HF Sinclair Corp (DINO)

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 and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions.

We use certain non-GAAP financial measures in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”). For a description of each of the non-GAAP measures used in this MD&A, please refer to the discussion under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 2 of Part I of this Quarterly Report on Form 10-Q. This Item 2 should be read in conjunction with our consolidated financial statements and the notes thereto included in this interim report. In addition, this Item 2 should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

OVERVIEW

We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and lubricants and specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. We provide petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry. We market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states, and we supply high-quality fuels to more than 1,750 branded stations and license the use of the Sinclair brand to more than 350 additional locations throughout the country. We produce renewable diesel at two of our facilities in Wyoming and one facility in New Mexico. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries.

Market Developments

For the three months ended March 31, 2026, Net income attributable to HF Sinclair stockholders was $648 million, compared to a Net loss attributable to HF Sinclair stockholders of $4 million in the three months ended March 31, 2025. Adjusted refinery gross margin per barrel sold increased $0.83, or 9%, from $9.12 for the three months ended March 31, 2025, to $9.95 for the three months ended March 31, 2026.

In the Refining segment, we saw stronger refining margins in the West region in the back half of the quarter, which were partially offset by weaker refining margins in the Mid-Continent region throughout the quarter. Additionally, our results were impacted by planned turnarounds at our Puget Sound and Woods Cross refineries. For the second quarter of 2026, we expect to run between 600,000-630,000 barrels per day of crude oil, which reflects the completion of the turnarounds at our Puget Sound and Woods Cross refineries, planned maintenance at our Parco and Navajo refineries and unplanned maintenance at our El Dorado refinery.

In the Renewables segment, higher margins in the quarter were a result of the narrowing of the BOHO spread, higher RINs prices and higher Producer’s Tax Credit (“PTC”) benefits. PTCs recognized in the first quarter of 2026 included prior year benefits of $49 million that were recognized following the February 2026 proposed ruling by the United States Department of the Treasury and Internal Revenue Service. For the second quarter of 2026, we expect continued strength in RINs and LCFS prices.

In the Marketing segment, we continued to realize strong value from our Sinclair branded sites during the first quarter of 2026, as the marketing business provided a consistent sales channel with margin uplift for our produced fuels. We expect to grow the number of branded sites by approximately 10% annually. In February 2026, we formed Green Trail Fuels, LLC, a new joint venture in which we hold a 50% non-operating economic interest. The new joint venture includes various retail sites across Colorado and New Mexico.

In the Lubricants & Specialties segment, our results (excluding first-in, first out (“FIFO”) impacts) were impacted by the dislocation between rising feedstock costs and product sales price increases during the three months ended March 31, 2026. Results for the quarter included contributions from our January 2026 acquisition of Industrial Oils Unlimited, LLC, which expanded our specialty product portfolio and is expected to support future growth opportunities.

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In the Midstream segment, our results continued to benefit from higher third-party pipeline revenues during the three months ended March 31, 2026, but were marginally impacted by a fuel-contamination incident at one of our product terminals in Colorado in the first quarter of 2026.

We continue to review and adjust our operational plans to evolving market conditions. The extent to which our future results are affected by volatile regional and global economic conditions, including ongoing tariff and trade negotiations and global hostilities, such as the ongoing military conflict in the Middle East, will depend on various factors and consequences beyond our control.

On May 1, 2026, our Board of Directors announced that it declared a regular quarterly dividend in the amount of $0.50 per share. The dividend is payable on June 2, 2026 to holders of record of common stock on May 11, 2026.

Renewable Fuel Standard Regulations

Pursuant to the 2007 Energy Independence and Security Act, the 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 satisfy annual renewable volume obligations calculated as a percentage of their petroleum fuel shipments or imports, which may be met through physical blending of renewable fuels or by purchasing and retiring RINs. Compliance with RFS regulations significantly increased our Cost of materials and other, with RINs costs totaling $358 million for the three months ended March 31, 2026. During the three months ended March 31, 2026, we recognized $21 million in Sales and other revenues related to the small refinery RINs waivers granted by the EPA in the fourth quarter of 2025. At March 31, 2026, our open RINs credit obligations were $306 million.

A more detailed discussion of our financial and operating results for the three months ended March 31, 2026 and 2025 is presented in the following sections.

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RESULTS OF OPERATIONS

Financial Data

(1) Exclusive of Depreciation and amortization.

(2) Exclusive of Lower of cost or market inventory valuation adjustments.

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Balance Sheet Data

Other Financial Data

(1)Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as Net income (loss) attributable to HF Sinclair stockholders plus (i) Income tax expense, (ii) Interest expense, net of Interest income and (iii) Depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to Net income or Income from operations 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 financial indicator widely 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 2 of Part I of this Quarterly Report on Form 10-Q.

Supplemental Segment Operating Data

Our operations are organized into five reportable segments, Refining, Renewables, Marketing, Lubricants & Specialties and Midstream. See Note 16 “Segment Information” in the Notes to Consolidated Financial Statements for additional information on our reportable segments.

