[FORM 10-Q Information](index=1&type=section&id=FORM%2010-Q%20Information) [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides basic identification details for the registrant, HF Sinclair Corporation - Registrant is HF SINCLAIR CORPORATION, incorporated in Delaware, with Commission File Number 001-41325[2](index=2&type=chunk) - Principal executive offices are located at 2828 N. Harwood, Suite 1300, Dallas, Texas 75201[3](index=3&type=chunk) [Securities Registered](index=1&type=section&id=Securities%20Registered) This section lists the securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock $0.01 par value | DINO | New York Stock Exchange | [Filing Status](index=1&type=section&id=Filing%20Status) This section confirms the registrant's compliance with SEC filing requirements and its large accelerated filer status - The registrant has filed all required reports during the preceding 12 months and has been subject to filing requirements for the past 90 days[4](index=4&type=chunk) - The registrant has electronically submitted every Interactive Data File required during the preceding 12 months[4](index=4&type=chunk) - HF Sinclair Corporation is classified as a **Large accelerated filer** and is not a shell company[5](index=5&type=chunk) - **192,307,059 shares** of Common Stock, par value $.01 per share, were outstanding on April 28, 2023[5](index=5&type=chunk) [Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Definitions](index=5&type=section&id=DEFINITIONS) [Part I. Financial Information](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the three months ended March 31, 2023 and 2022 - The financial statements are unaudited and include all normal recurring adjustments necessary for a fair presentation in accordance with SEC rules and GAAP[45](index=45&type=chunk) - Financial statements for periods from March 14, 2022, to March 31, 2023, include the combined operations of HollyFrontier and the Acquired Sinclair Businesses[10](index=10&type=chunk)[41](index=41&type=chunk) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :----- | :------------------------------ | :------------------------------- | | Total Assets | $18,006,008 | $18,125,483 | | Total Equity | $10,050,527 | $10,017,572 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------------------- | :------------------ | :------------------ | :----------- | | Sales and Other Revenues | $7,565,142 | $7,458,750 | +1% | | Income from Operations | $504,209 | $232,832 | **+117%** | | Net Income Attributable to HF Sinclair Stockholders | $353,266 | $159,974 | **+121%** | | Basic Earnings Per Share | $1.79 | $0.90 | **+99%** | [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income Highlights (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :------------------------------------------------ | :------------------ | :------------------ | | Total Comprehensive Income | $386,795 | $186,217 | | Comprehensive Income Attributable to HF Sinclair Stockholders | $355,056 | $160,890 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Net Cash Provided by Operating Activities | $177,705 | $461,036 | **-61.4%** | | Net Cash Used for Investing Activities | $(100,237) | $(385,176) | **+74% (less outflow)** | | Net Cash Provided by (Used for) Financing Activities | $(379,110) | $281,386 | **Significant shift from inflow to outflow** | | Cash and Cash Equivalents at End of Period | $1,364,930 | $592,278 | [Consolidated Statements of Equity](index=11&type=section&id=Consolidated%20Statements%20of%20Equity) Consolidated Statements of Equity Highlights (Three Months Ended March 31) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :------------------------------ | :------------------------------- | | Total Equity | $10,050,527 | $10,017,572 | | Common Stock Held in Treasury | $(1,576,689) | $(1,335,431) | | Dividends (Q1 2023 vs Q1 2022) | $(87,987) | $0 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1: Description of Business and Presentation of Financial Statements](index=12&type=section&id=NOTE%201:%20Description%20of%20Business%20and%20Presentation%20of%20Financial%20Statements) This note details HF Sinclair's business operations and key accounting policies - HF Sinclair is an independent energy company producing and marketing high-value light products, operating refineries in multiple states, supplying over 1,500 branded stations, and producing renewable diesel[43](index=43&type=chunk) - On March 14, 2022, HF Sinclair was established as the new parent company, acquiring Sinclair Oil and Sinclair Transportation Company (STC), integrating their operations[40](index=40&type=chunk)[41](index=41&type=chunk) - As of March 31, 2023, HF Sinclair owned a **47% limited partner interest** and a non-economic general partner interest in Holly Energy Partners, L.P. (HEP), which is consolidated as a variable interest entity (VIE)[43](index=43&type=chunk)[82](index=82&type=chunk) Income Tax Expense and Effective Tax Rates (Three Months Ended March 31) | Metric | 2023 (in millions) | 2022 (in millions) | | :------------------ | :----------------- | :----------------- | | Income Tax Expense | $99.7 | $21.3 | | Effective Tax Rate | **20.6%** | **10.3%** | [Note 2: Acquisitions](index=15&type=section&id=NOTE%202:%20Acquisitions) This note details the Sinclair Transactions, including consideration and purchase price allocation - HF Sinclair completed the acquisition of the Target Company (Sinclair Oil) and HEP acquired STC on March 14, 2022[64](index=64&type=chunk)[65](index=65&type=chunk) Sinclair Transactions Purchase Consideration | Consideration Type | Amount (in thousands) | | :----------------- | :-------------------- | | HF Sinclair common stock issued | $2,149,008 | | HEP common units issued | $349,020 | | Total equity consideration | $2,498,028 | | Total cash consideration | $251,448 | | Total purchase consideration | **$2,749,476** | - The final purchase price allocation resulted in **$685.9 million in goodwill**, allocated across Refining, Renewables, Marketing, and HEP segments, driven by expected synergies and deferred tax liabilities[69](index=69&type=chunk) - Incremental direct acquisition and integration costs were **$3.9 million for Q1 2023** and $25.0 million for Q1 2022, recorded as selling, general and administrative expenses[76](index=76&type=chunk) [Note 3: Holly Energy Partners](index=17&type=section&id=NOTE%203:%20Holly%20Energy%20Partners) This note describes Holly Energy Partners (HEP), a consolidated master limited partnership - HEP owns and operates logistics assets (pipelines, terminals, tankage, etc) supporting HF Sinclair's refining and marketing operations, and other third-party refineries[81](index=81&type=chunk) - HF Sinclair accounted for **82% of HEP's total revenues** for the three months ended March 31, 2023, through long-term transportation agreements[84](index=84&type=chunk) - On March 14, 2022, HEP acquired STC for approximately **$678.0 million**, consisting of 21,000,000 common limited partner units and $329.0 million in cash[87](index=87&type=chunk) HEP Lease Income (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :-------------------------------------------------------------------------------- | :------------------ | :------------------ | | Operating lease revenues | $4,634 | $3,127 | | Sales-type lease interest income | $632 | $632 | | Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable | $705 | $361 | [Note 4: Revenues](index=19&type=section&id=NOTE%204:%20Revenues) This note disaggregates revenues by type and market and details future performance obligations Total Sales and Other Revenues (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :---------------------- | :------------------ | :------------------ | | Total Sales and Other Revenues | $7,565,142 | $7,458,750 | Revenues by Type (Three Months Ended March 31) | Revenue Type | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :-------------------------- | :------------------ | :------------------ | :----------- | | Transportation fuels | $4,507,894 | $5,301,036 | **-15%** | | Renewable diesel | $202,413 | $28,313 | **+615%** | | Marketing revenues | $937,385 | $277,041 | **+238%** | Future Performance Obligations - Refined Product Sales Volumes | Period | Volumes (in thousand barrels) | | :--------- | :---------------------------- | | Remainder of 2023 | 27,091 | | 2024 | 30,423 | | 2025 | 21,087 | | Thereafter | 29,676 | | Total | 108,277 | HEP Contractual Minimum Revenues | Period | Revenues (in thousands) | | :--------- | :---------------------- | | Remainder of 2023 | $12,261 | | 2024 | $17,075 | | 2025 | $8,226 | | Thereafter | $33,636 | | Total | $71,198 | [Note 5: Fair Value Measurements](index=21&type=section&id=NOTE%205:%20Fair%20Value%20Measurements) This note details the fair value measurements of financial instruments, categorized by input level Fair Value of Assets (March 31, 2023) | Asset Type | Carrying Amount (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :-------------------------- | :----------------------------- | :--------------------- | :--------------------- | :--------------------- | | Commodity price swaps | $2,624 | $0 | $2,624 | $0 | | RINs receivable | $75,724 | $0 | $75,724 | $0 | | Foreign currency forward contracts | $11,757 | $0 | $11,757 | $0 | Fair Value of Liabilities (March 31, 2023) | Liability Type | Carrying Amount (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :-------------------------- | :----------------------------- | :--------------------- | :--------------------- | :--------------------- | | NYMEX futures contracts | $3,438 | $3,438 | $0 | $0 | | Commodity collar contracts | $21,422 | $0 | $21,422 | $0 | | RINs credit obligations | $75,724 | $0 | $75,724 | $0 | - Nonrecurring fair value measurements for the Sinclair Transactions were based on **Level 3 inputs**, including discounted cash flows, guideline public company/transaction methods, and obsolescence adjusted replacement costs[108](index=108&type=chunk) [Note 6: Earnings Per