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HF Sinclair Corporation Reports Quarterly Results and Announces Regular Cash Dividend

11/07/2022
  • Reported net income attributable to HF Sinclair stockholders of $954.4 million, or $4.45 per diluted share, and adjusted net income of $982.9 million, or $4.58 per diluted share, for the third quarter
  • Reported EBITDA of $1,463.2 million and Adjusted EBITDA of $1,500.3 million for the third quarter
  • Returned $951.5 million to shareholders through dividends and share repurchases in the third quarter
  • Announced a regular quarterly dividend of $0.40 per share

HF Sinclair Corporation (NYSE: DINO) (“HF Sinclair” or the “Company”) today reported third quarter net income attributable to HF Sinclair stockholders of $954.4 million, or $4.45 per diluted share, for the quarter ended September 30, 2022, compared to $280.8 million, or $1.71 per diluted share, for the quarter ended September 30, 2021.

The third quarter results reflect special items that collectively decreased net income by a total of $28.5 million. On a pre-tax basis, these items include a lower of cost or market inventory valuation adjustment of $16.8 million, HF Sinclair's pro-rata share of HEP's share of Osage environmental remediation costs of $9.6 million and acquisition integration costs of $10.7 million. Excluding these items, adjusted net income for the third quarter of 2022 was $982.9 million ($4.58 per diluted share) compared to $209.9 million ($1.28 per diluted share) for the third quarter of 2021, which excludes certain items that collectively increased net income by $70.8 million.

HF Sinclair’s CEO, Michael Jennings, commented, “HF Sinclair’s solid third quarter results were driven by robust product margins and record throughputs in our refining segment. We returned over $951 million in cash to shareholders through share repurchases and dividends during the quarter, and another $152 million in the month of October. Since the closing of the Sinclair acquisition on March 14, 2022, we have returned over $1.1 billion, which is well ahead of our initial target of returning $1 billion to our shareholders by the end of the first quarter of 2023. With the announcement of our new $1 billion share repurchase authorization in September, we remain fully committed to our cash return strategy and long-term payout ratio.”

Refining segment income before interest and income taxes was $1,344.1 million for the third quarter of 2022 compared to $217.4 million for the third quarter of 2021. The segment reported EBITDA of $1,446.7 million for the third quarter of 2022 compared to $295.3 million for the third quarter of 2021. This increase was primarily driven by higher refining margins in both the West and Mid-Continent regions, which resulted in higher refining segment earnings in the quarter. Consolidated refinery gross margin was $31.47 per produced barrel, a 112% increase compared to $14.87 for the third quarter of 2021, and crude oil charge averaged 645,780 barrels per day (“BPD”) for the third quarter of 2022 compared to 416,430 BPD for the third quarter of 2021.

Renewables segment loss before interest and income taxes was $(49.3) million for the third quarter of 2022 compared to $(13.4) million for the third quarter of 2021. The segment reported EBITDA of $(31.1) million for the third quarter of 2022 compared to $(13.1) million for the third quarter of 2021. Excluding the lower of cost or market inventory valuation charge of $16.8 million, Adjusted EBITDA in the third quarter of 2022 was $(14.2) million. Total sales volumes were 52 million gallons for the third 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 was completed and fully operational in the second quarter of 2022. Also, effective with the Sinclair acquisition that closed on March 14, 2022, the Renewables segment includes the Sinclair RDU.

Marketing segment income before interest and income taxes was $3.9 million and reported EBITDA was $10.2 million for the third quarter of 2022. Total branded fuel sales volumes were 362 million gallons for the third quarter of 2022.

Lubricants and Specialty Products segment loss before interest and income taxes was $(5.0) million for the third quarter of 2022 compared to income of $148.5 million in the third quarter of 2021. The segment reported EBITDA of $15.2 million for the third quarter of 2022 compared to $167.7 million in the third quarter of 2021. Excluding a gain on sale of real property of $86.0 million, Adjusted EBITDA in the third quarter of 2021 was $81.7 million. This decrease was largely driven by FIFO impact from consumption of higher priced feedstock inventory, resulting in lower margins.

Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $66.0 million for the third quarter of 2022 compared to $77.6 million for the third quarter of 2021 and Adjusted EBITDA of $110.1 million for the third quarter of 2022 compared to $83.3 million for the third quarter of 2021.

For the third quarter of 2022, net cash provided by operations totaled $872.8 million. At September 30, 2022, the Company's cash and cash equivalents totaled $1,447.4 million, a $254.9 million decrease over cash and cash equivalents of $1,702.3 million at June 30, 2022. During the third quarter of 2022, the Company announced and paid a regular dividend of $0.40 per share to shareholders totaling $85.3 million and spent $866.2 million on share repurchases. Additionally, the Company's consolidated debt was $3,334.2 million. The Company’s debt, exclusive of HEP debt, which is nonrecourse to HF Sinclair, was $1,740.4 million at September 30, 2022.

HF Sinclair also announced today that its Board of Directors declared a regular quarterly dividend in the amount of $0.40 per share, payable on December 5, 2022 to holders of record of common stock on November 21, 2022.

Through September 30, 2022, HF Sinclair has achieved annualized run rate targeted synergies of over $100 million related to the Sinclair acquisition and over $100 million of working capital synergies. The Company achieved annual run rate synergies through a combination of commercial improvements, operating expense reductions and optimization of selling, general and administrative expenses.

The Company has scheduled a webcast conference call for today, November 7, 2022, at 8:30 AM Eastern Time to discuss third quarter financial results. This webcast may be accessed at https://events.q4inc.com/attendee/908108663. An audio archive of this webcast will be available using the above noted link through November 21, 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 and also at its facility in Artesia, New Mexico. 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) and Sinclair Transportation Company LLC businesses acquired from The Sinclair Companies (now known as REH Company) (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, accidents, unexpected leaks or spills, unscheduled shutdowns, weather events, civil unrest, expropriation of assets, and other economic, diplomatic, legislative, or political events or developments, terrorism, cyberattacks, or other catastrophes or disruptions affecting our operations, production facilities, machinery, pipelines and other logistics assets, equipment, or information systems, or any of the foregoing of our suppliers, customers, or third-party providers, and any potential asset impairments resulting from, or the failure to have adequate insurance coverage for or receive insurance recoveries from, such actions; 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 and increases in interest rates; 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 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, including the Russia-Ukraine war, 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, inflation and labor costs 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
September 30,

 

Change from 2021

 

2022

 

2021

 

Change

 

Percent

 

(In thousands, except per share data)

Sales and other revenues

$

10,599,002

 

 

$

4,685,059

 

 

$

5,913,943

 

 