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Refining Segment Operating Data

The disaggregation of our

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Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Item 7 contains “forward-looking” statements. See “Forward-Looking Statements” at the beginning of this Annual Report on Form 10-K. In this document, the words “we,” “our,” “ours” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person with certain exceptions.

We use certain non-GAAP financial measures in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”). For a description of each of the non-GAAP measures used in this MD&A, please refer to the discussion under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this Annual Report.

The comparison between the years ended December 31, 2024 and 2023 have been omitted from this Annual Report on Form 10-K for the year ended December 31, 2025, as such information can be found in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed on February 20, 2025.

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OVERVIEW

We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and lubricants and specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. We provide petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry. We market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states, and we supply high-quality fuels to more than 1,700 branded stations and license the use of the Sinclair brand to more than 350 additional locations throughout the country. We produce renewable diesel at two of our facilities in Wyoming and one facility in New Mexico. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries.

Market Developments

For the year ended December 31, 2025, Net income attributable to HF Sinclair stockholders was $579 million compared to $177 million for the year ended December 31, 2024. Adjusted refinery gross margin per produced barrel sold in our Refining segment for 2025 increased 47% over the year ended December 31, 2024.

In the Refining segment, we saw improved refining margins in the Mid-Continent and West regions in 2025. Small refinery RINs waivers granted by the EPA increased adjusted refinery gross margins by $485 million. Additionally, our results were impacted by planned turnarounds at our Parco, Puget Sound and Tulsa refineries that were completed during 2025. For the first quarter of 2026, we expect to run between 585,000-615,000 barrels per day of crude oil, which reflects the planned turnarounds at our Puget Sound and Woods Cross refineries.

In the Renewables segment, we saw lower volumes and margins. Margins were negatively impacted by the lower value of benefit from the recognition of the Producer’s Tax Credit (“PTC”) in 2025 compared to the Blender’s Tax Credit in 2024. Margins were also impacted by volatility in feedstock costs, RINs and LCFS prices. For the first quarter of 2026, we expect continued volatility in RINs and LCFS prices and to capture incrementally more value from the PTC.

In the Marketing segment, we saw strong value in the Sinclair branded sites during 2025 as the marketing business provided a consistent sales channel with margin uplift for our produced fuels. We expect to grow the number of branded sites by approximately 10% annually. In February 2026, we announced the formation of Green Trail Fuels, LLC, a new joint venture in which we will hold a 50% non-operating economic interest. The joint venture will include retail sites across Colorado and New Mexico and will be supplied fuel by our refineries, strengthening our branded marketing footprint in the Rocky Mountain and Southwest regions.

In the Lubricants & Specialties segment, we continued to improve our sales mix optimization and base oil integration across our portfolio during 2025. Our results were impacted by the planned turnaround at our Mississauga facility and headwinds related to base oil margins. In the first quarter of 2026, we completed our acquisition of Industrial Oils Unlimited, LLC for $38 million, which will enable us to continue improving our sales mix optimization and base oil integration efforts across our portfolio.

In the Midstream segment, our results benefited from higher third-party pipeline revenues and lower operating expenses in 2025.

We continue to adjust our operational plans to evolving market conditions. The extent to which our future results are affected by volatile regional and global economic conditions, including ongoing tariff and trade negotiations, will depend on various factors and consequences beyond our control.

On May 7, 2024, our Board of Directors authorized a $1.0 billion share repurchase program (the “2024 Share Repurchase Program”). The timing and amount of share repurchases under the 2024 Share Repurchase Program, including those from REH Advisors Inc. (“REH”), will depend on market conditions and corporate, tax, regulatory and other relevant conditions. We repurchased 6,908,293 shares for $340 million for the year ended December 31, 2025, under open market and privately negotiated purchases.

On February 18, 2026, our Board of Directors announced that it declared a regular quarterly dividend in the amount of $0.50 per share. The dividend is payable on March 12, 2026 to holders of record of common stock on March 2, 2026.

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One Big Beautiful Bill Act

On July 4, 2025, the President signed the One Big Beautiful Bill Act (“OBBBA”) into law. Among other things, OBBBA extends the PTC under Section 45Z through the end of 2029, indefinitely extends the first-year depreciation allowance on qualified property placed in service after January 19, 2025, and extends and enhances many of the provisions enacted under the 2017 Tax Cuts and Jobs Act. The enactment of OBBBA did not materially impact our results of operations but did reduce cash taxes paid.

Renewable Fuel Standard Regulations

Pursuant to the 2007 Energy Independence and Security Act, the 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 annually increase amounts of “renewable fuels” relative to their petroleum products or purchase credits, known as RINs, in lieu of such blending. Compliance with RFS regulations significantly increases our Cost of materials and other, with RINs costs totaling $475 million for the year ended December 31, 2025. Small refinery RINs waivers granted by the EPA increased pre-tax earnings by $485 million, of which $203 million was recognized in Cost of materials and other and $282 million was recognized in Sales and other revenues. At December 31, 2025, our open RINs credit obligations were $43 million.