Share](index=23&type=section&id=NOTE%206:%20Earnings%20Per%20Share) This note provides the reconciliation of basic and diluted earnings per share Earnings Per Share (Three Months Ended March 31) | Metric | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Net income attributable to HF Sinclair stockholders (in thousands) | $353,266 | $159,974 | | Basic earnings per share | **$1.79** | **$0.90** | | Diluted earnings per share | **$1.79** | **$0.90** | | Average number of common shares outstanding (in thousands) | 195,445 | 175,081 | [Note 7: Stock-Based Compensation](index=23&type=section&id=NOTE%207:%20Stock-Based%20Compensation) This note describes stock-based compensation plans and associated costs - Total compensation cost for HF Sinclair's plans was **$3.3 million for Q1 2023**, down from $8.9 million for Q1 2022[113](index=113&type=chunk) - HEP's equity-based compensation cost was **$0.4 million for Q1 2023**, down from $0.6 million for Q1 2022[113](index=113&type=chunk) Restricted Stock Unit and Performance Share Unit Activity (Three Months Ended March 31, 2023) | Metric | Restricted Stock Units | Performance Share Units | | :------------------------------------------ | :--------------------- | :---------------------- | | Outstanding at January 1, 2023 | 1,055,875 | 771,197 | | Granted | 29,590 | 1,509 | | Forfeited | (25,053) | (12,540) | | Outstanding at March 31, 2023 | 1,284,772 | 534,949 | [Note 8: Inventories](index=24&type=section&id=NOTE%208:%20Inventories) This note details the composition and valuation of inventories, including LCOM adjustments Total Inventory (March 31, 2023 vs December 31, 2022) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------- | :------------------------------ | :------------------------------- | | Total Inventory | $3,448,821 | $3,214,528 | Inventory Components (March 31, 2023) | Component | Amount (in thousands) | | :------------------------------------ | :-------------------- | | Crude oil | $858,985 | | Other raw materials and unfinished products | $966,222 | | Finished products | $1,396,254 | | Lower of cost or market reserve | $(108,748) | - A valuation reserve of **$108.7 million** was recorded at March 31, 2023, for renewables inventories, compared to $61.2 million at December 31, 2022, increasing cost of products sold by **$47.6 million** for Q1 2023[118](index=118&type=chunk) [Note 9: Environmental](index=24&type=section&id=NOTE%209:%20Environmental) This note outlines accounting for environmental costs and liabilities - Environmental remediation expense was **$13.3 million for Q1 2023**, up from $7.1 million for Q1 2022[122](index=122&type=chunk) Accrued Environmental Liability | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :------------------------------ | :------------------------------- | | Accrued Environmental Liability | $202,000 | $192,300 | - Accrued environmental liabilities assumed in the Sinclair Transactions were **$72.2 million** at the acquisition date, with an associated receivable from third parties of $21.5 million[122](index=122&type=chunk) [Note 10: Debt](index=25&type=section&id=NOTE%2010:%20Debt) This note details HF Sinclair's and HEP's debt instruments and compliance - HF Sinclair has a **$1.65 billion** senior unsecured revolving credit facility maturing in April 2026, with no outstanding borrowings and $2.3 million in letters of credit at March 31, 2023[123](index=123&type=chunk) - HEP has a **$1.2 billion** senior secured revolving credit facility maturing in July 2025, with **$651.5 million** in outstanding borrowings and no outstanding letters of credit at March 31, 2023, with a weighted average interest rate of **6.88%**[125](index=125&type=chunk)[126](index=126&type=chunk) Total Long-Term Debt | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :---------------- | :------------------------------ | :------------------------------- | | Total Long-Term Debt | $2,932,989 | $2,948,513 | Fair Values of Senior Notes (March 31, 2023) | Senior Notes Type | Fair Value (in thousands) | | :-------------------------------- | :------------------------ | | HollyFrontier and HF Sinclair Senior Notes | $1,677,864 | | HEP Senior Notes | $866,860 | [Note 11: Derivative Instruments and Hedging Activities](index=28&type=section&id=NOTE%2011:%20Derivative%20Instruments%20and%20Hedging%20Activities) This note describes the use of derivative instruments to manage commodity and currency risk - HF Sinclair uses derivative contracts to mitigate commodity price risk related to inventory, natural gas purchases, refined product sales, and crude oil costs[140](index=140&type=chunk) - Foreign exchange forward contracts are used to mitigate foreign currency exchange rate volatility on intercompany notes with foreign subsidiaries[141](index=141&type=chunk) Pre-Tax Effect of Accounting Hedges on OCI and Earnings (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :---------------------------------------------------------------- | :------------------ | :------------------ | | Net Unrealized Gain Recognized in OCI (Commodity contracts) | $271 | $326 | | Loss Reclassified into Earnings (Commodity contracts) | $(1) | $(5,288) | Notional Contract Volumes for Derivative Instruments (March 31, 2023) | Instrument Type | Total Outstanding Notional | 2023 Maturity | 2024 Maturity | Unit of Measure | | :------------------------------------ | :------------------------- | :-------------- | :-------------- | :-------------- | | NYMEX futures (WTI) - short | 1,790,000 | 1,790,000 | — | Barrels | | Foreign currency forward contracts | 428,211,705 | 322,227,146 | 105,984,559 | U.S. dollar | | Natural gas collar contracts | 22,000,000 | 22,000,000 | — | MMBTU | [Note 12: Equity](index=30&type=section&id=NOTE%2012:%20Equity) This note details the share repurchase program and dividend declarations - In September 2022, a **$1.0 billion share repurchase program** was approved, replacing all existing programs[151](index=151&type=chunk) Common Stock Repurchases (Three Months Ended March 31, 2023) | Metric | Shares | Amount (in millions) | | :-------------------------------- | :------- | :------------------- | | Open market and privately negotiated purchases | 4,793,857 | $240.3 | | Repurchases from REH Company | 1,969,279 | $100.0 | - As of March 31, 2023, **$419.8 million remained authorized** under the share repurchase program[152](index=152&type=chunk) - On May 3, 2023, a regular quarterly dividend of **$0.45 per share** was declared, payable on June 1, 2023[153](index=153&type=chunk) [Note 13: Other Comprehensive Income](index=31&type=section&id=NOTE%2013:%20Other%20Comprehensive%20Income) This note presents the components and tax effects of other comprehensive income (OCI) Other Comprehensive Income Attributable to HF Sinclair Stockholders (Three Months Ended March 31, After-Tax) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :---------------------------------------------------------------- | :------------------ | :------------------ | | Net change in foreign currency translation adjustment | $2,312 | $1,342 | | Net unrealized gain on hedging instruments | $205 | $259 | | Net change in pension and other post-retirement benefit obligations | $(727) | $(685) | | Total Other Comprehensive Income | $1,790 | $916 | Accumulated Other Comprehensive Loss (March 31, 2023 vs December 31, 2022) | Component | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Foreign currency translation adjustment | $(31,115) | $(33,427) | | Unrealized loss on pension obligations | $(2,706) | $(2,661) | | Unrealized gain on post-retirement benefit obligations | $13,393 | $14,075 | | Unrealized gain on hedging instruments | $205 | $0 | | Accumulated other comprehensive loss | $(20,223) | $(22,013) | [Note 14: Contingencies](index=32&type=section&id=NOTE%2014:%20Contingencies) This note discusses various legal and environmental contingencies, including RINs obligations - REH Company is financially responsible for pre-closing RINs obligations, secured by **2,570,000 shares** of HF Sinclair common stock held in escrow[159](index=159&type=chunk) - The EPA reversed small refinery exemptions for Woods Cross and Cheyenne refineries for 2016 and 2018 compliance years and denied petitions for 2019 and 2020, with legal challenges ongoing[161](index=161&type=chunk) [Note 15: Segment Information](index=33&type=section&id=NOTE%2015:%20Segment%20Information) This note provides a detailed breakdown of financial performance by operating segment - HF Sinclair operates through Refining, Renewables, Marketing, Lubricants and Specialty Products, and HEP segments[163](index=163&type=chunk) - The Refining segment includes seven refineries marketing refined products in the Mid-Continent, Southwest, and Rocky Mountains regions[164](index=164&type=chunk) - The Renewables segment operates multiple renewable diesel units (RDU) including Cheyenne, Artesia, and Sinclair RDUs[165](index=165&type=chunk) Segment Income (Loss) from Operations (Three Months Ended March 31) | Segment | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :-------------------------- | :------------------ | :------------------ | :----------- | | Refining | $440,683 | $113,022 | **+290%** | | Renewables | $(64,579) | $(22,121) | **-192%** | | Marketing | $502 | $5,269 | **-90%** | | Lubricants and Specialty Products | $78,740 | $122,088 | **-35%** | | HEP | $62,052 | $51,676 | **+20%** | Segment Capital Expenditures (Three Months Ended March 31) | Segment | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :-------------------------- | :------------------ | :------------------ | :----------- | | Refining | $67,774 | $29,920 | **+127%** | | Renewables | $4,844 | $98,769 | **-95%** | | Marketing | $5,255 | $0 | N/A | | Lubricants and Specialty Products | $8,649 | $6,370 | **+36%** | | HEP | $7,614 | $14,147 | **-46%** | [Note 16: Subsequent Event](index=35&type=section&id=NOTE%2016:%20Subsequent%20Event) This note discloses a non-binding proposal to acquire all outstanding common units of HEP - HF Sinclair submitted