HF Sinclair Corporation

Company Overview

Business Model: HF Sinclair Corporation is an independent energy company engaged in the production and marketing of high-value light products, including gasoline, diesel fuel, jet fuel, renewable diesel, and other specialty products. The Company owns and operates seven complex refineries with a combined crude oil processing capacity of 678,000 barrels per stream day (BPSD), capable of converting discounted heavy or sour crude oils into a high percentage of high-value refined products. Additionally, HF Sinclair Corporation provides petroleum product and crude oil transportation, terminalling, storage, and throughput services primarily supporting its refining operations and other third-party refineries. Its operations also encompass the production and marketing of base oils and specialized lubricants, as well as branded fuel sales and licensing of the Sinclair brand.

Market Position: HF Sinclair Corporation holds a significant market presence across its diverse operations. Its refineries are strategically located to serve the Mid-Continent, Southwest, and Rocky Mountains regions, extending into the Pacific Northwest of the United States. The Company's Petro-Canada Lubricants business is a leading manufacturer of Group III base oils in North America, and its Sonneborn business, combined with Petro-Canada Lubricants, is one of the world’s leading producers of pharmaceutical white oils. Red Giant Oil Company LLC is noted as one of the leading suppliers of locomotive engine oil in North America. The Company's marketing segment supports over 1,700 branded sites and licenses the Sinclair brand to more than 350 additional locations across the United States.

Recent Strategic Developments:

• Debt Refinancing and Capital Structure Optimization: In January 2025, HF Sinclair Corporation issued $1.4 billion in senior notes (5.750% Senior Notes due 2031 and 6.250% Senior Notes due 2035) and in August 2025, an additional $500 million in 5.500% Senior Notes due 2032. Proceeds were used to repay $350 million under the Terminated Holly Energy Partners, L.P. Credit Agreement and to complete early settlements of cash tender offers and redemptions for $996 million and $404 million in aggregate principal amount of existing senior notes, respectively.
• Credit Facility Restructuring: On April 3, 2025, the Company terminated its $1.65 billion senior unsecured revolving credit facility and the $1.2 billion senior secured revolving credit facility of its wholly owned subsidiary Holly Energy Partners, L.P., replacing them with a new $2.0 billion senior unsecured revolving credit facility maturing in April 2030, with an accordion feature allowing an increase up to $2.75 billion.
• Renewable Fuel Standard (RFS) Exemptions: In August and November 2025, the U.S. Environmental Protection Agency (EPA) granted, in whole or in part, small refinery exemption petitions for several of the Company's refineries (Woods Cross Refinery, Cheyenne Refinery, Casper Refinery, Parco Refinery, and Tulsa East Refinery) for various compliance years from 2019 to 2024.
• Share Repurchase Program: In May 2024, the Board of Directors approved a $1.0 billion share repurchase program, replacing all existing programs. For the year ended December 31, 2025, the Company repurchased 6,908,293 shares for $340 million, with $459 million remaining under authorization.
• Legislative Impact: The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, extended the 45Z Clean Fuel Production Credit through 2029 and indefinitely extended the first-year depreciation allowance on qualified property, reducing cash taxes paid.
• Post-Period Acquisitions and Joint Ventures: In January 2026, HF Sinclair Corporation acquired Industrial Oils Unlimited, LLC, a producer of high-quality lubricants and specialty fluids, for $38 million. In February 2026, the Company announced the formation of Green Trail Fuels, LLC, a new joint venture in which it will hold a 50% non-operating economic interest, to include retail sites across Colorado and New Mexico.

Geographic Footprint: HF Sinclair Corporation's operations span across the United States, Canada, and Europe.