HF Sinclair Management and Audit Committee Process

As previously disclosed, the Audit Committee of our Board of Directors engaged in an assessment of certain matters relating to the Company’s disclosure processes in relation to the reporting of the Company’s financial results for the fourth quarter of 2025 and full-year 2025. That assessment began in January 2026 after Mr. Atanas Atanasov, the Company’s Executive Vice President and Chief Financial Officer, raised concerns that certain actions taken by Mr. Tim Go, Chief Executive Officer and President, created an unfavorable “tone at the top” in relation to the 2025 disclosure processes. The Company’s management and the Audit Committee, with the support of external legal counsel, reviewed the concerns and other relevant information. In the course of these reviews, the Board of Directors developed separate concerns about the approach taken by Mr. Go in some communications made to management during the 2025 disclosure processes. Also, as previously discussed, on February 17, 2026, the Board of Directors received a request from Mr. Go to take a voluntary leave of absence from his duties as an officer and director of the Company. The Board of Directors accepted Mr. Go’s request, and his leave commenced on such date.

On February 17, 2026, the Board of Directors also appointed the current Chairperson of the Board of Directors, Mr. Franklin Myers, as Chief Executive Officer and President of the Company on a temporary basis.

Also, during the latter stages of this review, a separate concern developed relating to certain actions taken by Mr. Atanasov bearing upon the review process conducted by the Company’s management and the Audit Committee and the viability of his future working relationships with other members of the Company’s management team. After discussion of these concerns, on February 24, 2026, the Board of Directors received a request from Mr. Atanasov to take a voluntary leave of absence from his duties. The Board of Directors accepted Mr. Atanasov’s request, and his leave commenced on such date. Also on February 24, 2026, the Board of Directors appointed Mr. Vivek Garg, the Company’s Vice President, Chief Accounting Officer and Controller, as acting Chief Financial Officer of the Company, effective as of such date. See Item 9B “Other Information.”

The Company currently expects to negotiate a mutually agreeable separation arrangement with each of Mr. Go and Mr. Atanasov.

The Audit Committee has completed its review and has concluded that the certain actions referenced above did not create an unfavorable “tone at the top” in relation to the 2025 disclosure processes and that the Company’s disclosure controls and procedures are effective. See Item 9A “Controls and Procedures.”

A more detailed discussion of our financial and operating results for the years ended December 31, 2025 and 2024 is presented in the following sections.

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RESULTS OF OPERATIONS

Financial Data

(1)Exclusive of Depreciation and amortization.

(2)Exclusive of Lower of cost or market inventory valuation adjustments.

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Other Financial Data

(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) Income tax expense (benefit), (ii) Interest expense, net of Interest income and (iii) Depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to Net income or Income from operations 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 financial indicator widely 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” in Item 7 of Part II of this Annual Report on Form 10-K.

Supplemental Segment Operating Data

Our operations are organized into five reportable segments, Refining, Renewables, Marketing, Lubricants & Specialties and Midstream. See Note 19 “Segment Information” in the Notes to Consolidated Financial Statements for additional information on our reportable segments.

Refining Segment Operating Data

The disaggregation of our refining geographic operating data is presented in two regions, Mid-Continent and West, to best reflect the economic drivers of our refining operations. The Mid-Continent region is comprised of the El Dorado and Tulsa refineries. The West region is comprised of the Puget Sound, Navajo, Woods Cross, Parco and Casper refineries. The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations. Adjusted refinery gross margin per produced barrel sold is total Refining segment gross margin plus Lower of cost or market inventory valuation adjustments, Depreciation and amortization and Operating expenses, divided by sales volumes of produced refined products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to inventory held at the end of the period. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

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(1)Crude charge represents the barrels per day of crude oil processed at our refineries.

(2)Refinery throughput represents the barrels per day of crude and other refinery feedstocks input to the crude units and other conversion units at our refineries.

(3)Represents barrels sold of refined products produced at our refineries (including Asphalt and intersegment sales) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.

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

(5)Represents the average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(6)Gross margin represents total Refining segment Sales and other revenues less Cost of materials and other, Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization, divided by sales volumes of produced refined products.

(7)Represents total Refining segment Operating expenses, exclusive of Depreciation and amortization, divided by sales volumes of produced refined products.

(8)Adjusted refinery gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(9)Adjusted refinery operating expenses is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(10)Represents total Refining segment Operating expenses, exclusive of Depreciation and amortization, divided by refinery throughput.

(11)Represents total Refining segment adjusted refinery operating expenses, exclusive of Depreciation and amortization, divided by refinery throughput.

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Renewables Segment Operating Data

The following table sets forth information, including non-GAAP performance measures, about our renewables operations. Adjusted renewables gross margin per produced gallon sold is total Renewables segment gross margin plus Lower of cost or market inventory valuation adjustments, Depreciation and amortization and Operating expenses, divided by sales volumes of produced renewables products. This margin measure does not include the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to volumes in inventory at the end of the period. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(1)Represents the average amount per produced gallon sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(2)Gross margin represents total Renewables segment Sales and other revenues less Cost of materials and other, Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization, divided by sales volumes of produced renewables products.