a non-binding proposal on May 3, 2023, to acquire all outstanding HEP common units not beneficially owned by HF Sinclair or its affiliates[173](index=173&type=chunk) - HEP unitholders would receive **0.3714 shares** of HF Sinclair Common Stock for each publicly held Common Unit[173](index=173&type=chunk) - The proposal is subject to negotiation and execution of a definitive agreement, with no assurance of approval or consummation[173](index=173&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and results of operations for Q1 2023 versus Q1 2022 - Net income attributable to HF Sinclair stockholders increased by **$193.3 million to $353.3 million** for Q1 2023, driven by healthy demand, favorable crude spreads, and constrained refined product supply[177](index=177&type=chunk) - The Refining segment saw healthy margins in both West and Mid-continent regions due to steady demand, tight supply, and favorable crude spreads, with turnarounds completed at multiple refineries[178](index=178&type=chunk) - RINs costs totaled **$157.5 million** for Q1 2023, significantly increasing cost of products sold[183](index=183&type=chunk) - Outlook for Q2 2023 includes expected crude oil throughput of **550,000 – 580,000 BPD** in Refining, increased throughputs in Renewables, and favorable product mix in Lubricants[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [Overview](index=36&type=section&id=OVERVIEW) Net Income Attributable to HF Sinclair Stockholders (Three Months Ended March 31) | Metric | 2023 (in millions) | 2022 (in millions) | Change (YoY) | | :----------------------------------- | :----------------- | :----------------- | :----------- | | Net Income Attributable to HF Sinclair Stockholders | $353.3 | $160.0 | **+121%** | - Q1 2023 results were favorably impacted by healthy demand for transportation fuels, lubricants, and transportation/terminal services, favorable crude spreads, and constrained refined product supply[177](index=177&type=chunk) - HF Sinclair submitted a non-binding proposal on May 3, 2023, to acquire all outstanding HEP common units not beneficially owned by HF Sinclair or its affiliates, at an exchange ratio of **0.3714 shares** of Common Stock per Common Unit[181](index=181&type=chunk) - For Q2 2023, the Refining segment expects to run between **550,000 – 580,000 barrels per day** of crude oil, with healthy refined product margins[185](index=185&type=chunk) [Results of Operations](index=39&type=section&id=RESULTS%20OF%20OPERATIONS) [Financial Data](index=39&type=section&id=Financial%20Data) Key Financial Performance (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change | Percent Change | | :------------------------------------------------------------------------------------------------ | :------------------ | :------------------ | :------- | :------------- | | Sales and other revenues | $7,565,142 | $7,458,750 | $106,392 | 1% | | Income from operations | $504,209 | $232,832 | $271,377 | **117%** | | Net income attributable to HF Sinclair stockholders | $353,266 | $159,974 | $193,292 | **121%** | | Basic earnings per share | $1.79 | $0.90 | $0.89 | **99%** | Balance Sheet Highlights (March 31, 2023 vs December 31, 2022) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :---------------------- | :------------------------------ | :------------------------------- | | Cash and cash equivalents | $1,364,930 | $1,665,066 | | Total assets | $18,006,008 | $18,125,483 | | Total debt | $3,240,245 | $3,255,472 | | Total equity | $10,050,527 | $10,017,572 | [Other Financial Data](index=40&type=section&id=Other%20Financial%20Data) Cash Flow and Capital Expenditures (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :---------------------------------------- | :------------------ | :------------------ | | Net cash provided by operating activities | $177,705 | $461,036 | | Net cash used for investing activities | $(100,237) | $(385,176) | | Net cash provided by (used for) financing activities | $(379,110) | $281,386 | | Capital expenditures | $100,069 | $158,296 | | EBITDA | $652,836 | $359,766 | [Segment Operating Data](index=40&type=section&id=Segment%20Operating%20Data) [Refining Segment Operating Data](index=40&type=section&id=Refining%20Segment%20Operating%20Data) Consolidated Refining Operations (Three Months Ended March 31) | Metric | 2023 | 2022 | Change (YoY) | | :------------------------------------ | :----- | :----- | :----------- | | Crude charge (BPD) | 498,500 | 525,080 | -5.1% | | Refinery utilization | 73.5% | 88.6% | -15.1 pp | | Refinery gross margin (per produced barrel) | **$23.70** | **$12.69** | **+86.8%** | | Net operating margin (per produced barrel) | **$12.55** | **$5.14** | **+144.2%** | Mid-Continent Region Refining Operations (Three Months Ended March 31) | Metric | 2023 | 2022 | Change (YoY) | | :------------------------------------ | :----- | :----- | :----------- | | Crude charge (BPD) | 211,390 | 290,200 | -27.2% | | Refinery utilization | 81.3% | 111.6% | -30.3 pp | | Refinery gross margin (per produced barrel) | **$20.34** | **$9.32** | **+118.2%** | West Region Refining Operations (Three Months Ended March 31) | Metric | 2023 | 2022 | Change (YoY) | | :------------------------------------ | :----- | :----- | :----------- | | Crude charge (BPD) | 287,110 | 234,880 | +22.2% | | Refinery utilization | 68.7% | 70.6% | -1.9 pp | | Refinery gross margin (per produced barrel) | **$25.92** | **$16.61** | **+56.0%** | [Renewables Segment Operating Data](index=43&type=section&id=Renewables%20Segment%20Operating%20Data) Renewables Operations (Three Months Ended March 31) | Metric | 2023 | 2022 | Change (YoY) | | :------------------------------------ | :----- | :----- | :----------- | | Sales volumes (in thousand gallons) | 46,012 | 4,943 | **+830.8%** | | Renewables gross margin (per produced gallon) | $0.77 | $0.63 | +22.2% | | Net operating margin (per produced gallon) | $0.09 | $(4.85) | **Significant improvement** | [Marketing Segment Operating Data](index=43&type=section&id=Marketing%20Segment%20Operating%20Data) Marketing Operations (Three Months Ended March 31) | Metric | 2023 | 2022 | Change (YoY) | | :------------------------------------ | :----- | :----- | :----------- | | Number of branded sites at period end | 1,511 | 1,323 | +14.2% | | Sales volumes (in thousand gallons) | 328,407 | 84,913 | **+286.7%** | | Margin per gallon of sales | $0.04 | $0.07 | -42.9% | [Lubricants and Specialty Products Segment Operating Data](index=43&type=section&id=Lubricants%20and%20Specialty%20Products%20Segment%20Operating%20Data) Lubricants and Specialty Products Operations (Three Months Ended March 31) | Metric | 2023 | 2022 | Change (YoY) | | :------------------------------------ | :----- | :----- | :----------- | | Sales of produced refined products (BPD) | 31,790 | 35,010 | -9.2% | | Finished products (as % of sales) | 50% | 51% | -1 pp | | Base oils (as % of sales) | 29% | 30% | -1 pp | - Effective Q1 2023, management views this segment as an integrated business of processing feedstocks into base oils and finished lubricant products for sale to customers[209](index=209&type=chunk) [Results of Operations – Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022](index=44&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20Months%20Ended%20March%2031,%202023%20Compared%20to%20Three%20Months%20Ended%20March%2031,%202022) [Summary](index=44&type=section&id=Summary%20(Results%20of%20Operations)) - Net income attributable to HF Sinclair stockholders increased by **$193.3 million to $353.3 million** ($1.79 per share) for Q1 2023, compared to $160.0 million ($0.90 per share) for Q1 2022[210](index=210&type=chunk) - Refinery gross margins increased to **$23.70 per produced barrel sold** for Q1 2023, from $12.69 for Q1 2022[210](index=210&type=chunk) - A lower of cost or market inventory reserve adjustment decreased pre-tax earnings by **$47.6 million** for Q1 2023 due to renewables inventories[210](index=210&type=chunk) [Sales and Other Revenues](index=44&type=section&id=Sales%20and%20Other%20Revenues%20(Results%20of%20Operations)) - Sales and other revenues increased 1% to **$7,565.1 million** for Q1 2023 from $7,458.8 million for Q1 2022, primarily due to increased sales prices, partially offset by lower refined product sales volumes[211](index=211&type=chunk) - Unaffiliated revenues for Q1 2023 included **$937.4 million** from Marketing, **$733.7 million** from Lubricants and Specialty Products, and **$202.4 million** from Renewables segments[211](index=211&type=chunk) [Cost of Products Sold](index=44&type=section&id=Cost%20of%20Products%20Sold%20(Results%20of%20Operations)) - Total cost of products sold decreased 5% to **$6,151.7 million** for Q1 2023 from $6,493.5 million for Q1 2022, mainly due to lower crude oil costs and lower refined product sales volumes[212](index=212&type=chunk) - A **$47.6 million charge** for renewables inventories in Q1 2023, compared to an $8.6 million benefit in Q1 2022, due to lower of cost or market inventory valuation adjustment[212](index=212&type=chunk) - The FIFO impact within the Lubricants and Specialty Products segment was a **$13.9 million charge** for Q1 2023, compared to a $58.4 million benefit for Q1 2022[212](index=212&type=chunk) [Gross Refinery Margins](index=44&type=section&id=Gross%20Refinery%20Margins%20(Results%20of%20Operations)) - Gross refinery margin per produced barrel sold increased **87% to $23.70** for Q1 2023 from $12.69 for Q1 2022, driven by higher average sales prices and lower crude oil/feedstock prices[213](index=213&type=chunk) [Operating Expenses](index=44&type=section&id=Operating%20Expenses%20(Results%20of%20Operations)) - Operating expenses (exclusive of depreciation and amortization) increased 34% to **$639.4 million** for Q1 2023 from $477.4 million for Q1 2022, primarily due to the acquisition of the Acquired Sinclair Businesses and higher purchased fuel costs[214](index=214&type=chunk) [Selling, General and Administrative