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What changed in HF Sinclair Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of HF Sinclair Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+415 added−389 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-28)

Top changes in HF Sinclair Corp's 2023 10-K

415 paragraphs added · 389 removed · 289 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

175 edited+82 added−23 removed176 unchanged
Biggest changeFurthermore, our operations are subject to potentially disruptive activity by those concerned with our industry. • An impairment of our goodwill or long-lived assets could reduce our earnings or negatively impact our financial condition and results of operations. • We sell many of our lubricants and specialty products through distributors, which presents risks that could adversely affect our operating results. • The market price of our common stock may fluctuate significantly, and the value of a stockholder's investment could be impacted. 27 Table of Content Risks Related to Government Regulation • We are subject to significant regulation and oversight by governmental agencies. • We incur significant costs, and expect to incur additional costs in the future, to comply with existing, new and changing environmental and health and safety laws and regulations, and face potential exposure for environmental matters. • There are various risks associated with greenhouse gases and climate change that could result in increased operating costs and litigation and reduced demand for the refined products we produce and investment in our industry. • Increasing attention to environmental, social and governance (“ESG”) matters may adversely impact our business, financial results, stock price or price of debt securities. • Physical impacts of climate change could have an adverse effect on our financial condition and results of operations. • Compliance with, or developments with respect to, renewable and low carbon fuel blending programs, and other regulations, policies, and standards impacting the demand for low-carbon fuels could have an adverse effect on our financial condition and results of operations. • Increases in required fuel economy and regulation of CO 2 emissions from motor vehicles may reduce demand for transportation fuels. • Compliance with and changes in tax laws could materially and adversely impact our financial condition, results of operations and cash flows.
Biggest changeRisks Related to Government Regulation • We are subject to significant regulation and oversight by governmental agencies. • We incur significant costs and liabilities, and expect to incur additional costs and liabilities in the future, resulting from compliance with existing, new and changing environmental, health and safety laws and regulations, and face potential exposure for environmental matters. • We may incur significant costs and liabilities resulting from performance of pipeline integrity programs and related repairs. 28 Table of Content • There are various risks associated with GHGs and climate change that could result in increased operating costs and litigation and reduced demand for the refined products we produce and investment in our industry. • Increasing attention to ESG matters may adversely impact our business, financial results, stock price or price of debt securities. • Compliance with, or developments with respect to, renewable and low carbon fuel blending programs, and other regulations, policies, and standards impacting the demand for low-carbon fuels could have an adverse effect on our financial condition and results of operations. • Increases in required fuel economy and regulation of GHG emissions from motor vehicles may reduce demand for petroleum-based transportation fuels. • State regulation of petroleum product markets and reporting requirements could adversely impact our business, costs of operation and financial results. • Physical impacts of climate change could have an adverse effect on our financial condition and results of operations. • Compliance with and changes in tax laws could materially and adversely impact our financial condition, results of operations and cash flows.
Risks Related to Cybersecurity, Data Security and Privacy, Information Technology and Intellectual Property • Our information technology systems, operational systems, security systems, infrastructure, communications networks, software integrated in our manufacturing and administrative processes, and customer data processed by us, third-party vendors or suppliers are subject to risks presented by cyber events, including incidents or breaches of security, any of which could prevent us or third parties we rely on from effectively operating our business, and could harm our reputation or materially adversely affect our company's assets, growth efforts, operations, facilities, business reputation or financial condition. • We may be subject to information technology system failures, communications network disruptions and data breaches that are generally beyond our control. • Our business is subject to complex and evolving global laws, regulations and security standards regarding data privacy, cybersecurity and data protection, which could result in claims, increased cost of operations, or other harm to our business. • We may be unable to adequately maintain, enforce and protect our intellectual property and may not be able to prevent third parties from unauthorized access or use of our intellectual property, which may increase our cost of doing business or otherwise hurt our ability to compete in the market. • If we fail to comply with our obligations under license or technology agreements with third parties or are unable to license rights to use technologies on reasonable terms or at all, we may be required to pay damages or could potentially lose license rights that are critical to our business.
Risks Related to Cybersecurity, Data Security and Privacy, Information Technology and Intellectual Property • Our information technology systems, operational systems, security systems, infrastructure, communications networks, software integrated in our manufacturing and administrative processes, and customer data processed by us, third-party vendors or suppliers are subject to risks presented by cyber events, including incidents or breaches of security, any of which could prevent us or third parties we rely on from effectively operating our business, and could harm our reputation or materially adversely affect our company's assets, growth efforts, operations, facilities, business reputation or financial condition. • We may be subject to information technology system failures, communications network disruptions and data breaches that are generally beyond our control. • Our business is subject to complex and evolving global laws, regulations and security standards regarding data privacy, cybersecurity and data protection, which could result in claims or increased cost of operations, or other harm to our business. • We may be unable to adequately maintain, enforce and protect our intellectual property and may not be able to prevent third parties from unauthorized access or use of our intellectual property, which may increase our cost of doing business or otherwise hurt our ability to compete in the market. • If we fail to comply with our obligations under license or technology agreements with third parties or are unable to license rights to use technologies on reasonable terms or at all, we may be required to pay damages or could potentially lose license rights that are critical to our business.
The installation and redesign of key equipment at our facilities involves significant uncertainties, including the following: our upgraded equipment may not perform at expected levels; operating costs of the upgraded equipment may be higher than expected; the yield and product quality of new equipment may differ from design and/or specifications and redesign, modification or replacement of the equipment may be required to correct equipment that does not perform as expected, which could require facility shutdowns until the equipment has been redesigned or modified.
The installation and redesign of key equipment at our facilities involves significant uncertainties, including the following: our upgraded equipment may not perform at expected levels; operating costs of the upgraded equipment may be higher than expected; and the yield and product quality of new equipment may differ from design and/or specifications and redesign, modification or replacement of the equipment may be required to correct equipment that does not perform as expected, which could require facility shutdowns until the equipment has been redesigned or modified.
The low-carbon fuel standards, carbon cap and trade programs and similar U.S. state and international low carbon fuel regulations, policies, and standards are extremely complex, often have different or conflicting requirements or methodologies, and are frequently evolving, requiring us to periodically update our systems and controls to maintain compliance, which could require significant expenditures, and presents an increased risk of administrative error.
The LCFS, carbon cap and trade programs and similar U.S. state and international low carbon fuel regulations, policies, and standards are extremely complex, often have different or conflicting requirements or methodologies, and are frequently evolving, requiring us to periodically update our systems and controls to maintain compliance, which could require significant expenditures, and presents an increased risk of administrative error.
The costs of environmental and safety regulations are already significant and compliance with more stringent laws or regulations or adverse changes in the interpretation of existing regulations by government agencies or courts could have an adverse effect on the financial position and the results of our operations and could require substantial expenditures for the installation and operation of systems and equipment that we do not currently possess.
The costs of environmental, health and safety regulations are already significant and compliance with more stringent laws or regulations or adverse changes in the interpretation of existing regulations by government agencies or courts could have an adverse effect on the financial position and the results of our operations and could require substantial expenditures for the installation and operation of systems and equipment that we do not currently possess.
In addition, lending counterparties under any existing revolving credit facility and other debt instruments may be unwilling or unable to meet their funding obligations, or we may experience a decrease in our capacity to issue debt or obtain commercial credit or a deterioration in our credit profile, including a rating agency lowering or withdrawing of our credit ratings if, in its judgment, the circumstances warrant.
In addition, lending counterparties under any existing revolving credit facility and other debt instruments may be unwilling or unable to meet their funding obligations, or we may experience a decrease in our capacity to issue debt or obtain commercial credit or a deterioration in our credit profile, including a rating agency lowering or withdrawing our credit ratings if, in its judgment, the circumstances warrant.
In addition, the laws and/or judicial systems and enforcement mechanisms of foreign jurisdictions in which we create, market and sell our products may afford little or no effective protection of our intellectual property. We may also be subject to infringement, misappropriation, dilution, or other violation complaints from others challenging our use of a technology or intellectual property right.
In addition, the laws and/or judicial systems and enforcement mechanisms of foreign jurisdictions in which we create, market and sell our products may afford little or no effective protection of our intellectual property. We may also be subject to infringement, misappropriation, dilution, or other violation complaints from others challenging our use of a valid technology or intellectual property right.
If rail transportation is disrupted, we may be unable to produce and/or deliver our products in a competitive or profitable manner and, if such disruption were to occur over an extended period of time, it could have a material adverse effect on our business, financial condition and results of operations.
If rail or marine transportation is disrupted, we may be unable to produce and/or deliver our products in a competitive or profitable manner and, if such disruption were to occur over an extended period of time, it could have a material adverse effect on our business, financial condition and results of operations.
Instability in the financial markets as a result of terrorism, cyberattacks, vandalism or war could also affect our ability to raise capital including our ability to repay or refinance debt. Our business may suffer due to a change in the composition of our Board of Directors, or the departure of any of our key senior executives or other key employees.
Instability in the financial markets as a result of terrorism, cyberattacks, vandalism or war could also affect our ability to raise capital including our ability to repay or refinance debt. Our business may suffer due to a change in the composition of our Board of Directors, or the departure of any of our key executives or other key employees.
The profitability of our Renewable segment depends largely on the spread between market prices for renewable diesel plus state and federal low carbon fuel incentives and renewable feedstocks, such as soybean oil. This margin is continually changing and may fluctuate significantly from time to time.
The profitability of our Renewables segment depends largely on the spread between market prices for renewable diesel plus state and federal low carbon fuel incentives and renewable feedstocks, such as soybean oil. This margin is continually changing and may fluctuate significantly from time to time.
There is also the potential for liability for spill response and remediation, natural resource damage claims, and personal and property damage claims in the event of an oil or other refined product spill at a facility located near federal or state waters or a release of hazardous or other substances into the environment.
There is also the potential for liability for spill response and remediation, natural resource damage claims, and personal and property damage claims in the event of an oil or other refined product spill at a facility located near federal, state or provincial waters or a release of hazardous or other substances into the environment.
Further, the existence of a new significant stockholder may have the effect of deterring hostile takeovers, delaying or preventing changes in control or changes in management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in the best interests of our company.
Further, the existence of a significant stockholder may have the effect of deterring hostile takeovers, delaying or preventing changes in control or changes in management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in the best interests of our company.
In 2021, President Biden issued several executive orders that committed to substantial action on climate change, released the “The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050,” which established a roadmap to net zero emissions in the United States by 2050 and called for, among other things, improving energy efficiency, decarbonizing energy sources, the increased use of zero-emission vehicles by the federal government, the elimination of subsidies provided to the fossil fuel industry, and increased emphasis on climate-related risks across governmental agencies and economic sectors.
In 2021, President Biden issued several executive orders that committed to substantial action on climate change, released “The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050”, which established a roadmap to net zero emissions in the United States by 2050 and called for, among other things, improving energy efficiency, decarbonizing energy sources, the increased use of zero-emission vehicles by the federal government, the elimination of subsidies provided to the fossil fuel industry, and increased emphasis on climate-related risks across governmental agencies and economic sectors.
Termination by the licensor would cause us to lose valuable rights that may be difficult to acquire elsewhere, and could prevent us from selling, marketing, manufacturing, importing or producing our products and services, or inhibit our ability to commercialize future products and services.
Termination by the licensor would cause us to lose valuable rights that may be difficult to acquire elsewhere, and could prevent us from using, selling, marketing, manufacturing, importing or producing our products and services, or inhibit our ability to commercialize future products and services.
Furthermore, a shortage of skilled labor may make it difficult for us to maintain labor productivity. Our future performance depends to a significant degree upon the continued contributions of our Board of Directors, our senior management team and key technical personnel.
A shortage of skilled labor may make it difficult for us to maintain labor productivity. Our future performance depends to a significant degree upon the continued contributions of our Board of Directors, our senior management team and key technical personnel.
The headings provided in this Item 1A. are for convenience and reference purposes only and shall not affect or limit the extent or interpretation of the risk factors. 28 Table of Content RISKS RELATED TO OUR BUSINESS/INDUSTRY The prices of crude oil, renewable feedstocks and refined, finished lubricant and renewable diesel products materially affect our profitability, and are dependent upon many factors that are beyond our control, including general market demand and economic conditions, seasonal and weather-related factors, regional and grade differentials and governmental regulations and policies.
The headings provided in this Item 1A. are for convenience and reference purposes only and shall not affect or limit the extent or interpretation of the risk factors. 29 Table of Content RISKS RELATED TO OUR BUSINESS/INDUSTRY The prices of crude oil, renewable feedstocks and refined, finished lubricant and renewable diesel products materially affect our profitability, and are dependent upon many factors that are beyond our control, including general market demand and economic conditions, seasonal and weather-related factors, regional and grade differentials and governmental regulations and policies.
Permits or other authorizations are required under these laws and regulations for the operation of our facilities, pipelines and related operations, and these permits and authorizations are subject to revocation, modification and renewal or may require operational changes, which may involve significant costs.
Permits or other authorizations are required under these laws and regulations for the operation of our facilities, pipelines and other operations, and these permits and authorizations are subject to revocation, modification and renewal or may require operational changes, which may involve significant costs.
Continued global hostilities or other sustained military campaigns may adversely impact our results of operations. • Our business may suffer due to a change in the composition of our Board of Directors, or the departure of any of our key senior executives or other key employees.
Continued global hostilities or other sustained military campaigns may adversely impact our results of operations. • Our business may suffer due to a change in the composition of our Board of Directors, or the departure of any of our key executives or other key employees.
Operations of our facilities, pipelines and distribution operations are subject to international, federal, state, provincial and local laws and regulations regarding, among other things, the generation, storage, handling, use, transportation and distribution of petroleum and hazardous substances by pipeline, truck, rail, ship and barge, the emission and discharge of materials into the environment, waste management, and characteristics and composition of gasoline and diesel fuels, and other matters otherwise relating to the protection of human health and the environment, including climate change.