(3)Adjusted renewables gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(4)Represents total Renewables segment Operating expenses, exclusive of Depreciation and amortization, divided by sales volumes of produced renewables products.

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Marketing Segment Operating Data

The following table sets forth information, including non-GAAP performance measures, about our marketing operations and includes our Sinclair branded fuel business. Adjusted marketing gross margin per gallon sold is total Marketing segment gross margin plus Depreciation and amortization, divided by sales volumes of marketing products. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(1)Includes certain non-Sinclair branded sites.

(2)Represents the average amount per gallon sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

(3)Gross margin represents total Marketing segment Sales and other revenues less Cost of materials and other and Depreciation and amortization, divided by sales volumes of marketing products.

(4)Adjusted marketing gross margin is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” in Item 7 of Part II of this Annual Report on Form 10-K.

Lubricants & Specialties Segment Operating Data

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

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Midstream Segment Operating Data

The following table sets forth information about our midstream operations.

Results of Operations - Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Summary

Net income attributable to HF Sinclair stockholders for the year ended December 31, 2025 was $579 million ($3.08 per basic and diluted share), a $402 million increase compared to net income of $177 million ($0.91 per basic and diluted share) for the year ended December 31, 2024. The increase in Net income attributable to HF Sinclair stockholders was principally driven by higher adjusted refinery gross margins. Adjusted refinery gross margin for the year ended December 31, 2025 increased to $15.37 per produced barrel sold from $10.43 for the year ended December 31, 2024, primarily due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers, partially offset by lower average sales prices per barrel. Small refinery RINs waivers increased adjusted refinery gross margins by $485 million, of which $203 million was recognized in Cost of materials and other and $282 million was recognized in Sales and other revenues. Lower of cost or market inventory valuation adjustments decreased pre-tax earnings by $417 million for the year ended December 31, 2025 and increased pre-tax earnings by $43 million for the year ended December 31, 2024.

Sales and Other Revenues

Sales and other revenues decreased 6% from $28,580 million for the year ended December 31, 2024 to $26,869 million for the year ended December 31, 2025, principally due to decreased refined product sales prices. Sales and other revenues included $551 million, $3,142 million, $2,519 million and $121 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the year ended December 31, 2025. Sales and other revenues included $644 million, $3,428 million, $2,700 million and $107 million in unaffiliated revenues related to our Renewables, Marketing, Lubricants & Specialties and Midstream segments, respectively, for the year ended December 31, 2024.

Cost of Materials and Other

Cost of materials and other, exclusive of Lower of cost or market inventory valuation adjustments, decreased 11% from $24,582 million for the year ended December 31, 2024 to $21,760 million for the year ended December 31, 2025, principally due to lower crude oil and feedstock prices. Within our Lubricants & Specialties segment, FIFO impact was a charge of $8 million and $45 million for the years ended December 31, 2025 and 2024, respectively.

During the year ended December 31, 2025, we recognized a lower of cost or market inventory valuation adjustment charge of $417 million compared to a benefit of $43 million for the year ended December 31, 2024.

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Adjusted Refinery Gross Margins

Adjusted refinery gross margin per barrel sold increased 47% from $10.43 for the year ended December 31, 2024 to $15.37 for the year ended December 31, 2025. The increase was primarily due to lower crude oil and feedstock prices and the grant of small refinery RINs waivers, partially offset by lower average sales prices per barrel. Adjusted refinery gross margin per barrel excludes 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” in Item 7 of Part II of this Annual Report on Form 10-K.

Operating Expenses

Operating expenses decreased 4% from $2,484 million for the year ended December 31, 2024 to $2,391 million for the year ended December 31, 2025, primarily due to lower maintenance, regulatory and other miscellaneous costs, partially offset by higher natural gas costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 2% from $447 million for the year ended December 31, 2024 to $456 million for the year ended December 31, 2025, primarily due to higher compensation and benefit costs and foreign currency transaction losses, partially offset by lower professional service costs.

Depreciation and Amortization Expenses

Depreciation and amortization increased 9% from $832 million for the year ended December 31, 2024 to $909 million for the year ended December 31, 2025. This increase was principally due to additional capitalized refinery turnaround costs and capitalized improvement projects as compared to the prior period.

Other Operating Expenses, Net

During the year ended December 31, 2025, we incurred decommissioning and closure costs of $8 million, other miscellaneous costs of $9 million and asset impairments of $3 million. These costs were partially offset by a gain of $11 million from a legal settlement related to winter storm Uri, which occurred in the first quarter of 2021. During the year ended December 31, 2024, we incurred asset impairment charges totaling $17 million, primarily related to certain logistics assets in our Midstream segment and other assets in our Refining segment.

Earnings of Equity Method Investments

For the year ended December 31, 2025, we recorded net earnings of $33 million compared to net earnings of $32 million for the year ended December 31, 2024. This increase is primarily due to improved performance in our Pioneer Pipeline and Osage Pipeline investments, partially offset by the assignment of our ownership interest in certain of our joint venture investments.

