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HF Sinclair Corporation Reports 2024 First Quarter Results and Announces Regular Cash Dividend

  • Reported net income attributable to HF Sinclair stockholders of $314.7 million, or $1.57 per diluted share, and adjusted net income of $142.3 million, or $0.71 per diluted share, for the first quarter
  • Reported EBITDA of $617.4 million and Adjusted EBITDA of $399.1 million for the first quarter
  • Returned $269.0 million to stockholders through dividends and share repurchases in the first quarter
  • Authorized a new $1.0 billion share repurchase program
  • Announced a regular quarterly dividend of $0.50 per share

HF Sinclair Corporation (NYSE: DINO) (“HF Sinclair” or the “Company”) today reported first quarter net income attributable to HF Sinclair stockholders of $314.7 million, or $1.57 per diluted share, for the quarter ended March 31, 2024, compared to $353.3 million, or $1.79 per diluted share, for the quarter ended March 31, 2023. Excluding the adjustments shown in the accompanying earnings release table, adjusted net income attributable to HF Sinclair stockholders for the first quarter of 2024 was $142.3 million, or $0.71 per diluted share, compared to $394.1 million, or $2.00 per diluted share, for the first quarter of 2023.

HF Sinclair’s Chief Executive Officer, Tim Go, commented, “We are pleased to report our first quarter, 2024 results. We continue to advance our corporate strategy focused on improving reliability, optimizing and integrating our portfolio and generating strong cash flows to support our cash return strategy. During the quarter, our businesses maintained safe and reliable operations, representing another quarter of successful turnaround and maintenance execution. We also returned $269 million in cash to shareholders during the quarter and today announced a new $1.0 billion share repurchase authorization demonstrating our continued commitment to shareholder returns. Looking forward, as we head into summer driving season, we expect a favorable market environment and believe we are well positioned to generate strong earnings and cash flows.”

Refining segment income before interest and income taxes was $312.0 million for the first quarter of 2024 compared to $436.9 million for the first quarter of 2023. The segment reported EBITDA of $429.4 million for the first quarter of 2024 compared to $537.0 million for the first quarter of 2023. Excluding the lower of cost or market inventory valuation benefit of $220.6 million, the segment reported Adjusted EBITDA in the first quarter of 2024 was $208.8 million. This decrease was principally driven by lower refinery gross margins in both the West and Mid-Continent regions as a result of seasonal demand weakness for transportation fuels in our regions, partially offset by higher refined product sales volumes. Consolidated refinery gross margin was $12.70 per produced barrel, a 45% decrease compared to $23.20 for the first quarter of 2023. Crude oil charge averaged 604,930 barrels per day (“BPD”) for the first quarter of 2024 compared to 498,500 BPD for the first quarter of 2023. This increase was primarily a result of decreased turnaround activities and improved reliability at our refineries compared to the first quarter of 2023.

Renewables segment loss before interest and income taxes was $(40.0) million for the first quarter of 2024, compared to a loss of $(64.6) million for the first quarter of 2023. The segment reported EBITDA of $(19.7) million for the first quarter of 2024 compared to $(44.6) million for the first quarter of 2023. Excluding the lower of cost or market inventory valuation adjustment, the segment reported Adjusted EBITDA of $(18.6) million for the first quarter of 2024 compared to $3.0 million for the first quarter of 2023. This decrease was primarily due to weakened RINs and Low Carbon Fuel Standard prices in the first quarter of 2024. Total sales volumes were 61 million gallons for the first quarter of 2024 as compared to 46 million gallons for the first quarter of 2023.

Marketing segment income before interest and income taxes was $9.4 million for the first quarter of 2024 compared to $0.5 million for the first quarter of 2023. The segment reported EBITDA of $15.7 million for the first quarter of 2024 compared to $6.4 million for the first quarter of 2023. This increase was primarily driven by stronger branded wholesale margins in the first quarter of 2024. Total branded fuel sales volumes were 321 million gallons for the first quarter of 2024 as compared to 328 million gallons for the first quarter of 2023.

Lubricants & Specialties segment income before interest and income taxes was $64.5 million for the first quarter of 2024, compared to an income of $78.2 million in the first quarter of 2023. The segment reported EBITDA of $87.0 million for the first quarter of 2024 compared to $97.6 million in the first quarter of 2023. This decrease was largely driven by lower base oil prices in the first quarter of 2024.