126

%

Operating costs and expenses:

 

 

 

 

 

 

 

Cost of products sold:

 

 

 

 

 

 

 

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

 

8,375,253

 

 

 

3,822,858

 

 

 

4,552,395

 

 

119

 

Lower of cost or market inventory valuation adjustment

 

16,847

 

 

 

 

 

 

16,847

 

 

 

 

8,392,100

 

 

 

3,822,858

 

 

 

4,569,242

 

 

120

 

Operating expenses (exclusive of depreciation and amortization)

 

604,591

 

 

 

352,520

 

 

 

252,071

 

 

72

 

Selling, general and administrative expenses (exclusive of depreciation and amortization)

 

102,677

 

 

 

91,056

 

 

 

11,621

 

 

13

 

Depreciation and amortization

 

171,973

 

 

 

121,220

 

 

 

50,753

 

 

42

 

Total operating costs and expenses

 

9,271,341

 

 

 

4,387,654

 

 

 

4,883,687

 

 

111

 

Income from operations

 

1,327,661

 

 

 

297,405

 

 

 

1,030,256

 

 

346

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Earnings (loss) of equity method investments

 

(16,334

)

 

 

3,689

 

 

 

(20,023

)

 

(543

)

Interest income

 

9,821

 

 

 

1,018

 

 

 

8,803

 

 

865

 

Interest expense

 

(44,830

)

 

 

(26,892

)

 

 

(17,938

)

 

67

 

Gain (loss) on foreign currency transactions

 

1,544

 

 

 

(3,492

)

 

 

5,036

 

 

(144

)

Gain on sale of assets and other

 

2,130

 

 

 

85,779

 

 

 

(83,649

)

 

(98

)

 

 

(47,669

)

 

 

60,102

 

 

 

(107,771

)

 

(179

)

Income before income taxes

 

1,279,992

 

 

 

357,507

 

 

 

922,485

 

 

258

 

Income tax expense

 

301,853

 

 

 

54,766

 

 

 

247,087

 

 

451

 

Net income

 

978,139

 

 

 

302,741

 

 

 

675,398

 

 

223

 

Less net income attributable to noncontrolling interest

 

23,734

 

 

 

21,954

 

 

 

1,780

 

 

8

 

Net income attributable to HF Sinclair stockholders

$

954,405

 

 

$

280,787

 

 

$

673,618

 

 

240

%

 

 

 

 

 

 

 

 

Earnings per share attributable to HF Sinclair stockholders:

 

 

 

 

 

 

 

Basic

$

4.45

 

 

$

1.71

 

 

$

2.74

 

 

160

%

Diluted

$

4.45

 

 

$

1.71

 

 

$

2.74

 

 

160

%

Cash dividends declared per common share

$

0.40

 

 

$

 

 

$

0.40

 

 

100

%

Average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

212,388

 

 

 

162,551

 

 

 

49,837

 

 

31

%

Diluted

 

212,388

 

 

 

162,551

 

 

 

49,837

 

 

31

%

 

 

 

 

 

 

 

 

EBITDA

$

1,463,240

 

 

$

482,647

 

 

$

980,593

 

 

203

%

Adjusted EBITDA

$

1,500,321

 

 

$

407,830

 

 

$

1,092,491

 

 

268

%

 

Nine Months Ended
September 30,

 

Change from 2021

 

2022

 

2021

 

Change

 

Percent

 

(In thousands, except per share data)

Sales and other revenues

$

29,219,912

 

 

$

12,766,475

 

 

$

16,453,437

 

 

129

%

Operating costs and expenses:

 

 

 

 

 

 

 

Cost of products sold:

 

 

 

 

 

 

 

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

 

23,457,180

 

 

 

10,608,892

 

 

 

12,848,288

 

 

121

 

Lower of cost or market inventory valuation adjustment

 

42,839

 

 

 

(318,862

)

 

 

361,701

 

 

(113

)

 

 

23,500,019

 

 

 

10,290,030

 

 

 

13,209,989

 

 

128

 

Operating expenses (exclusive of depreciation and amortization)

 

1,688,152

 

 

 

1,086,620

 

 

 

601,532

 

 

55

 

Selling, general and administrative expenses (exclusive of depreciation and amortization)

 

323,974

 

 

 

250,785

 

 

 

73,189

 

 

29

 

Depreciation and amortization

 

480,618

 

 

 

369,341

 

 

 

111,277

 

 

30

 

Total operating costs and expenses

 

25,992,763

 

 

 

11,996,776

 

 

 

13,995,987

 

 

117

 

Income from operations

 

3,227,149

 

 

 

769,699

 

 

 

2,457,450

 

 

319

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Earnings (loss) of equity method investments

 

(7,261

)

 

 

8,875

 

 

 

(16,136

)

 

(182

)

Interest income

 

12,662

 

 

 

3,078

 

 

 

9,584

 

 

311

 

Interest expense

 

(118,650

)

 

 

(94,220

)

 

 

(24,430

)

 

26

 

Gain on tariff settlement

 

 

 

 

51,500

 

 

 

(51,500

)

 

(100

)

Gain (loss) on foreign currency transactions

 

778

 

 

 

(4,226

)

 

 

5,004

 

 

(118

)

Gain on sale of assets and other

 

8,345

 

 

 

95,596

 

 

 

(87,251

)

 

(91

)

 

 

(104,126

)

 

 

60,603

 

 

 

(164,729

)

 

(272

)

Income before income taxes

 

3,123,023

 

 

 

830,302

 

 

 

2,292,721

 

 

276

 

Income tax expense

 

706,675

 

 

 

149,944

 

 

 

556,731

 

 

371

 

Net income

 

2,416,348

 

 

 

680,358

 

 

 

1,735,990

 

 

255

 

Less net income attributable to noncontrolling interest

 

80,707

 

 

 

82,504

 

 

 

(1,797

)

 

(2

)

Net income attributable to HollyFrontier stockholders

$

2,335,641

 

 

$

597,854

 

 

$

1,737,787

 

 

291

%

 

 

 

 

 

 

 

 

Earnings per share attributable to HollyFrontier stockholders:

 

 

 

 

 

 

 

Basic

$

11.35

 

 

$

3.63

 

 

$

7.72

 

 

213

%

Diluted

$

11.35

 

 

$

3.63

 

 

$

7.72

 

 

213

%

Cash dividends declared per common share

$

0.80

 

 

$

0.35

 

 

$

0.45

 

 

129

%

Average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

203,610

 

 

 

162,518

 

 

 

41,092

 

 

25

%

Diluted

 

203,610

 

 

 

162,518

 

 

 

41,092

 

 

25

%

 

 

 

 

 

 