Interest Income

Interest income was $42 million for the year ended December 31, 2025 compared to $75 million for the year ended December 31, 2024. The decrease in interest income was primarily due to the decrease in average cash balance.

Interest Expense

Interest expense was $217 million for the year ended December 31, 2025 compared to $165 million for the year ended December 31, 2024. This increase was primarily due to unrealized losses on precious metals financing arrangements during the period.

Other Income (Expense), Net

Other income (expense), net was $(53) million for the year ended December 31, 2025 compared to $15 million for the year ended December 31, 2024. During the year ended December 31, 2025, we assigned certain of our equity ownership interests to other parties, resulting in a loss on sale of equity method investments of $47 million. Additionally, during the year ended December 31, 2025, we recognized a $24 million loss on early extinguishment of debt, inclusive of unamortized discount and debt issuance costs, as a result of the tender and redemption of certain debt, and the termination of certain credit agreements (see Note 13 “Debt” in the Notes to the Consolidated Financial Statements for additional information).

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Income Taxes

For the year ended December 31, 2025, we recorded income tax expense of $146 million compared to $34 million for the year ended December 31, 2024. This increase was principally due to higher pre-tax earnings during the year ended December 31, 2025 compared to the year ended December 31, 2024. Our effective tax rates were 19.9% and 15.6% for the years ended December 31, 2025 and 2024, respectively. The difference between the U.S federal statutory rate and the effective tax rate for the year ended December 31, 2025 was primarily due to the relationship between pre-tax earnings and the benefits of nontaxable renewable fuel incentives and foreign tax effects, partially offset by state taxes and other nondeductible items. The difference between the U.S. federal statutory rate and the effective tax rate for the year ended December 31, 2024 was primarily due to the relationship between pre-tax earnings and benefits attributable to nontaxable renewable fuel incentives offset by an increase in state income taxes and unrecognized tax benefits.

LIQUIDITY AND CAPITAL RESOURCES

We have a disciplined capital allocation strategy of maintaining financial flexibility to execute our capital priorities and generate long-term value for our stockholders. Consistent with that strategy, we aim to self-fund development projects and make strategic investments focused on profitable growth, while reducing our debt and returning cash to stockholders through dividends and share repurchases.

Credit Agreements

On April 3, 2025, we terminated our $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the “Terminated HF Sinclair Credit Agreement”) and the $1.2 billion senior secured revolving credit facility maturing in July 2025 of our wholly owned subsidiary Holly Energy Partners, L.P. (the “Terminated HEP Credit Agreement”). Contemporaneously, we entered into a new $2.0 billion senior unsecured revolving credit facility maturing in April 2030 (the “HF Sinclair Credit Agreement”), which contains an extension feature that allows us to extend the term of the commitment from time to time in increments of up to one year subject to the terms and conditions set forth in the HF Sinclair Credit Agreement. The HF Sinclair Credit Agreement includes an accordion feature that allows us to increase such commitments to an aggregate principal amount of up to $2.75 billion. In addition, HF Sinclair was released from its obligations under the Parent Guaranty Agreement, dated as of December 1, 2023, as guarantor, in favor of Wells Fargo Bank, National Association, in its capacity as administrative agent (the “Guaranty”), and the Guaranty was terminated. We did not pay any prepayment penalties in connection with the termination of the Terminated HF Sinclair Credit Agreement or the Terminated HEP Credit Agreement. We recognized an early extinguishment loss of $1 million, inclusive of unamortized debt issuance costs.

Indebtedness under the HF Sinclair Credit Agreement bears interest, at our option, at either (a) the greater of (i) the prime rate (as publicly announced from time to time by the administrative agent), (ii) a base rate equal to the highest of the Federal Funds Effective Rate (as defined in the HF Sinclair Credit Agreement) plus 0.5%, and (iii) Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for a one-month interest period plus 1%, as applicable, plus an applicable margin (ranging from 0.125% to 1.000%), or (b) at a rate equal to the Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for the applicable interest period plus an applicable margin (ranging from 1.125% to 2.000%). The applicable margin is based on HF Sinclair’s debt rating assigned by Standard & Poor’s Rating Services, Fitch Ratings, Ltd. and Moody’s Investors Service, Inc.

As of December 31, 2025, we were in compliance with all covenants and had no outstanding borrowings or letters of credit under the HF Sinclair Credit Agreement.

Senior Notes Offering, Tender Offers and Redemptions

On January 23, 2025, HF Sinclair issued an aggregate principal amount of $1.4 billion of senior notes consisting of $650 million aggregate principal amount of 5.750% Senior Notes due 2031 (the “HF Sinclair 5.750% Senior Notes”) and $750 million aggregate principal amount of 6.250% Senior Notes due 2035 (the “HF Sinclair 6.250% Senior Notes” and together with the HF Sinclair 5.750% Senior Notes, the “January HFS Notes”) for net proceeds of approximately $1.38 billion, after deducting the underwriters’ discount and commissions and offering expenses. The January HFS Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness.

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We used a portion of the funds from the January HFS Notes to complete the early settlement of cash tender offers and redemptions for $996 million in aggregate principal amount as follows:

Additionally, we used a portion of the net proceeds from the January HFS Notes offering to repay the $350 million under the Terminated HEP Credit Agreement due 2025.