Operations of our facilities, pipelines and distribution operations are subject to international, federal, state, provincial and local laws and regulations regarding, among other things, the manufacture, storage, handling, use, transportation and distribution of petroleum and hazardous substances by pipeline, truck, rail, ship and barge, the emission and discharge of materials into the environment, waste management, and characteristics and composition of gasoline and diesel fuels, and other matters otherwise relating to the protection of human health and the environment, including climate change.
Furthermore, we collect and store sensitive data in the ordinary course of our business, including personally identifiable information of our employees as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders.
Furthermore, we collect and store sensitive data in the ordinary course of our business, including personally identifiable information of our employees as well as our proprietary business information and that of our customers, suppliers, contractors, investors and other stakeholders.
As a result, our operations, and those of our customers, are subject to a series of regulatory, political, litigation, and financial risks associated with the refining and the use of petroleum products and emission of GHGs.
As a result, our operations, and those of our customers, are subject to a series of regulatory, political, litigation, and financial risks associated with the refining, transportation and use of petroleum products and emission of GHGs.
We have implemented safeguards and other preventative measures designed to protect our systems and data, including sophisticated network security and internal control measures; however, our information technology systems and communications network, and those of our information technology and communication service providers, remain vulnerable to interruption by natural disasters, power loss, telecommunications failure, terrorist attacks, Internet failures, computer malware, ransomware, cyberattacks, data breaches and other events unforeseen or generally beyond our control.
We have implemented safeguards and other preventative measures designed to protect our systems and confidential and proprietary data, including sophisticated network security and internal control measures; however, our information technology systems and communications network, and those of our information technology and communication service providers, remain vulnerable to interruption by natural disasters, power loss, telecommunications failure, terrorist attacks, internet failures, computer malware, ransomware, cyberattacks, data breaches and other events unforeseen or generally beyond our control.
If we are unable to meet the ESG standards or investment, lending, ratings, or voting criteria and policies set by these parties, we may lose investors, investors may allocate a portion of their capital away from us, we may become a target for ESG-focused activism, we may face increased costs of or limitations on access to capital or insurance necessary to sustain or grow our business, the price of our common stock or debt securities may be adversely impacted, demand for our services and refined petroleum products may be adversely impacted, and our reputation may be adversely affected, all of which could adversely impact our future financial results.
If we are unable to meet the ESG standards or investment, lending, ratings, or voting criteria and policies set by these parties, we may lose investors, investors may allocate a portion of their capital away from us, we may become a target for ESG- 45 Table of Content focused activism, we may face increased costs of or limitations on access to capital or insurance necessary to sustain or grow our business, the price of our common stock or debt securities may be adversely impacted, demand for our services and refined petroleum products may be adversely impacted, and our reputation may be adversely affected, all of which could adversely impact our future financial results.
In addition, we compete with other industries that provide alternative means to satisfy the energy and fuel requirements of our industrial, commercial and individual consumers. The more successful these alternatives become as a result of governmental regulations, technological advances, consumer demand, improved pricing or otherwise, the greater the impact on pricing and demand for our products and our profitability.
We compete with other industries that provide alternative means to satisfy the energy and fuel requirements of our industrial, commercial and individual consumers. The more successful these alternatives become as a result of governmental regulations, technological advances, consumer demand, improved pricing or otherwise, the greater the impact on pricing and demand for our products and our profitability.
If the market value of our inventory were to decline to an amount less than our LIFO cost, we would record a write-down of inventory and a non-cash charge to cost of products sold even when there is no underlying economic impact at 29 Table of Content that point in time.
If the market value of our inventory were to decline to an amount less than our LIFO cost, we would record a write-down of inventory and a non-cash charge to cost of products sold even when there is no underlying economic impact at 30 Table of Content that point in time.
The adoption of legislation or regulatory programs to reduce emissions of GHGs could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emissions allowances or comply with new regulatory or reporting requirements or otherwise result in decreased demand for the petroleum products we refine and produce.
The adoption of legislation or regulatory programs to reduce emissions of GHGs could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems and electricity, to acquire emissions allowances or comply with new regulatory or reporting and disclosure requirements or otherwise result in decreased demand for the petroleum products we refine and produce.
We do not produce crude oil or our renewable feedstocks and must purchase nearly all of the feedstocks we process, the price of which fluctuates based upon worldwide and local market conditions. The profitability of our Refining, Lubricants and Specialty Products and Marketing segments depends largely on the spread between market prices for refined petroleum products and crude oil prices.
We do not produce crude oil or our renewable feedstocks and must purchase nearly all of the feedstocks we process, the price of which fluctuates based upon worldwide and local market conditions. The profitability of our Refining, Lubricants & Specialties and Marketing segments depends largely on the spread between market prices for refined petroleum products and crude oil prices.
One of the ways we may grow our business is through the construction of new refinery processing units (or the purchase and refurbishment of used units from another refinery) and the conversion or expansion of existing ones, such as the conversion of the Cheyenne Refinery to renewable diesel production and the connection of a new renewable diesel and a pre-treatment unit in Artesia, New Mexico.
One of the ways we may grow our business is through the construction of new refinery processing units (or the purchase and refurbishment of used units from another refinery), pipelines and terminals and the conversion or expansion of existing ones, such as the conversion of the Cheyenne Refinery to renewable diesel production and the connection of a new renewable diesel and a pre-treatment unit in Artesia, New Mexico.
Violations of these laws and regulations could materially adversely affect our company's brand, international growth efforts and business. In addition, global market risks, actions by foreign nations and other international conditions, particularly in a time of increasing economic and global instability, may have a material adverse effect on our results and operations.
Violations of these laws and regulations could materially adversely affect our company’s brand, reputation, international growth efforts and business. In addition, global market risks, actions by foreign nations and other international conditions, particularly in a time of increasing political, economic and global instability, may have a material adverse effect on our results and operations.
The construction process involves numerous regulatory, environmental, political, and legal uncertainties, most of which are not fully within our control, including: • third party challenges to, denials, or delays with respect to the issuance of requisite regulatory approvals and/or obtaining or renewing permits, licenses, registrations and other authorizations; • societal and political pressures and other forms of opposition; • compliance with or liability under environmental regulations; • unplanned increases in the cost of construction materials or labor; • disruptions in transportation of modular components and/or construction materials; • severe adverse weather conditions, natural disasters, terror or cyberattacks, vandalism or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors and suppliers; • shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; • market-related increases in a project's debt or equity financing costs; and/or • nonperformance or force majeure by, or disputes with, vendors, suppliers, contractors, or sub-contractors involved with a project.
The construction process involves numerous regulatory, environmental, political, and legal uncertainties, most of which are not fully within our control, including: • third party challenges to, denials, or delays with respect to the issuance of requisite regulatory approvals and/or obtaining or renewing permits, licenses, registrations and other authorizations; • societal and political pressures and other forms of opposition; • compliance with or liability under environmental or pipeline safety regulations; • unplanned increases in the cost of construction materials or labor; • disruptions in transportation of modular components and/or construction materials; • severe adverse weather conditions, natural disasters, terror or cyberattacks, vandalism or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors and suppliers; 33 Table of Content • shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; • market-related increases in a project's debt or equity financing costs; and/or • nonperformance or force majeure by, or disputes with, vendors, suppliers, contractors, or sub-contractors involved with a project.
If we are unable to renegotiate our collective bargaining agreements when they expire, any work stoppages or other labor disturbances at these facilities could have an adverse effect on our business, impact our ability to pay dividends to our stockholders and payments of our debt obligations, and increase our costs.
If we are unable to renegotiate our collective bargaining or labor agreements when they expire, any work stoppages or other labor disturbances at these facilities could have an adverse effect on our business, impact our ability to pay dividends to our stockholders and make payments on our debt obligations, and increase our costs.
Governments and third-parties have brought suit against some fossil fuel companies alleging, among other things, that such companies created public and private nuisances by producing fuels that contributed to climate change, such as rising sea levels, and therefore are responsible for roadway and infrastructure damages as a result, or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts.
Governments and third-parties have brought suit against some fossil fuel companies alleging, among other things, that such companies created public and private nuisances by producing fuels that contributed to climate change, such as rising sea levels, and therefore are responsible for resulting roadway and infrastructure damages, or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts.
The matters include, but are not limited to, soil, groundwater and water discharges and contamination, air pollution, accident prevention and personal injury and property damage allegedly caused by substances which we processed, manufactured, handled, used, released or disposed and climate change.
The matters include, but are not limited to, soil, groundwater and water discharges and contamination, air pollution, accident prevention and personal injury and property damage allegedly caused by substances which we processed, manufactured, handled, used, transported, stored, released or disposed and climate change.
As a result, our Renewables segment could be materially and adversely affected if (i) these regulations, policies, and standards are adversely changed, not enforced, or discontinued, (ii) the benefits therefrom are reduced (such as the blender’s tax credit and other incentives), (iii) any of the products we produce are deemed not to qualify for compliance therewith, or (iv) we are unable to satisfy or maintain any approved pathways.
As a result, our Renewables segment could be materially and adversely affected if (i) these regulations, policies, and standards are adversely 47 Table of Content changed, not enforced, or discontinued, (ii) the benefits therefrom are reduced (such as the blender’s tax credit and other incentives), (iii) any of the products we produce are deemed not to qualify for compliance therewith, or (iv) we are unable to satisfy or maintain any approved pathways.
Our ability to grow our Lubricants and Specialty Products segment depends, in part, on our ability to continuously develop, manufacture and introduce new products and product enhancements on a timely and cost-effective basis, in response to customers’ demands for higher performance process lubricants, coatings, greases and other product offerings.
Our ability to grow our Lubricants & Specialties segment depends, in part, on our ability to continuously develop, manufacture and introduce new products and product enhancements on a timely and cost-effective basis, in response to customers’ demands for higher performance process lubricants, coatings, greases and other product offerings.
We monitor our information technology systems on a 24/7 basis in an effort to detect cyberattacks, security breaches or unauthorized access. Preventative and detective measures we utilize include independent cybersecurity audits and penetration tests.
We and vendors on our behalf monitor our information technology systems on a 24/7 basis in an effort to detect cyberattacks, security breaches or unauthorized access. Preventative and detective measures we utilize include independent cybersecurity audits and penetration tests.
These potential risks to our intellectual property and any failure to adequately maintain, enforce and protect our intellectual property could subject us to increased competition and potentially result in the loss of our competitive advantage, resources, and customer trust, and negatively impact our brand.
These potential risks to our intellectual property and any failure to adequately maintain, enforce and protect our intellectual property could subject us to increased competition and potentially result in the loss of our competitive advantage, key technology and resources, and customer trust, and negatively impact our brand.
Despite our security measures, our or our third-party partners’ information technology systems may become the target of cyberattacks or security breaches (including employee error, malfeasance or other intentional or unintentional breaches) which are generally beyond our control, which could result in the theft or loss of the stored information, misappropriation of assets, disruption of transactions and reporting functions, our ability to protect customer or company information and our financial reporting.
Despite our cybersecurity measures, our or our third-party partners’ information technology systems may become the target of cyberattacks or security breaches (including employee error, malfeasance or other intentional or unintentional breaches) which are generally beyond our control, which could result in the theft or loss of the stored information, misappropriation of assets, disruption of transactions and reporting functions, harm our ability to protect customer or company information and impact our financial reporting.
We do not currently maintain key person life insurance, non-compete agreements, or employment agreements with respect to any member of our senior management team. The loss or unavailability to us of any member of our senior management team or a key technical employee could significantly harm us.
We do not currently maintain key person life insurance, or employment agreements with respect to any member of our senior management team. The loss or unavailability to us of any member of our senior management team or a key technical employee could significantly harm us.
Dutch policy also aims to increase the share of renewable energy used in transportation and reduce greenhouse gas emissions from transportation fuels. In Canada, fuel content legislation exists at the federal and provincial level. These statutory mandates may have the impact over time of offsetting projected increases in the demand for refined petroleum products, particularly gasoline, in certain markets.
Dutch policy also aims to increase the share of renewable energy used in transportation and reduce GHG emissions from transportation fuels. In Canada, fuel content legislation exists at the federal and provincial level. These statutory mandates may have the impact over time of offsetting projected increases in the demand for refined petroleum products, particularly gasoline, in certain markets.
Furthermore, the Climate Act has come into effect with the goal of significantly reducing GHG emissions by 49% (compared to 1990) by 2030 and to be climate neutral by 2050. The Climate Act also establishes that the government must prepare a Climate Plan.
Furthermore, the Climate Act has come into effect with the goal of significantly reducing GHG emissions by 55% (compared to 1990) by 2030 and to be climate neutral by 2050. The Climate Act also establishes that the government must prepare a Climate Plan.
Moreover, following the United States’ reentry into Paris Agreement, the United States, the European Union and other partner countries have announced further pledges and agreements at several United Nations Climate Change Conference of Parties, including a pledge to reduce global methane emissions by 30% from 2020 to 2030 and a commitment to develop international standards for monitoring and reporting on methane emissions.
Moreover, following the United States’ reentry into Paris Agreement, the United States, the EU and other partner countries have announced further pledges and agreements at several United Nations Climate Change Conference of Parties, including a pledge to reduce global methane emissions by 30% from 2020 to 2030 and a commitment to develop international standards for monitoring and reporting on methane emissions.
A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation or a loss of confidence in our products and services, or additional costs for remediation and 46 Table of Content modification or enhancement of our information systems to prevent future occurrences, all of which could have a material and adverse effect on our business, financial condition or results of operations.
A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation or a loss of confidence in our products and services, or additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could have a material and adverse effect on our business, financial condition or results of operations.
Factors that could have a negative impact on our reputation and our brands include an operating incident or significant cybersecurity disruption; changes in consumer views concerning our products; a perception by investors or others that we are making insufficient progress with respect to our carbon emission reduction goals, or that pursuit of this ambition may result in allocation of capital to investments with reduced returns; and other adverse events such as those described in this Item 1A.
Factors that could have a negative impact on our reputation and our brands include, by way of example and not limitation, an operating incident or significant cybersecurity disruption; changes in consumer views concerning our products; a perception by investors or others that we are making insufficient progress with respect to our carbon emission reduction goals, or that pursuit of this ambition may result in allocation of capital to investments with reduced returns; and other adverse events such as those described in this Item 1A.