 

 

EBITDA

$

3,628,922

 

 

$

1,208,281

 

 

$

2,420,641

 

 

200

%

Adjusted EBITDA

$

3,730,036

 

 

$

789,639

 

 

$

2,940,397

 

 

372

%

Balance Sheet Data

 

September 30,

 

December 31,

 

2022

 

2021

 

(In thousands)

Cash and cash equivalents

$

1,447,359

 

$

234,444

Working capital

$

3,585,175

 

$

1,696,990

Total assets

$

18,226,285

 

$

12,916,613

Long-term debt

$

3,334,200

 

$

3,072,737

Total equity

$

9,778,525

 

$

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 HF Sinclair Asphalt Company LLC (“Asphalt”). Also, effective with our acquisition that closed on November 1, 2021, the Refining segment includes our Puget Sound refinery, and effective with our acquisition that closed on March 14, 2022, includes our Sinclair (also referred to as Parco) 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. 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 was completed and fully operational in the second quarter of 2022. Also, effective with our acquisition that closed on 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.

Effective with our acquisition that closed on March 14, 2022, 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 represents 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 the 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 September 30, 2022

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

8,230,606

 

$

254,952

 

 

$

1,266,681

 

$

820,630

 

 

$

26,133

 

 

$

 

 

$

10,599,002

 

Intersegment revenues

 

 

1,405,180

 

 

100,708

 

 

 

 

 

2,809

 

 

 

122,869

 

 

 

(1,631,566

)

 

 

 

 

 

$

9,635,786

 

$

355,660

 

 

$

1,266,681

 

$

823,439

 

 

$

149,002

 

 

$

(1,631,566

)

 

$

10,599,002

 

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

 

$

7,680,153

 

$

345,588

 

 

$

1,255,119

 

$

696,864

 

 

$

 

 

$

(1,602,471

)

 

$

8,375,253

 

Lower of cost or market inventory valuation adjustment

 

$

 

$

16,847

 

 

$

 

$

 

 

$

 

 

$

 

 

$

16,847

 

Operating expenses

 

$

474,631

 

$

23,427

 

 

$

 

$

69,506

 

 

$

60,471

 

 

$

(23,444

)

 

$

604,591

 

Selling, general and administrative expenses

 

$

34,353

 

$

873

 

 

$

1,351

 

$

41,833

 

 

$

3,750

 

 

$

20,517

 

 

$

102,677

 

Depreciation and amortization

 

$

102,599

 

$

18,228

 

 

$

6,355

 

$

20,227

 

 

$

25,846

 

 

$

(1,282

)

 

$

171,973

 

Income (loss) from operations

 

$

1,344,050

 

$

(49,303

)

 

$

3,856

 

$

(4,991

)

 

$

58,935

 

 

$

(24,886

)

 

$

1,327,661

 

Income (loss) before interest and income taxes

 

$

1,344,103

 

$

(49,285

)

 

$

3,856

 

$

(4,978

)

 

$

43,096

 

 

$

(21,791

)

 

$

1,315,001

 

Net income attributable to noncontrolling interest

 

$

 

$

 

 

$

 

$

 

 

$

1,962

 

 

$

21,772

 

 

$

23,734

 

Loss of equity method investments

 

$

 

$

 

 

$

 

$

 

 

$

(16,334

)

 

$

 

 

$

(16,334

)

Capital expenditures

 

$

37,653

 

$

24,499

 

 

$

1,487

 

$

10,158

 

 

$

7,948

 

 

$

17,958

 

 

$

99,703

 

 

 

Refining

 

Renewables

 

Lubricants
and Specialty
Products

 

HEP

 

Corporate,
Other and
Eliminations

 

Consolidated
Total

 

 

(In thousands)

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

3,993,570

 

$

 

 

$

666,033

 

$

25,459

 

$

(3

)

 

$

4,685,059

Intersegment revenues

 

 

189,441

 

 

 

 

 

501

 

 

97,125

 

 

(287,067

)

 

 

 

 

$

4,183,011

 

$

 

 

$

666,534

 

$

122,584

 

$

(287,070

)

 

$

4,685,059

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

 

$

3,605,600

 

$

 

 

$

482,533

 

$

 

$

(265,275

)

 

$

3,822,858

Operating expenses

 

$

248,316

 

$

13,117

 

 

$

60,940

 

$

42,793

 

$

(12,646

)

 

$

352,520

Selling, general and administrative expenses

 

$

32,345

 

$

 

 

$

41,476

 

$

3,849

 

$

13,386

 

 

$

91,056

Depreciation and amortization

 

$

77,890

 

$

328

 

 

$

19,226

 

$

21,627

 

$

2,149

 

 

$

121,220

Income (loss) from operations

 

$

218,860

 

$

(13,445

)

 

$

62,359

 

$

54,315

 

$

(24,684

)

 

$

297,405

Income (loss) before interest and income taxes

 

$

217,438

 

$

(13,445

)

 

$

148,460

 

$

58,081

 

$

(27,153

)

 

$

383,381

Net income attributable to noncontrolling interest

 

$

 

$

 

 

$

 

$

1,188

 

$

20,766

 

 

$

21,954

Earnings of equity method investments

 

$

 

$

 

 

$

 

$

3,689

 

$

 

 

$

3,689

Capital expenditures

 

$

40,814

 

$

141,302

 

 

$

7,833

 

$

19,217

 

$

6,338

 

 

$

215,504

 

 

Refining

 

Renewables

 

Marketing

 

Lubricants
and
Specialty
Products

 

HEP

 

Corporate,
Other
and
Eliminations

 

Consolidated
Total

 

 

(In thousands)

Nine Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

23,442,162

 

 

399,204

 

 

 

2,880,024

 

$

2,419,212

 

$

79,310

 

 

$

 

 

$

29,219,912

 

Intersegment revenues

 

 

2,988,372

 

 

198,401

 

 

 

 

 

9,177

 

 

325,660

 

 

 

(3,521,610

)

 

 

 

 

 

$

26,430,534

 

 

597,605

 

 

 

2,880,024

 

$

2,428,389

 

$

404,970

 

 

$

(3,521,610

)

 

$

29,219,912

 

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

 

$

21,709,048

 

$

582,521

 

 

$

2,837,583

 

$

1,777,869

 

$

 

 

$

(3,449,841

)

 

$

23,457,180

 

Lower of cost or market inventory valuation adjustment

 

$

 

$

42,839

 

 

$

 

$

 

$

 

 

$

 

 

$

42,839

 

Operating expenses

 

$

1,298,907

 

$

79,796

 

 

$

 

$

209,977

 

$

156,994

 

 

$

(57,522

)

 

