable U.S. Treasury Security, with calculations made by the Lead Dealer Managers on the price determination date [6]. - In addition to the tender offer consideration, accrued and unpaid interest will be paid in cash on all validly tendered notes accepted for purchase [7]. Conditions and Management - The tender offer is subject to certain conditions, including the receipt of sufficient gross proceeds from a concurrent public offering of senior debt securities [3][11]. - The corporation may waive conditions or extend the tender offer at its discretion [4]. Company Overview - HF Sinclair Corporation is an independent energy company that produces and markets high-value light products, operating refineries across several states and providing various petroleum-related services [14]. - The company markets its refined products primarily in the Southwest U.S. and has a significant presence in the renewable diesel market [14].

PART I - FINANCIAL INFORMATION [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company's Q2 2025 net income rose to $208 million, while H1 2025 net income fell to $204 million, with total assets at $16.84 billion [Consolidated Financial Statements (Summary)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(Summary)) Total assets grew to $16.84 billion, with Q2 2025 net income rising to $210 million while H1 2025 net income declined significantly Consolidated Balance Sheet Summary (in millions) | Balance Sheet Items | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $874 | $800 | | Total current assets | $5,173 | $5,014 | | **Total assets** | **$16,843** | **$16,643** | | Total current liabilities | $2,841 | $3,043 | | Long-term debt, net | $2,677 | $2,288 | | **Total liabilities** | **$7,495** | **$7,297** | | **Total equity** | **$9,348** | **$9,346** | Consolidated Income Statement Summary (in millions, except per share data) | Income Statement Items | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales and other revenues | $6,784 | $7,846 | $13,154 | $14,873 | | Income from operations | $275 | $197 | $356 | $609 | | **Net income attributable to HF Sinclair stockholders** | **$208** | **$152** | **$204** | **$466** | | Diluted EPS | $1.10 | $0.79 | $1.07 | $2.38 | Consolidated Cash Flow Summary (Six Months Ended June 30, in millions) | Cash Flow Items | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $498 | $541 | | Net cash used for investing activities | ($193) | ($173) | | Net cash used for financing activities | ($239) | ($851) | | **Net change in cash** | **$74** | **($488)** | [Note 3: Revenues](index=13&type=section&id=Note%203%3A%20Revenues) Q2 2025 revenues fell to $6.78 billion, driven by lower transportation fuel sales, with the U.S. Mid-Continent as the largest market Disaggregated Revenues by Type (in millions) | Revenue Type | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Transportation fuels | $5,344 | $6,102 | $10,305 | $11,657 | | Lubricants and specialty products | $583 | $644 | $1,180 | $1,258 | | Asphalt, fuel oil and other | $393 | $569 | $712 | $1,052 | | Excess crude oil revenues | $345 | $437 | $728 | $704 | | **Total sales and other revenues** | **$6,784** | **$7,846** | **$13,154** | **$14,873** | Refined Product Revenues by Market - Q2 2025 (in millions) | Market | Revenue | | :--- | :--- | | Mid-Continent | $2,221 | | Rocky Mountains | $1,370 | | Northwest | $1,290 | | Southwest | $919 | | Other | $520 | - The company has future performance obligations for minimum volumes under long-term contracts, including **84 million barrels** of refined product sales through 2035 and **$59 million** in minimum midstream revenues through 2033[58](index=58&type=chunk) [Note 11: Debt](index=20&type=section&id=Note%2011%3A%20Debt) The company refinanced its debt, issuing $1.4 billion in new notes and entering a new $2.0 billion credit facility in early 2025 - On April 3, 2025, the company terminated its existing credit agreements and entered into a new **$2.0 billion senior unsecured revolving credit facility** maturing in 2030[85](index=85&type=chunk) - In January 2025, the company issued **$1.4 billion of new senior notes** and used a portion of the proceeds to tender for and redeem **$647 million** and **$349 million** of existing notes, respectively[88](index=88&type=chunk)[89](index=89&type=chunk)[91](index=91&type=chunk) Total Debt Summary (in