10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________________

FORM 10-Q

_________________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from    __________   to   ____________         

Commission File Number 001-41325

_________________________________________________________________

HF SINCLAIR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	87-2092143
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2828 N. Harwood, Suite 1300
Dallas, Texas	75201
(Address of principal executive offices)	(Zip Code)

(214) 871-3555

(Registrant’s telephone number, including area code)

_________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.01 par value	DINO	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

192,307,059 shares of Common Stock, par value $.01 per share, were outstanding on April 28, 2023.

HF SINCLAIR CORPORATION

INDEX

	Page
Forward-Looking Statements	3
Definitions	5
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 2023 (Unaudited) and December 31, 2022	6
Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31, 2023 and 2022	7
Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended March 31, 2023 and 2022	8
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2023 and 2022	9
Consolidated Statements of Equity (Unaudited)
Three Months Ended March 31, 2023 and 2022	10
Notes to Consolidated Financial Statements (Unaudited)	11
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles	50
Item 4. Controls and Procedures	53
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	54
Item 1A. Risk Factors	55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 6. Exhibits	57
Signatures	58

2

FORWARD-LOOKING STATEMENTS

On March 14, 2022 (the “Closing Date”), HollyFrontier Corporation (“HollyFrontier”) and Holly Energy Partners, L.P. (“HEP”) announced the establishment of HF Sinclair Corporation, a Delaware corporation (“HF Sinclair”), as the new parent holding company of HollyFrontier and HEP and their subsidiaries, and the completion of their respective acquisitions (the “Sinclair Transactions”) of Sinclair Oil Corporation (now known as Sinclair Oil LLC, “Sinclair Oil”) and Sinclair Transportation Company LLC (“STC”) from The Sinclair Companies (now known as REH Company and referred to herein as “REH Company”).

References herein to HF Sinclair, “we,” “our,” “ours,” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier and its consolidated subsidiaries and do not include Sinclair Holding LLC, STC or their respective consolidated subsidiaries (collectively, the “Acquired Sinclair Businesses”). References herein to HF Sinclair, “we,” “our,” “ours,” and “us” with respect to time periods from and after March 14, 2022 include the operations of the Acquired Sinclair Businesses. Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to March 31, 2023 includes the combined business operations of HollyFrontier and its consolidated subsidiaries and the Acquired Sinclair Businesses.

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. All statements, other than statements of historical fact included in this Form 10-Q, including, but not limited to, those under “Results of Operations,” “Liquidity and Capital Resources” and “Risk Management” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and those in Part II, Item 1 “Legal Proceedings” are forward-looking statements. 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. These statements are 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. Unless specifically noted, all statements concerning our expectations for future results of operations are based on forecasts for our existing operations and do not include the potential impact of any future acquisitions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove to be correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in these statements. Any differences could be caused by a number of factors including, but not limited to:

•the negotiation and execution, and the terms and conditions, of a definitive agreement relating to the Proposed HEP Transaction (defined below) and the ability of HF Sinclair or HEP to enter into or consummate such agreement;

•the risk that the Proposed HEP Transaction does not occur;

•negative effects from the pendency of the Proposed HEP Transaction;

•failure to obtain the required approvals for the Proposed HEP Transaction;

•the time required to consummate the Proposed HEP Transaction;

•the focus of management time and attention on the Proposed HEP Transaction and other disruptions arising from the Proposed HEP Transaction;

•limitations on our ability to effectuate share repurchases due to market conditions and corporate, tax, regulatory and other considerations;

•our and HEP’s ability to successfully integrate the Acquired Sinclair Businesses with our existing operations and fully realize the expected synergies of the Sinclair Transactions or on the expected timeline;

•our ability to successfully integrate the operation of the Puget Sound refinery with our 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 our 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;

3

•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, 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 our financing;

•the effectiveness of our capital investments and marketing strategies;

•our and HEP’s efficiency in carrying out and consummating construction projects, including our ability to complete announced capital projects on time and within capital guidance;

•our and HEP’s ability to timely obtain or maintain permits, including those necessary for operations or capital projects;

•our ability 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 our refined products and create instability in the financial markets that could restrict our 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, and

•other financial, operational and legal risks and uncertainties detailed from time to time in our and HEP’s Securities Exchange Commission filings.

Cautionary statements identifying important factors that could cause actual results to differ materially from our expectations are set forth in this Form 10-Q, including without limitation the forward-looking statements that are referred to above. You should not put any undue reliance on any forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth under the heading “Risk Factors” included in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2022 and in conjunction with the discussion in this Form 10-Q in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings “Outlook” and “Liquidity and Capital Resources.” All forward-looking statements included in this Form 10-Q and all subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these 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.

4

DEFINITIONS

Within this report, the following terms have these specific meanings:

“BPD” means the number of barrels per calendar day of crude oil or petroleum products.

“BPSD” means the number of barrels per stream day (barrels of capacity in a 24 hour period) of crude oil or petroleum products.

“Base oil” is a lubricant grade oil initially produced from refining crude oil or through chemical synthesis that is used in producing lubricant products such as lubricating greases, motor oil and metal processing fluids.

“Black wax crude oil” is a low sulfur, low gravity crude oil produced in the Uintah Basin in Eastern Utah that has certain characteristics that require specific facilities to transport, store and refine into transportation fuels.

“Cracking” means the process of breaking down larger, heavier and more complex hydrocarbon molecules into simpler and lighter molecules.

“Crude oil distillation” means the process of distilling vapor from liquid crudes, usually by heating, and condensing the vapor slightly above atmospheric pressure turning it back to liquid in order to purify, fractionate or form the desired products.

“FCC,” or fluid catalytic cracking, means a refinery process that breaks down large complex hydrocarbon molecules into smaller more useful ones using a circulating bed of catalyst at relatively high temperatures.

“LPG” means liquid petroleum gases.

“Lubricant” or “lube” means a solvent neutral paraffinic product used in commercial heavy duty engine oils, passenger car oils and specialty products for industrial applications such as heat transfer, metalworking, rubber and other general process oil.

“MMBTU” means one million British thermal units.

“Refinery gross margin” means the difference between average net sales price and average cost per barrel sold. This does not include the associated depreciation and amortization costs.

“Renewable diesel” means a diesel fuel derived from renewable feedstock such as vegetable oil or animal fats that is produced through various processes, most commonly through hydrotreating, reacting the feedstock with hydrogen under temperatures and pressure in the presence of a catalyst.

“RINs” means renewable identification numbers and refers to serial numbers assigned to credits generated from renewable fuel production under the Environmental Protection Agency’s Renewable Fuel Standard (“RFS”) regulations, which require blending renewable fuels into the nation’s fuel supply. In lieu of blending, refiners may purchase these transferable credits in order to comply with the regulations.

“Sour crude oil” means crude oil containing quantities of sulfur greater than 0.4 percent by weight, while “sweet crude oil” means crude oil containing quantities of sulfur equal to or less than 0.4 percent by weight.

“Vacuum distillation” means the process of distilling vapor from liquid crudes, usually by heating, and condensing the vapor below atmospheric pressure turning it back to a liquid in order to purify, fractionate or form the desired products.

“White oil” is an extremely pure, highly-refined petroleum product that has a wide variety of applications ranging from pharmaceutical to cosmetic products.

“WTI” means West Texas Intermediate and is a grade of crude oil used as a common benchmark in oil pricing. WTI is a sweet crude oil and has a relatively low density.

5

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HF SINCLAIR CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (HEP:$7,105 and $10,917, respectively)	$	1,364,930	$	1,665,066
Accounts receivable: Product, transportation and other (HEP: $15,435 and $16,344, respectively)	1,358,265		1,626,199
Crude oil resales	259,153		76,950
	1,617,418		1,703,149
Inventories: Crude oil and refined products	3,112,713		2,853,425
Materials, supplies and other (HEP: $1,192 and $1,246, respectively)	336,108		361,103
	3,448,821		3,214,528
Income taxes receivable	43,239		53,563
Prepayments and other (HEP: $4,851 and $5,699, respectively)	84,121		112,013
Total current assets	6,558,529		6,748,319
Properties, plants and equipment, at cost (HEP: $2,190,097 and $2,173,248, respectively)	10,220,164		10,146,652
Less accumulated depreciation (HEP: $(781,790) and $(761,210), respectively)	(3,563,848)		(3,457,747)
	6,656,316		6,688,905
Operating lease right-of-use assets (HEP: $65,421 and $66,382, respectively)	330,942		351,068
Other assets: Turnaround costs	495,628		376,158
Goodwill (HEP: $431,985 and $431,985, respectively)	2,978,504		2,978,315
Intangibles and other (HEP: $361,951 and $360,768, respectively)	986,089		982,718
	4,460,221		4,337,191
Total assets	$	18,006,008	$	18,125,483
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable (HEP: $18,352 and $27,199, respectively)	$	2,109,245	$	2,334,107
Income taxes payable	59,536		7,818
Operating lease liabilities (HEP: $4,160 and $4,204, respectively)	108,499		109,926
Current debt	307,256		306,959
Accrued liabilities (HEP: $28,953 and $39,110, respectively)	533,198		486,719
Total current liabilities	3,117,734		3,245,529
Long-term debt (HEP: $1,540,385 and $1,556,334, respectively)	2,932,989		2,948,513
Noncurrent operating lease liabilities (HEP: $61,631 and $62,550, respectively)	234,006		254,215
Deferred income taxes (HEP: $374 and $374, respectively)	1,278,061		1,262,165
Other long-term liabilities (HEP: $53,257 and $55,373, respectively)	392,691		397,489
Equity:
HF Sinclair stockholders’ equity:
Preferred stock, $1.00 par value – 5,000,000 shares authorized; none issued	—		—
Common stock $.01 par value – 320,000,000 shares authorized; 223,231,546 shares issued as of March 31, 2023 and December 31, 2022	2,232		2,232
Additional capital	6,469,814		6,468,775
Retained earnings	4,395,531		4,130,252
Accumulated other comprehensive loss	(20,223)		(22,013)
Common stock held in treasury, at cost – 30,924,520 and 26,152,344 shares as of March 31, 2023 and December 31, 2022, respectively	(1,576,689)		(1,335,431)
Total HF Sinclair stockholders’ equity	9,270,665		9,243,815
Noncontrolling interest	779,862		773,757
Total equity	10,050,527		10,017,572
Total liabilities and equity	$	18,006,008	$	18,125,483

Parenthetical amounts represent asset and liability balances attributable to Holly Energy Partners, L.P. (“HEP”) as of March 31, 2023 and December 31, 2022. HEP is a variable interest entity.

See accompanying notes.

6

HF SINCLAIR CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended March 31,
	2023		2022
Sales and other revenues	$	7,565,142	$	7,458,750
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization):
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	6,104,057		6,502,012
Lower of cost or market inventory valuation adjustment	47,597		(8,551)
	6,151,654		6,493,461
Operating expenses (exclusive of depreciation and amortization)	639,383		477,434
Selling, general and administrative expenses (exclusive of depreciation and amortization)	95,913		110,422
Depreciation and amortization	173,983		144,601
Total operating costs and expenses	7,060,933		7,225,918
Income from operations	504,209		232,832
Other income (expense):
Earnings of equity method investments	3,882		3,626
Interest income	19,935		997
Interest expense	(45,822)		(34,859)
Gain on foreign currency transactions	870		139
Gain on sale of assets and other	1,631		3,895
	(19,504)		(26,202)
Income before income taxes	484,705		206,630
Income tax expense (benefit):
Current	84,395		46,263
Deferred	15,305		(24,934)
	99,700		21,329
Net income	385,005		185,301
Less net income attributable to noncontrolling interest	31,739		25,327
Net income attributable to HF Sinclair stockholders	$	353,266	$	159,974
Earnings per share:
Basic	$	1.79	$	0.90
Diluted	$	1.79	$	0.90
Average number of common shares outstanding:
Basic	195,445		175,081
Diluted	195,445		175,081

See accompanying notes.

7

HF SINCLAIR CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2023		2022
Net income	$	385,005	$	185,301
Other comprehensive income:
Foreign currency translation adjustment	2,926		1,721
Hedging instruments:
Change in fair value of cash flow hedging instruments	270		(4,962)
Reclassification adjustments to net income on settlement of cash flow hedging instruments	1		5,288
Net unrealized gain on hedging instruments	271		326
Pension and other post-retirement benefit obligations:
Pension plans gain reclassified to net income	(45)		(45)
Post-retirement healthcare plans gain reclassified to net income	(918)		(870)
Retirement restoration plan loss reclassified to net income	3		9
Net change in pension and other post-retirement benefit obligations	(960)		(906)
Other comprehensive income before income taxes	2,237		1,141
Income tax expense	447		225
Other comprehensive income	1,790		916
Total comprehensive income	386,795		186,217
Less noncontrolling interest in comprehensive income	31,739		25,327
Comprehensive income attributable to HF Sinclair stockholders	$	355,056	$	160,890

See accompanying notes.

8

HF SINCLAIR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	385,005	$	185,301
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	173,983		144,601
Lower of cost or market inventory valuation adjustment	47,597		(8,551)
Earnings of equity method investments, inclusive of distributions	(1,799)		(520)
Gain on sale of assets	(414)		(2,669)
Deferred income taxes	15,305		(24,934)
Equity-based compensation expense	3,325		7,831
Change in fair value – derivative instruments	15,402		(226)
(Increase) decrease in current assets:
Accounts receivable	86,369		(419,609)
Inventories	(280,263)		(267,461)
Income taxes receivable	10,494		(3,026)
Prepayments and other	28,007		(12,334)
Increase (decrease) in current liabilities:
Accounts payable	(220,018)		790,060
Income taxes payable	51,697		12,284
Accrued liabilities	32,424		113,802
Turnaround expenditures	(163,734)		(45,156)
Other, net	(5,675)		(8,357)
Net cash provided by operating activities	177,705		461,036
Cash flows from investing activities:
Additions to properties, plants and equipment	(92,455)		(144,149)
Additions to properties, plants and equipment – HEP	(7,614)		(14,147)
Acquisitions, net of cash acquired	—		(231,201)
Proceeds from sale of assets	1,572		2,617
HEP investment in Osage Pipe Line Company LLC	(2,500)		—
Distributions from equity method investments in excess of equity earnings	760		1,704
Net cash used for investing activities	(100,237)		(385,176)
Cash flows from financing activities:
Borrowings under credit agreements	42,000		360,000
Repayments under credit agreements	(58,500)		(58,500)
Purchase of treasury stock	(245,566)		(352)
Dividends	(87,987)		—
Distributions to noncontrolling interests	(25,986)		(17,003)
Payments on finance leases	(3,071)		(2,611)
Other, net	—		(148)
Net cash provided by (used for) financing activities	(379,110)		281,386
Effect of exchange rate on cash flow	1,506		588
Cash and cash equivalents:
Increase (decrease) for the period	(300,136)		357,834
Beginning of period	1,665,066		234,444
End of period	$	1,364,930	$	592,278
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	(25,934)	$	(18,986)
Income taxes, net	$	(22,010)	$	(40,098)
Increase (decrease) in accrued and unpaid capital expenditures	$	(17,819)	$	(21,738)

See accompanying notes.

9

HF SINCLAIR CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands except per share data)

	Three Months Ended March 31, 2023
	Common Stock			Additional Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Non-controlling Interest		Total Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2022	223,231	$	2,232	$	6,468,775	$	4,130,252	$	(22,013)	26,152	$	(1,335,431)	$	773,757	$	10,017,572
Net income	—	—		—		353,266		—		—	—		31,739		385,005
Dividends ($0.45 declared per common share)	—	—		—		(87,987)		—		—	—		—		(87,987)
Other comprehensive income, net of tax	—	—		—		—		1,790		—	—		—		1,790
Issuance of common shares under incentive compensation plans	—	—		(1,934)		—		—		(38)	1,934		—		—
Equity-based compensation	—	—		2,973		—		—		—	—		352		3,325
Purchase of treasury stock, inclusive of excise tax	—	—		—		—		—		4,810	(243,192)		—		(243,192)
Distributions to noncontrolling interest holders	—	—		—		—		—		—	—		(25,986)		(25,986)
Balance at March 31, 2023	223,231	$	2,232	$	6,469,814	$	4,395,531	$	(20,223)	30,924	$	(1,576,689)	$	779,862	$	10,050,527

	Three Months Ended March 31, 2022
	Common Stock			Additional Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock			Non-controlling Interest		Total Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2021	256,046	$	2,560	$	4,220,075	$	4,413,836	$	2,671	93,045	$	(2,951,257)	$	606,580	$	6,294,465
Net income	—	—		—		159,974		—		—	—		25,327		185,301
Other comprehensive income, net of tax	—	—		—		—		916		—	—		—		916
Issuance of common shares for HFC Transactions	60,230	602		2,148,406		—		—		—	—		—		2,149,008
Issuance of common shares under incentive compensation plans	—	—		(282)		—		—		(7)	282		—		—
Equity-based compensation	—	—		7,211		—		—		—	—		620		7,831
Purchase of treasury stock	—	—		—		—		—		9	(352)		—		(352)
Retirement of treasury stock	(93,045)	(930)		—		(2,950,324)		—		(93,045)	2,951,254		—		—
Distributions to noncontrolling interest holders	—	—		—		—		—		—	—		(17,003)		(17,003)
Purchase of HEP units for equity grants	—	—		—		—		—		—	—		(57)		(57)
Equity attributable to HEP common unit issuance, net of tax	—	—		95,047		—		—		—	—		223,471		318,518
Acquisition of remaining UNEV interests	—	—		16,537		—		—		—	—		(78,187)		(61,650)
Balance at March 31, 2022	223,231	$	2,232	$	6,486,994	$	1,623,486	$	3,587	2	$	(73)	$	760,751	$	8,876,977

See accompanying notes.

10

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1:Description of Business and Presentation of Financial Statements

On March 14, 2022 (the “Closing Date”), HollyFrontier Corporation (“HollyFrontier”) and Holly Energy Partners, L.P. (“HEP”) announced the establishment of HF Sinclair Corporation, a Delaware corporation (“HF Sinclair”), as the new parent holding company of HollyFrontier and HEP and their subsidiaries, and the completion of their respective acquisitions of Sinclair Oil Corporation (now known as Sinclair Oil LLC, “Sinclair Oil”) and Sinclair Transportation Company LLC (“STC”) from The Sinclair Companies (now known as REH Company and referred to herein as “REH Company”). On the Closing Date, pursuant to that certain Business Combination Agreement, dated as of August 2, 2021 (as amended on March 14, 2022, the “Business Combination Agreement”), by and among HollyFrontier, HF Sinclair, Hippo Merger Sub, Inc., a wholly owned subsidiary of HF Sinclair (“Parent Merger Sub”), REH Company, and Hippo Holding LLC (now known as Sinclair Holding LLC), a wholly owned subsidiary of REH Company (the “Target Company”), HF Sinclair completed its previously announced acquisition of the Target Company by effecting (a) a holding company merger in accordance with Section 251(g) of the Delaware General Corporation Law whereby HollyFrontier merged with and into Parent Merger Sub, with HollyFrontier surviving such merger as a direct wholly owned subsidiary of HF Sinclair (the “HFC Merger”) and (b) immediately following the HFC Merger, a contribution whereby REH Company contributed all of the equity interests of the Target Company to HF Sinclair in exchange for 60,230,036 shares of HF Sinclair common stock, resulting in the Target Company becoming a direct wholly owned subsidiary of HF Sinclair (the “HFC Transactions”). At the effective time of the HFC Merger, HollyFrontier became a wholly owned subsidiary of HF Sinclair, and all of HollyFrontier’s outstanding shares were automatically converted into equivalent corresponding shares of HF Sinclair. Pursuant to the HFC Merger, HF Sinclair became the successor issuer to HollyFrontier pursuant to Rule 12g-3(a) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and replaced HollyFrontier as the public company trading on the New York Stock Exchange (“NYSE”) under the symbol “DINO.” See Note 2 and Note 4 for additional information.

References herein to HF Sinclair, “we,” “our,” “ours,” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier and its consolidated subsidiaries and do not include Sinclair Holding LLC, STC or their respective consolidated subsidiaries (collectively, the “Acquired Sinclair Businesses”). References herein to HF Sinclair, “we,” “our,” “ours,” and “us” with respect to time periods from and after March 14, 2022 include the operations of the Acquired Sinclair Businesses. Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to March 31, 2023 includes the combined business operations of HollyFrontier and the Acquired Sinclair Businesses.

In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include HEP and its subsidiaries as consolidated subsidiaries of HF Sinclair, unless when used in disclosures of transactions or obligations between HEP and HF Sinclair or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HF Sinclair. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries.

We are 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. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah and market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. We supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries. Through our subsidiaries, we produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. At March 31, 2023, we owned a 47% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States.

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

We have prepared these consolidated financial statements without audit. In management’s opinion, these consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our consolidated financial position as of March 31, 2023, the consolidated results of operations, comprehensive income and statements of equity for the three months ended March 31, 2023 and 2022 and consolidated cash flows for the three months ended March 31, 2023 and 2022 in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Although certain notes and other information required by generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 that has been filed with the SEC.

Accounts Receivable: Our accounts receivable primarily consist of amounts due from customers that are primarily from sales of refined products and renewable diesel. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for expected credit losses based on our historical loss experience as well as expected credit losses from current economic conditions and management’s expectations of future economic conditions. Credit losses are charged to the allowance for expected credit losses when an account is deemed uncollectible. Our allowance for expected credit losses was $7.6 million at March 31, 2023 and $7.7 million at December 31, 2022.

Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. Inventories related to our renewables business are stated at the lower of cost, using the LIFO method for feedstock and unfinished and finished renewable products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

Inventories of our Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value.

Inventories consisting of process chemicals, materials and maintenance supplies and RINs are stated at the lower of weighted-average cost or net realizable value.

Leases: At inception, we determine if an arrangement is or contains a lease. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our payment obligation under the leasing arrangement. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable.

Operating leases are recorded in “Operating lease right-of-use assets” and current and noncurrent “Operating lease liabilities” on our consolidated balance sheet. Finance leases are included in “Properties, plants and equipment, at cost” and “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheet.

Our lease term includes an option to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet. For certain equipment leases, we apply a portfolio approach for the operating lease ROU assets and liabilities. Also, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. In addition, HEP, as a lessor, does not separate the non-lease (service) component for operating leases in contracts in which the lease component is the dominant component. HEP treats these combined components as a lease. HEP bifurcates the consideration received for sales-type lease contracts between lease and service revenue, with the service component accounted for within the scope of Accounting Standards Codification 606.

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Revenue Recognition: Revenues on refined product, branded fuel sales, renewable diesel, and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold.

Our lubricants and specialty products business has sales agreements with marketers and distributors that provide certain rights of return or provisions for the repurchase of products previously sold to them. Under these agreements, revenues and cost of revenues are deferred until the products have been sold to end customers. Our lubricants and specialty products business also has agreements that create an obligation to deliver products at a future date for which consideration has already been received and recorded as deferred revenue. This revenue is recognized when the products are delivered to the customer.

HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain throughput agreements that specify minimum volume requirements, whereby HEP bills a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. If there are no future performance obligations, HEP recognizes these deficiency payments as revenue. In certain of these throughput agreements, a customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. HEP recognizes the service portion of these deficiency payments as revenue when HEP does not expect it will be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer.

Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.

Foreign Currency Translation: Assets and liabilities recorded in foreign currencies are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income.

We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the consolidated statements of operations. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to Corporate and Other. See Note 15 for additional information on our segments.

Income Taxes: Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized. We account for U.S. tax on global intangible low-taxed income in the period in which it is incurred.

Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.

For the three months ended March 31, 2023, we recorded an income tax expense of $99.7 million compared to $21.3 million for the three months ended March 31, 2022. This increase was principally due to higher pre-tax income during the three months ended March 31, 2023 compared to the same period of 2022. Our effective tax rates were 20.6% and 10.3% for the three months ended March 31, 2023 and 2022, respectively. The difference between the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2023 is primarily due to the impact of federal tax credits and the relationship between pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes. The difference in the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2022 was primarily due to the impact of federal tax credits and the decrease in the state tax rate applied to our deferred tax assets and liabilities as a result of the Sinclair Transaction.

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Inventory Repurchase Obligations: We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. For the three months ended March 31, 2023 and 2022, we received proceeds of $6.3 million and $11.0 million, respectively, and subsequently repaid $7.0 million and $9.9 million, respectively, under these sell / buy transactions.

NOTE 2:Acquisitions

On March 14, 2022, pursuant to the Business Combination Agreement, HF Sinclair completed its acquisition of the Target Company by effecting (a) the HFC Merger and (b) immediately following the HFC Merger, a contribution whereby REH Company contributed all of the equity interests of the Target Company to HF Sinclair in exchange for shares of HF Sinclair, resulting in the Target Company becoming a direct wholly owned subsidiary of HF Sinclair.

In connection with the closing of the HFC Transactions, HF Sinclair issued 60,230,036 shares of HF Sinclair common stock, par value $0.01 per share, to REH Company, representing 27% of the pro forma equity of HF Sinclair with a value of approximately $2,149 million based on HollyFrontier’s fully diluted shares of common stock outstanding and closing stock price on March 11, 2022. Pursuant to the Business Combination Agreement, REH Company made a $77.5 million cash payment to HF Sinclair, inclusive of final working capital adjustments, which reduced the aggregate transaction value to approximately $2,072 million. Of the 60,230,036 shares of HF Sinclair common stock, 2,570,000 shares are currently held in escrow to secure REH Company’s renewable identification numbers (“RINs”) credit obligations under Section 6.22 of the Business Combination Agreement. Additionally, on the Closing Date, and immediately prior to the consummation of the HFC Transactions, HEP completed its acquisition of STC, REH Company’s integrated crude and refined products midstream business, and issued 21,000,000 common limited partner units and paid cash consideration of $329.0 million, inclusive of final working capital adjustments, to REH Company in exchange for all the outstanding equity interests of STC (the “HEP Transaction” and together with the HFC Transactions, the “Sinclair Transactions”). Of these 21,000,000 common limited partner units, 5,290,000 units were held in escrow and were released to REH Company in April 2023 upon their satisfaction of the corresponding RINs credit obligations to HF Sinclair to secure REH Company’s RINs credit obligations under Section 6.22 of the Business Combination Agreement.

The Sinclair Transactions were accounted for as a business combination using the acquisition method of accounting, with the assets acquired and liabilities assumed at their respective acquisition date fair values at the effective date, with the excess consideration recorded as goodwill.

The following tables present the purchase consideration and final purchase price allocation of the assets acquired and liabilities assumed on March 14, 2022:

Purchase Consideration (in thousands except for per share amounts)
Shares of HF Sinclair common stock issued	60,230
Closing price per share of HFC common stock (1)	$	35.68
Purchase consideration paid in HF Sinclair common stock	2,149,008
Shares of HEP common units issued to Sinclair	21,000
Closing price per share of HEP common units (2)	$	16.62
Purchase consideration paid in HEP common units	349,020
Total equity consideration	2,498,028
Cash consideration paid by HEP	328,955
Cash consideration received by HFC	(77,507)
Total cash consideration	251,448
Total purchase consideration	$	2,749,476

(1)Based on the HollyFrontier closing stock price on March 11, 2022.

(2)Based on the HEP closing unit price on March 11, 2022.

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

	(In thousands)
Assets Acquired
Accounts receivable	$	467,530
Inventories: Crude oil and refined products	906,461
Inventories: Materials, supplies and other	39,350
Properties, plants and equipment	1,242,549
Operating lease right-of-use assets	4,585
Other assets: Intangibles and other	495,621
Total assets acquired	$	3,156,096
Liabilities Assumed
Accounts payable	$	564,385
Operating lease liabilities	1,030
Accrued liabilities	84,298
Noncurrent operating lease liabilities	3,554
Deferred income taxes	351,189
Other long-term liabilities	88,098
Total liabilities assumed	$	1,092,554
Net assets acquired	$	2,063,542
Goodwill	$	685,934

The final purchase price allocation resulted in the recognition of $685.9 million in goodwill. Our Refining, Renewables, Marketing and HEP segments recognized $244.0 million, $159.0 million, $163.8 million and $119.1 million of goodwill, respectively. The goodwill recognized is primarily attributable to operating and administrative synergies and net deferred tax liabilities arising from the differences between the estimated fair values of assets and liabilities and the tax basis of these assets and liabilities. There are qualitative assumptions of long-term factors that this acquisition creates for our stockholders, including increased scale and diversification that is expected to drive growth through the expanded refining and renewables businesses and the addition of an integrated branded wholesale distribution network. This goodwill is not deductible for income tax purposes.

The fair value measurements for properties, plants and equipment were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The fair value of properties, plants and equipment was based on the combination of the cost and market approaches. Key assumptions in the cost approach include determining the replacement cost by evaluating recent published data and adjusting replacement cost for physical deterioration, functional, and economic obsolescence. We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties. The fair value of crude oil and refined products inventory was based on market prices as of the acquisition date.

Intangibles include the Sinclair trade name, fuel agreements and customer relationships totaling $221.4 million that are being amortized on a straight-line basis over a range of four to twenty-year period. The intangible assets were valued using the income approach.

The fair value of equity method investments totaled $234.3 million and was based on a combination of valuation methods including discounted cash flows and the guideline public company method.

Accrued liabilities include $70.6 million of RINs credit obligations, including 2022 obligations through the Closing Date, which were valued based on market prices for RINs at the effective date, a Level 2 input. REH Company is financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing. This receivable totaled $68.4 million and was valued based on market prices for RINs at the effective date.

15

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

During the three months ended March 31, 2023, we sold $15.7 million of RINs to REH Company based on applicable market prices.

All other fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The fair values of all other current receivable and payables were equivalent to their carrying values due to their short-term nature.

During the three months ended March 31, 2023 and 2022, we incurred $3.9 million and $25.0 million in incremental direct acquisition and integration costs that principally relate to legal, advisory and other professional fees and are presented as selling, general and administrative expenses in our statements of operations.

The following unaudited pro forma combined condensed financial data for the three months ended March 31, 2022 was derived from our historical financial statements giving effect to the Sinclair Transactions as if they had occurred on January 1, 2021. The below information reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including the depreciation of the fair-valued properties, plants and equipment acquired in the Sinclair Transactions and the estimated tax impacts of the pro forma adjustments.

Additionally, pro forma earnings include certain non-recurring charges, the substantial majority of which consist of transaction costs related to financial advisors, legal advisors and professional accounting services.

The pro forma results of operations do not include any cost savings or other synergies that may result from the Sinclair Transactions. The pro forma combined condensed financial data has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Sinclair Transactions taken place on January 1, 2021 and is not intended to be a projection of future results.

	Three Months Ended March 31, 2022
	(in thousands)
Sales and other revenues	$	8,464,249
Net income attributable to HF Sinclair stockholders	$	71,266

NOTE 3:Holly Energy Partners

HEP is a publicly held master limited partnership that owns and / or operates logistic and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations, as well as other third-party refineries, in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. Additionally, as of March 31, 2023, HEP owned a 50% ownership interest in each of Osage Pipe Line Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas (the “Osage Pipeline”); Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”) and Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), the owner of a crude oil storage terminal in Cushing, Oklahoma and a pipeline that runs from Cushing, Oklahoma to our Tulsa West and Tulsa East facilities (collectively, the “Tulsa Refineries”); a 25.06% ownership interest in Saddle Butte Pipeline III, LLC, the owner of a pipeline from the Powder River Basin to Casper, Wyoming (the “Saddle Butte Pipeline”); and a 49.995% ownership interest in Pioneer Investments Corp., the owner of a pipeline from Sinclair, Wyoming to the North Salt Lake City, Utah Terminal (the “Pioneer Pipeline”).

