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HF Sinclair Corporation Reports Quarterly Results and Announces Increased Regular Cash Dividend

05/09/2022
  • Reported net income attributable to HF Sinclair stockholders of $160.0 million, or $0.90 per diluted share, and adjusted net income of $175.6 million, or $0.99 per diluted share, for the first quarter
  • Reported EBITDA of $359.8 million and Adjusted EBITDA of $376.7 million for the first quarter
  • Announced reinstatement and increase of regular quarterly dividend to $0.40 per share
  • Closed the acquisition of the Sinclair companies and established new parent company, HF Sinclair Corporation
  • Commenced production of renewable diesel at the Cheyenne, Wyoming renewable diesel facility and commenced operations at the Artesia, New Mexico pre-treatment unit

HF Sinclair Corporation (NYSE:DINO) (“HF Sinclair” or the “Company”) today reported first quarter net income attributable to HF Sinclair stockholders of $160.0 million, or $0.90 per diluted share, for the quarter ended March 31, 2022, compared to $148.2 million, or $0.90 per diluted share, for the quarter ended March 31, 2021.

The first quarter results reflect special items that collectively decreased net income by a total of $15.7 million. On a pre-tax basis, these items include acquisition integration costs of $25.0 million and decommissioning charges of $1.0 million related to the Cheyenne Refinery conversion to renewable diesel production, partially offset by a reduction in cost of goods sold by $8.6 million from lower of cost or market valuation. Excluding these items, net income for the current quarter was $175.6 million ($0.99 per diluted share) compared to net loss of $(85.3) million ($(0.53) per diluted share) for the first quarter of 2021, which excludes certain items that collectively increased net income by $233.5 million.

The HF Sinclair Board of Directors has declared the reinstatement of the regular quarterly dividend at an increased rate of $0.40 per share, compared to the first quarter 2021 dividend of $0.35 per share. The dividend is payable on June 2, 2022 to holders of record of common stock on May 23, 2022.

HF Sinclair’s CEO, Michael Jennings, commented, “The first quarter was transformational as we closed on the acquisition of the Sinclair companies, marking the new HF Sinclair, and made our first sales of renewable diesel from Cheyenne. Our combined, integrated platform delivered strong financial results led by the performance of our refining and lubricants segments. With the closing of the acquisitions of the Puget Sound refinery and Sinclair and our Renewables business approaching full operation, we are pleased to announce the first milestone in our capital return plan, an increased regular dividend of $0.40 per share. As we head into summer driving season, refining fundamentals are very favorable due to strong gasoline and diesel demand, coupled with low product inventories. We remain fully committed to our capital allocation strategy of returning $1 billion in cash to shareholders over the next twelve months.”

Refining segment income before interest and income taxes was $113.1 million for the first quarter of 2022 compared to $45.7 million in the first quarter of 2021. The segment reported EBITDA of $207.7 million for the first quarter of 2022 compared to $133.8 million for the first quarter of 2021. This increase was driven by higher sales volumes from the Puget Sound refinery and Sinclair acquisitions as well as the impact of stronger product demand on gross margins. Consolidated refinery gross margin was $12.69 per produced barrel, a 59% increase compared to $8.00 for the first quarter of 2021 and crude oil charge averaged 525,080 barrels per day (“BPD”) for the current quarter compared to 348,170 BPD for the first quarter of 2021.

Renewables segment loss before interest and income taxes was $(22.1) million for the first quarter of 2022 compared to $(13.2) million in the first quarter of 2021. The segment reported EBITDA of $(16.3) million for the first quarter of 2022 compared to $(12.8) million in the first quarter of 2021. Total sales volumes were 5 million gallons for the first quarter of 2022. The Cheyenne renewable diesel unit (“RDU”) was mechanically complete in the fourth quarter of 2021 and fully operational in the first quarter of 2022, the pre-treatment unit (“PTU”) at our Artesia, New Mexico facility was completed and fully operational in the first quarter of 2022 and the Artesia RDU is expected to be completed in the second quarter of 2022. Also, effective with the Sinclair acquisition that closed March 14, 2022, the Renewables segment includes the Sinclair RDU.

Marketing segment income before interest and income taxes was $5.3 million and reported EBITDA was $5.8 million for the first quarter of 2022. Total branded fuel sales volumes were 85 million gallons for the first quarter of 2022.

Lubricants and Specialty Products segment income before interest and income taxes was $124.7 million for the first quarter of 2022 compared to $67.0 million in the first quarter of 2021. The segment reported EBITDA of $145.3 million for the first quarter of 2022 compared to $87.1 million in the first quarter of 2021. This increase was driven by strong finished product demand and pricing initiatives that outpaced rising feedstock and energy costs.

Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $72.8 million for the first quarter of 2022 compared to $96.2 million in the first quarter of 2021.

For the first quarter of 2022, net cash provided by operations totaled $461.0 million. At March 31, 2022, the Company's cash and cash equivalents totaled $592.3 million, a $357.8 million increase over cash and cash equivalents of $234.4 million at December 31, 2021. Additionally, the Company's consolidated debt was $3,374.7 million. The Company’s debt, exclusive of HEP debt, which is nonrecourse to HF Sinclair, was $1,740.3 million at March 31, 2022.

The Company has scheduled a webcast conference call for today, May 9, 2022, at 8:30 AM Eastern Time to discuss first quarter financial results. This webcast may be accessed at https://events.q4inc.com/attendee/607702822. An audio archive of this webcast will be available using the above noted link through May 23, 2022.

HF Sinclair Corporation, headquartered in Dallas, Texas, is an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. HF Sinclair owns and operates refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah and markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. HF Sinclair supplies high-quality fuels to more than 1,300 Sinclair branded stations and licenses the use of the Sinclair brand at more than 300 additional locations throughout the country. In addition, subsidiaries of HF Sinclair produce and market base oils and other specialized lubricants in the U.S., Canada and the Netherlands, and export products to more than 80 countries. Through its subsidiaries, HF Sinclair produces renewable diesel at two of its facilities in Wyoming. HF Sinclair also owns a 47% limited partner interest and a non-economic general partner interest in Holly Energy Partners, L.P., a master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including HF Sinclair subsidiaries.