millions) | Debt Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Senior Notes | $2,704 | $2,300 | | Total Credit Agreements | $0 | $350 | | **Total debt at face value** | **$2,704** | **$2,650** | | Unamortized discount and costs | ($27) | ($12) | | **Total debt** | **$2,677** | **$2,638** | [Note 13: Stockholders' Equity](index=25&type=section&id=Note%2013%3A%20Stockholders%27%20Equity) A new $1.0 billion share repurchase program was initiated, with $50 million in shares repurchased in H1 2025 and a quarterly dividend declared - A new **$1.0 billion share repurchase program** was approved in May 2024, with **$749 million remaining** authorized for repurchases as of June 30, 2025[112](index=112&type=chunk)[113](index=113&type=chunk) Share Repurchases (in millions, except share data) | Period | Number of Shares Repurchased | Cash Paid | | :--- | :--- | :--- | | Three Months Ended June 30, 2025 | 1,329,725 | $50 | | Six Months Ended June 30, 2025 | 1,329,725 | $50 | | Six Months Ended June 30, 2024 | 9,279,177 | $537 | - On July 31, 2025, the Board of Directors declared a regular quarterly dividend of **$0.50 per share**[114](index=114&type=chunk) [Note 15: Commitments and Contingencies](index=27&type=section&id=Note%2015%3A%20Commitments%20and%20Contingencies) The company settled a major environmental case for its Navajo refinery and received a favorable court ruling on RFS exemption petitions - On May 5, 2025, a consent decree was entered to resolve alleged Clean Air Act violations at the Artesia refinery, requiring a **$34 million civil penalty** and an estimated **$137 million in injunctive relief**[129](index=129&type=chunk)[130](index=130&type=chunk) - On July 26, 2024, the D.C. Circuit Court vacated the EPA's denial of the company's small refinery exemption petitions for 2016, 2018, 2019, and 2020, finding the denial unlawful and remanding the petitions to the EPA[124](index=124&type=chunk) [Note 16: Segment Information](index=28&type=section&id=Note%2016%3A%20Segment%20Information) The Refining segment drove Q2 2025 profitability with $166 million in operating income, while the Renewables segment reported a loss Segment Income (Loss) from Operations (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Refining | $166 | $65 | $136 | $377 | | Renewables | ($4) | ($15) | ($43) | ($54) | | Marketing | $18 | $9 | $38 | $18 | | Lubricants & Specialties | $31 | $74 | $94 | $139 | | Midstream | $91 | $90 | $181 | $175 | | **Total Income from Operations** | **$275** | **$197** | **$356** | **$609** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes improved Q2 2025 results to refining margins and discusses liquidity, capital plans, and regulatory impacts [Overview](index=32&type=section&id=Overview) Q2 2025 net income rose to $208 million on better refining margins, while the company analyzes impacts of new tax credit legislation - Q2 2025 net income attributable to stockholders was **$208 million**, compared to $152 million in Q2 2024, while H1 2025 net income was **$204 million**, compared to $466 million in H1 2024[150](index=150&type=chunk) - The Marketing segment added **55 net new branded sites** during Q2 2025 and is expected to grow the number of sites by approximately 10% annually[153](index=153&type=chunk) - The "One Big Beautiful Bill Act" (OBBBA) was signed into law on July 4, 2025, extending the **Producer's Tax Credit (Section 45Z) through 2029**[158](index=158&type=chunk) - Compliance costs for the Renewable Fuel Standard (RFS) increased, with **RINs costs totaling $180 million** in Q2 2025, up from $108 million in Q2 2024[159](index=159&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Q2 2025 net income rose to $208 million on higher refinery margins, but H1 2025 income fell due to inventory valuation adjustments Financial Performance vs. Prior Year | Metric | Q2 2025 vs Q2 2024 | H1 2025 vs H1 2024 | | :--- | :--- | :--- | | Net Income Attributable to Stockholders | +$56M (+37%) | -$262M (-56%) | | Sales and other revenues | -$1,062M (-14%) | -$1,719M (-12%) | | Income from operations | +$78M (+40%) | -$253M (-42%) | - The increase in Q2 2025 net income was principally driven by higher adjusted refinery gross margins, which increased to **$16.50 per produced barrel** sold from $11.33 in Q2 2024[189](index=189&type=chunk)[193](index=193&type=chunk) - Lower of cost or market inventory