At March 31, 2023, we owned a 47% limited partner interest and a non-economic general partner interest in HEP. As the general partner of HEP, we have the sole ability to direct the activities that most significantly impact HEP’s financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP.

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

HEP generates revenues by charging tariffs for transporting petroleum products and crude oil through its pipelines, by charging fees for terminalling refined products and other hydrocarbons, and by storing and providing other services at its storage tanks and terminals. Under our long-term transportation agreements with HEP (discussed further below), we accounted for 82% of HEP’s total revenues for the three months ended March 31, 2023. We do not provide financial or equity support through any liquidity arrangements and / or debt guarantees to HEP.

HEP has outstanding debt under its senior secured revolving credit agreement and its senior notes. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. See Note 10 for a description of HEP’s debt obligations.

HEP has risk associated with its operations. If a major customer of HEP were to terminate its contracts or fail to meet desired shipping or throughput levels for an extended period of time, revenue would be reduced and HEP could suffer substantial losses to the extent that a new customer is not found. In the event that HEP incurs a loss, our operating results will reflect HEP’s loss, net of intercompany eliminations, to the extent of our ownership interest in HEP at that point in time.

Sinclair Transportation Company Acquisition

On August 2, 2021, HEP, REH Company and STC, a wholly owned subsidiary of REH Company, entered into a contribution agreement (as amended on March 14, 2022, the “Contribution Agreement”), which closed on March 14, 2022. Pursuant to the Contribution Agreement, HEP acquired all of the outstanding equity interests of STC in exchange for 21,000,000 newly issued common limited partner units of HEP with a value of approximately $349.0 million based on HEP’s fully diluted common limited partner units outstanding and HEP’s closing unit price on March 11, 2022, and cash consideration equal to $329.0 million, inclusive of final working capital adjustments pursuant to the Contribution Agreement for an aggregate transaction value of $678.0 million.

As a result of this common unit issuance and our resulting HEP ownership change, we adjusted additional capital and equity attributable to HEP’s noncontrolling interest holders to reallocate HEP’s equity among its unitholders.

As part of HEP’s acquisition of STC, HEP acquired the 25.0% non-operated interest of UNEV Pipeline, LLC (“UNEV”) not already owned by HEP and as such, UNEV, the owner of a pipeline running from Woods Cross, Utah to Las Vegas, Nevada and associated product terminals, became a wholly owned subsidiary of HEP.

Transportation Agreements

HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2024 through 2037. Under these agreements, we pay HEP fees to transport, store and process throughput volumes of refined products, crude oil and feedstocks on HEP's pipelines, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to HEP. Under these agreements, the agreed upon tariff rates are subject to annual tariff rate adjustments on July 1 at a rate based upon the percentage change in Producer Price Index or Federal Energy Regulatory Commission index. As of March 31, 2023, these agreements require minimum annualized payments to HEP of $456.6 million.

Our transactions with HEP and fees paid under our transportation agreements with HEP are eliminated and have no impact on our consolidated financial statements.

Lessor Accounting

Our consolidated statements of operations reflect lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor.

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Lease income recognized was as follows:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Operating lease revenues	$	4,634	$	3,127
Sales-type lease interest income	$	632	$	632
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable	$	705	$	361

NOTE 4:Revenues

Substantially all revenue-generating activities relate to sales of refined product, branded fuel, renewable diesel and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to HEP logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties.

Disaggregated revenues were as follows:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	4,507,894	$	5,301,036
Specialty lubricant products (2)	679,862		682,041
Asphalt, fuel oil and other products (3)	440,339		439,182
Total refined product revenues	5,628,095		6,422,259
Excess crude oil revenues (4)	710,897		682,597
Renewable diesel revenues (5)	202,413		28,313
Transportation and logistic services	26,416		27,944
Marketing revenues (6)	937,385		277,041
Other revenues (7)	59,936		20,596
Total sales and other revenues	$	7,565,142	$	7,458,750

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Refined product revenues by market
United States
Mid-Continent	$	2,007,156	$	2,909,468
Southwest	832,702		1,063,104
Rocky Mountains	2,197,827		1,858,487
Northeast	263,904		243,437
Canada	250,724		253,959
Europe, Asia and Latin America	75,782		93,804
Total refined product revenues	$	5,628,095	$	6,422,259

(1)Transportation fuels revenues are attributable to our Refining segment wholesale marketing of gasoline, diesel and jet fuel.

(2)Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

(3)Asphalt, fuel oil and other products revenues include revenues attributable to our Refining and Lubricants and Specialty Products segments of $386.8 million and $53.6 million, respectively, for the three months ended March 31, 2023, and $367.6 million and $71.6 million, respectively, for the three months ended March 31, 2022.

(4)Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.

(5)Renewable diesel revenues are attributable to our Renewables segment.

(6)Marketing revenues consist primarily of branded gasoline and diesel fuel sales.

(7)Other revenues are principally attributable to our Refining segment.

Our consolidated balance sheets reflect contract liabilities related to unearned revenues attributable to future service obligations under HEP’s third-party transportation agreements and production agreements from our Sonneborn operations. The following table presents changes to our contract liabilities:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Balance at January 1	$	10,722	$	9,278
Increase	5,159		7,664
Recognized as revenue	(5,744)		(8,197)
Balance at March 31	$	10,137	$	8,745

As of March 31, 2023, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialty products to be sold ratably at market prices through 2032. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under Accounting Standards Codification 606-10-50-14A. Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:

	Remainder of 2023	2024	2025	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	27,091	30,423	21,087	29,676	108,277

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HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Additionally, HEP has long-term contracts with third-party customers that specify minimum volumes of product to be transported through its pipelines and terminals that result in fixed-minimum annual revenues through 2033. Annual minimum revenues attributable to HEP’s third-party contracts as of March 31, 2023 are presented below:

	Remainder of 2023		2024		2025		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	12,261	$	17,075	$	8,226	$	33,636	$	71,198

NOTE 5:Fair Value Measurements

Our financial instruments measured at fair value on a recurring basis consist of derivative instruments and RINs receivable and credit obligations.

Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability, including assumptions about risk). GAAP categorizes inputs used in fair value measurements into three broad levels as follows:

•(Level 1) Quoted prices in active markets for identical assets or liabilities.

•(Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data.

•(Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs.

The carrying amounts of derivative instruments and RINs receivable and credit obligations at March 31, 2023 and December 31, 2022 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
March 31, 2023
Assets:
Commodity price swaps	$	2,624	$	—	$	2,624	$	—
Commodity forward contracts	724		—		724		—
RINs receivable (1)	75,724		—		75,724		—
Foreign currency forward contracts	11,757		—		11,757		—
Total assets	$	90,829	$	—	$	90,829	$	—
Liabilities:
NYMEX futures contracts	$	3,438	$	3,438	$	—	$	—
Commodity collar contracts	21,422		—		21,422		—
Commodity forward contracts	439		—		439		—
Foreign currency forward contracts	663		—		663		—
RINs credit obligations (1)	75,724		—		75,724		—
Total liabilities	$	101,686	$	3,438	$	98,248	$	—

20

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
December 31, 2022
Assets:
Commodity price swaps	$	342	$	—	$	342	$	—
Commodity forward contracts	2,949		—		2,949		—
RINs receivable (1)	81,232		—		81,232		—
Foreign currency forward contracts	15,359		—		15,359		—
Total assets	$	99,882	$	—	$	99,882	$	—
Liabilities:
NYMEX futures contracts	$	2,750	$	2,750	$	—	$	—
Commodity collar contracts	6,275		—		6,275		—
Commodity forward contracts	2,987		—		2,987		—
RINs credit obligations (1)	81,232		—		81,232		—
Total liabilities	$	93,244	$	2,750	$	90,494	$	—

(1)REH Company is financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing of the Sinclair Transactions. See Note 2 for additional information on RINs credit obligations assumed in the Sinclair Transactions.

Level 1 Instruments

Our NYMEX futures contracts are exchange traded and are measured and recorded at fair value using quoted market prices, a Level 1 input.

Level 2 Financial Instruments

Derivative instruments consisting of foreign currency forward contracts, commodity price swaps, commodity collar contracts and forward sales and purchase contracts are measured and recorded at fair value using Level 2 inputs. The fair value of the commodity price swap contracts is based on the net present value of expected future cash flows related to both variable and fixed rate legs of the respective swap agreements. The measurements are computed using market-based observable input and quoted forward commodity prices with respect to our commodity price swaps. The fair value of the commodity collar contracts is based on forward natural gas prices. The fair value of the forward sales and purchase contracts are computed using quoted forward commodity prices. The fair value of foreign currency forward contracts are based on values provided by a third party, which were derived using market quotes for similar type instruments, a Level 2 input. RINs credit obligations are valued based on current market RINs prices.

Nonrecurring Fair Value Measurements

During the three months ended March 31, 2023, we recognized assets and liabilities based on fair value measurements for the Sinclair Transactions (see Note 2). The fair value measurements were based on a combination of valuation methods including discounted cash flows, the guideline public company and guideline transaction methods and obsolescence adjusted replacement costs, all of which are Level 3 inputs.

21

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 6:Earnings Per Share

Basic earnings per share is calculated as net income attributable to HF Sinclair stockholders, adjusted for participating securities’ share in earnings divided by the average number of shares of common stock outstanding. Diluted earnings per share includes the incremental shares resulting from certain share-based awards. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HF Sinclair stockholders:

	Three Months Ended March 31,
	2023		2022
	(In thousands, except per share data)
Net income attributable to HF Sinclair stockholders	$	353,266	$	159,974
Participating securities’ share in earnings (1)	2,925		1,983
Net income attributable to common shares	$	350,341	$	157,991
Average number of shares of common stock outstanding	195,445		175,081
Average number of shares of common stock outstanding assuming dilution	195,445		175,081
Basic earnings per share	$	1.79	$	0.90
Diluted earnings per share	$	1.79	$	0.90

(1)Unvested restricted stock unit awards and unvested performance share units that settle in HF Sinclair common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HF Sinclair. Participating earnings represent the distributed and undistributed earnings of HF Sinclair attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so.

NOTE 7:Stock-Based Compensation

We have a principal share-based compensation plan (the HF Sinclair Corporation Amended and Restated 2020 Long Term Incentive Plan, the “2020 Plan”). The 2020 Plan provides for the grant of unrestricted and restricted stock, restricted stock units, other stock based awards, stock options, performance awards, substitute awards, cash awards and stock appreciation rights. The restricted stock unit awards generally vest over a period of one to three years. Upon vesting, restrictions on the restricted stock units lapse at which time they convert to common shares or cash. The performance share units generally vest over a period of three years and are payable in stock or cash upon meeting certain financial and performance criteria. The number of shares ultimately issued or cash paid for the performance share units can range from zero to 200% of target award amounts. The holders of unvested restricted stock units and performance share units have the right to receive dividends. We also have a stock compensation deferral plan which allows non-employee directors to defer settlement of vested stock granted under our share-based compensation plan.

The compensation cost for these plans was $3.3 million and $8.9 million for the three months ended March 31, 2023 and 2022, respectively.

Additionally, HEP maintains an equity-based compensation plan for Holly Logistic Services, L.L.C.’s non-employee directors and certain executives and employees. Compensation cost attributable to HEP’s equity-based compensation plan was $0.4 million and $0.6 million for the three months ended March 31, 2023 and 2022.

22

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

A summary of restricted stock unit and performance share unit activity during the three months ended March 31, 2023 is presented below:

	Restricted Stock Units		Performance Share Units
Outstanding at January 1, 2023	1,055,875		771,197
Granted (1)	29,590		1,509
Vested	(857)		—
Forfeited	(25,053)		(12,540)
Performance share units converted to restricted stock units	225,217		(225,217)
Outstanding at March 31, 2023	1,284,772		534,949
(1) Weighted average grant date fair value per unit	$	52.75	$	73.27

NOTE 8:Inventories

Inventories consist of the following components:

	March 31, 2023		December 31, 2022
	(In thousands)
Crude oil	$	858,985	$	818,737
Other raw materials and unfinished products (1)	966,222		842,855
Finished products (2)	1,396,254		1,252,984
Lower of cost or market reserve	(108,748)		(61,151)
Process chemicals (3)	51,633		53,900
Repair and maintenance supplies and other (4)	284,475		307,203
Total inventory	$	3,448,821	$	3,214,528

(1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude.

(2)Finished products include gasolines, jet fuels, diesels, renewable diesels, lubricants, asphalts, LPG’s and residual fuels.

(3)Process chemicals include additives and other chemicals.

(4)Includes RINs.

Our renewables inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $108.7 million and $61.2 million at March 31, 2023 and December 31, 2022, respectively. A new market reserve of $108.7 million as of March 31, 2023 was based on market conditions and prices at that time. The effect of the change in the lower of cost or market reserve was an increase to cost of products sold totaling $47.6 million for the three months ended March 31, 2023 and a decrease to cost of products sold of $8.6 million for the three months ended March 31, 2022.

At March 31, 2023, the LIFO value of our refining inventories was equal to cost.

NOTE 9:Environmental

Environmental costs are charged to operating expenses if they relate to an existing condition caused by past operations and do not contribute to current or future revenue generation. We have ongoing investigations of environmental matters at various locations and routinely assess our recorded environmental obligations, if any, with respect to such matters. Liabilities are recorded when site restoration and environmental remediation, cleanup and other obligations are either known or considered probable and can be reasonably estimated. Such estimates are undiscounted and require judgment with respect to costs, time frame and extent of required remedial and cleanup activities and are subject to periodic adjustments based on currently available information. Recoveries of environmental costs through insurance, indemnification arrangements or other sources are included in other assets to the extent such recoveries are considered probable.

23

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

We incurred expense of $13.3 million and $7.1 million for the three months ended March 31, 2023 and 2022, respectively, for environmental remediation obligations. The accrued environmental liability reflected on our consolidated balance sheets was $202.0 million and $192.3 million at March 31, 2023 and December 31, 2022, respectively, of which $168.0 million and $170.0 million, respectively, were classified as other long-term liabilities. These accruals include remediation and monitoring costs expected to be incurred over an extended period of time. Accrued environmental liabilities assumed in the Sinclair Transactions were $72.2 million at the acquisition date and an associated receivable from third parties of $21.5 million. Estimated liabilities could increase in the future when the results of ongoing investigations become known, are considered probable and can be reasonably estimated.

NOTE 10:Debt

HF Sinclair Credit Agreement

We have a $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the “HF Sinclair Credit Agreement”). The HF Sinclair Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. At March 31, 2023, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.3 million under the HF Sinclair Credit Agreement.

Indebtedness under the HF Sinclair Credit Agreement bears interest, at our option, based on the currency of such indebtedness at either (a) a base rate equal to the highest of the Federal Funds Effective Rate (as defined in the HF Sinclair Credit Agreement) plus half of 1%, Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for a one-month interest period plus 1% and the prime rate (as publicly announced from time to time by the administrative agent), as applicable, plus an applicable margin (ranging from 0.25% to 1.125%), (b) the CDOR Rate (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) (c) the Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) or (d) the Daily Simple RFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%). In each case, the applicable margin is based on HF Sinclair’s debt rating assigned by Standard & Poor’s Financial Services LLC and Moody’s Investors Service, Inc.

HEP Credit Agreement

HEP has a $1.2 billion senior secured revolving credit facility maturing in July 2025 (the “HEP Credit Agreement”). The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has an accordion feature that allows HEP to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. At March 31, 2023, HEP was in compliance with all of its covenants, had outstanding borrowings of $651.5 million and no outstanding letters of credit under the HEP Credit Agreement.

Prior to the Investment Grade Date (as defined in the HEP Credit Agreement), indebtedness under the HEP Credit Agreement bears interest, at HEP’s option, at either (a) the Alternate Base Rate (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 0.75% to 1.75%) or (b) Adjusted Term SOFR (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 1.75% to 2.75%). In each case, the applicable margin is based upon HEP’s Total Leverage Ratio (as defined in the HEP Credit Agreement). The weighted average interest rate in effect under the HEP Credit Agreement on HEP’s borrowings was 6.88% as of March 31, 2023.

HEP’s obligations under the HEP Credit Agreement are collateralized by substantially all of HEP’s assets and are guaranteed by HEP’s material wholly owned subsidiaries. Any recourse to the general partner would be limited to the extent of HEP Logistics Holdings, L.P.’s assets, which other than its investment in HEP are not significant. HEP’s creditors have no recourse to our other assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

24

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

HollyFrontier and HF Sinclair Senior Notes

At March 31, 2023, our senior notes consisted of the following:

•$59.637 million in aggregate principal amount of 2.625% senior notes maturing October 2023 (the “HollyFrontier 2.625% Senior Notes”);

•$202.9 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HollyFrontier 5.875% Senior Notes”), and

•$74.966 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HollyFrontier 4.500% Senior Notes” and, collectively, the “HollyFrontier Senior Notes”).

•$248.190 million in aggregate principal amount of 2.625% senior notes maturing October 2023 (the “HF Sinclair 2.625% Senior Notes”);

•$797.1 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HF Sinclair 5.875% Senior Notes”), and

•$325.034 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HF Sinclair 4.500% Senior Notes” and, collectively, the “HF Sinclair Senior Notes”).

The HollyFrontier Senior Notes and HF Sinclair Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all future unsecured and unsubordinated indebtedness.

Further, we may from time to time seek to retire some or all of our outstanding debt or debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and will depend on prevailing market conditions, our liquidity requirements and other factors.

HF Sinclair Financing Arrangements

Certain of our wholly owned subsidiaries entered into financing arrangements whereby such subsidiaries sold a portion of their precious metals catalyst to a financial institution and then leased back the precious metals catalyst in exchange for cash. The volume of the precious metals catalyst and the lease rate are fixed over the term of each lease, and the lease payments are recorded as interest expense. The current leases mature in one year or less. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity. These financing arrangements are recorded at a Level 2 fair value totaling $37.4 million and $39.8 million at March 31, 2023 and December 31, 2022, respectively, and are included in “Accrued liabilities” on our consolidated balance sheets. See Note 5 for additional information on Level 2 inputs.

HEP Senior Notes

At March 31, 2023, HEP’s senior notes consisted of the following:

•$400.0 million in aggregate principal amount of 6.375% senior notes maturing April 2027 (the “HEP 6.375% Senior Notes”), and

•$500.0 million in aggregate principal amount of 5.0% HEP senior notes maturing February 2028 (the “HEP 5.0% Senior Notes”).

These HEP senior notes (collectively, the “HEP Senior Notes”) are unsecured and impose certain restrictive covenants, including limitations on HEP’s ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates, and enter into mergers. HEP was in compliance with the restrictive covenants for the HEP Senior Notes as of March 31, 2023. At any time when the HEP Senior Notes are rated investment grade by either Moody’s Investors Service, Inc. or S&P Global Ratings and no default or event of default exists, HEP will not be subject to many of the foregoing covenants. Additionally, HEP has certain redemption rights at varying premiums over face value under the HEP Senior Notes.

Indebtedness under the HEP Senior Notes is guaranteed by certain of HEP’s wholly owned subsidiaries. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

25

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

The carrying amounts of long-term debt are as follows:

	March 31, 2023		December 31, 2022
	(In thousands)
HollyFrontier
2.625% Senior Notes	$	59,637	$	59,637
5.875% Senior Notes	202,900		202,900
4.500% Senior Notes	74,966		74,966
	337,503		337,503
HF Sinclair
2.625% Senior Notes	248,190		248,190
5.875% Senior Notes	797,100		797,100
4.500% Senior Notes	325,034		325,034
	1,370,324		1,370,324
Less current debt (1)	(307,256)		(306,959)
Unamortized discount and debt issuance costs (1)	(7,967)		(8,689)
Total HF Sinclair long-term debt	1,392,604		1,392,179
HEP Credit Agreement	651,500		668,000
HEP
5.000% Senior Notes	500,000		500,000
6.375% Senior Notes	400,000		400,000
	900,000		900,000
Unamortized discount and debt issuance costs	(11,115)		(11,666)
Total HEP long-term debt	1,540,385		1,556,334
Total long-term debt	$	2,932,989	$	2,948,513

(1)The HollyFrontier 2.625% Senior Notes and HF Sinclair 2.625% Senior Notes, inclusive of unamortized discount and debt issuance costs of $0.6 million and $0.9 million at March 31, 2023 and December 31, 2022, respectively, are due October 2023 and were classified as current debt on our consolidated balance sheets.

The fair values of the senior notes are as follows:

	March 31, 2023		December 31, 2022
	(In thousands)
HollyFrontier and HF Sinclair Senior Notes	$	1,677,864	$	1,655,726
HEP Senior Notes	$	866,860	$	852,658

These fair values are based on a Level 2 input. See Note 5 for additional information on Level 2 inputs.

We capitalized $1.2 million and $3.7 million for the three months ended March 31, 2023 and 2022, respectively, of interest attributable to construction projects.

26

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 11:Derivative Instruments and Hedging Activities

Commodity Price Risk Management

Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, collar contracts, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

Foreign Currency Risk Management

We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.

Accounting Hedges

We periodically have forward sales contracts that lock in the prices of future sales of crude oil and refined product. These contracts have been designated as accounting hedges and are measured at fair value with offsetting adjustments (gains/losses) recorded directly to other comprehensive income (loss). These fair value adjustments are later reclassified to earnings as the hedging instruments mature.

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of hedging instruments under hedge accounting:

	Net Unrealized Gain Recognized in OCI				Loss Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Three Months Ended March 31,				Income Statement Location	Three Months Ended March 31,
	2023		2022			2023		2022
	(In thousands)
Commodity contracts	$	271	$	326	Sales and other revenues	$	(1)	$	(5,288)
Total	$	271	$	326		$	(1)	$	(5,288)

Economic Hedges

We have commodity contracts including NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory, collar contracts and basis swap contracts to mitigate exposure to natural gas price volatility and forward purchase and sell contracts of refined products that serve as economic hedges (derivatives used for risk management, but not designated as accounting hedges). We also have forward currency contracts to fix the rate of foreign currency. In addition, our catalyst financing arrangements discussed in Note 10 could require repayment under certain conditions based on the future pricing of platinum, which is an embedded derivative. These contracts are measured at fair value with offsetting adjustments (gains/losses) recorded directly to earnings.

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended March 31,
		2023		2022
		(In thousands)
Commodity contracts	Cost of products sold	$	6,748	$	(9,788)
	Operating expenses	(14,058)		—
	Interest expense	2,406		(1,421)
Foreign currency contracts	Gain on foreign currency transactions	114		(6,430)
	Total	$	(4,790)	$	(17,639)

27

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

As of March 31, 2023, we have the following notional contract volumes related to outstanding derivative instruments:

		Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional	2023	2024	Unit of Measure
Derivatives Designated as Hedging Instruments
Forward diesel contracts - short	100,000	100,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	1,790,000	1,790,000	—	Barrels
Forward gasoline and diesel contracts - long	145,000	145,000	—	Barrels
Foreign currency forward contracts	428,211,705	322,227,146	105,984,559	U.S. dollar
Forward commodity contracts (platinum)	36,969	14,550	22,419	Troy ounces
Natural gas price swaps (basis spread) - long	3,850,000	3,850,000	—	MMBTU
Natural gas collar contracts	22,000,000	22,000,000	—	MMBTU

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
March 31, 2023
Derivatives designated as cash flow hedging instruments:
Commodity forward contracts	$	312	$	—	$	312	$	—	$	—	$	—
	$	312	$	—	$	312	$	—	$	—	$	—
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	3,438	$	—	$	3,438
Commodity price swap contracts	2,624		—		2,624		—		—		—
Commodity collar contracts	—		—		—		21,422		—		21,422
Commodity forward contracts	412		—		412		439		—		439
Foreign currency forward contracts	11,757		(663)		11,094		—		—		—
	$	14,793	$	(663)	$	14,130	$	25,299	$	—	$	25,299
Total net balance					$	14,442					$	25,299
Balance sheet classification:	Prepayment and other				$	14,442	Accrued liabilities				$	25,299

28

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2022
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	2,750	$	—	$	2,750
Commodity price swap contracts	342		—		342		—		—		—
Commodity collar contracts	—		—		—		6,275		—		6,275
Commodity forward contracts	2,949		—		2,949		2,987		—		2,987
Foreign currency forward contracts	15,359		—		15,359		—		—		—
	$	18,650	$	—	$	18,650	$	12,012	$	—	$	12,012
Total net balance					$	18,650					$	12,012
Balance sheet classification:	Prepayment and other				$	18,650	Accrued liabilities				$	12,012

At March 31, 2023, we had a pre-tax net unrealized gain of $0.3 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2023, which assuming commodity prices remain unchanged, will be effectively transferred from accumulated other comprehensive loss into the statement of operations as the hedging instruments contractually mature over the next three-month period.

NOTE 12:Equity

In September 2022, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company are also authorized under this share repurchase program, subject to REH Company’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. This program may be discontinued at any time by our Board of Directors. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs.

During the three months ended March 31, 2023, we made open market and privately negotiated purchases of 4,793,857 shares for $240.3 million under our share repurchase program, of which 1,969,279 shares were repurchased for $100.0 million pursuant to privately negotiated repurchases from REH Company. As of March 31, 2023, we had remaining authorization to repurchase up to $419.8 million under this share repurchase program. We did not repurchase any shares in April 2023.

During the three months ended March 31, 2023 and 2022, we withheld 16,200 and 1,764 shares, respectively, of our common stock under the terms of stock-based compensation agreements to provide funds for the payment of payroll and income taxes due at the vesting of share-based awards.

On May 3, 2023, our Board of Directors declared a regular quarterly dividend in the amount of $0.45 per share, payable on June 1, 2023 to holders of record of common stock on May 18, 2023.

29

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 13:Other Comprehensive Income

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax		Tax Expense (Benefit)		After-Tax
	(In thousands)
Three Months Ended March 31, 2023
Net change in foreign currency translation adjustment	$	2,926	$	614	$	2,312
Net unrealized gain on hedging instruments	271		66		205
Net change in pension and other post-retirement benefit obligations	(960)		(233)		(727)
Other comprehensive income attributable to HF Sinclair stockholders	$	2,237	$	447	$	1,790
Three Months Ended March 31, 2022
Net change in foreign currency translation adjustment	$	1,721	$	379	$	1,342
Net unrealized gain on hedging instruments	326		67		259
Net change in pension and other post-retirement benefit obligations	(906)		(221)		(685)
Other comprehensive income attributable to HF Sinclair stockholders	$	1,141	$	225	$	916

The following table presents the statements of operations line item effects for reclassifications out of accumulated other comprehensive income (loss) (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI				Statement of Operations Line Item
	Three Months Ended March 31,
	2023		2022
	(In thousands)
Hedging instruments:
Commodity price swaps	$	(1)	$	(5,288)	Sales and other revenues
	—		(1,282)		Income tax benefit
	(1)		(4,006)		Net of tax
Other post-retirement benefit obligations:
Pension obligations	45		45		Gain on sale of assets and other
	11		11		Income tax expense
	34		34		Net of tax
Post-retirement healthcare obligations	918		870		Gain on sale of assets and other
	223		211		Income tax expense
	695		659		Net of tax
Retirement restoration plan	(3)		(9)		Gain on sale of assets and other
	(1)		(2)		Income tax benefit
	(2)		(7)		Net of tax
Total reclassifications for the period	$	726	$	(3,320)

30

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Accumulated other comprehensive loss in the equity section of our consolidated balance sheets includes:

	March 31, 2023		December 31, 2022
	(In thousands)
Foreign currency translation adjustment	$	(31,115)	$	(33,427)
Unrealized loss on pension obligations	(2,706)		(2,661)
Unrealized gain on post-retirement benefit obligations	13,393		14,075
Unrealized gain on hedging instruments	205		—
Accumulated other comprehensive loss	$	(20,223)	$	(22,013)

NOTE 14:Contingencies

We are a party to various litigation and legal proceedings which we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse effect on our financial condition, results of operations or cash flows.

Pursuant to the Business Combination Agreement, all pre-closing RINs obligations of REH Company’s subsidiaries (which are now subsidiaries of HF Sinclair as a result of the HFC Transactions) remain with REH Company. REH Company is required to transfer to HF Sinclair the number of each applicable type of RIN required for REH Company to demonstrate compliance for any pre-closing obligations it retained by the deadlines set forth in the Business Combination Agreement. If REH Company does not deliver all the required RINs by the applicable deadline, then, within five days following the delivery of an invoice therefor, REH Company is required to pay to HF Sinclair the amount of all out-of-pocket costs and expenses incurred by HF Sinclair to comply with REH Company’s pre-closing obligations prior to such deadline, including the price of any RINs purchased by HF Sinclair. In relation to this, 2,570,000 shares of HF Sinclair common stock, out of the purchase consideration paid to REH Company, are held in escrow to secure REH Company’s RINs credit obligations under Section 6.22 of the Business Combination Agreement. The 5,290,000 HEP common units that were also held in escrow to secure REH Company’s RINs credit obligations were released to REH Company in April 2023 upon their satisfaction of the RINs credit obligations relating thereto.

During 2017, 2018 and 2019, the EPA granted the Cheyenne, Wyoming refinery (the “Cheyenne Refinery”) and the refinery in Woods Cross, Utah (the “Woods Cross Refinery”) each a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2016, 2017 and 2018, respectively, calendar years. As a result, the Cheyenne Refinery’s and Woods Cross Refinery’s gasoline and diesel production are not subject to the Renewable Volume Obligation for the respective years. Upon each exemption granted, we increased our inventory of RINs and reduced our cost of products sold.

On April 7, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2018 compliance year. On June 3, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2016 compliance year and denying small refinery exemption petitions for our Woods Cross and Cheyenne refineries for the 2019 and 2020 compliance years. Various subsidiaries of HollyFrontier are currently pursuing legal challenges to the EPA’s decisions to reverse its grant of small refinery exemptions for the 2016 and 2018 compliance years. The first lawsuit, filed against the EPA on May 6, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2018 small refinery exemption petitions overturned. The second lawsuit, filed against the EPA on August 5, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2016 small refinery exemption petitions overturned and to have the EPA’s denial of our 2019 and 2020 small refinery exemption petitions reversed. In addition, for both the 2016 and 2018 compliance years, pursuant to the June 2022 and April 2022 decisions, respectively, the EPA established an alternative compliance demonstration for small refineries pursuant to which the EPA is not imposing any obligations for the small refineries whose exemptions were reversed. On June 24, 2022, Growth Energy filed two lawsuits in the U.S. Court of Appeals for the DC Circuit against the EPA challenging the alternative compliance demonstration for the 2016 and 2018 compliance years. On July 25, 2022, various subsidiaries of HollyFrontier intervened on behalf of the EPA to aid the defense of the EPA’s alternative compliance demonstration decision. It is too early to predict the outcome of these matters. We are unable to estimate the costs we may incur, if any, at this time.

31

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 15:Segment Information

Our operations are 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.

The Refining segment represents the operations of our El Dorado, Tulsa, Navajo, Woods Cross and Puget Sound refineries and HF Sinclair Asphalt Company LLC (“Asphalt”). Effective with our acquisition that closed on March 14, 2022, the Refining segment includes our 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 our Cheyenne renewable diesel unit (“RDU”), which was mechanically complete in the fourth quarter of 2021 and operational in the first quarter of 2022, the pre-treatment unit at our Artesia, New Mexico facility, which was completed and operational in the first quarter of 2022 and the Artesia RDU, which was completed and 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.

Effective with our acquisition that closed on March 14, 2022, 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 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 and Specialty Products segment represents Petro-Canada Lubricants Inc.’s 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.

The accounting policies for our segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2022.

