HOUSTON, Feb. 23 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced quarterly net income of $63.0 million, or
$1.10 per diluted share for the quarter ended December 31, 2005, compared to
net income of $239,000 or $0.00 per diluted share, for the same period of
2004. For the twelve months ended December 31, 2005, net income totaled a
record $272.5 million, or $4.80 per diluted share, compared to $69.8 million,
or $1.27 per diluted share for the twelve months ended December 31, 2004. The
record $272.5 million earned for the year ended December 31, 2005 represents a
dramatic increase over the prior record of $107.7 million earned in 2001.
Frontier's record results are attributable to record diesel crack spreads,
wide light/heavy crude oil differentials and improved gasoline crack spreads.
The diesel crack spread increased to an average of $24.69 per barrel for the
recent quarter, well more than double the $9.84 per barrel in the fourth
quarter of 2004 while the gasoline crack spread also more than doubled to an
average of $8.59 per barrel in the fourth quarter compared to an average
$3.71 per barrel in 2004. The light/heavy crude oil differential increased to
$18.11 per barrel for the quarter compared to $13.34 for the same period in
2004. The WTI/WTS crude oil differential decreased slightly to $5.56 per
barrel for the quarter compared to $5.82 per barrel for the fourth quarter of
2004.
Frontier's crude oil charge for the fourth quarter of 2005 averaged
156,489 barrels per day (bpd), approximately 10,321 bpd more than the average
146,168 bpd the Company charged in the fourth quarter of 2004. Total product
sales averaged a record 181,436 bpd for the fourth quarter 2005, compared to
169,518 bpd in the fourth quarter of 2004.
For the twelve months ending December 31, 2005, Frontier generated
$360.3 million cash from operating activities while investing approximately
$109.7 million in capital expenditures. Frontier's cash balance at year end
was $356.1 million and there were no borrowings under the Company's revolving
credit facility. Frontier's cash exceeded its debt by $206.1 million as of
December 31, 2005.
Beginning in March of 2006, the Company plans to run Canadian heavy crude
oil at its El Dorado Refinery. Initially, Frontier anticipates running
approximately 20,000 barrels a day of heavy crude oil in El Dorado. Based on
the current light/heavy crude oil differential, Frontier expects this
development to have a significant positive impact on second quarter earnings.
Frontier's Chairman, President and CEO, James Gibbs, commented, "Our
record fourth quarter earnings were a fitting end to a record year. Our
record profitability and cash flow allowed us to accomplish many of our
previously stated goals including: approving high-return internal improvement
and expansion projects, increasing the quarterly dividend, paying a special
dividend and repurchasing shares of our common stock. Looking forward, we
remain optimistic about the fundamentals of our business and believe we are
well positioned for continued success. We are particularly excited about
crude oil differentials. Currently, the light/heavy crude oil spread is
trading at a historically wide level and for the first time in our history we
will be able to capture that discount at both plants."
The fourth quarter 2005 results include an after-tax inventory loss of
approximately $14.3 million, or $0.25 per diluted share, compared to a loss of
$8.1 million, or $0.15 per diluted share, for the same period of 2004. The
twelve months ended December 31, 2005 include an after-tax inventory gain of
$29.4 million, or $0.52 per diluted share, compared to a gain of
$19.8 million, or $0.36 per diluted share, for the twelve-month period ended
December 31, 2004. On December 31, 2005 we adopted Financial Accounting
Standard Board's Interpretation 47 "Accounting for Conditional Asset
Retirement Obligations." This new accounting standard resulted in Frontier
recording a $5.5 million liability for future asset retirement obligations and
a $0.04 per diluted share reduction in net income for the cumulative effect of
the accounting change.
