01—Abstract
Summary
Summary of the 10-K filed February 28, 2023. Cited figures are marked; the original filing is the authoritative source.
HF Sinclair Corporation (NYSE: DINO) reported net income attributable to HF Sinclair stockholders of $2,922.7 milliona, or $14.28 per diluted share, for 2022, compared with $558.3 million ($3.39 per share) in 2021 and a net loss of $601.4 million in 2020.
Sales and other revenues rose to $38.20 billionb from $18.39 billion, principally reflecting higher sales prices, higher refined product volumes, and the acquisitions of the Puget Sound Refinery and the Acquired Sinclair Businesses. Refinery gross margin per produced barrel sold increased to $26.78 from $10.89. Net cash provided by operating activities was $3.78 billion, compared with $406.7 million in 2021.
The March 14, 2022 Sinclair Transactions added the Parco and Casper refineries, the Sinclair renewable diesel unit, roughly 1,300 Sinclair-branded stations plus licensing at more than 300 locations, and midstream assets acquired by Holly Energy Partners. REH Company received 60,230,036 HF Sinclair shares, and at February 15, 2023 owned approximately 20.8% of common stock. Capital expenditures were $524.0 millionc in 2022, and 2023 expected total cash spending is $940.0 million to $1,150.0 million.
The company repurchased 25,716,042 shares for $1,313.0 milliond during 2022, and the Board declared a quarterly dividend of $0.45 per share, up from $0.40. The filing also discloses pending matters, including an EPA and DOJ compliance review at the Artesia refinery with no penalties demanded to date, and legal challenges to EPA small refinery exemption decisions, for which the company states it is too early to predict outcomes. Management's assessment of internal control excluded the Acquired Sinclair Businesses, which represented about 17% of total assets and 26% of revenues.
02—Key points
Key Highlights
- Net income attributable to HF Sinclair stockholders was $2,922.7 million ($14.28 per diluted share) for 2022, up from $558.3 million ($3.39 per share) in 2021.
- Sales and other revenues were $38.20 billion in 2022, versus $18.39 billion in 2021, driven by higher sales prices, higher volumes and the Puget Sound and Sinclair acquisitions.
- Refinery gross margin per produced barrel sold was $26.78 in 2022, compared with $10.89 in 2021; the Refining segment's gross margin per barrel grew 146%.
- Net cash provided by operating activities was $3.78 billion in 2022, compared with $406.7 million in 2021.
- Shareholder returns in 2022 included $1,313.0 million of share repurchases and $255.9 million of dividends; the Board declared a $0.45 quarterly dividend, up from $0.40, and authorized a $1.0 billion repurchase program.
- The Sinclair Transactions added the Parco and Casper refineries, the Sinclair renewable diesel unit, and HEP's acquisition of STC, with 2023 expected total cash spending of $940.0 million to $1,150.0 million.
- Long-term debt was $2.95 billion at year end, and the standalone liquidity was approximately $3.30 billion at December 31, 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, HF Sinclair kept $0.08.
- Revenue$38.20B100.0%
- Cost of revenue−$30.68B80.3%
- Gross profit$7.52B19.7%
- Operating costs−$3.47B9.1%
- Operating income$4.05B10.6%
- Interest, other & tax−$1.13B3.0%
- Net income$2.92B7.7%
Where FY2022 revenue went
$38.20B- Cost of revenue: $30.68B, 80% of revenue
- Net income: $2.92B, 7.7% of revenue
- SG&A: $427.0M, 1.1% of revenue
- Other operating costs: $3.04B, 8.0% of revenue
- Interest, other & tax: $1.13B, 3.0% of revenue
Kept 7.7% as net incomeNet income $2.92B · 7.7%SG&A $427.0M · 1.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 28, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $38.20B$18.39B | +107.8% |
| Cost of Revenue | $30.68B$15.57B | +97.1% |
| Gross Profit | $7.52B$2.82B | +166.6% |
| SG&A Expenses | $427.00M$362.01M | +18.0% |
| Operating Expenses | $34.15B$17.64B | +93.6% |
| Operating Income | $4.05B$749.19M | +441.1% |
| Interest Expense | $175.63M$125.17M | +40.3% |
| Net Income | $2.92B$558.32M | +423.5% |
| EPS (Basic) | $14.28$3.39 | +321.2% |
| EPS (Diluted) | $14.28$3.39 | +321.2% |
| Shares Outstanding (Basic) | 202.57M162.57M | +24.6% |
| Shares Outstanding (Diluted) | 202.57M162.57M | +24.6% |
05—Questions
Frequently Asked Questions
How did HF Sinclair's profitability change in 2022?
Net income attributable to HF Sinclair stockholders rose to $2,922.7 million, or $14.28 per diluted share, from $558.3 million, or $3.39 per share, in 2021. The filing attributes the increase principally to stronger product demand, higher sales prices, the Puget Sound Refinery and Acquired Sinclair Businesses acquisitions, and higher refinery gross margins.
What did the Sinclair Transactions add to the company?
On March 14, 2022, HF Sinclair acquired REH Company's refining, branded marketing, renewables and midstream businesses. These include the Parco and Casper refineries in Wyoming, the Sinclair renewable diesel unit, more than 1,300 Sinclair-branded stations plus licensing at more than 300 additional locations, and about 1,200 miles of pipeline acquired by Holly Energy Partners.
How much did the company return to shareholders in 2022?
During 2022 the company purchased 25,716,042 shares for $1,313.0 million under its share repurchase programs and paid $255.9 million in dividends, which were $1.20 per share declared for the year. On February 23, 2023, the Board declared a quarterly dividend of $0.45 per share, an increase from $0.40.
What are the main regulatory and legal matters disclosed?
The filing discloses an ongoing discussion with the EPA, DOJ and New Mexico Environment Department about Clean Air Act compliance at the Artesia refinery, where no penalties have been demanded. It also describes legal challenges to EPA decisions reversing small refinery exemptions for the Woods Cross and Cheyenne refineries. The company states it is too early to predict the outcome of these matters.
How is REH Company positioned as a shareholder?
As of February 15, 2023, REH Company owned approximately 20.8% of HF Sinclair's common stock. Approximately 30,111,018 shares issued to REH parties remain subject to lock-up, with one-half released on the first anniversary of the closing and the remainder 15 months after closing. REH parties may nominate board members and the filing notes possible influence over management and the market price of the stock.
06—Continue