HF Sinclair Corporation

10/30/2025 | Press release | Distributed by Public on 10/30/2025 11:52

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
This Item 2 contains "forward-looking" statements. See "Forward-Looking Statements" at the beginning of Part I of this Quarterly Report on Form 10-Q. In this document, the words "we," "our," "ours" and "us" refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person with certain exceptions.
We use certain non-GAAP financial measures in our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"). For a detailed description of each of the non-GAAP measures used in this MD&A, please refer to the discussion under Reconciliations to Amounts Reported Under GAAP. This Item 2 should be read in conjunction with our consolidated financial statements and the notes thereto included in this interim report. In addition, this Item 2 should be read in conjunction with our consolidated financial statements and notes within our Annual Report on Form 10-K for the year ended December 31, 2024.
OVERVIEW
We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and lubricants and specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. We provide petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry.We market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states, and we supply high-quality fuels to more than 1,700 branded stations and license the use of the Sinclair brand to more than 300 additional locations throughout the country. We produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries.
Market Developments
For the three months ended September 30, 2025, Net income attributable to HF Sinclair stockholders was $403 million compared to a Net loss attributable to HF Sinclair stockholders of $76 million for the same period last year. For the nine months ended September 30, 2025, Net income attributable to HF Sinclair stockholders was $607 million compared to $391 million for the nine months ended September 30, 2024.
In the Refining segment, we continued to see improved refining margins during the third quarter of 2025 in both the Mid-Continent and West regions. Additionally, our results were impacted by the start of the planned turnaround at our Puget Sound refinery. For the fourth quarter of 2025, we expect to run between 550,000-590,000 barrels per day of crude oil, which reflects the completion of the planned turnaround at our Puget Sound refinery.
In the Renewables segment, we saw lower margins, primarily due to elevated feedstock costs in the third quarter of 2025. Additionally, we recognized incrementally more in value from the Producer's Tax Credit ("PTC") in the third quarter of 2025. For the fourth quarter of 2025, we expect to capture incrementally more value from the PTC.
In the Marketing segment, we continued to see strong value in the Sinclair branded sites during the three months ended September 30, 2025 as the marketing business provided a consistent sales channel with margin uplift for our produced fuels. We expect to grow the number of branded sites by approximately 10% annually.
In the Lubricants & Specialties segment, we continued to see solid performance (excluding first-in, first-out ("FIFO") impacts), driven by sales mix optimization and base oil integration across our portfolio during the three months ended September 30, 2025 and increased sales volumes compared to a quarter ago.
In the Midstream segment, our results benefited from higher pipeline revenues and throughput volumes and lower operating expenses during the three months ended September 30, 2025 compared to a quarter ago.
We continue to adjust our operational plans to evolving market conditions, including our recent announcement regarding the evaluation of a multi-phased expansion of our Midstream footprint. The extent to which our future results are affected by volatile regional and global economic conditions, including ongoing tariff and trade negotiations, will depend on various factors and consequences beyond our control.
On May 7, 2024, our Board of Directors authorized a $1.0 billion share repurchase program (the "May 2024 Share Repurchase Program"), which replaced all existing share repurchase programs. The timing and amount of share repurchases under the May 2024 Share Repurchase Program, including those from REH Company, LLC ("REH Company" and together with its affiliate REH Advisors Inc., "REH"), will depend on market conditions and corporate, tax, regulatory and other relevant conditions.
On October 30, 2025, our Board of Directors announced that it declared a regular quarterly dividend in the amount of $0.50 per share, payable on December 5, 2025 to holders of record of common stock on November 19, 2025.
One Big Beautiful Bill Act
On July 4, 2025, the President signed the One Big Beautiful Bill Act ("OBBBA") into law. Among other things, OBBBA extends the Producer's Tax Credit under Section 45Z through the end of 2029, indefinitely extends the first-year depreciation allowance on qualified property placed in service after January 19, 2025, and extends and enhances many of the provisions enacted under the 2017 Tax Cuts and Jobs Act. The enactment of OBBBA will not have a material impact on our results of operations but will affect our financial position by resulting in a reduction of cash taxes paid.
Renewable Fuel Standard Regulations
Pursuant to the 2007 Energy Independence and Security Act, the Environmental Protection Agency ("EPA") promulgated the Renewable Fuel Standard ("RFS") regulations, which increased the volume of renewable fuels mandated to be blended into the nation's fuel supply. The regulations, in part, require refiners to increase amounts annually of "renewable fuels" to their petroleum products or purchase credits, known as RINs, in lieu of such blending. Compliance with RFS regulations significantly increases our Cost of materials and other, with RINs costs totaling $76 million and $394 million for the three and nine months ended September 30, 2025, respectively, compared to $119 million and $334 million for the three and nine months ended September 30, 2024, respectively. Small refinery RINs waivers granted by the EPA increased pre-tax earnings by $171 million for each of the three and nine months ended September 30, 2025, of which $115 million was recognized in Cost of materials and otherand $56 million was recognized in Sales and other revenues. At September 30, 2025, our open RINs credit obligations were $44 million.
A more detailed discussion of our financial and operating results for the three and nine months ended September 30, 2025 and 2024 is presented in the following sections.