valuation adjustments **decreased pre-tax earnings by $148 million** in Q2 2025, compared to a $3 million increase in Q2 2024[189](index=189&type=chunk)[192](index=192&type=chunk) - The decrease in H1 2025 net income was principally driven by a **$31 million charge from inventory valuation adjustments**, compared to a $223 million benefit in H1 2024[200](index=200&type=chunk)[203](index=203&type=chunk) [Segment Operating Data](index=39&type=section&id=Segment%20Operating%20Data) The Refining segment's adjusted gross margin rose to $16.50/bbl in Q2 2025, while the Renewables segment's margin decreased Refining Segment - Adjusted Gross Margin per Barrel | Region | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Mid-Continent | $15.52 | $8.39 | $11.61 | $9.41 | | West | $17.15 | $13.50 | $13.80 | $13.93 | | **Consolidated** | **$16.50** | **$11.33** | **$12.91** | **$11.99** | Renewables Segment - Adjusted Gross Margin per Gallon | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted renewables gross margin | $0.36 | $0.44 | $0.27 | $0.30 | Marketing Segment - Key Metrics | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Number of branded sites | 1,719 | 1,564 | 1,719 | 1,564 | | Adjusted marketing gross margin/gallon | $0.10 | $0.06 | $0.11 | $0.07 | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity of $2.9 billion and plans $875 million in 2025 capital spending while returning cash to shareholders - Total liquidity was approximately **$2.9 billion** at June 30, 2025, consisting of $0.9 billion in cash and cash equivalents and $2.0 billion available under the HF Sinclair Credit Agreement[222](index=222&type=chunk) Expected 2025 Cash Spending (in millions) | Category | Expected Spending | | :--- | :--- | | Refining Capital | $240 | | Renewables Capital | $5 | | Marketing Capital | $30 | | Lubricants & Specialties Capital | $40 | | Midstream Capital | $30 | | Corporate Capital | $20 | | Turnarounds and catalyst | $410 | | **Total Sustaining** | **$775** | | Growth capital | $100 | | **Total** | **$875** | - Net cash from operating activities was **$498 million for H1 2025**, a decrease from $541 million in H1 2024, primarily due to higher turnaround expenditures ($284 million vs. $169 million)[225](index=225&type=chunk) - Financing activities in H1 2025 included **$190 million in dividend payments**, **$50 million in stock repurchases**, and net proceeds of $387 million from the issuance and redemption of senior notes[232](index=232&type=chunk) [Risk Management](index=47&type=section&id=Risk%20Management) The company uses derivative instruments to manage commodity price and foreign currency risks, with a potential $6 million loss on a 10% price shift - The company's primary market risks are commodity price risk and foreign currency risk, which are managed periodically with derivative contracts[240](index=240&type=chunk)[241](index=241&type=chunk) Outstanding Derivative Notional Volumes as of June 30, 2025 | Contract Description | Total Outstanding Notional | | :--- | :--- | | NYMEX futures (WTI) - short | 970,000 Barrels | | Forward crude oil contracts - long | 640,000 Barrels | | Forward crude oil contracts - short | 368,000 Barrels | | Foreign currency forward contracts | 522,000,000 Canadian dollar | | Forward commodity contracts (platinum) | 34,628 Troy ounces | - A hypothetical 10% increase in underlying commodity prices would result in a derivative fair value **loss of $6 million** as of June 30, 2025[243](index=243&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section cross-references the 'Risk Management' discussion for details on the company's market risk exposures - This section refers to the "Risk Management" section under "Management's Discussion and Analysis of Financial Condition and Results of Operations" for disclosures about market risk[258](index=258&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[259](index=259&type=chunk) - **No changes occurred** during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[260](index=260&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company finalized a consent decree for the Navajo refinery and received a favorable court ruling on small refinery exemption petitions - A settlement was reached with the EPA, DOJ, and NMED regarding the Navajo refinery, where the company will pay a **$34 million civil penalty** and implement