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: The statements in this press release relating to matters that are not historical facts are “forward-looking statements” based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties, including those contained in our filings with the Securities and Exchange Commission (the “SEC”). Forward-looking statements use words such as “anticipate,” “project,” “will,” “expect,” “plan,” “goal,” “forecast,” “strategy,” “intend,” “should,” “would,” “could,” “believe,” “may,” and similar expressions and statements regarding our plans and objectives for future operations. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Any differences could be caused by a number of factors, including, but not limited to, the Company’s and HEP’s ability to successfully integrate the Sinclair Oil Corporation (now known as Sinclair Oil LLC, “Sinclair Oil”) and Sinclair Transportation Company LLC (“STC”) businesses acquired from REH Company (formerly known as The Sinclair Companies) (collectively, the “Sinclair Transactions”) with their existing operations and fully realize the expected synergies of the Sinclair Transactions or on the expected timeline; the Company's ability to successfully integrate the operation of the Puget Sound refinery with its existing operations; the demand for and supply of crude oil and refined products, including uncertainty regarding the effects of the continuing coronavirus (“COVID-19”) pandemic on future demand and increasing societal expectations that companies address climate change; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products or lubricant and specialty products in the Company’s markets; the spread between market prices for refined products and market prices for crude oil; the possibility of constraints on the transportation of refined products or lubricant and specialty products; the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand; the effects of current and/or future governmental and environmental regulations and policies, including the effects of current and/or future restrictions on various commercial and economic activities in response to the COVID-19 pandemic; the availability and cost of financing to the Company; the effectiveness of the Company’s capital investments and marketing strategies; the Company’s and HEP’s efficiency in carrying out and consummating construction projects, including the Company's ability to complete announced capital projects, such as the construction of the Artesia renewable diesel unit and pretreatment unit, on time and within capital guidance; the Company's and HEP’s ability to timely obtain or maintain permits, including those necessary for operations or capital projects; the ability of the Company to acquire refined or lubricant product operations or pipeline and terminal operations on acceptable terms and to integrate any existing or future acquired operations; the possibility of terrorist or cyberattacks and the consequences of any such attacks; uncertainty regarding the effects and duration of global hostilities and any associated military campaigns which may disrupt crude oil supplies and markets for the Company's refined products and create instability in the financial markets that could restrict the Company's ability to raise capital; general economic conditions, including uncertainty regarding the timing, pace and extent of an economic recovery in the United States; a prolonged economic slowdown due to the COVID-19 pandemic which could result in an impairment of goodwill and/or long-lived asset impairments; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s and HEP’s SEC filings. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

RESULTS OF OPERATIONS

 
Financial Data (all information in this release is unaudited)

 

Three Months Ended
March 31,

 

Change from 2021

 

2022

 

2021

 

Change

 

Percent

 

(In thousands, except per share data)

Sales and other revenues

$

7,458,750

 

 

$

3,504,293

 

 

$

3,954,457

 

 

113

%

Operating costs and expenses:

 

 

 

 

 

 

 

Cost of products sold:

 

 

 

 

 

 

 

Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)

 

6,502,012

 

 

 

2,960,305

 

 

 

3,541,707

 

 

120

 

Lower of cost or market inventory valuation adjustment

 

(8,551

)

 

 

(200,037

)

 

 

191,486

 

 

(96

)

 

 

6,493,461

 

 

 

2,760,268

 

 

 

3,733,193

 

 

135

 

Operating expenses (exclusive of depreciation and amortization)

 

477,434

 

 

 

399,909

 

 

 

77,525

 

 

19

 

Selling, general and administrative expenses

 

110,422

 

 

 

81,975

 

 

 

28,447

 

 

35

 

Depreciation and amortization

 

144,601

 

 

 

124,079

 

 

 

20,522

 

 

17

 

Total operating costs and expenses

 

7,225,918

 

 

 

3,366,231

 

 

 

3,859,687

 

 

115

 

Income from operations

 

232,832

 

 

 

138,062

 

 

 

94,770

 

 

69

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Earnings of equity method investments

 

3,626

 

 

 

1,763

 

 

 

1,863

 

 

106

 

Interest income

 

997

 

 

 

1,031

 

 

 

(34

)

 

(3

)

Interest expense

 

(34,859

)

 

 

(38,386

)

 

 

3,527

 

 

(9

)

Gain on tariff settlement

 

 

 

 

51,500

 

 

 

(51,500

)

 

(100

)

Gain (loss) on foreign currency transactions

 

139

 

 

 

(1,317

)

 

 

1,456

 

 

(111

)

Gain on sale of assets and other

 

3,895

 

 

 

1,890

 

 

 

2,005

 

 

106

 

 

 

(26,202

)

 

 

16,481

 

 

 

(42,683

)

 

(259

)

Income before income taxes

 

206,630

 

 

 

154,543

 

 

 

52,087

 

 

34

 

Income tax expense (benefit)

 

21,329

 

 

 

(28,307

)

 

 

49,636

 

 

(175

)

Net income

 

185,301

 

 

 

182,850

 

 

 

2,451

 

 

1

 

Less net income attributable to noncontrolling interest

 

25,327

 

 

 

34,633

 

 

 

(9,306

)

 

(27

)

Net income attributable to HF Sinclair stockholders

$

159,974

 

 

$

148,217

 

 

$

11,757

 

 

8

%

 

 

 

 

 

 

 

 

Earnings per share attributable to HF Sinclair stockholders:

 

 

 

 

 

 

 

Basic

$

0.90

 

 

$

0.90

 

 

$

 

 

%

Diluted

$

0.90

 

 

$

0.90

 

 

$

 

 

%

Cash dividends declared per common share

$

 

 

$

0.35

 

 

$

(0.35

)