RESULTS OF OPERATIONS
Financial Data
Three Months Ended September 30, Change from 2024
2025 2024 Change Percent
(In millions, except share and per share data)
Sales and other revenues $ 7,251 $ 7,207 $ 44 1 %
Operating costs and expenses:
Cost of sales: (1)
Cost of materials and other (2)
5,692 6,158 (466) (8) %
Lower of cost or market inventory valuation adjustments 66 202 (136) (67) %
Operating expenses 590 630 (40) (6) %
6,348 6,990 (642) (9) %
Selling, general and administrative expenses (1)
105 118 (13) (11) %
Depreciation and amortization 230 210 20 10 %
Other operating expenses, net 4 10 (6) (60) %
Total operating costs and expenses 6,687 7,328 (641) (9) %
Income (loss) from operations 564 (121) 685 (566) %
Other income (expense):
Earnings of equity method investments 6 8 (2) (25) %
Interest income 11 18 (7) (39) %
Interest expense (51) (40) (11) 28 %
Other income (expense), net (2) 4 (6) (150) %
(36) (10) (26) 260 %
Income (loss) before income taxes 528 (131) 659 (503) %
Income tax expense (benefit):
Current 74 8 66 825 %
Deferred 49 (65) 114 (175) %
123 (57) 180 (316) %
Net income (loss) 405 (74) 479 (647) %
Less: net income attributable to noncontrolling interest 2 2 - - %
Net income (loss) attributable to HF Sinclair stockholders $ 403 $ (76) $ 479 (630) %
Earnings (loss) per share attributable to HF Sinclair stockholders:
Basic $ 2.15 $ (0.40) $ 2.55 (638) %
Diluted $ 2.15 $ (0.40) $ 2.55 (638) %
Average number of common shares outstanding (in thousands):
Basic 186,499 189,840 (3,341) (2) %
Diluted 186,499 189,840 (3,341) (2) %
Nine Months Ended September 30, Change from 2024
2025 2024 Change Percent
(In millions, except share and per share data)
Sales and other revenues $ 20,405 $ 22,080 $ (1,675) (8) %
Operating costs and expenses:
Cost of sales: (1)
Cost of materials and other (2)
16,608 18,835 (2,227) (12) %
Lower of cost or market inventory valuation adjustments 97 (20) 117 (585) %
Operating expenses 1,758 1,828 (70) (4) %
18,463 20,643 (2,180) (11) %
Selling, general and administrative expenses (1)
323 327 (4) (1) %
Depreciation and amortization 681 613 68 11 %
Other operating expenses, net 18 10 8 80 %
Total operating costs and expenses 19,485 21,593 (2,108) (10) %
Income from operations 920 487 433 89 %
Other income (expense):
Earnings of equity method investments 27 24 3 13 %
Interest income 27 59 (32) (54) %
Interest expense (153) (127) (26) 20 %
Other income (expense), net (48) 5 (53) (1,060) %
(147) (39) (108) 277 %
Income before income taxes
773 448 325 73 %
Income tax expense (benefit):
Current 106 106 - - %
Deferred 54 (54) 108 (200) %
160 52 108 208 %
Net income
613 396 217 55 %
Less: net income attributable to noncontrolling interest 6 5 1 20 %
Net income attributable to HF Sinclair stockholders
$ 607 $ 391 $ 216 55 %
Earnings per share attributable to HF Sinclair stockholders:
Basic $ 3.21 $ 2.01 $ 1.20 60 %
Diluted $ 3.21 $ 2.01 $ 1.20 60 %
Average number of common shares outstanding (in thousands):
Basic 187,688 193,341 (5,653) (3) %
Diluted 187,688 193,341 (5,653) (3) %
(1) Exclusive of Depreciation and amortization.
(2) Exclusive of Lower of cost or market inventory valuation adjustments.
Balance Sheet Data
September 30, 2025 December 31, 2024
(In millions)
Cash and cash equivalents $ 1,451 $ 800
Working capital $ 2,694 $ 1,971
Total assets $ 17,264 $ 16,643
Total debt $ 2,768 $ 2,638
Total equity $ 9,495 $ 9,346
Other Financial Data
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions)
Net cash provided by operating activities
$ 809 $ 709 $ 1,307 $ 1,250
Net cash used for investing activities $ (148) $ (122) $ (341) $ (295)
Net cash used for financing activities $ (84) $ (228) $ (323) $ (1,079)
Capital expenditures $ 121 $ 124 $ 318 $ 297
EBITDA (1)
$ 796 $ 99 $ 1,574 $ 1,124
(1)Earnings before interest, taxes, depreciation and amortization, which we refer to as "EBITDA," is calculated as Net income attributable to HF Sinclair stockholdersplus (i) Income tax expense, (ii) Interest expense, net of Interest income, and (iii) Depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to Net incomeor Income from operationsas an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a financial indicator widely used by investors and analysts to measure our operating performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants. EBITDA presented above is reconciled to Net Incomeunder "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Supplemental Segment Operating Data
Our operations are organized into five reportable segments, Refining, Renewables, Marketing, Lubricants & Specialties and Midstream. See Note 16 "Segment Information" in the Notes to Consolidated Financial Statements for additional information on our reportable segments.
Refining Segment Operating Data
The disaggregation of our refining geographic operating data is presented in two regions, Mid-Continent and West, to best reflect the economic drivers of our refining operations. The Mid-Continent region is comprised of the El Dorado and Tulsa refineries. The West region is comprised of the Puget Sound, Navajo, Woods Cross, Parco and Casper refineries. The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations. Adjusted refinery gross margin per produced barrel sold is total Refining segment gross margin plus Lower of cost or market inventory valuation adjustments, Depreciation and amortizationand Operating expenses, divided by sales volumes of produced refined products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relates to inventory held at the end of the period. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Mid-Continent Region
Crude charge (BPD) (1)
280,240 263,170 264,580 262,670
Refinery throughput (BPD) (2)
296,220 279,210 280,920 278,210
Sales of produced refined products (BPD) (3)
281,040 274,870 265,300 276,830
Refinery utilization (4)
107.8 % 101.2 % 101.8 % 101.0 %
Average per produced barrel sold: (5)
Gross margin (6)
$ 8.08 $ (3.91) $ 4.01 $ 1.35
Adjusted refinery gross margin (7)
$ 17.50 $ 9.38 $ 13.71 $ 9.40
Less: operating expenses (8)
6.20 6.56 6.52 6.28
Adjusted refinery gross margin, less operating expenses $ 11.30 $ 2.82 $ 7.19 $ 3.12
Operating expenses per throughput barrel (9)
$ 5.88 $ 6.45 $ 6.15 $ 6.25
Feedstocks:
Sweet crude oil 52 % 54 % 51 % 53 %
Sour crude oil 27 % 24 % 25 % 23 %
Heavy sour crude oil 16 % 16 % 18 % 18 %
Other feedstocks and blends 5 % 6 % 6 % 6 %
Total 100 % 100 % 100 % 100 %
Sales of produced refined products:
Gasolines 50 % 50 % 51 % 52 %
Diesel fuels 32 % 31 % 32 % 31 %
Jet fuels 7 % 7 % 7 % 6 %
Fuel oil 1 % 1 % 1 % 1 %
Asphalt 4 % 5 % 3 % 4 %
Base oils 4 % 3 % 4 % 4 %
LPG and other 2 % 3 % 2 % 2 %
Total 100 % 100 % 100 % 100 %
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
West Region
Crude charge (BPD)(1)
358,810 343,840 355,910 352,860
Refinery throughput (BPD)(2)
384,860 370,540 381,960 378,310
Sales of produced refined products (BPD) (3)
380,100 379,530 378,890 373,890
Refinery utilization(4)
85.8 % 82.3 % 85.1 % 84.4 %
Average per produced barrel sold: (5)
Gross margin (6)
$ 9.30 $ (1.67) $ 4.82 $ 2.11
Adjusted refinery gross margin (7)
$ 20.38 $ 11.82 $ 16.02 $ 13.21