Expenses](index=44&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20(Results%20of%20Operations)) - Selling, general and administrative expenses decreased 13% to **$95.9 million** for Q1 2023 from $110.4 million for Q1 2022, mainly due to lower professional services and legal costs[215](index=215&type=chunk) - Acquisition integration and regulatory costs were **$3.9 million in Q1 2023**, down from $25.0 million in Q1 2022[215](index=215&type=chunk) [Depreciation and Amortization Expenses](index=44&type=section&id=Depreciation%20and%20Amortization%20Expenses%20(Results%20of%20Operations)) - Depreciation and amortization increased 20% to **$174.0 million** for Q1 2023 from $144.6 million for Q1 2022, primarily due to the Acquired Sinclair Businesses and newly capitalized renewable diesel units[216](index=216&type=chunk) [Interest Income](index=44&type=section&id=Interest%20Income%20(Results%20of%20Operations)) - Interest income increased significantly to **$19.9 million** for Q1 2023 from $1.0 million for Q1 2022, due to higher average cash balance and interest rates on cash investments[217](index=217&type=chunk) [Interest Expense](index=45&type=section&id=Interest%20Expense%20(Results%20of%20Operations)) - Interest expense increased to **$45.8 million** for Q1 2023 from $34.9 million for Q1 2022, mainly due to HEP's April 2022 senior notes issuance and higher market interest rates on HEP's revolving credit facility[218](index=218&type=chunk) - Interest expense attributable to the HEP segment was **$26.0 million** for Q1 2023, compared to $13.6 million for Q1 2022[219](index=219&type=chunk) [Gain on Foreign Currency Transactions](index=45&type=section&id=Gain%20on%20Foreign%20Currency%20Transactions%20(Results%20of%20Operations)) - A net gain of **$0.9 million** for Q1 2023, compared to $0.1 million for Q1 2022, from remeasurement adjustments on intercompany financing notes and mark-to-market valuations on foreign exchange forward contracts[220](index=220&type=chunk) [Income Taxes](index=45&type=section&id=Income%20Taxes%20(Results%20of%20Operations)) - Income tax expense increased to **$99.7 million** for Q1 2023 from $21.3 million for Q1 2022, primarily due to higher pre-tax income[221](index=221&type=chunk) - Effective tax rates were **20.6% for Q1 2023** and 10.3% for Q1 2022[221](index=221&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) [HF Sinclair Credit Agreement](index=45&type=section&id=HF%20Sinclair%20Credit%20Agreement%20(Liquidity)) - HF Sinclair has a **$1.65 billion** senior unsecured revolving credit facility maturing in April 2026[222](index=222&type=chunk) - At March 31, 2023, HF Sinclair was in compliance with all covenants, had **no outstanding borrowings**, and $2.3 million in outstanding letters of credit[222](index=222&type=chunk) [HF Sinclair Financing Arrangements](index=45&type=section&id=HF%20Sinclair%20Financing%20Arrangements%20(Liquidity)) - Certain wholly-owned subsidiaries entered into financing arrangements involving the sale and leaseback of precious metals catalyst, with current leases maturing in one year or less[223](index=223&type=chunk) [HEP Credit Agreement](index=45&type=section&id=HEP%20Credit%20Agreement%20(Liquidity)) - HEP has a **$1.2 billion** senior secured revolving credit facility maturing in July 2025[224](index=224&type=chunk) - At March 31, 2023, HEP was in compliance with all covenants, had **$651.5 million in outstanding borrowings**, and no outstanding letters of credit[224](index=224&type=chunk) - HEP had net repayments of **$16.5 million** under the credit agreement during Q1 2023[224](index=224&type=chunk) [Liquidity](index=46&type=section&id=Liquidity%20(Overall)) - Standalone liquidity was approximately **$3.01 billion** at March 31, 2023, comprising $1.36 billion in cash and cash equivalents and an undrawn $1.65 billion credit facility[227](index=227&type=chunk) - Management believes current cash, internally generated cash flow, and credit facilities will provide sufficient resources for planned capital projects and liquidity needs[226](index=226&type=chunk) - During Q1 2023, **4,793,857 shares were repurchased for $240.3 million** under the $1.0 billion share repurchase program, with **$419.8 million remaining authorized** as of March 31, 2023[229](index=229&type=chunk)[230](index=230&type=chunk) [Cash Flows – Operating Activities](index=46&type=section&id=Cash%20Flows%20%E2%80%93%20Operating%20Activities%20(Liquidity)) - Net cash flows provided by operating activities decreased by **$283.3 million to $177.7 million** for Q1 2023, compared to $461.0 million for Q1 2022, primarily due to higher turnaround spend[231](index=231&type=chunk) - Turnaround expenditures were **$163.7 million** for Q1 2023, compared to $45.2 million for Q1 2022[231](index=231&type=chunk) [Cash Flows – Investing Activities and Planned Capital Expenditures](index=46&type=section&id=Cash%20Flows%20%E2%80%93%20Investing%20Activities%20and%20Planned%20Capital%20Expenditures%20(Liquidity)) - Net cash flows used for investing activities were **$100.2 million** for Q1 2023, a decrease from $385.2 million for Q1 2022[232](index=232&type=chunk)[233](index=233&type=chunk) - Cash expenditures for properties, plants and equipment were **$100.1 million** for Q1 2023 (including $7.6 million for HEP), compared to $158.3 million for Q1 2022 (including $14.1 million for HEP)[232](index=232&type=chunk)[233](index=233&type=chunk) - The Sinclair Transactions in Q1 2022 resulted in a cash outflow of **$231.2 million**[233](index=233&type=chunk) Expected Capital and Turnaround Cash Spending for 2023 | Category | Expected Range (in millions) | | :-------------------------------- | :--------------------------- | | Total HF Sinclair Capital Expenditures | $910.0 - $1,105.0 | | Total HEP Capital Expenditures | $30.0 - $45.0 | | Total Company Capital Expenditures | $940.0 - $1,150.0 | [Cash Flows – Financing Activities](index=47&type=section&id=Cash%20Flows%20%E2%80%93%20Financing%20Activities%20(Liquidity)) - Net cash flows used for financing activities were **$379.1 million** for Q1 2023, a significant shift from $281.4 million provided by financing activities for Q1 2022[240](index=240&type=chunk)[241](index=241&type=chunk) - Key financing activities in Q1 2023 included **$245.6 million in common stock repurchases** and **$88.0 million in dividends paid**, while HEP had net repayments of $16.5 million and paid $26.0 million in distributions[240](index=240&type=chunk) - In Q1 2022, HEP had net borrowings of **$301.5 million** under its credit agreement and paid $17.0 million in distributions to noncontrolling interests[241](index=241&type=chunk) [Contractual Obligations and Commitments](index=49&type=section&id=Contractual%20Obligations%20and%20Commitments) - There were no significant changes to HF Sinclair's or HEP's long-term contractual obligations during Q1 2023, other than HEP's net repayments of **$16.5 million** under its credit agreement[242](index=242&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) [Critical Accounting Estimates](index=49&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) [Inventory Valuation](index=49&type=section&id=Inventory%20Valuation%20(Critical%20Accounting%20Estimates)) - Refining and renewables inventories are valued at the lower of LIFO cost or market, with interim LIFO calculations based on management's estimates of expected year-end inventory levels[247](index=247&type=chunk) - A renewables inventory valuation reserve of **$108.7 million** at March 31, 2023 (up from $61.2 million at December 31, 2022) increased cost of products sold by **$47.6 million** in Q1 2023 due to market conditions[248](index=248&type=chunk) - Inventories for Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of FIFO cost or net realizable value[249](index=249&type=chunk) [Valuation of Business Combinations](index=50&type=section&id=Valuation%20of%20Business%20Combinations%20(Critical%20Accounting%20Estimates)) - Assets acquired and liabilities assumed in business combinations are recognized and measured at estimated fair values at the acquisition date, with any excess consideration recorded as goodwill[251](index=251&type=chunk) - Fair value determinations are based on a combination of valuation methods, including income, cost, and market approaches, which involve inherently uncertain estimates[251](index=251&type=chunk) [Contingencies](index=50&type=section&id=Contingencies%20(Critical%20Accounting%20Estimates)) - The company is subject to various legal, regulatory, and administrative proceedings, requiring assessment of the likelihood of adverse judgments and potential ranges of probable losses[252](index=252&type=chunk) - Required reserves for contingencies are subject to periodic adjustments based on new developments or changes in settlement strategy[252](index=252&type=chunk) [Risk Management](index=50&type=section&id=RISK%20MANAGEMENT) [Commodity Price Risk Management](index=50&type=section&id=Commodity%20Price%20Risk%20Management%20(Risk%20Management)) - The primary market risk is commodity price volatility in crude oil, refined products, and natural gas[254](index=254&type=chunk) - Derivative contracts are used to mitigate price exposure for inventory, natural gas purchases, refined product sales, and crude oil costs[254](index=254&type=chunk) [Foreign Currency Risk Management](index=50&type=section&id=Foreign%20Currency%20Risk%20Management%20(Risk%20Management)) - The company is exposed to market risk related to volatility in foreign currency exchange rates[255](index=255&type=chunk) - Foreign exchange forward contracts are periodically entered into to mitigate exposure associated with fluctuations on intercompany notes with foreign subsidiaries[255](index=255&type=chunk) Foreign Currency Forward Contracts Notional Volumes (March 31, 2023) | Instrument Type | Total Outstanding Notional | 2023 Maturity | 2024 Maturity | Unit of Measure | | :------------------------------------ | :------------------------- | :-------------- | :-------------- | :-------------- | | Foreign