On August 18, 2025, HF Sinclair issued an aggregate principal amount of $500 million of 5.500% Senior Notes due 2032 (the “HF Sinclair 5.500% Senior Notes”) for net proceeds of approximately $491 million, after deducting the underwriters’ discount and commissions and offering expenses. The HF Sinclair 5.500% Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness.

We used a portion of the funds from the HF Sinclair 5.500% Senior Notes to complete the early settlement of cash tender offers and redemptions for $404 million in aggregate principal amount as follows:

We recognized an early extinguishment loss of $23 million, inclusive of unamortized discount and debt issuance costs, as a result of the tender offers and redemptions for the year ended December 31, 2025.

HF Sinclair Financing Arrangements

Certain of our wholly owned subsidiaries entered into financing arrangements whereby such subsidiaries sold a portion of their precious metals catalyst to a financial institution in exchange for cash and then financed the use of the precious metals catalyst for a term not to exceed one year. During the year ended December 31, 2025, we received proceeds of $30 million and made principal payments of $6 million related to such arrangements. The volume of the precious metals catalyst and the interest rate are fixed over the term of each agreement, and the payments are recorded as Interest expense. Upon maturity of the financing arrangements, we must either extend the maturity or satisfy the obligation at fair market value, which is considered an embedded derivative.

Certain inventory buy/sell arrangements in which we have a repurchase obligation are recognized as financing arrangements. During the year ended December 31, 2025, we received cash proceeds and made principal payments of $103 million related to these financing arrangements.

We may, from time to time, issue letters of credit pursuant to uncommitted letters of credit facilities, which are unrelated to the HF Sinclair Credit Agreement. At December 31, 2025, we had letters of credit totaling a nominal amount under such credit facilities.

See Note 13 “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 current liquidity needs. We expect that, to the extent necessary, we can raise additional funds from time to time through equity or debt financings in the public and private capital markets. Further, from time to time we may seek to retire some or all of our outstanding debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and depends on prevailing market conditions, our liquidity requirements and other factors. In addition, components of our long-term growth strategy include the optimization of existing units at our facilities, expansion of our Midstream footprint and selective acquisition of complementary assets for our operations intended to capture synergies and increase earnings and cash flow. We also expect to use cash for payment of cash dividends, which are at the discretion of our Board of Directors, and for the repurchase of common stock under the 2024 Share Repurchase Program.

Our liquidity was approximately $3.0 billion at December 31, 2025, consisting of Cash and cash equivalents of $978 million and $2.0 billion available under the HF Sinclair Credit Agreement.

We consider all highly liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. These primarily consist of investments in liquid, 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 May 2024, our Board of Directors approved the 2024 Share Repurchase Program, which replaced all existing share repurchase programs. The 2024 Share Repurchase Program authorizes us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH are also authorized under the 2024 Share Repurchase Program, subject to REH’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs. The 2024 Share Repurchase Program may be discontinued at any time by our Board of Directors.

During the year ended December 31, 2025, we made open market and privately negotiated purchases of 6,908,293 shares for $340 million under our 2024 Share Repurchase Program, of which 3,345,857 shares were repurchased for $174 million pursuant to privately negotiated repurchases from REH. As of December 31, 2025, we had remaining authorization to repurchase up to $459 million under the 2024 Share Repurchase Program.

Cash Flows – Operating Activities

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Net cash flows provided by operating activities were $1,315 million for the year ended December 31, 2025 compared to $1,110 million for the year ended December 31, 2024, an increase of $205 million primarily driven by higher income from operations, excluding non-cash impacts reflected in the reconciliation to net cash provided by operating activities, partially offset by changes in working capital and an increase in turnaround expenditures. Changes in working capital decreased operating cash flows by $303 million and increased operating cash flows by $554 million for the years ended December 31, 2025 and 2024, respectively. Additionally, for the year ended December 31, 2025, turnaround expenditures were $437 million compared to $413 million for the year ended December 31, 2024.

Cash Flows – Investing Activities and Planned Capital Expenditures

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

For the year ended December 31, 2025, our Net cash flows used for investing activities were $516 million, primarily comprising cash expenditures for Properties, plants and equipment and precious metals of $449 million and $72 million, respectively.

For the year ended December 31, 2024, our Net cash flows used for investing activities were $468 million, primarily comprising cash expenditures for Properties, plants and equipment of $470 million.

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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 ongoing investments to sustain our refining operations. This includes replacement of, or rebuilding, refinery units and components that extend their useful lives. 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.

Expected capital and turnaround cash spending for 2026 is as follows:

Cash Flows – Financing Activities

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

For the year ended December 31, 2025, our Net cash flows used for financing activities were $631 million. During the year ended December 31, 2025, we paid $376 million in Dividends, repurchased $354 million of our Common Stock, repaid $350 million under the Terminated HEP Credit Agreement and had net proceeds from the issuance, tender and redemption of certain senior notes of $449 million.