32

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

	Refining		Renewables		Marketing		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
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	1,053,401		95,603		—		5,796		116,878		(1,271,678)		—
	$	6,718,615	$	298,016	$	937,385	$	739,510	$	143,294	$	(1,271,678)	$	7,565,142
Cost of products sold (exclusive of lower of cost or market inventory)	$	5,617,911	$	262,738	$	924,049	$	538,003	$	—	$	(1,238,644)	$	6,104,057
Lower of cost or market inventory valuation adjustment	$	—	$	47,597	$	—	$	—	$	—	$	—	$	47,597
Operating expenses	$	517,820	$	31,371	$	—	$	63,593	$	52,142	$	(25,543)	$	639,383
Selling, general and administrative expenses	$	39,078	$	915	$	6,963	$	39,264	$	4,635	$	5,058	$	95,913
Depreciation and amortization	$	103,123	$	19,974	$	5,871	$	19,910	$	24,465	$	640	$	173,983
Income (loss) from operations	$	440,683	$	(64,579)	$	502	$	78,740	$	62,052	$	(13,189)	$	504,209
Earnings of equity method investments	$	—	$	—	$	—	$	—	$	3,882	$	—	$	3,882
Capital expenditures	$	67,774	$	4,844	$	5,255	$	8,649	$	7,614	$	5,933	$	100,069
Three Months Ended March 31, 2022
Sales and other revenues:
Revenues from external customers	$	6,371,894	$	28,313	$	277,041	$	753,558	$	27,944	$	—	$	7,458,750
Intersegment revenues	134,273		19,054		—		1,451		92,254		(247,032)		—
	$	6,506,167	$	47,367	$	277,041	$	755,009	$	120,198	$	(247,032)	$	7,458,750
Cost of products sold (exclusive of lower of cost or market inventory)	$	5,909,610	$	44,271	$	271,131	$	504,577	$	—	$	(227,577)	$	6,502,012
Lower of cost or market inventory valuation adjustment	$	—	$	(8,551)			$	—	$	—	$	—	$	(8,551)
Operating expenses	$	354,972	$	27,096	$	—	$	66,001	$	42,624	$	(13,259)	$	477,434
Selling, general and administrative expenses	$	33,882	$	872	$	140	$	41,749	$	4,312	$	29,467	$	110,422
Depreciation and amortization	$	94,681	$	5,800	$	501	$	20,594	$	21,586	$	1,439	$	144,601
Income (loss) from operations	$	113,022	$	(22,121)	$	5,269	$	122,088	$	51,676	$	(37,102)	$	232,832
Earnings of equity method investments	$	—	$	—	$	—	$	—	$	3,626	$	—	$	3,626
Capital expenditures	$	29,920	$	98,769	$	—	$	6,370	$	14,147	$	9,090	$	158,296

33

HF SINCLAIR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 16:Subsequent Event

On May 3, 2023, we submitted a non-binding proposal to acquire all of the outstanding common units (“Common Units”) of HEP not beneficially owned by us or our affiliates in exchange for common stock, par value $0.01 per share (“Common Stock”), of HF Sinclair. Under the proposal, HEP unitholders would receive newly issued shares of Common Stock at a fixed exchange ratio of 0.3714 per each publicly held Common Unit, which was derived using the 30-day volume weighted average prices for each security as of market close on May 3, 2023 (the “Proposed HEP Transaction”). The proposal has been made to the board of directors of the ultimate general partner of HEP. The Proposed HEP Transaction is subject to the negotiation and execution of a definitive agreement. There can be no assurance that a definitive agreement will be executed or that any transaction will be approved or consummated.

34

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Item 2 contains “forward-looking” statements. See “Forward-Looking Statements” at the beginning of Part I of this Quarterly Report on Form 10-Q. In this document, the words “we,” “our,” “ours” and “us” refer only to HF Sinclair Corporation (“HF Sinclair”) and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HF Sinclair, unless when used in disclosures of transactions or obligations between HEP and HF Sinclair or its other subsidiaries. This document contains certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HF Sinclair. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries. References herein to HF Sinclair “we,” “our,” “ours,” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier Corporation (“HollyFrontier”) and its consolidated subsidiaries and do not include Hippo Holding LLC (now known as Sinclair Holding LLC), the parent company of Sinclair Oil LLC, Sinclair Transportation Company LLC or their respective consolidated subsidiaries (collectively, the “Acquired Sinclair Businesses”). References herein to HF Sinclair “we,” “our,” “ours,” and “us” with respect to time periods from and after March 14, 2022 include the operations of the Acquired Sinclair Businesses. Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to March 31, 2023 includes the combined business operations of HollyFrontier and the Acquired Sinclair Businesses.

OVERVIEW

We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Washington, Utah and Wyoming. We market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. We supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries. Through our subsidiaries, we produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. We also own a 47% limited partner interest and a non-economic general partner interest in HEP, 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.

For the three months ended March 31, 2023, net income attributable to HF Sinclair stockholders was $353.3 million compared to $160.0 million for the three months ended March 31, 2022..Our results for the first quarter of 2023 were favorably impacted by healthy demand for transportation fuels, lubricants and transportation and terminal services, favorable crude spreads and constrained refined product supply due to global supply disruption. We continue to adjust our operational plans to the evolving market conditions. The extent to which our future results are affected by volatile regional and global economic conditions or the COVID-19 pandemic will depend on various factors and consequences beyond our control.

In the Refining segment, we saw healthy refining margins in both the West and Mid-continent regions as a result of steady demand, tight supply and favorable crude spreads. The first quarter of 2023 was a heavy quarter for turnarounds; with turnarounds completed at our Puget Sound, El Dorado and Woods Cross Refineries, which also provided us the opportunity to execute maintenance strategies focused on improving operational reliability.

In the Renewables segment, we continued to optimize the operation of our assets and reliability.

In the Marketing segment, we continued to see strong value in the Sinclair brand as the marketing business provides a consistent sales channel with margin uplift for our produced fuels.

In the Lubricants segment, effective the first quarter of 2023, management views the Lubricants and Specialty Products segment as an integrated business of processing feedstocks into base oils and processing base oils into finished lubricant products along with the packaging, distribution and sales to customers. We saw strong performance (excluding FIFO) driven by product mix optimization

35

HEP Proposal

On May 3, 2023, we submitted a non-binding proposal to acquire all of the outstanding common units (“Common Units”) of HEP not beneficially owned by us or our affiliates in exchange for common stock, par value $0.01 per share (“Common Stock”), of HF Sinclair. Under the proposal, HEP unitholders would receive newly issued shares of Common Stock at a fixed exchange ratio of 0.3714 per each publicly held Common Unit, which was derived using the 30-day volume weighted average prices for each security as of market close on May 3, 2023 (the “Proposed HEP Transaction”). The proposal has been made to the board of directors of the ultimate general partner of HEP. The Proposed HEP Transaction is subject to the negotiation and execution of a definitive agreement. There can be no assurance that a definitive agreement will be executed or that any transaction will be approved or consummated.

Sinclair Acquisition

On March 14, 2022, HollyFrontier and HEP announced the establishment of HF Sinclair as the new parent holding company of HollyFrontier and HEP and their subsidiaries, and the completion of their respective acquisitions (the “Sinclair Transactions”) of Sinclair Oil Corporation (now known as Sinclair Oil LLC, “Sinclair Oil”) and Sinclair Transportation Company LLC (“STC”) from The Sinclair Companies (now known as REH Company and referred to herein as “REH Company”). See Note 2 “Acquisitions” and Note 3 “Holly Energy Partners” in the Notes to Consolidated Financial Statements for additional information.

Renewable Fuel Standard Regulations

Pursuant to the 2007 Energy Independence and Security Act, the Environmental Protection Agency (“EPA”) promulgated the Renewable Fuel Standard (“RFS”) regulations, which increased the volume of renewable fuels mandated to be blended into the nation’s fuel supply. The regulations, in part, require refiners to add annually increasing amounts of “renewable fuels” to their petroleum products or purchase credits, known as renewable identification numbers (“RINs”), in lieu of such blending. Compliance with RFS regulations significantly increases our cost of products sold, with RINs costs totaling $157.5 million for the three months ended March 31, 2023. At March 31, 2023, our open RINs credit obligations were $75.7 million. See Note 2 “Acquisitions” in the Notes to Consolidated Financial Statements for additional information on RINs credit obligations assumed in the Sinclair Transactions.

Recent U.S. Tax Legislation

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act") into law. As part of this Inflation Reduction Act, an excise tax of 1% tax was imposed on the fair market value of net stock repurchases made after December 31, 2022, which has been reflected in our financials.

OUTLOOK

Within our Refining segment, for the second quarter of 2023, we expect to run between 550,000 – 580,000 barrels per day of crude oil. This guidance reflects planned maintenance activities at our Navajo and Parco refineries during the period. Refined product margins are expected to remain healthy driven by constrained refined product supply in the markets we serve, coupled with seasonal demand from the upcoming driving season.

Within our Renewables segment, for the second quarter of 2023, we expect to continue to increase throughputs by optimizing our operations, and we expect to achieve normalized run rates in the second half of the year.

Within our Marketing segment, we expect to see 5% or more annual growth in the number of sites.

Within our Lubricants and Specialty Products segment, we expect favorable product mix, seasonal improvement for transportation lubricants demand, offset by softness in certain finished products into the second quarter of 2023. We continue to look for ways to optimize the business.

Subject to the final negotiated terms of a definitive agreement on the Proposed HEP Transaction and the discretion of the board of directors of the ultimate general partner of HEP to declare distributions, HEP expects its future cash distribution will continue as long as it remains a public company.

In September 2022, our Board of Directors authorized a new $1.0 billion share repurchase program. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. On May 3, 2023, our Board of Directors also declared a regular quarterly dividend in the amount of $0.45 per share. The dividend is payable on June 1, 2023 to holders of record of common stock on May 18, 2023.

36

A more detailed discussion of our financial and operating results for the three months ended March 31, 2023 and 2022 is presented in the following sections.

37

RESULTS OF OPERATIONS

Financial Data

	Three Months Ended March 31,				Change from 2022
	2023		2022		Change		Percent
	(In thousands, except per share data)
Sales and other revenues	$	7,565,142	$	7,458,750	$	106,392	1	%
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization):
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	6,104,057		6,502,012		(397,955)		(6)
Lower of cost or market inventory valuation adjustment	47,597		(8,551)		56,148		(657)
	6,151,654		6,493,461		(341,807)		(5)
Operating expenses (exclusive of depreciation and amortization)	639,383		477,434		161,949		34
Selling, general and administrative expenses (exclusive of depreciation and amortization)	95,913		110,422		(14,509)		(13)
Depreciation and amortization	173,983		144,601		29,382		20
Total operating costs and expenses	7,060,933		7,225,918		(164,985)		(2)
Income from operations	504,209		232,832		271,377		117
Other income (expense):
Earnings of equity method investments	3,882		3,626		256		7
Interest income	19,935		997		18,938		1,899
Interest expense	(45,822)		(34,859)		(10,963)		31
Gain on foreign currency transactions	870		139		731		526
Gain on sale of assets and other	1,631		3,895		(2,264)		(58)
	(19,504)		(26,202)		6,698		(26)
Income before income taxes	484,705		206,630		278,075		135
Income tax expense	99,700		21,329		78,371		367
Net income	385,005		185,301		199,704		108
Less net income attributable to noncontrolling interest	31,739		25,327		6,412		25
Net income attributable to HF Sinclair stockholders	$	353,266	$	159,974	$	193,292	121	%
Earnings per share attributable to HF Sinclair stockholders:
Basic	$	1.79	$	0.90	$	0.89	99	%
Diluted	$	1.79	$	0.90	$	0.89	99	%
Cash dividends declared per common share	$	0.45	$	—	$	0.45	100	%
Average number of common shares outstanding:
Basic	195,445		175,081		20,364		12	%
Diluted	195,445		175,081		20,364		12	%

Balance Sheet Data

	March 31, 2023		December 31, 2022
	(Unaudited)
	(In thousands)
Cash and cash equivalents	$	1,364,930	$	1,665,066
Working capital	$	3,440,795	$	3,502,790
Total assets	$	18,006,008	$	18,125,483
Total debt	$	3,240,245	$	3,255,472
Total equity	$	10,050,527	$	10,017,572

38

Other Financial Data 

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Net cash provided by operating activities	$	177,705	$	461,036
Net cash used for investing activities	$	(100,237)	$	(385,176)
Net cash provided by (used for) financing activities	$	(379,110)	$	281,386
Capital expenditures	$	100,069	$	158,296
EBITDA (1)	$	652,836	$	359,766

(1)Earnings before interest, taxes, depreciation and amortization, which we refer 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. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to net 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 is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants. EBITDA presented above is reconciled to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q.

Segment Operating Data

Our operations are organized into five reportable segments, Refining, Renewables, Marketing, Lubricants and Specialty Products and HEP. See Note 15 “Segment Information” in the Notes to Consolidated Financial Statements for additional information on our reportable segments.

Refining Segment Operating Data

The disaggregation of our refining geographic operating data is presented in two regions, Mid-Continent and West, to best reflect the economic drivers of our refining operations. The Mid-Continent region is comprised of the El Dorado and Tulsa refineries. The West region is comprised of the Puget Sound, Navajo, Woods Cross, Parco and Casper refineries. The refinery operations of the Parco and Casper refineries are included for the period March 14, 2022 (date of acquisition) through March 31, 2023. The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations. The 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” following Item 3 of Part I of this Form 10-Q.

	Three Months Ended March 31,
	2023			2022 (8)
Mid-Continent Region
Crude charge (BPD) (1)	211,390			290,200
Refinery throughput (BPD) (2)	231,260			305,390
Sales of produced refined products (BPD) (3)	205,010			280,260
Refinery utilization (4)	81.3		%	111.6		%
Average per produced barrel (5)
Refinery gross margin	$	20.34		$	9.32
Refinery operating expenses (6)	9.37			6.02
Net operating margin	$	10.97		$	3.30
Refinery operating expenses per throughput barrel (7)	$	8.31		$	5.53

39

	Three Months Ended March 31,
	2023		2022 (8)
Mid-Continent Region
Feedstocks:
Sweet crude oil	65	%	63	%
Sour crude oil	15	%	14	%
Heavy sour crude oil	11	%	18	%
Other feedstocks and blends	9	%	5	%
Total	100	%	100	%
Sales of produced refined products:
Gasolines	49	%	50	%
Diesel fuels	29	%	33	%
Jet fuels	8	%	7	%
Fuel oil	1	%	1	%
Asphalt	4	%	3	%
Base oils	5	%	4	%
LPG and other	4	%	2	%
Total	100	%	100	%

West Region
Crude charge (BPD) (1)	287,110			234,880
Refinery throughput (BPD) (2)	326,870			259,340
Sales of produced refined products (BPD) (3)	310,950			241,910
Refinery utilization (4)	68.7		%	70.6		%
Average per produced barrel (5)
Refinery gross margin	$	25.92		$	16.61
Refinery operating expenses (6)	12.32			9.33
Net operating margin	$	13.60		$	7.28
Refinery operating expenses per throughput barrel (7)	$	11.72		$	8.70
Feedstocks:
Sweet crude oil	32		%	23		%
Sour crude oil	40		%	55		%
Heavy sour crude oil	11		%	7		%
Black wax crude oil	5		%	6		%
Other feedstocks and blends	12		%	9		%
Total	100		%	100		%
Sales of produced refined products:
Gasolines	57		%	52		%
Diesel fuels	31		%	27		%
Jet fuels	4		%	6		%
Fuel oil	2		%	10		%
Asphalt	2		%	2		%
LPG and other	4		%	3		%
Total	100		%	100		%

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	Three Months Ended March 31,
	2023			2022 (8)
Consolidated
Crude charge (BPD) (1)	498,500			525,080
Refinery throughput (BPD) (2)	558,130			564,730
Sales of produced refined products (BPD) (3)	515,960			522,170
Refinery utilization (4)	73.5		%	88.6		%
Average per produced barrel (5)
Refinery gross margin	$	23.70		$	12.69
Refinery operating expenses (6)	11.15			7.55
Net operating margin	$	12.55		$	5.14
Refinery operating expenses per throughput barrel (7)	$	10.31		$	6.98

Feedstocks:
Sweet crude oil	46	%	45	%
Sour crude oil	30	%	32	%
Heavy sour crude oil	10	%	13	%
Black wax crude oil	3	%	3	%
Other feedstocks and blends	11	%	7	%
Total	100	%	100	%
Sales of produced refined products:
Gasolines	54	%	51	%
Diesel fuels	30	%	31	%
Jet fuels	6	%	6	%
Fuel oil	1	%	5	%
Asphalt	3	%	2	%
Base oils	2	%	2	%
LPG and other	4	%	3	%
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 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). 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” following Item 3 of Part I of this Form 10-Q.

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

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Renewables Segment Operating Data

The following table sets forth information about our renewables operations and includes our Sinclair RDU for the period March 14, 2022 (the date of acquisition) through March 31, 2023.

	Three Months Ended March 31,
	2023		2022
Renewables
Sales volumes (in thousand gallons)	46,012		4,943
Average per produced gallon (1)
Renewables gross margin	$	0.77	$	0.63
Renewables operating expenses (2)	0.68		5.48
Net operating margin	$	0.09	$	(4.85)

(1)Represents average amount per produced gallon sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q.

(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 branded fuel business for the period March 14, 2022 (the date of acquisition) through March 31, 2023.

	Three Months Ended March 31,
	2023 (1)		2022
Marketing
Number of branded sites at period end	1,511		1,323
Sales volumes (in thousand gallons)	328,407		84,913
Margin per gallon of sales (2)	$	0.04	$	0.07

(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” following Item 3 of Part I of this Form 10-Q.

Lubricants and Specialty Products Segment Operating Data

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

	Three Months Ended March 31,
	2023		2022
Lubricants and Specialty Products
Sales of produced refined products (BPD)	31,790		35,010
Sales of produced refined products:
Finished products	50	%	51	%
Base oils	29	%	30	%
Other	21	%	19	%
Total	100	%	100	%

Effective the first quarter of 2023, management views the Lubricants and Specialty Products segment as an integrated business of processing feedstocks into base oils and processing base oils into finished lubricant products along with the packaging, distribution and sales to customers.

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Results of Operations – Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Summary

Net income attributable to HF Sinclair stockholders for the three months ended March 31, 2023 was $353.3 million ($1.79 per basic and diluted share), a $193.3 million increase compared to net income of $160.0 million ($0.90 per basic and diluted share) for the three months ended March 31, 2022. The increase in net income was principally driven by higher refinery gross margins. Lower of cost or market inventory reserve adjustments related to our renewables inventories decreased pre-tax earnings by $47.6 million for the three months ended March 31, 2023. Refinery gross margins for the three months ended March 31, 2023 increased to $23.70 per produced barrel sold from $12.69 for the three months ended March 31, 2022.

Sales and Other Revenues

Sales and other revenues increased 1% from $7,458.8 million for the three months ended March 31, 2022 to $7,565.1 million for the three months ended March 31, 2023 principally due to increased sales prices, partially offset by lower refined product sales volumes. Sales and other revenues included $937.4 million, $733.7 million and $202.4 million in unaffiliated revenues related to our Marketing, Lubricants and Specialty Products and Renewables segments, respectively, for the three months ended March 31, 2023. Sales and other revenues included $277.0 million, $753.6 million and $28.3 million in unaffiliated revenues related to our Marketing, Lubricants and Specialty Products and Renewables segments, respectively, for the three months ended March 31, 2022.

Cost of Products Sold

Total cost of products sold decreased 5% from $6,493.5 million for the three months ended March 31, 2022 to $6,151.7 million for the three months ended March 31, 2023 principally due to lower crude oil costs and lower refined product sales volumes. During the first quarter of 2023, we recognized a lower of cost or market inventory valuation adjustment charge related to our renewables inventories of $47.6 million as compared to a benefit of $8.6 million for the three months ended March 31, 2022. Within our Lubricants and Specialty Products segment, FIFO impact was a charge of $13.9 million for the three months ended March 31, 2023 and a benefit of $58.4 million for the three months ended March 31, 2022.

Gross Refinery Margins

Gross refinery margin per produced barrel sold increased 87% from $12.69 for the three months ended March 31, 2022 to $23.70 for the three months ended March 31, 2023. The increase was due to higher average per barrel sold sales prices and lower crude oil and feedstock prices during the three months ended March 31, 2023. Gross refinery margin per barrel does not include the non-cash effects of lower of cost or market inventory valuation adjustments or depreciation and amortization. See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q for a reconciliation to the income statement of sale prices of products sold and cost of products purchased.

Operating Expenses

Operating expenses, exclusive of depreciation and amortization, increased 34% from $477.4 million for the three months ended March 31, 2022 to $639.4 million for the three months ended March 31, 2023 primarily due to our acquisition of the Acquired Sinclair Businesses and higher purchased fuel costs in the current period.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 13% from $110.4 million for the three months ended March 31, 2022 to $95.9 million for the three months ended March 31, 2023 primarily due to lower professional services and legal costs as compared to the prior period. We incurred $3.9 million and $25.0 million in acquisition integration and regulatory costs during the three months ended March 31, 2023 and 2022, respectively.

Depreciation and Amortization Expenses

Depreciation and amortization increased 20% from $144.6 million for the three months ended March 31, 2022 to $174.0 million for the three months ended March 31, 2023. This increase was due principally to depreciation and amortization attributable to the Acquired Sinclair Businesses and newly capitalized projects related to our renewable diesel units.

Interest Income

Interest income was $19.9 million for the three months ended March 31, 2023 compared to $1.0 million for the three months ended March 31, 2022. The increase in interest income was primarily due to the increase in the average cash balance and higher interest rates on cash investments.

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Interest Expense

Interest expense was $45.8 million for the three months ended March 31, 2023 compared to $34.9 million for the three months ended March 31, 2022. This increase was primarily due to the April 2022 issuance of $400 million in aggregate principal amount of HEP’s 6.375% senior notes maturing in April 2027 and higher market interest rates on HEP’s revolving credit facility during the three months ended March 31, 2023.

For the three months ended March 31, 2023 and 2022, interest expense attributable to our HEP segment was $26.0 million and $13.6 million, respectively.

Gain on Foreign Currency Transactions

Remeasurement adjustments resulting from the foreign currency conversion of the intercompany financing notes payable by Petro-Canada Lubricants Inc. net of mark-to-market valuations on foreign exchange forward contracts with banks which hedge the foreign currency exposure on these intercompany notes was a net gain of $0.9 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively. For the three months ended March 31, 2023 and 2022, gain on foreign currency transactions included a gain of $0.1 million and a loss of $6.4 million, respectively, on foreign exchange forward contracts (utilized as an economic hedge).

Income Taxes

For the three months ended March 31, 2023, we recorded an income tax expense of $99.7 million compared to $21.3 million for the three months ended March 31, 2022. This increase was principally due to higher pre-tax income during the three months ended March 31, 2023 compared to the same period of 2022. Our effective tax rates were 20.6% and 10.3% for the three months ended March 31, 2023 and 2022, respectively. The difference between the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2023 is primarily due to the impact of federal tax credits and the relationship between pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes. The difference in the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2022 was primarily due to the impact of federal tax credits and the decrease in the state tax rate applied to our deferred tax assets and liabilities as a result of the Sinclair Transaction.

LIQUIDITY AND CAPITAL RESOURCES

HF Sinclair Credit Agreement

We have a $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the “HF Sinclair Credit Agreement”). The HF Sinclair Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. At March 31, 2023, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.3 million under the HF Sinclair Credit Agreement.

HF Sinclair Financing Arrangements

Certain of our wholly owned subsidiaries entered into financing arrangements whereby such subsidiaries sold a portion of their precious metals catalyst to a financial institution and then leased back the precious metals catalyst in exchange for cash. The volume of the precious metals catalyst and the lease rate are fixed over the term of each lease, and the lease payments are recorded as interest expense. The current leases mature in one year or less. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity.

HEP Credit Agreement

HEP has a $1.2 billion senior secured revolving credit facility maturing in July 2025 (the “HEP Credit Agreement”). The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has an accordion feature that allows HEP to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. During the three months ended March 31, 2023, HEP had net repayments of $16.5 million under the HEP Credit Agreement. At March 31, 2023, HEP was in compliance with all of its covenants, had outstanding borrowings of $651.5 million and no outstanding letters of credit under the HEP Credit Agreement.

See Note 10 “Debt” in the Notes to Consolidated Financial Statements for additional information on our debt instruments.

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Liquidity

We believe our current cash and cash equivalents, along with future internally generated cash flow and funds available under our credit facilities, will provide sufficient resources to fund currently planned capital projects and our liquidity needs for the foreseeable future. We expect that, to the extent necessary, we can raise additional funds from time to time through equity or debt financings in the public and private capital markets. Further, we may from time to time seek to retire some or all of our outstanding debt or debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and will depend on prevailing market conditions, our liquidity requirements and other factors. In addition, components of our long-term growth strategy include the optimization of existing units at our facilities and selective acquisition of complementary assets for our operations intended to increase earnings and cash flow. We also expect to use cash for payment of cash dividends, which are at the discretion of our Board of Directors, and for the repurchase of common stock under our share repurchase program.

Our standalone (excluding HEP) liquidity was approximately $3.01 billion at March 31, 2023, consisting of cash and cash equivalents of $1.36 billion and an undrawn $1.65 billion credit facility.

We consider all highly-liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. These primarily consist of investments in conservative, highly-rated instruments issued by financial institutions, government and corporate entities with strong credit standings and money market funds. Cash equivalents are stated at cost, which approximates market value.

In September 2022, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company are also authorized under this share repurchase program, subject to REH Company’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. This program may be discontinued at any time by our Board of Directors.

During the three months ended March 31, 2023, we made open market and privately negotiated purchases of 4,793,857 shares for $240.3 million under our share repurchase program, of which 1,969,279 shares were repurchased for $100.0 million pursuant to privately negotiated repurchases from REH Company. As of March 31, 2023, we had remaining authorization to repurchase up to $419.8 million under this share repurchase program. We did not repurchase any shares in April 2023.

Cash Flows – Operating Activities

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Net cash flows provided by operating activities were $177.7 million for the three months ended March 31, 2023 compared to $461.0 million for the three months ended March 31, 2022, a decrease of $283.3 million driven by higher turnaround spend in the quarter. Changes in working capital decreased operating cash flows by $291.3 million for the three months ended March 31, 2023 and increased operating cash flows by $213.7 million for the three months ended March 31, 2022. Additionally, for the three months ended March 31, 2023, turnaround expenditures were $163.7 million compared to $45.2 million for the three months ended March 31, 2022.

Cash Flows – Investing Activities and Planned Capital Expenditures

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

For the three months ended March 31, 2023, our net cash flows used for investing activities were $100.2 million. Cash expenditures for properties, plants and equipment for the three months ended March 31, 2023 were $100.1 million, which include HEP capital expenditures of $7.6 million for the three months ended March 31, 2023.

For the three months ended March 31, 2022, our net cash flows used for investing activities were $385.2 million. On March 14, 2022, we closed the Sinclair Transactions and paid cash of $231.2 million. The remainder of the purchase consideration was funded with the issuance of HF Sinclair common stock and HEP common units. See Note 2 “Acquisitions” in the Notes to Consolidated Financial Statements for additional information on the Sinclair Transactions. Cash expenditures for properties, plants and equipment for the three months of ended March 31, 2022 were $158.3 million primarily due to expenditures related to our renewable diesel units. Cash expenditures for properties, plants and equipment include HEP capital expenditures of $14.1 million for the three months ended March 31, 2022.

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HF Sinclair Corporation

Each year our Board of Directors approves our annual capital budget which includes specific projects that management is authorized to undertake. When conditions warrant or as new opportunities arise, additional projects may be approved. The funds appropriated for a particular capital project may be expended over a period of several years, depending on the time required to complete the project. Therefore, our planned capital expenditures for a given year consist of expenditures appropriated in that year’s capital budget plus expenditures for projects appropriated in prior years which have not yet been completed. Refinery turnaround spending is amortized over the useful life of the turnaround.

The refining industry is capital intensive and requires on-going investments to sustain our refining operations. This includes replacement of, or rebuilding, refinery units and components that extend the useful life. We also invest in projects that improve operational reliability and profitability via enhancements that improve refinery processing capabilities as well as production yield and flexibility. Our capital expenditures also include projects related to renewable diesel, environmental, health and safety compliance and include initiatives as a result of federal and state mandates.

Our refinery operations and related emissions are highly regulated at both federal and state levels, and we invest in our facilities as needed to remain in compliance with these standards. Additionally, when faced with new emissions or fuels standards, we seek to execute projects that facilitate compliance and also improve the operating costs and / or yields of associated refining processes.

HEP

Each year the Holly Logistic Services, L.L.C. board of directors approves HEP’s annual capital budget, which specifies capital projects that HEP management is authorized to undertake. Additionally, at times when conditions warrant or as new opportunities arise, special projects may be approved. The funds allocated for a particular capital project may be expended over a period in excess of a year, depending on the time required to complete the project. Therefore, HEP’s planned capital expenditures for a given year consist of expenditures approved for capital projects included in its current year capital budget as well as, in certain cases, expenditures approved for capital projects in capital budgets for prior years. In addition, HEP may spend funds periodically to perform capital upgrades or additions to its assets where a customer reimburses HEP for such costs. The upgrades or additions would generally benefit the customer over the remaining life of the related service agreements.

Expected capital and turnaround cash spending for 2023 is as follows.

	Expected Cash Spending Range
	(In millions)
HF Sinclair Capital Expenditures
Refining	$	250.0	$	280.0
Renewables	25.0		35.0
Lubricants and Specialty Products	35.0		50.0
Marketing	20.0		30.0
Corporate	50.0		80.0
Turnarounds and catalyst	530.0		630.0
Total HF Sinclair	910.0		1,105.0
HEP
Maintenance	25.0		35.0
Expansion and joint venture investment	5.0		10.0
Total HEP	30.0		45.0
Total	$	940.0	$	1,150.0

Cash Flows – Financing Activities

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

For the three months ended March 31, 2023, our net cash flows used for financing activities were $379.1 million. During the three months ended March 31, 2023, we repurchased $245.6 million of our common stock and paid $88.0 million in dividends. During the three months ended March 31, 2023, HEP had net repayments of $16.5 million under the HEP Credit Agreement and paid distributions of $26.0 million to noncontrolling interests.

For the three months ended March 31, 2022, our net cash flows provided by financing activities were $281.4 million. During the three months ended March 31, 2022, HEP had net borrowings of $301.5 million under the HEP Credit Agreement and paid distributions of $17.0 million to noncontrolling interests.

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Contractual Obligations and Commitments

HF Sinclair Corporation

There were no significant changes to our long-term contractual obligations during the three months ended March 31, 2023.

HEP

During the three months ended March 31, 2023, HEP had net repayments of $16.5 million resulting in $651.5 million of outstanding borrowings under the HEP Credit Agreement at March 31, 2023.

There were no other significant changes to HEP’s long-term contractual obligations during this period.

CRITICAL ACCOUNTING ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2022. Certain critical accounting policies that materially affect the amounts recorded in our consolidated financial statements include the use of the last-in, first-out (“LIFO”) method of valuing certain inventories, assessing the possible impairment of certain long-lived assets and goodwill, and assessing contingent liabilities for probable losses.

Inventory Valuation

Inventories related to our refining operations are stated at the lower of cost, using the LIFO method for crude oil and unfinished and finished refined products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

Our renewables inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $108.7 million and $61.2 million at March 31, 2023 and December 31, 2022, respectively. A new market reserve of $108.7 million as of March 31, 2023 was based on market conditions and prices at that time. The effect of the change in the lower of cost or market reserve was an increase to cost of products sold totaling $47.6 million for the three months ended March 31, 2023.