injunctive relief measures estimated to cost **$137 million**[266](index=266&type=chunk)[267](index=267&type=chunk) - The company is engaged in discussions with regulators regarding compliance at its Puget Sound Refinery, but no penalties have been demanded, and the outcome is not yet predictable[268](index=268&type=chunk)[270](index=270&type=chunk) - On July 26, 2024, the D.C. Circuit Court issued a favorable decision, **vacating the EPA's denial** of the company's small refinery exemption petitions and remanding them to the EPA for a new determination[274](index=274&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K - There have been **no material changes** in the company's risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[277](index=277&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 1.3 million shares for $50 million in Q2 2025, with $749 million remaining under its repurchase authorization Common Stock Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 0 | N/A | | May 2025 | 616,015 | $36.20 | | June 2025 | 713,710 | $38.81 | | **Total** | **1,329,725** | **N/A** | - As of June 30, 2025, the company had **$749 million remaining** under its $1.0 billion May 2024 Share Repurchase Program[278](index=278&type=chunk) [Other Information](index=57&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[279](index=279&type=chunk) [Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate documents and required certifications

Financial Data and Key Metrics Changes - The company reported a second quarter net income attributable to shareholders of $208 million or $1.1 per diluted share, with adjusted net income of $322 million or $1.7 per diluted share compared to $150 million or $0.78 per diluted share in the same period of 2024 [15][16] - Adjusted EBITDA for the second quarter was $665 million compared to $406 million in 2024 [16] - The company returned $145 million in cash to shareholders, consisting of $50 million in share repurchases and $95 million in regular dividends [13] Business Line Data and Key Metrics Changes - In the refining segment, adjusted EBITDA was $476 million compared to $187 million in 2024, driven by higher adjusted refinery gross margins [16] - The Renewables segment reported adjusted EBITDA of negative $2 million, impacted by lower sales volumes and margins, with total sales volumes of 55 million gallons compared to 64 million gallons in 2024 [17][18] - The Marketing segment delivered $25 million in EBITDA, up from $15 million in 2024, driven by higher margins [18] - The Lubricants and Specialties segment reported EBITDA of $55 million, down from $97 million in 2024, primarily due to lower base oil margins and sales volumes [19] - The Midstream segment reported adjusted EBITDA of $112 million, slightly up from $110 million in the same period last year [19] Market Data and Key Metrics Changes - The company achieved an operating expense per throughput barrel of $7.32, nearing its goal of $7.25 per barrel [10] - The refining throughput averaged 616,000 barrels per day for the second quarter, down from 635,000 barrels per day in 2024 due to turnaround activities [16] Company Strategy and Development Direction - The company is focused on improving reliability, optimization, and integration, with a commitment to return excess cash to shareholders [8][14] - The company plans to continue executing its strategy with one remaining turnaround scheduled at the Puget Sound refinery [10] - The company is optimistic about refining margins, particularly in distillates, and believes its overall strategy is delivering organic growth [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of each business, including refining, and noted improvements in reliability and operational performance [104][105] - The company anticipates continued strength in refining margins and is positioned well to take advantage of market opportunities [13][40] Other Important Information - The company has approximately $750 million remaining on its share repurchase authorization and has reduced its share count by over 58 million shares since the Sinclair acquisition [13] - The Board of Directors declared a regular quarterly dividend of $0.50 per share, payable on September 4, 2025 [13] Q&A Session Summary Question: Understanding strong performance in refining and capture rates - Management highlighted improvements