For the year ended December 31, 2024, our Net cash flows used for financing activities were $1,182 million. During the year ended December 31, 2024, we repurchased $672 million of our Common Stock, paid $386 million in Dividends and had net repayments of $106 million under the Terminated HEP Credit Agreement.

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Contractual Obligations and Commitments

The following table presents our long-term contractual obligations as of December 31, 2025 that are expected to be paid within the next year and thereafter:

(1)See Note 13 “Debt” in the Notes to Consolidated Financial Statements for a description of our outstanding debt.

(2)We have financing arrangements related to the sale and subsequent leaseback of certain of our precious metals.

(3)We have long-term supply agreements to secure certain quantities of crude oil, feedstock and other resources used in the production process at market prices. We have estimated future payments under these fixed-quantity agreements expiring between 2026 and 2031 using current market rates.

(4)Consists of contractual obligations under agreements with third parties for the transportation of crude oil, natural gas and feedstocks to our refineries and for terminal and storage services under contracts expiring between 2026 and 2038.

(5)Operating and finance lease obligations include options to extend terms that are reasonably certain of being exercised.

CRITICAL ACCOUNTING POLICIES AND 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. We consider the following policies to be the most critical to understanding the judgments that are involved and the uncertainties that could impact our results of operations, financial condition and cash flows. For additional information, see Note 1 “Description of Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements. Certain critical accounting policies that materially affect the amounts recorded in our consolidated financial statements include assessing the possible impairment of certain assets and goodwill and assessing contingent liabilities for probable losses.

Goodwill and Long-lived Assets

As of December 31, 2025, our Goodwill balance was $2,978 million, with goodwill assigned to reporting units in our Refining, Renewables, Marketing, Lubricants & Specialties and Midstream segments. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing entails either a quantitative assessment or an optional qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. With our qualitative assessment, if we determine based on the qualitative factors that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, a quantitative test is performed in which we estimate the fair value of the related reporting unit. If the carrying amount of a reporting unit exceeds its fair value, the goodwill of that reporting unit is impaired, and we measure goodwill impairment as the excess of the carrying amount of the reporting unit over the related fair value.

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During the year ended December 31, 2025, we elected to change our annual goodwill impairment testing date from July 1 to October 1 to better align the timing of our goodwill impairment assessment with our annual budgeting processes. The change in annual goodwill impairment testing date constitutes a voluntary change in accounting principle. This change does not delay, accelerate, or avoid an impairment charge and has been applied prospectively as retrospective application was impracticable due to the inability to objectively determine the assumptions and significant estimates used in prior periods without the benefit of hindsight. Prior to the goodwill impairment test performed as of October 1, 2025, the most recent annual goodwill impairment test was performed as of July 1, 2025. For the test performed on July 1, 2025, one reporting unit within each of the Refining, Renewables and Lubricants & Specialties segments was tested for impairment using a quantitative approach, and all other reporting units were assessed for impairment using a qualitative approach. For the test performed as of October 1, 2025, all reporting units were assessed for impairment using a qualitative approach. No impairment was identified in 2025.

In performing our quantitative goodwill impairment tests, the estimated fair values of our reporting units were derived using a combination of income and market approaches. The income approach reflects expected future cash flows based on estimated forecasted production levels, selling prices, gross margins, operating costs and capital expenditures. Our market approaches include both the guideline public company and guideline transaction methods. Both methods utilize pricing multiples derived from historical market transactions and other market data for like-kind assets. The fair values of the reporting units tested quantitatively on July 1, 2025 exceeded their respective carrying values by more than 10%. Increasing the discount rate by 1.0% or reducing the terminal cash flow growth rate by 1.0% would not have changed the results of our annual assessment.

In performing our quantitative impairment test of goodwill, we developed cash flow forecasts for each of our reporting units. Significant judgment is involved in performing these fair value estimates since the results are based on forecasted financial information. The cash flow forecasts include significant assumptions such as planned utilization, end-user demand, selling prices, gross margins, operating costs and capital expenditures. Other key assumptions applied to these forecasts to determine the fair value of a reporting unit are the discount rate and terminal cash flow growth rate. The discount rate is intended to reflect the weighted-average cost of capital for a market participant and the risks associated with the realization of the estimated future cash flows. Our fair value estimates are based on projected cash flows, which we believe to be reasonable.

In performing the qualitative goodwill impairment assessment as of October 1, 2025, management evaluated whether events or changes in circumstances occurring subsequent to the July 1, 2025 impairment tests indicated that it was more likely than not that the fair value of any reporting unit was less than its carrying amount. Factors considered included changes in forecasted operating results, commodity price assumptions, discount rates, market capitalization, overall macroeconomic conditions, regulatory developments and other entity-specific and reporting unit-specific events. Based on this evaluation, management concluded that no reporting unit met the criteria requiring a quantitative goodwill impairment test as of October 1, 2025.

We continually monitor and evaluate various factors for potential indicators of goodwill and asset impairments. A reasonable expectation exists that sustained deterioration in our operating results or overall economic conditions could lead to goodwill and/or asset impairments at some point in the future. Future impairment charges could be material to our results of operations and financial condition.