Less: operating expenses (8)
8.18 9.15 8.48 9.08
Adjusted refinery gross margin, less operating expenses $ 12.20 $ 2.67 $ 7.54 $ 4.13
Operating expenses per throughput barrel (9)
$ 8.08 $ 9.37 $ 8.41 $ 8.97
Feedstocks:
Sweet crude oil 33 % 34 % 32 % 34 %
Sour crude oil 44 % 44 % 45 % 43 %
Heavy sour crude oil 11 % 9 % 11 % 10 %
Wax crude oil 5 % 6 % 5 % 6 %
Other feedstocks and blends 7 % 7 % 7 % 7 %
Total 100 % 100 % 100 % 100 %
Sales of produced refined products:
Gasolines 51 % 53 % 52 % 52 %
Diesel fuels 32 % 31 % 33 % 32 %
Jet fuels 6 % 6 % 6 % 6 %
Fuel oil 2 % 1 % 2 % 2 %
Asphalt 3 % 3 % 2 % 2 %
LPG and other 6 % 6 % 5 % 6 %
Total 100 % 100 % 100 % 100 %
Consolidated
Crude charge (BPD) (1)
639,050 607,010 620,490 615,530
Refinery throughput (BPD) (2)
681,080 649,750 662,880 656,520
Sales of produced refined products (BPD) (3)
661,140 654,400 644,190 650,720
Refinery utilization (4)
94.3 % 89.5 % 91.5 % 90.8 %
Average per produced barrel sold: (5)
Gross margin (6)
$ 8.78 $ (2.62) $ 4.49 $ 1.79
Adjusted refinery gross margin (7)
$ 19.16 $ 10.79 $ 15.07 $ 11.59
Less: operating expenses (8)
7.34 8.06 7.67 7.89
Adjusted refinery gross margin, less operating expenses $ 11.82 $ 2.73 $ 7.40 $ 3.70
Operating expenses per throughput barrel (9)
$ 7.12 $ 8.12 $ 7.45 $ 7.82
Feedstocks:
Sweet crude oil 42 % 42 % 40 % 42 %
Sour crude oil 36 % 36 % 37 % 34 %
Heavy sour crude oil 13 % 12 % 14 % 14 %
Wax crude oil 3 % 3 % 3 % 4 %
Other feedstocks and blends 6 % 7 % 6 % 6 %
Total 100 % 100 % 100 % 100 %
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Consolidated
Sales of produced refined products:
Gasolines 51 % 52 % 52 % 52 %
Diesel fuels 31 % 31 % 31 % 32 %
Jet fuels 7 % 7 % 7 % 6 %
Fuel oil 2 % 1 % 2 % 1 %
Asphalt 3 % 4 % 2 % 3 %
Base oils 2 % 1 % 2 % 2 %
LPG and other 4 % 4 % 4 % 4 %
Total 100 % 100 % 100 % 100 %
(1)Crude charge represents the barrels per day of crude oil processed at our refineries.
(2)Refinery throughput represents the barrels per day of crude and other refinery feedstocks input to the crude units and other conversion units at our refineries.
(3)Represents barrels sold of refined products produced at our refineries (including Asphalt and intersegment sales) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.
(4)Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 678,000 BPSD.
(5)Represents the average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(6)Gross margin represents total Refining segment Sales and other revenuesless Cost of materials and other, Lower of cost or market inventory valuation adjustments, Operating expensesand Depreciation and amortization, divided by sales volumes of produced refined products.
(7)Adjusted refinery gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(8)Represents total Refining segment Operating expenses, exclusive of Depreciation and amortization, divided by sales volumes of produced refined products.
(9)Represents total Refining segment Operating expenses, exclusive of Depreciation and amortization, divided by refinery throughput.
Renewables Segment Operating Data
The following table sets forth information, including non-GAAP performance measures, about our renewables operations. Adjusted renewables gross margin per produced gallon sold is total Renewables segment gross margin plus Lower of cost or market inventory valuation adjustments, Depreciation and amortizationand Operating expenses, divided by sales volumes of produced renewables products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to volumes in inventory at the end of the period. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Renewables
Sales of produced renewables products (in thousand gallons) 57,159 68,755 156,408 193,484
Average per produced gallon sold: (1)
Gross margin (2)
$ (0.94) $ (0.32) $ (0.61) $ (0.38)
Adjusted renewables gross margin(3)
$ 0.18 $ 0.41 $ 0.24 $ 0.34
Less: operating expenses (4)
0.39 0.36 0.43 0.39
Adjusted renewables gross margin, less operating expenses $ (0.21) $ 0.05 $ (0.19) $ (0.05)
(1)Represents the average amount per produced gallon sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(2)Gross margin represents total Renewables segment Sales and other revenuesless Cost of materials and other, Lower of cost or market inventory valuation adjustments, Operating expensesand Depreciation and amortization, divided by sales volumes of produced renewables products.
(3)Adjusted renewables gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(4)Represents total Renewables segment Operating expenses, exclusive of Depreciation and amortization, divided by sales volumes of produced renewables products.
Marketing Segment Operating Data
The following table sets forth information, including non-GAAP performance measures, about our marketing operations and includes our Sinclair branded fuel business. Adjusted marketing gross margin per gallon sold is total Marketing segment gross margin plus Depreciation and amortization, divided by sales volumes of marketing products. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Marketing
Number of branded sites at period end (1)
1,705 1,586 1,705 1,586
Sales of refined products (in thousand gallons) 360,482 365,036 991,494 1,043,183
Average per gallon sold: (2)
Gross margin (3)
$ 0.09 $ 0.07 $ 0.09 $ 0.06
Adjusted marketing gross margin (4)
$ 0.11 $ 0.09 $ 0.11 $ 0.07
(1)Includes certain non-Sinclair branded sites.
(2)Represents the average amount per gallon sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
(3)Gross margin represents total Marketing segment Sales and other revenuesless Cost of materials and otherand Depreciation and amortization, divided by sales volumes of marketing products.
(4)Adjusted marketing gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Lubricants & Specialties Segment Operating Data
The following table sets forth information about our lubricants and specialties operations.
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Lubricants & Specialties
Sales of produced refined products (BPD) 32,008 32,914 30,981 32,977
Sales of produced refined products:
Finished products 49 % 45 % 51 % 47 %
Base oils 26 % 27 % 25 % 27 %
Other 25 % 28 % 24 % 26 %
Total 100 % 100 % 100 % 100 %
Midstream Segment Operating Data
The following table sets forth information about our midstream operations.
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Midstream
Volumes (BPD)
Pipelines:
Affiliates-refined product pipelines 141,617 156,346 150,434 165,566
Affiliates-intermediate pipelines 139,868 145,236 137,194 145,068
Affiliates-crude pipelines 464,323 459,273 424,426 442,317
745,808 760,855 712,054 752,951
Third parties-refined product pipelines 37,754 39,190 39,981 39,170
Third parties-crude pipelines 195,994 240,496 194,882 201,256
979,556 1,040,541 946,917 993,377
Terminals and loading racks: (1)
Affiliates 1,045,066 1,019,229 1,002,107 1,030,624
Third parties 39,705 40,124 38,643 37,621
1,084,771 1,059,353 1,040,750 1,068,245
Total for pipelines and terminal assets (BPD)
2,064,327 2,099,894 1,987,667 2,061,622
(1)Certain volumetric non-financial information has been recast to conform to current year presentation.