 

(100

) %

Average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

175,081

 

 

 

162,479

 

 

 

12,602

 

 

8

%

Diluted

 

175,081

 

 

 

162,479

 

 

 

12,602

 

 

8

%

 

 

 

 

 

 

 

 

EBITDA

$

359,766

 

 

$

281,344

 

 

$

78,422

 

 

28

%

Adjusted EBITDA

$

376,707

 

 

$

47,308

 

 

$

329,399

 

 

696

%

Balance Sheet Data

 

March 31,

 

December 31,

 

2022

 

2021

 

(In thousands)

Cash and cash equivalents

$

592,278

 

$

234,444

Working capital

$

2,627,703

 

$

1,696,990

Total assets

$

17,733,097

 

$

12,916,613

Long-term debt

$

3,374,701

 

$

3,072,737

Total equity

$

8,876,977

 

$

6,294,465

Segment Information

Effective the first quarter of 2022, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our businesses. Accordingly, we created two new reportable segments, Renewables and Marketing. Our operations are now organized into five reportable segments, Refining, Renewables, Marketing, Lubricants and Specialty Products and HEP. Our operations that are not included in one of these five reportable segments are included in Corporate and Other. Intersegment transactions are eliminated in our consolidated financial statements and are included in Eliminations. Corporate and Other and Eliminations are aggregated and presented under the Corporate, Other and Eliminations column.

As a result of the Sinclair Transactions that closed on March 14, 2022, the operations of the acquired Sinclair businesses are reported in the Refining, Renewables, Marketing and HEP segments.

The Refining segment represents the operations of our El Dorado, Tulsa, Navajo and Woods Cross refineries and HollyFrontier Asphalt Company LLC (“HFC Asphalt”). Also, effective with our acquisition that closed November 1, 2021, the Refining segment includes our Puget Sound refinery, and effective with our acquisition that closed March 14, 2022, includes our Sinclair and Casper refineries. Refining activities involve the purchase and refining of crude oil and wholesale marketing of refined products, such as gasoline, diesel fuel and jet fuel. These petroleum products are primarily marketed in the Mid-Continent, Southwest and Rocky Mountains extending into the Pacific Northwest geographic regions of the United States. HFC Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma.

The Renewables segment represents the operations of the Cheyenne RDU, which was mechanically complete in the fourth quarter of 2021 and fully operational in the first quarter of 2022, the PTU at our Artesia, New Mexico facility, which was completed and fully operational in the first quarter of 2022 and the Artesia RDU, which is expected to be completed in the second quarter of 2022. Also, effective with our acquisition that closed March 14, 2022, the Renewables segment includes the Sinclair RDU. During the construction phase of our RDUs and PTU, operating expense and capital expenditures were reported in the Corporate and Other segment, and this financial information has been retrospectively adjusted to reflect our current segment presentation.

The Marketing segment includes branded fuel sales through more than 300 distributors to more than 1,300 branded sites in the United States and licensing fees for the use of the Sinclair brand at more than 300 additional locations throughout the country.

The Lubricants and Specialty Products segment involves Petro-Canada Lubricants, Inc.’s (“PCLI”) production operations, located in Mississauga, Ontario, that includes lubricant products such as base oils, white oils, specialty products and finished lubricants, and the operations of our Petro-Canada Lubricants business that includes the marketing of products to both retail and wholesale outlets through a global sales network with locations in Canada, the United States, Europe and China. Additionally, the Lubricants and Specialty Products segment includes specialty lubricant products produced at our Tulsa refineries that are marketed throughout North America and are distributed in Central and South America and the operations of Red Giant Oil Company LLC, one of the largest suppliers of locomotive engine oil in North America. Also, the Lubricants and Specialty Products segment includes Sonneborn, a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes with manufacturing facilities in the United States and Europe.

The HEP segment includes all of the operations of HEP, which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. The HEP segment also includes 50% ownership interests in each of the Osage Pipeline, the Cheyenne Pipeline and Cushing Connect, a 25.06% ownership interest in the Saddle Butte Pipeline and a 49.995% ownership interest in Pioneer Pipeline. Revenues from the HEP segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations as well as revenues relating to pipeline transportation services provided for our refining operations. Due to certain basis differences, our reported amounts for the HEP segment may not agree to amounts reported in HEP’s periodic public filings.

 

 

Refining

 

Renewables

 

Marketing

 

Lubricants
and Specialty
Products

 

HEP

 

Corporate,
Other and
Eliminations

 

Consolidated
Total

 

 

(In thousands)

Three Months Ended March 31, 2022

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

6,371,894

 

$

28,313

 

 

$

277,041

 

$

753,558

 

$

27,944

 

$

 

 

$

7,458,750

 

Intersegment revenues

 

 

134,273

 

 

19,054

 

 

 

 

 

1,451

 

 

92,254

 

 

(247,032

)

 

 

 

 

 

$

6,506,167

 

$

47,367

 

 

$

277,041

 

$

755,009

 

$

120,198

 

$

(247,032

)

 

$

7,458,750

 

Cost of products sold (exclusive of lower of cost or market inventory)

 

$

5,909,610

 

$

44,271

 

 

$

271,131

 

$

504,577

 

$

 

$

(227,577

)

 

$

6,502,012

 

Lower of cost or market inventory valuation adjustment

 

$

 

$

(8,551

)

 

$

 

$

 

$

 

$

 

 

$

(8,551

)

Operating expenses

 

$

354,972

 

$

27,096

 

 

$

 

$

66,001

 

$

42,624

 

$

(13,259

)

 

$

477,434

 

Selling, general and administrative expenses

 

$

33,882

 

$

872

 

 

$

140

 

$

41,749

 

$

4,312

 

$

29,467

 

 

$

110,422

 

Depreciation and amortization

 

$

94,681

 

$

5,800

 

 

$

501

 

$

20,594

 

$

21,586

 

$

1,439

 

 

$

144,601

 

Income (loss) from operations

 

$

113,022

 