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 of 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 when 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 the price of crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, collar contracts, forward contracts and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

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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 December 31, 2025, we have the following notional amounts related to all outstanding derivative instruments used to mitigate commodity price and foreign currency risk (all maturing in 2026):

(1)Represents an embedded derivative within our precious metals catalyst financing arrangements, which may be refinanced or require repayment under certain conditions. See Note 13 “Debt” in the Notes to Consolidated Financial Statements for additional information on these financing arrangements.

The following sensitivity analysis provides the hypothetical effects of market price fluctuations to the commodity hedged under our derivative contracts at December 31, 2025 and 2024:

Interest Rate Risk Management

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

For the fixed rate HF Sinclair, HollyFrontier and HEP Senior Notes (each as demarcated in Note 13 “Debt” in the Notes to Consolidated Financial Statements), changes in interest rates will generally affect the 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 December 31, 2025 is presented below:

For the variable rate under the HF Sinclair Credit Agreement, changes in interest rates would affect cash flows, but not the fair value. At December 31, 2025, there were no amounts outstanding under the HF Sinclair Credit Agreement. A hypothetical 10% change in interest rates applicable to the HF Sinclair Credit Agreement would not materially affect cash flows.

Operational Interruption Risk Management

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

Financial information is reviewed for the counterparties in order to 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 counterparties honoring their commitments.

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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.

Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles

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

Earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, is calculated as Net income attributable to HF Sinclair stockholders plus (i) Interest expense, net of Interest income, (ii) Income tax expense 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 Income from operations 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 financial indicator widely used by investors and analysts to measure our operating performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants.

Set forth below is our calculation of EBITDA:

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

Adjusted refinery gross margin is a non-GAAP performance measure that is used by our management and others to compare our refining performance to that of other companies in our industry. We believe this margin measure is helpful to investors in evaluating our refining performance on a relative and absolute basis, including against publicly available crack spread data. Adjusted refinery gross margin per produced barrel sold is total Refining segment gross margin plus Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization, divided by sales volumes of produced refined products. This margin measure excludes the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to inventory held at the end of the period. Adjusted refinery gross margin is a non-GAAP performance measure and should not be considered in isolation or as a substitute for Refining segment gross margin. The GAAP measure most directly comparable to adjusted refinery gross margin is Refining segment gross margin. Other companies in our industry may not calculate these performance measures in the same manner. Due to rounding of reported numbers, some amounts may not calculate exactly.

Reconciliation of Refining segment gross margin to adjusted refinery gross margin to adjusted refinery gross margin per produced barrel sold and adjusted refinery gross margin less operating expenses per produced barrel sold

(1)Exclusive of Depreciation and amortization.

(2)Regulatory charges represent a one-time penalty of $35 million related to the 2025 Consent Decree. Refer to Note 18 for further information.

(3)Represents barrels sold of refined products produced at our refineries (including Asphalt and intersegment sales) and excludes volumes of refined products purchased for resale or volumes of excess crude oil sold.

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

Adjusted renewables gross margin is a non-GAAP performance measure that is used by our management and others to compare our renewables performance to that of other companies in our industry. We believe this margin measure is helpful to investors in evaluating our renewables performance on a relative and absolute basis. Adjusted renewables gross margin per produced gallon sold is total Renewables segment gross margin plus Lower of cost or market inventory valuation adjustments, Operating expenses and Depreciation and amortization, divided by sales volumes of produced renewables products. This margin measure excludes the non-cash effects of Lower of cost or market inventory valuation adjustments, which relate to volumes in inventory at the end of the period. Adjusted renewables gross margin is not a calculation provided for under GAAP and should not be considered in isolation or as a substitute for Renewables segment gross margin. The GAAP measure most directly comparable to adjusted renewables gross margin is Renewables segment gross margin. Other companies in our industry may not calculate these performance measures in the same manner. Due to rounding of reported numbers, some amounts may not calculate exactly.

Reconciliation of Renewables segment gross margin to adjusted renewables gross margin to adjusted renewables gross margin per produced gallon sold and adjusted renewables gross margin, less operating expenses per produced gallon sold

(1) Exclusive of Depreciation and amortization.

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

Adjusted marketing gross margin is a non-GAAP performance measure that is used by our management and others to compare our marketing performance to that of other companies in our industry. We believe this margin measure is helpful to investors in evaluating our marketing performance on a relative and absolute basis. Adjusted marketing gross margin per gallon sold is total Marketing segment gross margin plus Depreciation and amortization, divided by sales volumes of marketing products. Adjusted marketing gross margin is not a calculation provided for under GAAP and should not be considered in isolation or as a substitute for Marketing segment gross margin. The GAAP measure most directly comparable to adjusted marketing gross margin is Marketing segment gross margin. Other companies in our industry may not calculate these performance measures in the same manner. Due to rounding of reported numbers, some amounts may not calculate exactly.

Reconciliation of Marketing segment gross margin to adjusted marketing gross margin to adjusted marketing gross margin per gallon sold

(1) Exclusive of Depreciation and amortization.