• Refining: Refineries are located in El Dorado, Kansas; Tulsa, Oklahoma; Anacortes, Washington (Puget Sound Refinery); Artesia, New Mexico and Lovington, New Mexico (Navajo Refineries); West Bountiful, Utah (Woods Cross Refinery); Sinclair, Wyoming (Parco Refinery); and Casper, Wyoming (Casper Refinery). Asphalt terminals are operated in Arizona, New Mexico, and Oklahoma.
• Renewables: Renewable diesel units (RDUs) are located in Artesia, New Mexico; Cheyenne, Wyoming; and Sinclair, Wyoming. A pre-treatment unit (PTU) is in Artesia, New Mexico.
• Marketing: Branded fuel sales and licensing are concentrated in the West and Mid-Continent regions of the United States.
• Lubricants & Specialties: Manufacturing facilities are in Mississauga, Ontario (Petro-Canada Lubricants); Petrolia, Pennsylvania and the Netherlands (Sonneborn). Red Giant Oil Company LLC has blending and distribution facilities in Iowa and Texas. Products are marketed in over 80 countries worldwide.
• Midstream: Logistics and refinery assets, including pipelines, terminals, tankage, and loading rack facilities, primarily support refining operations in the Mid-Continent, Southwest, and Rocky Mountains geographic regions of the United States.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 5.18%
• Operating Margin: 3.45%
• Net Margin: 2.15%

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed as a separate line item.
• Capital Expenditures: $449 million
• Strategic Investments: The Company acquired Industrial Oils Unlimited, LLC for $38 million in the first quarter of 2026.

Business Segment Analysis

Refining

Financial Performance:

• Revenue: $23,822 million (-6.0% YoY)
• Income from Operations: $600 million (vs. -$167 million in 2024)
• Adjusted Refinery Gross Margin: $15.37 per produced barrel sold (+47.4% YoY)
• Key Growth Drivers: Improved refining margins in the Mid-Continent and West regions, primarily due to lower crude oil and feedstock prices. Small refinery Renewable Identification Numbers (RINs) waivers granted by the EPA increased adjusted refinery gross margins by $485 million.
• Crude Charge: 604,350 BPD (+0.4% YoY)
• Refinery Utilization: 89.1% (vs. 88.8% in 2024)

Product Portfolio:

• Gasolines: 53% of produced refined products sales
• Diesel fuels: 31%
• Jet fuels: 6%
• Fuel oil: 2%
• Asphalt: 2%
• Base oils: 2%
• LPG and other: 4%

Market Dynamics: The segment serves the Mid-Continent, Southwest, and Rocky Mountains extending into the Pacific Northwest regions. Competition includes other Plains states and Mid-Continent refiners, as well as Gulf Coast refiners who may have lower production costs but higher transportation costs.

Sub-segment Breakdown:

• Mid-Continent Region: Crude charge of 267,030 BPD, refinery utilization of 102.7%, and adjusted refinery gross margin of $14.38 per produced barrel sold.
• West Region: Crude charge of 337,320 BPD, refinery utilization of 80.7%, and adjusted refinery gross margin of $16.10 per produced barrel sold.

Renewables

Financial Performance:

• Revenue: $551 million (-14.4% YoY)
• Income from Operations: -$129 million (vs. -$86 million in 2024)
• Sales of Produced Renewables Products: 213,713 thousand gallons (-16.4% YoY)
• Adjusted Renewables Gross Margin: $0.26 per produced gallon sold (-21.2% YoY)
• Key Growth Drivers: Lower volumes and margins, negatively impacted by the lower value of benefit from the Producer’s Tax Credit (PTC) in 2025 compared to the Blender’s Tax Credit in 2024, and volatility in feedstock costs, RINs, and Low Carbon Fuel Standard (LCFS) prices.

Product Portfolio:

• Renewable diesel, a cleaner burning fuel with 50% to 80% lower lifecycle greenhouse gas (GHG) emissions than conventional diesel.

Market Dynamics: Renewable diesel is sold to customers in California, Oregon, Utah, and Canada, driven by low-carbon fuel regulations. The Artesia RDU and Sinclair RDU are co-located with refineries and share certain infrastructure, such as hydrogen plants.