$

(22,121

)

 

$

5,269

 

$

122,088

 

$

51,676

 

$

(37,102

)

 

$

232,832

 

Income (loss) before interest and income taxes

 

$

113,051

 

$

(22,102

)

 

$

5,269

 

$

124,701

 

$

55,403

 

$

(35,830

)

 

$

240,492

 

Net income attributable to noncontrolling interest

 

$

 

$

 

 

$

 

$

 

$

3,263

 

$

22,064

 

 

$

25,327

 

Earnings of equity method investments

 

$

 

$

 

 

$

 

$

 

$

3,626

 

$

 

 

$

3,626

 

Capital expenditures

 

$

29,920

 

$

98,769

 

 

$

 

$

6,370

 

$

14,147

 

$

9,090

 

 

$

158,296

 

 

 

Refining

 

Renewables

 

Lubricants
and Specialty
Products

 

HEP

 

Corporate,
Other and
Eliminations

 

Consolidated Total

 

 

(In thousands)

Three Months Ended March 31, 2021

 

 

 

 

 

 

 

 

 

 

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

2,957,033

 

 

$

 

 

$

521,998

 

$

25,258

 

$

4

 

 

$

3,504,293

 

Intersegment revenues

 

 

60,462

 

 

 

 

 

 

2,565

 

 

101,926

 

 

(164,953

)

 

 

 

 

 

$

3,017,495

 

 

$

 

 

$

524,563

 

$

127,184

 

$

(164,949

)

 

$

3,504,293

 

Cost of products sold (exclusive of lower of cost or market inventory)

 

$

2,761,943

 

 

$

 

 

$

331,523

 

$

 

$

(133,161

)

 

$

2,960,305

 

Lower of cost or market inventory valuation adjustment

 

$

(199,528

)

 

$

 

 

$

 

$

 

$

(509

)

 

$

(200,037

)

Operating expenses

 

$

292,855

 

 

$

12,821

 

 

$

60,753

 

$

41,365

 

$

(7,885

)

 

$

399,909

 

Selling, general and administrative expenses

 

$

28,496

 

 

$

 

 

$

45,553

 

$

2,969

 

$

4,957

 

 

$

81,975

 

Depreciation and amortization

 

$

88,082

 

 

$

342

 

 

$

20,121

 

$

23,006

 

$

(7,472

)

 

$

124,079

 

Income (loss) from operations

 

$

45,647

 

 

$

(13,163

)

 

$

66,613

 

$

59,844

 

$

(20,879

)

 

$

138,062

 

Income (loss) before interest and income taxes

 

$

45,677

 

 

$

(13,163

)

 

$

66,985

 

$

86,758

 

$

5,641

 

 

$

191,898

 

Net income attributable to noncontrolling interest

 

$

 

 

$

 

 

$

 

$

1,646

 

$

32,987

 

 

$

34,633

 

Earnings of equity method investments

 

$

 

 

$

 

 

$

 

$

1,763

 

$

 

 

$

1,763

 

Capital expenditures

 

$

40,361

 

 

$

70,223

 

 

$

4,087

 

$

33,218

 

$

2,072

 

 

$

149,961

 

Refining Segment Operating Data

The following tables set forth information, including non-GAAP (generally accepted accounting principles) performance measures about our refinery operations. Refinery gross and net operating margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments and depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” below.

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, Sinclair and Casper refineries. The Puget Sound refinery was acquired November 1, 2021, and thus is included for the period January 1, 2022 to March 31, 2022. In addition, the refinery operations of the Sinclair and Casper refineries are included for the period March 14, 2022 (the date of acquisition) through March 31, 2022.

 

 

Three Months Ended
March 31,

 

 

2022

 

2021

Mid-Continent Region

 

 

Crude charge (BPD) (1)

 

 

290,200

 

 

 

216,290

 

Refinery throughput (BPD) (2)

 

 

305,390

 

 

 

229,560

 

Sales of produced refined products (BPD) (3)

 

 

280,260

 

 

 

210,680

 

Refinery utilization (4)

 

 

111.6

%

 

 

83.2

%

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

Refinery gross margin

 

$

9.32

 

 

$

6.45

 

Refinery operating expenses (6)

 

 

6.02

 

 

 

9.91

 

Net operating margin

 

$

3.30

 

 

$

(3.46

)

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

5.53

 

 

$

9.09

 

 

 

 

 

 

Feedstocks:

 

 

 

 

Sweet crude oil

 

 

63

%

 

 

59

%

Sour crude oil

 

 

14

%

 

 

13

%

Heavy sour crude oil

 

 

18

%

 

 

22

%

Other feedstocks and blends

 

 

5

%

 

 

6

%

Total

 

 

100

%

 

 

100

%

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

Gasolines

 

 

50

%

 

 

51

%

Diesel fuels

 

 

33

%

 

 

34

%

Jet fuels

 

 

7

%

 

 

5

%

Fuel oil

 

 

1

%

 

 

1

%

Asphalt

 

 

3

%

 

 

3

%

Base oils

 

 

4

%

 

 

4

%

LPG and other

 

 

2

%

 

 

2

%

Total

 

 

100

%

 

 

100

%

 

 

Three Months Ended
March 31,

 

 

2022 (8)

 

2021

West Region

 

 

 

 

Crude charge (BPD) (1)

 

 

234,880

 

 

 

131,880

 

Refinery throughput (BPD) (2)

 

 

259,340

 

 

 

144,600

 

Sales of produced refined products (BPD) (3)

 

 

241,910

 

 

 

144,260

 

Refinery utilization (4)

 

 

70.6

%

 

 

91.0

%

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

Refinery gross margin

 

$

16.61

 

 

$

10.26

 

Refinery operating expenses (6)

 

 

9.33

 

 

 

8.09

 

Net operating margin

 

$

7.28

 

 

$

2.17

 

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

8.70

 

 

$

8.07

 

 

 

 

 

 

Feedstocks:

 

 

 

 

Sweet crude oil

 