Midstream segment income before interest and income taxes was $93.1 million for the first quarter of 2024 compared to $73.9 million for the first quarter of 2023, and segment reported Adjusted EBITDA of $111.3 million for the first quarter of 2024 compared to $93.3 million for the first quarter of 2023. This increase was primarily driven by higher revenues from tariff increases in the first quarter of 2024.

For the first quarter of 2024, net cash provided by operations totaled $316.9 million. At March 31, 2024, the Company's cash and cash equivalents totaled $1,240.9 million, a $112.9 million decrease over cash and cash equivalents of $1,353.7 million at December 31, 2023. During the first quarter of 2024, the Company announced and paid a regular dividend of $0.50 per share to stockholders totaling $99.4 million and spent $169.6 million on share repurchases. Additionally, at March 31, 2024, the Company’s consolidated debt was $2,678.6 million.

HF Sinclair also announced today that its Board of Directors declared a regular quarterly dividend in the amount of $0.50 per share, payable on June 5, 2024 to holders of record of common stock on May 22, 2024.

The Company has scheduled a webcast conference call for today, May 8, 2024, at 8:30 AM Eastern Time to discuss first quarter financial results. This webcast may be accessed at https://events.q4inc.com/attendee/868284986. An audio archive of this webcast will be available using the above noted link through May 22, 2024.

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. HF Sinclair provides petroleum product and crude oil transportation, terminalling, storage and throughput services to its refineries and the petroleum industry. HF Sinclair markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states and supplies high-quality fuels to more than 1,500 branded stations and licenses the use of the Sinclair brand at more than 300 additional locations throughout the country. HF Sinclair produces renewable diesel at two of its facilities in Wyoming and also at its facility in New Mexico. 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.

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 the Company's 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 the Company's plans and objectives for future operations. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company cannot assure you that the Company's expectations will prove to be 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 demand for and supply of feedstocks, crude oil and refined products, including uncertainty regarding the increasing societal expectations that companies address climate change and greenhouse gas emissions; 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 reductions in demand, accidents, unexpected leaks or spills, unscheduled shutdowns, infection in the workforce, weather events, global health events, civil unrest, expropriation of assets, and other economic, diplomatic, legislative, or political events or developments, terrorism, cyberattacks, vandalism or other catastrophes or disruptions affecting the Company’s operations, production facilities, machinery, pipelines and other logistics assets, equipment, or information systems, or any of the foregoing of the Company’s 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 compliance with existing, new and changing environmental and health and safety laws and regulations, related reporting requirements and pipeline integrity programs; the availability and cost of financing to the Company; the effectiveness of the Company’s capital investments and marketing strategies; the Company’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 ability to timely obtain or maintain permits, including those necessary for operations or capital projects; the ability of the Company to acquire complementary assets or businesses to the Company's existing assets and businesses on acceptable terms and to integrate any existing or future acquired operations and realize the expected synergies of any such transaction on the expected timeline; the possibility of vandalism or other disruptive activity, or terrorist or cyberattacks and the consequences of any such activities or attacks; uncertainty regarding the effects and duration of global hostilities, including shipping disruptions in the Red Sea, the Israel-Gaza conflict, 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 economic slowdowns caused by a local or national recession or other adverse economic condition, such as periods of increased or prolonged inflation; limitations on the Company’s ability to make future dividend payments or effectuate share repurchases due to market conditions and corporate, tax, regulatory and other considerations; and other business, financial, operational and legal risks. Additional information on risks and uncertainties that could affect our business prospects and performance is provided in the reports filed by us with the SEC. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. 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 2023

 

2024

 

2023

 

Change

 

Percent

 

(In thousands, except per share data)

Sales and other revenues

$

7,027,145

 

 

$

7,565,142

 

 

$

(537,997

)

 

(7

)%

Operating costs and expenses:

 

 

 

 

 

 

 

Cost of products sold:

 

 

 

 

 

 

 

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

 

5,926,500

 

 

 

6,104,057

 

 

 

(177,557

)

 

(3

)%

Lower of cost or market inventory valuation adjustment

 

(219,370

)

 

 

47,597

 

 

 

(266,967

)

 

(561

)%

 

 

5,707,130

 

 

 

6,151,654

 

 

 

(444,524

)

 

(7

)%

Operating expenses (exclusive of depreciation and amortization)

 

607,112

 

 

 

639,383

 

 

 

(32,271

)

 

(5

)%

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

 

103,374

 

 

 

95,913

 

 

 

7,461

 

 

8

%

Depreciation and amortization

 