Marketing

Financial Performance:

• Revenue: $3,142 million (-8.3% YoY)
• Income from Operations: $73 million (+52.1% YoY)
• Sales of Refined Products: 1,328,006 thousand gallons (-3.5% YoY)
• Adjusted Marketing Gross Margin: $0.11 per gallon sold (+37.5% YoY)
• Key Growth Drivers: Strong value from Sinclair branded sites, providing a consistent sales channel with margin uplift for produced fuels. The Company expects to grow the number of branded sites by approximately 10% annually.

Product Portfolio:

• Branded fuel sales, including gasoline and diesel, to over 1,700 branded sites and licensing fees for the Sinclair brand to more than 350 additional locations.

Market Dynamics: Branded sites are concentrated in the West and Mid-Continent regions of the United States.

Lubricants & Specialties

Financial Performance:

• Revenue: $2,519 million (-6.7% YoY)
• Income from Operations: $165 million (-31.3% YoY)
• Sales of Produced Refined Products: 30,733 BPD (-4.2% YoY)
• Key Growth Drivers: Continued improvement in sales mix optimization and base oil integration. Results were impacted by a planned turnaround at the Mississauga facility and headwinds related to base oil margins.

Product Portfolio:

• Petro-Canada Lubricants: Base oils, automotive, industrial, and food-grade lubricants and greases, process oils, and specialty fluids.
• Sonneborn: Specialty products such as white oils, petrolatums, and waxes for personal care, cosmetic, pharmaceutical, and food processing industries.
• Red Giant Oil Company LLC: High-quality lubricants to the railroad industry.
• Tulsa West facility: High-quality base oils, process oils, waxes, horticultural oils, asphalt, and rubber performance products.

Market Dynamics: Products are marketed in over 80 countries worldwide through a global sales force and distributor network.

Midstream

Financial Performance:

• Revenue: $121 million (+13.1% YoY)
• Income from Operations: $258 million (+7.5% YoY)
• Pipeline Volumes: 956,065 BPD (-5.3% YoY)
• Terminals and Loading Racks Volumes: 1,052,424 BPD (+2.5% YoY)
• Key Growth Drivers: Higher third-party pipeline revenues and lower operating expenses.

Product Portfolio:

• Petroleum product and crude oil pipelines, terminals, tankage, and loading rack facilities.
• Equity investments include 50% ownership in Osage Pipe Line Company, LLC and Cushing Connect Pipeline & Terminal LLC, 26.08% in Saddle Butte Pipeline III, LLC, and 49.995% in Pioneer Investments Corp.

Market Dynamics: The segment primarily supports the Company's refining operations in the Mid-Continent, Southwest, and Rocky Mountains geographic regions of the United States, and also serves other third-party refineries. The Midstream segment does not take ownership of products, thus is not directly exposed to changes in commodity prices.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $340 million (6,908,293 shares) were repurchased during the year ended December 31, 2025, under the $1.0 billion 2024 Share Repurchase Program. As of December 31, 2025, $459 million remained available under this program.
• Dividend Payments: $376 million in dividends were paid during the year ended December 31, 2025. A regular quarterly dividend of $0.50 per share was declared on February 18, 2026.
• Future Capital Return Commitments: The Company has remaining authorization of $459 million under its 2024 Share Repurchase Program.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $978 million
• Total Debt: $2,769 million
• Net Cash Position: -$1,791 million (Net Debt)
• Debt Maturity Profile: No principal maturities in 2026 or 2027. $500 million due in 2028, $400 million in 2030, and $1,900 million thereafter.