Results of Operations - Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Summary
Net income attributable to HF Sinclair stockholdersfor the three months ended September 30, 2025, was $403 million ($2.15 per basic and diluted share), a $479 million increase compared to Net loss attributable to HF Sinclair stockholders of $76 million ($(0.40) per basic and diluted share) for the three months ended September 30, 2024. The increase in net income was principally driven by higher adjusted refinery gross margins in both the West and Mid-Continent regions. Adjusted refinery gross margins for the three months ended September 30, 2025 increased to $19.16 per produced barrel sold as compared to $10.79 for the three months ended September 30, 2024, primarily due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the three months ended September 30, 2025, partially offset by lower average sales prices per barrel during the three months ended September 30, 2025. Lower of cost or market inventory valuation adjustmentsrelated to our Refining and Renewables segment inventories decreased pre-tax earnings by $66 million and $202 million for the three months ended September 30, 2025 and 2024, respectively.
Sales and Other Revenues
Sales and other revenuesincreased 1% from $7,207 million for the three months ended September 30, 2024, to $7,251 million for the three months ended September 30, 2025, principally due to higher refined product sales volumes. Sales and other revenuesincluded $163 million, $898 million, $654 million and $29 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended September 30, 2025. Sales and other revenuesincluded $160 million, $950 million, $683 million and $27 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the three months ended September 30, 2024.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 8% from $6,158 million for the three months ended September 30, 2024 to $5,692 million for the three months ended September 30, 2025, principally due to lower crude oil costs and the grant of small refinery RINs waivers during the three months ended September 30, 2025, partially offset by higher refined product sales volumes. Within our Lubricants & Specialties segment, the FIFO impact was a benefit of $2 million and a charge of $27 million for the three months ended September 30, 2025 and 2024, respectively.
During the third quarter of 2025, we recognized a lower of cost or market inventory valuation adjustment charge of $66 million compared to a charge of $202 million during the third quarter of 2024.
Adjusted Refinery Gross Margin
Adjusted refinery gross margin per produced barrel sold increased 78% from $10.79 for the three months ended September 30, 2024, to $19.16 for the three months ended September 30, 2025. The increase was due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the three months ended September 30, 2025, partially offset by lower average sales prices per barrel during the three months ended September 30, 2025. Adjusted refinery gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Operating Expenses
Operating expensesdecreased 6% from $630 million for the three months ended September 30, 2024, to $590 million for the three months ended September 30, 2025, primarily due to lower maintenance and other miscellaneous costs, partially offset by higher natural gas costs.
Selling, General and Administrative Expenses
Selling, general and administrative expensesdecreased 11% from $118 million for the three months ended September 30, 2024, to $105 million for the three months ended September 30, 2025, primarily due to a decrease in professional services and other miscellaneous costs.
Depreciation and Amortization Expenses
Depreciation and amortizationincreased 10% from $210 million for the three months ended September 30, 2024, to $230 million for the three months ended September 30, 2025, principally due to amortization attributable to additional capitalized refinery turnaround costs as compared to the prior period.
Interest Income
Interest incomewas $11 million for the three months ended September 30, 2025, compared to $18 million for the three months ended September 30, 2024. The decrease in Interest incomewas primarily due to the decrease in average cash balance.
Interest Expense
Interest expensewas $51 million for the three months ended September 30, 2025, compared to $40 million for the three months ended September 30, 2024. This increase was primarily due to unrealized losses on precious metals financing arrangements in the third quarter of 2025.
Income Taxes
For the three months ended September 30, 2025, Income tax expenseof $123 million was recorded on pre-tax income of $528 million, compared to an Income tax benefitof $57 million on pre-tax loss of $131 million for the three months ended September 30, 2024. For the three months ended September 30, 2025, our effective tax rate of 23.3% was higher than the statutory rate of 21%, primarily due to the relationship between pre-tax results and the effects of state and local income tax. For the three months ended September 30, 2024, our effective tax rate of 43.6% was higher than the statutory rate of 21% primarily due to the benefit of non-taxable permanent differences relative to the pre-tax loss for the quarter. Due to rounding of reported numbers, some amounts may not calculate exactly.
Results of Operations - Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Summary
Net income attributable to HF Sinclair stockholdersfor the nine months ended September 30, 2025, was $607 million ($3.21 per basic and diluted share), a $216 million increase compared to $391 million ($2.01 per basic and diluted share) for the nine months ended September 30, 2024. The increase in Net income attributable to HF Sinclair stockholderswas principally driven by higher adjusted refinery gross margins in both the West and Mid-Continent regions. Adjusted refinery gross margins for the nine months ended September 30, 2025 increased to $15.07 per produced barrel sold as compared to $11.59 for the nine months ended September 30, 2024, primarily due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the nine months ended September 30, 2025, partially offset by lower average sales prices per barrel during the nine months ended September 30, 2025. Lower of cost or market inventory valuation adjustmentsrelated to our Refining and Renewables segments' inventories decreased pre-tax earnings by $97 million for the nine months ended September 30, 2025 and increased pre-tax earnings by $20 million for the nine months ended September 30, 2024.
Sales and Other Revenues
Sales and other revenuesdecreased 8% from $22,080 million for the nine months ended September 30, 2024, to $20,405 million for the nine months ended September 30, 2025, principally due to decreased refined product sales prices and lower refined product sales volumes. Sales and other revenuesincluded $388 million, $2,410 million, $1,932 million, and $87 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the nine months ended September 30, 2025. Sales and other revenuesincluded $520 million, $2,668 million, $2,084 million, and $78 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties, and Midstream segments, respectively, for the nine months ended September 30, 2024.
Cost of Materials and Other
Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 12% from $18,835 million for the nine months ended September 30, 2024, to $16,608 million for the nine months ended September 30, 2025, principally due to lower crude oil costs, lower refined product sales volumes and the grant of small refinery RINs waivers during the nine months ended September 30, 2025. Within our Lubricants & Specialties segment, the FIFO impact was a charge of $10 million and $42 million for the nine months ended September 30, 2025 and 2024, respectively.
During the nine months ended September 30, 2025, we recognized a lower of cost or market inventory valuation adjustment charge of $97 million compared to a benefit of $20 million during the nine months ended September 30, 2024.
Adjusted Refinery Gross Margins
Adjusted refinery gross margin per produced barrel sold increased 30% from $11.59 for the nine months ended September 30, 2024, to $15.07 for the nine months ended September 30, 2025. The increase was due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers during the nine months ended September 30, 2025, partially offset by lower average sales prices per barrel during the nine months ended September 30, 2025. Adjusted refinery gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" following Item 2 of Part I of this Quarterly Report on Form 10-Q.
Operating Expenses
Operating expensesdecreased 4% from $1,828 million for the nine months ended September 30, 2024, to $1,758 million for the nine months ended September 30, 2025, primarily due to lower maintenance and other miscellaneous costs, partially offset by higher natural gas costs.
Selling, General and Administrative Expenses
Selling, general and administrative expensesdecreased 1% from $327 million for the nine months ended September 30, 2024, to $323 million for the nine months ended September 30, 2025.