in crude performance and flexibility in crude slate, contributing to strong capture rates despite market headwinds [24][26] Question: Balancing shareholder returns and bolt-on opportunities - Management reiterated commitment to shareholder returns while also pursuing organic growth opportunities, indicating a balance can be achieved [30][31] Question: Renewable diesel credits and market structure - Management confirmed recognition of producers' tax credits and expressed optimism about future market structure improvements for renewable diesel [35][40] Question: Operational performance and turnaround improvements - Management noted significant improvements in turnaround performance and reliability, indicating a successful operational excellence journey [42][45] Question: M&A perspective and market opportunities - Management stated a focus on bolt-on opportunities in marketing and lubricants, while being cautious about the current M&A landscape [72][74] Question: Renewable diesel sustainable EBITDA and SREs - Management expressed confidence in renewable diesel positioning and acknowledged potential impacts of SREs on RIN prices, indicating ongoing monitoring of the situation [96][100]

Financial Data and Key Metrics Changes - The company reported a second quarter net income attributable to shareholders of $208 million or $1.1 per diluted share, with adjusted net income of $322 million or $1.7 per diluted share compared to $150 million or $0.78 per diluted share in the same period in 2024 [13][14] - Adjusted EBITDA for the second quarter was $665 million compared to $406 million in 2024 [14][16] - The company returned $145 million in cash to shareholders, consisting of $50 million in share repurchases and $95 million in regular dividends [11][12] Business Segment Data and Key Metrics Changes - In the refining segment, adjusted EBITDA was $476 million compared to $187 million in 2024, driven by higher adjusted refinery gross margins [14][16] - The Renewables segment reported adjusted EBITDA of negative $2 million, impacted by lower sales volumes and margins, with total sales volumes of 55 million gallons compared to 64 million gallons in 2024 [15][16] - The Marketing segment delivered $25 million in EBITDA, up from $15 million in 2024, driven by higher margins [15][16] - The Lubricants and Specialty segment reported EBITDA of $55 million, down from $97 million in 2024, primarily due to lower base oil margins and sales volumes [16] - The Midstream segment reported adjusted EBITDA of $112 million, slightly up from $110 million in the same period last year [16] Market Data and Key Metrics Changes - The company achieved an operating expense per throughput barrel of $7.32, nearing its near-term goal of $7.25 per barrel [8] - The company noted that distillate production was up quarter over quarter by over 10,000 barrels a day [22] - The company expects to run between 606,000 and 645,000 barrels per day of crude oil in the refining segment for the remainder of 2025 [18] Company Strategy and Development Direction - The company is focused on improving reliability, optimization, and integration, with a commitment to return excess cash to shareholders [7][12] - The company plans to continue executing its strategy of organic growth while balancing shareholder returns and potential bolt-on acquisitions in the marketing and lubricants segments [26][67] - The company is optimistic about the fundamentals of its businesses, particularly in refining and non-refining segments [99] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of refining margins, particularly in distillates, and noted improvements in operational performance [11][12][58] - The company anticipates capturing more value from the producers' tax credit in the third quarter, which is expected to benefit the Renewables segment [9][36] - Management highlighted that the market structure for renewable diesel is expected to improve, with tightening LCFS regulations and proposed RVO numbers supporting the market [35][36] Other Important Information - The company has approximately $750 million remaining on its share repurchase authorization and has returned over $4.2 billion in cash to shareholders since the Sinclair acquisition [11][12] - The Board of Directors declared a regular quarterly dividend of $0.50 per share, payable on September 4, 2025 [11] Q&A Session Summary