Cash Flow Generation (Year Ended December 31, 2025):

• Operating Cash Flow: $1,315 million
• Free Cash Flow: $866 million (Operating Cash Flow of $1,315 million minus Capital Expenditures of $449 million)

Operational Excellence

Production & Service Model: HF Sinclair Corporation operates seven complex refineries with a combined crude oil processing capacity of 678,000 BPSD, designed to process discounted heavy or sour crude oils into high-value light products. The Renewables segment operates three renewable diesel units (RDUs) with a combined production capacity of approximately 378 million gallons per year, supported by a pre-treatment unit for feedstock flexibility. The Lubricants & Specialties segment includes facilities with lubricant production capacities of 15,600 BPD in Mississauga, Ontario, and specialty product capacities of 6,000 BPD in Petrolia, Pennsylvania, and 1,500 BPD in the Netherlands. The Midstream segment provides transportation, terminalling, storage, and loading rack services.

Supply Chain Architecture: Key Suppliers & Partners:

• Crude Oil & Feedstocks: The Company contracts for crude oil and renewable feedstock supplies from third parties, with a limited number of suppliers in certain geographic regions, sometimes relying on a single supplier.
• Utilities: Facilities often have sole or limited suppliers for essential utilities such as steam, electricity, hydrogen, water, and gas.

Facility Network:

• Manufacturing (Refining): El Dorado (Kansas), Tulsa (Oklahoma), Puget Sound (Washington), Navajo (New Mexico), Woods Cross (Utah), Parco (Wyoming), and Casper (Wyoming) refineries.
• Manufacturing (Renewables): Artesia RDU, Cheyenne RDU, Sinclair RDU, and Artesia PTU.
• Manufacturing (Lubricants & Specialties): Mississauga (Ontario), Petrolia (Pennsylvania), and Netherlands facilities, along with Red Giant Oil Company LLC's blending and distribution facilities in Iowa and Texas.
• Distribution: Extensive network of approximately 2,800 miles of refined product and crude oil pipelines, including significant equity interests in joint venture pipelines (Osage Pipe Line Company, LLC, Cushing Connect Pipeline & Terminal LLC, Saddle Butte Pipeline III, LLC, Pioneer Investments Corp.). The Company also operates numerous refined product terminals, refinery tankage, and loading rack facilities across its operating regions.

Operational Metrics:

• Refinery Utilization: 89.1% for the year ended December 31, 2025.
• OSHA Combined Total Recordable Incident Rate: Declined by 39% over the past five years ended December 31, 2025, reflecting a strong commitment to safety.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels: HF Sinclair Corporation utilizes a multi-modal distribution strategy, including product pipelines, refinery truck facilities, marine docks, rail, and terminals. Products are also made available through exchanges with other parties.

• Direct Sales: The Company sells gasoline to other refiners, branded sites, convenience store chains, independent marketers, and retailers. Diesel fuel is sold to other refiners, branded sites, truck stop chains, wholesalers, and railroads. Jet fuel is sold for commercial airline use. Asphalt products are sold to governmental entities, paving contractors, or manufacturers.
• Channel Partners: The Petro-Canada Lubricants business leverages a global sales force and distributor network to market products in over 80 countries.
• Digital Platforms: Not explicitly detailed for sales.

Customer Portfolio:

• Customer Concentration: For the year ended December 31, 2025, no single customer accounted for 10% or more of total annual revenues. In 2024 and 2023, Shell, together with certain of its affiliates, accounted for approximately 11% and 12% of total annual revenues, respectively.

Geographic Revenue Distribution (Refined Product Revenues, 2025):

• Mid-Continent (United States): 29%
• Southwest (United States): 15%
• Rocky Mountains (United States): 22%
• Northwest (United States): 20%
• Northeast (United States): 3%
• Canada: 4%
• Other: 1%

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The refining and marketing, and lubricants and specialties industries are highly competitive. Profitability is significantly influenced by the demand and supply of feedstocks, crude oil, and refined products, crack spreads, transportation costs, and governmental regulations. The renewable diesel market is expected to become more competitive with increasing production volumes.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: HF Sinclair Corporation competes with a broad range of refining and marketing companies, including multinational oil companies. Some competitors benefit from integrated operations (company-owned production, extensive retail outlets) and greater resources, which can provide resilience during volatile market conditions.