198,729

 

 

 

173,983

 

 

 

24,746

 

 

14

%

Total operating costs and expenses

 

6,616,345

 

 

 

7,060,933

 

 

 

(444,588

)

 

(6

)%

Income from operations

 

410,800

 

 

 

504,209

 

 

 

(93,409

)

 

(19

)%

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Earnings (loss) of equity method investments

 

7,346

 

 

 

3,882

 

 

 

3,464

 

 

89

%

Interest income

 

22,179

 

 

 

19,935

 

 

 

2,244

 

 

11

%

Interest expense

 

(40,691

)

 

 

(45,822

)

 

 

5,131

 

 

(11

)%

Gain on foreign currency transactions

 

443

 

 

 

870

 

 

 

(427

)

 

(49

)%

Gain on sale of assets and other

 

2,019

 

 

 

1,631

 

 

 

388

 

 

24

%

 

 

(8,704

)

 

 

(19,504

)

 

 

10,800

 

 

(55

)%

Income before income taxes

 

402,096

 

 

 

484,705

 

 

 

(82,609

)

 

(17

)%

Income tax expense

 

85,474

 

 

 

99,700

 

 

 

(14,226

)

 

(14

)%

Net income

 

316,622

 

 

 

385,005

 

 

 

(68,383

)

 

(18

)%

Less net income attributable to noncontrolling interest

 

1,958

 

 

 

31,739

 

 

 

(29,781

)

 

(94

)%

Net income attributable to HF Sinclair stockholders

$

314,664

 

 

$

353,266

 

 

$

(38,602

)

 

(11

)%

 

 

 

 

 

 

 

 

Earnings per share attributable to HF Sinclair stockholders:

 

 

 

 

 

 

 

Basic

$

1.57

 

 

$

1.79

 

 

$

(0.22

)

 

(12

)%

Diluted

$

1.57

 

 

$

1.79

 

 

$

(0.22

)

 

(12

)%

Cash dividends declared per common share

$

0.50

 

 

$

0.45

 

 

$

0.05

 

 

11

%

Average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

198,710

 

 

 

195,445

 

 

 

3,265

 

 

2

%

Diluted

 

198,710

 

 

 

195,445

 

 

 

3,265

 

 

2

%

 

 

 

 

 

 

 

 

EBITDA

$

617,379

 

 

$

652,836

 

 

$

(35,457

)

 

(5

)%

Adjusted EBITDA

$

399,057

 

 

$

704,753

 

 

$

(305,696

)

 

(43

)%

Balance Sheet Data

 

 

March 31,

 

December 31,

 

2024

 

2023

 

(In thousands)

Cash and cash equivalents

$

1,240,860

 

$

1,353,747

Working capital

$

3,404,525

 

$

3,371,905

Total assets

$

17,915,990

 

$

17,716,265

Total debt

$

2,678,645

 

$

2,739,083

Total equity

$

10,276,089

 

$

10,237,298

Segment Information

Our operations are organized into five reportable segments: Refining, Renewables, Marketing, Lubricants & Specialties and Midstream. 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.

The Refining segment represents the operations of our El Dorado, Tulsa, Navajo, Woods Cross, Puget Sound, Parco and Casper refineries and HF Sinclair Asphalt Company LLC (“Asphalt”). 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 our Cheyenne renewable diesel unit (“RDU”), the pre-treatment unit at our Artesia, New Mexico facility, the Artesia RDU, and the Sinclair RDU.

The Marketing segment represents branded fuel sales to Sinclair branded sites in the United States and licensing fees for the use of the Sinclair brand at additional locations throughout the country. The Marketing segment also includes branded fuel sales to non-Sinclair branded sites from legacy HollyFrontier Corporation (“HollyFrontier”) agreements and revenues from other marketing activities. Our branded sites are located in several states across the United States with the highest concentration of the sites located in our West and Mid-Continent regions.

The Lubricants & Specialties segment represents Petro-Canada Lubricants Inc.’s production operations, located in Mississauga, Ontario, which 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 and Europe. Additionally, the Lubricants & Specialties 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 leading suppliers of locomotive engine oil in North America. Also, the Lubricants & Specialties 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 Midstream segment includes all of the operations of Holly Energy Partners, L.P. (“HEP”), which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, and terminals, tankage and loading rack facilities in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. The Midstream segment also includes 50% ownership interests in each of Osage Pipeline Company, LLC (“Osage”), the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas, Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming, and Cushing Connect Pipeline & Terminal LLC, a 25.12% ownership interest in Saddle Butte Pipeline III, LLC, the owner of a pipeline running from the Powder River Basin to Casper, Wyoming, and a 49.995% ownership interest in Pioneer Investments Corp., the owner of a pipeline running from Sinclair, Wyoming to the North Salt Lake City, Utah Terminal. Revenues from the Midstream 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.

