HF Sinclair Corporation Q4 FY2025 earnings call

• Franklin Myers temporarily serves as CEO. Audit Committee of the Board is assessing disclosure processes, emphasizing it relates to disclosure process not numbers. Expect to file 10-K timely. - Full-year adjusted EBITDA $2,300,000,000, fourth quarter $564,000,000. Refining affected by seasonality and turnarounds, midstream, marketing and lubricants segments contributed positively. Returned $230,000,000 to shareholders in fourth quarter. Returned over $724,000,000 to shareholders in 2025. Declared quarterly dividend of $0.50 per share. - Refining business successfully completed major turnarounds in 2025. Progressing vacuum furnace project at El Dorado refinery. - Marketing business had record EBITDA in 2025, grew branded footprint. Formed joint venture. - Lubricants and specialties business had EBITDA in 2025, integrating acquired business. - Midstream business had record adjusted EBITDA in 2025, planning to expand pipeline network.

Refining segment: Fourth quarter adjusted EBITDA was $403,000,000. Full-year adjusted EBITDA was $2,300,000,000. Affected by seasonal weakness in refining, margin weakness in core markets, refinery turnarounds and unplanned events. Full-year throughput was a record 652,000 barrels per day, operating costs down $87,000,000 year over year. Midstream segment: Fourth quarter adjusted EBITDA was $114,000,000. Full-year record adjusted EBITDA was $459,000,000. Planning to expand refined products pipeline network in Western U.S., targeting FID for phase one by mid-year. Marketing segment: Fourth quarter EBITDA was $22,000,000. Full-year record EBITDA was $103,000,000, up 37%. Net added 117 branded sites. Announced joint venture Green Trail Fuels LLC with U-Pop Holdings. Lubricants and Specialties segment: Fourth quarter adjusted EBITDA was $43,000,000. Full-year was $261,000,000. Affected by lower sales volumes, refinery turnaround and base oil margin weakness. Integrating acquired Industrial Oils Unlimited business.

Full-year 2026 capital spending: expected to spend approximately $650,000,000 in sustaining capital, down $125,000,000 from 2025, and $125,000,000 in growth capital. Refining segment in 2026 expected to run between 585,000 - 615,000 barrels per day of crude oil, considering planned turnarounds at Puget Sound and Woods Cross refineries.

Audit Committee assessing disclosure processes may affect 10-K filing, but financial statements and disclosures are reliable. Market factors like crude oil price fluctuations and product margin changes may impact financial performance. Operational risks such as refinery turnaround accidents and pipeline project execution issues.

Q: Any color on management change and audit?

A: No further comment today, view as buying opportunity, will update when having additional information.

Q: Color on small refinery exemptions' impact on profit and 2026 outlook?

A: Intend to continue participate, EPA follows formulaic approach, cannot comment on further benefit, but had significant EBITDA and cash benefit in this quarter and year.

Q: Region gross margin of refining segment excluding small refinery exemptions?

A: Crack environment strong in first half of quarter, weakened in second half, maintenance in high margin period, after maintenance needed to liquidate inventory in lower market environment, still bullish on refining outlook.

Q: Tangible benefits of marketing JV?

A: Accelerate brand growth, take advantage of rack-to-retail and backcourt markets, capture synergies in refining and midstream, is growth platform.

Q: Will company strategy change after management change?

A: Business as usual, no further comment on Tim's leave.

Q: Regional breakdown of small refinery exemptions' impact on margin?

A: Discuss offline, follow-up call to show breakdowns.

Q: View on economic recovery path of Mid-Con refining business?

A: Tightness will return in long-term, winter storm affected short-term demand and inventory, diesel and jet fuel strong, Mid-Con weaker early in year, normalize with driving season.

Q: Capital expenditure and earnings contribution of Green Trail Fuels JV?

A: Efficient use of capital, has attractive multiples, brings brand footprint and rack-to-retail economic advantages.

Q: Cumulative impact and ongoing benefit of small refinery exemptions?

A: Full-year cash impact near $300,000,000, significant in fourth quarter, total EBITDA impact in fourth quarter $313,000,000, full-year $485,000,000, cash contribution near $300,000,000 in fourth quarter. Net working capital affected by inventory building and accounts payable in declining price environment.

Q: Drivers of fourth quarter weakness in lubricants and ongoing progress?

A: Seasonal customer destocking, energy, feedstock costs and quality issues in Mississauga facility, slowdown in specialty side, finished business healthy, future watch specialty side slowdown and base oil improvement.

Q: Progress of midstream westward expansion pipeline project?

A: Progressing through project delivery framework, working on economic assessment and execution, target FID by mid-year.

Q: Reason for bullish view on refining margins?

A: Global supply-demand balance shortage in 2026, U.S. market tightness, favorable differentials, exposure to PAD 5 region,看好 2026 refining outlook.

Q: Relevance to ADM event and involvement of SEC or DOJ?

A: Cannot comment, Audit Committee and Board comfortable with disclosures.

Q: Small refinery exemptions application status of various refineries?

A: Submitted petitions for all refineries, waiting for EPA deliberation.

Q: Refining reliability, integration, operating cost improvement progress and commercial improvement?

A: Operating costs continuing to improve, working towards $7.25 per barrel goal, commercial progress through joint ventures, pipeline projects, etc., pursuing capture rate improvement.

Q: Trend of renewable diesel business in first quarter and EBITDA margin?

A: Renewable diesel business near breakeven in tough market conditions, RIN values up, feedstock strategy improved, operating efficiency enhanced, Artesia refinery catalyst change completed,看好 financial outcomes.

Q: Impact of Utah gasoline tax proposal on company?

A: Actively communicating with legislatures, not in favor of taxing, discussing through projects to solve supply security and fuel cost issues.

Q: Impact of RVO on crack and capture of RIN after marketing business expansion?

A: Difficult to pass RVO impact in oversupplied market,有望随市场收紧体现, integration and brand layout help pass part of it.

Q: Reason for early turnaround of Puget Sound refinery?

A: Normal maintenance cycle, splitting maintenance units to ensure success, fall turnaround executed successfully, this small turnaround closes north side units this year.