currency forward contracts | 428,211,705 | 322,227,146 | 105,984,559 | U.S. dollar | [Interest Rate Risk Management](index=51&type=section&id=Interest%20Rate%20Risk%20Management%20(Risk%20Management)) - For fixed-rate debt, changes in interest rates generally affect fair value but not earnings or cash flows[258](index=258&type=chunk) - For variable-rate debt (HEP Credit Agreement), changes in interest rates affect cash flows but not fair value[259](index=259&type=chunk) Estimated Change in Fair Value for Fixed-Rate Debt (March 31, 2023) | Debt Type | Outstanding Principal (in thousands) | Estimated Fair Value (in thousands) | Estimated Change in Fair Value (10% yield change, in thousands) | | :-------------------------------- | :--------------------------------- | :---------------------------------- | :------------------------------------------------------------- | | HollyFrontier and HF Sinclair Senior Notes | $1,707,827 | $1,677,864 | $29,993 | | HEP Senior Notes | $900,000 | $866,860 | $22,254 | - A hypothetical 10% change in interest rates applicable to the HEP Credit Agreement's **$651.5 million** outstanding borrowings would not materially affect cash flows[259](index=259&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the "Risk Management" discussion for disclosures about market risk - This item directs readers to the "Risk Management" section under "Management's Discussion and Analysis of Financial Condition and Results of Operations" for detailed disclosures on market risk[263](index=263&type=chunk) [Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles](index=50&type=section&id=Reconciliations%20to%20Amounts%20Reported%20Under%20Generally%20Accepted%20Accounting%20Principles) This section provides reconciliations of non-GAAP financial measures to their most comparable GAAP measures EBITDA Reconciliation (Three Months Ended March 31) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :------------------------------------ | :------------------ | :------------------ | | Net income attributable to HF Sinclair stockholders | $353,266 | $159,974 | | Add interest expense | $45,822 | $34,859 | | Subtract interest income | $(19,935) | $(997) | | Add income tax expense | $99,700 | $21,329 | | Add depreciation and amortization | $173,983 | $144,601 | | EBITDA | **$652,836** | **$359,766** | Consolidated Refining Segment Gross Margin and Net Operating Margin Reconciliation (Three Months Ended March 31) | Metric | 2023 (in thousands, except per barrel) | 2022 (in thousands, except per barrel) | | :------------------------------------------------------------------------------------------------ | :------------------------------------ | :------------------------------------ | | Refining segment sales and other revenues | $6,718,615 | $6,506,167 | | Refining segment gross margin | $1,100,704 | $596,557 | | Refinery gross margin per produced barrel sold | **$23.70** | **$12.69** | | Net operating margin per produced barrel sold | **$12.55** | **$5.14** | Renewables Segment Gross Margin and Net Operating Margin Reconciliation (Three Months Ended March 31) | Metric | 2023 (in thousands, except per gallon) | 2022 (in thousands, except per gallon) | | :------------------------------------------------------------------------------------------------ | :------------------------------------ | :------------------------------------ | | Renewables segment sales and other revenues | $298,016 | $47,367 | | Renewables gross margin | $35,278 | $3,096 | | Renewables gross margin per produced gallon sold | **$0.77** | **$0.63** | | Net operating margin per produced gallon sold | **$0.09** | **$(4.85)** | Marketing Segment Gross Margin Reconciliation (Three Months Ended March 31) | Metric | 2023 (in thousands, except per gallon) | 2022 (in thousands, except per gallon) | | :------------------------------------------------------------------------------------------------ | :------------------------------------ | :------------------------------------ | | Marketing segment sales and other revenues | $937,385 | $277,041 | | Marketing gross margin | $13,336 | $5,910 | | Marketing segment gross margin per gallon sold | **$0.04** | **$0.07** | [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were **effective** at the reasonable assurance level as of March 31, 2023[275](index=275&type=chunk) - There have been **no material changes** in internal control over financial reporting during the last fiscal quarter[276](index=276&type=chunk) [Part II. Other Information](index=56&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) This section details various legal, regulatory, and administrative proceedings and their potential impact - HollyFrontier Navajo Refining LLC is in discussions with the EPA, DOJ, and NMED regarding alleged noncompliance with the Clean Air Act at its Artesia and Lovington refineries[281](index=281&type=chunk) - Sinclair Oil received a Notice of Claim from the Port of Seattle alleging responsibility for bunker fuel clean-up from 1977-1980, with ongoing discussions[284](index=284&type=chunk) - The EPA reversed small refinery exemptions for Woods Cross and Cheyenne refineries for the 2016 and 2018 compliance years and denied petitions for 2019 and 2020, with legal challenges ongoing[285](index=285&type=chunk)[286](index=286&type=chunk) - Management believes that the resolution of these proceedings will **not individually or in the aggregate have a materially adverse effect** on the company's financial condition, results of operations, or cash flows[279](index=279&type=chunk)[289](index=289&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting a new risk related to the proposed acquisition of HEP common units - There have been **no material changes** in risk factors as previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022, except as described[290](index=290&type=chunk) - A new risk factor highlights that there can be **no assurance of entering into a definitive agreement or completing the proposed HEP Transaction** to acquire all outstanding HEP common units not beneficially owned by HF Sinclair or its affiliates[291](index=291&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchases made by the company during the first quarter of 2023 Common Stock Repurchases (First Quarter 2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | | :------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------------------------ | | January 2023 | 511,716 | $51.60 | $635.37 | | February 2023 | 692,357 | $53.10 | $598.24 | | March 2023 | 3,589,784 | $49.35 | $419.77 | | Total for Q1 2023 | **4,793,857** | N/A | N/A | - The repurchases were made under a **$1.0 billion share repurchase program** approved in September 2022, which authorizes open market or privately negotiated transactions, including from REH Company[294](index=294&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL data - Key exhibits include Amended and Restated Certificate of Incorporation and By-Laws, various material agreements, CEO/CFO Certifications, and Inline XBRL financial information[298](index=298&type=chunk) [Signatures](index=60&type=section&id=SIGNATURES)

Part I [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section clarifies the nature of forward-looking statements, emphasizing their reliance on current beliefs and the numerous risk factors that could cause actual results to differ materially - On March 14, 2022, HollyFrontier Corporation and Holly Energy Partners, L.P. established HF Sinclair Corporation as the new parent holding company after acquiring Sinclair Oil Corporation and Sinclair Transportation Company[15](index=15&type=chunk) - Key risk factors impacting future performance include the integration of Acquired Sinclair Businesses, demand for crude oil and refined products, refined product and crude oil price spreads, and governmental and environmental regulations[18](index=18&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section provides a glossary of technical terms and abbreviations, defining key processes, products, and metrics relevant to the oil refining and specialty products industry - Key industry terms defined include **BPD** (barrels per calendar day), **Refinery gross margin** (difference between average net sales price and average cost per barrel sold, excluding depreciation and amortization), and **RINs** (renewable identification numbers)[22](index=22&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) [Business and Properties](index=8&type=section&id=Items%201%20and%202.