Depreciation and Amortization Expenses
Depreciation and amortizationincreased 11% from $613 million for the nine months ended September 30, 2024, to $681 million for the nine months ended September 30, 2025, principally due to depreciation and amortization attributable to additional capitalized refinery turnaround costs and capitalized improvement projects as compared to the prior period.
Interest Income
Interest incomewas $27 million for the nine months ended September 30, 2025, compared to $59 million for the nine months ended September 30, 2024. The decrease in Interest incomewas primarily due to the decrease in average cash balance.
Interest Expense
Interest expensewas $153 million for the nine months ended September 30, 2025, compared to $127 million for the nine months ended September 30, 2024. This increase was primarily due to unrealized losses on precious metals financing arrangements during the period.
Other Income (Expense), Net
During the nine months ended September 30, 2025, we assigned our 50% ownership interest in Cheyenne Pipeline, LLC to our joint venture partner in exchange for the cancellation of certain future commitments, resulting in a loss on sale of equity method investment of $40 million. Additionally, during the nine months ended September 30, 2025, we recognized an early extinguishment loss on debt of $24 million, inclusive of unamortized discount and debt issuance costs, as a result of the tendering and redemption of certain debt, and the termination of certain credit agreements (see Note 11 "Debt" in the Notes to the Consolidated Financial Statements for additional information).
Income Taxes
For the nine months ended September 30, 2025, Income tax expenseof $160 million was recorded on pre-tax income of $773 million, compared to Income tax expenseof $52 million on pre-tax income of $448 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, our effective tax rate of 20.7% was lower than the statutory rate of 21% primarily due to the relationship between pre-tax results and permanent differences and a discrete benefit associated with the revaluation of deferred tax liabilities from state tax law changes enacted in the second quarter of 2025. For the nine months ended September 30, 2024, our effective tax rate of 11.6% was lower than the statutory rate of 21% primarily due to the relationship between pre-tax results and non-taxable permanent differences.
LIQUIDITY AND CAPITAL RESOURCES
Credit Agreements
On April 3, 2025, we terminated our $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the "Terminated HF Sinclair Credit Agreement") and the $1.2 billion senior secured revolving credit facility maturing in July 2025 of our wholly owned subsidiary HEP (the "Terminated HEP Credit Agreement"). Contemporaneously, we entered into a new $2.0 billion senior unsecured revolving credit facility maturing in April 2030 (the "HF Sinclair Credit Agreement"), which contains an extension feature that allows us to extend the term of the commitment from time to time in increments of up to one year subject to the terms and conditions set forth in the HF Sinclair Credit Agreement. The HF Sinclair Credit Agreement includes an accordion feature that allows us to increase such commitments to an aggregate principal amount of up to $2.75 billion. In addition, HF Sinclair was released from its obligations under the Parent Guaranty Agreement, dated as of December 1, 2023, as guarantor, in favor of Wells Fargo Bank, National Association, in its capacity as administrative agent (the "Guaranty"), and the Guaranty was terminated. We did not pay any prepayment penalties in connection with the termination of the Terminated HF Sinclair Credit Agreement or the Terminated HEP Credit Agreement. We recognized an early extinguishment loss of $1 million, inclusive of unamortized debt issuance costs.
Indebtedness under the HF Sinclair Credit Agreement bears interest, at our option, at either (a) the greater of (i) the prime rate (as publicly announced from time to time by the administrative agent), (ii) a base rate equal to the highest of the Federal Funds Effective Rate (as defined in the HF Sinclair Credit Agreement) plus 0.5%, and (iii) Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for a one-month interest period plus 1%, as applicable, plus an applicable margin (ranging from 0.125% to 1.000%), or (b) at a rate equal to the Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for the applicable interest period plus an applicable margin (ranging from 1.125% to 2.000%). The applicable margin is based on HF Sinclair's debt rating assigned by Standard & Poor's Rating Services, Fitch Ratings, Ltd. and Moody's Investors Service, Inc.
At September 30, 2025, we were in compliance with all covenants and had no outstanding borrowings under the HF Sinclair Credit Agreement. At September 30, 2025, we had letters of credit outstanding under the HF Sinclair Credit Agreement in the amount of $128 million, which represented commitments and guarantees entered into in the normal course of business. The letters of credit were undrawn as of September 30, 2025.
Senior Notes Offerings, Tender Offers and Redemptions
On January 23, 2025, HF Sinclair issued an aggregate principal amount of $1.4 billion of senior notes consisting of $650 million aggregate principal amount of 5.750% Senior Notes due 2031 (the "HF Sinclair 5.750% Senior Notes") and $750 million aggregate principal amount of 6.250% Senior Notes due 2035 (the "HF Sinclair 6.250% Senior Notes" and together with the HF Sinclair 5.750% Senior Notes, the "January HFS Notes") for net proceeds of approximately $1.38 billion, after deducting the underwriters' discount and commissions and offering expenses. The January HFS Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness.
We used a portion of the funds to complete the early settlement of cash tender offers for $646 million in aggregate principal amount as follows:
Maturity Date Aggregate Principal Amount Accepted
Purchase Price Including Premium
Interest Paid
(In millions)
HF Sinclair Senior Notes:
5.875% Senior Notes
April 2026 $ 448 $ 452 $ 9
6.375% Senior Notes
April 2027 150 153 3
$ 598 $ 605 $ 12
HollyFrontier Senior Notes:
5.875% Senior Notes
April 2026 48 49 1
Total $ 646 $ 654 $ 13
Additionally, we used net proceeds from the January HFS Notes offering to repay and redeem the following aggregate principal amounts outstanding:
•$350 million under the Terminated HEP Credit Agreement due 2025,
•$195 million of HF Sinclair's 5.875% Senior Notes due 2026, and
•$155 million of our wholly owned subsidiary, HollyFrontier Corporation's ("HollyFrontier") 5.875% Senior Notes due 2026.
On August 18, 2025, HF Sinclair issued an aggregate principal amount of $500 million of 5.500% Senior Notes due 2032 (the "HF Sinclair 5.500% Senior Notes") for net proceeds of approximately $491 million, after deducting the underwriters' discount and commissions and offering expenses. The HF Sinclair 5.500% Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness.
We used a portion of the funds from the HF Sinclair 5.500% Senior Notes to complete the early settlement of a cash tender offer for $201 million in aggregate principal amount as follows:
Maturity Date Aggregate Principal Amount Accepted
Purchase Price Including Premium
Interest Paid
(In millions)
HF Sinclair Senior Notes:
5.875% Senior Notes
April 2026 $ 37 $ 37 $ 1
6.375% Senior Notes
April 2027 164 166 4
Total $ 201 $ 203 $ 5
Additionally, we used net proceeds from the HF Sinclair 5.500% Senior Notes offering to repay and redeem the remaining balance outstanding of the following aggregate principal amounts:
•$117 million of HF Sinclair's 5.875% Senior Notes due 2026, and
•$86 million of HF Sinclair's and HEP's 6.375% Senior Notes due 2027.
