HOUSTON, Feb. 23 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced results for the quarter ended December 31, 2004.
Fourth quarter earnings, excluding the impact of a $9.2 million (1) (after-
tax) charge related to the Company's early debt retirement, would have been
approximately $9.5 million, or $0.34 per diluted share. Including this
charge, Frontier reported net income of $239,000, or $0.01 per diluted share.
Net income for the fourth quarter of 2003 was $4.1 million, or $0.15 per
diluted share.
For the twelve months ended December 31, 2004, Frontier's net income
excluding the early debt retirement charge totaled $79.0 million, or $2.88 per
diluted share, compared to net income of $3.2 million, or $0.12 per diluted
share, for the twelve-month period in 2003. Including the early debt
retirement charge, net income for the twelve-month period ended 2004 totaled
$69.8 million, or $2.55 per diluted share.
The fourth quarter 2004 results benefited primarily from wide crude oil
differentials and strong diesel crack spreads. Frontier's light/heavy crude
oil differential averaged $13.34 per barrel for the fourth quarter 2004,
significantly higher than the average $7.66 per barrel in the same period of
2003. The WTI/WTS (sweet/sour) crude oil differential averaged $5.82 per
barrel for the fourth quarter 2004, more than double the $2.71 per barrel
average in the fourth quarter of 2003. The diesel crack spread improved to an
average of $9.84 per barrel in the fourth quarter of 2004 compared to an
average of $5.57 per barrel for the fourth quarter of 2003. The fourth
quarter 2004 was negatively impacted by the gasoline crack spread averaging
$3.71 per barrel in the fourth quarter 2004, compared to the $5.22 per barrel
average earned in the same period of 2003.
Frontier's Chairman, President and CEO, James Gibbs, commented, "We are
delighted with the fourth quarter and year-end 2004 results. Crude oil
differentials continue to be a significant competitive advantage for Frontier
and with the continued worldwide increase of heavy and sour crude oil
production, we expect wide crude oil differentials for several years to come.
The future bodes well for refiners like Frontier with complex plants that can
process these lower cost feedstocks. Our outstanding 2004 results allowed us
to accomplish two of our previously stated strategic goals, increasing our
quarterly dividend as well as refinancing our long-term debt. In September of
2004 our Board of Directors increased our dividend from $0.20 to $0.24
annually and we hope to announce another increase in 2005. Also in the fourth
quarter, we not only reduced our debt outstanding by more than $50 million, we
also decreased our long-term interest rate to 6 5/8%, which should lead to an
approximate $10 million annual reduction in interest expense going forward."
Frontier's year-end cash balance was $124.4 million and the Company had no
borrowings under its revolving credit facility. As of December 31, 2004,
Frontier's debt to total capitalization was 38.5% and net debt (debt minus
cash) to total capitalization was 9.6%.
The fourth quarter 2004 results include an after-tax inventory loss of
approximately $8.1 million, or $0.29 per diluted share, compared to a gain of
$6.7 million, or $0.25 per diluted share, for the same period of 2003. The
twelve months ended December 31, 2004 include an after-tax inventory gain of
$19.8 million, or $0.72 per share, compared to a gain of $4.4 million, or
$0.16 per share, for the twelve-month period ended December 31, 2003.
Conference Call
A conference call is scheduled for today, February 23, 2005, at 11:00 a.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 289-0746. For those individuals outside the United States, please
call (913) 981-5573. A recorded replay of the call may be heard through
March 9, 2005 by dialing (888) 203-1112 (international callers (719) 457-0820)
and entering the code 7142683. In addition, the real-time conference call and
a recorded replay will be webcast by PR Newswire. To access the call or the
replay via the Internet, go to http://www.frontieroil.com and register from
the Investor Relations page of the site.
Frontier operates a 110,000 barrel-per-day refinery located in El Dorado,
Kansas, and a 46,000 barrel-per-day refinery located in Cheyenne, Wyoming, and
markets its refined products principally along the eastern slope of the Rocky
Mountains and in other neighboring plains states. Information about the
Company may be found on its web site http://www.frontieroil.com .
This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements are those concerning
strategic plans, expectations and objectives for future operations. All
statements, other than statements of historical facts, included in this press
release that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future are forward-
looking statements. These statements are based on certain assumptions made by
the Company based on its experience and perception of historical trends,
current conditions, expected future developments and other factors it believes
are appropriate in the circumstances. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the control
of the Company. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.