$

1,688,152

 

Selling, general and administrative expenses

 

$

107,358

 

$

2,746

 

 

$

2,540

 

$

127,137

 

$

12,745

 

 

$

71,448

 

 

$

323,974

 

Depreciation and amortization

 

$

300,060

 

$

34,399

 

 

$

11,274

 

$

61,426

 

$

73,803

 

 

$

(344

)

 

$

480,618

 

Income (loss) from operations

 

$

3,015,161

 

$

(144,696

)

 

$

28,627

 

$

251,980

 

$

161,428

 

 

$

(85,351

)

 

$

3,227,149

 

Income (loss) before interest and income taxes

 

$

3,015,274

 

$

(144,589

)

 

$

28,627

 

$

254,839

 

$

154,808

 

 

$

(79,948

)

 

$

3,229,011

 

Net income attributable to noncontrolling interest

 

$

 

$

 

 

$

 

$

 

$

7,154

 

 

$

73,553

 

 

$

80,707

 

Loss of equity method investments

 

$

 

$

 

 

$

 

$

 

$

(7,261

)

 

$

 

 

$

(7,261

)

Capital expenditures

 

$

104,284

 

$

210,793

 

 

$

6,796

 

$

24,553

 

$

31,194

 

 

$

39,823

 

 

$

417,443

 

 

 

Refining

 

Renewables

 

Lubricants
and Specialty
Products

 

HEP

 

Corporate,
Other
and
Eliminations

 

Consolidated
Total

 

 

(In thousands)

Nine Months Ended September 30, 2021

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

10,837,876

 

 

$

 

 

$

1,850,786

 

$

77,809

 

$

4

 

 

$

12,766,475

 

Intersegment revenues

 

$

455,089

 

 

$

 

 

$

9,500

 

$

298,193

 

$

(762,782

)

 

$

 

 

 

$

11,292,965

 

 

$

 

 

$

1,860,286

 

$

376,002

 

$

(762,778

)

 

$

12,766,475

 

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

 

$

9,986,862

 

 

$

 

 

$

1,305,274

 

$

 

$

(683,244

)

 

$

10,608,892

 

Lower of cost or market inventory valuation adjustment

 

$

(318,353

)

 

$

 

 

$

 

$

 

$

(509

)

 

$

(318,862

)

Operating expenses

 

$

772,593

 

 

$

37,169

 

 

$

183,003

 

$

126,226

 

$

(32,371

)

 

$

1,086,620

 

Selling, general and administrative expenses

 

$

90,977

 

 

$

 

 

$

124,612

 

$

9,664

 

$

25,532

 

 

$

250,785

 

Depreciation and amortization

 

$

245,910

 

 

$

986

 

 

$

58,499

 

$

66,908

 

$

(2,962

)

 

$

369,341

 

Income (loss) from operations

 

$

514,976

 

 

$

(38,155

)

 

$

188,898

 

$

173,204

 

$

(69,224

)

 

$

769,699

 

Income (loss) before interest and income taxes

 

$

513,226

 

 

$

(38,155

)

 

$

275,538

 

$

212,750

 

$

(41,915

)

 

$

921,444

 

Net income attributable to noncontrolling interest

 

$

 

 

$

 

 

$

 

$

4,027

 

$

78,477

 

 

$

82,504

 

Earnings of equity method investments

 

$

 

 

 

 

 

$

 

$

8,875

 

$

 

 

$

8,875

 

Capital expenditures

 

$

114,325

 

 

$

325,271

 

 

$

17,534

 

$

76,933

 

$

14,282

 

 

$

548,345

 

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 September 30, 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 September 30, 2022.

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022 (8)

 

2021

Mid-Continent Region

 

 

 

 

 

 

Crude charge (BPD) (1)

 

 

278,410

 

 

 

280,220

 

 

 

282,130

 

 

 

258,530

 

Refinery throughput (BPD) (2)

 

 

293,890

 

 

 

294,970

 

 

 

297,240

 

 

 

272,770

 

Sales of produced refined products (BPD) (3)

 

 

280,390

 

 

 

277,310

 

 

 

279,940

 

 

 

258,800

 

Refinery utilization (4)

 

 

107.1

%

 

 

107.8

%

 

 

108.5

%

 

 

99.4

%

 

 

 

 

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

 

 

 

 

Refinery gross margin

 

$

25.72

 

 

$

13.59

 

 

$

22.62

 

 

$

10.65

 

Refinery operating expenses (6)

 

 

6.12

 

 

 

5.72

 

 

 

6.12

 

 

 

6.68

 

Net operating margin

 

$

19.60

 

 

$

7.87

 

 

$

16.50

 

 

$

3.97

 

 

 

 

 

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

5.84

 

 

$

5.37

 

 

$

5.76

 

 

$

6.33

 

 

 

 

 

 

 

 

 

 

Feedstocks:

 

 

 

 

 

 

 

 

Sweet crude oil

 

 

59

%

 

 

66

%

 

 

58

%

 

 

63

%

Sour crude oil

 

 

26

%

 

 

13

%

 

 

21

%

 

 

14

%

Heavy sour crude oil

 

 

10

%

 

 

16

%

 

 

16

%

 

 

18

%

Other feedstocks and blends

 

 

5

%

 

 

5

%

 

 

5

%

 

 

5

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

 

 

 

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

 

 

 

 

Gasolines

 

 

50

%

 

 

52

%

 

 

50

%

 

 

51

%

Diesel fuels

 

 

34

%

 

 

32

%

 

 

34

%

 

 

33

%

Jet fuels

 

 

6

%

 

 

5

%

 

 

6

%

 

 

5

%

Fuel oil

 

 

1

%

 

 

1

%

 

 

1

%

 

 

1

%

Asphalt

 

 

4

%

 

 

4

%

 

 

3

%

 

 

3

%

Base oils

 

 

3

%

 

 

4

%

 

 

4

%

 

 

4

%

LPG and other

 

 

2

%

 

 

2

%

 

 

2

%

 

 

3

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022 (8)

 

2021

West Region

 

 

 

 

 

 

 

 

Crude charge (BPD) (1)

 

 

367,370

 

 

 

136,210

 

 

 

317,700

 

 

 

135,370

 

Refinery throughput (BPD) (2)

 

 

391,230

 

 

 

149,760

 

 

 

340,920

 

 

 

148,700

 

Sales of produced refined products (BPD) (3)

 

 

394,980

 

 

 

144,710

 

 

 

338,330

 

 

 

148,410

 

Refinery utilization (4)

 

 

87.9

%

 

 

93.9

%

 

 

81.2

%

 

 

93.4

%

 

 

 

 

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

 

 