%20Business%20and%20Properties) HF Sinclair is an independent energy company with five segments, significantly expanded by the 2022 Sinclair Oil acquisition and 2021 Puget Sound Refinery acquisition, and heavily invested in renewable diesel, all subject to extensive governmental regulation - On March 14, 2022, HF Sinclair formed as the new parent company after acquiring Sinclair Oil's refining, branded marketing, renewables, and midstream businesses, adding two refineries, over 1,300 branded stations, and a renewable diesel unit[46](index=46&type=chunk)[48](index=48&type=chunk) - Renewable diesel capacity expanded in 2022 with Artesia RDU (**135 million gallons/year**) and Cheyenne RDU (**90 million gallons/year**) becoming operational, complementing the acquired Sinclair RDU (**153 million gallons/year**)[51](index=51&type=chunk)[52](index=52&type=chunk)[87](index=87&type=chunk) - As of December 31, 2022, the company employed **5,223 people**, with **1,384** under collective bargaining agreements, emphasizing a culture of safety, integrity, teamwork, ownership, and inclusion[112](index=112&type=chunk)[113](index=113&type=chunk) - Operations are subject to extensive regulation, including the Clean Air Act, Renewable Fuel Standard (RFS), and various state-level low carbon fuel programs, incurring significant compliance costs and capital expenditures[121](index=121&type=chunk)[128](index=128&type=chunk)[131](index=131&type=chunk) [Company Overview](index=8&type=section&id=Company%20Overview) This section details significant corporate transactions, including the March 2022 Sinclair Oil acquisition and November 2021 Puget Sound Refinery acquisition, alongside major investments in new renewable diesel units becoming operational in 2022 - On March 14, 2022, HF Sinclair completed its acquisition of Sinclair Oil, issuing **60.2 million shares** of common stock and integrating Sinclair's refining, marketing, and renewables businesses[46](index=46&type=chunk)[47](index=47&type=chunk) - The company acquired the **149,000 BPD** Puget Sound refinery from Shell on November 1, 2021, for **$624.3 million** in cash, strategically expanding its West Coast presence[49](index=49&type=chunk) - New Renewable Diesel Units (RDUs) at Artesia (**135 million gallons/year**) and Cheyenne (**90 million gallons/year**) became operational in 2022, supported by a new pre-treatment unit (PTU) in Artesia[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Operations by Segment](index=10&type=section&id=Operations%20by%20Segment) Operations are detailed across five segments: Refining (678,000 BPSD capacity), Renewables (378 million gallons/year), Marketing (1,500+ sites), Lubricants and Specialty Products (global market), and HEP (midstream logistics) Refinery Crude Oil Processing Capacity (BPSD) | Region | Refinery | Capacity (BPSD) | | :--- | :--- | :--- | | **Mid-Continent** | El Dorado | 135,000 | | | Tulsa | 125,000 | | **West** | Puget Sound | 149,000 | | | Navajo | 100,000 | | | Parco | 94,000 | | | Woods Cross | 45,000 | | | Casper | 30,000 | | **Total** | | **678,000** | - The Renewables segment operates three RDUs: Artesia (**135 million gallons/year**), Cheyenne (**90 million gallons/year**), and the acquired Sinclair RDU (**153 million gallons/year**), processing feedstocks into renewable diesel for LCFS credit markets[87](index=87&type=chunk)[88](index=88&type=chunk) - The Marketing segment includes branded fuel sales to over **1,500 sites** and licenses the Sinclair brand to an additional **300+ locations**, concentrated in the West and Mid-Continent regions[89](index=89&type=chunk) - The Lubricants and Specialty Products segment operates facilities in Canada, the U.S., and the Netherlands, producing base oils, finished lubricants, and specialty products for over **80 countries**[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - HF Sinclair holds a **47%** limited partner interest in Holly Energy Partners (HEP), a publicly traded MLP operating critical pipelines, terminals, and processing units supporting refining operations[56](index=56&type=chunk)[97](index=97&type=chunk) [Human Capital and Governance](index=20&type=section&id=Human%20Capital%20and%20Governance) As of year-end 2022, HF Sinclair employed 5,223 people, with 1,384 unionized, emphasizing safety, diversity, and talent development, achieving a 45% decline in OSHA incident rates - As of December 31, 2022, the company had **5,223 employees** (**4,336** in the U.S., **654** in Canada, **233** in Europe/Asia), with approximately **26%** of the workforce unionized[113](index=113&type=chunk)[219](index=219&type=chunk) - Workforce diversity as of December 31, 2022, included approximately **17% female employees** and **22% non-white employees**, with veterans representing about **5%** of the U.S. workforce[115](index=115&type=chunk) - A strong focus on safety led to a **45% decline** in the OSHA total recordable incident rate over the five years ending December 31, 2022[118](index=118&type=chunk) - In fiscal 2022, the company invested **$6.0 million** in employee training and development programs, offering a suite of programs for various career levels[120](index=120&type=chunk) [Governmental Regulation](index=21&type=section&id=Governmental%20Regulation) Operations are heavily regulated by international, federal, state, and local laws, including the EPA's RFS and state LCFS programs, with increasing scrutiny on climate change and GHG emissions, requiring substantial compliance costs - HEP's interstate pipelines are subject to rate regulation by the Federal Energy Regulatory Commission (FERC) under the Interstate Commerce Act, requiring rates to be just and reasonable[124](index=124&type=chunk) - The company must comply with the EPA's Renewable Fuel Standard (RFS), requiring biofuel blending or RINs purchases, with increasing RVOs finalized for 2020-2022 and proposed for 2023-2025[131](index=131&type=chunk) - The company is subject to Low Carbon Fuel Standard (LCFS) programs in California, Oregon, and Washington, requiring reduced carbon intensity of transportation fuels and creating a market for LCFS credits[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - Legislative and regulatory measures addressing climate change, including GHG cap-and-trade programs, carbon taxes, and potential SEC disclosure rules, are expected to increase operating and capital costs[140](index=140&type=chunk)[143](index=143&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section details significant business, regulatory, cybersecurity, and financial risks, including volatile commodity prices, intense competition, operational hazards, integration challenges, environmental compliance costs, and cyberattack threats - **Business/Industry Risks:** Profitability is highly dependent on volatile crude oil and refined product prices, the industry is intensely competitive, and operations are subject to catastrophic losses and interruptions for which insurance may be inadequate[166](index=166&type=chunk)[171](index=171&type=chunk)[178](index=178&type=chunk) - **Regulatory Risks:** The company incurs significant costs to comply with extensive environmental, health, and safety laws, while climate change regulations and renewable fuel standards (like RFS) could increase operating costs and reduce demand for refined products[167](index=167&type=chunk)[246](index=246&type=chunk)[253](index=253&type=chunk) - **Cybersecurity Risks:** Information technology and operational systems are vulnerable to cyberattacks, potentially disrupting operations, compromising sensitive data, and causing significant financial and reputational harm[168](index=168&type=chunk)[277](index=277&type=chunk)[279](index=279&type=chunk) - **Liquidity & Financial Risks:** Volatility in capital markets may hinder funding, the company is exposed to credit risks of key customers and vendors, and hedging activities may limit gains or expose it to losses[169](index=169&type=chunk)[288](index=288&type=chunk)[290](index=290&type=chunk) [Unresolved Staff Comments](index=55&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the staff of the Securities and Exchange Commission - The company states it does not have any unresolved staff comments[298](index=298&type=chunk) [Legal Proceedings](index=55&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in several legal and environmental proceedings, including discussions with the EPA regarding Clean Air Act noncompliance and legal challenges against EPA's RFS small refinery exemption decisions - HF Sinclair Navajo Refining LLC is in discussions with the EPA and New Mexico Environment Department regarding alleged noncompliance with the Clean Air Act at its Artesia and Lovington refineries[301](index=301&type=chunk) - The company is pursuing legal challenges against the EPA's decisions to reverse previously granted small refinery exemptions for the 2016 and 2018 compliance years and to deny petitions for 2019 and 2020[305](index=305&type=chunk)[306](index=306&type=chunk) - As of December 31, 2022, the company has an accrued liability of **$192.3 million** for environmental remediation projects resulting from past releases of refined product and crude oil[158](index=158&type=chunk) [Mine Safety Disclosures](index=57&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - The company states that this item is not applicable[310](index=310&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=58&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE under 'DINO', with a new **$1.0 billion** share repurchase program approved in September 2022, and quarterly dividends considered based on financial performance - The company's common stock is traded on the NYSE under the symbol **'DINO'**[313](index=313&type=chunk) - A new **$1.0 billion** share repurchase program was approved in September 2022, with **$662.0 million** remaining available as of Q4 2022[313](index=313&type=chunk)[314](index=314&type=chunk) Share Repurchases in Q4 2022 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | October 2022 | 946,911 | $54.70 | | November 2022 | 2,391,249 | $61.69 | | December 2022 | 1,767,354 | $49.37 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=58&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income surged to **$2.92 billion** in 2022, driven by strong demand and acquisitions, with gross refining margin up **146%** to **$26.78/bbl**, maintaining strong liquidity of **$3.30 billion**, and projecting **$940 million** to **$1.15 billion** in 2023 capital expenditures Key Financial Performance (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Income (attributable to stockholders) | $2,922.7M | $558.3M | | Diluted EPS | $14.28 | $3.39 | | Sales and other revenues | $38,204.8M | $18,389.1M | | Net cash from operating activities | $3,777.2M | $406.7M | - The significant increase in 2022 earnings was driven by strong product demand returning to pre-pandemic levels, higher sales prices, and increased sales volumes from the acquisitions of the Puget Sound Refinery and the Acquired Sinclair Businesses[319](index=319&type=chunk)[355](index=355&type=chunk) - The company's standalone liquidity was approximately **$3.30 billion** at year-end 2022, comprising **$1.65 billion** in cash and a **$1.65 billion** undrawn credit facility[386](index=386&type=chunk) - In 2022, the company repurchased **25.7 million shares** for **$1.31 billion** under its share repurchase programs, including **$750 million** in privately