Emerging Competitive Threats: The Company faces competition from alternative energy sources and fuel-efficient technologies, including electric, hybrid, and hydrogen-powered vehicles, which could reduce demand for petroleum-based transportation fuels. Increased production of renewable diesel by competitors also poses a growing competitive threat.

Competitive Response Strategy: The Company focuses on optimizing its crude slate, leveraging favorable pricing dynamics, and continuously developing and introducing new products and enhancements, particularly within its Lubricants & Specialties segment. Strategic growth initiatives include expanding its branded marketing footprint and selectively acquiring complementary assets.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The Company's operating results are materially affected by the volatility in prices of crude oil, renewable feedstocks, and refined, finished lubricant, and renewable diesel products. Profitability is sensitive to crack spreads and renewable diesel product margins, which are influenced by global and local economic conditions, weather patterns, consumer preferences, and governmental policies. Technology Disruption: A shift towards more fuel-efficient vehicles, alternative fuels (e.g., ethanol, electric, hybrid, hydrogen), or increased vehicle fuel economy could reduce demand for petroleum-based transportation fuels. Customer Concentration: While no single customer accounted for 10% or more of total annual revenues in 2025, the Company has experienced customer concentration in prior years (e.g., Shell). Nonpayment or nonperformance by key customers could adversely impact financial results.

Operational & Execution Risks

Supply Chain Vulnerabilities: Reliance on a limited number of crude oil and renewable feedstock suppliers, and in some cases single suppliers, in certain geographic regions. Disruptions in pipeline, rail, or marine transportation systems, or issues with sole/limited utility suppliers, could negatively impact production levels and increase costs. Geographic Concentration: Operations on or adjacent to Native American tribal lands are subject to unique regulations, taxes, fees, and potential access restrictions. Capacity Constraints: Refinery operations are subject to catastrophic losses, operational hazards, and unforeseen interruptions (e.g., natural disasters, accidents, mechanical failures, unscheduled downtime for maintenance or repairs), which can reduce revenues and increase costs.

Financial & Regulatory Risks

Market & Financial Risks: Volatility and uncertainty in credit and capital markets may hinder access to funding or increase financing costs. Changes in the Company's credit profile or significant increases in crude oil prices could affect supplier relationships and liquidity. Hedging transactions, while mitigating risk, may limit potential gains or expose the Company to other financial losses. Regulatory & Compliance Risks: The Company is subject to extensive regulation by various governmental agencies (e.g., FERC, EPA, PHMSA, OSHA, SEC, DOJ, and international authorities). Compliance with existing, new, and changing environmental, health, and safety laws (e.g., Clean Air Act, Clean Water Act, RFS, LCFS, Carbon Cap & Trade programs, climate change regulations, PFAS regulation, HF alkylation scrutiny) results in significant costs and potential liabilities. Changes in tax laws (e.g., repeal or revision of the 45Z Clean Fuel Production Credit) could materially impact financial condition.

Geopolitical & External Risks

Geopolitical Exposure: International operations expose the Company to foreign exchange risks, import/export requirements, tariffs, economic sanctions, anti-corruption laws, and data privacy regulations. Global market instability, hostilities, or military campaigns can disrupt crude oil supplies and markets for refined products. Trade Relations: Changes in trade policies, such as the imposition of tariffs (e.g., on Canadian crude oil), could impact feedstock costs, limit material availability, and affect competitive positioning. Sanctions & Export Controls: Compliance with trade restrictions and sanctions requirements can limit business operations.

Innovation & Technology Leadership

Research & Development Focus: The Company's innovation efforts are primarily focused on enhancing its product portfolio and operational efficiency. This includes continuous development and introduction of new products and product enhancements within the Lubricants & Specialties segment to meet evolving customer demands for higher performance lubricants, coatings, greases, and specialty fluids.