 

 

Refinery gross margin

 

$

35.56

 

 

$

17.33

 

 

$

32.40

 

 

$

13.67

 

Refinery operating expenses (6)

 

 

8.72

 

 

 

7.70

 

 

 

9.00

 

 

 

7.43

 

Net operating margin

 

$

26.84

 

 

$

9.63

 

 

$

23.40

 

 

$

6.24

 

 

 

 

 

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

8.80

 

 

$

7.44

 

 

$

8.93

 

 

$

7.41

 

 

 

 

 

 

 

 

 

 

Feedstocks:

 

 

 

 

 

 

 

 

Sweet crude oil

 

 

25

%

 

 

22

%

 

 

27

%

 

 

22

%

Sour crude oil

 

 

50

%

 

 

58

%

 

 

50

%

 

 

59

%

Heavy sour crude oil

 

 

14

%

 

 

%

 

 

11

%

 

 

%

Black wax crude oil

 

 

5

%

 

 

11

%

 

 

5

%

 

 

10

%

Other feedstocks and blends

 

 

6

%

 

 

9

%

 

 

7

%

 

 

9

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

 

 

 

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

 

 

 

 

Gasolines

 

 

53

%

 

 

51

%

 

 

52

%

 

 

52

%

Diesel fuels

 

 

34

%

 

 

39

%

 

 

32

%

 

 

38

%

Jet fuels

 

 

5

%

 

 

%

 

 

5

%

 

 

%

Fuel oil

 

 

1

%

 

 

3

%

 

 

4

%

 

 

3

%

Asphalt

 

 

3

%

 

 

5

%

 

 

3

%

 

 

4

%

LPG and other

 

 

4

%

 

 

2

%

 

 

4

%

 

 

3

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

Consolidated

 

 

 

 

 

 

 

 

Crude charge (BPD) (1)

 

 

645,780

 

 

 

416,430

 

 

 

599,830

 

 

 

393,900

 

Refinery throughput (BPD) (2)

 

 

685,120

 

 

 

444,730

 

 

 

638,160

 

 

 

421,470

 

Sales of produced refined products (BPD) (3)

 

 

675,370

 

 

 

422,020

 

 

 

618,270

 

 

 

407,210

 

Refinery utilization (4)

 

 

95.2

%

 

 

102.8

%

 

 

92.2

%

 

 

97.3

%

 

 

 

 

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

 

 

 

 

Refinery gross margin

 

$

31.47

 

 

$

14.87

 

 

$

27.97

 

 

$

11.75

 

Refinery operating expenses (6)

 

 

7.64

 

 

 

6.40

 

 

 

7.70

 

 

 

6.95

 

Net operating margin

 

$

23.83

 

 

$

8.47

 

 

$

20.27

 

 

$

4.80

 

 

 

 

 

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

7.53

 

 

$

6.07

 

 

$

8.51

 

 

$

6.71

 

 

 

 

 

 

 

 

 

 

Feedstocks:

 

 

 

 

 

 

 

 

Sweet crude oil

 

 

39

%

 

 

51

%

 

 

42

%

 

 

49

%

Sour crude oil

 

 

39

%

 

 

28

%

 

 

36

%

 

 

29

%

Heavy sour crude oil

 

 

13

%

 

 

11

%

 

 

13

%

 

 

12

%

Black wax crude oil

 

 

3

%

 

 

4

%

 

 

3

%

 

 

4

%

Other feedstocks and blends

 

 

6

%

 

 

6

%

 

 

6

%

 

 

6

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022 (8)

 

2021

Consolidated

 

 

 

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

 

 

 

 

Gasolines

 

52

%

 

51

%

 

51

%

 

52

%

Diesel fuels

 

34

%

 

35

%

 

33

%

 

35

%

Jet fuels

 

6

%

 

3

%

 

6

%

 

3

%

Fuel oil

 

1

%

 

2

%

 

2

%

 

1

%

Asphalt

 

3

%

 

4

%

 

3

%

 

4

%

Base oils

 

1

%

 

3

%

 

2

%

 

2

%

LPG and other

 

3

%

 

2

%

 

3

%

 

3

%

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 inter-segment 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). 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 September 30, 2021 to 678,000 BPSD at September 30, 2022.

(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 nine months ended September 30, 2022 includes crude oil and feedstocks processed and refined products sold at our Sinclair and Casper Refineries for the period March 14, 2022 through September 30, 2022 only, averaged over the 273 days in the nine months ended September 30, 2022.

Renewables Segment Operating Data

The following table sets forth information about our renewables operations.

 

 

Three Months Ended
September 30, 2022

 

Nine Months Ended
September 30, 2022

Renewables

 

 

 

 

Sales volumes (in thousand gallons)

 

 

51,840

 

 

 

82,471

 

Average per produced gallon (1)

 

 

 

 

Renewables gross margin

 

$

0.19

 

 

$

0.18

 

Renewables operating expense (2)

 

 

0.45

 

 

 

0.97

 

Net operating margin

 

$

(0.26

)

 

$

(0.79

)

(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 Segment 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 September 30, 2022.

 

 

Three Months Ended
September 30, 2022

 

Nine Months Ended
September 30, 2022

Marketing

 

 

 

 

Number of branded sites at period end

 

 

1,358

 

 

1,358

Sales volumes (in thousand gallons)

 

 

362,499

 

 

782,518

Margin per gallon of sales (1)

 

$

0.03

 

$

0.05

(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 September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2021

 

2022

 

2021

Lubricants and Specialty Products

 

 

 

 

 

 

 

 

Throughput (BPD)

 

17,870

 

 

18,260

 

 

19,150

 

 

19,320

 

Sales of produced products (BPD)

 

32,610

 

 

31,700

 

 

33,870

 

 

33,640

 

 

 

 

 

 

 

 

 

 

Sales of produced products:

 

 

 

 

 

 

 

 

Finished products

 

49

%

 

53

%

 

51

%

 

52

%

Base oils

 

26

%

 

28

%

 

28

%

 

28

%

Other

 

25

%

 

19

%

 

21

%

 

20

%

Total

 

100

%

 

100

%

 

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 September 30, 2022

 

 

 

 

 

 

 

 

Sales and other revenues

 

$

342,688

 

 

$

740,321

 

 

$

(259,570

)

 

$

823,439

 

Cost of products sold

 

$

324,157

 

 

$

632,277

 

 

$

(259,570

)

 

$

696,864

 

Operating expenses

 

$

33,193

 

 

$

36,313

 

 

$

 

 

$

69,506

 

Selling, general and administrative expenses

 

$

5,810

 

 

$

36,023

 

 

$

 

 

$

41,833

 