Beginning in the first quarter of 2024, our Refining segment acquired from our Midstream segment the refinery processing units at our El Dorado and Woods Cross refineries. Additionally, we amended an intercompany agreement between certain of our subsidiaries within the Refining, Lubricants & Specialties and Midstream segments. As a result, we have revised our Refining, Lubricants & Specialties and Midstream segment information for the periods presented.

 

 

Refining

 

Renewables

 

Marketing

 

Lubricants &

Specialties

 

Midstream

 

Corporate,

Other and

Eliminations

 

Consolidated

Total

 

 

(In thousands)

Three Months Ended March 31, 2024

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

5,373,025

 

 

$

179,669

 

 

$

775,807

 

$

675,545

 

$

23,099

 

$

 

 

$

7,027,145

 

Intersegment revenues and other (1)

 

 

831,220

 

 

 

59,890

 

 

 

 

 

2,442

 

 

131,916

 

 

(1,025,468

)

 

 

 

 

 

$

6,204,245

 

 

$

239,559

 

 

$

775,807

 

$

677,987

 

$

155,015

 

$

(1,025,468

)

 

$

7,027,145

 

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

 

$

5,474,522

 

 

$

230,273

 

 

$

752,530

 

$

492,846

 

$

 

$

(1,023,671

)

 

$

5,926,500

 

Lower of cost or market inventory valuation adjustment

 

$

(220,558

)

 

$

1,188

 

 

$

 

$

 

$

 

$

 

 

$

(219,370

)

Operating expenses

 

$

472,086

 

 

$

26,461

 

 

$

 

$

64,000

 

$

45,518

 

$

(953

)

 

$

607,112

 

Selling, general and administrative expenses

 

$

48,717

 

 

$

1,402

 

 

$

7,756

 

$

34,568

 

$

3,929

 

$

7,002

 

 

$

103,374

 

Depreciation and amortization

 

$

117,370

 

 

$

20,272

 

 

$

6,303

 

$

22,511

 

$

20,120

 

$

12,153

 

 

$

198,729

 

Income (loss) from operations

 

$

312,108

 

 

$

(40,037

)

 

$

9,218

 

$

64,062

 

$

85,448

 

$

(19,999

)

 

$

410,800

 

Income (loss) before interest and income taxes

 

$

312,014

 

 

$

(40,012

)

 

$

9,428

 

$

64,487

 

$

93,050

 

$

(18,359

)

 

$

420,608

 

Net income attributable to noncontrolling interest

 

$

 

 

$

 

 

$

 

$

 

$

1,958

 

$

 

 

$

1,958

 

Earnings (loss) of equity method investments

 

$

 

 

$

 

 

$

 

$

 

$

7,388

 

$

(42

)

 

$

7,346

 

Capital expenditures

 

$

55,025

 

 

$

2,650

 

 

$

7,531

 

$

5,311

 

$

8,106

 

$

10,485

 

 

$

89,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2023

Sales and other revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

5,665,214

 

 

$

202,413

 

 

$

937,385

 

$

733,714

 

$

26,416

 

$

 

 

$

7,565,142

 

Intersegment revenues and other (1)

 

 

1,053,401

 

 

 

95,603

 

 

 

 

 

5,796

 

 

109,516

 

 

(1,264,316

)

 

 

 

 

 

$

6,718,615

 

 

$

298,016

 

 

$

937,385

 

$

739,510

 

$

135,932

 

$

(1,264,316

)

 

$

7,565,142

 

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

 

$

5,641,131

 

 

$

262,738

 

 

$

924,049

 

$

538,860

 

$

 

$

(1,262,721

)

 

$

6,104,057

 

Lower of cost or market inventory valuation adjustment

 

$

 

 

$

47,597

 

 

$

 

$

 

$

 

$

 

 

$

47,597

 

Operating expenses

 

$

501,759

 

 

$

31,371

 

 

$

 

$

63,593

 

$

41,679

 

$

981

 

 

$

639,383

 

Selling, general and administrative expenses

 

$

39,078

 

 

$

915

 

 

$

6,963

 

$

39,264

 