 

23

%

 

 

24

%

Sour crude oil

 

 

55

%

 

 

59

%

Heavy sour crude oil

 

 

7

%

 

 

%

Black wax crude oil

 

 

6

%

 

 

8

%

Other feedstocks and blends

 

 

9

%

 

 

9

%

Total

 

 

100

%

 

 

100

%

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

Gasolines

 

 

52

%

 

 

55

%

Diesel fuels

 

 

27

%

 

 

36

%

Jet fuels

 

 

6

%

 

 

%

Fuel oil

 

 

10

%

 

 

2

%

Asphalt

 

 

2

%

 

 

4

%

LPG and other

 

 

3

%

 

 

3

%

Total

 

 

100

%

 

 

100

%

Consolidated

 

 

 

 

Crude charge (BPD) (1)

 

 

525,080

 

 

 

348,170

 

Refinery throughput (BPD) (2)

 

 

564,730

 

 

 

374,160

 

Sales of produced refined products (BPD) (3)

 

 

522,170

 

 

 

354,940

 

Refinery utilization (4)

 

 

88.6

%

 

 

86.0

%

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

Refinery gross margin

 

$

12.69

 

 

$

8.00

 

Refinery operating expenses (6)

 

 

7.55

 

 

 

9.17

 

Net operating margin

 

$

5.14

 

 

$

(1.17

)

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

6.98

 

 

$

8.70

 

 

 

 

 

 

Feedstocks:

 

 

 

 

Sweet crude oil

 

 

45

%

 

 

45

%

Sour crude oil

 

 

32

%

 

 

31

%

Heavy sour crude oil

 

 

13

%

 

 

14

%

Black wax crude oil

 

 

3

%

 

 

3

%

Other feedstocks and blends

 

 

7

%

 

 

7

%

Total

 

 

100

%

 

 

100

%

 

 

Three Months Ended

March 31,

 

 

2022

 

2021

Consolidated

 

 

 

 

Sales of produced refined products:

 

 

 

 

Gasolines

 

51

%

 

54

%

Diesel fuels

 

31

%

 

35

%

Jet fuels

 

6

%

 

3

%

Fuel oil

 

5

%

 

1

%

Asphalt

 

2

%

 

3

%

Base oils

 

2

%

 

2

%

LPG and other

 

3

%

 

2

%

Total

 

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 HFC Asphalt) 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). As a result of our acquisition of the Puget Sound Refinery on November 1, 2021, and the Sinclair and Casper Refineries on March 14, 2022, our consolidated crude capacity increased from 405,000 BPSD at March 31, 2021 to 669,000 BPSD.

(5)

Represents 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” below.

(6)

Represents total Refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of refined products produced at our refineries.

(7)

Represents total Refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.

(8)

We acquired the Sinclair and Casper Refineries on March 14, 2022. Refining operating data for the three months ended March 31, 2022 includes crude oil and feedstocks processed and refined products sold at our Sinclair and Casper Refineries for the period March 14, 2022 through March 31, 2022 only, averaged over the 90 days in the three months ended March 31, 2022.

Renewables Segment Operating Data

The following table sets forth information about our renewables operations.

 

 

 

Three Months
Ended March 31,
2022

Renewables

 

 

Sales volumes (in thousand gallons)

 

 

4,943

 

Average per produced gallon (1)

 

 

Renewables gross margin

 

$

0.63

 

Renewables operating expense (2)

 

 

5.48

 

Net operating margin

 

$

(4.85

)

(1)

Represents average amount per produced gallons 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” below.

(2)

Represents total Renewables segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of renewable diesel produced at our renewable diesel units.

Marketing Operating Data

The following table sets forth information about our Marketing operations and includes our Sinclair business for the period March 14, 2022 (the date of acquisition) through March 31, 2022.

 

 

Three Months
Ended March 31,
2022

Marketing

 

 

Number of branded sites

 

 

1,323

Sales volumes (in thousand gallons)

 

 

84,913

Margin per gallon of sales (1)

 

$

0.07

(1)

Represents 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” below.

Lubricants and Specialty Products Segment Operating Data

The following table sets forth information about our lubricants and specialty products operations.

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Lubricants and Specialty Products

 

 

 

 

Throughput (BPD)

 

19,340

 

 

20,410

 

Sales of produced products (BPD)

 

35,010

 

 

32,570

 

 

 

 

 

 

Sales of produced products:

 

 

 

 

Finished products

 

51

%

 

52

%

Base oils

 

30

%

 

26

%

Other

 

19

%

 

22

%

Total

 

100

%

 

100

%

Supplemental financial data attributable to our Lubricants and Specialty Products segment is presented below:

 

 

Rack Back (1)

 

Rack Forward (2)

 

Eliminations (3)

 

Total Lubricants
and Specialty
Products

 

 

(In thousands)

Three months ended March 31, 2022

 

 

 

 

 

 

 

 

Sales and other revenues

 

$

278,586

 

 

$

687,947

 

$

(211,524

)

 

$

755,009

Cost of products sold

 

$

178,539

 

 

$

537,562

 

$

(211,524

)

 

$

504,577

Operating expenses

 

$

30,814

 

 

$

35,187

 

$

 

 

$

66,001

Selling, general and administrative expenses

 

$

6,207

 

 

$

35,542

 

$

 

 

$

41,749

Depreciation and amortization

 

$

7,557

 

 

$

13,037

 

$

 

 

$

20,594

Income from operations

 

$

55,469

 

 

$

66,619

 

$

 

 

$

122,088

Income before interest and income taxes

 

$

58,050

 

 

$

66,651

 

$

 

 

$

124,701

EBITDA

 

$

65,607

 

 

$

79,688

 

$

 

 

$

145,295

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2021

 

 

 

 

 

 

 

 

Sales and other revenues

 

$

173,442

 

 

$

483,246

 

$

(132,125

)

 

$

524,563

Cost of products sold

 

$

132,532

 

 

$

331,116

 

$

(132,125

)

 

$

331,523

Operating expenses

 

$

28,621

 

 

$

32,132

 

$

 

 

$

60,753

Selling, general and administrative expenses

 

$

6,739

 

 

$

38,814

 

$

 

 

$

45,553

Depreciation and amortization

 

$

7,305

 

 

$

12,816

 

$

 

 

$

20,121

Income (loss) from operations

 

$

(1,755

)

 

$

68,368

 

$

 

 

$

66,613

Income (loss) before interest and income taxes

 

$

(1,755

)

 

$

68,740

 

$

 

 

$

66,985

EBITDA

 

$

5,550

 

 

$

81,556

 

$

 

 

$

87,106

(1)

Rack Back consists of the PCLI base oil production activities, by-product sales to third parties and intra-segment base oil sales to Rack Forward.