FRONTIER OIL CORPORATION
Twelve Months Three Months
December 31 December 31
2004 2003 2004 2003
INCOME STATEMENT DATA
($000's except per share)
Revenues $2,861,716 $2,170,503 $803,404 $542,943
Raw material, freight
and other costs 2,432,461 1,860,795 712,610 459,394
Refining operating
expenses, excluding
depreciation 219,781 200,383 57,657 51,324
Selling and general
expenses, excluding
depreciation 29,893 19,890 8,972 4,964
Merger termination and
legal costs 3,824 8,739 4 4,786
Operating income before
depreciation 175,757 80,696 24,161 22,475
Depreciation and
amortization 32,208 28,832 8,280 7,645
Operating income 143,549 51,864 15,881 14,830
Interest expense and
other financing
costs (1) 37,573 28,746 19,955 7,997
Interest income (1,716) (1,109) (826) (202)
Gain on involuntary
conversion of assets (4,411) --- (3,817) ---
Merger financing
termination costs, net --- 18,039 --- 407
Provision for income
taxes 42,339 2,956 330 2,526
Net income $69,764 $3,232 $239 $4,102
Net income per diluted
share $2.55 $0.12 $0.01 $0.15
Average shares
outstanding (000's) 27,401 26,991 27,707 27,068
OTHER FINANCIAL DATA
($000's)
Adjusted EBITDA (2) $180,168 $80,696 $27,978 $22,475
Cash flow before changes
in working capital 139,280 19,917 15,058 (11,072)
Working capital changes 38,619 (25,922) 57,385 (24,250)
Net cash provided by
(used in) operating
activities 177,899 (6,005) 72,443 (35,322)
Net cash used in
investing activities (43,107) (34,300) (10,057) (7,544)
OPERATIONS
Consolidated
Operations (bpd)
Total charges 164,757 165,628 164,581 166,347
Gasoline yields 82,944 83,449 85,997 87,937
Diesel and jet fuel
yields 53,093 53,156 54,898 53,059
Total sales 165,989 165,667 169,518 169,233
Refinery operating
margins information
($ per bbl)
Refined products revenue $47.27 $35.88 $51.41 $34.95
Raw material, freight
and other costs 40.04 30.77 45.69 29.51
Refinery operating
expenses, excluding
depreciation 3.62 3.31 3.70 3.30
Refinery depreciation
and amortization 0.53 0.47 0.58 0.49
Light/Heavy crude oil
differential ($ per bbl) $9.90 $7.10 $13.34 $7.66
WTI/WTS crude oil
differential ($ per bbl) 3.74 2.68 5.82 2.71
BALANCE SHEET DATA ($000's)
Cash, including cash
equivalents (a) $124,389 $64,520
Working capital 97,261 38,621
Short-term and current
debt (b) --- 45,750
Total long-term debt (c) 150,000 168,689
Shareholders' equity (d) 240,113 169,277
Net debt to book
capitalization
(b+c-a)/(b+c-a+d) 9.6% 47.0%
(1) Interest expense and other financing costs for twelve months and
three months ended December 31, 2004 includes $14.9 million
($9.2 million after-tax) in costs related to the redemption of
11 3/4% senior notes.
(2) Adjusted EBITDA represents income before interest expense, interest
income, merger financing termination costs (includes both interest
expense and income), income tax, and depreciation and amortization.
Adjusted EBITDA is not a calculation based upon generally accepted
accounting principles; however, the amounts included in the adjusted
EBITDA calculation are derived from amounts included in the
consolidated financial statements of the Company. Adjusted EBITDA
should not be considered as an alternative to net income or
operating income, as an indication of operating performance of the
Company or as an alternative to operating cash flow as a measure of
liquidity. Adjusted EBITDA is not necessarily comparable to
similarly titled measures of other companies. Adjusted EBITDA is
presented here because it enhances an investor's understanding of
Frontier's ability to satisfy principal and interest obligations
with respect to Frontier's indebtedness and to use cash for other
purposes, including capital expenditures. Adjusted EBITDA is also
used for internal analysis and as a basis for financial covenants.
Frontier's adjusted EBITDA for the twelve and three months ended
December 31, 2004 and 2003 is reconciled to net income as follows:
Twelve Months Three Months
December 31 December 31
2004 2003 2004 2003
(In thousands)
Net income $69,764 $3,232 $239 $4,102
Add provision benefit
for income taxes 42,339 2,956 330 2,526
Add interest expense and
other financing costs 37,573 28,746 19,955 7,997
Subtract interest income (1,716) (1,109) (826) (202)
Add merger financing
termination costs, net --- 18,039 --- 407
Add depreciation and
amortization 32,208 28,832 8,280 7,645
Adjusted EBITDA $180,168 $80,696 $27,978 $22,475
SOURCE Frontier Oil Corporation
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Related links:
http://www.frontieroil.com
CONTACT:
Doug Aron of Frontier Oil Corporation,
+1-713-688-9600 ext. 145
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