Core Technology Areas:

• Refining Complexity: HF Sinclair Corporation's refineries are designed with the complexity to convert a variety of discounted, heavy, or sour crude oils into a high percentage of high-value light products.
• Lubricant Expertise: Petro-Canada Lubricants is a leading manufacturer of Group III base oils, and Sonneborn is a leading producer of pharmaceutical white oils, indicating specialized production capabilities.
• Renewable Diesel Production: The Renewables segment utilizes processes to convert renewable feedstocks like soybean oil into renewable diesel, a lower-carbon fuel.

Innovation Pipeline: The Company aims to continuously develop, manufacture, and introduce new products and product enhancements in a timely and cost-effective manner, particularly in its Lubricants & Specialties segment.

Intellectual Property Portfolio: The Company develops and uses intellectual property, including trademarks, trade secrets, copyrighted works, and innovations, some of which are material to its business. The intangible assets include customer relationships, transportation agreements, trademarks, and patents.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: As of February 2026, the Company experienced changes in its top leadership, with Mr. Tim Go (CEO and President) and Mr. Atanas Atanasov (Executive Vice President and CFO) taking voluntary leaves of absence. Mr. Franklin Myers was appointed temporary CEO and President, and Mr. Vivek Garg was appointed acting CFO. The Company expects to negotiate mutually agreeable separation arrangements with Mr. Go and Mr. Atanasov.

Board Composition: The Board of Directors and its committees (Audit, Compensation, Nominating, Governance and Social Responsibility, Finance, Environmental, Health, Safety, and Public Policy) provide oversight on strategies and policies related to human capital management, environmental, health, and safety (EHS), and corporate governance.

Human Capital Strategy

Workforce Composition:

• Total Employees: 5,165 as of December 31, 2025.
• Geographic Distribution: 4,301 employees in the United States, 656 in Canada, and 208 in Europe.
• Skill Mix: 1,588 employees (approximately 31%) are covered by collective bargaining agreements, with various expiration dates between 2026 and 2030.

Talent Management: Acquisition & Retention: The Company's university recruiting team partners with various university-based groups to attract diverse talent. Retention Metrics: The Occupational Safety and Health Administration (OSHA) combined total recordable incident rate declined by 39% over the past five years ended December 31, 2025. Employee Value Proposition: HF Sinclair Corporation offers comprehensive and competitive total rewards programs, including health care, retirement savings, vacation, holidays, income protection, and work-life benefits.

Diversity & Development:

• Diversity Metrics: The Company is committed to equal employment opportunity and fostering an inclusive workplace. It supports four voluntary and employee-led employee resource groups (ERGs): Women in Energy, Veterans in Energy, Family Caregivers in Energy, and Cultural Awareness in Energy.
• Development Programs: A suite of programs is offered across all organizational levels, including Accelerate and LinkedIn Learning (e-learning), Refine (workshops), Front Line Leadership Development, Catalyst (new leaders), and Leading the HF Sinclair Way (senior leaders).
• Culture & Engagement: The "One HF Sinclair Culture" emphasizes safety, integrity, teamwork, ownership, and inclusion. The "Goal Zero" vision reflects a commitment to safe production.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: The Company's Renewables segment produces renewable diesel, which offers 50% to 80% lower lifecycle greenhouse gas (GHG) emissions compared to conventional diesel, contributing to GHG reduction targets. Emissions Targets: Not explicitly stated as company-wide targets, but the Company's operations are subject to various federal, state, and international regulations aimed at reducing GHG emissions.

Social Impact Initiatives:

• Community Investment: HF Sinclair Corporation supports charitable organizations through financial contributions and in-kind giving, with employees actively volunteering in local communities.
• Product Impact: The production of renewable diesel contributes to the availability of cleaner burning fuels.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The Company's results of operations can vary significantly by quarter due to the seasonality of refined and renewable products markets and planned refinery maintenance schedules. Unseasonably cool summer or warm winter weather can also impact demand for its products.
• Economic Sensitivity: Demand for crude oil and refined/renewable products is largely driven by global and local economic conditions, including consumer spending, unemployment rates, consumer debt levels, inflation, equity market performance, and energy prices.