We recognized an early extinguishment loss of $8 million and $23 million, inclusive of unamortized discount and debt issuance costs, as a result of the tender offers and redemptions for the three and nine months ended September 30, 2025, respectively.
HF Sinclair Financing Arrangements
Certain of our wholly owned subsidiaries entered into financing arrangements whereby such subsidiaries sold a portion of their precious metals catalyst to a financial institution in exchange for cash and then financed the use of the precious metals catalyst for a term not to exceed one year. The volume of the precious metals catalyst and the interest rate are fixed over the term of each agreement, and the payments are recorded as Interest expense. Upon maturity of the financing arrangement, we must either satisfy the obligation at fair market value or refinance to extend the maturity, which is considered an embedded derivative.
Certain of our wholly owned subsidiaries may, from time to time, enter into buy/sell arrangements in which an inventory repurchase obligation is recognized. As of September 30, 2025, we had $103 million recorded in inventory repurchase obligations related to these commercial financing arrangements, which is included in Accrued liabilities.
We may, from time to time, issue letters of credit pursuant to uncommitted letters of credit facilities, which are unrelated to the HF Sinclair Credit Agreement. At September 30, 2025, we had letters of credit totaling a nominal amount under such credit facilities.
See Note 11 "Debt" in the Notes to Consolidated Financial Statements for additional information on our debt instruments.
Liquidity
We believe our current Cash and cash equivalents, along with future internally generated cash flow and funds available under our credit facilities, will provide sufficient resources to fund currently planned capital projects and our current liquidity needs. We expect that, to the extent necessary, we can raise additional funds from time to time through equity or debt financings in the public and private capital markets. Further, we may, from time to time, seek to retire some or all of our outstanding debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and will depend on prevailing market conditions, our liquidity requirements and other factors. In addition, components of our long-term growth strategy include the optimization of existing units at our facilities, expansion of our Midstream footprint and the selective acquisition of complementary assets for our operations intended to increase earnings and cash flow. We also expect to use cash for payment of cash dividends, which are at the discretion of our Board of Directors, and for the repurchase of common stock under the May 2024 Share Repurchase Program.
Our liquidity was approximately $3.3 billion at September 30, 2025, consisting of Cash and cash equivalentsof$1.5 billion and $1.9 billion available under the HF Sinclair Credit Agreement.
We consider all highly liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. These primarily consist of investments in conservative, highly rated instruments issued by financial institutions, government and corporate entities with strong credit standings and money market funds. Cash equivalents are stated at cost, which approximates market value.
On May 7, 2024, our Board of Directors approved the May 2024 Share Repurchase Program, which replaced all existing share repurchase programs. The May 2024 Share Repurchase Program authorizes us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH are also authorized under the May 2024 Share Repurchase Program, subject to REH's interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs. The May 2024 Share Repurchase Program may be discontinued at any time by our Board of Directors.
On September 16, 2025, we repurchased 1,948,558 shares of our outstanding common stock from REH in a privately negotiated transaction under the May 2024 Share Repurchase Program and pursuant to the Stock Purchase Agreement, dated September 16, 2025 (the "September 2025 Stock Purchase Agreement"), between us and REH. The price paid under the September 2025 Stock Purchase Agreement was $51.32 per share resulting in an aggregate purchase price of $100 million. The purchase price was funded with cash on hand.
Cash Flows - Operating Activities
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Net cash flows provided by operating activitieswere $1,307 million for the nine months ended September 30, 2025, compared to $1,250 million for the nine months ended September 30, 2024, an increase of $57 million primarily driven by an increase in net income, net of adjustments to reconcile net income to net cash provided by operating activities, partially offset by changes in working capital and an increase in turnaround expenditures. Changes in working capital increased operating cash flows by $83 million for the nine months ended September 30, 2025, and increased operating cash flows by $545 million for the nine months ended September 30, 2024. Additionally, for the nine months ended September 30, 2025, Turnaround expenditureswere $315 million compared to $259 million for the nine months ended September 30, 2024.
Cash Flows - Investing Activities and Planned Capital Expenditures
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
For the nine months ended September 30, 2025, our Net cash flows used for investing activitieswere $341 million. Cash expenditures for Properties, plants and equipmentfor the nine months ended September 30, 2025 were $318 million.
For the nine months ended September 30, 2024, our Net cash flows used for investing activitieswere $295 million. Cash expenditures for Properties, plants and equipmentfor the nine months ended September 30, 2024 were $297 million.
Each year, our Board of Directors approves our annual capital budget, which includes specific projects that management is authorized to undertake. When conditions warrant or as new opportunities arise, additional projects may be approved. The funds appropriated for a particular capital project may be expended over a period of several years, depending on the time required to complete the project. Therefore, our planned capital expenditures for a given year consist of expenditures appropriated in that year's capital budget plus expenditures for projects appropriated in prior years that have not yet been completed. Refinery turnaround spending is amortized over the useful life of the turnaround.
The refining industry is capital-intensive and requires ongoing investments to sustain our refining operations. This includes the replacement of, or rebuilding, refinery units and components that extend their useful life. We also invest in projects that improve operational reliability and profitability via enhancements that improve refinery processing capabilities as well as production yield and flexibility. Our capital expenditures also include projects related to renewable diesel, environmental, health and safety compliance and include initiatives as a result of federal and state mandates.
Our refinery operations and related emissions are highly regulated at both federal and state levels, and we invest in our facilities as needed to remain in compliance with these standards. Additionally, when faced with new emissions or fuel standards, we seek to execute projects that facilitate compliance and also improve the operating costs and/or yields of associated refining processes.
Expected capital and turnaround cash spending for 2025 is as follows:
Expected Cash Spending
(In millions)
Capital Expenditures:
Refining $ 240
Renewables 5
Marketing 30
Lubricants & Specialties 40
Midstream 30
Corporate 20
Turnarounds and catalyst 410
Total sustaining $ 775
Growth capital 100
Total $ 875
Cash Flows - Financing Activities
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
For the nine months ended September 30, 2025, our Net cash flows used for financing activitieswere $323 million. During the nine months ended September 30, 2025, we paid $284 million in Dividends, we repurchased $216 million of our Common stock, repaid $350 million under the Terminated HEP Credit Agreement and had net proceeds from the issuance and redemption of certain senior notes of $474 million.
For the nine months ended September 30, 2024, our Net cash flows used for financing activitieswere $1,079 million. During the nine months ended September 30, 2024, we repurchased $668 million of our Common stock, paid $291 million in Dividends, and repaid $106 million under the Terminated HEP Credit Agreement.
Contractual Obligations and Commitments
As of September 30, 2025, our contractual obligations included debt obligations, interest payments related to debt obligations, financing arrangements, supply agreements, transportation and storage agreements, operating and finance leases, and other long-term obligations and commitments. In the ordinary course of business, we had debt-related activities during the nine months ended September 30, 2025, as described in Note 11 "Debt" of the Consolidated Financial Statements.