(2)

Rack Forward activities include the purchase of base oils from Rack Back and the blending, packaging, marketing and distribution and sales of finished lubricants and specialty products to third parties.

(3)

Intra-segment sales of Rack Back produced base oils to Rack Forward are eliminated under the “Eliminations” column.

Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles

Reconciliations of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA excluding special items (“Adjusted EBITDA”) to amounts reported under generally accepted accounting principles (“GAAP”) in financial statements.

Earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, is calculated as net income attributable to HF Sinclair stockholders plus (i) interest expense, net of interest income, (ii) income tax provision and (iii) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA plus or minus (i) lower of cost or market inventory valuation adjustments, (ii) severance costs, (iii) restructuring charges, (iv) Cheyenne refinery LIFO inventory liquidation costs, (v) decommissioning costs, (vi) pre-close acquisition integration costs, (vii) acquisition integration and regulatory costs and (viii) gain on tariff settlement.

EBITDA and Adjusted EBITDA are not calculations provided for under accounting principles generally accepted in the United States; however, the amounts included in these calculations are derived from amounts included in our consolidated financial statements. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income or operating income as an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity. EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures of other companies. These are presented here because they are widely used financial indicators used by investors and analysts to measure performance. EBITDA and Adjusted EBITDA are also used by our management for internal analysis and as a basis for financial covenants.

Set forth below is our calculation of EBITDA and Adjusted EBITDA.

 

 

Three Months Ended
March 31,

 

 

2022

 

2021

 

 

(In thousands)

Net income attributable to HF Sinclair stockholders

 

$

159,974

 

 

$

148,217

 

Add interest expense

 

 

34,859

 

 

 

38,386

 

Subtract interest income

 

 

(997

)

 

 

(1,031

)

Add (subtract) income tax expense (benefit)

 

 

21,329

 

 

 

(28,307

)

Add depreciation and amortization

 

 

144,601

 

 

 

124,079

 

EBITDA

 

$

359,766

 

 

$

281,344

 

Subtract lower of cost or market inventory valuation adjustment

 

 

(8,551

)

 

 

(200,037

)

Add severance costs

 

 

 

 

 

514

 

Add restructuring charges

 

 

 

 

 

7,813

 

Add Cheyenne refinery LIFO inventory liquidation costs

 

 

 

 

 

923

 

Add decommissioning costs

 

 

957

 

 

 

8,251

 

Add pre-close acquisition integration costs

 

 

23,646

 

 

 

 

Add acquisition integration and regulatory costs

 

 

889

 

 

 

 

Subtract gain on tariff settlement

 

 

 

 

 

(51,500

)

Adjusted EBITDA

 

$

376,707

 

 

$

47,308

 

EBITDA and Adjusted EBITDA attributable to our Refining segment is presented below:

 

Three Months Ended
March 31,

Refining Segment

 

2022

 

2021

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

113,051

 

$

45,677

 

Add depreciation and amortization

 

 

94,681

 

 

88,082

 

EBITDA

 

 

207,732

 

 

133,759

 

Subtract lower of cost or market inventory valuation adjustment

 

 

 

 

(199,528

)

Adjusted EBITDA

 

$

207,732

 

$

(65,769

)

(1)

Income before interest and income taxes of our Refining segment represents income plus (i) interest expense, net of interest income and (ii) income tax provision.

EBITDA and Adjusted EBITDA attributable to our Renewables segment is set forth below:

 

 

Three Months Ended
March 31,

Renewables Segment

 

2022

 

2021

 

 

(In thousands)

Loss before interest and income taxes (1)

 

$

(22,102

)

 

$

(13,163

)

Add depreciation and amortization

 

 

5,800

 

 

 

342

 

EBITDA

 

 

(16,302

)

 

 

(12,821

)

Subtract lower of cost or market inventory valuation adjustment

 

 

(8,551

)

 

 

 

Adjusted EBITDA

 

$

(24,853

)

 

$

(12,821

)

(1)

Income before interest and income taxes of our Renewables segment represents income plus (i) interest expense, net of interest income and (ii) income tax provision.

EBITDA attributable to our Marketing segment is set forth below:

Marketing Segment

 

Three Months Ended
March 31, 2022

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

5,269

Add depreciation and amortization

 

 

501

EBITDA

 

$

5,770

(1)

Income before interest and income taxes of our Marketing segment represents income plus (i) interest expense, net of interest income and (ii) income tax provision.

EBITDA and Adjusted EBITDA attributable to our Lubricants and Specialty Products segment is set forth below.

Lubricants and Specialty Products Segment

 

Rack Back

 

Rack Forward

 

Total Lubricants
and Specialty
Products

 

 

(In thousands)

Three months ended March 31, 2022

 

 

 

 

 

 

Income before interest and income taxes (1)

 

$

58,050

 

 

$

66,651

 

$

124,701

Add depreciation and amortization

 

 

7,557

 

 

 

13,037

 

 

20,594

EBITDA

 

$

65,607

 

 

$

79,688

 

$

145,295

 

 

 

 

 

 

 

Three months ended March 31, 2021

 

 

 

 

 

 

Income (loss) before interest and income taxes (1)

 

$

(1,755

)

 

$

68,740

 

$

66,985

Add depreciation and amortization

 

 

7,305

 

 

 

12,816

 

 

20,121

EBITDA

 

 

5,550

 

 

 

81,556

 

 

87,106

Add restructuring charges

 

 

1,079

 

 

 

6,734

 

 

7,813

Adjusted EBITDA

 

$

6,629

 

 

$

88,290

 

$

94,919

(1)

Income (loss) before interest and income taxes of our Lubricants and Specialty Products segment represents income (loss) plus (i) interest expense, net of interest income and (ii) income tax provision.

Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.

Refinery gross margin and net operating margin are non-GAAP performance measures that are used by our management and others to compare our refining performance to that of other companies in our industry. We believe these margin measures are helpful to investors in evaluating our refining performance on a relative and absolute basis. Refinery gross margin per produced barrel sold is total Refining segment revenues less total Refining segment cost of products sold, exclusive of lower of cost or market inventory valuation adjustments, divided by sales volumes of produced refined products sold. Net operating margin per barrel sold is the difference between refinery gross margin and refinery operating expenses per produced barrel sold. These two margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments and depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of income. Other companies in our industry may not calculate these performance measures in the same manner.

Below are reconciliations to our consolidated statements of income for refinery net operating and gross margin and operating expenses, in each case averaged per produced barrel sold. Due to rounding of reported numbers, some amounts may not calculate exactly.

Reconciliation of average Refining segment net operating margin per produced barrel sold to refinery gross margin to total sales and other revenues

 

 

Three Months Ended
March 31,

 

 

2022

 

2021

 

 

(Dollars in thousands, except per barrel amounts)

Consolidated

 

 

 

 

Net operating margin per produced barrel sold

 

$

5.14

 

 

$

(1.17

)

Add average refinery operating expenses per produced barrel sold

 

 

7.55

 

 

 

9.17

 

Refinery gross margin per produced barrel sold

 

 

12.69

 

 

 

8.00

 

Times produced barrels sold (BPD)

 

 

522,170

 

 

 

354,940

 

Times number of days in period

 

 

90

 

 

 

90

 

Refinery gross margin

 

 

596,370

 

 

 

255,557

 

Subtract rounding

 

 

187

 

 

 

(5

)

Total Refining segment gross margin

 

 

596,557

 

 

 

255,552

 

Add Refining segment cost of products sold

 

 

5,909,610

 

 

 

2,761,943

 

Refining segment sales and other revenues

 

 

6,506,167

 

 

 

3,017,495

 

Add Renewables segment sales and other revenues

 

 

47,367

 

 

 

 

Add Marketing segment sales and other revenues

 

 

277,041

 

 

 

 

Add Lubricants and Specialty Products segment sales and other revenues

 

 

755,009

 

 

 

524,563

 

Add HEP segment sales and other revenues

 

 

120,198

 

 

 

127,184

 

Subtract corporate, other and eliminations

 

 

(247,032

)

 

 

(164,949

)

Sales and other revenues

 

$

7,458,750

 

 

$

3,504,293

 

Reconciliation of average Refining segment operating expenses per produced barrel sold to total operating expenses

 

 

Three Months Ended
March 31,

 

 

2022

 

2021

 

 

(Dollars in thousands, except per barrel amounts)

Consolidated

 

 

 

 

Average operating expenses per produced barrel sold

 

$

7.55

 

 

$

9.17

 

Times produced barrels sold (BPD)

 

 

522,170

 

 

 

354,940

 

Times number of days in period

 

 

90

 

 

 

90

 

Refinery operating expenses

 

 

354,815

 

 

 

292,932

 

Add (subtract) rounding

 

 

157

 

 

 

(77

)

Total Refining segment operating expenses

 

 

354,972

 

 

 

292,855

 

Add Renewables segment operating expenses

 

 

27,096

 

 

 

12,821

 

Add Lubricants and Specialty Products segment operating expenses

 

 

66,001

 

 

 

60,753

 

Add HEP segment operating expenses

 

 

42,624

 

 

 

41,365

 

Subtract corporate, other and eliminations

 

 

(13,259

)

 

 

(7,885

)

Operating expenses (exclusive of depreciation and amortization)

 

$

477,434

 

 

$

399,909

 

Reconciliation of renewables operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.

Renewables gross margin and net operating margin are non-GAAP performance measures that are used by our management and others to compare our renewables performance to that of other companies in our industry. We believe these margin measures are helpful to investors in evaluating our renewables performance on a relative and absolute basis. Renewables gross margin per produced gallon sold is total Renewables segment revenues less total Renewables segment cost of products sold, exclusive of lower of cost or market inventory valuation adjustments, divided by sales volumes of produced renewables products sold. Net operating margin per produced gallon sold is the difference between renewables gross margin and renewables operating expenses per produced gallon sold. These two margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments and depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of income. Other companies in our industry may not calculate these performance measures in the same manner.

Reconciliation of renewables gross margin and operating expenses to gross margin per produced gallon sold and net operating margin per produced gallon sold

 

 

Three Months Ended
March 31, 2022

 

 

(Dollars in thousands, except for per gallon and margin amounts)

Renewables segment sales and other revenues

 

$

47,367

 

Renewables segment cost of products sold

 

 

44,271

 

Lower of cost or market inventory adjustment

 

 

(8,551

)

 

 

 

11,647

 

Subtract lower of cost or market inventory adjustment

 

 

(8,551

)

Renewables gross margin

 

$

3,096

 

 

 

 

Renewables operating expense

 

$

27,096

 

Produced gallons sold (in thousand gallons)

 

 

4,943

 

 

 

 

Renewables gross margin per produced gallon sold

 

$

0.63

 

Less operating expense per produced gallon sold

 

 

5.48

 

Net operating margin per produced gallon sold

 

$

(4.85

)

Reconciliation of Marketing operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.