$

4,635

 

$

5,058

 

 

$

95,913

 

Depreciation and amortization

 

$

100,083

 

 

$

19,974

 

 

$

5,871

 

$

19,368

 

$

19,762

 

$

8,925

 

 

$

173,983

 

Income (loss) from operations

 

$

436,564

 

 

$

(64,579

)

 

$

502

 

$

78,425

 

$

69,856

 

$

(16,559

)

 

$

504,209

 

Income (loss) before interest and income taxes

 

$

436,885

 

 

$

(64,556

)

 

$

502

 

$

78,225

 

$

73,912

 

$

(14,376

)

 

$

510,592

 

Net income attributable to noncontrolling interest

 

$

 

 

$

 

 

$

 

$

 

$

1,752

 

$

29,987

 

 

$

31,739

 

Loss of equity method investments

 

$

 

 

$

 

 

$

 

$

 

$

3,882

 

$

 

 

$

3,882

 

Capital expenditures

 

$

67,774

 

 

$

4,844

 

 

$

5,255

 

$

8,649

 

$

7,614

 

$

5,933

��

 

$

100,069

 

(1)

Includes income earned by certain of our subsidiaries in the Midstream segment related to intercompany transportation agreements with certain of our subsidiaries in the Refining and Lubricants & Specialties segments that represent leases. These transactions eliminate in consolidation.

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, Parco and Casper refineries.

 

 

Three Months Ended

March 31,

 

 

2024

 

2023

Mid-Continent Region

 

 

Crude charge (BPD) (1)

 

 

259,030

 

 

 

211,390

 

Refinery throughput (BPD) (2)

 

 

273,890

 

 

 

231,260

 

Sales of produced refined products (BPD) (3)

 

 

272,460

 

 

 

205,010

 

Refinery utilization (4)

 

 

99.6

%

 

 

81.3

%

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

Refinery gross margin

 

$

10.47

 

 

$

20.06

 

Refinery operating expenses (6)

 

 

6.40

 

 

 

9.28

 

Net operating margin

 

$

4.07

 

 

$

10.78

 

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

6.37

 

 

$

8.23

 

 

 

 

 

 

Feedstocks:

 

 

 

 

Sweet crude oil

 

 

50

%

 

 

65

%

Sour crude oil

 

 

25

%

 

 

15

%

Heavy sour crude oil

 

 

19

%

 

 

11

%

Other feedstocks and blends

 

 

6

%

 

 

9

%

Total

 

 

100

%

 

 

100

%

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

Gasolines

 

 

52

%

 

 

49

%

Diesel fuels

 

 

32

%

 

 

29

%

Jet fuels

 

 

6

%

 

 

8

%

Fuel oil

 

 

1

%

 

 

1

%

Asphalt

 

 

3

%

 

 

4

%

Base oils

 

 

4

%

 

 

5

%

LPG and other

 

 

2

%

 

 

4

%

Total

 

 

100

%

 

 

100

%

 

 

Three Months Ended March 31,

 

 

2024

 

2023

West Region

 

 

 

 

Crude charge (BPD) (1)

 

 

345,900

 

 

 

287,110

 

Refinery throughput (BPD) (2)

 

 

369,410

 

 

 

326,870

 

Sales of produced refined products (BPD) (3)

 

 

359,010

 

 

 

310,950

 

Refinery utilization (4)

 

 

82.8

%

 

 

68.7

%

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

Refinery gross margin

 

$

14.39

 

 

$

25.28

 

Refinery operating expenses (6)

 

 

9.59

 

 

 

11.81

 

Net operating margin

 

$

4.80

 

 

$

13.47

 

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

9.32

 

 

$

11.23

 

 

 

 

 

 

Feedstocks:

 

 

 

 

Sweet crude oil

 

 

32

%

 

 

32

%

Sour crude oil

 

 

43

%

 

 

40

%

Heavy sour crude oil

 

 

12

%

 

 

11

%

Black wax crude oil

 

 

7

%

 

 

5

%

Other feedstocks and blends

 

 

6

%

 

 

12

%

Total

 

 

100

%

 

 

100

%

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

Gasolines

 

 

53

%

 

 

57

%

Diesel fuels

 

 

32

%

 

 

31

%

Jet fuels

 

 

5

%

 

 

4

%

Fuel oil

 

 

2

%

 

 

2

%

Asphalt

 

 

2

%

 

 

2

%

LPG and other

 

 

6

%

 

 

4

%

Total

 