There were no material changes outside the ordinary course of business with respect to our contractual obligations during the nine months ended September 30, 2025.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities as of the date of the consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions.
Our significant accounting policies are described in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2024. Certain critical accounting policies that materially affect the amounts recorded in our consolidated financial statements include assessing contingent liabilities for probable losses.
Goodwill and Asset Impairments
As of September 30, 2025, our Goodwillbalance was $2,978 million, with goodwill assigned to our Refining, Renewables, Marketing, Lubricants & Specialties and Midstream segments. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing first entails either a quantitative assessment or an optional qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. With our qualitative assessment, if we determine based on qualitative factors that it is more likely than not that the carrying value of the reporting unit is greater than its fair value, a quantitative test is performed in which we estimate the fair value of the related reporting unit. If the carrying amount of a reporting unit exceeds its fair value, the goodwill of that reporting unit is impaired, and we measure goodwill impairment as the excess of the carrying amount of reporting unit over the related fair value.
As of July 1, 2025, we elected to perform our annual goodwill impairment testing for certain of our reporting units quantitatively with the remaining units being tested qualitatively, and determined there was no impairment of goodwill attributable to our reporting units. For our reporting units tested quantitatively, the estimated fair values were derived using a combination of income and market approaches. The income approach reflects expected future cash flows based on estimated forecasted production levels, selling prices, gross margins, operating costs and capital expenditures. Our market approaches include both the guideline public company and guideline transaction methods. Both methods utilize pricing multiples derived from market data, including historical market transactions and other market data of other like-kind assets. The fair values of the reporting units over their respective carrying values exceeded 10%. Increasing the discount rate by 1.0% or reducing the terminal cash flow growth rate by 1.0% would not have changed the results of our annual goodwill testing.
In performing our quantitative impairment test of goodwill, we developed cash flow forecasts for our selected reporting units. Significant judgment is involved in performing these fair value estimates since the results are based on forecasted financial information. The cash flow forecasts include significant assumptions such as planned utilization, end-user demand, selling prices, gross margins, operating costs and capital expenditures. Other key assumptions applied to these forecasts to determine the fair value of a reporting unit are the discount rate and terminal cash flow growth rate. The discount rate is intended to reflect the weighted average cost of capital for a market participant and the risks associated with the realization of the estimated future cash flows. Our fair value estimates are based on projected cash flows, which we believe to be reasonable.
We continually monitor and evaluate various factors for potential indicators of goodwill and asset impairments. A reasonable expectation exists that further deterioration in our operating results or overall economic conditions could lead to goodwill and / or asset impairments at some point in the future. Future impairment charges could be material to our results of operations and financial condition.
RISK MANAGEMENT
We have a risk management oversight committee consisting of members from our senior management. This committee oversees our enterprise risk program, monitors our risk environment and provides direction for activities to mitigate identified risks that may adversely affect the achievement of our goals.
We use certain strategies to reduce some commodity price and operational risks. We do not attempt to eliminate all market risk exposures when we believe that the exposure relating to such risk would not be significant to our future earnings, financial position, capital resources or liquidity or that the cost of eliminating the exposure would outweigh the benefit.
Commodity Price Risk Management
Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in the price of crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, collar contracts, forward contracts and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.
Foreign Currency Risk Management
We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.
As of September 30, 2025, we have the following notional amounts related to all outstanding derivative instruments used to mitigate commodity price and foreign currency risk:
Notional Contract Volumes
by Year of Maturity
Contract Description
Total Outstanding Notional 2025 2026 Unit of Measure
WTI crude oil price swaps - long
400,000 400,000 - Barrels
Sub-octane gasoline price swaps - short
400,000 400,000 - Barrels
NYMEX futures (WTI) - short 500,000 500,000 - Barrels
Forward gasoline and diesel contracts - long 129,200 129,200 - Barrels
Forward crude oil contracts - long
180,000 - 180,000
Barrels
Foreign currency forward contracts 522,000,000 140,705,100 381,294,900
Canadian dollar
Forward commodity contracts (platinum) (1)
31,733 4,592 27,141 Troy ounces
(1)Represents an embedded derivative within our precious metals catalyst financing arrangements, which may be refinanced or require repayment under certain conditions. See Note 11 "Debt" in the Notes to Consolidated Financial Statements for additional information on these financing arrangements.
The following sensitivity analysis provides the hypothetical effects of market price fluctuations to the commodity hedged under our derivative contracts:
September 30,
Derivative Fair Value Gain (Loss)
2025 2024
(In millions)
10% increase in underlying commodity prices $ (4) $ (10)
10% decrease in underlying commodity prices $ 4 $ 10
Financial information of the counterparties is reviewed in order to evaluate and monitor their financial stability and assess their ongoing ability to honor their commitments under the derivative contracts. We have not experienced, nor do we expect to experience, any difficulty in the counterparties honoring their commitments.
Interest Rate Risk Management
The market risk inherent in our fixed-rate debt is the potential change arising from increases or decreases in interest rates, as discussed below.
For the fixed rate HF Sinclair, HollyFrontier and HEP Senior Notes (each as described in Note 11 "Debt" in the Notes to Consolidated Financial Statements), changes in interest rates will generally affect fair value of the debt, but not earnings or cash flows. The outstanding principal, estimated fair value and estimated change in fair value (assuming a hypothetical 10% change in the yield-to-maturity rates) for this debt as of September 30, 2025, is presented below:
Outstanding
Principal 		Estimated
Fair Value 		Estimated Change in Fair Value
(In millions)
HF Sinclair, HollyFrontier and HEP Senior Notes $ 2,800 $ 2,861 $ 76
For the variable rate under the HF Sinclair Credit Agreement, changes in interest rates would affect cash flows, but not the fair value. At September 30, 2025, there were no amounts outstanding under the HF Sinclair Credit Agreement. A hypothetical 10% change in interest rate applicable to the HF Sinclair Credit Agreement would not materially affect cash flows.
Operational Interruption Risk Management
Our operations are subject to catastrophic losses, operational hazards and unforeseen interruptions, including but not limited to fire, explosion, releases or spills, cyberattacks, weather-related perils, vandalism, power failures, mechanical failures and other events beyond our control. We maintain various insurance coverages, including general liability, property damage, business interruption and cyber insurance, subject to certain deductibles and insurance policy terms and conditions. We are not fully insured against certain risks because such risks are not fully insurable, coverage is unavailable, or premium costs, in our judgment, do not justify such expenditures.
Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles
Reconciliations of earnings before interest, taxes, depreciation and amortization ("EBITDA") to amounts reported under generally accepted accounting principles in the financial statements.
Earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, is calculated as Net income (loss) attributable to HF Sinclair stockholdersplus (i) Interest expense, net of Interest income, (ii) Income tax expense (benefit)and (iii) Depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to Net incomeor Income from operationsas an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a financial indicator widely used by investors and analysts to measure our operating performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants.