Depreciation and amortization

 

$

7,452

 

 

$

12,775

 

 

$

 

 

$

20,227

 

Income (loss) from operations

 

$

(27,924

)

 

$

22,933

 

 

$

 

 

$

(4,991

)

Income (loss) before interest and income taxes

 

$

(27,923

)

 

$

22,945

 

 

$

 

 

$

(4,978

)

EBITDA

 

$

(20,471

)

 

$

35,720

 

 

$

 

 

$

15,249

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2021

 

 

 

 

 

 

 

 

Sales and other revenues

 

$

270,207

 

 

$

634,654

 

 

$

(238,327

)

 

$

666,534

 

Cost of products sold

 

$

148,171

 

 

$

572,689

 

 

$

(238,327

)

 

$

482,533

 

Operating expenses

 

$

29,046

 

 

$

31,894

 

 

$

 

 

$

60,940

 

Selling, general and administrative expenses

 

$

7,058

 

 

$

34,418

 

 

$

 

 

$

41,476

 

Depreciation and amortization

 

$

6,375

 

 

$

12,851

 

 

$

 

 

$

19,226

 

Income (loss) from operations

 

$

79,557

 

 

$

(17,198

)

 

$

 

 

$

62,359

 

Income (loss) before interest and income taxes

 

$

165,575

 

 

$

(17,115

)

 

$

 

 

$

148,460

 

EBITDA

 

$

171,950

 

 

$

(4,264

)

 

$

 

 

$

167,686

 

 

 

Rack Back (1)

 

Rack Forward (2)

 

Eliminations (3)

 

Total Lubricants
and Specialty
Products

 

 

(In thousands)

Nine months ended September 30, 2022

 

 

 

 

 

 

 

 

Sales and other revenues

 

$

979,902

 

$

2,182,710

 

$

(734,223

)

 

$

2,428,389

Cost of products sold

 

$

751,791

 

$

1,760,301

 

$

(734,223

)

 

$

1,777,869

Operating expenses

 

$

102,080

 

$

107,897

 

$

 

 

$

209,977

Selling, general and administrative expenses

 

$

17,653

 

$

109,484

 

$

 

 

$

127,137

Depreciation and amortization

 

$

22,721

 

$

38,705

 

$

 

 

$

61,426

Income from operations

 

$

85,657

 

$

166,323

 

$

 

 

$

251,980

Income before interest and income taxes

 

$

88,258

 

$

166,581

 

$

 

 

$

254,839

EBITDA

 

$

110,979

 

$

205,286

 

$

 

 

$

316,265

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2021

 

 

 

 

 

 

 

 

Sales and other revenues

 

$

698,134

 

$

1,747,111

 

$

(584,959

)

 

$

1,860,286

Cost of products sold

 

$

443,983

 

$

1,446,250

 

$

(584,959

)

 

$

1,305,274

Operating expenses

 

$

86,773

 

$

96,230

 

$

 

 

$

183,003

Selling, general and administrative expenses

 

$

19,711

 

$

104,901

 

$

 

 

$

124,612

Depreciation and amortization

 

$

19,910

 

$

38,589

 

$

 

 

$

58,499

Income from operations

 

$

127,757

 

$

61,141

 

$

 

 

$

188,898

Income before interest and income taxes

 

$

213,775

 

$

61,763

 

$

 

 

$

275,538

EBITDA

 

$

233,685

 

$

100,352

 

$

 

 

$

334,037

(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) gain on sale of real property, (iii) severance costs, (iv) restructuring charges, (v) Cheyenne refinery LIFO inventory liquidation costs, (vi) decommissioning costs, (vii) HF Sinclair's pro-rata share of HEP's share of Osage environmental remediation costs, (viii) acquisition integration and regulatory costs and (iv) 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
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(In thousands)

Net income attributable to HF Sinclair stockholders

 

$

954,405

 

 

$

280,787

 

 

$

2,335,641

 

 

$

597,854

 

Add interest expense

 

 

44,830

 

 

 

26,892

 

 

 

118,650

 

 

 

94,220

 

Subtract interest income

 

 

(9,821

)

 

 

(1,018

)

 

 

(12,662

)

 

 

(3,078

)

Add income tax expense

 

 

301,853

 

 

 

54,766

 

 

 

706,675

 

 

 

149,944

 

Add depreciation and amortization

 

 

171,973

 

 

 

121,220

 

 

 

480,618

 

 

 

369,341

 

EBITDA

 

$

1,463,240

 

 

$

482,647

 

 

$

3,628,922

 

 

$

1,208,281

 

Add (subtract) lower of cost or market inventory valuation adjustment

 

 

16,847

 

 

 

 

 

 

42,839

 

 

 

(318,862

)

Subtract gain on sale of real property

 

 

 

 

 

(86,018

)

 

 

 

 

 

(86,018

)

Add severance costs

 

 

 

 

 

198

 

 

 

 

 

 

906

 

Add restructuring charges

 

 

 

 

 

 

 

 

 

 

 

7,813

 

Add Cheyenne refinery LIFO inventory liquidation costs

 

 

 

 

 

 

 

 

 

 

 

923

 

Add decommissioning costs

 

 

 

 

 

6,714

 

 

 

1,469

 

 

 

23,061

 

Add HF Sinclair's pro-rata share of HEP's share of Osage environmental remediation costs

 

 

9,572

 

 

 

 

 

 

9,572

 

 

 

 

Add acquisition integration and regulatory costs

 

 

10,662

 

 

 

4,289

 

 

 

47,234

 

 

 

5,035

 

Subtract gain on tariff settlement

 

 

 

 

 

 

 

 

 

 

 

(51,500

)

Adjusted EBITDA

 

$

1,500,321

 

 

$

407,830

 

 

$

3,730,036

 

 

$

789,639

 

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

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

Refining Segment

 

2022

 

2021

 

2022

 

2021

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

1,344,103

 

$

217,438

 

$

3,015,274

 

$

513,226

 

Add depreciation and amortization

 

 

102,599

 

 

77,890

 

 

300,060

 

 

245,910

 

EBITDA

 

 

1,446,702

 

 

295,328

 

 

3,315,334

 

 

759,136

 

Subtract lower of cost or market inventory valuation adjustment

 

 

 

 

 

 

 

 

(318,353

)

Adjusted EBITDA

 

$

1,446,702

 

$

295,328

 

$

3,315,334

 

$

440,783

 

(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
September 30,

 

Nine Months Ended
September 30,

Renewables Segment

 

2022

 

2021

 

2022

 

2021

 

 

(In thousands)

Loss before interest and income taxes (1)

 

$

(49,285

)

 

$

(13,445

)