Inventories consisting of process chemicals, materials and maintenance supplies and RINs are stated at the lower of weighted-average cost or net realizable value. Inventories of our Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of cost, using the first-in, first-out method, or net realizable value.

At March 31, 2023, the LIFO value of our refining inventories was equal to cost.

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Valuation of Business Combinations

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date. Any excess or surplus of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase. The fair value of assets and liabilities as of the acquisition date are often estimated using a combination of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate; the cost approach, which requires estimates of replacement costs and depreciation and obsolescence estimates; and the market approach which uses market data and adjusts for entity-specific differences. We use all available information to make these fair value determinations and engage third-party consultants for valuation assistance. The estimates used in determining fair values are based on assumptions believed to be reasonable but which are inherently uncertain. Accordingly, actual results may differ materially from the projected results used to determine fair value.

Contingencies

We are subject to proceedings, lawsuits and other claims related to environmental, labor, product and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.

RISK MANAGEMENT

We use certain strategies to reduce some commodity price and operational risks. We do not attempt to eliminate all market risk exposures when we believe that the exposure relating to such risk would not be significant to our future earnings, financial position, capital resources or liquidity or that the cost of eliminating the exposure would outweigh the benefit.

Commodity Price Risk Management

Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, collar contracts, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

Foreign Currency Risk Management

We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.

As of March 31, 2023, we have the following notional contract volumes related to all outstanding derivative instruments used to mitigate commodity price and foreign currency risk:

		Notional Contract Volumes by Year of Maturity
Derivative Instrument	Total Outstanding Notional	2023	2024	Unit of Measure
NYMEX futures (WTI) - short	1,790,000	1,790,000	—	Barrels
Forward gasoline and diesel contracts - long	145,000	145,000	—	Barrels
Forward diesel contracts - short	100,000	100,000	—	Barrels
Foreign currency forward contracts	428,211,705	322,227,146	105,984,559	U.S. dollar
Forward commodity contracts (platinum) (1)	36,969	14,550	22,419	Troy ounces
Natural gas price swaps (basis spread) - long	3,850,000	3,850,000	—	MMBTU
Natural gas collar contracts	22,000,000	22,000,000	—	MMBTU

(1)Represents an embedded derivative within our catalyst financing arrangements, which may be refinanced or require repayment under certain conditions. See Note 10 “Debt” in the Notes to Consolidated Financial Statements for additional information on these financing arrangements.

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The following sensitivity analysis provides the hypothetical effects of market price fluctuations to the commodity hedged under our derivative contracts:

	Derivative Fair Value Gain (Loss) at March 31,
	2023		2022
	(In thousands)
10% increase in underlying commodity prices	$	(10,696)	$	(20,849)
10% decrease in underlying commodity prices	$	10,290	$	20,849

Interest Rate Risk Management

The market risk inherent in our fixed-rate debt is the potential change arising from increases or decreases in interest rates as discussed below.

For the fixed rate HF Sinclair Senior Notes, HollyFrontier Senior Notes and HEP Senior Notes, changes in interest rates will generally affect fair value of the debt, but not earnings or cash flows. The outstanding principal, estimated fair value and estimated change in fair value (assuming a hypothetical 10% change in the yield-to-maturity rates) for this debt as of March 31, 2023 is presented below:

	Outstanding Principal		Estimated Fair Value		Estimated Change in Fair Value
	(In thousands)
HollyFrontier and HF Sinclair Senior Notes	$	1,707,827	$	1,677,864	$	29,993
HEP Senior Notes	$	900,000	$	866,860	$	22,254

For the variable rate HEP Credit Agreement, changes in interest rates would affect cash flows, but not the fair value. At March 31, 2023, outstanding borrowings under the HEP Credit Agreement were $651.5 million. A hypothetical 10% change in interest rates applicable to the HEP Credit Agreement would not materially affect cash flows.

Our operations are subject to catastrophic losses, operational hazards and unforeseen interruptions, including but not limited to fire, explosion, releases or spills, cyberattacks, weather-related perils, vandalism, power failures, mechanical failures and other events beyond our control. We maintain various insurance coverages, including general liability, property damage, business interruption and cyber insurance, subject to certain deductibles and insurance policy terms and conditions. We are not fully insured against certain risks because such risks are not fully insurable, coverage is unavailable, or premium costs, in our judgment, do not justify such expenditures.

Financial information is reviewed on the counterparties in order to review and monitor their financial stability and assess their ongoing ability to honor their commitments under the derivative contracts. We have not experienced, nor do we expect to experience, any difficulty in the counterparties honoring their commitments.

We have a risk management oversight committee consisting of members from our senior management. This committee oversees our risk enterprise program, monitors our risk environment and provides direction for activities to mitigate identified risks that may adversely affect the achievement of our goals.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

See “Risk Management” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles

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

Earnings before interest, taxes, depreciation and amortization, which we refer 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. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to net 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 is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants.

Set forth below is our calculation of EBITDA.

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Net income attributable to HF Sinclair stockholders	$	353,266	$	159,974
Add interest expense	45,822		34,859
Subtract interest income	(19,935)		(997)
Add income tax expense	99,700		21,329
Add depreciation and amortization	173,983		144,601
EBITDA	652,836		359,766

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 operations. Other companies in our industry may not calculate these performance measures in the same manner.

Below are reconciliations to our consolidated statements of operations 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.

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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,
	2023		2022
	(Dollars in thousands, except per barrel amounts)
Consolidated
Refining segment sales and other revenues	$	6,718,615	$	6,506,167
Refining segment cost of products sold (exclusive of lower of cost or market inventory adjustment)	5,617,911		5,909,610
Refining segment gross margin	$	1,100,704	$	596,557
Refining segment operating expenses	$	517,820	$	354,972
Produced barrels sold (BPD)	515,960		522,170
Refinery gross margin per produced barrel sold	$	23.70	$	12.69
Less average refinery operating expenses per produced barrel sold	11.15		7.55
Net operating margin per produced barrel sold	$	12.55	$	5.14

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 operations. 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,
	2023		2022
	(In thousands, except for per gallon amounts)
Renewables segment sales and other revenues	$	298,016	$	47,367
Renewables segment cost of products sold	262,738		44,271
Lower of cost or market inventory adjustment	47,597		(8,551)
	(12,319)		11,647
Add (subtract) lower of cost or market inventory adjustment	47,597		(8,551)
Renewables gross margin	$	35,278	$	3,096
Renewables operating expense	$	31,371	$	27,096
Produced gallons sold (in thousand gallons)	46,012		4,943
Renewables gross margin per produced gallon sold	$	0.77	$	0.63
Less operating expense per produced gallon sold	0.68		5.48
Net operating margin per produced gallon sold	$	0.09	$	(4.85)

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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 operations. 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,
	2023		2022
	(In thousands, except for per gallon amounts)
Marketing segment sales and other revenues	$	937,385	$	277,041
Marketing segment cost of products sold	924,049		271,131
Marketing gross margin	$	13,336	$	5,910
Sales volumes (in thousand gallons)	328,407		84,913
Marketing segment gross margin per gallon sold	$	0.04	$	0.07

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Item 4.Controls and Procedures

Evaluation of disclosure controls and procedures. Our principal executive officer and principal financial officer have evaluated, as required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2023.

Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings

Commitment and Contingency Reserves

In the ordinary course of business, we may become party to legal, regulatory or administrative proceedings or governmental investigations, including environmental and other matters. Damages or penalties may be sought from us in some matters and certain matters may require years to resolve. While the outcome and impact of these proceedings and investigations on us cannot be predicted with certainty, based on advice of counsel and information currently available to us, management believes that the resolution of these proceedings and investigations through settlement or adverse judgment will not either individually or in the aggregate have a material adverse effect on our financial condition, results of operations or cash flows.

The environmental proceedings are reported to comply with SEC regulations which require us to disclose proceedings arising under provisions regulating the discharge of materials into the environment or protecting the environment when a governmental authority is party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe could exceed $300,000 or more.

Environmental Matters

Navajo

HollyFrontier Navajo Refining LLC (now known as HF Sinclair Navajo Refining LLC (“HFS Navajo”)) has been engaged in discussions with, and has responded to document requests from, the EPA, the DOJ and the New Mexico Environment Department (“NMED”) (collectively, the “Agencies”) regarding HFS Navajo’s compliance with the Clean Air Act (“CAA”) and underlying regulations, and similar New Mexico laws and regulations, at its Artesia and Lovington, New Mexico refineries. The discussions have included the following topics: (a) alleged noncompliance with CAA’s National Emission Standards for Hazardous Air Pollutants (“NESHAP”) and New Source Performance Standards (“NSPS”) at the Artesia refinery, which were set forth in a Notice of Violation (“May 2020 NOV”) issued by the EPA in May 2020; (b) a Post Inspection Notice issued in June 2020 by the NMED, alleging noncompliance issues similar to those alleged by the EPA in its May 2020 NOV as well as alleged noncompliance with the State Implementation Plan (“SIP”) and the Title V permit operating programs; (c) an information request issued in September 2020 by the EPA, pursuant to CAA Section 114, related to benzene fenceline monitoring, flare fuel gas, leak detection and repair, storage vessels and tanks, and other information regarding the Artesia refinery; (d) an information request issued by the EPA in May 2021, pursuant to CAA Section 114, requesting additional information and testing related to certain tanks at the Artesia refinery; and (e) informal information requests related to, among other things, the Artesia refinery’s wastewater treatment plant, oil water separators and heat exchangers. In April 2022, the EPA alleged additional CAA noncompliance at the Artesia refinery beyond the allegations in the May 2020 NOV, including alleged noncompliance with NESHAP, NSPS, SIP, Title V and other requirements.

Beginning in the spring of 2021, HFS Navajo and the Agencies began monthly meetings to discuss potential injunctive relief measures to address the alleged noncompliance at the Artesia refinery. In September 2021, the EPA presented to HFS Navajo potential claims for stipulated penalties for alleged noncompliance with a 2002 consent decree.

HFS Navajo continues to work with the Agencies to resolve these issues. At this time, no penalties have been demanded, and it is too early to predict the outcome of this matter.

Port of Seattle

In October 2017, Sinclair Oil received a Notice of Claim from the Port of Seattle alleging Sinclair Oil’s responsibility for the clean-up of 12.5 million gallons of bunker fuel improperly disposed of at a facility in the Port of Seattle from 1977 to 1980. Sinclair Oil responded that it did sell bunker fuel for use as a fuel for ships at the Port of Seattle during this time frame but not for disposal as is being alleged. In late 2018, Sinclair Oil received a demand letter from the Port of Seattle. Sinclair Oil and the Port of Seattle entered into a tolling agreement in mid-2019. The parties have exchanged offers, and Sinclair Oil is awaiting a response to its last offer made in August 2020. It is too early to predict the outcome of this matter.

Renewable Fuel Standard

On April 7, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2018 compliance year. On June 3, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2016 compliance year and denying small refinery exemption petitions for our Woods Cross and Cheyenne refineries for the 2019 and 2020 compliance years.

54

Various subsidiaries of HollyFrontier are currently pursuing legal challenges to the EPA’s decisions to reverse its grant of small refinery exemptions for the 2016 and 2018 compliance years. The first lawsuit, filed against the EPA on May 6, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2018 small refinery exemption petitions overturned. The second lawsuit, filed against the EPA on August 5, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2016 small refinery exemption petitions overturned and to have the EPA’s denial of our 2019 and 2020 small refinery exemption petitions reversed.

In addition, for both the 2016 and 2018 compliance years, pursuant to the June 2022 and April 2022 decisions, respectively, the EPA established an alternative compliance demonstration for small refineries pursuant to which the EPA is not imposing any obligations for the small refineries whose exemptions were reversed. On June 24, 2022, Growth Energy filed two lawsuits in the U.S. Court of Appeals for the DC Circuit against the EPA challenging the alternative compliance demonstration for the 2016 and 2018 compliance years. On July 25, 2022, various subsidiaries of HollyFrontier intervened on behalf of the EPA to aid the defense of the EPA’s alternative compliance demonstration decision.

It is too early to predict the outcome of these matters.

Other

We are a party to various other litigation and proceedings that we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse impact on our financial condition, results of operations or cash flows.

Item 1A.Risk Factors

Except as described below, there have been no material changes in our risk factors as previously disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. You should carefully consider the risk factors discussed in our 2022 Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

There can be no assurances that we will enter into a definitive agreement with HEP related to our proposal to acquire all of HEP’s common units that we or our affiliates do not already own, or that we will complete any transactions contemplated by such an agreement.

On May 3, 2023, we submitted a non-binding proposal to acquire all of the outstanding common units (“Common Units”) of HEP not beneficially owned by us or our affiliates in exchange for common stock, par value $0.01 per share (“Common Stock”), of HF Sinclair. Under the proposal, HEP unitholders would receive newly issued shares of Common Stock at a fixed exchange ratio of 0.3714 per each publicly held Common Unit, which was derived using the 30-day volume weighted average prices for each security as of market close on May 3, 2023 (the “Proposed HEP Transaction”). The proposal has been made to the board of directors of the ultimate general partner of HEP. The Proposed HEP Transaction is subject to the negotiation and execution of a definitive agreement. There can be no assurance that a definitive agreement will be executed or that any transaction will be approved or consummated.

55

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(c) Common Stock Repurchases Made in the Quarter

The following table discloses purchases of shares of our common stock made by us during the first quarter of 2023.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 2023	511,716	$	51.60	511,716	$	635,369,482
February 2023	692,357	$	53.10	692,357	$	598,235,301
March 2023	3,589,784	$	49.35	3,589,784	$	419,766,383
Total for January to March 2023	4,793,857			4,793,857

(1) In September 2022, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company are also authorized under the share repurchase program, subject to REH Company’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. This program may be discontinued at any time by our Board of Directors.

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Item 6.Exhibits

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of HF Sinclair Corporation (incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K12B filed March 14, 2022, File No. 1-41325).
3.2	Second Amended and Restated By-Laws of HF Sinclair Corporation (incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K filed February 17, 2023, File No. 1-41325).
10.1	Stock Purchase Agreement, by and among HF Sinclair Corporation and REH Company, dated as of March 2, 2023 (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed March 3, 2023, File No. 1-41325.
10.2†	Ninth Amended and Restated Master Throughput Agreement, dated as of February 27, 2023, by and between Holly Energy Partners – Operating, L.P. and HF Sinclair Refining & Marketing LLC (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed March 1, 2023, File No. 1-41325).
10.3	Second Amended and Restated Transportation Services Agreement, dated as of February 23, 2023, by and between UNEV Pipeline, LLC and HF Sinclair Refining & Marketing LLC (incorporated by reference to Exhibit 10.2 of Registrant’s Current Report on Form 8-K filed March 1, 2023, File No. 1-41325).
10.4*	Third Amendment to Amended and Restated Master Tolling Agreement (Operating Assets), dated effective January 1, 2023, by and between HF Sinclair El Dorado Refining LLC, HF Sinclair Woods Cross Refining LLC and Holly Energy Partners - Operating L.P.
31.1*	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
101++	The following financial information from HF Sinclair Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted as inline XBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
104++	Cover page Interactive Data File (formatted as inline XBRL and contained in exhibit 101).

* Filed herewith.

** Furnished herewith.

+ Constitutes management contracts or compensatory plans or arrangements.

++ Filed electronically herewith.

† Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the SEC upon request.

57

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HF SINCLAIR CORPORATION
	(Registrant)
Date: May 5, 2023		/s/ Atanas H. Atanasov
		Atanas H. Atanasov
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: May 5, 2023		/s/ Indira Agarwal
		Indira Agarwal
		Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)

58

EX-10.4

Exhibit 10.4

Execution Version

THIRD AMENDMENT

TO

AMENDED AND RESTATED MASTER TOLLING AGREEMENT

(Operating Assets)

THIS THIRD AMENDMENT TO AMENDED AND RESTATED MASTER TOLLING AGREEMENT (Operating Assets) (this “Amendment”) is entered into as of April 28, 2023 and effective as of January 1, 2023, by and among the Persons set forth on Exhibit A (each hereinafter sometimes referred to as a “Party” and sometimes collectively referred to as the “Parties”).

RECITALS:

A.Effective as of October 1, 2016, the Parties entered into a certain Amended and Restated Master Tolling Agreement (Operating Assets) (as amended by the Amendment to Amended and Restated Master Tolling Agreement, dated January 1, 2017, and the Second Amendment to Amended and Restated Master Tolling Agreement dated October 29, 2018 the “Amended and Restated Master Tolling Agreement”). Capitalized terms used but not otherwise defined in this Amendment have the meanings ascribed to such terms in the Amended and Restated Master Tolling Agreement.

B.Exhibit C-2 to the Amended and Restated Master Tolling Agreement provides for the adjustment of the Tolling Fee based on the aggregate Turnaround Costs actually incurred after the first turnaround on the Applicable Asset.

C.The Parties desire to, among other things, adjust the Tolling Fee for the El Dorado Assets and the Woods Cross Assets as provided in Exhibit C-2 attached to the Amended and Restated Master Tolling Agreement, on the terms and conditions set forth herein.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby amend the Amended and Restated Master Tolling Agreement as follows:

1.Incorporation of Recitals. The recitals for this Amendment are fully incorporated herein by the reference thereto with the same force and effect as though recited herein.

2.Amendments to Articles 6, 7 and 10.

a.Section 6.2 of the Amended and Restated Master Tolling Agreement is hereby amended by removing the reference to HollyFrontier and replacing it with “HF Sinclair”.

b.Article 7 of the Amended and Restated Master Tolling Agreement is hereby amended by removing the reference to HollyFrontier and replacing it with “HF Sinclair”.

c.Article 10 of the Amended and Restated Master Tolling Agreement is hereby amended by removing all references to HollyFrontier and replacing them with “HF Sinclair”.

d.Article 10 of the Amended and Restated Master Tolling Agreement is hereby amended by adding a new Section 10.8 as follows:

“10.8     Termination of HollyFrontier Guarantee. HF Sinclair, HEP Operating, the Partnership, HF Sinclair El Dorado and HF Sinclair Woods Cross acknowledge and agree that all obligations of HollyFrontier, pursuant to this Article 10 are hereby terminated, and HollyFrontier shall no longer be a party to this Agreement nor have any obligations hereunder.”

3.Amendment to Exhibit A.

DB1/ 137458606.2

a.Exhibit A of the Amended and Restated Master Tolling Agreement is hereby deleted and replaced, in its entirety, with Exhibit A attached to this Amendment.

4.Amendment to Exhibit B.

a.Exhibit B of the Amended and Restated Master Tolling Agreement is hereby amended by removing the reference to HollyFrontier Woods Cross and replacing it with “HF Sinclair Woods Cross”.

5.Amendment to Exhibit C. Effective as of 12:01 a.m. Central Time on January 1, 2023 Exhibit C-2 attached to the Amended and Restated Master Tolling Agreement is hereby deleted and replaced, in its entirety, with Exhibit C-2 attached to this Amendment.

6.Amendments to Exhibit D.

a.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by removing the definition of “Applicable Refinery Owner” and replacing it as follows:

““Applicable Refinery Owner” means, with respect to the El Dorado Refinery, HF Sinclair El Dorado, and with respect to the Woods Cross Refinery, HF Sinclair Woods Cross.”

b.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by adding the definition of “HF Sinclair” as follows:

““HF Sinclair” means HF Sinclair Corporation, a Delaware corporation.”

c.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by adding the definition of “HF Sinclair El Dorado” as follows:

““HF Sinclair El Dorado” means HF Sinclair El Dorado Refining LLC (f/k/a HollyFrontier El Dorado Refining LLC), a Delaware limited liability company.”

d.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by removing the definition of “El Dorado Refinery Complex” and replacing it as follows:

““El Dorado Refinery Complex” means the refinery complex owned by HF Sinclair El Dorado, commonly known as the El Dorado Refinery, and located in the City of El Dorado, Butler County, Kansas.”

e.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by removing the definition of “HollyFrontier El Dorado”.

f.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by adding the definition of “HF Sinclair Woods Cross” as follows:

““HF Sinclair Woods Cross” means HF Sinclair Woods Cross Refining LLC (f/k/a HollyFrontier Woods Cross Refining LLC), a Delaware limited liability company.”

g.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by removing the definition of “HollyFrontier Woods Cross”.

h.Exhibit D of the Amended and Restated Master Tolling Agreement is hereby amended by removing the definition of “Woods Cross Refinery Complex” and replacing it as follows:

““Woods Cross Refinery Complex” means the refinery complex owned by HF Sinclair Woods Cross, commonly known as the Woods Cross Refinery, and located in the City of West Bountiful, Davis County, Utah.”

2

DB1/ 137458606.2

7.Counterparts. This Amendment may be executed in counterparts each of which shall be deemed an original. An executed counterpart of this Amendment transmitted by facsimile shall be equally as effective as a manually executed counterpart.

8.Successors and Assigns. This Amendment shall inure for the benefit of and shall be binding on each of the Parties and their respective successors and/or assigns.

9.Entire Agreement. This Amendment contains the entire agreement between the Parties as to the subject matter hereof and, except as provided for in this Amendment, the terms and provisions of the Amended and Restated Master Tolling Agreement shall remain in full force and effect.

[Signature page follows]

3

DB1/ 137458606.2

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized officers to be effective as of the date first set forth above.

	HEP OPERATING:
	Holly Energy Partners-Operating, L.P.
By: /s/	Michael C. Jennings
	Michael C. Jennings
	Chief Executive Officer and President
	APPLICABLE REFINERY OWNER:
	HF Sinclair El Dorado Refining LLC
	(f/k/a HollyFrontier El Dorado Refining LLC)
	HF Sinclair Woods Cross Refining LLC
	(f/k/a HollyFrontier Woods Cross Refining LLC)
By: /s/	Tim Go
	Tim Go
	President and Chief Operating Officer

4

DB1/ 137458606.2

Exhibit A

to

Amended and Restated Master Tolling Agreement

Parties:

HF Sinclair El Dorado and HEP Operating, as to the El Dorado Assets.

HF Sinclair Woods Cross and HEP Operating, as to the Woods Cross Assets.

Exhibit A-1

DB1/ 137458606.2

Exhibit C-2

to

Amended and Restated Master Tolling Agreement

Applicable Assets; Minimum Throughput Commitment; Tolling Fees and Adjustments; Applicable Term

Appli-cable Assets

Type of Applicable Asset

Products

Minimum Throughput Commit-ment (on a BPD basis)

Tolling Fee*

Tolling Fee Adjustment

PPI Adjust-ment Minimum/ Cap

Fee Adjustment Commence-ment Date

Purchase Price

Accrued Turn-around Cost

Assumed Fuel Gas Cost

Initial Term (all times are Dallas, TX time)

Extension Term (all times are Dallas, TX time)

El Dorado Assets

Naphtha Fractiona-tion Unit

Isopentane1 ISOM Feed Int. Naphtha Reformer Feed

48,750 BPD

$0.4410/BBL2

PPI/DINO Merit Comp Adjustment3 Turnaround Surcharge4 Fuel Gas Surcharge5

Subject to 1% Minimum/ 3% Cap3

July 1, 2017

$25,936,371

$1.6M4

$73,6105

12:01 a.m. on November 1, 2015 (the “Effective Time”) to 12:00 mid-night on October 31, 2030

The Applicable Refinery Owner shall have the option to extend the Applicable Term beyond the Initial Term for one additional five (5) year period beginning at 12:01 am on November 1, 2030 and ending at 12:00 midnight on October 31, 2035 on the same terms and conditions as in existence for the Initial Term.

Exhibit C2-1

DB1/ 137458606.2

Woods Cross Assets

Crude Unit 2

Naphtha Diesel tower bottoms

14,625 BPD6

$3.0527/ BBL8

PPI/WX Union Annual Increase7 Turn-around Surcharge4 Fuel Gas Surcharge (excluding Polymeri-zation Unit)5

None

July 1, 2017

$64.75M

$8.7M4

$11,871

12:01 a.m. on October 1, 2016 (the “Effective Time”) to 12:00 midnight on September 30, 2031

The Applicable Refinery Owner shall have the option to extend the Applicable Term beyond the Initial Term for one additional five (5) year period beginning at 12:01 am on October 1, 2031 and ending at 12:00 midnight on September 30, 2036 on the same terms and conditions as in existence for the Initial Term.

FCC Unit 2

Gasoline Light  Cycle Oil Olefins Slurry

7,600 BPD6

$15.6251/BBL8

$176.25M

$7.8M4

$11,566

Polymeriza-tion Unit

Gasoline Butane Propane

2,438 BPD6

$10.8512/ BBL8

$37.0M

$3.2M4

-

*    As of January 1, 2023.

1.    The “Feedstock” for the El Dorado Assets is light naphtha and heavy naphtha. The “Feedstock” for the Woods Cross Assets is as follows: Crude Unit 2 – crude oil; FCC Unit 2 – crude tower bottoms and outside gas oil; Poly Unit – olefins.

2.    El Dorado Only: The Tolling Fee shall never be less than $0.36 per BBL of Feedstock. If as a result of a reduction to the Tolling Fee or Minimum Throughput Commitment for a Contract Quarter pursuant to Section 2.2(d) of the Agreement, the Applicable Refinery Owner has overpaid its Tolling Fees for a Contract Quarter, the Applicable Refinery Owner shall receive a credit against its Tolling Fees due for the following Contract Quarter in the amount of such overpayment.

3.    El Dorado Only: The Tolling Fee, as previously adjusted on a cumulative basis, shall be adjusted on July 1 of each calendar year, commencing July 1, 2017, by an amount equal to a percentage calculated as follows: (A) 0.75 x the change in the PPI as described below, plus (B) 0.25 x the annual HF Sinclair Merit Compensation Adjustment (positive or negative) for such calendar year. The change in the PPI is the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. (“PPI”), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUFD49207– located at http://www.bls.gov/data/. The change in PPI for each year shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1); provided that the change in PPI in any year shall not be less than one percent (1%) or more than three percent (3%). For the avoidance of doubt, if the change in PPI in any year is less than one percent (1%) (including if the change in the PPI is negative) it will be rounded up to one percent (1%) and if the change in PPI in any year is greater than three percent (3%) it will be rounded down to three percent (3%). If either index is no longer published, the Parties shall negotiate in good faith to agree on a new index (as applicable) that gives comparable protection against inflation or deflation, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the Tolling Fee. If the Parties are unable to agree on a new index, a new index will be determined in accordance with the dispute resolution provisions set forth in the Article VIII of Omnibus Agreement, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the Tolling Fee. The annual HF Sinclair Merit Compensation Adjustment is the company-wide increase (or decrease) in salary for the year in which the adjustment occurs as determined by the HF Sinclair Chief Executive Officer and Chief Human Resources Officer (excluding merit compensation adjustments for executive officers that are determined by the HF Sinclair Board of Directors (or a committee thereof) and excluding any annual increases for union employees). Examples of the annual Tolling Fee adjustment under various scenarios are as follows:

Exhibit C2-2

DB1/ 137458606.2

(1)if the change in PPI is 0% and the DINO Merit Compensation Adjustment is 3.5%, the Tolling Fee adjustment would be (0.75 x 1%) + (0.25 x 3.5%) = 1.625%

(2)if the change in PPI is 2% and the DINO Merit Compensation Adjustment is 2%, the Tolling Fee adjustment would be (0.75 x 2%) + (0.25 x 2%) = 2%

(3)if the change in PPI is 5% and the DINO Merit Compensation Adjustment is 2%, the Tolling Fee adjustment would be (0.75 x 3%) + (0.25 x 2%) = 2.75%

(4)if the change in PPI is 0% and the DINO Merit Compensation Adjustment is -2%, the Tolling Fee adjustment would be (0.75 x 1%) + (0.25 x (-2%)) = 0.25%

4.    After the first turnaround on the Applicable Asset during the Applicable Term, HEP Operating will calculate its aggregate Turnaround Costs incurred in connection therewith. In the event such aggregate Turnaround Costs for the Applicable Asset exceeds the Accrued Turnaround Cost set forth above then (A) a turnaround surcharge (the “Turnaround Surcharge”) will be added to the Tolling Fee based on each BBL of Feedstock (using the Minimum Throughput Commitment) in order to allow HEP Operating to recover (i) such Turnaround Costs in excess of the Accrued Turnaround Cost plus (ii) a ten percent (10%) return on such excess (the aggregate amount specified in clauses (i) and (ii), the “Turnaround Payment”). Such Turnaround Surcharge shall be paid by the Applicable Refinery Owner to HEP Operating on each BBL of Feedstock processed through the Applicable Asset until the earlier to occur of (i) the expiration of the Applicable Term or (ii) the recovery by HEP Operating of the Turnaround Payment. In addition, the Tolling Fee will be adjusted by the amount necessary to recover the new estimated turnaround expense for the remainder of the Applicable Term (based on the Minimum Throughput Commitment).

The aggregate Turnaround Costs incurred though December 31, 2022 for the Woods Cross FCC Unit 2 exceeded the Accrued Turnaround Costs set forth above. Therefore, effective January 1, 2023, the tolling fee above has been increased by the amount necessary to recover the new estimated turnaround expense for the remainder of the Applicable Term. At the Woods Cross Refinery, the Turnaround Costs adjustment only applies to the FCC Unit 2 as the other two Applicable Assets at the Woods Cross Refinery did not exceed the Accrued Turnaround costs set forth in the chart above.

In addition, HEP Operating will add a $0.7161/BBL Turnaround Surcharge to the FCC Unit 2 tolling fee to recover the Turnaround Payment. This Turnaround Surcharge should be applied to each BBL of Feedstock until the earlier of (i) the expiration of the Applicable Term or (ii) the aggregate Turnaround Surcharge billings reach $17,170,646 (23.978,000 barrels x $0.7161). The Turnaround Surcharge is not subject to the annual fee adjustment.

5.    If at the end of any calendar month during the Applicable Term the aggregate cost of gas incurred by HEP Operating in connection with the operation of the Applicable Assets exceeds the Assumed Fuel Gas Cost, the Applicable Refinery Owner shall promptly pay to HEP Operating an amount equal to the positive difference, if any, of (i) the aggregate cost of fuel gas incurred by HEP Operating in connection with the operation of the Applicable Assets during such calendar month less (ii) the Assumed Fuel Gas Cost.

6.    Determined on a Contract Quarter basis.

7.    Woods Cross Only: The Tolling Fee, as previously adjusted on a cumulative basis, shall be adjusted on July 1 of each calendar year, commencing July 1, 2017, by an amount equal to a percentage calculated as follows: (A) 0.5 x the change in the PPI as described below, plus (B) 0.5 x the annual increase under the then current Woods Cross union contract. The change in the PPI is the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. (“PPI”), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUFD49207– located at http://www.bls.gov/data/. The change in PPI for each year shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). If either index is no longer published, the Parties shall negotiate in good faith to agree on a new index (as applicable) that gives comparable protection against inflation or deflation, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the Tolling Fee. If the Parties are unable to agree on a new index, a new index will be determined in accordance with the dispute resolution provisions set forth in the Article VIII of Omnibus Agreement, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the Tolling Fee. The annual increase under the then current Woods Cross union contract is the annual base pay increase given to union employees at Woods Cross, currently on or about February 1 of each year. Examples of the annual Tolling Fee adjustment under various scenarios are as follows:

Exhibit C2-3

DB1/ 137458606.2

(1)    if the change in PPI is 0% and the annual increase under the then current Woods Cross union contract is 3.5%, the Tolling Fee adjustment would be (0.5 x 0%) + (0.5 x 3.5%) = 1.75%

(2)    if the change in PPI is 2% and the annual increase under the then current Woods Cross union contract is 2%, the Tolling Fee adjustment would be (0.5 x 2%) + (0.5 x 2%) = 2%

(3)    if the change in PPI is 5% and the annual increase under the then current Woods Cross union contract is 2%, the Tolling Fee adjustment would be (0.5 x 5%) + (0.5 x 2%) = 3.5%10.