Question: Understanding strong performance in refining and capture rates - Management attributed strong capture rates to improved crude performance and flexibility in crude slate management despite headwinds [21][22] Question: Balancing shareholder returns and bolt-on opportunities - Management reiterated commitment to shareholder returns while also pursuing organic growth and capital returns, indicating a balance can be achieved [25][26] Question: Renewable diesel credits and market structure - Management confirmed the ability to recognize PTC in the second quarter and expressed optimism about future recognition and market structure improvements [31][36] Question: Operational performance and turnaround improvements - Management noted that the completion of turnarounds positions the company well for future operational excellence and reliability improvements [38][40] Question: Margin trajectory in lubricants and market dynamics - Management discussed the impact of planned turnarounds and FIFO headwinds on margins, indicating ongoing challenges in the lubricants market [46][48] Question: M&A strategy and market opportunities - Management stated that while they are open to M&A opportunities, the focus remains on bolt-on acquisitions in marketing and lubricants, with a cautious approach to larger deals [66][67]

Company Performance - HF Sinclair reported quarterly earnings of $1.7 per share, exceeding the Zacks Consensus Estimate of $1.09 per share, and showing a significant increase from $0.78 per share a year ago, representing an earnings surprise of +55.96% [1] - The company posted revenues of $6.78 billion for the quarter ended June 2025, which was 5.77% below the Zacks Consensus Estimate and down from $7.85 billion year-over-year [2] - Over the last four quarters, HF Sinclair has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] Stock Performance - HF Sinclair shares have increased by approximately 23.9% since the beginning of the year, outperforming the S&P 500's gain of 8.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.33 on revenues of $7.49 billion, and for the current fiscal year, it is $2.45 on revenues of $28.14 billion [7] Industry Outlook - The Oil and Gas - Refining and Marketing industry, to which HF Sinclair belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of HF Sinclair's stock may be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8] Future Expectations - The estimate revisions trend for HF Sinclair was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6] - Investors are encouraged to monitor how estimates for the coming quarters and the current fiscal year may change following the recent earnings report [4][7]

[Financial Highlights & CEO Commentary](index=1&type=section&id=Financial%20Highlights%20%26%20CEO%20Commentary) HF Sinclair reported strong Q2 2025 financial results, with net income rising to $208 million and $145 million returned to shareholders Q2 2025 vs Q2 2024 Key Financial Metrics | Metric | Q2 2025 (Millions $) | Q2 2024 (Millions $) | | :--- | :--- | :--- | | Net Income (attributable to stockholders) | 208 | 152 | | Diluted EPS ($) | 1.10 | 0.79 | | Adjusted Net Income (attributable to stockholders) | 322 | 150 | | Adjusted Diluted EPS ($) | 1.70 | 0.78 | | EBITDA | 516 | 408 | | Adjusted EBITDA | 665 | 406 | - Returned **$145 million** to stockholders in Q2 2025, consisting of **$95 million** in dividends and **$50 million** in share repurchases[3](index=3&type=chunk)[6](index=6&type=chunk)[9](index=9&type=chunk) - Announced a regular quarterly dividend of **$0.50 per share**, payable on September 4, 2025[6](index=6&type=chunk)[10](index=10&type=chunk) - CEO Tim Go emphasized strong progress on key priorities: improving reliability, optimization, and integration, leading to sequential improvements over the last three quarters[3](index=3&type=chunk) [Consolidated Financial Performance](index=4&type=section&id=Consolidated%20Financial%20Performance) Consolidated Q2 2025 revenue decreased 14% but income from operations rose 40%, while H1 2025 revenues and net income declined, with cash increasing to $874 million [Q2 2025 Financial Results (Quarterly)](index=4&type=section&id=Q2%202025%20Financial%20Results%20(Quarterly)) Q2 2025 sales and other revenues decreased 14% to $6.78 billion, yet net income rose 37% to $208 million due to lower material costs