 

100

%

 

 

100

%

Consolidated

 

 

 

 

Crude charge (BPD) (1)

 

 

604,930

 

 

 

498,500

 

Refinery throughput (BPD) (2)

 

 

643,300

 

 

 

558,130

 

Sales of produced refined products (BPD) (3)

 

 

631,470

 

 

 

515,960

 

Refinery utilization (4)

 

 

89.2

%

 

 

73.5

%

 

 

 

 

 

Average per produced barrel (5)

 

 

 

 

Refinery gross margin

 

$

12.70

 

 

$

23.20

 

Refinery operating expenses (6)

 

 

8.22

 

 

 

10.81

 

Net operating margin

 

$

4.48

 

 

$

12.39

 

 

 

 

 

 

Refinery operating expenses per throughput barrel (7)

 

$

8.06

 

 

$

9.99

 

 

 

 

 

 

Feedstocks:

 

 

 

 

Sweet crude oil

 

 

39

%

 

 

46

%

Sour crude oil

 

 

36

%

 

 

30

%

Heavy sour crude oil

 

 

15

%

 

 

10

%

Black wax crude oil

 

 

4

%

 

 

3

%

Other feedstocks and blends

 

 

6

%

 

 

11

%

Total

 

 

100

%

 

 

100

%

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Consolidated

 

 

 

 

Sales of produced refined products:

 

 

 

 

Gasolines

 

53

%

 

54

%

Diesel fuels

 

32

%

 

30

%

Jet fuels

 

6

%

 

6

%

Fuel oil

 

1

%

 

1

%

Asphalt

 

2

%

 

3

%

Base oils

 

2

%

 

2

%

LPG and other

 

4

%

 

4

%

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 Asphalt and intersegment sales) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.

(4)

Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 678,000 BPSD.

(5)

Represents 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.

Renewables Segment Operating Data

The following table sets forth information about our renewables operations and includes our Sinclair RDU. The renewables 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.

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Renewables

 

 

 

 

Sales volumes (in thousand gallons)

 

 

61,172

 

 

 

46,012

Average per produced gallon (1)

 

 

 

 

Renewables gross margin

 

$

0.15

 

 

$

0.77

Renewables operating expense (2)

 

 

0.43

 

 

 

0.68

Net operating margin

 

$

(0.28

)

 

$

0.09

(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. The marketing gross margin does not include the non-cash effects of depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” below.

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Marketing

 

 

 

 

Number of branded sites at period end (1)

 

 

1,547

 

 

1,511

Sales volumes (in thousand gallons)

 

 

321,010

 

 

328,407

Gross margin per gallon of sales (2)

 

$

0.07

 

$

0.04

(1)

Includes non-Sinclair branded sites from legacy HollyFrontier agreements.

(2)

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 & Specialties Segment Operating Data

The following table sets forth information about our lubricants and specialties operations:

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Lubricants & Specialties

 

 

 

 

Sales of produced refined products (BPD)

 

31,104

 

 

31,790

 

 

 

 

 

 

Sales of produced refined products:

 

 

 

 

Finished products

 

49

%

 

50

%

Base oils

 

27

%

 

29

%

Other

 

24

%

 

21

%

Total

 

100

%

 

100

%

Midstream Segment Operating Data

The following table sets forth information about our midstream operations:

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Midstream

 

 

 

 

Volumes (BPD)

 

 

 

 

Pipelines:

 

 

 

 

Affiliates—refined product pipelines

 

164,628

 

143,002

Affiliates—intermediate pipelines

 

138,071

 

114,326

Affiliates—crude pipelines

 

441,454

 

473,712

 

 

744,153

 

731,040

Third parties—refined product pipelines

 

36,723

 

40,431

Third parties—crude pipelines

 

162,493

 

175,984

 

 

943,369

 

947,455

Terminals and loading racks:

 

 

 

 

Affiliates

 

788,919

 

686,845

Third parties

 

33,110

 

42,462

 

 

822,029

 

729,307

Total for pipelines and terminals (BPD)

 

1,765,398

 

1,676,762

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) decommissioning costs, (iii) HF Sinclair's pro-rata share of HEP's share of Osage environmental remediation costs and (iv) acquisition integration and regulatory costs.