Our goodwill and long-lived assets impairment analyses are sensitive to changes in key assumptions used in our analysis, estimates of future crack spreads, forecasted 38 Table of Content production levels, operating costs and capital expenditures. If the assumptions used in our analysis are not realized, it is possible a material impairment charge may need to be recorded in the future.
Our goodwill and long-lived assets impairment analyses are sensitive to changes in key assumptions used in our analysis, estimates of future crack spreads, forecasted production levels, operating costs and capital expenditures. If the assumptions used in our analysis are not realized, it is possible a material impairment charge may need to be recorded in the future.
Any further increases in fuel economy standards, along with mandated increases in use of renewable fuels discussed above, as well as electric vehicle mandates or combustion engine bans, could result in decreasing demand for petroleum fuels. Decreasing demand for petroleum fuels could have a material adverse effect on our financial condition and results of operation.
Any further increases in fuel economy standards, along with mandated increases in use of renewable fuels discussed above, as well as electric vehicle mandates or internal combustion engine bans, could result in decreasing demand for petroleum-based transportation fuels. Decreasing demand for petroleum-based transportation fuels could have a material adverse effect on our financial condition and results of operation.
These risks and uncertainties include, but are not limited to, the following: Risks Related to our Business/Industry: • The prices of crude oil, renewable feedstocks and refined, finished lubricant and renewable diesel products materially affect our profitability, and are dependent upon many factors that are beyond our control. • General economic conditions may adversely affect our business, operating results and financial condition. • Our operations are subject to catastrophic losses, operational hazards and unforeseen interruptions and other disruptive risks for which we may not be adequately insured. • A disruption to or proration of the product distribution systems or manufacturing facilities we utilize could negatively impact our profitability. • A material decrease in the supply, or a material increase in the price, of crude oil, renewable feedstocks or other raw materials or equipment available to our refineries and other facilities could significantly reduce our production levels and negatively affect our operations. • To successfully operate our facilities, we are required to expend significant amounts for capital outlays and operating expenditures.
These risks and uncertainties include, but are not limited to, the following: Risks Related to our Business/Industry: • The prices of crude oil, renewable feedstocks and refined, finished lubricant and renewable diesel products materially affect our profitability, and are dependent upon many factors that are beyond our control. • Our operations are subject to catastrophic losses, operational hazards and unforeseen interruptions and other disruptive risks for which we may not be adequately insured. • A disruption to or proration of the product distribution systems or manufacturing facilities we utilize could negatively impact our profitability. • A material decrease in the supply, or a material increase in the price, of crude oil, renewable feedstocks or other raw materials or equipment available to our refineries and other facilities could significantly reduce our production levels and negatively affect our operations. • To successfully operate our facilities, we are required to expend significant amounts for capital outlays and operating expenditures.
Item 1A. Risk Factors Risk Factor Summary Investing in us involves a degree of risk. You should carefully consider all information in this Form 10-K, including the Management’s Discussion & Analysis section and the financial statements and related notes, prior to investing in our common stock.
Item 1A. Risk Factors Risk Factor Summary Investing in us involves a degree of risk. You should carefully consider all information in this Annual Report on Form 10-K, including the Management’s Discussion & Analysis section and the financial statements and related notes, prior to investing in our common stock.
Any such regulatory violations could have a material adverse effect on our financial operating results including earnings, cash flow and liquidity. Further, our financial results may be 39 Table of Content materially affected by the adoption of new or amended financial accounting standards, and regulatory or outside auditor guidance or interpretations.
Any such regulatory violations could have a material adverse effect on our financial operating results including earnings, cash flow and liquidity. Further, our financial results may be materially affected by the adoption of new or amended financial accounting standards, and regulatory or outside auditor guidance or interpretations.
We develop and use intellectual property in the ordinary course of our business, including trademarks, trade secrets, copyrighted work and innovations, some of which is material to our business.
We develop and use intellectual property in the ordinary course of our business, including trademarks, trade secrets, copyrighted work and innovations, some of which are material to our business.
Moreover, institutional lenders have been lobbied intensively, and often publicly, by environmental activists, proponents of the international Paris Agreement, and foreign citizenry concerned about climate change not to provide funding for fossil fuel energy companies.
Moreover, institutional lenders have been lobbied intensively, and often publicly, by environmental activists, advocates of international climate change treaties and agreements, proponents of the international Paris Agreement, and foreign citizenry concerned about climate change not to provide funding for fossil fuel energy companies.
Any of these risks associated with new equipment, redesigned older equipment, or repaired equipment could lead to lower revenues or higher costs or otherwise have a negative impact on our future financial condition and results of 32 Table of Content operations.
Any of these risks associated with new equipment, redesigned older equipment, or repaired equipment could lead to lower revenues or higher costs or otherwise have a negative impact on our future financial condition and results of operations.
Our operations and those of our suppliers could also be impacted by new or revised federal restrictions or laws pertaining to oil and gas operations on federal lands, which could include pauses on leasing, enhanced environmental reviews, and emissions regulations.
Our operations and those of our suppliers could also be impacted by new or revised federal restrictions or laws pertaining to oil and gas operations on federal lands, which could include pauses on leasing, enhanced 41 Table of Content environmental reviews, and emissions regulations.
In addition, several states have also taken steps to incentivize the production of electric vehicles or otherwise limit the sale of gasoline or diesel-powered vehicles. These and any future legislation or regulatory programs could increase the cost of consuming or otherwise reduce demand for, the refined petroleum products that we produce.
In addition, several states have also taken steps to incentivize the production of electric vehicles or otherwise limit the sale of gasoline or diesel-powered vehicles. These and any future legislation or regulatory programs could increase the cost of consuming or otherwise reduce demand for, the refined petroleum 44 Table of Content products that we produce and transport.
If any of our facilities were to 30 Table of Content experience an interruption in operations, our earnings could be materially adversely affected (to the extent not recoverable through insurance) because of lost production and repair costs.
If any of our facilities were to experience an interruption in operations, our earnings could be materially adversely affected (to the extent not recoverable through insurance) because of lost production and repair costs.
The EPA and the National Highway Traffic Safety Administration (“NHTSA”) are required to promulgate requirements regarding the Corporate Average Fuel Economy (“CAFE”) of the nation's passenger fleet. The EPA and NHTSA previously adopted such standards, which standards were subsequently revised in April 2022 to impose more stringent requirements for emissions reductions.
The EPA and the National Highway Traffic Safety Administration (“NHTSA”) are required to promulgate requirements regarding the Corporate Average Fuel Economy (“CAFE”) of the nation's passenger fleet. The EPA and NHTSA previously adopted such standards, which were most recently revised in 2022 to impose more stringent requirements for emissions reductions.
Changes in our credit profile, or a significant increase in the price of crude oil, may affect our relationship with our suppliers, which could have a material adverse effect on our liquidity and limit our ability to purchase sufficient quantities of crude oil to operate our refineries at desired capacity.
RISKS RELATED TO LIQUIDITY, FINANCIAL INSTRUMENTS AND CREDIT Changes in our credit profile, or a significant increase in the price of crude oil, may affect our relationship with our suppliers, which could have a material adverse effect on our liquidity and limit our ability to purchase sufficient quantities of crude oil to operate our refineries at desired capacity.
In November 2022, the Biden Administration issued a proposed rule that would require government contractors to publicly disclose their greenhouse gas emissions and set emissions reduction targets, which could affect us if we enter into contractual and business arrangements with government contractors.
In November 2022, the Biden Administration issued 43 Table of Content a proposed rule that would require government contractors to publicly disclose their greenhouse gas emissions and set emissions reduction targets, which could affect us if we enter into contractual and business arrangements with government contractors.
We have manufacturing facilities in foreign countries that support the Lubricants and Specialty Products segment. If one of our facilities is damaged or disrupted, resulting in production being halted for an extended period, we may not be able to timely supply our customers.
We have manufacturing facilities in foreign countries that support the Lubricants & Specialties segment. If one of our facilities is damaged or disrupted, resulting in production being halted for an extended period, we may not be able to timely supply our customers.
Any of these events could cause system interruptions, delays, and loss of critical data, and could prevent us from developing or manufacturing products or providing services, which could make our business and services less attractive and subject us to liability. Any of these events could damage our reputation and be expensive to remedy.
Any of these events could cause system interruptions, delays, and loss of critical data, and could prevent us from developing or manufacturing products or providing services on a timely basis, which could make our business and services less attractive and subject us to liability. Any of these events could damage our reputation and be expensive to remedy.
These laws also are not uniform, as certain laws may be more stringent or broader in scope, or offer greater individual rights, with respect to sensitive and personal information, and such laws may differ from each other, which may complicate compliance efforts.
These laws also are not uniform, as certain laws may be more stringent or broader in scope, or offer greater individual rights, with respect to sensitive and personal information, and such laws may differ 50 Table of Content from each other, which may complicate compliance efforts.
In the near term, the increasing renewable fuel standard obligations, as discussed in our Risk Factor titled “ Compliance with, or developments with respect to, renewable and low carbon fuel blending programs, and other regulations, policies and standards impacting the demand for low-carbon fuels could have an adverse effect on our financial condition and results of operations ” below, present ethanol production and logistics challenges for both the ethanol and refining industries and may require additional capital expenditures or expenses by us to accommodate increased ethanol use.
In the near term, the increasing RFS obligations, as discussed in our Risk Factor titled “Compliance with, or developments with respect to, renewable and low carbon fuel blending programs, and other regulations, policies and standards impacting the demand for low-carbon fuels could have an adverse effect on our financial condition and results of operations” below, present ethanol production and logistics challenges for both the ethanol and refining industries and may require additional capital expenditures or expenses by us to accommodate increased ethanol use.
Such changes could also negatively impact the economic assumptions and projections with respect to many of our Renewables segment investments and could have a material adverse impact on the returns achieved from those investments. Increases in required fuel economy and regulation of CO 2 emissions from motor vehicles may reduce demand for transportation fuels.
Such changes could also negatively impact the economic assumptions and projections with respect to many of our Renewables segment investments and could have a material adverse impact on the returns achieved from those investments. Increases in required fuel economy and regulation of GHG emissions from motor vehicles may reduce demand for petroleum-based transportation fuels.
Prices for Low Carbon Fuel Standard Program credits are dependent upon a variety of factors, including, as applicable, changes in regulations, the availability of Low Carbon Fuel Standard Program credits for purchase, transportation fuel production levels, which can vary significantly each quarter, approved CI pathways, and CI scores.
Prices for LCFS program credits are dependent upon a variety of factors, including, as applicable, changes in regulations, the availability of LCFS program credits for purchase, transportation fuel production levels, which can vary significantly each quarter, approved CI pathways, and CI scores.
In addition, employees who are not currently represented by labor unions may seek union representation in the future. We may not be able to renegotiate our collective bargaining agreements when they expire on satisfactory terms or at all.
In addition, employees who are not currently represented by a labor union or works council may seek representation in the future. We may not be able to renegotiate our collective bargaining or labor agreements when they expire on satisfactory terms or at all.
If we fail to satisfy the covenants set forth in the credit facility or another event of default occurs under the credit facility, the maturity of the loan could be accelerated or we could be prohibited from borrowing for our future working capital needs and issuing letters of credit.
If we fail to satisfy the covenants set forth in the credit facilities or another event of default occurs under the credit facilities, the maturity of the loans could be accelerated or we could be prohibited from borrowing for our future working capital needs and issuing letters of credit.
Also, the potential operation of new or expanded refined product transportation pipelines, or the conversion of existing pipelines into refined product transportation pipelines, could impact the supply of refined products to our existing markets and negatively affect our profitability.
Also, the potential operation of new or expanded refined product transportation pipelines, or the conversion of existing pipelines into refined product transportation pipelines, could impact the supply of refined products to the geographies we supply and negatively affect our profitability.
The effects of the COVID-19 pandemic, volatility in global oil markets as well as the potential for a recession, while uncertain, have and may continue to, materially adversely affect our business, financial condition, results of operations and/or cash flows, as well as our ability to pay dividends to our shareholders.
The effects of an illness or pandemic, such as COVID-19, volatility in global oil markets as well as the potential for a recession, while uncertain, have and may continue to, materially adversely affect our business, financial condition, results of operations and/or cash flows, as well as our ability to pay dividends to our stockholders.
Such an event could result in an overall decline in 31 Table of Content volumes of refined products processed at our refineries and therefore a corresponding reduction in our cash flow.
Such an event could result in an overall decline in volumes of refined products processed at our refineries and therefore a corresponding reduction in our cash flow.
There are presently significant governmental and consumer pressures to increase the use of alternative fuels in the United States. The market for our lubricants and specialty products segment is highly competitive and requires us to continuously develop and introduce new products and product enhancements.
There are presently significant governmental and consumer pressures to increase the use of alternative fuels in the United States. 34 Table of Content The market for our Lubricants & Specialties segment is highly competitive and requires us to continuously develop and introduce new products and product enhancements.
Such cases could also adversely impact public perception and the demand for fossil fuels and petroleum 42 Table of Content products, which could subsequently result in decreased demand for our services and refined products and a drop in our stock price.
Such cases could also adversely impact public perception and the demand for fossil fuels and petroleum products, which could subsequently result in decreased demand for our services and refined products and a drop in our stock price.
We utilize various common carrier or other third party pipeline systems to deliver our products to market. The key systems utilized by the Casper, El Dorado, Navajo, Parco, Puget Sound, Woods Cross, and Tulsa Refineries are Magellan (RMPS), NuStar Energy Magellan (Mid-Con), SFPP, Pioneer, Olympic, UNEV and MPLX, and Magellan (Mid-Con), respectively.
We utilize various third party pipeline systems to deliver our products from our refineries to market. The key third party pipeline systems utilized by the Casper, El Dorado, Navajo, Parco, Puget Sound, Woods Cross, and Tulsa Refineries are Magellan (RMPS), NuStar Energy Magellan (Mid-Con), SFPP, Pioneer, Olympic, MPLX, and Magellan (Mid-Con), respectively.