Consolidated Statement of Operations (Three Months Ended June 30) | (In millions, except per share data) | 2025 ($) | 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Sales and other revenues | 6,784 | 7,846 | (14)% | | Cost of materials and other | 5,440 | 6,751 | (19)% | | Income from operations | 275 | 197 | 40% | | Net income attributable to HF Sinclair stockholders | 208 | 152 | 37% | | Diluted EPS | 1.10 | 0.79 | 39% | [H1 2025 Financial Results (Six-Months)](index=5&type=section&id=H1%202025%20Financial%20Results%20(Six-Months)) H1 2025 sales and other revenues decreased 12% to $13.15 billion, with net income declining 56% to $204 million Consolidated Statement of Operations (Six Months Ended June 30) | (In millions, except per share data) | 2025 ($) | 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Sales and other revenues | 13,154 | 14,873 | (12)% | | Income from operations | 356 | 609 | (42)% | | Net income attributable to HF Sinclair stockholders | 204 | 466 | (56)% | | Diluted EPS | 1.07 | 2.38 | (55)% | [Balance Sheet as of June 30, 2025](index=5&type=section&id=Balance%20Sheet%20as%20of%20June%2030%2C%202025) As of June 30, 2025, cash and cash equivalents increased to $874 million, with total debt stable at $2.68 billion and equity at $9.35 billion Balance Sheet Highlights (in millions) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 874 | 800 | | Total assets | 16,843 | 16,643 | | Total debt | 2,677 | 2,638 | | Total equity | 9,348 | 9,346 | [Segment Performance Analysis](index=1&type=section&id=Segment%20Performance%20Analysis) Q2 2025 segment performance was mixed, with Refining, Marketing, and Midstream showing improved results, while Lubricants & Specialties declined and Renewables reduced its loss [Refining](index=1&type=section&id=Refining) Refining segment income surged to $166 million in Q2 2025, driven by a 46% increase in adjusted gross margin to $16.50 per barrel, despite slightly lower throughput Refining Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income before interest and income taxes (Millions $) | 166 | 65 | | Adjusted EBITDA (Millions $) | 476 | 187 | | Adjusted refinery gross margin/barrel ($/barrel) | 16.50 | 11.33 | | Crude oil charge (BPD) | 615,930 | 634,730 | [Renewables](index=1&type=section&id=Renewables) Renewables segment reported a reduced pre-tax loss of $4 million in Q2 2025, with sales volumes at 55 million gallons, and began recognizing Producer's Tax Credit benefits Renewables Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Loss before interest and income taxes (Millions $) | (4) | (15) | | Adjusted EBITDA (Millions $) | (2) | 2 | | Total sales volumes (Million Gallons) | 55 | 64 | - The company began to partially recognize benefits from the Producer's Tax Credit in Q2 2025 and expects to capture additional value in Q3 2025[4](index=4&type=chunk) [Marketing](index=1&type=section&id=Marketing) Marketing segment income doubled to $18 million in Q2 2025, with EBITDA reaching $25 million, driven by higher margins despite lower branded fuel sales volumes Marketing Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income before interest and income taxes (Millions $) | 18 | 9 | | EBITDA (Millions $) | 25 | 15 | | Branded fuel sales volumes (Million Gallons) | 337 | 357 | [Lubricants & Specialties](index=2&type=section&id=Lubricants%20%26%20Specialties) Lubricants & Specialties segment income significantly declined to $33 million in Q2 2025, with EBITDA at $55 million, due to lower margins and reduced sales volumes Lubricants & Specialties Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income before interest and income taxes (Millions $) | 33 | 74 | | EBITDA (Millions $) | 55 | 97 | | Sales of produced refined products (BPD) | 31,963 | 34,915 | [Midstream](index=2&type=section&id=Midstream) Midstream segment delivered stable Q2 2025 results, with income at $98 million and Adjusted EBITDA at $112 million, driven by higher pipeline revenues Midstream Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income before interest and income taxes (Millions $) | 98 | 97 | | Adjusted EBITDA (Millions $) | 112 | 110 | [Shareholder Returns and Capital Management](index=1&type=section&id=Shareholder%20Returns%20and%20Capital%20Management) HF Sinclair returned $145 million to shareholders in Q2 2025 via dividends and buybacks, declared a $0.50 per