(4)    if the change in PPI is -1% and the annual increase under the then current Woods Cross union contract is 2%, the Tolling Fee adjustment would be (0.5 x -1%) + (0.5 x 2%) = 0.5%.    

8.     Woods Cross Only: If the Applicable Refinery Owner has overpaid its monthly Tolling Fees after adjustments to Tolling Fees or Minimum Throughput Commitments for a Contract Quarter pursuant to Section 2.2(d) of the Agreement, the Applicable Refinery Owner shall be entitled to apply any such overpayment as a credit against Tolling Fees within the succeeding twelve months for volumes of Feedstock delivered to HEP Operating in excess of the Minimum Throughput Commitment for any of the Applicable Assets. If any such overpayment has not been credited within twelve months of the overpayment, such overpayment shall be credited against Tolling Fees due with respect to any Minimum Throughput Commitment for any of the Applicable Assets, or if there are no such Tolling Fees due, such overpayment shall be credited against any other obligations owed by the Applicable Refinery Owner, or its Affiliates, to HEP Operating.

Exhibit C2-4

DB1/ 137458606.2

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael C. Jennings, certify that:

1.I have reviewed this quarterly report on Form 10-Q of HF Sinclair Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting

May 5, 2023	/s/ Michael C. Jennings
	Michael C. Jennings
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Atanas H. Atanasov, certify that:

1.I have reviewed this quarterly report on Form 10-Q of HF Sinclair Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2023	/s/ Atanas H. Atanasov
	Atanas H. Atanasov
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE

OFFICER UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the quarterly period ended March 31, 2023 and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael C. Jennings, Chief Executive Officer of HF Sinclair Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2023	/s/ Michael C. Jennings
	Michael C. Jennings
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL

OFFICER UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the quarterly period ended March 31, 2023 and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Atanas H. Atanasov, Chief Financial Officer of HF Sinclair Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2023	/s/ Atanas H. Atanasov
	Atanas H. Atanasov
	Executive Vice President and Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	Apr. 28, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	1-41325
Entity Registrant Name	HF SINCLAIR CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-2092143
Entity Address, Address Line One	2828 N. Harwood,
Entity Address, Address Line Two	Suite 1300
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75201
City Area Code	214
Local Phone Number	871-3555
Title of 12(b) Security	Common Stock $0.01 par value
Trading Symbol	DINO
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		192,307,059
Entity Central Index Key	0001915657
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents (HEP:$7,105 and $10,917, respectively)	$ 1,364,930	$ 1,665,066
Accounts receivable: Product, transportation and other (HEP: $15,435 and $16,344, respectively)	1,358,265	1,626,199
Crude oil resales	259,153	76,950
Accounts receivable, total	1,617,418	1,703,149
Inventories: Crude oil and refined products	3,112,713	2,853,425
Materials, supplies and other (HEP: $1,192 and $1,246, respectively)	336,108	361,103
Total inventory	3,448,821	3,214,528
Income taxes receivable	43,239	53,563
Prepayments and other (HEP: $4,851 and $5,699, respectively)	84,121	112,013
Total current assets	6,558,529	6,748,319
Properties, plants and equipment, at cost (HEP: $2,190,097 and $2,173,248, respectively)	10,220,164	10,146,652
Less accumulated depreciation (HEP: $(781,790) and $(761,210), respectively)	(3,563,848)	(3,457,747)
Properties, plants and equipment, net	6,656,316	6,688,905
Operating lease right-of-use assets (HEP: $65,421 and $66,382, respectively)	330,942	351,068
Other assets: Turnaround costs	495,628	376,158
Goodwill (HEP: $431,985 and $431,985, respectively)	2,978,504	2,978,315
Intangibles and other (HEP: $361,951 and $360,768, respectively)	986,089	982,718
Other assets, total	4,460,221	4,337,191
Total assets	18,006,008	18,125,483
Current liabilities:
Accounts payable (HEP: $18,352 and $27,199, respectively)	2,109,245	2,334,107
Income taxes payable	59,536	7,818
Operating lease liabilities (HEP: $4,160 and $4,204, respectively)	108,499	109,926
Current debt	307,256	306,959
Accrued liabilities (HEP: $28,953 and $39,110, respectively)	533,198	486,719
Total current liabilities	3,117,734	3,245,529
Long-term debt (HEP: $1,540,385 and $1,556,334, respectively)	2,932,989	2,948,513
Noncurrent operating lease liabilities (HEP: $61,631 and $62,550, respectively)	234,006	254,215
Deferred income taxes (HEP: $374 and $374, respectively)	1,278,061	1,262,165
Other long-term liabilities (HEP: $53,257 and $55,373, respectively)	392,691	397,489
HF Sinclair stockholders’ equity:
Preferred stock, $1.00 par value – 5,000,000 shares authorized; none issued	0	0
Common stock $.01 par value – 320,000,000 shares authorized; 223,231,546 shares issued as of March 31, 2023 and December 31, 2022	2,232	2,232
Additional capital	6,469,814	6,468,775
Retained earnings	4,395,531	4,130,252
Accumulated other comprehensive loss	(20,223)	(22,013)
Common stock held in treasury, at cost – 30,924,520 and 26,152,344 shares as of March 31, 2023 and December 31, 2022, respectively	(1,576,689)	(1,335,431)
Total HF Sinclair stockholders’ equity	9,270,665	9,243,815
Noncontrolling interest	779,862	773,757
Total equity	10,050,527	10,017,572
Total liabilities and equity	$ 18,006,008	$ 18,125,483

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Cash and cash equivalents	$ 1,364,930	$ 1,665,066
Accounts receivable: product, transportation and other	1,358,265	1,626,199
Inventories: materials, supplies and other	336,108	361,103
Prepayments and other	84,121	112,013
Properties, plants and equipment, at cost	10,220,164	10,146,652
Accumulated depreciation	(3,563,848)	(3,457,747)
Operating lease right-of-use asset	330,942	351,068
Goodwill	2,978,504	2,978,315
Intangibles and other	986,089	982,718
Accounts payable	2,109,245	2,334,107
Operating lease liabilities	108,499	109,926
Accrued liabilities	533,198	486,719
Long-term debt	2,932,989	2,948,513
Noncurrent operating lease liabilities	234,006	254,215
Deferred income taxes	1,278,061	1,262,165
Other long-term liabilities	$ 392,691	$ 397,489
Preferred stock par value (in USD per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock par value (in USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	320,000,000	320,000,000
Common stock, shares issued (in shares)	223,231,546	223,231,546
Common stock held in treasury (in shares)	30,924,520	26,152,344
HEP
Cash and cash equivalents	$ 7,105	$ 10,917
Accounts receivable: product, transportation and other	15,435	16,344
Inventories: materials, supplies and other	1,192	1,246
Prepayments and other	4,851	5,699
Properties, plants and equipment, at cost	2,190,097	2,173,248
Accumulated depreciation	(781,790)	(761,210)
Operating lease right-of-use asset	65,421	66,382
Goodwill	431,985	431,985
Intangibles and other	361,951	360,768
Accounts payable	18,352	27,199
Operating lease liabilities	4,160	4,204
Accrued liabilities	28,953	39,110
Long-term debt	1,540,385	1,556,334
Noncurrent operating lease liabilities	61,631	62,550
Deferred income taxes	374	374
Other long-term liabilities	$ 53,257	$ 55,373

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Sales and other revenues	$ 7,565,142	$ 7,458,750
Cost of products sold (exclusive of depreciation and amortization):
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	6,104,057	6,502,012
Lower of cost or market inventory valuation adjustment	47,597	(8,551)
Total costs of products sold (exclusive of depreciation and amortization)	6,151,654	6,493,461
Operating expenses (exclusive of depreciation and amortization)	639,383	477,434
Selling, general and administrative expenses (exclusive of depreciation and amortization)	95,913	110,422
Depreciation and amortization	173,983	144,601
Total operating costs and expenses	7,060,933	7,225,918
Income from operations	504,209	232,832
Other income (expense):
Earnings of equity method investments	3,882	3,626
Interest income	19,935	997
Interest expense	(45,822)	(34,859)
Gain on foreign currency transactions	870	139
Gain on sale of assets and other	1,631	3,895
Other income (expense) total	(19,504)	(26,202)
Income before income taxes	484,705	206,630
Income tax expense (benefit):
Current	84,395	46,263
Deferred	15,305	(24,934)
Income tax expense (benefit) total	99,700	21,329
Net income	385,005	185,301
Less net income attributable to noncontrolling interest	31,739	25,327
Net income attributable to HF Sinclair stockholders	$ 353,266	$ 159,974
Earnings per share:
Basic (in USD per share)	$ 1.79	$ 0.90
Diluted (in USD per share)	$ 1.79	$ 0.90
Average number of common shares outstanding:
Basic (in shares)	195,445	175,081
Diluted (in shares)	195,445	175,081

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Net income	$ 385,005	$ 185,301
Other comprehensive income:
Foreign currency translation adjustment	2,926	1,721
Change in fair value of cash flow hedging instruments	270	(4,962)
Reclassification adjustments to net income on settlement of cash flow hedging instruments	1	5,288
Net unrealized gain on hedging instruments	271	326
Net change in pension and other post-retirement benefit obligations	(960)	(906)
Other comprehensive income before income taxes	2,237	1,141
Income tax expense	447	225
Other comprehensive income	1,790	916
Total comprehensive income	386,795	186,217
Less noncontrolling interest in comprehensive income	31,739	25,327
Comprehensive income attributable to HF Sinclair stockholders	355,056	160,890
Actuarial loss on pension plans
Other comprehensive income:
Plan gain reclassified to net income	(45)	(45)
Actuarial gain on post-retirement healthcare plans
Other comprehensive income:
Plan gain reclassified to net income	(918)	(870)
Retirement restoration plan
Other comprehensive income:
Retirement restoration plan loss reclassified to net income	$ 3	$ 9

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income	$ 385,005	$ 185,301
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	173,983	144,601
Lower of cost or market inventory valuation adjustment	47,597	(8,551)
Earnings of equity method investments, inclusive of distributions	(1,799)	(520)
Gain on sale of assets	(414)	(2,669)
Deferred income taxes	15,305	(24,934)
Equity-based compensation expense	3,325	7,831
Change in fair value – derivative instruments	15,402	(226)
(Increase) decrease in current assets:
Accounts receivable	86,369	(419,609)
Inventories	(280,263)	(267,461)
Income taxes receivable	10,494	(3,026)
Prepayments and other	28,007	(12,334)
Increase (decrease) in current liabilities:
Accounts payable	(220,018)	790,060
Income taxes payable	51,697	12,284
Accrued liabilities	32,424	113,802
Turnaround expenditures	(163,734)	(45,156)
Other, net	(5,675)	(8,357)
Net cash provided by operating activities	177,705	461,036
Cash flows from investing activities:
Additions to properties, plants and equipment	(92,455)	(144,149)
Acquisitions, net of cash acquired	0	(231,201)
Proceeds from sale of assets	1,572	2,617
Distributions from equity method investments in excess of equity earnings	760	1,704
Net cash used for investing activities	(100,237)	(385,176)
Cash flows from financing activities:
Borrowings under credit agreements	42,000	360,000
Repayments under credit agreements	(58,500)	(58,500)
Purchase of treasury stock	(245,566)	(352)
Dividends	(87,987)	0
Distributions to noncontrolling interests	(25,986)	(17,003)
Payments on finance leases	(3,071)	(2,611)
Other, net	0	(148)
Net cash provided by (used for) financing activities	(379,110)	281,386
Effect of exchange rate on cash flow	1,506	588
Cash and cash equivalents:
Increase (decrease) for the period	(300,136)	357,834
Beginning of period	1,665,066	234,444
End of period	1,364,930	592,278
Cash paid during the period for:
Interest	(25,934)	(18,986)
Income taxes, net	(22,010)	(40,098)
Increase (decrease) in accrued and unpaid capital expenditures	(17,819)	(21,738)
HEP
Cash flows from investing activities:
Additions to properties, plants and equipment	(7,614)	(14,147)
HEP investment in Osage Pipe Line Company LLC	$ (2,500)	$ 0

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CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Thousands	Total	HEP	UNEV	Common Stock	Additional Capital	Additional Capital UNEV	Retained Earnings	Accumulated other comprehensive loss	Treasury Stock	Non-controlling Interest	Non-controlling Interest HEP	Non-controlling Interest UNEV
Common stock outstanding at beginning of period (in shares) at Dec. 31, 2021				256,046,000
Stockholders' equity at beginning of period at Dec. 31, 2021	$ 6,294,465			$ 2,560	$ 4,220,075		$ 4,413,836	$ 2,671	$ (2,951,257)	$ 606,580
Treasury stock outstanding at beginning of period (in shares) at Dec. 31, 2021									93,045,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	185,301						159,974			25,327
Other comprehensive income, net of tax	916							916
Issuance of common shares for HFC Transactions (in shares)				60,230,000
Issuance of common shares for HFC Transactions	2,149,008			$ 602	2,148,406
Issuance of common shares under incentive compensation plans (in shares)									(7,000)
Issuance of common shares under incentive compensation plans	0				(282)				$ 282
Equity-based compensation	7,831				7,211					620
Purchase of treasury stock (in shares)									9,000
Purchase of treasury stock	(352)								$ (352)
Retirement of treasury stock (in shares)				(93,045,000)					(93,045,000)
Retirement of treasury stock	0			$ (930)			(2,950,324)		$ 2,951,254
Distributions to noncontrolling interest holders	(17,003)									(17,003)
Purchase of HEP units for equity grants		$ (57)	$ (61,650)			$ 16,537					$ (57)	$ (78,187)
Equity attributable to HEP common unit issuance, net of tax	318,518				95,047					223,471
Acquisition of remaining UNEV interests		$ (57)	$ (61,650)			$ 16,537					$ (57)	$ (78,187)
Common stock outstanding at end of period (in shares) at Mar. 31, 2022				223,231,000
Stockholders' equity at end of period at Mar. 31, 2022	8,876,977			$ 2,232	6,486,994		1,623,486	3,587	$ (73)	760,751
Treasury stock outstanding at end of period (in shares) at Mar. 31, 2022									2,000
Common stock outstanding at beginning of period (in shares) at Dec. 31, 2022				223,231,000
Stockholders' equity at beginning of period at Dec. 31, 2022	10,017,572			$ 2,232	6,468,775		4,130,252	(22,013)	$ (1,335,431)	773,757
Treasury stock outstanding at beginning of period (in shares) at Dec. 31, 2022									26,152,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	385,005						353,266			31,739
Dividends	(87,987)						(87,987)
Other comprehensive income, net of tax	1,790							1,790
Issuance of common shares under incentive compensation plans (in shares)									(38,000)
Issuance of common shares under incentive compensation plans	0				(1,934)				$ 1,934
Equity-based compensation	3,325				2,973					352
Purchase of treasury stock, inclusive of excise tax (in shares)									4,810,000
Purchase of treasury stock, inclusive of excise tax	$ (243,192)								$ (243,192)
Purchase of treasury stock (in shares)	4,793,857
Purchase of treasury stock	$ (240,300)
Distributions to noncontrolling interest holders	(25,986)									(25,986)
Common stock outstanding at end of period (in shares) at Mar. 31, 2023				223,231,000
Stockholders' equity at end of period at Mar. 31, 2023	$ 10,050,527			$ 2,232	$ 6,469,814		$ 4,395,531	$ (20,223)	$ (1,576,689)	$ 779,862
Treasury stock outstanding at end of period (in shares) at Mar. 31, 2023									30,924,000

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CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2023 $ / shares
Statement of Stockholders' Equity [Abstract]
Dividends declared per common share (in USD per share)	$ 0.45

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Description of Business and Presentation of Financial Statements

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Presentation of Financial Statements

Description of Business and Presentation of Financial Statements

On March 14, 2022 (the “Closing Date”), HollyFrontier Corporation (“HollyFrontier”) and Holly Energy Partners, L.P. (“HEP”) announced the establishment of HF Sinclair Corporation, a Delaware corporation (“HF Sinclair”), as the new parent holding company of HollyFrontier and HEP and their subsidiaries, and the completion of their respective acquisitions of Sinclair Oil Corporation (now known as Sinclair Oil LLC, “Sinclair Oil”) and Sinclair Transportation Company LLC (“STC”) from The Sinclair Companies (now known as REH Company and referred to herein as “REH Company”). On the Closing Date, pursuant to that certain Business Combination Agreement, dated as of August 2, 2021 (as amended on March 14, 2022, the “Business Combination Agreement”), by and among HollyFrontier, HF Sinclair, Hippo Merger Sub, Inc., a wholly owned subsidiary of HF Sinclair (“Parent Merger Sub”), REH Company, and Hippo Holding LLC (now known as Sinclair Holding LLC), a wholly owned subsidiary of REH Company (the “Target Company”), HF Sinclair completed its previously announced acquisition of the Target Company by effecting (a) a holding company merger in accordance with Section 251(g) of the Delaware General Corporation Law whereby HollyFrontier merged with and into Parent Merger Sub, with HollyFrontier surviving such merger as a direct wholly owned subsidiary of HF Sinclair (the “HFC Merger”) and (b) immediately following the HFC Merger, a contribution whereby REH Company contributed all of the equity interests of the Target Company to HF Sinclair in exchange for 60,230,036 shares of HF Sinclair common stock, resulting in the Target Company becoming a direct wholly owned subsidiary of HF Sinclair (the “HFC Transactions”). At the effective time of the HFC Merger, HollyFrontier became a wholly owned subsidiary of HF Sinclair, and all of HollyFrontier’s outstanding shares were automatically converted into equivalent corresponding shares of HF Sinclair. Pursuant to the HFC Merger, HF Sinclair became the successor issuer to HollyFrontier pursuant to Rule 12g-3(a) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and replaced HollyFrontier as the public company trading on the New York Stock Exchange (“NYSE”) under the symbol “DINO.” See Note 2 and Note 4 for additional information.

References herein to HF Sinclair, “we,” “our,” “ours,” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier and its consolidated subsidiaries and do not include Sinclair Holding LLC, STC or their respective consolidated subsidiaries (collectively, the “Acquired Sinclair Businesses”). References herein to HF Sinclair, “we,” “our,” “ours,” and “us” with respect to time periods from and after March 14, 2022 include the operations of the Acquired Sinclair Businesses. Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to March 31, 2023 includes the combined business operations of HollyFrontier and the Acquired Sinclair Businesses.

In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include HEP and its subsidiaries as consolidated subsidiaries of HF Sinclair, unless when used in disclosures of transactions or obligations between HEP and HF Sinclair or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HF Sinclair. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries.

We are 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. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah and market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. We supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries. Through our subsidiaries, we produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. At March 31, 2023, we owned a 47% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States.

We have prepared these consolidated financial statements without audit. In management’s opinion, these consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our consolidated financial position as of March 31, 2023, the consolidated results of operations, comprehensive income and statements of equity for the three months ended March 31, 2023 and 2022 and consolidated cash flows for the three months ended March 31, 2023 and 2022 in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Although certain notes and other information required by generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 that has been filed with the SEC.

Accounts Receivable: Our accounts receivable primarily consist of amounts due from customers that are primarily from sales of refined products and renewable diesel. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for expected credit losses based on our historical loss experience as well as expected credit losses from current economic conditions and management’s expectations of future economic conditions. Credit losses are charged to the allowance for expected credit losses when an account is deemed uncollectible. Our allowance for expected credit losses was $7.6 million at March 31, 2023 and $7.7 million at December 31, 2022.

Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. Inventories related to our renewables business are stated at the lower of cost, using the LIFO method for feedstock and unfinished and finished renewable products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

Inventories of our Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value.

Inventories consisting of process chemicals, materials and maintenance supplies and RINs are stated at the lower of weighted-average cost or net realizable value.

Leases: At inception, we determine if an arrangement is or contains a lease. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our payment obligation under the leasing arrangement. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable.

Operating leases are recorded in “Operating lease right-of-use assets” and current and noncurrent “Operating lease liabilities” on our consolidated balance sheet. Finance leases are included in “Properties, plants and equipment, at cost” and “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheet.

Our lease term includes an option to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet. For certain equipment leases, we apply a portfolio approach for the operating lease ROU assets and liabilities. Also, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. In addition, HEP, as a lessor, does not separate the non-lease (service) component for operating leases in contracts in which the lease component is the dominant component. HEP treats these combined components as a lease. HEP bifurcates the consideration received for sales-type lease contracts between lease and service revenue, with the service component accounted for within the scope of Accounting Standards Codification 606.

Revenue Recognition: Revenues on refined product, branded fuel sales, renewable diesel, and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold.

Our lubricants and specialty products business has sales agreements with marketers and distributors that provide certain rights of return or provisions for the repurchase of products previously sold to them. Under these agreements, revenues and cost of revenues are deferred until the products have been sold to end customers. Our lubricants and specialty products business also has agreements that create an obligation to deliver products at a future date for which consideration has already been received and recorded as deferred revenue. This revenue is recognized when the products are delivered to the customer.

HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain throughput agreements that specify minimum volume requirements, whereby HEP bills a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. If there are no future performance obligations, HEP recognizes these deficiency payments as revenue. In certain of these throughput agreements, a customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. HEP recognizes the service portion of these deficiency payments as revenue when HEP does not expect it will be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer.

Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.

Foreign Currency Translation: Assets and liabilities recorded in foreign currencies are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income.

We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the consolidated statements of operations. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to Corporate and Other. See Note 15 for additional information on our segments.

Income Taxes: Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized. We account for U.S. tax on global intangible low-taxed income in the period in which it is incurred.

Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.

For the three months ended March 31, 2023, we recorded an income tax expense of $99.7 million compared to $21.3 million for the three months ended March 31, 2022. This increase was principally due to higher pre-tax income during the three months ended March 31, 2023 compared to the same period of 2022. Our effective tax rates were 20.6% and 10.3% for the three months ended March 31, 2023 and 2022, respectively. The difference between the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2023 is primarily due to the impact of federal tax credits and the relationship between pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes. The difference in the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2022 was primarily due to the impact of federal tax credits and the decrease in the state tax rate applied to our deferred tax assets and liabilities as a result of the Sinclair Transaction.

Inventory Repurchase Obligations: We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. For the three months ended March 31, 2023 and 2022, we received proceeds of $6.3 million and $11.0 million, respectively, and subsequently repaid $7.0 million and $9.9 million, respectively, under these sell / buy transactions.

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Acquisitions

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

On March 14, 2022, pursuant to the Business Combination Agreement, HF Sinclair completed its acquisition of the Target Company by effecting (a) the HFC Merger and (b) immediately following the HFC Merger, a contribution whereby REH Company contributed all of the equity interests of the Target Company to HF Sinclair in exchange for shares of HF Sinclair, resulting in the Target Company becoming a direct wholly owned subsidiary of HF Sinclair.

In connection with the closing of the HFC Transactions, HF Sinclair issued 60,230,036 shares of HF Sinclair common stock, par value $0.01 per share, to REH Company, representing 27% of the pro forma equity of HF Sinclair with a value of approximately $2,149 million based on HollyFrontier’s fully diluted shares of common stock outstanding and closing stock price on March 11, 2022. Pursuant to the Business Combination Agreement, REH Company made a $77.5 million cash payment to HF Sinclair, inclusive of final working capital adjustments, which reduced the aggregate transaction value to approximately $2,072 million. Of the 60,230,036 shares of HF Sinclair common stock, 2,570,000 shares are currently held in escrow to secure REH Company’s renewable identification numbers (“RINs”) credit obligations under Section 6.22 of the Business Combination Agreement. Additionally, on the Closing Date, and immediately prior to the consummation of the HFC Transactions, HEP completed its acquisition of STC, REH Company’s integrated crude and refined products midstream business, and issued 21,000,000 common limited partner units and paid cash consideration of $329.0 million, inclusive of final working capital adjustments, to REH Company in exchange for all the outstanding equity interests of STC (the “HEP Transaction” and together with the HFC Transactions, the “Sinclair Transactions”). Of these 21,000,000 common limited partner units, 5,290,000 units were held in escrow and were released to REH Company in April 2023 upon their satisfaction of the corresponding RINs credit obligations to HF Sinclair to secure REH Company’s RINs credit obligations under Section 6.22 of the Business Combination Agreement.

The Sinclair Transactions were accounted for as a business combination using the acquisition method of accounting, with the assets acquired and liabilities assumed at their respective acquisition date fair values at the effective date, with the excess consideration recorded as goodwill.

The following tables present the purchase consideration and final purchase price allocation of the assets acquired and liabilities assumed on March 14, 2022:

Purchase Consideration (in thousands except for per share amounts)
Shares of HF Sinclair common stock issued	60,230
Closing price per share of HFC common stock (1)	$	35.68
Purchase consideration paid in HF Sinclair common stock	2,149,008
Shares of HEP common units issued to Sinclair	21,000
Closing price per share of HEP common units (2)	$	16.62
Purchase consideration paid in HEP common units	349,020
Total equity consideration	2,498,028
Cash consideration paid by HEP	328,955
Cash consideration received by HFC	(77,507)
Total cash consideration	251,448
Total purchase consideration	$	2,749,476

(1)Based on the HollyFrontier closing stock price on March 11, 2022.

(2)Based on the HEP closing unit price on March 11, 2022.

	(In thousands)
Assets Acquired
Accounts receivable	$	467,530
Inventories: Crude oil and refined products	906,461
Inventories: Materials, supplies and other	39,350
Properties, plants and equipment	1,242,549
Operating lease right-of-use assets	4,585
Other assets: Intangibles and other	495,621
Total assets acquired	$	3,156,096
Liabilities Assumed
Accounts payable	$	564,385
Operating lease liabilities	1,030
Accrued liabilities	84,298
Noncurrent operating lease liabilities	3,554
Deferred income taxes	351,189
Other long-term liabilities	88,098
Total liabilities assumed	$	1,092,554
Net assets acquired	$	2,063,542
Goodwill	$	685,934

The final purchase price allocation resulted in the recognition of $685.9 million in goodwill. Our Refining, Renewables, Marketing and HEP segments recognized $244.0 million, $159.0 million, $163.8 million and $119.1 million of goodwill, respectively. The goodwill recognized is primarily attributable to operating and administrative synergies and net deferred tax liabilities arising from the differences between the estimated fair values of assets and liabilities and the tax basis of these assets and liabilities. There are qualitative assumptions of long-term factors that this acquisition creates for our stockholders, including increased scale and diversification that is expected to drive growth through the expanded refining and renewables businesses and the addition of an integrated branded wholesale distribution network. This goodwill is not deductible for income tax purposes.

The fair value measurements for properties, plants and equipment were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The fair value of properties, plants and equipment was based on the combination of the cost and market approaches. Key assumptions in the cost approach include determining the replacement cost by evaluating recent published data and adjusting replacement cost for physical deterioration, functional, and economic obsolescence. We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties. The fair value of crude oil and refined products inventory was based on market prices as of the acquisition date.

Intangibles include the Sinclair trade name, fuel agreements and customer relationships totaling $221.4 million that are being amortized on a straight-line basis over a range of four to twenty-year period. The intangible assets were valued using the income approach.

The fair value of equity method investments totaled $234.3 million and was based on a combination of valuation methods including discounted cash flows and the guideline public company method.

Accrued liabilities include $70.6 million of RINs credit obligations, including 2022 obligations through the Closing Date, which were valued based on market prices for RINs at the effective date, a Level 2 input. REH Company is financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing. This receivable totaled $68.4 million and was valued based on market prices for RINs at the effective date.

During the three months ended March 31, 2023, we sold $15.7 million of RINs to REH Company based on applicable market prices.

All other fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The fair values of all other current receivable and payables were equivalent to their carrying values due to their short-term nature.

During the three months ended March 31, 2023 and 2022, we incurred $3.9 million and $25.0 million in incremental direct acquisition and integration costs that principally relate to legal, advisory and other professional fees and are presented as selling, general and administrative expenses in our statements of operations.

The following unaudited pro forma combined condensed financial data for the three months ended March 31, 2022 was derived from our historical financial statements giving effect to the Sinclair Transactions as if they had occurred on January 1, 2021. The below information reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including the depreciation of the fair-valued properties, plants and equipment acquired in the Sinclair Transactions and the estimated tax impacts of the pro forma adjustments.

Additionally, pro forma earnings include certain non-recurring charges, the substantial majority of which consist of transaction costs related to financial advisors, legal advisors and professional accounting services.

The pro forma results of operations do not include any cost savings or other synergies that may result from the Sinclair Transactions. The pro forma combined condensed financial data has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Sinclair Transactions taken place on January 1, 2021 and is not intended to be a projection of future results.

	Three Months Ended March 31, 2022
	(in thousands)
Sales and other revenues	$	8,464,249
Net income attributable to HF Sinclair stockholders	$	71,266

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Holly Energy Partners

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Holly Energy Partners

Holly Energy Partners

HEP is a publicly held master limited partnership that owns and / or operates logistic and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations, as well as other third-party refineries, in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. Additionally, as of March 31, 2023, HEP owned a 50% ownership interest in each of Osage Pipe Line Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas (the “Osage Pipeline”); Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”) and Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), the owner of a crude oil storage terminal in Cushing, Oklahoma and a pipeline that runs from Cushing, Oklahoma to our Tulsa West and Tulsa East facilities (collectively, the “Tulsa Refineries”); a 25.06% ownership interest in Saddle Butte Pipeline III, LLC, the owner of a pipeline from the Powder River Basin to Casper, Wyoming (the “Saddle Butte Pipeline”); and a 49.995% ownership interest in Pioneer Investments Corp., the owner of a pipeline from Sinclair, Wyoming to the North Salt Lake City, Utah Terminal (the “Pioneer Pipeline”).

At March 31, 2023, we owned a 47% limited partner interest and a non-economic general partner interest in HEP. As the general partner of HEP, we have the sole ability to direct the activities that most significantly impact HEP’s financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP.

HEP generates revenues by charging tariffs for transporting petroleum products and crude oil through its pipelines, by charging fees for terminalling refined products and other hydrocarbons, and by storing and providing other services at its storage tanks and terminals. Under our long-term transportation agreements with HEP (discussed further below), we accounted for 82% of HEP’s total revenues for the three months ended March 31, 2023. We do not provide financial or equity support through any liquidity arrangements and / or debt guarantees to HEP.

HEP has outstanding debt under its senior secured revolving credit agreement and its senior notes. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. See Note 10 for a description of HEP’s debt obligations.

HEP has risk associated with its operations. If a major customer of HEP were to terminate its contracts or fail to meet desired shipping or throughput levels for an extended period of time, revenue would be reduced and HEP could suffer substantial losses to the extent that a new customer is not found. In the event that HEP incurs a loss, our operating results will reflect HEP’s loss, net of intercompany eliminations, to the extent of our ownership interest in HEP at that point in time.

Sinclair Transportation Company Acquisition

On August 2, 2021, HEP, REH Company and STC, a wholly owned subsidiary of REH Company, entered into a contribution agreement (as amended on March 14, 2022, the “Contribution Agreement”), which closed on March 14, 2022. Pursuant to the Contribution Agreement, HEP acquired all of the outstanding equity interests of STC in exchange for 21,000,000 newly issued common limited partner units of HEP with a value of approximately $349.0 million based on HEP’s fully diluted common limited partner units outstanding and HEP’s closing unit price on March 11, 2022, and cash consideration equal to $329.0 million, inclusive of final working capital adjustments pursuant to the Contribution Agreement for an aggregate transaction value of $678.0 million.

As a result of this common unit issuance and our resulting HEP ownership change, we adjusted additional capital and equity attributable to HEP’s noncontrolling interest holders to reallocate HEP’s equity among its unitholders.