Below is our calculation of EBITDA:
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions)
Net income (loss) attributable to HF Sinclair stockholders
$ 403 $ (76) $ 607 $ 391
Add: interest expense 51 40 153 127
Less: interest income (11) (18) (27) (59)
Add: income tax expense (benefit)
123 (57) 160 52
Add: depreciation and amortization 230 210 681 613
EBITDA $ 796 $ 99 $ 1,574 $ 1,124
Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Adjusted refinery gross margin is a non-GAAP performance measure that is used by our management and others to compare our refining performance to that of other companies in our industry. We believe this margin measure is helpful to investors in evaluating our refining performance on a relative and absolute basis, including against publicly available crack spread data. Adjusted refinery gross margin per produced barrel sold is total Refining segment gross margin plus Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization,divided by sales volumes of produced refined products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to inventory held at the end of the period. Adjusted refinery gross margin is a non-GAAP performance measure and should not be considered in isolation or as a substitute for Refining segment gross margin. The GAAP measure most directly comparable to adjusted refinery gross margin is Refining segment gross margin. Other companies in our industry may not calculate these performance measures in the same manner. Due to rounding of reported numbers, some amounts may not calculate exactly.
Reconciliation of Refining segment gross margin to adjusted refinery gross margin to adjusted refinery gross margin per produced barrel sold and adjusted refinery gross margin, less operating expenses per produced barrel sold
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions, except barrel and per barrel amounts)
Refining segment
Sales and other revenues $ 6,443 $ 6,382 $ 18,113 $ 19,564
Cost of sales (1)
5,771 6,416 16,914 18,882
Depreciation and amortization 139 123 410 363
Gross margin $ 533 $ (157) $ 789 $ 319
Add: lower of cost or market inventory valuation adjustments
46 199 102 (22)
Add: operating expenses 447 485 1,349 1,407
Add: depreciation and amortization 139 123 410 363
Adjusted refinery gross margin $ 1,165 $ 650 $ 2,650 $ 2,067
Sales of produced refined products (BPD) (2)
661,140 654,400 644,190 650,720
Average per produced barrel sold:
Gross margin $ 8.78 $ (2.62) $ 4.49 $ 1.79
Add: lower of cost or market inventory valuation adjustments
0.75 3.30 0.58 (0.12)
Add: operating expenses 7.34 8.06 7.67 7.89
Add: depreciation and amortization 2.29 2.05 2.33 2.03
Adjusted refinery gross margin $ 19.16 $ 10.79 $ 15.07 $ 11.59
Less: operating expenses 7.34 8.06 7.67 7.89
Adjusted refinery gross margin, less operating expenses $ 11.82 $ 2.73 $ 7.40 $ 3.70
(1)Exclusive of Depreciation and amortization.
(2)Represents barrels sold of refined products produced at our refineries (including Asphalt and intersegment sales) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.
Reconciliation of renewables operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Adjusted renewables gross margin is a non-GAAP performance measure that is used by our management and others to compare our renewables performance to that of other companies in our industry. We believe this margin measure is helpful to investors in evaluating our renewables performance on a relative and absolute basis. Adjusted renewables gross margin per produced gallon sold is total Renewables segment gross margin plus Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization, divided by sales volumes of produced renewables products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to volumes in inventory at the end of the period. Adjusted renewables gross margin is not a calculation provided for under GAAP and should not be considered in isolation or as a substitute for Renewables segment gross margin. The GAAP measure most directly comparable to adjusted renewables gross margin is Renewables segment gross margin. Other companies in our industry may not calculate these performance measures in the same manner. Due to rounding of reported numbers, some amounts may not calculate exactly.
Reconciliation of Renewables segment gross margin to adjusted renewables gross margin to adjusted renewables gross margin per produced gallon sold and adjusted renewables gross margin, less operating expenses per produced gallon sold
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions, except gallon and per gallon amounts)
Renewables segment
Sales and other revenues $ 277 $ 265 $ 725 $ 753
Cost of sales (1)
309 265 750 766
Depreciation and amortization 22 21 71 61
Gross margin $ (54) $ (21) $ (96) $ (74)
Add: lower of cost or market inventory valuation adjustments
20 3 (5) 2
Add: operating expenses 22 25 67 76
Add: depreciation and amortization 22 21 71 61
Adjusted renewables gross margin $ 10 $ 28 $ 37 $ 65
Sales of produced renewables products (in thousand gallons)
57,159 68,755 156,408 193,484
Average per produced gallon sold:
Gross margin $ (0.94) $ (0.32) $ (0.61) $ (0.38)
Add: lower of cost or market inventory valuation adjustments
0.35 0.05 (0.03) 0.01
Add: operating expenses 0.39 0.36 0.43 0.39
Add: depreciation and amortization 0.38 0.32 0.45 0.32
Adjusted renewables gross margin $ 0.18 $ 0.41 $ 0.24 $ 0.34
Less: operating expenses 0.39 0.36 0.43 0.39
Adjusted renewables gross margin, less operating expenses $ (0.21) $ 0.05 $ (0.19) $ (0.05)
(1) Exclusive of Depreciation and amortization.
Reconciliation of marketing operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Adjusted marketing gross margin is a non-GAAP performance measure that is used by our management and others to compare our marketing performance to that of other companies in our industry. We believe this margin measure is helpful to investors in evaluating our marketing performance on a relative and absolute basis. Adjusted marketing gross margin per gallon sold is total Marketing segment gross margin plus Depreciation and amortization, divided by sales volumes of marketing products. Adjusted marketing gross margin is not a calculation provided for under GAAP and should not be considered in isolation or as a substitute for Marketing segment gross margin. The GAAP measure most directly comparable to adjusted marketing gross margin is Marketing segment gross margin. Other companies in our industry may not calculate these performance measures in the same manner. Due to rounding of reported numbers, some amounts may not calculate exactly.
Reconciliation of Marketing segment gross margin to adjusted marketing gross margin to adjusted marketing gross margin per gallon sold
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions, except gallon and per gallon amounts)
Marketing segment
Sales and other revenues $ 898 $ 950 $ 2,410 $ 2,668
Cost of sales (1)
860 918 2,304 2,591
Depreciation and amortization 7 6 21 19
Gross margin $ 31 $ 26 $ 85 $ 58
Add: depreciation and amortization
7 6 21 19
Adjusted marketing gross margin $ 38 $ 32 $ 106 $ 77
Sales of refined products (in thousand gallons)
360,482 365,036 991,494 1,043,183
Average per gallon sold:
Gross margin $ 0.09 $ 0.07 $ 0.09 $ 0.06
Add: depreciation and amortization
0.02 0.02 0.02 0.01
Adjusted marketing gross margin $ 0.11 $ 0.09 $ 0.11 $ 0.07
(1) Exclusive of Depreciation and amortization.
HF Sinclair Corporation published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 17:53 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]