Planning & Forecasting: The Company adjusts its operational plans in response to evolving market conditions and undertakes turnarounds at its refineries, which involve scheduled downtime for maintenance and upgrades.

Regulatory Environment & Compliance

Regulatory Framework: HF Sinclair Corporation's operations are subject to extensive international, federal, state, provincial, and local laws and regulations.

• Industry-Specific Regulations: This includes federal transportation rate regulation by the Federal Energy Regulatory Commission (FERC), state transportation rate regulation, commodity regulation by the Federal Trade Commission (FTC), FERC, and Commodity Futures Trading Commission (CFTC), and pipeline safety and maintenance regulations by the Pipeline and Hazardous Materials Safety Administration (PHMSA).
• Environmental Regulations: Compliance with the Clean Air Act (CAA), Clean Water Act (CWA), Safe Drinking Water Act (SDWA), Resource Conservation and Recovery Act (RCRA), Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), and Oil Pollution Act of 1990 (OPA) is required. This includes regulations related to air emissions (e.g., National Ambient Air Quality Standards (NAAQS), MSAT2, Tier 3, benzene monitoring), fuel quality, water discharges, hazardous substances and wastes (e.g., PFAS, HF alkylation), and accident prevention (e.g., EPA Risk Management Plan (RMP), OSHA Process Safety Management (PSM)).
• Low Carbon Fuel Standards: The Company is subject to the Renewable Fuel Standard (RFS) regulations, California's Low Carbon Fuel Standard (LCFS), Oregon's Clean Fuels Program (CFP), Washington's Clean Fuel Standard (CFS), and New Mexico's Clean Transportation Fuel Standard (CTFS).
• Carbon Cap & Trade Programs: Operations are subject to Oregon's Climate Protection Program (CPP) and Washington's Climate Commitment Act (CCA).
• Climate Change Regulations: The Company is impacted by various legislative and regulatory measures to address climate change and GHG emissions, including reporting requirements, vehicle efficiency standards, and potential carbon taxes. International regulations include the EU's Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).

Trade & Export Controls: The Company's international operations are subject to import and export requirements, tariffs, economic or trade sanctions, and anti-corruption laws.

Legal Proceedings: HF Sinclair Corporation is involved in various legal and regulatory proceedings, including discussions with government agencies regarding compliance at its Puget Sound Refinery, and ongoing lawsuits challenging EPA decisions on RFS small refinery exemptions. The Company also disclosed a fuel-contamination incident in Colorado in January 2026, for which costs are currently inestimable.

Tax Strategy & Considerations

Tax Profile: For the year ended December 31, 2025, the Company's effective tax rate was 19.9%, compared to 15.6% in 2024. The difference from the U.S. federal statutory rate is primarily due to the benefits of nontaxable renewable fuel incentives and foreign tax effects, partially offset by state taxes and other nondeductible items. Tax Reform Impact: The enactment of the One Big Beautiful Bill Act (OBBBA) in July 2025 extended the 45Z Clean Fuel Production Credit and enhanced first-year depreciation allowances, which reduced cash taxes paid.

Insurance & Risk Transfer

Risk Management Framework: HF Sinclair Corporation maintains a risk management oversight committee composed of senior management to oversee its risk enterprise program, monitor the risk environment, and direct mitigation activities.

Insurance Coverage: The Company maintains various insurance coverages, including general liability, property damage, business interruption, and cyber insurance, subject to certain deductibles and policy terms. However, it is not fully insured against all risks, either due to uninsurability, unavailability of coverage, or cost considerations.

Risk Transfer Mechanisms: The Company periodically uses derivative contracts, such as commodity price swaps, collar contracts, forward contracts, and futures contracts, to manage commodity price risk related to inventory, natural gas purchases, and sales prices of refined products. Foreign exchange forward contracts are used to mitigate exposure to foreign currency exchange rate volatility.