The development and commercialization of new products require significant expenditures over an extended period of time, and some products that we seek to develop may never become profitable, and we could be required to write-off our investments related to a new product that does not reach commercial viability.
The development and commercialization of new products require significant expenditures over an extended period of time, and some products that we seek to develop may never become profitable, and we could be required to write-off our investments related to a new product that does not reach commercial viability. Our business is subject to the risks of international operations.
The United States initially joined and then withdrew from such agreement in 2020. The United States rejoined the Paris Agreement in 2021 and issued its corresponding “nationally determined contribution” (“NDC”) to reduce economy-wide net GHG emissions to 50-52% below 2005 levels by 2030.
The United States initially joined and then withdrew from such agreement in 2020. The United States rejoined the Paris Agreement in 2021 and issued its corresponding NDC to reduce economy-wide net GHG emissions to 50-52% below 2005 levels by 2030.
In 2022, for example, the EPA announced an enforcement initiative targeting GHG compliance. In the Netherlands, The Hague District Court has ordered Royal Dutch Shell (“RDS”) to reduce the CO 2 emissions of the RDS group by net 45% by 2030, compared to 2019 levels, through the RDS group's corporate policy.
In 2022, the EPA announced an ongoing enforcement initiative targeting GHG compliance. In the Netherlands, The Hague District Court has ordered Royal Dutch Shell (“RDS”) to reduce the CO2 emissions of the RDS group by net 45% by 2030, compared to 2019 levels, through the RDS group’s corporate policy.
Members of the investment community are also increasing their focus on ESG practices and disclosures, including those related to climate change, GHG emissions targets, business resilience under the assumptions of demand-constrained scenarios, and net-zero ambitions in the energy industry in particular, as well as diversity, equality, and inclusion initiatives, political activities, and governance standards among companies more generally.
In recent years, members of the investment community have also increased their focus on ESG practices and disclosures, including those related to climate change, GHG emissions targets, business resilience under the assumptions of demand-constrained scenarios, and net-zero ambitions in the energy industry in particular, as well as diversity, equity, and inclusion initiatives, political activities, and governance standards among companies more generally.
In addition, compliance with applicable U.S. and foreign laws and regulations, such as import and export requirements, anti-corruption laws, data privacy regulations and foreign exchange controls and cash repatriation restrictions, environmental laws, labor laws and anti-competition regulations, increases the cost of doing business in foreign jurisdictions.
In addition, compliance with applicable U.S. and foreign laws and regulations, such as import and export requirements, economic or trade sanctions, anti-corruption laws, data privacy regulations and foreign exchange controls and cash repatriation restrictions, environmental laws, labor laws and anti-competition regulations, increase the cost of doing business in foreign jurisdictions.
Additionally, our Refining, Lubricants and Specialty Products and Renewables segments depend on rail transportation for the delivery of feedstocks used in the production of our products and to deliver products to market, the availability of which is subject to various risks, including those associated with rail strikes, equipment shortages, operating hazards and transportation regulations.
Additionally, our Refining, Lubricants & Specialties and Renewables segments depend on rail and marine transportation for the delivery of feedstocks used in the production of our products and to deliver products to market, the availability of which is 31 Table of Content subject to various risks, including those associated with rail or marine strikes, equipment shortages, operating hazards and transportation regulations.
The spread of COVID-19 caused us to modify our business practices from time to time as needed (including limiting employee and contractor presence at our work locations, restricting travel unless approved by senior leadership, quarantining employees 36 Table of Content when necessary and reducing utilization at our refineries), and similar widespread outbreaks of illness or pandemics could significantly disrupt our operations and ability to perform critical functions in the future.
The widespread outbreaks of illness or pandemics could cause us to modify our business practices from time to time as needed (including limiting employee and contractor presence at our work locations, restricting travel unless approved by senior leadership, quarantining employees when necessary and reducing utilization at our refineries), and could significantly disrupt our operations and ability to perform critical functions in the future.
The COVID-19 pandemic or any other widespread outbreak of an illness or pandemic or other public health crisis, and actions taken in response thereto, have had and may continue to have a material adverse effect on our operations, business, financial condition and results of operations and cash flows.
The widespread outbreak of an illness or pandemic or other public health crisis, and actions taken in response thereto, may have a material adverse effect on our operations, business, financial condition and results of operations and cash flows.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe environmental proceedings are reported to comply with SEC regulations which require us to disclose proceedings arising under provisions regulating the discharge of materials into the environment or protecting the environment when a governmental authority is party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe could exceed $300,000 or more. 50 Table of Content Environmental Matters Navajo HollyFrontier Navajo Refining LLC (now known as HF Sinclair Navajo Refining LLC (“HFS Navajo”)) has been engaged in discussions with, and has responded to document requests from, the EPA, the DOJ and the New Mexico Environment Department (“NMED”) (collectively, the “Agencies”) regarding HFS Navajo’s compliance with the Clean Air Act (“CAA”) and underlying regulations, and similar New Mexico laws and regulations, at its Artesia and Lovington, New Mexico refineries.
Biggest changeThe environmental proceedings are reported to comply with SEC regulations which require us to disclose proceedings arising under provisions regulating the discharge of materials into the environment or protecting the environment when a governmental authority is party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe could exceed $300,000 or more. 55 Table of Content Environmental Matters Navajo HF Sinclair Navajo Refining LLC (“HFS Navajo”) has been engaged in discussions with, and has responded to document requests from, the EPA, the United States Department of Justice (the “DOJ”) and the New Mexico Environment Department (the “NMED”) (collectively, the “Agencies”) regarding HFS Navajo’s compliance with the Clean Air Act (“CAA”) and underlying regulations, and similar New Mexico laws and regulations, at its Artesia and Lovington, New Mexico refineries.
Beginning in the spring of 2021, HFS Navajo and the Agencies began monthly meetings to discuss potential injunctive relief measures to address the alleged noncompliance at the Artesia refinery. In September 2021, the EPA presented to HFS Navajo potential claims for stipulated penalties for alleged noncompliance with a 2002 consent decree.
Beginning in the spring of 2021, HFS Navajo and the Agencies began monthly meetings to discuss potential injunctive relief measures to address the alleged noncompliance at the Artesia refinery. In September 2021 and August 2023, the EPA presented to HFS Navajo potential claims for stipulated penalties for alleged noncompliance with a 2002 consent decree.
In April 2022, the EPA alleged additional CAA noncompliance at the Artesia refinery beyond the allegations in the May 2020 NOV, including alleged noncompliance with NESHAP, NSPS, SIP, Title V and other requirements.
In each of April 2022, June 2023 and August 2023, the EPA alleged additional CAA noncompliance at the Artesia refinery beyond the allegations in the May 2020 NOV, including alleged noncompliance with NESHAP, NSPS, SIP, Title V and other requirements.
Court of Appeals for the DC Circuit against the EPA challenging the alternative compliance demonstration for the 2016 and 2018 compliance years. On July 25, 2022, various subsidiaries of HollyFrontier intervened on behalf of the EPA to aid the defense of the EPA’s alternative compliance demonstration decision.
Court of Appeals for the DC Circuit against the EPA challenging the alternative compliance demonstration for the 2016 and 2018 compliance years. On July 25, 2022, various subsidiaries of HollyFrontier intervened on behalf of the EPA to aid the defense of the EPA’s alternative compliance demonstration decision. It is too early to predict the outcome of these matters.
It is too early to predict the outcome of these matters. 51 Table of Content Other We are a party to various other litigation and proceedings that we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse impact on our financial condition, results of operations or cash flows.
Other We are a party to various other litigation and proceedings that we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse impact on our financial condition, results of operations or cash flows.
Removed
Port of Seattle In October 2017, Sinclair Oil received a Notice of Claim from the Port of Seattle alleging Sinclair Oil’s responsibility for the clean-up of 12.5 million gallons of bunker fuel improperly disposed of at a facility in the Port of Seattle from 1977 to 1980.
Added
Osage Pipeline On July 8, 2022, the Osage Pipeline, which is owned by Osage Pipe Line Company, LLC (“Osage”), a joint venture between El Dorado Osage Company LLC and CHS McPherson Refinery Inc., experienced a release of crude oil at a location approximately 5 miles north of Cushing, Oklahoma. 56 Table of Content Osage and Holly Energy Partners – Operating, L.P.
Removed
Sinclair Oil responded that it did sell bunker fuel for use as a fuel for ships at the Port of Seattle during this time frame but not for disposal as is being alleged. In late 2018, Sinclair Oil received a demand letter from the Port of Seattle.
Added
(“HEP Operating”), the operator of the Osage Pipeline, are working with federal, state, tribal, and local governmental agencies, as well as the affected landowners. Discussions with the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration, the EPA and the DOJ regarding resolution of their potential claims relating to the incident are ongoing.
Removed
Sinclair Oil and the Port of Seattle entered into a tolling agreement in mid-2019. The parties have exchanged offers, and Sinclair Oil is awaiting a response to its last offer made in August 2020. It is too early to predict the outcome of this matter.
Added
On September 13, 2023, Osage and HEP Operating received an offer for settlement from the EPA and the DOJ.
Added
After several months of negotiations, the EPA, the DOJ, Osage, and HEP Operating reached an agreement that resolves the civil claims of the United States under the CWA, subject to certain reservations of rights by the United States, in exchange for the payment of a $7.4 million civil penalty and performance of certain items of injunctive relief by Osage and HEP Operating.
Added
The agreement is set forth in a Consent Decree lodged in federal court on January 30, 2024. The Consent Decree is subject to a review and comment period of 30 days.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs October 2022 946,911 $ 54.70 946,911 $ 848,199,339 November 2022 2,391,249 $ 61.69 2,391,249 $ 700,689,691 December 2022 (1) 1,767,354 $ 49.37 767,354 $ 662,037,439 Total for October to December 2022 5,105,514 4,105,514 (1) On December 14, 2022, we repurchased 1,000,000 shares pursuant to separate authorization from our Board of Directors and not as part of our $1.0 billion share repurchase program.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs October 2023 1,376,652 $ 54.48 1,376,652 $ 750,000,036 November 2023 — $ — — $ 750,000,036 December 2023 1,334,454 $ 55.14 1,334,454 $ 676,422,860 Total for October to December 2023 2,711,106 2,711,106 On January 3, 2024, we repurchased 454,380 shares of our outstanding common stock from REH Company in a privately negotiated transaction under our share repurchase program and pursuant to the Stock Purchase Agreement, dated January 3, 2024 (the “January Stock Purchase Agreement”), between us and REH Company.
This share repurchase program authorizes us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company (formerly known as The Sinclair Companies) are also authorized under the share repurchase program, subject to REH Company’s interest in selling its shares and other limitations.
This share repurchase program authorizes us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company (formerly known as The Sinclair Companies) are also authorized under this share repurchase program, subject to REH Company’s interest in selling its shares and other limitations.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange under the trading symbol “DINO.” In September 2022, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange under the trading symbol “DINO.” In August 2023, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs.
The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. This program may be discontinued at any time by our Board of Directors. The following table includes repurchases made under this program during the fourth quarter of 2022.
The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. This share repurchase program may be discontinued at any time by our Board of Directors.
Removed
This repurchase was made in connection with the sale by REH Company of approximately 5,000,000 shares of common stock, inclusive of the 1,000,000 shares we repurchased in an unregistered block trade permitted under applicable securities laws. As of February 15, 2023 , we had approximately 130,876 stockholders, including beneficial owners holding shares in street name.
Added
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 following table includes repurchases made under this program during the fourth quarter of 2023.
Added
The price paid by us under the January Stock Purchase Agreement was $55.02 per share resulting in an aggregate purchase price of $25.0 million. The purchase price was funded with cash on hand.
Added
On February 8, 2024, we repurchased 1,061,946 shares of our outstanding common stock from REH Company in a privately negotiated transaction under our new share repurchase program and pursuant to the Stock Purchase Agreement, dated February 8, 2024 (the “February Stock Purchase Agreement”), between us and REH Company.
Added
The price paid by us under the February Stock Purchase Agreement was $56.50 per share resulting in an aggregate purchase price of $60.0 million. The purchase price was funded with cash on hand. As of February 15, 2024, we had remaining authorization to repurchase up to $591.4 million under our share repurchase program.