 

$

(144,589

)

 

$

(38,155

)

Add depreciation and amortization

 

 

18,228

 

 

 

328

 

 

 

34,399

 

 

 

986

 

EBITDA

 

 

(31,057

)

 

 

(13,117

)

 

 

(110,190

)

 

 

(37,169

)

Add lower of cost or market inventory valuation adjustment

 

 

16,847

 

 

 

 

 

 

42,839

 

 

 

 

Adjusted EBITDA

 

$

(14,210

)

 

$

(13,117

)

 

$

(67,351

)

 

$

(37,169

)

(1)

Loss before interest and income taxes of our Renewables segment represents loss 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
September 30, 2022

 

Nine Months Ended
September 30, 2022

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

3,856

 

$

28,627

Add depreciation and amortization

 

 

6,355

 

 

11,274

EBITDA

 

$

10,211

 

$

39,901

(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 September 30, 2022

 

 

 

 

 

 

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

 

$

(27,923

)

 

$

22,945

 

 

$

(4,978

)

Add depreciation and amortization

 

 

7,452

 

 

 

12,775

 

 

 

20,227

 

EBITDA

 

$

(20,471

)

 

$

35,720

 

 

$

15,249

 

 

 

 

 

 

 

 

Three months ended September 30, 2021

 

 

 

 

 

 

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

 

$

165,575

 

 

$

(17,115

)

 

$

148,460

 

Add depreciation and amortization

 

 

6,375

 

 

 

12,851

 

 

 

19,226

 

EBITDA

 

 

171,950

 

 

 

(4,264

)

 

 

167,686

 

Subtract gain on sale of real property

 

 

(86,018

)

 

 

 

 

 

(86,018

)

Adjusted EBITDA

 

$

85,932

 

 

$

(4,264

)

 

$

81,668

 

Lubricants and Specialty Products Segment

 

Rack Back

 

Rack Forward

 

Total Lubricants
and Specialty
Products

 

 

(In thousands)

Nine months ended September 30, 2022

 

 

 

 

 

 

Income before interest and income taxes (1)

 

$

88,258

 

 

$

166,581

 

$

254,839

 

Add depreciation and amortization

 

 

22,721

 

 

 

38,705

 

 

61,426

 

EBITDA

 

 

110,979

 

 

 

205,286

 

 

316,265

 

 

 

 

 

 

 

 

Nine months ended September 30, 2021

 

 

 

 

 

 

Income before interest and income taxes (1)

 

$

213,775

 

 

$

61,763

 

$

275,538

 

Add depreciation and amortization

 

 

19,910

 

 

 

38,589

 

 

58,499

 

EBITDA

 

 

233,685

 

 

 

100,352

 

 

334,037

 

Subtract gain on sale of land

 

 

(86,018

)

 

 

 

 

(86,018

)

Add restructuring charges

 

 

1,079

 

 

 

6,734

 

 

7,813

 

Adjusted EBITDA

 

$

148,746

 

 

$

107,086

 

$

255,832

 

(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
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(Dollars in thousands, except per barrel amounts)

Consolidated

 

 

 

 

 

 

 

 

Net operating margin per produced barrel sold

 

$

23.83

 

 

$

8.47

 

 

$

20.27

 

 

$

4.80

 

Add average refinery operating expenses per produced barrel sold

 

 

7.64

 

 

 

6.40

 

 

 

7.70

 

 

 

6.95

 

Refinery gross margin per produced barrel sold

 

 

31.47

 

 

 

14.87

 

 

 

27.97

 

 

 

11.75

 

Times produced barrels sold (BPD)

 

 

675,370

 

 

 

422,020

 

 

 

618,270

 

 

 

407,210

 

Times number of days in period

 

 

92

 

 

 

92

 

 

 

273

 

 

 

273

 

Refinery gross margin

 

 

1,955,358

 

 

 

577,340

 

 

 

4,720,992

 

 

 

1,306,228

 

Add (subtract) rounding

 

 

275

 

 

 

71

 

 

 

494

 

 

 

(125

)

Total Refining segment gross margin

 

 

1,955,633

 

 

 

577,411

 

 

 

4,721,486

 

 

 

1,306,103

 

Add Refining segment cost of products sold

 

 

7,680,153

 

 

 

3,605,600

 

 

 

21,709,048

 

 

 

9,986,862

 

Refining segment sales and other revenues

 

 

9,635,786

 

 

 

4,183,011

 

 

 

26,430,534

 

 

 

11,292,965

 

Add Renewables segment sales and other revenues

 

 

355,660

 

 

 

 

 

 

597,605

 

 

 

 

Add Marketing segment sales and other revenues

 

 

1,266,681

 

 

 

 

 

 

2,880,024

 

 

 

 

Add Lubricants and Specialty Products segment sales and other revenues

 

 

823,439

 

 

 

666,534

 

 

 

2,428,389

 

 

 

1,860,286

 

Add HEP segment sales and other revenues

 

 

149,002

 

 

 

122,584

 

 

 

404,970

 

 

 

376,002

 

Subtract corporate, other and eliminations

 

 

(1,631,566

)

 

 

(287,070

)

 

 

(3,521,610

)

 

 

(762,778

)

Sales and other revenues

 

$

10,599,002

 

 

$

4,685,059

 

 

$

29,219,912

 

 

$

12,766,475

 

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

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(Dollars in thousands, except per barrel amounts)

Consolidated

 

 

 

 

 

 

 

 

Average operating expenses per produced barrel sold

 

$

7.64

 

 

$

6.40

 

 

$

7.70

 

 

$

6.95

 

Times produced barrels sold (BPD)

 

 

675,370

 

 

 

422,020

 

 

 

618,270

 

 

 

407,210

 

Times number of days in period

 

 

92

 

 

 

92

 

 

 

273

 

 

 

273

 

Refinery operating expenses

 

 

474,704

 

 

 

248,485

 

 

$

1,299,665

 

 

$

772,620

 

Subtract rounding

 

 

(73

)

 

 

(169

)

 

 

(758

)

 

 

(27

)

Total Refining segment operating expenses

 

 

474,631

 

 

 

248,316

 

 

 

1,298,907

 

 

 

772,593

 

Add Renewables segment operating expenses

 

 

23,427

 

 

 

13,117

 

 

 

79,796

 

 

 

37,169

 

Add Lubricants and Specialty Products segment operating expenses

 

 

69,506

 

 

 

60,940

 

 

 

209,977

 

 

 

183,003

 

Add HEP segment operating expenses

 

 

60,471

 

 

 

42,793

 

 

 

156,994

 

 

 

126,226

 

Subtract corporate, other and eliminations

 

 