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,

 

 

2024

 

2023

 

 

(In thousands)

Net income attributable to HF Sinclair stockholders

 

$

314,664

 

 

$

353,266

 

Add interest expense

 

 

40,691

 

 

 

45,822

 

Subtract interest income

 

 

(22,179

)

 

 

(19,935

)

Add income tax expense

 

 

85,474

 

 

 

99,700

 

Add depreciation and amortization

 

 

198,729

 

 

 

173,983

 

EBITDA

 

$

617,379

 

 

$

652,836

 

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

 

 

(219,370

)

 

 

47,597

 

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

 

 

 

 

 

410

 

Add acquisition integration and regulatory costs

 

 

1,048

 

 

 

3,910

 

Adjusted EBITDA

 

$

399,057

 

 

$

704,753

 

EBITDA attributable to our Refining segment is presented below:

 

 

Three Months Ended

March 31,

Refining Segment

 

2024

 

2023

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

312,014

 

 

$

436,885

Add depreciation and amortization

 

 

117,370

 

 

 

100,083

EBITDA

 

 

429,384

 

 

 

536,968

Add lower of cost or market inventory valuation adjustment

 

 

(220,558

)

 

 

Adjusted EBITDA

 

$

208,826

 

 

$

536,968

(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

 

2024

 

2023

 

 

(In thousands)

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

 

$

(40,012

)

 

$

(64,556

)

Add depreciation and amortization

 

 

20,272

 

 

 

19,974

 

EBITDA

 

 

(19,740

)

 

 

(44,582

)

Add lower of cost or market inventory valuation adjustment

 

 

1,188

 

 

 

47,597

 

Adjusted EBITDA

 

$

(18,552

)

 

$

3,015

 

(1)

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

EBITDA attributable to our Marketing segment is set forth below:

 

 

Three Months Ended

March 31,

Marketing Segment

 

2024

 

2023

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

9,428

 

$

502

Add: depreciation and amortization

 

 

6,303

 

 

5,871

EBITDA

 

$

15,731

 

$

6,373

(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 attributable to our Lubricants & Specialties segment is set forth below:

 

 

Three Months Ended

March 31,

Lubricants & Specialties Segment

 

2024

 

2023

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

64,487

 

$

78,225

Add: depreciation and amortization

 

 

22,511

 

 

19,368

EBITDA

 

$

86,998

 

$

97,593

(1)

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

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

 

 

Three Months Ended

March 31,

Midstream Segment

 

2024

 

2023

 

 

(In thousands)

Income before interest and income taxes (1)

 

$

93,050

 

 

$

73,912

 

Add depreciation and amortization

 

 

20,120

 

 

 

19,762

 

Subtract net income attributable to noncontrolling interest

 

 

(1,958

)

 

 

(1,752

)

EBITDA

 

$

111,212

 

 

$

91,922

 

Add (subtract) share of Osage environmental remediation costs, net of insurance recoveries

 

 

 

 

 

870

 

Add acquisition integration and regulatory costs

 

 

53

 

 

 

518

 

Adjusted EBITDA

 

$

111,265

 

 

$

93,310

 

(1)

Income before interest and income taxes of our Midstream segment represents income 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 or 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 average refining net operating margin per produced barrel sold to refinery gross margin to refining sales and other revenues

 

 

Three Months Ended

March 31,

 

 

2024

 

2023

 

 

(In thousands, except per barrel amounts)

Consolidated

 

 

 

 

Refining segment sales and other revenues

 

$

6,204,245

 

 

$

6,718,615

Refining segment cost of products sold (exclusive of lower of cost or market inventory adjustment)

 

 

5,474,522

 

 

 

5,641,131

Lower of cost or market inventory adjustment

 

 

(220,558

)

 

 

 

 

 

950,281

 

 

 

1,077,484

Add lower of cost or market inventory adjustment

 

 

(220,558

)

 

 

Refinery gross margin

 

$

729,723

 

 

$

1,077,484

 

 

 

 

 

Refining segment operating expenses

 

$

472,086

 

 

$

501,759

 

 

 

 

 

Produced barrels sold (BPD)

 

 

631,470

 

 

 

515,960

 

 

 

 

 

Refinery gross margin per produced barrel sold

 

$

12.70

 

 

$

23.20

Less average refinery operating expenses per produced barrel sold

 

 

8.22

 

 

 

10.81

Net operating margin per produced barrel sold

 

$

4.48

 

 

$

12.39

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,

 

 

2024

 

2023

 

 

(In thousands, except per gallon amounts)

Renewables segment sales and other revenues

 

$

239,559

 

 

$

298,016

 

Renewables segment cost of products sold (exclusive of lower of cost or market inventory adjustment)