As part of HEP’s acquisition of STC, HEP acquired the 25.0% non-operated interest of UNEV Pipeline, LLC (“UNEV”) not already owned by HEP and as such, UNEV, the owner of a pipeline running from Woods Cross, Utah to Las Vegas, Nevada and associated product terminals, became a wholly owned subsidiary of HEP.

Transportation Agreements

HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2024 through 2037. Under these agreements, we pay HEP fees to transport, store and process throughput volumes of refined products, crude oil and feedstocks on HEP's pipelines, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to HEP. Under these agreements, the agreed upon tariff rates are subject to annual tariff rate adjustments on July 1 at a rate based upon the percentage change in Producer Price Index or Federal Energy Regulatory Commission index. As of March 31, 2023, these agreements require minimum annualized payments to HEP of $456.6 million.

Our transactions with HEP and fees paid under our transportation agreements with HEP are eliminated and have no impact on our consolidated financial statements.

Lessor Accounting

Our consolidated statements of operations reflect lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor.

Lease income recognized was as follows:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Operating lease revenues	$	4,634	$	3,127
Sales-type lease interest income	$	632	$	632
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable	$	705	$	361

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Revenues

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Substantially all revenue-generating activities relate to sales of refined product, branded fuel, renewable diesel and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to HEP logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties.

Disaggregated revenues were as follows:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	4,507,894	$	5,301,036
Specialty lubricant products (2)	679,862		682,041
Asphalt, fuel oil and other products (3)	440,339		439,182
Total refined product revenues	5,628,095		6,422,259
Excess crude oil revenues (4)	710,897		682,597
Renewable diesel revenues (5)	202,413		28,313
Transportation and logistic services	26,416		27,944
Marketing revenues (6)	937,385		277,041
Other revenues (7)	59,936		20,596
Total sales and other revenues	$	7,565,142	$	7,458,750

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Refined product revenues by market
United States
Mid-Continent	$	2,007,156	$	2,909,468
Southwest	832,702		1,063,104
Rocky Mountains	2,197,827		1,858,487
Northeast	263,904		243,437
Canada	250,724		253,959
Europe, Asia and Latin America	75,782		93,804
Total refined product revenues	$	5,628,095	$	6,422,259

(1)Transportation fuels revenues are attributable to our Refining segment wholesale marketing of gasoline, diesel and jet fuel.

(2)Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

(3)Asphalt, fuel oil and other products revenues include revenues attributable to our Refining and Lubricants and Specialty Products segments of $386.8 million and $53.6 million, respectively, for the three months ended March 31, 2023, and $367.6 million and $71.6 million, respectively, for the three months ended March 31, 2022.

(4)Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.

(5)Renewable diesel revenues are attributable to our Renewables segment.

(6)Marketing revenues consist primarily of branded gasoline and diesel fuel sales.

(7)Other revenues are principally attributable to our Refining segment.

Our consolidated balance sheets reflect contract liabilities related to unearned revenues attributable to future service obligations under HEP’s third-party transportation agreements and production agreements from our Sonneborn operations. The following table presents changes to our contract liabilities:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Balance at January 1	$	10,722	$	9,278
Increase	5,159		7,664
Recognized as revenue	(5,744)		(8,197)
Balance at March 31	$	10,137	$	8,745

As of March 31, 2023, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialty products to be sold ratably at market prices through 2032. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under Accounting Standards Codification 606-10-50-14A. Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:

	Remainder of 2023	2024	2025	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	27,091	30,423	21,087	29,676	108,277

Additionally, HEP has long-term contracts with third-party customers that specify minimum volumes of product to be transported through its pipelines and terminals that result in fixed-minimum annual revenues through 2033. Annual minimum revenues attributable to HEP’s third-party contracts as of March 31, 2023 are presented below:

	Remainder of 2023		2024		2025		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	12,261	$	17,075	$	8,226	$	33,636	$	71,198

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Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Our financial instruments measured at fair value on a recurring basis consist of derivative instruments and RINs receivable and credit obligations.

Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability, including assumptions about risk). GAAP categorizes inputs used in fair value measurements into three broad levels as follows:

•(Level 1) Quoted prices in active markets for identical assets or liabilities.

•(Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data.

•(Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs.

The carrying amounts of derivative instruments and RINs receivable and credit obligations at March 31, 2023 and December 31, 2022 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
March 31, 2023
Assets:
Commodity price swaps	$	2,624	$	—	$	2,624	$	—
Commodity forward contracts	724		—		724		—
RINs receivable (1)	75,724		—		75,724		—
Foreign currency forward contracts	11,757		—		11,757		—
Total assets	$	90,829	$	—	$	90,829	$	—
Liabilities:
NYMEX futures contracts	$	3,438	$	3,438	$	—	$	—
Commodity collar contracts	21,422		—		21,422		—
Commodity forward contracts	439		—		439		—
Foreign currency forward contracts	663		—		663		—
RINs credit obligations (1)	75,724		—		75,724		—
Total liabilities	$	101,686	$	3,438	$	98,248	$	—

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
December 31, 2022
Assets:
Commodity price swaps	$	342	$	—	$	342	$	—
Commodity forward contracts	2,949		—		2,949		—
RINs receivable (1)	81,232		—		81,232		—
Foreign currency forward contracts	15,359		—		15,359		—
Total assets	$	99,882	$	—	$	99,882	$	—
Liabilities:
NYMEX futures contracts	$	2,750	$	2,750	$	—	$	—
Commodity collar contracts	6,275		—		6,275		—
Commodity forward contracts	2,987		—		2,987		—
RINs credit obligations (1)	81,232		—		81,232		—
Total liabilities	$	93,244	$	2,750	$	90,494	$	—

(1)REH Company is financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing of the Sinclair Transactions. See Note 2 for additional information on RINs credit obligations assumed in the Sinclair Transactions.

Level 1 Instruments

Our NYMEX futures contracts are exchange traded and are measured and recorded at fair value using quoted market prices, a Level 1 input.

Level 2 Financial Instruments

Derivative instruments consisting of foreign currency forward contracts, commodity price swaps, commodity collar contracts and forward sales and purchase contracts are measured and recorded at fair value using Level 2 inputs. The fair value of the commodity price swap contracts is based on the net present value of expected future cash flows related to both variable and fixed rate legs of the respective swap agreements. The measurements are computed using market-based observable input and quoted forward commodity prices with respect to our commodity price swaps. The fair value of the commodity collar contracts is based on forward natural gas prices. The fair value of the forward sales and purchase contracts are computed using quoted forward commodity prices. The fair value of foreign currency forward contracts are based on values provided by a third party, which were derived using market quotes for similar type instruments, a Level 2 input. RINs credit obligations are valued based on current market RINs prices.

Nonrecurring Fair Value Measurements

During the three months ended March 31, 2023, we recognized assets and liabilities based on fair value measurements for the Sinclair Transactions (see Note 2). The fair value measurements were based on a combination of valuation methods including discounted cash flows, the guideline public company and guideline transaction methods and obsolescence adjusted replacement costs, all of which are Level 3 inputs.

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Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated as net income attributable to HF Sinclair stockholders, adjusted for participating securities’ share in earnings divided by the average number of shares of common stock outstanding. Diluted earnings per share includes the incremental shares resulting from certain share-based awards. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HF Sinclair stockholders:

	Three Months Ended March 31,
	2023		2022
	(In thousands, except per share data)
Net income attributable to HF Sinclair stockholders	$	353,266	$	159,974
Participating securities’ share in earnings (1)	2,925		1,983
Net income attributable to common shares	$	350,341	$	157,991
Average number of shares of common stock outstanding	195,445		175,081
Average number of shares of common stock outstanding assuming dilution	195,445		175,081
Basic earnings per share	$	1.79	$	0.90
Diluted earnings per share	$	1.79	$	0.90

(1)Unvested restricted stock unit awards and unvested performance share units that settle in HF Sinclair common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HF Sinclair. Participating earnings represent the distributed and undistributed earnings of HF Sinclair attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

We have a principal share-based compensation plan (the HF Sinclair Corporation Amended and Restated 2020 Long Term Incentive Plan, the “2020 Plan”). The 2020 Plan provides for the grant of unrestricted and restricted stock, restricted stock units, other stock based awards, stock options, performance awards, substitute awards, cash awards and stock appreciation rights. The restricted stock unit awards generally vest over a period of one to three years. Upon vesting, restrictions on the restricted stock units lapse at which time they convert to common shares or cash. The performance share units generally vest over a period of three years and are payable in stock or cash upon meeting certain financial and performance criteria. The number of shares ultimately issued or cash paid for the performance share units can range from zero to 200% of target award amounts. The holders of unvested restricted stock units and performance share units have the right to receive dividends. We also have a stock compensation deferral plan which allows non-employee directors to defer settlement of vested stock granted under our share-based compensation plan.

The compensation cost for these plans was $3.3 million and $8.9 million for the three months ended March 31, 2023 and 2022, respectively.

Additionally, HEP maintains an equity-based compensation plan for Holly Logistic Services, L.L.C.’s non-employee directors and certain executives and employees. Compensation cost attributable to HEP’s equity-based compensation plan was $0.4 million and $0.6 million for the three months ended March 31, 2023 and 2022.

A summary of restricted stock unit and performance share unit activity during the three months ended March 31, 2023 is presented below:

	Restricted Stock Units		Performance Share Units
Outstanding at January 1, 2023	1,055,875		771,197
Granted (1)	29,590		1,509
Vested	(857)		—
Forfeited	(25,053)		(12,540)
Performance share units converted to restricted stock units	225,217		(225,217)
Outstanding at March 31, 2023	1,284,772		534,949
(1) Weighted average grant date fair value per unit	$	52.75	$	73.27

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Inventories

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following components:

	March 31, 2023		December 31, 2022
	(In thousands)
Crude oil	$	858,985	$	818,737
Other raw materials and unfinished products (1)	966,222		842,855
Finished products (2)	1,396,254		1,252,984
Lower of cost or market reserve	(108,748)		(61,151)
Process chemicals (3)	51,633		53,900
Repair and maintenance supplies and other (4)	284,475		307,203
Total inventory	$	3,448,821	$	3,214,528

(1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude.

(2)Finished products include gasolines, jet fuels, diesels, renewable diesels, lubricants, asphalts, LPG’s and residual fuels.

(3)Process chemicals include additives and other chemicals.

(4)Includes RINs.

Our renewables inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $108.7 million and $61.2 million at March 31, 2023 and December 31, 2022, respectively. A new market reserve of $108.7 million as of March 31, 2023 was based on market conditions and prices at that time. The effect of the change in the lower of cost or market reserve was an increase to cost of products sold totaling $47.6 million for the three months ended March 31, 2023 and a decrease to cost of products sold of $8.6 million for the three months ended March 31, 2022.

At March 31, 2023, the LIFO value of our refining inventories was equal to cost.

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Environmental	3 Months Ended
	Mar. 31, 2023
Environmental Expense and Liabilities [Abstract]
Environmental	EnvironmentalEnvironmental costs are charged to operating expenses if they relate to an existing condition caused by past operations and do not contribute to current or future revenue generation. We have ongoing investigations of environmental matters at various locations and routinely assess our recorded environmental obligations, if any, with respect to such matters. Liabilities are recorded when site restoration and environmental remediation, cleanup and other obligations are either known or considered probable and can be reasonably estimated. Such estimates are undiscounted and require judgment with respect to costs, time frame and extent of required remedial and cleanup activities and are subject to periodic adjustments based on currently available information. Recoveries of environmental costs through insurance, indemnification arrangements or other sources are included in other assets to the extent such recoveries are considered probable.We incurred expense of $13.3 million and $7.1 million for the three months ended March 31, 2023 and 2022, respectively, for environmental remediation obligations. The accrued environmental liability reflected on our consolidated balance sheets was $202.0 million and $192.3 million at March 31, 2023 and December 31, 2022, respectively, of which $168.0 million and $170.0 million, respectively, were classified as other long-term liabilities. These accruals include remediation and monitoring costs expected to be incurred over an extended period of time. Accrued environmental liabilities assumed in the Sinclair Transactions were $72.2 million at the acquisition date and an associated receivable from third parties of $21.5 million. Estimated liabilities could increase in the future when the results of ongoing investigations become known, are considered probable and can be reasonably estimated.

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Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Debt

HF Sinclair Credit Agreement

We have a $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the “HF Sinclair Credit Agreement”). The HF Sinclair Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. At March 31, 2023, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.3 million under the HF Sinclair Credit Agreement.

Indebtedness under the HF Sinclair Credit Agreement bears interest, at our option, based on the currency of such indebtedness at either (a) a base rate equal to the highest of the Federal Funds Effective Rate (as defined in the HF Sinclair Credit Agreement) plus half of 1%, Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for a one-month interest period plus 1% and the prime rate (as publicly announced from time to time by the administrative agent), as applicable, plus an applicable margin (ranging from 0.25% to 1.125%), (b) the CDOR Rate (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) (c) the Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) or (d) the Daily Simple RFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%). In each case, the applicable margin is based on HF Sinclair’s debt rating assigned by Standard & Poor’s Financial Services LLC and Moody’s Investors Service, Inc.

HEP Credit Agreement

HEP has a $1.2 billion senior secured revolving credit facility maturing in July 2025 (the “HEP Credit Agreement”). The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has an accordion feature that allows HEP to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. At March 31, 2023, HEP was in compliance with all of its covenants, had outstanding borrowings of $651.5 million and no outstanding letters of credit under the HEP Credit Agreement.

Prior to the Investment Grade Date (as defined in the HEP Credit Agreement), indebtedness under the HEP Credit Agreement bears interest, at HEP’s option, at either (a) the Alternate Base Rate (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 0.75% to 1.75%) or (b) Adjusted Term SOFR (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 1.75% to 2.75%). In each case, the applicable margin is based upon HEP’s Total Leverage Ratio (as defined in the HEP Credit Agreement). The weighted average interest rate in effect under the HEP Credit Agreement on HEP’s borrowings was 6.88% as of March 31, 2023.

HEP’s obligations under the HEP Credit Agreement are collateralized by substantially all of HEP’s assets and are guaranteed by HEP’s material wholly owned subsidiaries. Any recourse to the general partner would be limited to the extent of HEP Logistics Holdings, L.P.’s assets, which other than its investment in HEP are not significant. HEP’s creditors have no recourse to our other assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

HollyFrontier and HF Sinclair Senior Notes

At March 31, 2023, our senior notes consisted of the following:

•$59.637 million in aggregate principal amount of 2.625% senior notes maturing October 2023 (the “HollyFrontier 2.625% Senior Notes”);

•$202.9 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HollyFrontier 5.875% Senior Notes”), and

•$74.966 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HollyFrontier 4.500% Senior Notes” and, collectively, the “HollyFrontier Senior Notes”).

•$248.190 million in aggregate principal amount of 2.625% senior notes maturing October 2023 (the “HF Sinclair 2.625% Senior Notes”);

•$797.1 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HF Sinclair 5.875% Senior Notes”), and

•$325.034 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HF Sinclair 4.500% Senior Notes” and, collectively, the “HF Sinclair Senior Notes”).

The HollyFrontier Senior Notes and HF Sinclair Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all future unsecured and unsubordinated indebtedness.

Further, we may from time to time seek to retire some or all of our outstanding debt or debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and will depend on prevailing market conditions, our liquidity requirements and other factors.

HF Sinclair Financing Arrangements

Certain of our wholly owned subsidiaries entered into financing arrangements whereby such subsidiaries sold a portion of their precious metals catalyst to a financial institution and then leased back the precious metals catalyst in exchange for cash. The volume of the precious metals catalyst and the lease rate are fixed over the term of each lease, and the lease payments are recorded as interest expense. The current leases mature in one year or less. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity. These financing arrangements are recorded at a Level 2 fair value totaling $37.4 million and $39.8 million at March 31, 2023 and December 31, 2022, respectively, and are included in “Accrued liabilities” on our consolidated balance sheets. See Note 5 for additional information on Level 2 inputs.

HEP Senior Notes

At March 31, 2023, HEP’s senior notes consisted of the following:

•$400.0 million in aggregate principal amount of 6.375% senior notes maturing April 2027 (the “HEP 6.375% Senior Notes”), and

•$500.0 million in aggregate principal amount of 5.0% HEP senior notes maturing February 2028 (the “HEP 5.0% Senior Notes”).

These HEP senior notes (collectively, the “HEP Senior Notes”) are unsecured and impose certain restrictive covenants, including limitations on HEP’s ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates, and enter into mergers. HEP was in compliance with the restrictive covenants for the HEP Senior Notes as of March 31, 2023. At any time when the HEP Senior Notes are rated investment grade by either Moody’s Investors Service, Inc. or S&P Global Ratings and no default or event of default exists, HEP will not be subject to many of the foregoing covenants. Additionally, HEP has certain redemption rights at varying premiums over face value under the HEP Senior Notes.

Indebtedness under the HEP Senior Notes is guaranteed by certain of HEP’s wholly owned subsidiaries. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

The carrying amounts of long-term debt are as follows:

	March 31, 2023		December 31, 2022
	(In thousands)
HollyFrontier
2.625% Senior Notes	$	59,637	$	59,637
5.875% Senior Notes	202,900		202,900
4.500% Senior Notes	74,966		74,966
	337,503		337,503
HF Sinclair
2.625% Senior Notes	248,190		248,190
5.875% Senior Notes	797,100		797,100
4.500% Senior Notes	325,034		325,034
	1,370,324		1,370,324
Less current debt (1)	(307,256)		(306,959)
Unamortized discount and debt issuance costs (1)	(7,967)		(8,689)
Total HF Sinclair long-term debt	1,392,604		1,392,179
HEP Credit Agreement	651,500		668,000
HEP
5.000% Senior Notes	500,000		500,000
6.375% Senior Notes	400,000		400,000
	900,000		900,000
Unamortized discount and debt issuance costs	(11,115)		(11,666)
Total HEP long-term debt	1,540,385		1,556,334
Total long-term debt	$	2,932,989	$	2,948,513

(1)The HollyFrontier 2.625% Senior Notes and HF Sinclair 2.625% Senior Notes, inclusive of unamortized discount and debt issuance costs of $0.6 million and $0.9 million at March 31, 2023 and December 31, 2022, respectively, are due October 2023 and were classified as current debt on our consolidated balance sheets.

The fair values of the senior notes are as follows:

	March 31, 2023		December 31, 2022
	(In thousands)
HollyFrontier and HF Sinclair Senior Notes	$	1,677,864	$	1,655,726
HEP Senior Notes	$	866,860	$	852,658

These fair values are based on a Level 2 input. See Note 5 for additional information on Level 2 inputs.

We capitalized $1.2 million and $3.7 million for the three months ended March 31, 2023 and 2022, respectively, of interest attributable to construction projects.

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Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Commodity Price Risk Management

Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, collar contracts, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

Foreign Currency Risk Management

We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.

Accounting Hedges

We periodically have forward sales contracts that lock in the prices of future sales of crude oil and refined product. These contracts have been designated as accounting hedges and are measured at fair value with offsetting adjustments (gains/losses) recorded directly to other comprehensive income (loss). These fair value adjustments are later reclassified to earnings as the hedging instruments mature.

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of hedging instruments under hedge accounting:

	Net Unrealized Gain Recognized in OCI				Loss Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Three Months Ended March 31,				Income Statement Location	Three Months Ended March 31,
	2023		2022			2023		2022
	(In thousands)
Commodity contracts	$	271	$	326	Sales and other revenues	$	(1)	$	(5,288)
Total	$	271	$	326		$	(1)	$	(5,288)

Economic Hedges

We have commodity contracts including NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory, collar contracts and basis swap contracts to mitigate exposure to natural gas price volatility and forward purchase and sell contracts of refined products that serve as economic hedges (derivatives used for risk management, but not designated as accounting hedges). We also have forward currency contracts to fix the rate of foreign currency. In addition, our catalyst financing arrangements discussed in Note 10 could require repayment under certain conditions based on the future pricing of platinum, which is an embedded derivative. These contracts are measured at fair value with offsetting adjustments (gains/losses) recorded directly to earnings.

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended March 31,
		2023		2022
		(In thousands)
Commodity contracts	Cost of products sold	$	6,748	$	(9,788)
	Operating expenses	(14,058)		—
	Interest expense	2,406		(1,421)
Foreign currency contracts	Gain on foreign currency transactions	114		(6,430)
	Total	$	(4,790)	$	(17,639)

As of March 31, 2023, we have the following notional contract volumes related to outstanding derivative instruments:

		Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional	2023	2024	Unit of Measure
Derivatives Designated as Hedging Instruments
Forward diesel contracts - short	100,000	100,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	1,790,000	1,790,000	—	Barrels
Forward gasoline and diesel contracts - long	145,000	145,000	—	Barrels
Foreign currency forward contracts	428,211,705	322,227,146	105,984,559	U.S. dollar
Forward commodity contracts (platinum)	36,969	14,550	22,419	Troy ounces
Natural gas price swaps (basis spread) - long	3,850,000	3,850,000	—	MMBTU
Natural gas collar contracts	22,000,000	22,000,000	—	MMBTU

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
March 31, 2023
Derivatives designated as cash flow hedging instruments:
Commodity forward contracts	$	312	$	—	$	312	$	—	$	—	$	—
	$	312	$	—	$	312	$	—	$	—	$	—
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	3,438	$	—	$	3,438
Commodity price swap contracts	2,624		—		2,624		—		—		—
Commodity collar contracts	—		—		—		21,422		—		21,422
Commodity forward contracts	412		—		412		439		—		439
Foreign currency forward contracts	11,757		(663)		11,094		—		—		—
	$	14,793	$	(663)	$	14,130	$	25,299	$	—	$	25,299
Total net balance					$	14,442					$	25,299
Balance sheet classification:	Prepayment and other				$	14,442	Accrued liabilities				$	25,299

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2022
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	2,750	$	—	$	2,750
Commodity price swap contracts	342		—		342		—		—		—
Commodity collar contracts	—		—		—		6,275		—		6,275
Commodity forward contracts	2,949		—		2,949		2,987		—		2,987
Foreign currency forward contracts	15,359		—		15,359		—		—		—
	$	18,650	$	—	$	18,650	$	12,012	$	—	$	12,012
Total net balance					$	18,650					$	12,012
Balance sheet classification:	Prepayment and other				$	18,650	Accrued liabilities				$	12,012

At March 31, 2023, we had a pre-tax net unrealized gain of $0.3 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2023, which assuming commodity prices remain unchanged, will be effectively transferred from accumulated other comprehensive loss into the statement of operations as the hedging instruments contractually mature over the next three-month period.

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Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Equity

Equity

In September 2022, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company are also authorized under this share repurchase program, subject to REH Company’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. This program may be discontinued at any time by our Board of Directors. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs.

During the three months ended March 31, 2023, we made open market and privately negotiated purchases of 4,793,857 shares for $240.3 million under our share repurchase program, of which 1,969,279 shares were repurchased for $100.0 million pursuant to privately negotiated repurchases from REH Company. As of March 31, 2023, we had remaining authorization to repurchase up to $419.8 million under this share repurchase program. We did not repurchase any shares in April 2023.

During the three months ended March 31, 2023 and 2022, we withheld 16,200 and 1,764 shares, respectively, of our common stock under the terms of stock-based compensation agreements to provide funds for the payment of payroll and income taxes due at the vesting of share-based awards.

On May 3, 2023, our Board of Directors declared a regular quarterly dividend in the amount of $0.45 per share, payable on June 1, 2023 to holders of record of common stock on May 18, 2023.

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Other Comprehensive Income

3 Months Ended

Mar. 31, 2023

Other Comprehensive Income (Loss), before Tax [Abstract]

Other Comprehensive Income

Other Comprehensive Income

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax		Tax Expense (Benefit)		After-Tax
	(In thousands)
Three Months Ended March 31, 2023
Net change in foreign currency translation adjustment	$	2,926	$	614	$	2,312
Net unrealized gain on hedging instruments	271		66		205
Net change in pension and other post-retirement benefit obligations	(960)		(233)		(727)
Other comprehensive income attributable to HF Sinclair stockholders	$	2,237	$	447	$	1,790
Three Months Ended March 31, 2022
Net change in foreign currency translation adjustment	$	1,721	$	379	$	1,342
Net unrealized gain on hedging instruments	326		67		259
Net change in pension and other post-retirement benefit obligations	(906)		(221)		(685)
Other comprehensive income attributable to HF Sinclair stockholders	$	1,141	$	225	$	916

The following table presents the statements of operations line item effects for reclassifications out of accumulated other comprehensive income (loss) (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI				Statement of Operations Line Item
	Three Months Ended March 31,
	2023		2022
	(In thousands)
Hedging instruments:
Commodity price swaps	$	(1)	$	(5,288)	Sales and other revenues
	—		(1,282)		Income tax benefit
	(1)		(4,006)		Net of tax
Other post-retirement benefit obligations:
Pension obligations	45		45		Gain on sale of assets and other
	11		11		Income tax expense
	34		34		Net of tax
Post-retirement healthcare obligations	918		870		Gain on sale of assets and other
	223		211		Income tax expense
	695		659		Net of tax
Retirement restoration plan	(3)		(9)		Gain on sale of assets and other
	(1)		(2)		Income tax benefit
	(2)		(7)		Net of tax
Total reclassifications for the period	$	726	$	(3,320)

Accumulated other comprehensive loss in the equity section of our consolidated balance sheets includes:

	March 31, 2023		December 31, 2022
	(In thousands)
Foreign currency translation adjustment	$	(31,115)	$	(33,427)
Unrealized loss on pension obligations	(2,706)		(2,661)
Unrealized gain on post-retirement benefit obligations	13,393		14,075
Unrealized gain on hedging instruments	205		—
Accumulated other comprehensive loss	$	(20,223)	$	(22,013)

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Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

We are a party to various litigation and legal proceedings which we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse effect on our financial condition, results of operations or cash flows.

Pursuant to the Business Combination Agreement, all pre-closing RINs obligations of REH Company’s subsidiaries (which are now subsidiaries of HF Sinclair as a result of the HFC Transactions) remain with REH Company. REH Company is required to transfer to HF Sinclair the number of each applicable type of RIN required for REH Company to demonstrate compliance for any pre-closing obligations it retained by the deadlines set forth in the Business Combination Agreement. If REH Company does not deliver all the required RINs by the applicable deadline, then, within five days following the delivery of an invoice therefor, REH Company is required to pay to HF Sinclair the amount of all out-of-pocket costs and expenses incurred by HF Sinclair to comply with REH Company’s pre-closing obligations prior to such deadline, including the price of any RINs purchased by HF Sinclair. In relation to this, 2,570,000 shares of HF Sinclair common stock, out of the purchase consideration paid to REH Company, are held in escrow to secure REH Company’s RINs credit obligations under Section 6.22 of the Business Combination Agreement. The 5,290,000 HEP common units that were also held in escrow to secure REH Company’s RINs credit obligations were released to REH Company in April 2023 upon their satisfaction of the RINs credit obligations relating thereto.

During 2017, 2018 and 2019, the EPA granted the Cheyenne, Wyoming refinery (the “Cheyenne Refinery”) and the refinery in Woods Cross, Utah (the “Woods Cross Refinery”) each a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2016, 2017 and 2018, respectively, calendar years. As a result, the Cheyenne Refinery’s and Woods Cross Refinery’s gasoline and diesel production are not subject to the Renewable Volume Obligation for the respective years. Upon each exemption granted, we increased our inventory of RINs and reduced our cost of products sold.

On April 7, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2018 compliance year. On June 3, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2016 compliance year and denying small refinery exemption petitions for our Woods Cross and Cheyenne refineries for the 2019 and 2020 compliance years. Various subsidiaries of HollyFrontier are currently pursuing legal challenges to the EPA’s decisions to reverse its grant of small refinery exemptions for the 2016 and 2018 compliance years. The first lawsuit, filed against the EPA on May 6, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2018 small refinery exemption petitions overturned. The second lawsuit, filed against the EPA on August 5, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2016 small refinery exemption petitions overturned and to have the EPA’s denial of our 2019 and 2020 small refinery exemption petitions reversed. In addition, for both the 2016 and 2018 compliance years, pursuant to the June 2022 and April 2022 decisions, respectively, the EPA established an alternative compliance demonstration for small refineries pursuant to which the EPA is not imposing any obligations for the small refineries whose exemptions were reversed. On June 24, 2022, Growth Energy filed two lawsuits in the U.S. Court of Appeals for the DC Circuit against the EPA challenging the alternative compliance demonstration for the 2016 and 2018 compliance years. On July 25, 2022, various subsidiaries of HollyFrontier intervened on behalf of the EPA to aid the defense of the EPA’s alternative compliance demonstration decision. It is too early to predict the outcome of these matters. We are unable to estimate the costs we may incur, if any, at this time.

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Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

Our operations are 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.

The Refining segment represents the operations of our El Dorado, Tulsa, Navajo, Woods Cross and Puget Sound refineries and HF Sinclair Asphalt Company LLC (“Asphalt”). Effective with our acquisition that closed on March 14, 2022, the Refining segment includes our 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 our Cheyenne renewable diesel unit (“RDU”), which was mechanically complete in the fourth quarter of 2021 and operational in the first quarter of 2022, the pre-treatment unit at our Artesia, New Mexico facility, which was completed and operational in the first quarter of 2022 and the Artesia RDU, which was completed and 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.

Effective with our acquisition that closed on March 14, 2022, 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 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 and Specialty Products segment represents Petro-Canada Lubricants Inc.’s 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.

The accounting policies for our segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2022.

	Refining		Renewables		Marketing		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
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	1,053,401		95,603		—		5,796		116,878		(1,271,678)		—
	$	6,718,615	$	298,016	$	937,385	$	739,510	$	143,294	$	(1,271,678)	$	7,565,142
Cost of products sold (exclusive of lower of cost or market inventory)	$	5,617,911	$	262,738	$	924,049	$	538,003	$	—	$	(1,238,644)	$	6,104,057
Lower of cost or market inventory valuation adjustment	$	—	$	47,597	$	—	$	—	$	—	$	—	$	47,597
Operating expenses	$	517,820	$	31,371	$	—	$	63,593	$	52,142	$	(25,543)	$	639,383
Selling, general and administrative expenses	$	39,078	$	915	$	6,963	$	39,264	$	4,635	$	5,058	$	95,913
Depreciation and amortization	$	103,123	$	19,974	$	5,871	$	19,910	$	24,465	$	640	$	173,983
Income (loss) from operations	$	440,683	$	(64,579)	$	502	$	78,740	$	62,052	$	(13,189)	$	504,209
Earnings of equity method investments	$	—	$	—	$	—	$	—	$	3,882	$	—	$	3,882
Capital expenditures	$	67,774	$	4,844	$	5,255	$	8,649	$	7,614	$	5,933	$	100,069
Three Months Ended March 31, 2022
Sales and other revenues:
Revenues from external customers	$	6,371,894	$	28,313	$	277,041	$	753,558	$	27,944	$	—	$	7,458,750
Intersegment revenues	134,273		19,054		—		1,451		92,254		(247,032)		—
	$	6,506,167	$	47,367	$	277,041	$	755,009	$	120,198	$	(247,032)	$	7,458,750
Cost of products sold (exclusive of lower of cost or market inventory)	$	5,909,610	$	44,271	$	271,131	$	504,577	$	—	$	(227,577)	$	6,502,012
Lower of cost or market inventory valuation adjustment	$	—	$	(8,551)			$	—	$	—	$	—	$	(8,551)
Operating expenses	$	354,972	$	27,096	$	—	$	66,001	$	42,624	$	(13,259)	$	477,434
Selling, general and administrative expenses	$	33,882	$	872	$	140	$	41,749	$	4,312	$	29,467	$	110,422
Depreciation and amortization	$	94,681	$	5,800	$	501	$	20,594	$	21,586	$	1,439	$	144,601
Income (loss) from operations	$	113,022	$	(22,121)	$	5,269	$	122,088	$	51,676	$	(37,102)	$	232,832
Earnings of equity method investments	$	—	$	—	$	—	$	—	$	3,626	$	—	$	3,626
Capital expenditures	$	29,920	$	98,769	$	—	$	6,370	$	14,147	$	9,090	$	158,296

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Subsequent Event	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn May 3, 2023, we submitted a non-binding proposal to acquire all of the outstanding common units (“Common Units”) of HEP not beneficially owned by us or our affiliates in exchange for common stock, par value $0.01 per share (“Common Stock”), of HF Sinclair. Under the proposal, HEP unitholders would receive newly issued shares of Common Stock at a fixed exchange ratio of 0.3714 per each publicly held Common Unit, which was derived using the 30-day volume weighted average prices for each security as of market close on May 3, 2023 (the “Proposed HEP Transaction”). The proposal has been made to the board of directors of the ultimate general partner of HEP. The Proposed HEP Transaction is subject to the negotiation and execution of a definitive agreement. There can be no assurance that a definitive agreement will be executed or that any transaction will be approved or consummated.