Added
As of February 15, 2024, we had approximately 1,594 registered holders of our common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers and other financial institutions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

96 edited+34 added−72 removed42 unchanged
Biggest changeYears Ended December 31, 2022 (8) 2021 (9) 2020 Mid-Continent Region Crude charge (BPD) (1) 283,160 260,350 241,140 Refinery throughput (BPD) (2) 299,380 276,430 257,030 Sales of produced refined products (BPD) (3) 280,800 265,470 248,320 Refinery utilization (4) 108.9 % 100.1 % 92.7 % Average per produced barrel sold (5) Refinery gross margin $ 22.01 $ 9.44 $ 5.17 Refinery operating expenses (6) 6.19 6.42 5.46 Net operating margin $ 15.82 $ 3.02 $ (0.29) Refinery operating expenses per throughput barrel (7) $ 5.81 $ 6.17 $ 5.27 Feedstocks: Sweet crude oil 58 % 61 % 58 % Sour crude oil 20 % 15 % 19 % Heavy sour crude oil 16 % 18 % 17 % Other feedstocks and blends 6 % 6 % 6 % Total 100 % 100 % 100 % 58 Table of Content Years Ended December 31, 2022 (8) 2021 (9) 2020 Mid-Continent Region Sales of refined products: Gasolines 51 % 52 % 52 % Diesel fuels 33 % 33 % 34 % Jet fuels 6 % 5 % 4 % Fuel oil 1 % 1 % 1 % Asphalt 3 % 3 % 3 % Base oils 4 % 4 % 4 % LPG and other 2 % 2 % 2 % Total 100 % 100 % 100 % West Region Crude charge (BPD) (1) 323,820 140,370 124,050 Refinery throughput (BPD) (2) 347,590 155,440 138,050 Sales of produced refined products (BPD) (3) 347,540 158,630 143,350 Refinery utilization (4) 81.4 % 82.7 % 85.6 % Average per produced barrel sold (5) Refinery gross margin $ 30.64 $ 13.32 $ 10.97 Refinery operating expenses (6) 9.31 8.09 7.07 Net operating margin $ 21.33 $ 5.23 $ 3.90 Refinery operating expenses per throughput barrel (7) $ 9.31 $ 9.27 $ 7.34 Feedstocks: Sweet crude oil 28 % 22 % 30 % Sour crude oil 50 % 58 % 49 % Heavy sour crude oil 10 % 1 % — % Black wax crude oil 5 % 10 % 11 % Other feedstocks and blends 7 % 9 % 10 % Total 100 % 100 % 100 % Sales of refined products: Gasolines 53 % 54 % 56 % Diesel fuels 32 % 35 % 35 % Jet fuels 5 % 1 % — % Fuel oil 3 % 3 % 3 % Asphalt 3 % 4 % 4 % LPG and other 4 % 3 % 2 % Total 100 % 100 % 100 % Consolidated Crude charge (BPD) (1) 606,980 400,720 365,190 Refinery throughput (BPD) (2) 646,970 431,870 395,080 Sales of produced refined products (BPD) (3) 628,340 424,100 391,670 Refinery utilization (4) 92.3 % 93.1 % 90.2 % Average per produced barrel (5) Refinery gross margin $ 26.78 $ 10.89 $ 7.29 Refinery operating expenses (6) 7.92 7.04 6.05 Net operating margin $ 18.86 $ 3.85 $ 1.24 Refinery operating expenses per throughput barrel (7) $ 7.69 $ 6.92 $ 6.00 59 Table of Content Years Ended December 31, 2022 (8) 2021 (9) 2020 Feedstocks: Sweet crude oil 42 % 47 % 48 % Sour crude oil 36 % 31 % 29 % Heavy sour crude oil 13 % 12 % 11 % Black wax crude oil 3 % 4 % 4 % Other feedstocks and blends 6 % 6 % 8 % Total 100 % 100 % 100 % Sales of refined products: Gasolines 52 % 53 % 54 % Diesel fuels 32 % 34 % 34 % Jet fuels 6 % 4 % 3 % Fuel oil 2 % 1 % 1 % Asphalt 3 % 3 % 4 % Base oils 2 % 2 % 2 % LPG and other 3 % 3 % 2 % Total 100 % 100 % 100 % (1) Crude charge represents the barrels per day of crude oil processed at our refineries.
Biggest changeYears Ended December 31, 2023 2022 (8) 2021 (9) Mid-Continent Region Crude charge (BPD) (1) 237,510 283,160 260,350 Refinery throughput (BPD) (2) 256,810 299,380 276,430 Sales of produced refined products (BPD) (3) 248,330 280,800 265,470 Refinery utilization (4) 91.4 % 108.9 % 100.1 % Average per produced barrel sold (5) Refinery gross margin $ 17.49 $ 22.01 $ 9.44 Refinery operating expenses (6) 7.02 6.19 6.42 Net operating margin $ 10.47 $ 15.82 $ 3.02 Refinery operating expenses per throughput barrel (7) $ 6.79 $ 5.81 $ 6.17 Feedstocks: Sweet crude oil 56 % 58 % 61 % Sour crude oil 20 % 20 % 15 % Heavy sour crude oil 16 % 16 % 18 % Other feedstocks and blends 8 % 6 % 6 % Total 100 % 100 % 100 % 63 Table of Content Years Ended December 31, 2023 2022 (8) 2021 (9) Mid-Continent Region Sales of refined products: Gasolines 51 % 51 % 52 % Diesel fuels 30 % 33 % 33 % Jet fuels 6 % 6 % 5 % Fuel oil 1 % 1 % 1 % Asphalt 4 % 3 % 3 % Base oils 4 % 4 % 4 % LPG and other 4 % 2 % 2 % Total 100 % 100 % 100 % West Region Crude charge (BPD) (1) 330,030 323,820 140,370 Refinery throughput (BPD) (2) 360,200 347,590 155,440 Sales of produced refined products (BPD) (3) 353,950 347,540 158,630 Refinery utilization (4) 79.0 % 81.4 % 82.7 % Average per produced barrel sold (5) Refinery gross margin $ 24.13 $ 30.64 $ 13.32 Refinery operating expenses (6) 10.14 9.31 8.09 Net operating margin $ 13.99 $ 21.33 $ 5.23 Refinery operating expenses per throughput barrel (7) $ 9.97 $ 9.31 $ 9.27 Feedstocks: Sweet crude oil 30 % 28 % 22 % Sour crude oil 45 % 50 % 58 % Heavy sour crude oil 11 % 10 % 1 % Black wax crude oil 6 % 5 % 10 % Other feedstocks and blends 8 % 7 % 9 % Total 100 % 100 % 100 % Sales of refined products: Gasolines 54 % 53 % 54 % Diesel fuels 31 % 32 % 35 % Jet fuels 6 % 5 % 1 % Fuel oil 2 % 3 % 3 % Asphalt 2 % 3 % 4 % LPG and other 5 % 4 % 3 % Total 100 % 100 % 100 % Consolidated Crude charge (BPD) (1) 567,540 606,980 400,720 Refinery throughput (BPD) (2) 617,010 646,970 431,870 Sales of produced refined products (BPD) (3) 602,280 628,340 424,100 Refinery utilization (4) 83.7 % 92.3 % 93.1 % Average per produced barrel (5) Refinery gross margin $ 21.39 $ 26.78 $ 10.89 Refinery operating expenses (6) 8.86 7.92 7.04 Net operating margin $ 12.53 $ 18.86 $ 3.85 Refinery operating expenses per throughput barrel (7) $ 8.65 $ 7.69 $ 6.92 64 Table of Content Years Ended December 31, 2023 2022 (8) 2021 (9) Consolidated Feedstocks: Sweet crude oil 42 % 42 % 47 % Sour crude oil 34 % 36 % 31 % Heavy sour crude oil 13 % 13 % 12 % Black wax crude oil 3 % 3 % 4 % Other feedstocks and blends 8 % 6 % 6 % Total 100 % 100 % 100 % Sales of refined products: Gasolines 53 % 52 % 53 % Diesel fuels 30 % 32 % 34 % Jet fuels 6 % 6 % 4 % Fuel oil 1 % 2 % 1 % Asphalt 3 % 3 % 3 % Base oils 2 % 2 % 2 % LPG and other 5 % 3 % 3 % Total 100 % 100 % 100 % (1) Crude charge represents the barrels per day of crude oil processed at our refineries.
Gain on Business Interruption Insurance Settlement During the year ended December 31, 2022, we recorded a gain of $15.2 million from the settlement of our business interruption claim related to winter storm Uri that occurred in the first quarter of 2021.
Gain on Business Interruption Insurance Settlement During the year ended December 31, 2022, we recorded a gain of $15.2 million from a settlement of our business interruption claim related to winter storm Uri that occurred in the first quarter of 2021.
In addition, the refinery operations of the Parco and Casper Refineries are included for the period March 14, 2022 (date of acquisition) through December 31, 2022. The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations.
In addition, the refinery operations of the Parco and Casper Refineries are included for the period March 14, 2022 (date of acquisition) through December 31, 2023. The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations.
In addition, components of our long-term growth strategy include the optimization of existing units at our facilities and selective acquisition of complementary assets for our refining operations intended to increase earnings and cash flow.
In addition, components of our long-term growth strategy include the optimization of existing units at our facilities and selective acquisition of complementary assets for our operations intended to increase earnings and cash flow.
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 Puget Sound Refinery was acquired November 1, 2021, and thus is included for the period November 1, 2021 through December 31, 2022.
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 Puget Sound Refinery was acquired November 1, 2021, and thus is included for the period November 1, 2021 through December 31, 2023.
Net loss during the year ended December 31, 2022 was primarily due to HEP’s 50% share of incurred and estimated environmental remediation and recovery expenses, net of insurance proceeds received to date, for Osage Pipeline. In July 2022, Osage Pipeline, which carries crude oil from Cushing, Oklahoma to El Dorado, Kansas, suffered a release of crude oil.
Net loss during the year ended December 31, 2022 was primarily due to HEP’s 50% share of incurred and estimated environmental remediation and recovery expenses, net of insurance proceeds received to date, for the Osage Pipeline. I n July 2022, the Osage Pipeline, which carries crude oil from Cushing, Oklahoma to El Dorado, Kansas, suffered a release of crude oil.
Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Form 10-K. (2) Represents total Renewables segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of renewable diesel produced at our renewable diesel units.
Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Annual Report on Form 10-K. (2) Represents total Renewables segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of renewable diesel produced at our renewable diesel units.
References herein to HF Sinclair “we,” “our,” “ours,” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier and its consolidated subsidiaries and do not include the Acquired Sinclair Businesses.
References herein to HF Sinclair “we,” “our,” “ours” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier and its consolidated subsidiaries and do not include the Acquired Sinclair Businesses.
Sinclair Acquisition On March 14, 2022 (the “Closing Date”), HollyFrontier and HEP announced the establishment of HF Sinclair as the new parent holding company of HollyFrontier and HEP and their subsidiaries, and the completion of their respective acquisitions of Sinclair Oil Corporation (now known as Sinclair Oil LLC, “Sinclair Oil”) and Sinclair Transportation Company LLC (“STC”) from The Sinclair Companies (now known as REH Company and referred to herein as “REH Company”).
Sinclair Acquisition On March 14, 2022, HollyFrontier and HEP announced the establishment of HF Sinclair as the new parent holding company of HollyFrontier and HEP and their subsidiaries, and the completion of their respective acquisitions (the “Sinclair Transactions”) of Sinclair Oil Corporation (now known as Sinclair Oil LLC, “Sinclair Oil”) and Sinclair Transportation Company LLC (“STC”) from The Sinclair Companies (now known as REH Company and referred to herein as “REH Company”).
(5) Represents average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Form 10-K.
(5) Represents average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Annual Report on Form 10-K.
(2) We have a financing arrangement related to the sale and subsequent lease-back 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.
(2) We have financing arrangements related to the sale and subsequent lease-back 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.
As a result of the final rule released by the EPA on June 3, 2022 as noted above, we recognized a benefit of $72.0 million in the year ended December 31, 2022 related to the modification of the 2020 and 2021 volume targets. Recent U.S.
As a result of the final rule released by the EPA on June 3, 2022 as noted above, we recognized a benefit of $72.0 million in the year ended December 31, 2022 related to the modification of the 2020 and 2021 volume targets.
During the year ended December 31, 2022, HEP received $400.0 million in proceeds from the issuance of the HEP 6.375% Senior Notes, had n et repayments of $172.0 million under the HEP Credit Agreement and paid distributions of $96.2 million to noncontrolling interests.
During the year ended December 31, 2022, HEP received $400.0 million in proceeds from the issuance of the HEP 6.375% Senior Notes, had net repayments of $172.0 million under the HEP Credit Agreement and paid distributions of $96.2 million to noncontrolling interests.
See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Form 10-K for a reconciliation to the income statement of sale prices of products sold and cost of products purchased.
See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Annual Report on Form 10-K for a reconciliation to the income statement of sale prices of products sold and cost of products purchased.
The following sensitivity analysis provides the hypothetical effects of market price fluctuations in commodity prices for our open commodity derivative contracts at December 31, 2022 and 2021: Derivative Fair Value Gain (Loss) at December 31, 2022 2021 (In thousands) 10% increase in underlying commodity prices $ (3,502) $ (3,705) 10% decrease in underlying commodity prices $ 3,298 $ 3,705 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.
The following sensitivity analysis provides the hypothetical effects of market price fluctuations in commodity prices for our open commodity derivative contracts at December 31, 2023 and 2022: Derivative Fair Value Gain (Loss) at December 31, 2023 2022 (In thousands) 10% increase in underlying commodity prices $ (4,682) $ (3,502) 10% decrease in underlying commodity prices $ 4,682 $ 3,298 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.
Our fair value estimates are based on projected cash flows, which we believe to be reasonable. 70 Table of Content We continually monitor and evaluate various factors for potential indicators of goodwill and long-lived asset impairment.
Our fair value estimates are based on projected cash flows, which we believe to be reasonable. We continually monitor and evaluate various factors for potential indicators of goodwill and long-lived asset impairment.
Our operations are subject to catastrophic losses, hazards of petroleum processing operations 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.
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.
For the years ended December 31, 2022 and 2021, loss on foreign currency transactions include d a gain of $27.8 million and a loss of $4.0 million, respectively, on foreign exchange forward contracts (utilized as an economic hedge).
For the years ended December 31, 2023 and 2022, gain (loss) on foreign currency transactions include d a loss of $7.4 million and a gain of $27.8 million, respectively, on foreign exchange forward contracts (utilized as an economic hedge).
We have estimated future payments under these fixed-quantity agreements expiring between 2023 and 2025 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 2023 and 2040.
We have estimated future payments under these fixed-quantity agreements expiring between 2024 and 2028 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 2024 and 2038.
Earnings (Loss) of Equity Method Investments For the year ended December 31, 2022, we recorded a net loss of $0.3 million as compared to net earnings of $12.4 million of equity method investments for the year ended December 31, 2021.
Earnings (Loss) of Equity Method Investments For the year ended December 31, 2023, we recorded net earnings of $17.4 million of equity method investments as compared to a net loss of $0.3 million for the year ended December 31, 2022.
EBITDA presented above is reconciled to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Form 10-K. Supplemental Segment Operating Data Our operations are organized into five reportable segments, Refining, Renewables, Marketing, Lubricants and Specialty Products and HEP.
EBITDA presented above is reconciled to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A 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.
Year Ended December 31, 2022 Marketing Number of branded sites at period end (1) 1,513 Sales volumes (in thousand gallons) 1,118,444 Margin per gallon of sales (2) $ 0.06 (1) Includes 131 non-Sinclair branded sites from legacy HollyFrontier agreements. (2) Represents average amount per gallon sold, which is a non-GAAP measure.