 

 

230,273

 

 

 

262,738

 

Lower of cost or market inventory adjustment

 

 

1,188

 

 

 

47,597

 

 

 

 

8,098

 

 

 

(12,319

)

Add (subtract) lower of cost or market inventory adjustment

 

 

1,188

 

 

 

47,597

 

Renewables gross margin

 

$

9,286

 

 

$

35,278

 

 

 

 

 

 

Renewables segment operating expense

 

$

26,461

 

 

$

31,371

 

 

 

 

 

 

Produced gallons sold (in thousand gallons)

 

 

61,172

 

 

 

46,012

 

 

 

 

 

 

Renewables gross margin per produced gallon sold

 

$

0.15

 

 

$

0.77

 

Less average renewables operating expense per produced gallon sold

 

 

0.43

 

 

 

0.68

 

Net operating margin per produced gallon sold

 

$

(0.28

)

 

$

0.09

 

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,

 

 

2024

 

2023

 

 

(In thousands, except per gallon amounts)

Marketing segment sales and other revenues

 

$

775,807

 

$

937,385

Marketing segment cost of products sold

 

 

752,530

 

 

924,049

Marketing gross margin

 

$

23,277

 

$

13,336

 

 

 

 

 

Sales volumes (in thousand gallons)

 

 

321,010

 

 

328,407

 

 

 

 

 

Marketing segment gross margin per gallon sold

 

$

0.07

 

$

0.04

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, HEP's share of Osage environmental remediation costs and acquisition integration and regulatory costs. 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,

 

 

2024

 

2023

 

 

(In thousands, except per share amounts)

Consolidated

 

 

 

 

GAAP:

 

 

 

 

Income before income taxes

 

$

402,096

 

 

$

484,705

Income tax expense

 

 

85,474

 

 

 

99,700

Net income

 

 

316,622

 

 

 

385,005

Less net income attributable to noncontrolling interest

 

 

1,958

 

 

 

31,739

Net income attributable to HF Sinclair stockholders

 

 

314,664

 

 

 

353,266

 

 

 

 

 

Non-GAAP adjustments to arrive at adjusted results:

 

 

 

 

Lower of cost or market inventory valuation adjustment

 

 

(219,370

)

 

 

47,597

HEP's share of Osage environmental remediation costs

 

 

 

 

 

870

Acquisition integration and regulatory costs

 

 

1,048

 

 

 

3,910

Total adjustments to income before income taxes

 

 

(218,322

)

 

 

52,377

Adjustment to income tax expense (1)

 

 

(45,921

)

 

 

11,096

Adjustment to net income attributable to noncontrolling interest

 

 

 

 

 

460

Total adjustments, net of tax

 

 

(172,401

)

 

 

40,821

 

 

 

 

 

Adjusted results - Non-GAAP:

 

 

 

 

Adjusted income before income taxes

 

 

183,774

 

 

 

537,082

Adjusted income tax expense (2)

 

 

39,553

 

 

 

110,796

Adjusted net income

 

 

144,221

 

 

 

426,286

Less net income attributable to noncontrolling interest

 

 

1,958

 

 

 

32,199

Adjusted net income attributable to HF Sinclair stockholders

 

$

142,263

 

 

$

394,087

Adjusted earnings per share - diluted (3)

 

$

0.71

 

 

$

2.00

(1)

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

 

 

Three Months Ended

March 31,

 

 

2024

 

2023

 

 

(In thousands)

Non-GAAP income tax expense (2)

 

$

39,553

 

 

$

110,796

Add GAAP income tax expense

 

 

85,474

 

 

 

99,700

Non-GAAP adjustment to income tax expense

 

$

(45,921

)

 

$

11,096

(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

March 31,

 

 

2024

 

2023

 

 

(In thousands)

GAAP:

 

 

 

 

Income before income taxes

 

$

402,096

 

 

$

484,705

 

Income tax expense

 

$

85,474

 

 

$

99,700

 

Effective tax rate for GAAP financial statements

 

 

21.3

%

 

 

20.6

%

Adjusted - Non-GAAP:

 

 

 

 

Effect of Non-GAAP adjustments

 

 

0.2

%

 

 

%

Effective tax rate for adjusted results

 

 

21.5

%

 

 

20.6

%

 

Contacts

Atanas H. Atanasov, Executive Vice President and Chief Financial Officer

Craig Biery, Vice President, Investor Relations

HF Sinclair Corporation

214-954-6510

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