Conference Call
A conference call is scheduled for today, February 23, 2006, at 11:00 a.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 361-0912. For those individuals outside the United States, please
call (913) 981-5559. A recorded replay of the call may be heard through
March 9, 2006 by dialing (888) 203-1112 (international callers (719) 457-0820)
and entering the code 2606841. 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 bpd refinery located in El Dorado, Kansas, and
a 52,000 bpd 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 fact, 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 Ended Three Months Ended
December 31 December 31
2005 2004 2005 2004
INCOME STATEMENT DATA
($000's except per share)
Revenues $4,001,162 $2,861,716 $1,150,315 $803,404
Raw material, freight and
other costs (3,247,372) (2,432,461) (964,826) (712,610)
Refinery operating
expenses, excluding
depreciation (245,449) (219,781) (71,572) (57,657)
Selling and general
expenses, excluding
depreciation (30,715) (29,893) (5,597) (8,972)
Merger termination and
legal costs (48) (3,824) (1) (4)
Gain on sale of assets 3,644 --- 3,641 ---
Operating income before
depreciation 481,222 175,757 111,960 24,161
Depreciation and
amortization (35,213) (32,208) (8,552) (8,280)
Operating income 446,009 143,549 103,408 15,881
Interest expense and other
financing costs (10,341) (37,573) (2,006) (19,955)
Interest and investment
income 7,583 1,716 3,719 826
Gain on involuntary
conversion of assets --- 4,411 --- 3,817
Provision for income taxes (168,216) (42,339) (39,668) (330)
Income before cumulative
effect of accounting
change 275,035 69,764 65,453 239
Cumulative effect of
accounting change,
net of taxes (2,503) --- (2,503) ---
Net income $272,532 $69,764 $62,950 $239
Net income per diluted
share $4.80 $1.27 $1.10 $0.00
Average diluted shares
outstanding (000's) 56,818 54,802 57,163 55,414
OTHER FINANCIAL DATA ($000's)
Adjusted EBITDA (1) $481,222 $180,168 $111,960 $27,978
Cash flow before changes
in working capital 350,895 139,280 64,704 15,058
Working capital changes 9,442 38,619 55,892 57,385
Net cash provided by
operating activities 360,337 177,899 120,596 72,443
Net cash used by investing
activities (109,568) (43,107) (31,036) (10,057)
OPERATIONS - Consolidated
Operations (bpd)
Total charges 168,604 164,757 175,589 164,581
Gasoline yields 83,574 82,944 92,850 85,997
Diesel yields 55,151 53,093 57,926 54,898
Total sales 170,380 165,989 181,436 169,518
Refinery operating margins
information ($ per bbl)
Refined products revenue $64.32 $47.27 $68.77 $51.41
Raw material, freight and
other costs 52.22 40.04 57.80 45.69
Refinery operating expenses,
excluding depreciation 3.95 3.62 4.29 3.70
Refinery depreciation 0.56 0.53 0.51 0.58
Light/Heavy crude oil
differential ($ per bbl) $15.32 $9.90 $18.11 $13.34
WTI/WTS crude oil
differential ($ per bbl) 4.51 3.74 5.56 5.82
BALANCE SHEET DATA ($000's) At December 31, 2005 At December 31, 2004
Cash, including cash
equivalents (a) $356,065 $124,389
Working capital 262,264 97,261
Short-term and current
debt (b) --- ---
Total long-term debt (c) 150,000 150,000
Shareholders' equity (d) 445,059 240,113
Net debt to book
capitalization
(b+c-a)/(b+c-a+d) -86.2% 9.6%
(1) Adjusted EBITDA represents income before cumulative effect of
accounting change, interest expense, interest and investment 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 the Company believes that 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, 2005 and 2004 is reconciled to
net income as follows:
Twelve Months Ended Three Months Ended
December 31 December 31
2005 2004 2005 2004
($000's)
Net income $272,532 $69,764 $62,950 $239
Add cumulative effect of
accounting change 2,503 --- 2,503 ---
Add provision for income
taxes 168,216 42,339 39,668 330
Add interest expense and
other financing costs 10,341 37,573 2,006 19,955
Subtract interest and
investment income (7,583) (1,716) (3,719) (826)
Add depreciation and
amortization 35,213 32,208 8,552 8,280
Adjusted EBITDA $481,222 $180,168 $111,960 $27,978
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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