share dividend, and generated $587 million in operating cash - Returned a total of **$145 million** to stockholders during the second quarter[3](index=3&type=chunk)[6](index=6&type=chunk) - Announced and paid a regular dividend of **$0.50 per share**, totaling **$95 million**[9](index=9&type=chunk)[10](index=10&type=chunk) - Spent **$50 million** on share repurchases in Q2 2025[9](index=9&type=chunk) - Net cash provided by operations totaled **$587 million** for the second quarter[9](index=9&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=15&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) The company uses non-GAAP measures like Adjusted EBITDA ($665 million) and Adjusted Net Income ($322 million) to show core operating performance, with detailed reconciliations provided [EBITDA and Adjusted EBITDA Reconciliation](index=15&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) Consolidated Adjusted EBITDA for Q2 2025 was $665 million, up from $406 million, primarily adjusted for a $148 million lower of cost or market inventory valuation charge Consolidated EBITDA and Adjusted EBITDA Reconciliation (Q2, in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income attributable to HF Sinclair stockholders (Millions $) | 208 | 152 | | EBITDA (Millions $) | 516 | 408 | | Lower of cost or market inventory valuation adjustments (Millions $) | 148 | (3) | | **Adjusted EBITDA (Millions $)** | **665** | **406** | [Adjusted Net Income Reconciliation](index=21&type=section&id=Adjusted%20Net%20Income%20Reconciliation) Q2 2025 Adjusted Net Income was $322 million ($1.70 per diluted share), primarily adjusted for a $148 million pre-tax lower of cost or market inventory valuation charge Adjusted Net Income Reconciliation (Q2, in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income attributable to HF Sinclair stockholders (GAAP, Millions $) | 208 | 152 | | Total adjustments, net of tax (Millions $) | 114 | (2) | | **Adjusted net income attributable to HF Sinclair stockholders (Non-GAAP, Millions $)** | **322** | **150** | [Segment-Specific Margin Reconciliations](index=18&type=section&id=Segment-Specific%20Margin%20Reconciliations) The company provides segment-specific non-GAAP margin reconciliations, with Q2 2025 Adjusted Refinery Gross Margin at $16.50/barrel and Adjusted Marketing Gross Margin at $0.10/gallon - Adjusted refinery gross margin for Q2 2025 was **$16.50** per produced barrel sold, a significant increase from **$11.33** in Q2 2024[59](index=59&type=chunk) - Adjusted renewables gross margin for Q2 2025 was **$0.36** per produced gallon sold, compared to **$0.44** in Q2 2024[62](index=62&type=chunk) - Adjusted marketing gross margin for Q2 2025 was **$0.10** per gallon sold, up from **$0.06** in Q2 2024[65](index=65&type=chunk)

Core Viewpoint - The market anticipates HF Sinclair (DINO) to report a year-over-year increase in earnings despite lower revenues when it releases its results for the quarter ended June 2025 [1] Earnings Expectations - HF Sinclair is expected to post quarterly earnings of $1.06 per share, reflecting a year-over-year increase of +35.9% [3] - Revenues are projected to be $7.2 billion, which is an 8.2% decrease from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has been revised 8.83% higher in the last 30 days, indicating a positive reassessment by analysts [4] - The Most Accurate Estimate for HF Sinclair is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.97% [12] Earnings Surprise Prediction - A positive Earnings ESP reading suggests a potential earnings beat, especially when combined with a strong Zacks Rank [10] - HF Sinclair currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat despite the positive Earnings ESP [12] Historical Performance - In the last reported quarter, HF Sinclair was expected to post a loss of $0.41 per share but instead reported a loss of -$0.27, resulting in a surprise of +34.15% [13] - Over the past four quarters, the company has exceeded consensus EPS estimates three times [14] Industry Context - Another company in the same industry, World Kinect (WKC), is expected to report earnings of $0.48 per share, indicating no change from the previous year, with revenues expected to be $9.8 billion, down 10.7% [18][19] - World Kinect has an Earnings ESP of -4.83% and a Zacks Rank of 5, making it difficult to predict an earnings beat [20]