(23,444

)

 

 

(12,646

)

 

 

(57,522

)

 

 

(32,371

)

Operating expenses (exclusive of depreciation and amortization)

 

$

604,591

 

 

$

352,520

 

 

$

1,688,152

 

 

$

1,086,620

 

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
September 30, 2022

 

Nine Months Ended
September 30, 2022

 

 

(In thousands, except for per gallon amounts)

Renewables segment sales and other revenues

 

$

355,660

 

 

$

597,605

 

Renewables segment cost of products sold

 

 

345,588

 

 

 

582,521

 

Lower of cost or market inventory adjustment

 

 

16,847

 

 

 

42,839

 

 

 

 

(6,775

)

 

 

(27,755

)

Add lower of cost or market inventory adjustment

 

 

16,847

 

 

 

42,839

 

Renewables gross margin

 

$

10,072

 

 

$

15,084

 

 

 

 

 

 

Renewables operating expense

 

$

23,427

 

 

$

79,796

 

Produced gallons sold (in thousand gallons)

 

 

51,840

 

 

 

82,471

 

 

 

 

 

 

Renewables gross margin per produced gallon sold

 

$

0.19

 

 

$

0.18

 

Less operating expense per produced gallon sold

 

 

0.45

 

 

 

0.97

 

Net operating margin per produced gallon sold

 

$

(0.26

)

 

$

(0.79

)

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
September 30, 2022

 

Nine Months Ended
September 30, 2022

 

 

(In thousands, except for per gallon amounts)

Marketing segment sales and other revenues

 

$

1,266,681

 

$

2,880,024

Marketing segment cost of products sold

 

 

1,255,119

 

 

2,837,583

Marketing gross margin

 

$

11,562

 

$

42,441

 

 

 

 

 

Sales volumes (in thousand gallons)

 

 

362,499

 

 

782,518

 

 

 

 

 

Marketing segment gross margin per gallon sold

 

$

0.03

 

$

0.05

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, gain on sale of real property, severance costs, restructuring charges, Cheyenne refinery LIFO inventory liquidation costs, decommissioning costs, HEP's share of Osage environmental remediation 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
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(In thousands, except per share amounts)

Consolidated

 

 

 

 

 

 

 

 

GAAP:

 

 

 

 

 

 

 

 

Income before income taxes

 

$

1,279,992

 

$

357,507

 

 

$

3,123,023

 

$

830,302

 

Income tax expense

 

 

301,853

 

 

54,766

 

 

 

706,675

 

 

149,944

 

Net income

 

 

978,139

 

 

302,741

 

 

 

2,416,348

 

 

680,358

 

Less net income attributable to noncontrolling interest

 

 

23,734

 

 

21,954

 

 

 

80,707

 

 

82,504

 

Net income attributable to HF Sinclair stockholders

 

 

954,405

 

 

280,787

 

 

 

2,335,641

 

 

597,854

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments to arrive at adjusted results:

 

 

 

 

 

 

 

 

Lower of cost or market inventory valuation adjustment

 

 

16,847

 

 

 

 

 

42,839

 

 

(318,862

)

Gain on sale of real property

 

 

 

 

(86,018

)

 

 

 

 

(86,018

)

Severance costs

 

 

 

 

198

 

 

 

 

 

906

 

Restructuring charges

 

 

 

 

 

 

 

 

 

7,813

 

Cheyenne refinery LIFO inventory liquidation costs

 

 

 

 

 

 

 

 

 

923

 

Decommissioning costs

 

 

 

 

6,714

 

 

 

1,469

 

 

23,061

 

HEP's share of Osage environmental remediation costs

 

 

20,297

 

 

 

 

 

20,297

 

 

 

Acquisition integration and regulatory costs

 

 

10,662

 

 

4,289

 

 

 

48,144

 

 

5,035

 

Gain on tariff settlement

 

 

 

 

 

 

 

 

 

(51,500

)

Total adjustments to income before income taxes

 

 

47,806

 

 

(74,817

)

 

 

112,749

 

 

(418,642

)

Adjustment to income tax expense (1)

 

 

8,547

 

 

(3,979

)

 

 

19,653

 

 

(88,493

)

Adjustment to net income attributable to noncontrolling interest

 

 

10,725

 

 

 

 

 

11,635

 

 

 

Total adjustments, net of tax

 

 

28,534

 

 

(70,838

)

 

 

81,461

 

 

(330,149

)

 

 

 

 

 

 

 

 

 

Adjusted results - Non-GAAP:

 

 

 

 

 

 

 

 

Adjusted income before income taxes

 

 

1,327,798

 

 

282,690

 

 

 

3,235,772

 

 

411,660

 

Adjusted income tax expense (2)

 

 

310,400

 

 

50,787

 

 

 

726,328

 

 

61,451

 

Adjusted net income

 

 

1,017,398

 

 

231,903

 

 

 

2,509,444

 

 

350,209

 

Less net income attributable to noncontrolling interest

 

 

34,459

 

 

21,954

 

 

 

92,342

 

 

82,504

 

Adjusted net income attributable to HF Sinclair stockholders

 

$

982,939

 

$

209,949

 

 

$

2,417,102

 

$

267,705

 

Adjusted earnings per share - diluted (3)

 

$

4.58

 

$

1.28

 

 

$

11.75

 

$

1.63

 

(1)

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

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

Non-GAAP income tax expense (2)

 

$

310,400

 

$

50,787

 

 

$

726,328

 

$

61,451

 

Add GAAP income tax expense

 

 

301,853

 

 

54,766

 

 

 

706,675

 

 

149,944

 

Non-GAAP adjustment to income tax expense

 

$

8,547

 

$

(3,979

)

 

$

19,653

 

$

(88,493

)

(2)

Non-GAAP income tax expense 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 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
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(Dollars in thousands)

GAAP:

 

 

 

 

 

 

 

 

Income before income taxes

 

$

1,279,992

 

 

$

357,507

 

 

$

3,123,023

 

 

$

830,302

 

Income tax expense

 

$

301,853

 

 

$

54,766

 

 

$

706,675

 

 

$

149,944

 

Effective tax rate for GAAP financial statements

 

 

23.6

%

 

 

15.3

%

 

 

22.6

%

 

 

18.1

%

Adjusted - Non-GAAP:

 

 

 

 

 

 

 

 

Effect of Non-GAAP adjustments

 

 

(0.2

)%

 

 

2.7

%

 

 

(0.2

)%

 

 

(3.2

)%

Effective tax rate for adjusted results

 

 

23.4

%

 

 

18.0

%

 

 

22.4

%

 

 

14.9

%

 

Atanas H. Atanasov, 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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