Years Ended December 31, 2023 2022 Marketing Number of branded sites at period end (1) 1,540 1,513 Sales volumes (in thousand gallons) 1,441,607 1,118,444 Margin per gallon of sales (2) $ 0.07 $ 0.06 (1) Includes non-Sinclair branded sites from legacy HollyFrontier agreements. (2) Represents average amount per gallon sold, which is a non-GAAP measure.
At December 31, 2022, outstanding borrowings under the HEP Credit Agreement wer e $668.0 million . A hypothetical 10% change in interest rates applicable to the HEP Credit Agreement would not materially affect cash flows.
At December 31, 2023, outstanding borrowings under the HEP Credit Agreement wer e $455.5 million . A hypothetical 10% change in interest rates applicable to the HEP Credit Agreement would not materially affect cash flows.
The acquisition closed on November 1, 2021. Renewable Fuel Standard Regulations Pursuant to the 2007 Energy Independence and Security Act, the EPA promulgated the RFS regulations, which increased the volume of renewable fuels mandated to be blended into the nation’s fuel supply.
Renewable Fuel Standard Regulations Pursuant to the 2007 Energy Independence and Security Act, the EPA promulgated the RFS regulations, which increased the volume of renewable fuels mandated to be blended into the nation’s fuel supply.
Year Ended December 31, 2022 Renewables Sales volumes (in thousand gallons) 136,204 Average per produced gallon (1) Renewables gross margin $ 0.30 Renewables operating expenses (2) 0.82 Net operating margin $ (0.52) (1) Represents average amount per produced gallon sold, which is a non-GAAP measure.
Years Ended December 31, 2023 2022 Renewables Sales volumes (in thousand gallons) 215,510 136,204 Average per produced gallon (1) Renewables gross margin $ 0.50 $ 0.30 Renewables operating expenses (2) 0.51 0.82 Net operating margin $ (0.01) $ (0.52) (1) Represents average amount per produced gallon sold, which is a non-GAAP measure.
Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Form 10-K. Lubricants and Specialty Products Segment Operating Data The following table sets forth information about our lubricants and specialty products operations.
Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Annual Report on Form 10-K. 66 Table of Content Lubricants & Specialties Segment Operating Data The following table sets forth information about our lubricants and specialties operations.
The refinery gross and net operating margins do not include the non-cash effects of long-lived asset impairment charges, lower of cost or market inventory valuation adjustments and depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Form 10-K.
The renewables gross and net operating margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments and depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Annual Report on Form 10-K.
In November 2019, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs as of that time, authorizing us to repurchase common stock in the open market or through privately negotiated transactions.
In September 2022, our Board of Directors approved a $1.0 billion share repurchase program (the “ September 2022 Share Repurchase Program”), which replaced all existing share repurchase programs at that time, authorizing us to repurchase common stock in the open market or through privately negotiated transactions.
Under the terms of the Contribution Agreement, HEP acquired STC, REH Company’s integrated crude and refined products pipelines and terminal assets, including approximately 1,200 miles of integrated crude and refined product pipeline supporting the Sinclair refineries and third parties, eight product terminals and two crude terminals with approximately 4.5 million barrels of operated storage.
Under the terms of that certain Contribution Agreement as amended on March 14, 2022 (the “Contribution Agreement”), HEP acquired STC, REH Company’s integrated crude and refined products pipelines and terminal assets, including approximately 1,200 miles of integrated crude and refined product pipeline supporting the Sinclair refineries and third parties, eight product terminals and two crude terminals with approximately 4.5 million barrels of operated storage.
Puget Sound Refinery Acquisition On May 4, 2021, HollyFrontier Puget Sound Refining LLC (now known as HF Sinclair Puget Sound Refining LLC), a wholly owned subsidiary of HollyFrontier, entered into a sale and purchase agreement with Equilon Enterprises LLC d/b/a Shell Oil Products US (“Shell”) to acquire Shell's Puget Sound refinery and related assets, including the on-site cogeneration facility and related logistics assets.
Puget Sound Refinery Acquisition On May 4, 2021, HollyFrontier Puget Sound Refining LLC (now known as HF Sinclair Puget Sound Refining LLC), a wholly owned subsidiary of HollyFrontier, entered into a sale and purchase agreement with Equilon Enterprises LLC d/b/a Shell Oil Products US (“Shell”) to acquire the Puget Sound Refinery. The acquisition closed on November 1, 2021.
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.
In performing our 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.
Sales and other revenues included $3,911.9 million, $3,149.1 million and $654.9 million in unaffiliated revenues related to our Marketing, Lubricants and Specialty Products and Renewables segments, respectively, for the year ended December 31, 2022. Sales and other revenues included $2,550.6 million in unaffiliated revenues related to our Lubricants and Specialty Products segment for the year ended December 31, 2021.
Sales and other revenues included $ 3,911.9 million, $3,149.1 million and $ 654.9 million in unaffiliated revenues related to our Marketing, Lubricants & Specialties and Renewables segments, respectively, for the year ended December 31, 2022.
During the year ended December 31, 2022, we purchased $1,371.7 million of treasury stock, paid $255.9 million in dividends and paid $41.4 million to extinguish $42.2 million in principal of the HF Sinclair 2.625% Senior Notes and HollyFrontier 2.625% Senior Notes.
For the year ended December 31, 2022, our net cash flows used for financing activities were $1,560.8 million. During the year ended December 31, 2022, we purchased $1,371.7 million of treasury stock, paid $255.9 million in dividends and paid $41.4 million to extinguish $42.2 million in principal of the HF Sinclair 2.625% Senior Notes and HollyFrontier 2.625% Senior Notes.
Loss on Foreign Currency Transactions Remeasurement adjustments resulting from the foreign currency conversion of the intercompany financing notes payable by PCLI net of mark-to-market valuations on foreign exchange forward contracts with banks which hedge the foreign currency exposure on these intercompany notes were a loss of $1.6 million and $2.9 million for the years ended December 31, 2022 and 2021, respectively.
Gain (loss) on Foreign Currency Transactions Remeasurement adjustments resulting from the foreign currency conversion of the intercompany financing notes payable by PCLI net of mark-to-market valuations on foreign exchange forward contracts with banks which hedge the foreign currency exposure on these intercompany notes was a gain o f $2.5 million for the year ended December 31, 2023 compared to a loss of $1.6 million for the year ended December 31, 2022.
Refining operating data for the year ended December 31, 2021 includes crude oil and feedstocks processed and refined products sold at our Puget Sound Refinery for the period November 1, 2021 through December 31, 2021 only, averaged over the 365 days in the year ended December 31, 2021. 60 Table of Content Renewables Operating Data The following table sets forth information about our renewables operations and includes our Sinclair businesses for the period March 14, 2022 (the date of acquisition) through December 31, 2022.
Refining operating data for the year ended December 31, 2021 includes crude oil and feedstocks processed and refined products sold at our Puget Sound Refinery for the period November 1, 2021 through December 31, 2021 only, averaged over the 365 days in the year ended December 31, 2021. 65 Table of Content Renewables Operating Data The following table sets forth information, including non-GAAP performance measures, about our renewables operations and includes our Wyoming renewable diesel unit acquired as part of the Sinclair Transactions for the period March 14, 2022 (the date of acquisition) through December 31, 2023.
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.
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.
For the fixed rate HF Sinclair Senior Notes, HollyFrontier Senior Notes and HEP Senior Notes, changes in interest rates will generally affect fair value of the debt, but not earnings or cash flows.
For the fixed rate HF Sinclair Senior Notes, HollyFrontier Senior Notes and HEP Senior Notes (each as defined in Note 13 “Debt” in the Notes to Consolidated Financial Statements), changes in interest rates will generally affect fair value of the debt, but not earnings or cash flows.
The branded marketing business supplies high-quality fuels to more than 1,300 Sinclair branded stations and licenses the use of the Sinclair brand at more than 300 additional locations throughout the United States. The renewables business includes the operation of a renewable diesel unit located in Sinclair, Wyoming.
HF Sinclair acquired REH Company’s refining, branded marketing, renewables, and midstream businesses. The branded marketing business supplies high-quality fuels to Sinclair branded stations and licenses the use of the Sinclair brand to additional locations throughout the United States. The renewables business includes the operation of a renewable diesel unit located in Sinclair, Wyoming.
Cash Flows – Investing Activities and Planned Capital Expenditures Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For the year ended December 31, 2022, our net cash flows used for investing activities were $774.5 million. On March 14, 2022, we closed the Sinclair Transactions and paid cash of $251.4 million.
Cash expenditures for properties, plants and equipment for the year ended December 31, 2023 were $385.4 million for the year ended December 31, 2023. For the year ended December 31, 2022, our net cash flows used for investing activities were $774.5 million . On March 14, 2022, we closed the Sinclair Transactions for cash consideration of $251.4 million.
This increase was primarily due to the April 2022 issuance of $400 million in aggregate principal amount of HEP's 6.375% senior notes maturing in April 2027 and higher market interest rates on HEP's revolving credit facility during the year ended December 31, 2022. 63 Table of Content For the years ended December 31, 2022 and 2021, interest expense attributable to our HEP Segment was $82.6 million and $53.8 million, respectively.
This increase was primarily due to the April 2022 issuance of $400 million in aggregate principal amount of 6.375% senior notes maturing in April 2027 and higher market interest rates on HEP's revolving credit facility during the year ended December 31, 2023.
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, 2022 is presented below: Outstanding Principal Estimated Fair Value Estimated Change in Fair Value (In thousands) HollyFrontier and HF Sinclair Senior Notes $ 1,707,827 $ 1,655,726 $ 33,118 HEP Senior Notes $ 900,000 $ 852,658 $ 24,213 For the variable rate HEP Credit Agreement, changes in interest rates would affect cash flows, but not the fair value.
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, 2023 is presented below: Outstanding Principal Estimated Fair Value Estimated Change in Fair Value (In thousands) HF Sinclair, HollyFrontier and HEP Senior Notes $ 2,300,000 $2,271,856 $ 41,358 For the variable rate HEP Credit Agreement, changes in interest rates would affect cash flows, but not the fair value.
These primarily consist of investments in conservative, highly-rated instruments issued by financial institutions, government and corporate entities with strong credit standings and money market funds. Cash equivalents are stated at cost, which approximates market value.
We consider all highly liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. These primarily consist of investments in conservative, highly rated instruments issued by financial institutions, government and corporate entities with strong credit standings and money market funds. Cash equivalents are stated at cost, which approximates market value.
On February 23, 2023, our Board of Directors also declared a regular quarterly dividend in the amount of $0.45 per share, an increase of $0.05 over our previous dividend of $0.40 per share. The dividend is payable on March 17, 2023 to holders of record of common stock on March 7, 2023.
On February 14, 2024, our Board of Directors announced that it declared a regular quarterly dividend in the amount of $0.50 per share, an increase of $0.05 over our previous dividend of $0.45 per share. The dividend is payable on March 5, 2024 to holders of record of common stock on February 26, 2024.
Discussions of year-over-year comparisons for 2021 and 2020 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of HollyFrontier’s Annual Report on Form 10-K for the year ended December 31, 2021. 56 Table of Content RESULTS OF OPERATIONS Financial Data Years Ended December 31, 2022 2021 2020 (In thousands, except per share data) Sales and other revenues $ 38,204,839 $ 18,389,142 $ 11,183,643 Operating costs and expenses: Cost of products sold (exclusive of depreciation and amortization): Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) 30,680,013 15,567,052 9,158,805 Lower of cost or market inventory valuation adjustment 52,412 (310,123) 78,499 30,732,425 15,256,929 9,237,304 Operating expenses (exclusive of depreciation and amortization) 2,334,893 1,517,478 1,300,277 Selling, general and administrative expenses (exclusive of depreciation and amortization) 426,485 362,010 313,600 Depreciation and amortization 656,787 503,539 520,912 Goodwill and long-lived asset impairments — — 545,293 Total operating costs and expenses 34,150,590 17,639,956 11,917,386 Income (loss) from operations 4,054,249 749,186 (733,743) Other income (expense): Earnings (loss) of equity method investments (260) 12,432 6,647 Interest income 30,179 4,019 7,633 Interest expense (175,628) (125,175) (126,527) Gain on business interruption insurance settlement 15,202 — 81,000 Gain on tariff settlement — 51,500 — Gain on sales-type leases — — 33,834 Gain (loss) on early extinguishment of debt 604 — (25,915) Gain (loss) on foreign currency transactions (1,637) (2,938) 2,201 Gain on sale of assets and other 13,337 98,128 7,824 (118,203) 37,966 (13,303) Income (loss) before income taxes 3,936,046 787,152 (747,046) Income tax expense (benefit) 894,872 123,898 (232,147) Net income (loss) 3,041,174 663,254 (514,899) Less net income attributable to noncontrolling interest 118,506 104,930 86,549 Net income (loss) attributable to HF Sinclair stockholders $ 2,922,668 $ 558,324 $ (601,448) Earnings (loss) per share: Basic $ 14.28 $ 3.39 $ (3.72) Diluted $ 14.28 $ 3.39 $ (3.72) Cash dividends declared per common share $ 1.20 $ 0.35 $ 1.40 Average number of common shares outstanding: Basic 202,566 162,569 161,983 Diluted 202,566 162,569 161,983 Other Financial Data Years Ended December 31, 2022 2021 2020 (In thousands) Net cash provided by operating activities $ 3,777,159 $ 406,682 $ 457,931 Net cash used for investing activities $ (774,488) $ (1,327,219) $ (330,162) Net cash provided by (used for) financing activities $ (1,560,759) $ (211,803) $ 353,226 Capital expenditures $ 524,007 $ 813,409 $ 330,160 EBITDA (1) $ 4,619,776 $ 1,306,917 $ (193,789) 57 Table of Content (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 provision, (ii) interest expense, net of interest income and (iii) depreciation and amortization.