negotiated repurchases from REH Company[390](index=390&type=chunk) [Results of Operations](index=63&type=section&id=Results%20of%20Operations) Net income attributable to stockholders surged to **$2.92 billion** in 2022 from **$558.3 million** in 2021, driven by a **108%** increase in sales to **$38.2 billion** and a sharp rise in consolidated refinery gross margin to **$26.78/bbl** Consolidated Refinery Operating Data (2022 vs 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Crude Charge (BPD) | 606,980 | 400,720 | | Refinery Utilization | 92.3% | 93.1% | | Refinery Gross Margin ($/bbl) | $26.78 | $10.89 | | Net Operating Margin ($/bbl) | $18.86 | $3.85 | - Sales and other revenues grew **108%** to **$38.2 billion** in 2022, driven by higher sales prices and increased volumes from the Puget Sound and Sinclair acquisitions[356](index=356&type=chunk) - Cost of products sold increased **101%** to **$30.7 billion**, reflecting higher crude oil costs and sales volumes, with a **$52.4 million** lower of cost or market inventory charge recorded in 2022, compared to a **$310.1 million** benefit in 2021[357](index=357&type=chunk) - The effective tax rate increased to **22.7%** in 2022 from **15.7%** in 2021, primarily due to the relationship between higher pre-tax income and non-taxable earnings attributable to noncontrolling interests[371](index=371&type=chunk) [Liquidity and Capital Resources](index=70&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity of **$3.30 billion** at year-end 2022, with net cash from operations increasing to **$3.78 billion**, projecting **$940 million** to **$1.15 billion** in 2023 capital spending, and actively managing its debt structure - HF Sinclair entered into a new **$1.65 billion** senior unsecured revolving credit facility in April 2022, maturing in 2026, with no outstanding borrowings as of December 31, 2022[372](index=372&type=chunk) - HEP issued **$400 million** of 6.375% senior notes in April 2022 to repay credit facility borrowings, with **$668.0 million** outstanding on its credit facility at year-end[383](index=383&type=chunk)[382](index=382&type=chunk) Projected 2023 Capital and Turnaround Spending | Category | Expected Spending (in millions) | | :--- | :--- | | **HF Sinclair** | | | Refining | $250.0 - $280.0 | | Renewables | $25.0 - $35.0 | | Lubricants & Specialty Products | $35.0 - $50.0 | | Marketing | $20.0 - $30.0 | | Corporate | $50.0 - $80.0 | | Turnarounds and catalyst | $530.0 - $630.0 | | **HEP** | $30.0 - $45.0 | | **Total** | **$940.0 - $1,150.0** | - Net cash from financing activities was a use of **$1.56 billion** in 2022, primarily due to **$1.37 billion** in treasury stock purchases and **$255.9 million** in dividend payments[403](index=403&type=chunk) [Critical Accounting Policies and Estimates](index=76&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines critical accounting policies requiring significant judgment, including LIFO inventory valuation, goodwill and long-lived asset impairment assessment, business combination valuations, and contingency reserves for environmental and legal liabilities - **Inventory Valuation:** The company uses the LIFO method for most crude oil and refined product inventories, recording a **$61.2 million** lower of cost or market reserve for renewables inventories in 2022, increasing cost of products sold by **$52.4 million**[410](index=410&type=chunk)[412](index=412&type=chunk) - **Goodwill and Long-Lived Assets:** Goodwill totaled **$3.0 billion** as of December 31, 2022, with the July 1, 2022, impairment test indicating no impairment, as fair values exceeded carrying values by **32% to 47%**[414](index=414&type=chunk)[416](index=416&type=chunk) - **Business Combinations:** The company uses income, cost, and market approaches to estimate the fair value of assets acquired and liabilities assumed in business combinations, with these estimates based on inherently uncertain assumptions[419](index=419&type=chunk) - **Contingencies:** The company accrues for probable and reasonably estimable losses from proceedings and claims, with required reserves subject to change based on new developments[420](index=420&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=80&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses primary market risks including commodity price, foreign currency, and interest rate risks, managed through derivative contracts and forward contracts, while acknowledging operational hazards are not fully insured - The company's primary market risk is commodity price volatility for crude oil, refined products, and natural gas, managed with derivative contracts[422](index=422&type=chunk) - As of December 31, 2022, a hypothetical **10% increase** in underlying commodity prices would result in a derivative fair value loss of **$3.5 million** on open contracts[425](index=425&type=chunk) - For the company's fixed-rate senior notes, a hypothetical **10% change** in yield-to-maturity rates would change the fair value by approximately **$33.1 million** for HF Sinclair notes and **$24.2 million** for HEP notes[427](index=427&type=chunk) [Financial Statements and Supplementary Data](index=84&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the consolidated financial statements for fiscal year 2022, with management asserting effective internal controls (excluding Sinclair acquisition) and Ernst & Young LLP providing an unqualified opinion on both financial statements and internal controls - Management concluded that as of December 31, 2022, the company maintained effective internal control over financial reporting, excluding the internal controls of the Acquired Sinclair Businesses acquired on March 14, 2022[446](index=446&type=chunk) - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements, affirming fair presentation of financial position and results of operations in conformity with U.S. GAAP[461](index=461&type=chunk) - The auditor identified the valuation of personal property assets in the Sinclair acquisition as a Critical Audit Matter due to significant estimation and judgment required for fair value determination[467](index=467&type=chunk)[468](index=468&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=143&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its independent registered public accountants regarding accounting and financial disclosure matters - The company has had no disagreements with its accountants on accounting and financial disclosure[744](index=744&type=chunk) [Controls and Procedures](index=143&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2022, the company's principal executive and financial officers concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the last fiscal quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[745](index=745&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth quarter of 2022[746](index=746&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=143&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the forthcoming 2023 annual meeting proxy statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the forthcoming 2023 proxy statement[749](index=749&type=chunk) [Executive Compensation](index=143&type=section&id=Item%2011.%20Executive%20Compensation) Information detailing executive compensation policies and data is incorporated by reference from the forthcoming 2023 annual meeting proxy statement - Information regarding executive compensation is incorporated by reference from the forthcoming 2023 proxy statement[750](index=750&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=143&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information concerning security ownership by major shareholders and management, and details on equity compensation plans, is incorporated by reference from the forthcoming 2023 annual meeting proxy statement - Information regarding security ownership and equity compensation plans is incorporated by reference from the forthcoming 2023 proxy statement[751](index=751&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=145&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information covering related party transactions and director independence is incorporated by reference from the forthcoming 2023 annual meeting proxy statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the forthcoming 2023 proxy statement[753](index=753&type=chunk) [Principal Accounting Fees and Services](index=145&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information detailing fees paid to and services provided by the principal independent accountant is incorporated by reference from the forthcoming 2023 annual meeting proxy statement - Information regarding principal accounting fees and services is incorporated by reference from the forthcoming 2023 proxy statement[754](index=754&type=chunk) Part IV [Exhibit and Financial Statement Schedules](index=145&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section provides an index to the consolidated financial statements and a list of all exhibits filed with the Form 10-K, noting the omission of financial statement schedules as information is included elsewhere or not applicable - This section contains the index to the Consolidated Financial Statements and a list of all exhibits filed with the Form 10-K[756](index=756&type=chunk)[757](index=757&type=chunk) - All financial statement schedules are omitted as the required information is included elsewhere in the report or is not applicable[756](index=756&type=chunk)

HF Sinclair Corporation (NYSE:DINO) Q4 2022 Results Conference Call February 24, 2023 8:30 AM ET Company Participants Craig Biery - VP, IR Mike Jennings - CEO Atanas Atanasov - CFO Tim Go - President, COO John Harrison - VP, Finance, Strategy & Treasurer Conference Call Participants Doug Leggate - Bank of America John Royall - JP Morgan Matthew Blair - TPH Neil Mehta - Goldman Sachs Paul Cheng - Scotiabank Ryan Todd - Piper Sandler Theresa Chen - Barclays Doug Irwin - Citi Operator Welcome to HF Sinclair C ...