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Description of Business and Presentation of Financial Statements (Policy)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include HEP and its subsidiaries as consolidated subsidiaries of HF Sinclair, unless when used in disclosures of transactions or obligations between HEP and HF Sinclair or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HF Sinclair. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries.

We are 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. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah and market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. We supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries. Through our subsidiaries, we produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. At March 31, 2023, we owned a 47% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States.

We have prepared these consolidated financial statements without audit. In management’s opinion, these consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our consolidated financial position as of March 31, 2023, the consolidated results of operations, comprehensive income and statements of equity for the three months ended March 31, 2023 and 2022 and consolidated cash flows for the three months ended March 31, 2023 and 2022 in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Although certain notes and other information required by generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 that has been filed with the SEC.

Accounts Receivable

Accounts Receivable: Our accounts receivable primarily consist of amounts due from customers that are primarily from sales of refined products and renewable diesel. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for expected credit losses based on our historical loss experience as well as expected credit losses from current economic conditions and management’s expectations of future economic conditions. Credit losses are charged to the allowance for expected credit losses when an account is deemed uncollectible.

Inventories

Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. Inventories related to our renewables business are stated at the lower of cost, using the LIFO method for feedstock and unfinished and finished renewable products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

Inventories of our Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value.

Inventories consisting of process chemicals, materials and maintenance supplies and RINs are stated at the lower of weighted-average cost or net realizable value.

Leases

Leases: At inception, we determine if an arrangement is or contains a lease. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our payment obligation under the leasing arrangement. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable.

Operating leases are recorded in “Operating lease right-of-use assets” and current and noncurrent “Operating lease liabilities” on our consolidated balance sheet. Finance leases are included in “Properties, plants and equipment, at cost” and “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheet.

Our lease term includes an option to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet. For certain equipment leases, we apply a portfolio approach for the operating lease ROU assets and liabilities. Also, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. In addition, HEP, as a lessor, does not separate the non-lease (service) component for operating leases in contracts in which the lease component is the dominant component. HEP treats these combined components as a lease. HEP bifurcates the consideration received for sales-type lease contracts between lease and service revenue, with the service component accounted for within the scope of Accounting Standards Codification 606.

Revenue Recognition

Revenue Recognition: Revenues on refined product, branded fuel sales, renewable diesel, and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold.

Our lubricants and specialty products business has sales agreements with marketers and distributors that provide certain rights of return or provisions for the repurchase of products previously sold to them. Under these agreements, revenues and cost of revenues are deferred until the products have been sold to end customers. Our lubricants and specialty products business also has agreements that create an obligation to deliver products at a future date for which consideration has already been received and recorded as deferred revenue. This revenue is recognized when the products are delivered to the customer.

HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain throughput agreements that specify minimum volume requirements, whereby HEP bills a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. If there are no future performance obligations, HEP recognizes these deficiency payments as revenue. In certain of these throughput agreements, a customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. HEP recognizes the service portion of these deficiency payments as revenue when HEP does not expect it will be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer.

Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.

Foreign Currency Translation

Foreign Currency Translation: Assets and liabilities recorded in foreign currencies are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income.

We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the consolidated statements of operations. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to Corporate and Other. See Note 15 for additional information on our segments.

Income Taxes

Income Taxes: Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized. We account for U.S. tax on global intangible low-taxed income in the period in which it is incurred.

Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.

For the three months ended March 31, 2023, we recorded an income tax expense of $99.7 million compared to $21.3 million for the three months ended March 31, 2022. This increase was principally due to higher pre-tax income during the three months ended March 31, 2023 compared to the same period of 2022. Our effective tax rates were 20.6% and 10.3% for the three months ended March 31, 2023 and 2022, respectively. The difference between the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2023 is primarily due to the impact of federal tax credits and the relationship between pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes. The difference in the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2022 was primarily due to the impact of federal tax credits and the decrease in the state tax rate applied to our deferred tax assets and liabilities as a result of the Sinclair Transaction.

Inventory Repurchase Obligations

Inventory Repurchase Obligations: We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased.

Fair Value Measurements

Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability, including assumptions about risk). GAAP categorizes inputs used in fair value measurements into three broad levels as follows:

•(Level 1) Quoted prices in active markets for identical assets or liabilities.

•(Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data.

•(Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs.

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Purchase Price Consideration and Allocation

The following tables present the purchase consideration and final purchase price allocation of the assets acquired and liabilities assumed on March 14, 2022:

Purchase Consideration (in thousands except for per share amounts)
Shares of HF Sinclair common stock issued	60,230
Closing price per share of HFC common stock (1)	$	35.68
Purchase consideration paid in HF Sinclair common stock	2,149,008
Shares of HEP common units issued to Sinclair	21,000
Closing price per share of HEP common units (2)	$	16.62
Purchase consideration paid in HEP common units	349,020
Total equity consideration	2,498,028
Cash consideration paid by HEP	328,955
Cash consideration received by HFC	(77,507)
Total cash consideration	251,448
Total purchase consideration	$	2,749,476

(1)Based on the HollyFrontier closing stock price on March 11, 2022.

(2)Based on the HEP closing unit price on March 11, 2022.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

	(In thousands)
Assets Acquired
Accounts receivable	$	467,530
Inventories: Crude oil and refined products	906,461
Inventories: Materials, supplies and other	39,350
Properties, plants and equipment	1,242,549
Operating lease right-of-use assets	4,585
Other assets: Intangibles and other	495,621
Total assets acquired	$	3,156,096
Liabilities Assumed
Accounts payable	$	564,385
Operating lease liabilities	1,030
Accrued liabilities	84,298
Noncurrent operating lease liabilities	3,554
Deferred income taxes	351,189
Other long-term liabilities	88,098
Total liabilities assumed	$	1,092,554
Net assets acquired	$	2,063,542
Goodwill	$	685,934

Schedule of Pro Forma Information

The pro forma combined condensed financial data has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Sinclair Transactions taken place on January 1, 2021 and is not intended to be a projection of future results.

	Three Months Ended March 31, 2022
	(in thousands)
Sales and other revenues	$	8,464,249
Net income attributable to HF Sinclair stockholders	$	71,266

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Holly Energy Partners (Tables)

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Lease Income

Lease income recognized was as follows:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Operating lease revenues	$	4,634	$	3,127
Sales-type lease interest income	$	632	$	632
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable	$	705	$	361

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Revenues (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregated Revenues

Disaggregated revenues were as follows:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	4,507,894	$	5,301,036
Specialty lubricant products (2)	679,862		682,041
Asphalt, fuel oil and other products (3)	440,339		439,182
Total refined product revenues	5,628,095		6,422,259
Excess crude oil revenues (4)	710,897		682,597
Renewable diesel revenues (5)	202,413		28,313
Transportation and logistic services	26,416		27,944
Marketing revenues (6)	937,385		277,041
Other revenues (7)	59,936		20,596
Total sales and other revenues	$	7,565,142	$	7,458,750

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Refined product revenues by market
United States
Mid-Continent	$	2,007,156	$	2,909,468
Southwest	832,702		1,063,104
Rocky Mountains	2,197,827		1,858,487
Northeast	263,904		243,437
Canada	250,724		253,959
Europe, Asia and Latin America	75,782		93,804
Total refined product revenues	$	5,628,095	$	6,422,259

(1)Transportation fuels revenues are attributable to our Refining segment wholesale marketing of gasoline, diesel and jet fuel.

(2)Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

(3)Asphalt, fuel oil and other products revenues include revenues attributable to our Refining and Lubricants and Specialty Products segments of $386.8 million and $53.6 million, respectively, for the three months ended March 31, 2023, and $367.6 million and $71.6 million, respectively, for the three months ended March 31, 2022.

(4)Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.

(5)Renewable diesel revenues are attributable to our Renewables segment.

(6)Marketing revenues consist primarily of branded gasoline and diesel fuel sales.

(7)Other revenues are principally attributable to our Refining segment.

Schedule of Changes to Contract Liabilities

The following table presents changes to our contract liabilities:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Balance at January 1	$	10,722	$	9,278
Increase	5,159		7,664
Recognized as revenue	(5,744)		(8,197)
Balance at March 31	$	10,137	$	8,745

Schedules of Aggregate Minimum Volumes Expected to Be Sold Under Long-term Sales Contracts

Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:

	Remainder of 2023	2024	2025	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	27,091	30,423	21,087	29,676	108,277

Annual minimum revenues attributable to HEP’s third-party contracts as of March 31, 2023 are presented below:

	Remainder of 2023		2024		2025		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	12,261	$	17,075	$	8,226	$	33,636	$	71,198

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements of Asset and Liability Instruments

The carrying amounts of derivative instruments and RINs receivable and credit obligations at March 31, 2023 and December 31, 2022 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
March 31, 2023
Assets:
Commodity price swaps	$	2,624	$	—	$	2,624	$	—
Commodity forward contracts	724		—		724		—
RINs receivable (1)	75,724		—		75,724		—
Foreign currency forward contracts	11,757		—		11,757		—
Total assets	$	90,829	$	—	$	90,829	$	—
Liabilities:
NYMEX futures contracts	$	3,438	$	3,438	$	—	$	—
Commodity collar contracts	21,422		—		21,422		—
Commodity forward contracts	439		—		439		—
Foreign currency forward contracts	663		—		663		—
RINs credit obligations (1)	75,724		—		75,724		—
Total liabilities	$	101,686	$	3,438	$	98,248	$	—

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
December 31, 2022
Assets:
Commodity price swaps	$	342	$	—	$	342	$	—
Commodity forward contracts	2,949		—		2,949		—
RINs receivable (1)	81,232		—		81,232		—
Foreign currency forward contracts	15,359		—		15,359		—
Total assets	$	99,882	$	—	$	99,882	$	—
Liabilities:
NYMEX futures contracts	$	2,750	$	2,750	$	—	$	—
Commodity collar contracts	6,275		—		6,275		—
Commodity forward contracts	2,987		—		2,987		—
RINs credit obligations (1)	81,232		—		81,232		—
Total liabilities	$	93,244	$	2,750	$	90,494	$	—

(1)REH Company is financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing of the Sinclair Transactions. See Note 2 for additional information on RINs credit obligations assumed in the Sinclair Transactions.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share

The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HF Sinclair stockholders:

	Three Months Ended March 31,
	2023		2022
	(In thousands, except per share data)
Net income attributable to HF Sinclair stockholders	$	353,266	$	159,974
Participating securities’ share in earnings (1)	2,925		1,983
Net income attributable to common shares	$	350,341	$	157,991
Average number of shares of common stock outstanding	195,445		175,081
Average number of shares of common stock outstanding assuming dilution	195,445		175,081
Basic earnings per share	$	1.79	$	0.90
Diluted earnings per share	$	1.79	$	0.90

(1)Unvested restricted stock unit awards and unvested performance share units that settle in HF Sinclair common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HF Sinclair. Participating earnings represent the distributed and undistributed earnings of HF Sinclair attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so.

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule Of Restricted Stock Activity

A summary of restricted stock unit and performance share unit activity during the three months ended March 31, 2023 is presented below:

	Restricted Stock Units		Performance Share Units
Outstanding at January 1, 2023	1,055,875		771,197
Granted (1)	29,590		1,509
Vested	(857)		—
Forfeited	(25,053)		(12,540)
Performance share units converted to restricted stock units	225,217		(225,217)
Outstanding at March 31, 2023	1,284,772		534,949
(1) Weighted average grant date fair value per unit	$	52.75	$	73.27

Schedule Of Performance Share Activity

A summary of restricted stock unit and performance share unit activity during the three months ended March 31, 2023 is presented below:

	Restricted Stock Units		Performance Share Units
Outstanding at January 1, 2023	1,055,875		771,197
Granted (1)	29,590		1,509
Vested	(857)		—
Forfeited	(25,053)		(12,540)
Performance share units converted to restricted stock units	225,217		(225,217)
Outstanding at March 31, 2023	1,284,772		534,949
(1) Weighted average grant date fair value per unit	$	52.75	$	73.27

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Inventories (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory Components

Inventories consist of the following components:

	March 31, 2023		December 31, 2022
	(In thousands)
Crude oil	$	858,985	$	818,737
Other raw materials and unfinished products (1)	966,222		842,855
Finished products (2)	1,396,254		1,252,984
Lower of cost or market reserve	(108,748)		(61,151)
Process chemicals (3)	51,633		53,900
Repair and maintenance supplies and other (4)	284,475		307,203
Total inventory	$	3,448,821	$	3,214,528

(1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude.

(2)Finished products include gasolines, jet fuels, diesels, renewable diesels, lubricants, asphalts, LPG’s and residual fuels.

(3)Process chemicals include additives and other chemicals.

(4)Includes RINs.

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Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

The carrying amounts of long-term debt are as follows:

	March 31, 2023		December 31, 2022
	(In thousands)
HollyFrontier
2.625% Senior Notes	$	59,637	$	59,637
5.875% Senior Notes	202,900		202,900
4.500% Senior Notes	74,966		74,966
	337,503		337,503
HF Sinclair
2.625% Senior Notes	248,190		248,190
5.875% Senior Notes	797,100		797,100
4.500% Senior Notes	325,034		325,034
	1,370,324		1,370,324
Less current debt (1)	(307,256)		(306,959)
Unamortized discount and debt issuance costs (1)	(7,967)		(8,689)
Total HF Sinclair long-term debt	1,392,604		1,392,179
HEP Credit Agreement	651,500		668,000
HEP
5.000% Senior Notes	500,000		500,000
6.375% Senior Notes	400,000		400,000
	900,000		900,000
Unamortized discount and debt issuance costs	(11,115)		(11,666)
Total HEP long-term debt	1,540,385		1,556,334
Total long-term debt	$	2,932,989	$	2,948,513

(1)The HollyFrontier 2.625% Senior Notes and HF Sinclair 2.625% Senior Notes, inclusive of unamortized discount and debt issuance costs of $0.6 million and $0.9 million at March 31, 2023 and December 31, 2022, respectively, are due October 2023 and were classified as current debt on our consolidated balance sheets.

The fair values of the senior notes are as follows:

	March 31, 2023		December 31, 2022
	(In thousands)
HollyFrontier and HF Sinclair Senior Notes	$	1,677,864	$	1,655,726
HEP Senior Notes	$	866,860	$	852,658

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Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Net Unrealized Gain (Loss) Recognized in OCI and Gain (Loss) Reclassified into Earnings

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of hedging instruments under hedge accounting:

	Net Unrealized Gain Recognized in OCI				Loss Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Three Months Ended March 31,				Income Statement Location	Three Months Ended March 31,
	2023		2022			2023		2022
	(In thousands)
Commodity contracts	$	271	$	326	Sales and other revenues	$	(1)	$	(5,288)
Total	$	271	$	326		$	(1)	$	(5,288)

Schedule of Gain (Loss) Recognized in Earnings

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended March 31,
		2023		2022
		(In thousands)
Commodity contracts	Cost of products sold	$	6,748	$	(9,788)
	Operating expenses	(14,058)		—
	Interest expense	2,406		(1,421)
Foreign currency contracts	Gain on foreign currency transactions	114		(6,430)
	Total	$	(4,790)	$	(17,639)

Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges

As of March 31, 2023, we have the following notional contract volumes related to outstanding derivative instruments:

		Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional	2023	2024	Unit of Measure
Derivatives Designated as Hedging Instruments
Forward diesel contracts - short	100,000	100,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	1,790,000	1,790,000	—	Barrels
Forward gasoline and diesel contracts - long	145,000	145,000	—	Barrels
Foreign currency forward contracts	428,211,705	322,227,146	105,984,559	U.S. dollar
Forward commodity contracts (platinum)	36,969	14,550	22,419	Troy ounces
Natural gas price swaps (basis spread) - long	3,850,000	3,850,000	—	MMBTU
Natural gas collar contracts	22,000,000	22,000,000	—	MMBTU

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
March 31, 2023
Derivatives designated as cash flow hedging instruments:
Commodity forward contracts	$	312	$	—	$	312	$	—	$	—	$	—
	$	312	$	—	$	312	$	—	$	—	$	—
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	3,438	$	—	$	3,438
Commodity price swap contracts	2,624		—		2,624		—		—		—
Commodity collar contracts	—		—		—		21,422		—		21,422
Commodity forward contracts	412		—		412		439		—		439
Foreign currency forward contracts	11,757		(663)		11,094		—		—		—
	$	14,793	$	(663)	$	14,130	$	25,299	$	—	$	25,299
Total net balance					$	14,442					$	25,299
Balance sheet classification:	Prepayment and other				$	14,442	Accrued liabilities				$	25,299

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2022
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	2,750	$	—	$	2,750
Commodity price swap contracts	342		—		342		—		—		—
Commodity collar contracts	—		—		—		6,275		—		6,275
Commodity forward contracts	2,949		—		2,949		2,987		—		2,987
Foreign currency forward contracts	15,359		—		15,359		—		—		—
	$	18,650	$	—	$	18,650	$	12,012	$	—	$	12,012
Total net balance					$	18,650					$	12,012
Balance sheet classification:	Prepayment and other				$	18,650	Accrued liabilities				$	12,012

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Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2023

Other Comprehensive Income (Loss), before Tax [Abstract]

Schedule of Components and Allocated Tax Effects of OCI

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax		Tax Expense (Benefit)		After-Tax
	(In thousands)
Three Months Ended March 31, 2023
Net change in foreign currency translation adjustment	$	2,926	$	614	$	2,312
Net unrealized gain on hedging instruments	271		66		205
Net change in pension and other post-retirement benefit obligations	(960)		(233)		(727)
Other comprehensive income attributable to HF Sinclair stockholders	$	2,237	$	447	$	1,790
Three Months Ended March 31, 2022
Net change in foreign currency translation adjustment	$	1,721	$	379	$	1,342
Net unrealized gain on hedging instruments	326		67		259
Net change in pension and other post-retirement benefit obligations	(906)		(221)		(685)
Other comprehensive income attributable to HF Sinclair stockholders	$	1,141	$	225	$	916

Schedule of Income Statement Line Items Effects Out of AOCI

The following table presents the statements of operations line item effects for reclassifications out of accumulated other comprehensive income (loss) (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI				Statement of Operations Line Item
	Three Months Ended March 31,
	2023		2022
	(In thousands)
Hedging instruments:
Commodity price swaps	$	(1)	$	(5,288)	Sales and other revenues
	—		(1,282)		Income tax benefit
	(1)		(4,006)		Net of tax
Other post-retirement benefit obligations:
Pension obligations	45		45		Gain on sale of assets and other
	11		11		Income tax expense
	34		34		Net of tax
Post-retirement healthcare obligations	918		870		Gain on sale of assets and other
	223		211		Income tax expense
	695		659		Net of tax
Retirement restoration plan	(3)		(9)		Gain on sale of assets and other
	(1)		(2)		Income tax benefit
	(2)		(7)		Net of tax
Total reclassifications for the period	$	726	$	(3,320)

Schedule of AOCI in Equity

Accumulated other comprehensive loss in the equity section of our consolidated balance sheets includes:

	March 31, 2023		December 31, 2022
	(In thousands)
Foreign currency translation adjustment	$	(31,115)	$	(33,427)
Unrealized loss on pension obligations	(2,706)		(2,661)
Unrealized gain on post-retirement benefit obligations	13,393		14,075
Unrealized gain on hedging instruments	205		—
Accumulated other comprehensive loss	$	(20,223)	$	(22,013)

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule Of Segment Reporting Information

	Refining		Renewables		Marketing		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
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	1,053,401		95,603		—		5,796		116,878		(1,271,678)		—
	$	6,718,615	$	298,016	$	937,385	$	739,510	$	143,294	$	(1,271,678)	$	7,565,142
Cost of products sold (exclusive of lower of cost or market inventory)	$	5,617,911	$	262,738	$	924,049	$	538,003	$	—	$	(1,238,644)	$	6,104,057
Lower of cost or market inventory valuation adjustment	$	—	$	47,597	$	—	$	—	$	—	$	—	$	47,597
Operating expenses	$	517,820	$	31,371	$	—	$	63,593	$	52,142	$	(25,543)	$	639,383
Selling, general and administrative expenses	$	39,078	$	915	$	6,963	$	39,264	$	4,635	$	5,058	$	95,913
Depreciation and amortization	$	103,123	$	19,974	$	5,871	$	19,910	$	24,465	$	640	$	173,983
Income (loss) from operations	$	440,683	$	(64,579)	$	502	$	78,740	$	62,052	$	(13,189)	$	504,209
Earnings of equity method investments	$	—	$	—	$	—	$	—	$	3,882	$	—	$	3,882
Capital expenditures	$	67,774	$	4,844	$	5,255	$	8,649	$	7,614	$	5,933	$	100,069
Three Months Ended March 31, 2022
Sales and other revenues:
Revenues from external customers	$	6,371,894	$	28,313	$	277,041	$	753,558	$	27,944	$	—	$	7,458,750
Intersegment revenues	134,273		19,054		—		1,451		92,254		(247,032)		—
	$	6,506,167	$	47,367	$	277,041	$	755,009	$	120,198	$	(247,032)	$	7,458,750
Cost of products sold (exclusive of lower of cost or market inventory)	$	5,909,610	$	44,271	$	271,131	$	504,577	$	—	$	(227,577)	$	6,502,012
Lower of cost or market inventory valuation adjustment	$	—	$	(8,551)			$	—	$	—	$	—	$	(8,551)
Operating expenses	$	354,972	$	27,096	$	—	$	66,001	$	42,624	$	(13,259)	$	477,434
Selling, general and administrative expenses	$	33,882	$	872	$	140	$	41,749	$	4,312	$	29,467	$	110,422
Depreciation and amortization	$	94,681	$	5,800	$	501	$	20,594	$	21,586	$	1,439	$	144,601
Income (loss) from operations	$	113,022	$	(22,121)	$	5,269	$	122,088	$	51,676	$	(37,102)	$	232,832
Earnings of equity method investments	$	—	$	—	$	—	$	—	$	3,626	$	—	$	3,626
Capital expenditures	$	29,920	$	98,769	$	—	$	6,370	$	14,147	$	9,090	$	158,296

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Description of Business and Presentation of Financial Statements (Details) $ in Thousands		3 Months Ended
	Mar. 14, 2022 shares	Mar. 31, 2023 USD ($) location brandedStation	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Ownership Interest By Project Type [Line Items]
Number of branded stations | brandedStation		1,500
Number of locations licensed to use brand | location		300
Allowance for expected credit losses		$ 7,600		$ 7,700
Income tax expense		$ 99,700	$ 21,329
Effective income tax rate		20.60%	10.30%
Proceeds from inventory repurchase agreements		$ 6,300	$ 11,000
Payments under inventory repurchase agreements		$ 7,000	$ 9,900
HEP
Ownership Interest By Project Type [Line Items]
Percentage of ownership in variable interest entity		47.00%
Sinclair Merger | HEP
Ownership Interest By Project Type [Line Items]
Shares issued in transaction (in shares) | shares	21,000,000
Sinclair Merger | REH Company
Ownership Interest By Project Type [Line Items]
Shares issued in transaction (in shares) | shares	60,230,036
Sinclair Merger | REH Company | HEP
Ownership Interest By Project Type [Line Items]
Shares issued in transaction (in shares) | shares	21,000,000

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Acquisitions - Narrative (Details) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	Mar. 14, 2022 USD ($) $ / shares shares	Apr. 30, 2023 shares	Mar. 31, 2023 USD ($) $ / shares	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares
Business Acquisition [Line Items]
Common stock par value (in USD per share) | $ / shares	$ 0.01		$ 0.01		$ 0.01
Goodwill			$ 2,978,504		$ 2,978,315
HEP
Business Acquisition [Line Items]
Goodwill			431,985		$ 431,985
REH Company | RINs credit obligations
Business Acquisition [Line Items]
Market price of RINs credit obligations	$ 68,400
REH Company | RINs | Disposed of by Sale
Business Acquisition [Line Items]
RINs sold			15,700
Sinclair Merger
Business Acquisition [Line Items]
Value of shares issued in transaction	2,498,028
Transaction cash consideration transferred	251,448
Aggregate consideration paid in transaction	$ 2,749,476
Shares held in escrow (in shares) | shares	2,570,000
Goodwill	$ 685,934
Intangible assets acquired	221,400
Fair value of equity method investments acquired	234,300
Accrued liabilities	84,298
Incremental acquisition and integration costs			$ 3,900	$ 25,000
Sinclair Merger | RINs credit obligations
Business Acquisition [Line Items]
Accrued liabilities	$ 70,600
Sinclair Merger | Minimum
Business Acquisition [Line Items]
Amortization period of intangible assets acquired	4 years
Sinclair Merger | Maximum
Business Acquisition [Line Items]
Amortization period of intangible assets acquired	20 years
Sinclair Merger | Refining
Business Acquisition [Line Items]
Goodwill	$ 244,000
Sinclair Merger | Renewables
Business Acquisition [Line Items]
Goodwill	159,000
Sinclair Merger | Marketing
Business Acquisition [Line Items]
Goodwill	163,800
Sinclair Merger | HEP
Business Acquisition [Line Items]
Goodwill	$ 119,100
Sinclair Merger | HEP
Business Acquisition [Line Items]
Shares issued in transaction (in shares) | shares	21,000,000
Value of shares issued in transaction	$ 349,020
Transaction cash consideration transferred	328,955
Aggregate consideration paid in transaction	$ 678,000
Shares held in escrow (in shares) | shares	5,290,000
Sinclair Merger | REH Company
Business Acquisition [Line Items]
Shares issued in transaction (in shares) | shares	60,230,036
Percentage of pro forma equity representing shares issued in transaction	0.27
Value of shares issued in transaction	$ 2,149,000
Sinclair Merger | REH Company | HEP
Business Acquisition [Line Items]
Shares issued in transaction (in shares) | shares	21,000,000
Transaction cash consideration transferred	$ 329,000
Sinclair Merger | REH Company | HEP | Subsequent Event
Business Acquisition [Line Items]
Shares issued in transaction (in shares) | shares		5,290,000
Sinclair Merger | HF Sinclair | REH Company
Business Acquisition [Line Items]
Transaction cash consideration transferred	77,500
Aggregate consideration paid in transaction	$ 2,072,000

XML

Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - Sinclair Merger - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	Mar. 14, 2022	Mar. 11, 2022
Business Acquisition [Line Items]
Total equity consideration	$ 2,498,028
Total cash consideration	251,448
Cash consideration received by HFC	(77,507)
Total purchase consideration	$ 2,749,476
HF Sinclair
Business Acquisition [Line Items]
Shares issued (in shares)	60,230
Closing price per share (in USD per share)		$ 35.68
Total equity consideration	$ 2,149,008
HEP
Business Acquisition [Line Items]
Shares issued (in shares)	21,000
Closing price per share (in USD per share)		$ 16.62
Total equity consideration	$ 349,020
Total cash consideration	328,955
Total purchase consideration	$ 678,000

XML

Acquisitions - Schedule of Preliminary Purchase Consideration (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 14, 2022
Liabilities Assumed
Goodwill	$ 2,978,504	$ 2,978,315
Sinclair Merger
Assets Acquired
Accounts receivable			$ 467,530
Properties, plants and equipment			1,242,549
Operating lease right-of-use assets			4,585
Other assets: Intangibles and other			495,621
Total assets acquired			3,156,096
Liabilities Assumed
Accounts payable			564,385
Operating lease liabilities			1,030
Accrued liabilities			84,298
Noncurrent operating lease liabilities			3,554
Deferred income taxes			351,189
Other long-term liabilities			88,098
Total liabilities assumed			1,092,554
Net assets acquired			2,063,542
Goodwill			685,934
Sinclair Merger | Refining
Liabilities Assumed
Goodwill			244,000
Sinclair Merger | Renewables
Liabilities Assumed
Goodwill			159,000
Sinclair Merger | Marketing
Liabilities Assumed
Goodwill			163,800
Sinclair Merger | HEP
Liabilities Assumed
Goodwill			119,100
Sinclair Merger | Crude Oil and Refined Products
Assets Acquired
Inventories			906,461
Sinclair Merger | Materials, Supplies and Other
Assets Acquired
Inventories			$ 39,350

XML

Acquisitions - Schedule of Pro Forma Information (Details) - Sinclair Merger $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Business Acquisition [Line Items]
Sales and other revenues	$ 8,464,249
Net income attributable to HF Sinclair stockholders	$ 71,266

XML

Holly Energy Partners - Narrative (Details) shares in Thousands, $ in Thousands		3 Months Ended
	Mar. 14, 2022 USD ($) shares	Mar. 31, 2023 USD ($)
Sinclair Merger
Holly Energy Partners Entity [Line Items]
Value of shares issued in transaction	$ 2,498,028
Transaction cash consideration transferred	251,448
Aggregate consideration paid in transaction	$ 2,749,476
HEP
Holly Energy Partners Entity [Line Items]
Percentage of ownership in variable interest entity		47.00%
Minimum annualized payments under agreement		$ 456,600
HEP | Sinclair Merger
Holly Energy Partners Entity [Line Items]
Shares issued in transaction (in shares) | shares	21,000
Value of shares issued in transaction	$ 349,020
Transaction cash consideration transferred	328,955
Aggregate consideration paid in transaction	$ 678,000
HEP | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | HollyFrontier
Holly Energy Partners Entity [Line Items]
Concentration risk, percentage of total revenues		82.00%
HEP | Osage Pipeline
Holly Energy Partners Entity [Line Items]
Equity method investment, ownership percentage		50.00%
HEP | Cheyenne Pipeline
Holly Energy Partners Entity [Line Items]
Equity method investment, ownership percentage		50.00%
HEP | Cushing Connect
Holly Energy Partners Entity [Line Items]
Equity method investment, ownership percentage		50.00%
HEP | Saddle Butte Pipeline III, LLC
Holly Energy Partners Entity [Line Items]
Equity method investment, ownership percentage		25.06%
HEP | Pioneer Pipeline
Holly Energy Partners Entity [Line Items]
Equity method investment, ownership percentage		49.995%
HEP | UNEV
Holly Energy Partners Entity [Line Items]
Remaining ownership interest acquired	0.250

XML

Holly Energy Partners - Schedule of Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]
Operating lease revenues	$ 4,634	$ 3,127
Sales-type lease interest income	632	632
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable	$ 705	$ 361