Discussions of year-over-year comparisons for 2022 and 2021 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022. 61 Table of Content RESULTS OF OPERATIONS Financial Data Years Ended December 31, 2023 2022 2021 (In thousands, except per share data) Sales and other revenues $ 31,964,395 $ 38,204,839 $ 18,389,142 Operating costs and expenses: Cost of products sold (exclusive of depreciation and amortization): Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) 25,784,449 30,680,013 15,567,052 Lower of cost or market inventory valuation adjustment 270,419 52,412 (310,123) 26,054,868 30,732,425 15,256,929 Operating expenses (exclusive of depreciation and amortization) 2,438,148 2,334,893 1,517,478 Selling, general and administrative expenses (exclusive of depreciation and amortization) 498,240 426,485 362,010 Depreciation and amortization 770,573 656,787 503,539 Total operating costs and expenses 29,761,829 34,150,590 17,639,956 Income from operations 2,202,566 4,054,249 749,186 Other income (expense): Earnings (loss) of equity method investments 17,369 (260) 12,432 Interest income 93,468 30,179 4,019 Interest expense (190,796) (175,628) (125,175) Gain on business interruption insurance settlement — 15,202 — Gain on tariff settlement — — 51,500 Gain on early extinguishment of debt — 604 — Gain (loss) on foreign currency transactions 2,530 (1,637) (2,938) Gain on sale of assets and other 27,370 13,337 98,128 (50,059) (118,203) 37,966 Income before income taxes 2,152,507 3,936,046 787,152 Income tax expense 441,612 894,872 123,898 Net income 1,710,895 3,041,174 663,254 Less net income attributable to noncontrolling interest 121,229 118,506 104,930 Net income attributable to HF Sinclair stockholders $ 1,589,666 $ 2,922,668 $ 558,324 Earnings per share: Basic $ 8.29 $ 14.28 $ 3.39 Diluted $ 8.29 $ 14.28 $ 3.39 Cash dividends declared per common share $ 1.80 $ 1.20 $ 0.35 Average number of common shares outstanding: Basic 190,035 202,566 162,569 Diluted 190,035 202,566 162,569 Other Financial Data Years Ended December 31, 2023 2022 2021 (In thousands) Net cash provided by operating activities $ 2,297,235 $ 3,777,159 $ 406,682 Net cash used for investing activities $ (371,323) $ (774,488) $ (1,327,219) Net cash used for financing activities $ (2,243,882) $ (1,560,759) $ (211,803) Capital expenditures $ 385,413 $ 524,007 $ 813,409 EBITDA (1) $ 2,899,179 $ 4,619,776 $ 1,306,917 62 Table of Content (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 provision, (ii) interest expense, net of interest income and (iii) depreciation and amortization.
Financial information is reviewed on the counterparties in order to review and monitor their financial stability and assess their ongoing ability to honor their commitments under the derivative contracts. We have not experienced, nor do we expect to experience, any difficulty in the counterparties honoring their commitments.
Financial information is reviewed on the counterparties in order to review and monitor their financial stability and assess their ongoing ability to honor their commitments under the derivative contracts.
As of December 31, 2022, we have the following notional contract volumes related to all outstanding derivative contracts used to mitigate commodity price and foreign currency risk (all maturing in 2023): Contract Description Total Outstanding Notional Unit of Measure NYMEX futures (WTI) - short 845,000 Barrels Forward gasoline and diesel contracts - long 425,000 Barrels Foreign currency forward contracts 432,161,594 U.S. dollar Forward commodity contracts (platinum) (1) 36,969 Troy ounces Natural gas price swaps (basis spread) - long 5,110,000 MMBTU Natural gas collar contracts 29,200,000 MMBTU 71 Table of Content (1) Represents an embedded derivative within our catalyst financing arrangements, which may be refinanced or require repayment under certain conditions.
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. 74 Table of Content As of December 31, 2023, we have the following notional contract volumes related to all outstanding derivative contracts used to mitigate commodity price and foreign currency risk (all maturing in 2024): Contract Description Total Outstanding Notional Unit of Measure NYMEX futures (WTI) - short 640,000 Barrels Forward gasoline contracts - long 800,000 Barrels Foreign currency forward contracts 387,613,367 U.S. dollar Forward commodity contracts (platinum) (1) 36,969 Troy ounces Natural gas price swaps (basis spread) - long 6,667,000 MMBTU (1) Represents an embedded derivative within our catalyst financing arrangements, which may be refinanced or require repayment under certain conditions.
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.
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 of other like-kind assets.
In addition, HEP acquired STC’s interests in three pipeline joint ventures for crude gathering and product offtake including: Saddle Butte Pipeline III, LLC (25.06% non-operated interest); Pioneer Investments Corp. (49.995% non-operated interest); and UNEV Pipeline, LLC (“UNEV”) (the 25% non-operated interest not already owned by HEP, resulting in UNEV becoming a wholly owned subsidiary of HEP).
In addition, HEP acquired STC’s interests in three pipeline joint ventures for crude gathering and product offtake including: Saddle Butte Pipeline III, LLC (at the time of closing, 25.06% and currently, a 25.12% non-operated interest); Pioneer Investments Corp.
The EPA released a final rule on June 3, 2022 that, among other things, reduced the volume targets for 2020 and established targets for 2021 and 2022.
These volume requirements are used to determine an obligated party’s renewable volume obligation (“RVO”). The EPA released a final rule on June 3, 2022 that, among other things, reduced the volume targets for 2020 and established targets for 2021 and 2022.
(6) Represents total Mid-Continent and West regions operating expenses, exclusive of long-lived asset impairment charges and depreciation and amortization, divided by sales volumes of refined products produced at our refineries. (7) Represents total Mid-Continent and West regions operating expenses, exclusive of long-lived asset impairment charges and depreciation and amortization, divided by refinery throughput.
(6) Represents total Mid-Continent and West regions operating expenses, exclusive of depreciation and amortization, divided by sales volumes of refined products produced at our refineries. (7) Represents total Mid-Continent and West regions operating expenses, exclusive of depreciation and amortization, divided by refinery throughput. (8) We acquired the Parco and Casper Refineries on March 14, 2022.
Gross Refinery Margins Gross refinery margin per barrel sold increased 146% from $10.89 for the year ended December 31, 2021 to $26.78 for the year ended December 31, 2022 principally due to the increase in the average per barrel sold sales prices during 2022, partially offset by the increase in crude oil and feedstock prices.
Gross Refinery Margins Gross refinery margin per barrel sold decreased 20% from $26.78 for the year ended December 31, 2022 to $21.39 for the year ended December 31, 2023. The decrease was due to lower average per barrel sold sales prices, partially offset by lower crude oil and feedstock prices.
A more detailed discussion of our financial and operating results for the years ended December 31, 2022 and 2021 is presented in the following sections.
In June 2023, the EPA established the targets for 2023 through 2025, which increase RVOs in each of the concurrent years. A more detailed discussion of our financial and operating results for the years ended December 31, 2023 and 2022 is presented in the following sections.
Cost of Products Sold Total cost of products sold increased 101% from $15,256.9 million for the year ended December 31, 2021 to $30,732.4 million for the year ended December 31, 2022, principally due to higher crude oil costs and higher refined product sales volumes, in part due to the acquisition of the Puget Sound Refinery and the Acquired Sinclair Businesses.
Cost of Products Sold Total cost of products sold decreased 15% from $30,732.4 million for the year ended December 31, 2022 to $26,054.9 million for the year ended December 31, 2023, principally due to lower crude oil costs and lower refined product sales volumes.
Operating Expenses Operating expenses, exclusive of depreciation and amortization, increased 54% from $1,517.5 million for the year ended December 31, 2021 to $2,334.9 million for the year ended December 31, 2022 primarily due to our acquisition of the Puget Sound Refinery and the Acquired Sinclair Businesses.
Operating Expenses Operating expenses, exclusive of depreciation and amortization, increased 4% from $2,334.9 million for the year ended December 31, 2022 to $2,438.1 million for the year ended December 31, 2023, primarily due to increased maintenance activities and our acquisition of the Acquired Sinclair Businesses, partially offset by lower natural gas costs.
We supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries.
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 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country.
The HF Sinclair Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. The HF Sinclair Credit Agreement replaced the $1.35 billion senior unsecured revolving credit facility of HollyFrontier, which was terminated on April 27, 2022.
LIQUIDITY AND CAPITAL RESOURCES HF Sinclair Credit Agreement We have a $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the “HF Sinclair Credit Agreement”). The HF Sinclair Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes.
The regulations, in part, require refiners to add annually increasing amounts of “renewable fuels” to their petroleum products or purchase credits, known as RINs, in lieu of such blending. Compliance with RFS regulations significantly increases our cost of products sold, with RINs costs totaling $903.7 million for the year ended December 31, 2022.
The regulations, in part, require refiners to add annually increasing amounts of “renewable fuels” to their petroleum products or purchase credits, known as RINs, in lieu of such blending.
Marketing Operating Data The following table sets forth information about our Marketing operations and includes our Sinclair businesses for the period March 14, 2022 (the date of acquisition) through December 31, 2022.
Marketing Operating Data The following table sets forth information, including non-GAAP performance measures, about our marketing operations and includes our Sinclair branded fuel business for the period March 14, 2022 (the date of acquisition) through December 31, 2023. The marketing gross margin does not include the non-cash effects of depreciation and amortization.
Privately negotiated repurchases from REH Company are also authorized under the share repurchase program, subject to REH Company’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations.
The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. 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.
Market Developments For the year ended December 31, 2022, net income attributable to HF Sinclair stockholders was $2,922.7 million compared to net income of $558.3 million and net loss of $601.4 million for the years ended December 31, 2021, and 2020, respectively.
Market Developments For the year ended December 31, 2023, net income attributable to HF Sinclair stockholders was $1,589.7 million compared to $2,922.7 million and $558.3 million for the years ended December 31, 2022, and 2021, respectively. Gross refining margin per produced barrel sold in our Refining segment for 2023 decreased 20% over the year ended December 31, 2022.
The HF Sinclair Senior Notes were issued in exchange for the HollyFrontier Senior Notes pursuant to a private exchange offer exempt from registration under the Securities Act of 1933, as amended (the Securities Act”).
The New HF Sinclair Senior Notes were issued in exchange for the HEP Senior Notes pursuant to a private exchange offer exempt from registration under the Securities Act of 1933, as amended. This exchange was part of a broader corporate strategy, including the HEP Merger Transaction, which closed on December 1, 2023.
The HF Sinclair Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness.
The New HF Sinclair Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness. Each series of the New HF Sinclair Senior Notes has the same interest rate, interest payment dates, maturity date and redemption terms as the corresponding series of HEP Senior Notes.
At December 31, 2022, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.3 million under the HF Sinclair Credit Agreement.
During the year ended December 31, 2023, HEP had net repayments of $212.5 million under the HEP Credit Agreement. At December 31, 2023, we were in compliance with all of its covenants, had outstanding borrowings of $455.5 million and no outstanding letters of credit under the HEP Credit Agreement.
Additionally, HF Sinclair solicited consents to adopt certain amendments to the indenture governing the HollyFrontier Senior Notes. 64 Table of Content In connection with the exchange offers and consent solicitations, HollyFrontier amended the indenture governing the HollyFrontier Senior Notes to eliminate (i) substantially all of the restrictive covenants, (ii) certain of the events which may lead to an “Event of Default”, (iii) the SEC reporting covenant and (iv) with respect to the HollyFrontier 2.625% Senior Notes and the HollyFrontier 4.500% Senior Notes only, the offer to repurchase such senior notes upon certain change of control triggering events.
In connection with the exchange offers, HEP amended the indenture governing the HEP Senior Notes to eliminate (i) substantially all of the restrictive covenants, (ii) certain of the events which may lead to an “Event of Default,” (iii) the SEC reporting covenant and (iv) the requirement of HEP to offer to purchase the HEP Senior Notes upon a change of control.
During the years ended December 31, 2022 and 2021, we recognized a lower of cost or market inventory valuation adjustment charge of $52.4 million and a benefit of $310.1 million, respectively. Within our Lubricants and Specialty Products segment, FIFO impact was a benefit of $77.6 million and $86.6 million for the years ended December 31, 2022 and 2021, respectively.
During the years ended December 31, 2023 and 2022, we recognized a lower of cost or market inventory valuation adjustment charge of $270.4 million and $52.4 million, respectively.
The year-over-year increase in the effective tax rate is principally due to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes.
Our effective tax rates were 20.5% and 22.7% for the years ended December 31, 2023 and 2022, respectively. The year-over-year decrease in the effective tax rate is principally due to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes and other non-taxable permanent differences.
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 goodwill testing. In performing our impairment test of goodwill, we developed cash flow forecasts for each of our reporting units.
The excess of the fair values of the reporting units over their respective carrying values ranged from 23% to 91%. 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 goodwill testing.
Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to December 31, 2022 includes the combined business operations of HollyFrontier and the Acquired Sinclair Businesses. 53 Table of Content OVERVIEW We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products.
Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to December 31, 2023 includes the combined business operations of HollyFrontier and the Acquired Sinclair Businesses.
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. 67 Table of Content HEP Each year the Holly Logistic Services, L.L.C. board of directors approves HEP’s annual capital budget, which specifies capital projects that HEP management is authorized to undertake.
Additionally, 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.
In addition, HEP paid distributions of $75.4 million to noncontrolling interests and received contributions from noncontrolling interests of $23.2 million. 68 Table of Content Contractual Obligations and Commitments The following table presents our long-term contractual obligations as of December 31, 2022 in total and by period due beginning in 2023.
Contractual Obligations and Commitments The following table presents our long-term contractual obligations as of December 31, 2023 in total and by period due beginning in 2024.
This increase was due principally to depreciation and amortization attributable to the acquisition of the Puget Sound Refinery, the Acquired Sinclair Businesses and newly capitalized projects related to our renewable diesel units.
This increase was principally due to depreciation and amortization attributable to capitalized turnaround costs, capitalized improvement projects and the Acquired Sinclair Businesses.