HF Sinclair Corporation (NYSE:DINO) Q3 2022 Earnings Conference Call November 7, 2022 8:30 AM ET Company Participants Craig Biery - Vice President, Investor Relations Mike Jennings - Chief Executive Officer, HF Sinclair & Holly Energy Partners Atanas Atanasov - Chief Financial Officer, HF Sinclair Corporation John Harrison - Chief Financial Officer, Holly Energy Partners Tim Go - President & Chief Operating Officer of HF Sinclair Corporation Conference Call Participants Paul Cheng - Scotiabank Theresa Che ...

Financial Performance - The company reported a significant increase in revenue, with a year-over-year growth of 15% to $1.2 billion[13]. - Sales and other revenues for the three months ended September 30, 2022, were $10,599,002 thousand, a significant increase of 126% compared to $4,685,059 thousand in the same period of 2021[34]. - Net income attributable to HF Sinclair stockholders for the three months ended September 30, 2022, was $954,405 thousand, compared to $280,787 thousand for the same period in 2021, reflecting an increase of 239%[34]. - Net income for the nine months ended September 30, 2022, was $2,416,348, a significant increase from $680,358 in the same period of 2021, representing a growth of approximately 255%[37]. - For the nine months ended September 30, 2022, net income attributable to HF Sinclair stockholders was $2,335,641,000, up from $597,854,000 in the same period of 2021, indicating a growth of 290.5%[146]. Earnings and Margins - Basic earnings per share for the three months ended September 30, 2022, was $4.45, up from $1.71 in the same period of 2021, marking an increase of 160%[34]. - Future guidance indicates an expected EBITDA of $300 million for the next quarter, reflecting a 12% increase from the previous guidance[15]. - The average refinery gross margin improved to $10.50 per barrel, reflecting a 20% increase compared to the previous quarter[13]. Assets and Liabilities - Total assets increased to $18,226,285 thousand as of September 30, 2022, up from $12,916,613 thousand as of December 31, 2021, representing a growth of approximately 41%[30]. - Total current liabilities rose to $3,242,291 thousand as of September 30, 2022, compared to $2,065,464 thousand as of December 31, 2021, indicating a 57% increase[30]. - Long-term debt increased to $3,334,200 thousand as of September 30, 2022, from $3,072,737 thousand as of December 31, 2021, reflecting an increase of 9%[30]. - Total equity as of September 30, 2022, was $9,778,525 thousand, compared to $6,294,465 thousand as of December 31, 2021, indicating a growth of 55%[30]. Inventory and Operational Efficiency - The company reported a significant increase in inventories, which rose to $3,077,652 thousand as of September 30, 2022, from $1,879,131 thousand as of December 31, 2021, representing a growth of 64%[30]. - Capital investments in technology upgrades are estimated at $100 million, aimed at improving refinery efficiency by 5%[15]. - The company is facing potential risks from fluctuating crude oil prices, which could impact profit margins by up to 8%[13]. Strategic Initiatives and Acquisitions - A strategic acquisition of a regional competitor is projected to enhance operational synergies, potentially saving $30 million annually[13]. - HF Sinclair Corporation completed the acquisition of Sinclair Oil Corporation and Sinclair Transportation Company on March 14, 2022, resulting in the establishment of HF Sinclair as the new parent holding company[50]. - The acquisition expanded HF Sinclair's refining and renewables business, enhancing its scale and diversification[88]. Market Presence and Growth Projections - The company anticipates a 10% growth in refined product demand in the upcoming quarter, driven by economic recovery[15]. - The company plans to expand its market presence in the Southeast region, targeting a 15% market share by the end of the fiscal year[15]. - New product launches in the renewable diesel segment are expected to contribute an additional $50 million in revenue over the next year[13]. Cash Flow and Financing Activities - Cash flows from operating activities for the nine months ended September 30, 2022, amounted to $2,862,209, up from $739,494 in the prior year, indicating a growth of approximately 287%[39]. - The company reported a net cash provided by (used for) financing activities of $(975,478) for the nine months ended September 30, 2022, compared to $(184,169) in the prior year[39]. - The company entered into a $1.65 billion senior unsecured revolving credit facility maturing in April 2026, replacing a $1.35 billion facility[160]. Shareholder Returns and Dividends - The company declared dividends of $0.40 per common share, totaling $85,274 for the period[43]. - The Board declared a regular quarterly dividend of $0.40 per share, payable on December 5, 2022[202]. - The Board of Directors approved a $1.0 billion share repurchase program in November 2019, with $975.0 million repurchased as of September 30, 2022, including $500.0 million from REH Company[196]. Environmental and Legal Considerations - Environmental remediation expenses for the three months ended September 30, 2022, were $1.3 million, up from $0.5 million in the same period of 2021, reflecting a 160% increase[159]. - The company is involved in various litigation and legal proceedings, which are not expected to have a materially adverse effect on its financial condition[210].

Financial Data and Key Metrics Changes - The second quarter net income attributable to HF Sinclair shareholders was $1.221 billion or $5.43 per diluted share, reflecting a significant increase from adjusted net income of $144 million or $0.87 per diluted share in the same period of 2021 [7] - Adjusted EBITDA for the current quarter was $1.9 billion, an increase of more than $1.5 billion compared to the second quarter of 2021 [8] - Net cash provided by operations totaled $1.5 billion, with total liquidity standing at approximately $3.3 billion as of June 30, 2022 [14] Business Line Data and Key Metrics Changes - The refining segment is expected to run between 630 million and 650,000 barrels per day for the second quarter of 2022, with no major turnarounds scheduled for the remainder of the year [17] - HEP's second quarter 2022 adjusted EBITDA was $104.2 million, compared to $88.3 million in the same period last year, driven by earnings related to the recently acquired Sinclair transportation assets [18] Market Data and Key Metrics Changes - Diesel demand is at or above 2019 levels, while gasoline demand is approximately 5% below 2019 levels, indicating strong market performance [44] - The company added 20 retail sites in the second quarter and has more than 50 in progress, indicating growth in the marketing segment [56] Company Strategy and Development Direction - The company remains focused on the integration of recently acquired assets from Sinclair and aims to grow the marketing segment within existing geographies [11] - HF Sinclair is committed to returning $1 billion to shareholders no later than the first quarter of 2023 while maintaining a solid balance sheet and investment-grade rating [10] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about the outlook for transportation fuels, supported by low product inventories and healthy global demand [11] - The company is excited about the opportunity to provide low carbon fuels through its renewable diesel production, with expectations to reach full production levels by the end of the third quarter of 2022 [12] Other Important Information - The Board of Directors declared a regular dividend of $0.40 per share payable on September 1, 2022 [9] - The company achieved annualized run rate synergies of over $90 million related to the Sinclair acquisition [9] Q&A Session Summary Question: Positive surprises from the Sinclair acquisition - Management noted pleasant surprises in synergies and logistics opportunities that have led to higher throughput rates at Woods Cross and Casper [22] Question: Dynamics driving strength in the Rack Forward business - The Rack Forward business has benefited from SKU rationalization and an upgrade in product mix, leading to improved results [26] Question: Criteria for increasing capital return - Management is comfortable achieving the $1 billion capital return target and will evaluate market conditions for potential increases [30] Question: Midstream strategy and HEP distribution growth - HEP is critical to HF Sinclair, and management plans to increase distributions, primarily through distribution increases rather than buybacks [37] Question: Current views on gasoline demand - Management observed strong demand in their regions, with gasoline demand close to 2019 levels and no significant demand destruction noted [45] Question: Renewable diesel margins and outlook - Renewable diesel margins were affected by low throughput and high feedstock costs, but management remains optimistic about future profitability due to investments in diverse feedstock [49] Question: Marketing profitability drivers - The marketing segment's profitability improved due to strength in branded businesses and higher gasoline prices [70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________ FORM 10-Q _________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ ...

HF Sinclair Corporation (NYSE:DINO) Q1 2022 Earnings Conference Call May 9, 2022 8:30 AM ET Company Participants Craig Biery – Vice President, Investor Relations Mike Jennings – Chief Executive Officer of HF Sinclair and Holly Energy Partners Rich Voliva – Executive Vice President and Chief Financial Officer of HF Sinclair and President of Holly Energy Partners Tim Go – President and Chief Operating Officer Tom Creery – President, HF Sinclair Renewables Conference Call Participants Manav Gupta – Credit Suis ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________ FORM 10-Q _________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ ...

HollyFrontier Corporation (HFC) Q4 2021 Earnings Conference Call February 23, 2022 8:30 AM ET Company Participants Mike Jennings - President and Chief Executive Officer Rich Voliva - Chief Financial Officer Craig Biery - Investor Relations Tim Go - President and Chief Operating Officer Tom Creery - President, HollyFrontier Renewables Bruce Lerner - President, HollyFrontier Lubricants & Specialties Conference Call Participants Theresa Chen - Barclays Paul Cheng - Scotia Howard Weil Phil Gresh - JP Morgan Rog ...