XML

Revenues - Schedule of Disaggregated Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Sales and other revenues	$ 7,565,142	$ 7,458,750
Transportation fuels
Disaggregation of Revenue [Line Items]
Sales and other revenues	4,507,894	5,301,036
Specialty lubricant products
Disaggregation of Revenue [Line Items]
Sales and other revenues	679,862	682,041
Asphalt, fuel oil and other products
Disaggregation of Revenue [Line Items]
Sales and other revenues	440,339	439,182
Refined product
Disaggregation of Revenue [Line Items]
Sales and other revenues	5,628,095	6,422,259
Refined product | Mid-Continent
Disaggregation of Revenue [Line Items]
Sales and other revenues	2,007,156	2,909,468
Refined product | Southwest
Disaggregation of Revenue [Line Items]
Sales and other revenues	832,702	1,063,104
Refined product | Rocky Mountains
Disaggregation of Revenue [Line Items]
Sales and other revenues	2,197,827	1,858,487
Refined product | Northeast
Disaggregation of Revenue [Line Items]
Sales and other revenues	263,904	243,437
Refined product | Canada
Disaggregation of Revenue [Line Items]
Sales and other revenues	250,724	253,959
Refined product | Europe, Asia and Latin America
Disaggregation of Revenue [Line Items]
Sales and other revenues	75,782	93,804
Excess crude oil revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues	710,897	682,597
Renewable diesel revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues	202,413	28,313
Transportation and logistic services
Disaggregation of Revenue [Line Items]
Sales and other revenues	26,416	27,944
Marketing revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues	937,385	277,041
Other revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues	59,936	20,596
Refining
Disaggregation of Revenue [Line Items]
Sales and other revenues	5,665,214	6,371,894
Refining | Asphalt, fuel oil and other products
Disaggregation of Revenue [Line Items]
Sales and other revenues	386,800	367,600
Lubricants and Specialty Products
Disaggregation of Revenue [Line Items]
Sales and other revenues	733,714	753,558
Lubricants and Specialty Products | Asphalt, fuel oil and other products
Disaggregation of Revenue [Line Items]
Sales and other revenues	$ 53,600	$ 71,600

XML

Revenues - Schedule Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Change In Contract With Customer, Liability [Roll Forward]
Balance at beginning of period	$ 10,722	$ 9,278
Increase	5,159	7,664
Recognized as revenue	(5,744)	(8,197)
Balance at end of period	$ 10,137	$ 8,745

XML

Revenues - Schedule of Performance Obligations (Details) bbl in Thousands, $ in Thousands	Mar. 31, 2023 USD ($) bbl
HEP | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation revenues | $	$ 71,198
Refined product
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, sale of refined product barrels | bbl	108,277
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | HEP | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation revenues | $	$ 12,261
Satisfaction period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Refined product
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, sale of refined product barrels | bbl	27,091
Satisfaction period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | HEP | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation revenues | $	$ 17,075
Satisfaction period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Refined product
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, sale of refined product barrels | bbl	30,423
Satisfaction period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | HEP | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation revenues | $	$ 8,226
Satisfaction period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Refined product
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, sale of refined product barrels | bbl	21,087
Satisfaction period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | HEP | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation revenues | $	$ 33,636
Satisfaction period
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Refined product
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, sale of refined product barrels | bbl	29,676
Satisfaction period

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Level 1
Debt Instrument [Line Items]
Assets:	$ 0	$ 0
Liabilities:	3,438	2,750
Level 1 | Commodity price swaps
Debt Instrument [Line Items]
Assets:	0	0
Level 1 | NYMEX futures contracts
Debt Instrument [Line Items]
Liabilities:	3,438	2,750
Level 1 | Commodity collar contracts
Debt Instrument [Line Items]
Liabilities:	0	0
Level 1 | Commodity forward contracts
Debt Instrument [Line Items]
Assets:	0	0
Liabilities:	0	0
Level 1 | RINs
Debt Instrument [Line Items]
Assets:	0	0
Liabilities:	0	0
Level 1 | Foreign currency forward contracts
Debt Instrument [Line Items]
Assets:	0	0
Liabilities:	0
Level 2
Debt Instrument [Line Items]
Assets:	90,829	99,882
Liabilities:	98,248	90,494
Level 2 | Commodity price swaps
Debt Instrument [Line Items]
Assets:	2,624	342
Level 2 | NYMEX futures contracts
Debt Instrument [Line Items]
Liabilities:	0	0
Level 2 | Commodity collar contracts
Debt Instrument [Line Items]
Liabilities:	21,422	6,275
Level 2 | Commodity forward contracts
Debt Instrument [Line Items]
Assets:	724	2,949
Liabilities:	439	2,987
Level 2 | RINs
Debt Instrument [Line Items]
Assets:	75,724	81,232
Liabilities:	75,724	81,232
Level 2 | Foreign currency forward contracts
Debt Instrument [Line Items]
Assets:	11,757	15,359
Liabilities:	663
Level 3
Debt Instrument [Line Items]
Assets:	0	0
Liabilities:	0	0
Level 3 | Commodity price swaps
Debt Instrument [Line Items]
Assets:	0	0
Level 3 | NYMEX futures contracts
Debt Instrument [Line Items]
Liabilities:	0	0
Level 3 | Commodity collar contracts
Debt Instrument [Line Items]
Liabilities:	0	0
Level 3 | Commodity forward contracts
Debt Instrument [Line Items]
Assets:	0	0
Liabilities:	0	0
Level 3 | RINs
Debt Instrument [Line Items]
Assets:	0	0
Liabilities:	0	0
Level 3 | Foreign currency forward contracts
Debt Instrument [Line Items]
Assets:	0	0
Liabilities:	0
Carrying Amount
Debt Instrument [Line Items]
Assets:	90,829	99,882
Liabilities:	101,686	93,244
Carrying Amount | Commodity price swaps
Debt Instrument [Line Items]
Assets:	2,624	342
Carrying Amount | NYMEX futures contracts
Debt Instrument [Line Items]
Liabilities:	3,438	2,750
Carrying Amount | Commodity collar contracts
Debt Instrument [Line Items]
Liabilities:	21,422	6,275
Carrying Amount | Commodity forward contracts
Debt Instrument [Line Items]
Assets:	724	2,949
Liabilities:	439	2,987
Carrying Amount | RINs
Debt Instrument [Line Items]
Assets:	75,724	81,232
Liabilities:	75,724	81,232
Carrying Amount | Foreign currency forward contracts
Debt Instrument [Line Items]
Assets:	11,757	$ 15,359
Liabilities:	$ 663

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net income attributable to HF Sinclair stockholders	$ 353,266	$ 159,974
Participating securities' share in earnings	2,925	1,983
Net income attributable to common shares	$ 350,341	$ 157,991
Average number of shares of common stock outstanding (in shares)	195,445	175,081
Average number of shares of common stock outstanding assuming dilution (in shares)	195,445	175,081
Basic earnings per share (in USD per share)	$ 1.79	$ 0.90
Diluted earnings per share (in USD per share)	$ 1.79	$ 0.90

XML

Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost attributable to share-based compensation plans	$ 3.3	$ 8.9
HEP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost attributable to share-based compensation plans	$ 0.4	$ 0.6
Restricted Stock Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock vesting period	1 year
Restricted Stock Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock vesting period	3 years
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock vesting period	3 years
Performance Share Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target	0.00%
Performance Share Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target	200.00%

XML

Stock-Based Compensation - Schedule Of Restricted Stock and Performance Share Activity (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Grants outstanding at beginning of period (in shares)	1,055,875
Units granted (in shares)	29,590
Units vested (in shares)	(857)
Units forfeited (in shares)	(25,053)
Performance share units converted to restricted stock units (in shares)	225,217
Grants outstanding at end of period (in shares)	1,284,772
Weighted average grant date fair value of units granted (in USD per share) | $ / shares	$ 52.75
Performance Share Units
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Grants outstanding at beginning of period (in shares)	771,197
Units granted (in shares)	1,509
Units vested (in shares)	0
Units forfeited (in shares)	(12,540)
Performance share units converted to restricted stock units (in shares)	225,217
Grants outstanding at end of period (in shares)	534,949
Weighted average grant date fair value of units granted (in USD per share) | $ / shares	$ 73.27

XML

Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventories
Crude oil	$ 858,985	$ 818,737
Other raw materials and unfinished products	966,222	842,855
Finished products	1,396,254	1,252,984
Lower of cost or market reserve	(108,748)	(61,151)
Process chemicals	51,633	53,900
Repair and maintenance supplies and other	284,475	307,203
Total inventory	$ 3,448,821	$ 3,214,528

XML

Inventories - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Inventory Disclosure [Abstract]
Inventory valuation reserves	$ 108,748		$ 61,151
Increase (decrease) to cost of products sold	$ 47,600	$ (8,600)

XML

Environmental (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Mar. 14, 2022
Loss Contingencies [Line Items]
Environmental remediation costs	$ 13.3	$ 7.1
Environmental Remediation Expense, Statement of Income or Comprehensive Income [Extensible Enumeration]	Operating Costs and Expenses	Operating Costs and Expenses
Accrued environmental liability	$ 202.0		$ 192.3
Sinclair Merger
Loss Contingencies [Line Items]
Accrued environmental liabilities assumed in transaction				$ 72.2
Third party receivable associated with environmental liabilities assumed in transaction				$ 21.5
Other Noncurrent Liabilities
Loss Contingencies [Line Items]
Accrued environmental liability	$ 168.0		$ 170.0

XML

Debt - Narrative (Details) - USD ($)		3 Months Ended
	Apr. 27, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Debt Instrument [Line Items]
Fair value of financing arrangements		$ 37,400,000		$ 39,800,000
Capitalized interest		1,200,000	$ 3,700,000
HEP
Debt Instrument [Line Items]
Maximum borrowing capacity under revolving credit agreement		1,200,000,000
Outstanding borrowing		651,500,000		$ 668,000,000
Letters of credit amount outstanding		0
Maximum borrowing capacity with accordion feature		$ 1,700,000,000
Effective interest rate on debt		6.88%
HF Sinclair Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity under revolving credit agreement	$ 1,650,000,000
HF Sinclair Credit Agreement | Secured Overnight Financing Rate (SOFR) | Minimum
Debt Instrument [Line Items]
Variable rate spread	1.00%
HF Sinclair Credit Agreement | Base Rate | Minimum
Debt Instrument [Line Items]
Variable rate spread	0.25%
HF Sinclair Credit Agreement | Base Rate | Maximum
Debt Instrument [Line Items]
Variable rate spread	1.125%
HF Sinclair Credit Agreement | LIBOR | Minimum
Debt Instrument [Line Items]
Variable rate spread	1.25%
HF Sinclair Credit Agreement | LIBOR | Maximum
Debt Instrument [Line Items]
Variable rate spread	2.125%
HF Sinclair Credit Agreement | CDOR Rate | Minimum
Debt Instrument [Line Items]
Variable rate spread	1.25%
HF Sinclair Credit Agreement | CDOR Rate | Maximum
Debt Instrument [Line Items]
Variable rate spread	2.125%
HF Sinclair Credit Agreement | HEP | Base Rate | Minimum
Debt Instrument [Line Items]
Variable rate spread	0.75%
HF Sinclair Credit Agreement | HEP | Base Rate | Maximum
Debt Instrument [Line Items]
Variable rate spread	1.75%
HF Sinclair Credit Agreement | HEP | Adjusted Secured Overnight Financing Rate (SOFR) | Minimum
Debt Instrument [Line Items]
Variable rate spread	1.75%
HF Sinclair Credit Agreement | HEP | Adjusted Secured Overnight Financing Rate (SOFR) | Maximum
Debt Instrument [Line Items]
Variable rate spread	2.75%
Terminated HFC Credit Agreement
Debt Instrument [Line Items]
Outstanding borrowing		$ 0
Letters of credit amount outstanding		2,300,000
Letter of Credit | HEP
Debt Instrument [Line Items]
Line of credit, maximum capacity available		50,000,000
HollyFrontier 2.625% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		$ 59,637,000
Stated interest rate	2.625%	2.625%
HollyFrontier 5.875% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		$ 202,900,000
Stated interest rate	5.875%
HollyFrontier 4.500% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		74,966,000
Stated interest rate	4.50%
HF Sinclair 2.625% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		$ 248,190,000
Stated interest rate	2.625%	2.625%
HF Sinclair 5.875% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		$ 797,100,000
Stated interest rate	5.875%
HF Sinclair 4.500% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		325,034,000.000
Stated interest rate	4.50%
6.375% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		$ 400,000,000
6.375% Senior Notes | HEP
Debt Instrument [Line Items]
Stated interest rate		6.375%
5.000% Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of senior note		$ 500,000,000
5.000% Senior Notes | HEP
Debt Instrument [Line Items]
Stated interest rate		5.00%

XML

Debt - Carrying Amounts Of Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Apr. 27, 2022
Debt Instrument [Line Items]
Less current debt	$ (307,256)	$ (306,959)
Total long-term debt	2,932,989	2,948,513
Level 2
Debt Instrument [Line Items]
Senior notes	1,677,864	1,655,726
HollyFrontier 2.625% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	$ 59,637	59,637
Stated interest rate	2.625%		2.625%
HollyFrontier 5.875% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	$ 202,900	202,900
Stated interest rate			5.875%
HollyFrontier 4.500% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	74,966	74,966
Stated interest rate			4.50%
HollyFrontier Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	337,503	337,503
HF Sinclair 2.625% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	$ 248,190	248,190
Stated interest rate	2.625%		2.625%
HF Sinclair 2.625% Senior Notes Due 2023 And HollyFrontier 2.625% Senior Notes Due 2023
Debt Instrument [Line Items]
Unamortized discount and debt issuance costs	$ 600	900
HF Sinclair 5.875% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	797,100	797,100
Stated interest rate			5.875%
HF Sinclair 4.500% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	325,034	325,034
Stated interest rate			4.50%
HF Sinclair Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	1,370,324	1,370,324
Less current debt	(307,256)	(306,959)
Unamortized discount and debt issuance costs	7,967	8,689
Total long-term debt	1,392,604	1,392,179
HEP
Debt Instrument [Line Items]
Carrying amounts of long-term debt	900,000	900,000
Unamortized discount and debt issuance costs	11,115	11,666
Total long-term debt	1,540,385	1,556,334
HEP Credit Agreement	651,500	668,000
HEP | Level 2
Debt Instrument [Line Items]
Senior notes	866,860	852,658
HEP | 5.000% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	$ 500,000	500,000
Stated interest rate	5.00%
HEP | 6.375% Senior Notes
Debt Instrument [Line Items]
Carrying amounts of long-term debt	$ 400,000	$ 400,000
Stated interest rate	6.375%

XML

Derivative Instruments and Hedging Activities- Location of Gain (Loss) in Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Trading Activity, Gains and Losses, Net [Line Items]
Net Unrealized Gain Recognized in OCI	$ 271	$ 326
Loss Reclassified into Earnings	(1)	(5,288)
Commodity contracts
Trading Activity, Gains and Losses, Net [Line Items]
Net Unrealized Gain Recognized in OCI	271	326
Commodity contracts | Sales and other revenues
Trading Activity, Gains and Losses, Net [Line Items]
Loss Reclassified into Earnings	$ (1)	$ (5,288)

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Derivative Instruments and Hedging Activities - Pre-tax effect on Income Due to Maturities and Fair Value Adjustments of Economic Hedges (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives Not Designated as Hedging Instruments	$ (4,790)	$ (17,639)
Commodity contracts | Cost of products sold
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives Not Designated as Hedging Instruments	6,748	(9,788)
Commodity contracts | Operating expenses
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives Not Designated as Hedging Instruments	(14,058)	0
Commodity contracts | Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives Not Designated as Hedging Instruments	2,406	(1,421)
Foreign currency contracts | Gain on foreign currency transactions
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives Not Designated as Hedging Instruments	$ 114	$ (6,430)

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Derivative Instruments and Hedging Activities - Notional Contracts by Derivative Type (Details) bbl in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) MMBTU ozt bbl
Derivatives Designated as Hedging Instruments | Forward diesel contracts - short
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	100
Derivatives Designated as Hedging Instruments | Forward diesel contracts - short | 2023
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	100
Derivatives Designated as Hedging Instruments | Forward diesel contracts - short | 2024
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	0
Derivatives Not Designated as Hedging Instruments | NYMEX futures (WTI) - short
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	1,790
Derivatives Not Designated as Hedging Instruments | NYMEX futures (WTI) - short | 2023
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	1,790
Derivatives Not Designated as Hedging Instruments | NYMEX futures (WTI) - short | 2024
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	0
Derivatives Not Designated as Hedging Instruments | Forward gasoline and diesel contracts - long
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	145
Derivatives Not Designated as Hedging Instruments | Forward gasoline and diesel contracts - long | 2023
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	145
Derivatives Not Designated as Hedging Instruments | Forward gasoline and diesel contracts - long | 2024
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in barrels)	0
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts
Economic hedges by derivative type [Line Items]
Derivative notional amount | $	$ 428,211,705
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | 2023
Economic hedges by derivative type [Line Items]
Derivative notional amount | $	322,227,146
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | 2024
Economic hedges by derivative type [Line Items]
Derivative notional amount | $	$ 105,984,559
Derivatives Not Designated as Hedging Instruments | Commodity contracts
Economic hedges by derivative type [Line Items]
Derivative notional amount (in troy ounce) | ozt	36,969
Derivatives Not Designated as Hedging Instruments | Commodity contracts | 2023
Economic hedges by derivative type [Line Items]
Derivative notional amount (in troy ounce) | ozt	14,550
Derivatives Not Designated as Hedging Instruments | Commodity contracts | 2024
Economic hedges by derivative type [Line Items]
Derivative notional amount (in troy ounce) | ozt	22,419
Derivatives Not Designated as Hedging Instruments | Natural gas price swaps (basis spread) - long
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU	3,850,000
Derivatives Not Designated as Hedging Instruments | Natural gas price swaps (basis spread) - long | 2023
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU	3,850,000
Derivatives Not Designated as Hedging Instruments | Natural gas price swaps (basis spread) - long | 2024
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU	0
Derivatives Not Designated as Hedging Instruments | Natural gas collar contracts
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU	22,000,000
Derivatives Not Designated as Hedging Instruments | Natural gas collar contracts | 2023
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU	22,000,000
Derivatives Not Designated as Hedging Instruments | Natural gas collar contracts | 2024
Economic hedges by derivative type [Line Items]
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU	0

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Derivative Instruments and Hedging Activities - Summary Of Balance Sheet Locations And Related Fair Values Of Outstanding Derivative Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Net Assets Recognized in Balance Sheet	$ 14,442	$ 18,650
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Prepayments and other (HEP: $4,851 and $5,699, respectively)	Prepayments and other (HEP: $4,851 and $5,699, respectively)
Net Liabilities Recognized in Balance Sheet	$ 25,299	$ 12,012
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Accrued liabilities (HEP: $28,953 and $39,110, respectively)	Accrued liabilities (HEP: $28,953 and $39,110, respectively)
Derivatives Designated as Hedging Instruments
Derivative [Line Items]
Gross Assets	$ 312
Gross Liabilities Offset in Balance Sheet	0
Net Assets Recognized in Balance Sheet	312
Gross Liabilities	0
Gross Assets Offset in Balance Sheet	0
Net Liabilities Recognized in Balance Sheet	0
Derivatives Designated as Hedging Instruments | Commodity forward contracts
Derivative [Line Items]
Gross Assets	312
Gross Liabilities Offset in Balance Sheet	0
Net Assets Recognized in Balance Sheet	312
Gross Liabilities	0
Gross Assets Offset in Balance Sheet	0
Net Liabilities Recognized in Balance Sheet	0
Derivatives Not Designated as Hedging Instruments
Derivative [Line Items]
Gross Assets	14,793	$ 18,650
Gross Liabilities Offset in Balance Sheet	(663)	0
Net Assets Recognized in Balance Sheet	14,130	18,650
Gross Liabilities	25,299	12,012
Gross Assets Offset in Balance Sheet	0	0
Net Liabilities Recognized in Balance Sheet	25,299	12,012
Derivatives Not Designated as Hedging Instruments | NYMEX futures contracts
Derivative [Line Items]
Gross Assets	0	0
Gross Liabilities Offset in Balance Sheet	0	0
Net Assets Recognized in Balance Sheet	0	0
Gross Liabilities	3,438	2,750
Gross Assets Offset in Balance Sheet	0	0
Net Liabilities Recognized in Balance Sheet	3,438	2,750
Derivatives Not Designated as Hedging Instruments | Commodity price swap contracts
Derivative [Line Items]
Gross Assets	2,624	342
Gross Liabilities Offset in Balance Sheet	0	0
Net Assets Recognized in Balance Sheet	2,624	342
Gross Liabilities	0	0
Gross Assets Offset in Balance Sheet	0	0
Net Liabilities Recognized in Balance Sheet	0	0
Derivatives Not Designated as Hedging Instruments | Commodity collar contracts
Derivative [Line Items]
Gross Assets	0	0
Gross Liabilities Offset in Balance Sheet	0	0
Net Assets Recognized in Balance Sheet	0	0
Gross Liabilities	21,422	6,275
Gross Assets Offset in Balance Sheet	0	0
Net Liabilities Recognized in Balance Sheet	21,422	6,275
Derivatives Not Designated as Hedging Instruments | Commodity forward contracts
Derivative [Line Items]
Gross Assets	412	2,949
Gross Liabilities Offset in Balance Sheet	0	0
Net Assets Recognized in Balance Sheet	412	2,949
Gross Liabilities	439	2,987
Gross Assets Offset in Balance Sheet	0	0
Net Liabilities Recognized in Balance Sheet	439	2,987
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts
Derivative [Line Items]
Gross Assets	11,757	15,359
Gross Liabilities Offset in Balance Sheet	(663)	0
Net Assets Recognized in Balance Sheet	11,094	15,359
Gross Liabilities	0	0
Gross Assets Offset in Balance Sheet	0	0
Net Liabilities Recognized in Balance Sheet	$ 0	$ 0

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Derivative Instruments and Hedging Activities - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Pre-tax net unrealized gain to be transferred through 2023	$ 0.3

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Equity (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	May 03, 2023	Apr. 30, 2023	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2022
Class of Stock [Line Items]
Shares purchased under share repurchase program (in shares)			4,793,857
Value of shares purchased under share repurchase program			$ 240,300	$ 352
Common stock withheld under stock-based compensation agreements (in shares)			16,200	1,764
Dividends declared per share (in USD per share)			$ 0.45
Subsequent Event
Class of Stock [Line Items]
Shares purchased under share repurchase program (in shares)		0
Dividends declared per share (in USD per share)	$ 0.45
REH Company
Class of Stock [Line Items]
Shares purchased under share repurchase program (in shares)			1,969,279
Value of shares purchased under share repurchase program			$ 100,000
HF Sinclair Share Repurchase Program
Class of Stock [Line Items]
Authorized share repurchase amount					$ 1,000,000
Remaining authorized share repurchase amount			$ 419,800

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Other Comprehensive Income - Components And Allocated Tax Effects Of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Before-Tax	$ 2,237	$ 1,141
Tax Expense (Benefit)	447	225
Other comprehensive income	1,790	916
Net change in foreign currency translation adjustment
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Before-Tax	2,926	1,721
Tax Expense (Benefit)	614	379
Other comprehensive income	2,312	1,342
Net unrealized gain on hedging instruments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Before-Tax	271	326
Tax Expense (Benefit)	66	67
Other comprehensive income	205	259
Net change in pension and other post-retirement benefit obligations
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Before-Tax	(960)	(906)
Tax Expense (Benefit)	(233)	(221)
Other comprehensive income	$ (727)	$ (685)

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Other Comprehensive Income - Other Comprehensive Income (Loss) Amounts Reclassified to Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Gain on sale of assets and other	$ 1,631	$ 3,895
Income tax expense (benefit)	99,700	21,329
Net income	385,005	185,301
Reclassification out of Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	726	(3,320)
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Hedging instruments:
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax expense (benefit)	0	(1,282)
Net income	(1)	(4,006)
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Hedging instruments: | Commodity price swap contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sales and other revenues	(1)	(5,288)
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other post-retirement benefit obligations: | Pension obligations
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Gain on sale of assets and other	45	45
Income tax expense (benefit)	11	11
Net income	34	34
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other post-retirement benefit obligations: | Post-retirement healthcare obligations
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Gain on sale of assets and other	918	870
Income tax expense (benefit)	223	211
Net income	695	659
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other post-retirement benefit obligations: | Retirement restoration plan
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Gain on sale of assets and other	(3)	(9)
Income tax expense (benefit)	(1)	(2)
Net income	$ (2)	$ (7)

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Other Comprehensive Income - Accumulated Other Comprehensive Income (Loss) In Equity (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Stockholders' equity	$ 10,050,527	$ 10,017,572	$ 8,876,977	$ 6,294,465
Foreign currency translation adjustment
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Stockholders' equity	(31,115)	(33,427)
Unrealized gain (loss) on defined benefit plans | Pension obligations
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Stockholders' equity	(2,706)	(2,661)
Unrealized gain (loss) on defined benefit plans | Post-retirement healthcare obligations
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Stockholders' equity	13,393	14,075
Unrealized gain on hedging instruments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Stockholders' equity	205	0
Accumulated other comprehensive loss
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Stockholders' equity	$ (20,223)	$ (22,013)	$ 3,587	$ 2,671

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Contingencies (Details) - Sinclair Merger - shares		1 Months Ended
	Mar. 14, 2022	Apr. 30, 2023
Commitments And Contingencies [Line Items]
Period following delivery of invoice requirement acquiree payment	5 days
Shares held in escrow (in shares)	2,570,000
REH Company
Commitments And Contingencies [Line Items]
Shares issued (in shares)	60,230,036
HEP
Commitments And Contingencies [Line Items]
Shares held in escrow (in shares)	5,290,000
Shares issued (in shares)	21,000,000
HEP | REH Company
Commitments And Contingencies [Line Items]
Shares issued (in shares)	21,000,000
HEP | REH Company | Subsequent Event
Commitments And Contingencies [Line Items]
Shares issued (in shares)		5,290,000

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Segment Information - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 segment
Segment Reporting Information [Line Items]
Number of reportable segments	5
HEP | Osage Pipeline
Segment Reporting Information [Line Items]
Equity method investment, ownership percentage	50.00%
HEP | Cheyenne Pipeline
Segment Reporting Information [Line Items]
Equity method investment, ownership percentage	50.00%
HEP | Cushing Connect
Segment Reporting Information [Line Items]
Equity method investment, ownership percentage	50.00%
HEP | Saddle Butte Pipeline
Segment Reporting Information [Line Items]
Equity method investment, ownership percentage	25.06%
HEP | Pioneer Pipeline
Segment Reporting Information [Line Items]
Equity method investment, ownership percentage	49.995%

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Segment Information - Schedule Of Segment Reporting Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Sales and other revenues	$ 7,565,142	$ 7,458,750
Cost of products sold (exclusive of lower of cost or market inventory)	6,104,057	6,502,012
Lower of cost or market inventory valuation adjustment	47,597	(8,551)
Operating expenses	639,383	477,434
Selling, general and administrative expenses	95,913	110,422
Depreciation and amortization	173,983	144,601
Income (loss) from operations	504,209	232,832
Earnings of equity method investments	3,882	3,626
Capital expenditures	100,069	158,296
Corporate, Other and Eliminations
Segment Reporting Information [Line Items]
Sales and other revenues	(1,271,678)	(247,032)
Intersegment Eliminations
Segment Reporting Information [Line Items]
Sales and other revenues	(1,271,678)	(247,032)
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Sales and other revenues	0	0
Cost of products sold (exclusive of lower of cost or market inventory)	(1,238,644)	(227,577)
Lower of cost or market inventory valuation adjustment	0	0
Operating expenses	(25,543)	(13,259)
Selling, general and administrative expenses	5,058	29,467
Depreciation and amortization	640	1,439
Income (loss) from operations	(13,189)	(37,102)
Earnings of equity method investments	0	0
Capital expenditures	5,933	9,090
Refining
Segment Reporting Information [Line Items]
Sales and other revenues	5,665,214	6,371,894
Refining | Operating Segments
Segment Reporting Information [Line Items]
Sales and other revenues	6,718,615	6,506,167
Cost of products sold (exclusive of lower of cost or market inventory)	5,617,911	5,909,610
Lower of cost or market inventory valuation adjustment	0	0
Operating expenses	517,820	354,972
Selling, general and administrative expenses	39,078	33,882
Depreciation and amortization	103,123	94,681
Income (loss) from operations	440,683	113,022
Earnings of equity method investments	0	0
Capital expenditures	67,774	29,920
Refining | Intersegment Eliminations
Segment Reporting Information [Line Items]
Sales and other revenues	1,053,401	134,273
Renewables
Segment Reporting Information [Line Items]
Sales and other revenues	202,413	28,313
Renewables | Operating Segments
Segment Reporting Information [Line Items]
Sales and other revenues	298,016	47,367
Cost of products sold (exclusive of lower of cost or market inventory)	262,738	44,271
Lower of cost or market inventory valuation adjustment	47,597	(8,551)
Operating expenses	31,371	27,096
Selling, general and administrative expenses	915	872
Depreciation and amortization	19,974	5,800
Income (loss) from operations	(64,579)	(22,121)
Earnings of equity method investments	0	0
Capital expenditures	4,844	98,769
Renewables | Intersegment Eliminations
Segment Reporting Information [Line Items]
Sales and other revenues	95,603	19,054
Marketing
Segment Reporting Information [Line Items]
Sales and other revenues	937,385	277,041
Marketing | Operating Segments
Segment Reporting Information [Line Items]
Sales and other revenues	937,385	277,041
Cost of products sold (exclusive of lower of cost or market inventory)	924,049	271,131
Lower of cost or market inventory valuation adjustment	0
Operating expenses	0	0
Selling, general and administrative expenses	6,963	140
Depreciation and amortization	5,871	501
Income (loss) from operations	502	5,269
Earnings of equity method investments	0	0
Capital expenditures	5,255	0
Marketing | Intersegment Eliminations
Segment Reporting Information [Line Items]
Sales and other revenues	0	0
Lubricants and Specialty Products
Segment Reporting Information [Line Items]
Sales and other revenues	733,714	753,558
Lubricants and Specialty Products | Operating Segments
Segment Reporting Information [Line Items]
Sales and other revenues	739,510	755,009
Cost of products sold (exclusive of lower of cost or market inventory)	538,003	504,577
Lower of cost or market inventory valuation adjustment	0	0
Operating expenses	63,593	66,001
Selling, general and administrative expenses	39,264	41,749
Depreciation and amortization	19,910	20,594
Income (loss) from operations	78,740	122,088
Earnings of equity method investments	0	0
Capital expenditures	8,649	6,370
Lubricants and Specialty Products | Intersegment Eliminations
Segment Reporting Information [Line Items]
Sales and other revenues	5,796	1,451
HEP
Segment Reporting Information [Line Items]
Sales and other revenues	26,416	27,944
HEP | Operating Segments
Segment Reporting Information [Line Items]
Sales and other revenues	143,294	120,198
Cost of products sold (exclusive of lower of cost or market inventory)	0	0
Lower of cost or market inventory valuation adjustment	0	0
Operating expenses	52,142	42,624
Selling, general and administrative expenses	4,635	4,312
Depreciation and amortization	24,465	21,586
Income (loss) from operations	62,052	51,676
Earnings of equity method investments	3,882	3,626
Capital expenditures	7,614	14,147
HEP | Intersegment Eliminations
Segment Reporting Information [Line Items]
Sales and other revenues	$ 116,878	$ 92,254

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Subsequent Event (Details) - Subsequent Event - HEP	May 03, 2023 $ / shares
Subsequent Event [Line Items]
Par value of common stock exchanged (in USD per share)	$ 0.01
Fixed exchange ratio	0.3714