The increase in operating cash flows was primarily due to the increase in gross refinery margins, partially offset by higher operating expenses. Changes in working capita l increased operatin g cash flows by $28.7 million and decreased operating cash flows by $264.9 million for the years ended December 31, 2022 and 2021, respectively.
Changes in working capita l decreased operatin g cash flows by $119.1 million and increased o perating cash flows by $28.7 million for the years ended December 31, 2023 and 2022, respectively.
In June 2022, our Board of Directors determined that privately negotiated repurchases from REH Company (formerly known as The Sinclair Companies) are also authorized under the share repurchase program, subject to REH Company’s interest in selling its shares and other limitations.
Privately negotiated repurchases from REH Company were also authorized under the September 2022 Share Repurchase Program, subject to REH Company’s interest in selling its shares and other limitations. As of August 15, 2023, we had repurchased $995.0 million u nder the September 2022 Share Repurchase Program.
Gain on Sale of Assets and Other For the year ended December 31, 2021, we recorded an $86.0 million gain related to the sale of real property in Mississauga, Ontario, and HEP recorded a $5.3 million gain related to the sale of certain pipeline assets.
Gain on Sale of Assets and Other For the year ended December 31, 2023, we recorded a $15.0 million gain from the settlement of a preservation of property claim related to winter storm Uri that occurred in the first quarter of 2021.
On September 21, 2022, our Board of Directors approved a new $1.0 billion share repurchase program, which, effective September 26, 2022, replaced all existing share repurchase programs, including $25.0 million remaining under the previously existing $1.0 billion share repurchase program. This new share repurchase program authorizes us to repurchase common stock in the open market or through privately negotiated transactions.
On August 15, 2023, our Board of Directors approved a new $1.0 billion share repurchase program (the “ August 2023 Share Repurchase Program”), which replaced all existing share repurchase programs, including the $5.0 million remaining authorization under the September 2022 Share Repurchase Program.
During the year ended December 31, 2022, we made open market and privately negotiated purchases of 25,716,042 shares for $1,313.0 million under our share repurchase programs, of which 14,407,274 shares were repurchased for $750.0 million pursuant to privately negotiated repurchases from REH Company.
The August 2023 Share Repurchase Program may be discontinued at any time by our Board of Directors. During the year ended December 31, 2023, we made open market and privately negotiated purchases of 18,779,880 shares for $974.5 million under our share repurchase programs, of which 15,515,302 shares were repurchased for $810.6 million pursuant to privately negotiated repurchases from REH Company.
Under the RFS regulations, the EPA is required to set annual volume targets of renewable fuels that obligated parties, such as us, must blend into petroleum-based transportation fuels consumed in the United States. These volume requirements are used to determine an obligated party’s renewable volume obligation (“RVO”).
Compliance with RFS regulations significantly increases our cost of products sold, with RINs costs totaling $790.8 million for the year ended December 31, 2023. 60 Table of Content Under the RFS regulations, the EPA is required to set annual volume targets of renewable fuels that obligated parties, such as us, must blend into petroleum-based transportation fuels consumed in the United States.
HollyFrontier Bond Exchange and HF Sinclair Senior Notes On April 27, 2022, HF Sinclair completed its offers to exchange any and all outstanding HollyFrontier 2.625% senior notes maturing October 2023 (the “HollyFrontier 2.625% Senior Notes”), 5.875% senior notes maturing April 2026 (the “HollyFrontier 5.875% Senior Notes”) and 4.500% senior notes maturing October 2030 (the “HollyFrontier 4.500% Senior Notes”) (and, collectively, the “HollyFrontier Senior Notes”) for 2.625% senior notes maturing October 2023 (the “HF Sinclair 2.625% Senior Notes”), 5.875% senior notes maturing April 2026 (the “HF Sinclair 5.875% Senior Notes”) and 4.500% senior notes maturing October 2030 (the “HF Sinclair 4.500% Senior Notes”) (and, collectively, the “HF Sinclair Senior Notes”) to be issued by HF Sinclair and cash.
On December 4, 2023, we completed our offers to exchange any and all outstanding HEP 5.000% senior notes maturing February 2028 (the “HEP 5.000% Senior Notes”) and HEP 6.375% senior notes maturing April 2027 (the “HEP 6.375% Senior Notes”) (and, collectively, the “HEP Senior Notes”) for HF Sinclair 5.000% senior notes maturing February 2028 (the “HF Sinclair 5.000% Senior Notes”) and HF Sinclair 6.375% senior notes maturing April 2027 (the “HF Sinclair 6.375% Senior Notes”) (and, collectively, the “New HF Sinclair Senior Notes”) to be issued by HF Sinclair with registration rights and cash.
The pipeline resumed operations during the third quarter of 2022 and remediation efforts are underway. Interest Income Interest income was $30.2 million for the year ended December 31, 2022 compared to $4.0 million for the year ended December 31, 2021. The increase in interest income was primarily due to higher interest rates on cash investments.
The increase in interest income was primarily due to the increase in the average cash balance and higher interest rates on cash investments. Interest Expense Interest expense was $190.8 million for the year ended December 31, 2023 compared to $175.6 million for the year ended December 31, 2022.
Expected capital and turnaround cash spending for 2023 is as follows: Expected Cash Spending Range (In millions) HF Sinclair Refining $ 250.0 $ 280.0 Renewables 25.0 35.0 Lubricants and Specialty Products 35.0 50.0 Marketing 20.0 30.0 Corporate 50.0 80.0 Turnarounds and catalyst 530.0 630.0 Total HF Sinclair 910.0 1,105.0 HEP Maintenance 25.0 35.0 Expansion and joint venture investment 5.0 10.0 Total HEP 30.0 45.0 Total $ 940.0 $ 1,150.0 Cash Flows – Financing Activities Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For the year ended December 31, 2022, our net cash flows used for financing activities were $1,560.8 million.
Expected capital and turnaround cash spending for 2024 is as follows: Expected Cash Spending (In millions) HF Sinclair Refining $ 235.0 Renewables 5.0 Lubricants & Specialties 40.0 Marketing 10.0 Midstream 30.0 Corporate 65.0 Turnarounds and catalyst 415.0 Total sustaining 800.0 Growth capital 75.0 Total capital $ 875.0 72 Table of Content Cash Flows – Financing Activities Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 For the year ended December 31, 2023, our net cash flows used for financing activities were $2,243.9 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDue to rounding of reported numbers, some amounts may not calculate exactly. 73 Table of Content Reconciliation of average refining net operating margin per produced barrel sold to refinery gross margin to refining sales and other revenues Years Ended December 31, 2022 2021 2020 (Dollars in thousands, except per barrel amounts) Refining segment sales and other revenues $ 34,412,909 $ 16,358,558 $ 9,539,189 Refining segment cost of products sold (exclusive of lower of cost or market inventory adjustment) 28,270,195 14,673,062 8,439,680 Lower of cost or market inventory adjustment — (318,353) 82,214 6,142,714 2,003,849 1,017,295 Add (subtract) lower of cost or market inventory adjustment — (318,353) 82,214 Less Cheyenne Refinery sales and other revenues — — (501,589) Less Cheyenne Refinery cost of products sold — — 447,628 Refining gross margin $ 6,142,714 $ 1,685,496 $ 1,045,548 Refining segment operating expenses $ 1,815,931 $ 1,090,424 $ 988,045 Less Cheyenne Refinery operating expenses — — (121,151) $ 1,815,931 $ 1,090,424 $ 866,894 Produced barrels sold (BPD) 628,340 424,100 391,670 Refinery gross margin per produced barrel sold $ 26.78 $ 10.89 $ 7.29 Less average refinery operating expenses per produced barrel sold 7.92 7.04 6.05 Net operating margin per produced barrel sold $ 18.86 $ 3.85 $ 1.24 Reconciliation of renewables operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Biggest changeOther companies in our industry may not calculate these performance measures in the same manner. 76 Table of Content Reconciliation of average refining net operating margin per produced barrel sold to refinery gross margin to refining sales and other revenues Years Ended December 31, 2023 2022 2021 (Dollars in thousands, except per barrel amounts) Refining segment sales and other revenues $ 28,672,604 $ 34,412,909 $ 16,358,558 Refining segment cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) 23,969,557 28,270,195 14,673,062 Lower of cost or market inventory valuation adjustment 220,558 — (318,353) 4,482,489 6,142,714 2,003,849 Add (subtract) lower of cost or market inventory valuation adjustment 220,558 — (318,353) Refinery gross margin $ 4,703,047 $ 6,142,714 $ 1,685,496 Refining segment operating expenses $ 1,946,958 $ 1,815,931 $ 1,090,424 Produced barrels sold (BPD) 602,280 628,340 424,100 Refinery gross margin per produced barrel sold $ 21.39 $ 26.78 $ 10.89 Less average refinery operating expenses per produced barrel sold 8.86 7.92 7.04 Net operating margin per produced barrel sold $ 12.53 $ 18.86 $ 3.85 Reconciliation of renewables operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA, is calculated as net income (loss) attributable to HF Sinclair stockholders plus (i) income tax provision, (ii) interest expense, net of interest income and (iii) depreciation and amortization.
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 provision, (ii) interest expense, net of interest income and (iii) depreciation and amortization.
Net operating margin per produced gallon sold is the difference between renewables gross margin and renewables operating expenses per produced gallon sold. These two margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments and depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of operations.
Net operating margin per produced gallon sold is the difference between renewables gross margin and renewables operating expenses per produced gallon sold. These two margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments and depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of income.
Marketing gross margin per gallon sold is total Marketing segment revenues less total Marketing segment cost of products sold divided by sales volumes of Marketing products sold. This margin does not include the non-cash effects of depreciation and amortization. This component performance measure can be reconciled directly to our consolidated statements of operations.
Marketing gross margin per gallon sold is total Marketing segment revenues less total Marketing segment cost of products sold divided by sales volumes of marketing products sold. This margin does not include the non-cash effects of depreciation and amortization. This component performance measure can be reconciled directly to our consolidated statements of income.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk See “Risk Management” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 72 Table of Content Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles Reconciliations of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to amounts reported under generally accepted accounting principles in financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk See “Risk Management” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles Reconciliations of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to amounts reported under generally accepted accounting principles in financial statements.
These two margins do not include the non-cash effects of long-lived asset impairment charges, lower of cost or market inventory valuation adjustments or depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of operations. Other companies in our industry may not calculate these performance measures in the same manner.
These two margins do not include the non-cash effects of long-lived asset impairment charges, lower of cost or market inventory valuation adjustments or depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of income.
Other companies in our industry may not calculate these performance measures in the same manner. 74 Table of Content Reconciliation of renewables gross margin and operating expenses to gross margin per produced gallon sold and net operating margin per produced gallon sold Year Ended December 31, 2022 Renewables segment sales and other revenues $ 1,015,499 Renewables segment cost of products sold 974,167 Lower of cost or market inventory adjustment 52,412 (11,080) Add lower of cost or market inventory adjustment 52,412 Renewables gross margin $ 41,332 Renewables operating expenses $ 111,974 Produced gallons sold (in thousand gallons) 136,204 Renewables gross margin per produced gallon sold $ 0.30 Less operating expenses per produced gallon sold 0.82 Net operating margin per produced gallon sold $ (0.52) Reconciliation of Marketing operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Other companies in our industry may not calculate these performance measures in the same manner. 77 Table of Content Reconciliation of renewables gross margin and operating expenses to gross margin per produced gallon sold and net operating margin per produced gallon sold Years Ended December 31, 2023 2022 (In thousands, except for per gallon amounts) Renewables segment sales and other revenues $ 1,188,990 $ 1,015,499 Renewables segment cost of products sold 1,080,919 974,167 Lower of cost or market inventory valuation adjustment 49,861 52,412 58,210 (11,080) Add lower of cost or market inventory valuation adjustment 49,861 52,412 Renewables gross margin $ 108,071 $ 41,332 Renewables operating expenses $ 109,056 $ 111,974 Produced gallons sold (in thousand gallons) 215,510 136,204 Renewables gross margin per produced gallon sold $ 0.50 $ 0.30 Less operating expenses per produced gallon sold 0.51 0.82 Net operating margin per produced gallon sold $ (0.01) $ (0.52) Reconciliation of marketing operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Reconciliation of Marketing gross margin to gross margin per gallon sold Year Ended December 31, 2022 Marketing segment sales and other revenues $ 3,911,922 Marketing segment cost of products sold 3,845,625 Marketing gross margin $ 66,297 Sales volumes (in thousand gallons) 1,118,444 Marketing segment gross margin per gallon sold $ 0.06 75 Table of Content
Reconciliation of marketing gross margin to gross margin per gallon sold Years Ended December 31, 2023 2022 Marketing segment sales and other revenues $ 4,146,292 $ 3,911,922 Marketing segment cost of products sold 4,050,759 3,845,625 Marketing gross margin $ 95,533 $ 66,297 Sales volumes (in thousand gallons) 1,441,607 1,118,444 Marketing segment gross margin per gallon sold $ 0.07 $ 0.06 78 Table of Content
Years Ended December 31, 2022 2021 2020 (In thousands) Net income (loss) attributable to HF Sinclair stockholders $ 2,922,668 $ 558,324 $ (601,448) Add (subtract) income tax provision 894,872 123,898 (232,147) Add interest expense 175,628 125,175 126,527 Subtract interest income (30,179) (4,019) (7,633) Add depreciation and amortization 656,787 503,539 520,912 EBITDA $ 4,619,776 $ 1,306,917 $ (193,789) Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Years Ended December 31, 2023 2022 2021 (In thousands) Net income attributable to HF Sinclair stockholders $ 1,589,666 $ 2,922,668 $ 558,324 Add interest expense 190,796 175,628 125,175 Subtract interest income (93,468) (30,179) (4,019) Add income tax expense 441,612 894,872 123,898 Add depreciation and amortization 770,573 656,787 503,539 EBITDA $ 2,899,179 $ 4,619,776 $ 1,306,917 Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Removed
Below are reconciliations to our consolidated statements of operations for refinery net operating and gross margin and operating expenses, in each case averaged per produced barrel sold.

Other DINO 10-K year-over-year comparisons