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. Marketing gross margin per gallon sold is total Marketing segment revenues less total Marketing segment cost of products sold divided by sales volumes of Marketing products sold. This margin does not include the non-cash effects of depreciation and amortization. This component performance measure can be reconciled directly to our consolidated statements of income. Other companies in our industry may not calculate these performance measures in the same manner.

Reconciliation of Marketing gross margin to gross margin per gallon sold

 

 

Three Months Ended
March 31, 2022

 

 

(Dollars in thousands, except for per gallon amounts)

Marketing segment sales and other revenues

 

$

277,041

Marketing segment cost of products sold

 

 

271,131

Marketing gross margin

 

$

5,910

 

 

 

Sales volumes (in thousand gallons)

 

 

84,913

 

 

 

Marketing segment gross margin per gallon sold

 

$

0.07

Reconciliation of net income attributable to HF Sinclair stockholders to adjusted net income attributable to HF Sinclair stockholders

Adjusted net income attributable to HF Sinclair stockholders is a non-GAAP financial measure that excludes non-cash lower of cost or market inventory valuation adjustments, severance costs, restructuring charges, Cheyenne refinery LIFO inventory liquidation costs, decommissioning costs, pre-close acquisition integration costs, acquisition integration and regulatory costs and gain on tariff settlement. We believe this measure is helpful to investors and others in evaluating our financial performance and to compare our results to that of other companies in our industry. Similarly titled performance measures of other companies may not be calculated in the same manner.

 

 

Three Months Ended
March 31,

 

 

2022

 

2021

 

 

(In thousands, except per share amounts)

Consolidated

 

 

 

 

GAAP:

 

 

 

 

Income before income taxes

 

$

206,630

 

 

$

154,543

 

Income tax expense (benefit)

 

 

21,329

 

 

 

(28,307

)

Net income

 

 

185,301

 

 

 

182,850

 

Less net income attributable to noncontrolling interest

 

 

25,327

 

 

 

34,633

 

Net income attributable to HF Sinclair stockholders

 

 

159,974

 

 

 

148,217

 

 

 

 

 

 

Non-GAAP adjustments to arrive at adjusted results:

 

 

 

 

Lower of cost or market inventory valuation adjustment

 

 

(8,551

)

 

 

(200,037

)

Severance costs

 

 

 

 

 

514

 

Restructuring charges

 

 

 

 

 

7,813

 

Cheyenne refinery LIFO inventory liquidation costs

 

 

 

 

 

923

 

Decommissioning costs

 

 

957

 

 

 

8,251

 

Pre-close acquisition integration costs

 

 

24,142

 

 

 

 

Acquisition integration and regulatory costs

 

 

889

 

 

 

 

Gain on tariff settlement

 

 

 

 

 

(51,500

)

Total adjustments to income before income taxes

 

 

17,437

 

 

 

(234,036

)

Adjustment to income tax expense (benefit) (1)

 

 

1,274

 

 

 

(525

)

Adjustment to net income attributable to noncontrolling interest

 

 

496

 

 

 

 

Total adjustments, net of tax

 

 

15,667

 

 

 

(233,511

)

 

 

 

 

 

Adjusted results - Non-GAAP:

 

 

 

 

Adjusted income (loss) before income taxes

 

 

224,067

 

 

 

(79,493

)

Adjusted income tax expense (benefit) (2)

 

 

22,603

 

 

 

(28,832

)

Adjusted net income (loss)

 

 

201,464

 

 

 

(50,661

)

Less net income attributable to noncontrolling interest

 

 

25,823

 

 

 

34,633

 

Adjusted net income (loss) attributable to HF Sinclair stockholders

 

$

175,641

 

 

$

(85,294

)

Adjusted earnings (loss) per share - diluted (3)

 

$

0.99

 

 

$

(0.53

)

(1)

Represents adjustment to GAAP income tax benefit to arrive at adjusted income tax expense (benefit), which is computed as follows:

 

 

Three Months Ended
March 31,

 

 

2022

 

2021

 

 

(In thousands)

 

 

 

 

 

Non-GAAP income tax expense (benefit) (2)

 

$

22,603

 

$

(28,832

)

Add (subtract) GAAP income tax expense (benefit)

 

 

21,329

 

 

(28,307

)

Non-GAAP adjustment to income tax expense (benefit)

 

$

1,274

 

$

(525

)

(2)

Non-GAAP income tax expense (benefit) is computed by (a) adjusting HF Sinclair’s consolidated estimated Annual Effective Tax Rate (“AETR”) for GAAP purposes for the effects of the above Non-GAAP adjustments (b) applying the resulting Adjusted Non-GAAP AETR to Non-GAAP adjusted income before income taxes and (c) adjusting for discrete tax items applicable to the period.

 

(3)

Adjusted earnings per share - diluted is calculated as adjusted net income (loss) attributable to HF Sinclair stockholders divided by the average number of shares of common stock outstanding assuming dilution, which is based on weighted-average diluted shares outstanding as that used in the GAAP diluted earnings per share calculation. Income allocated to participating securities, if applicable, in the adjusted earnings per share calculation is calculated the same way as that used in GAAP diluted earnings per share calculation.

Reconciliation of effective tax rate to adjusted effective tax rate

 

 

Three Months Ended
March 31,

 

 

2022

 

2021

 

 

(Dollars in thousands)

GAAP:

 

 

 

 

Income before income taxes

 

$

206,630

 

 

$

154,543

 

Income tax expense (benefit)

 

$

21,329

 

 

$

(28,307

)

Effective tax rate for GAAP financial statements

 

 

10.3

%

 

 

(18.3

)%

Adjusted - Non-GAAP:

 

 

 

 

Effect of Non-GAAP adjustments

 

 

(0.2

)%

 

 

54.6

%

Effective tax rate for adjusted results

 

 

10.1

%

 

 

36.3

%

 

Richard L. Voliva III, Executive Vice President and
Chief Financial Officer
Craig Biery, Vice President,
Investor Relations
HF Sinclair Corporation
214-954-6510

Source: HF Sinclair Corporation

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