HOUSTON, Feb. 27 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced quarterly net income of $52.4 million, or $0.47
per diluted share for the quarter ended December 31, 2006, compared to net
income of $63.0 million or $0.55 per diluted share, for the quarter ended
December 31, 2005. For the twelve months ended December 31, 2006, Frontier
reported record net income of $379.3 million, or $3.37 per diluted share,
compared to the prior record net income of $275.2 million, or $2.42 per
diluted share, for the twelve months ended December 31, 2005.
Frontier's fourth quarter 2006 net income of $52.4 was lower than the
$63.0 million earned in the fourth quarter of 2005 primarily because the
strong gasoline and diesel crack spreads following hurricanes Katrina and
Rita in 2005 were not repeated in 2006. Additionally, Frontier had a $24
million after tax inventory loss in the fourth quarter of 2006 compared to
a $14.3 million loss for the same period of 2005. The quarter ended
December 31, 2006 was the second best fourth quarter in Company history.
The gasoline crack spread averaged $7.96 for the fourth quarter of 2006
compared to $8.59 in 2005. The diesel crack spread remained strong at
$20.21 for the fourth quarter 2006 compared to $24.69 in 2005. Frontier
continues to benefit from the ability to process both heavy and sour crude
oils. The light/heavy crude oil spread averaged $14.35 per barrel at the
Cheyenne Refinery and $13.99 per barrel at the El Dorado Refinery for the
most recent quarter. The WTI/WTS spread averaged $4.84 per barrel for the
fourth quarter of 2006.
Frontier's total charges for the fourth quarter of 2006 averaged
173,613 barrels per day (bpd), versus an average 175,589 bpd the Company
charged in the fourth quarter of 2005. For the twelve months ended December
31, 2006, total charges averaged a record 171,819 bpd compared to 168,604
bpd in 2005. Total crude oil charge averaged 154,473 bpd for the year 2006,
also a Company record. The Cheyenne Refinery will begin a plant wide
turnaround in mid-May of 2007.
Frontier's Chairman, President and CEO, James Gibbs, commented, "Our
2006 net income eclipsed last year's record by over $100 million. This
year's record earnings allowed us to make substantial reinvestment in our
Refineries and repurchase a significant amount of our stock. We were
particularly pleased with our throughput record for 2006 as our employees
did an excellent job of running our Refineries to maximize our earnings.
For 2007, we remain focused on trying to keep our expansion projects on
time and on budget, and we continue to seek ways to realize superior
shareholder returns."
For the three months ending December 31, 2006, Frontier generated $75.8
million in cash before changes in working capital, while investing
approximately $36.1 million in capital expenditures and repurchasing
354,724 shares of its common stock for a total cost of $8.8 million.
Frontier's cash balance of $405.5 million exceeded debt by $255.5 million
as of December 31, 2006. There were no borrowings under the Company's
revolving credit facility. For the twelve months ended December 31, 2006,
Frontier generated $446.7 million in cash before changes in working
capital, invested $137.2 million in capital expenditures, repurchased
approximately $99.0 million in common stock (3.7 million shares) and paid
$67.5 million in dividends.
The fourth quarter 2006 results include an after-tax inventory loss of
approximately $24.0 million or $0.22 per diluted share, compared to a loss
of $14.3 million, or $0.13 per diluted share, for the fourth quarter of
2005. The twelve months ended December 31, 2006 include an after-tax
inventory loss of approximately $16.1 million or $0.14 per diluted share
compared to a gain of $29.4 million, or $0.26 per diluted share for the
same period in 2005.
Conference Call
A conference call is scheduled for today, February 27, 2007, at 11:00
a.m. eastern time, to discuss the financial results. To access the call,
please dial (800) 310-6649. For those individuals outside the United
States, please call (719) 457-2693. A recorded replay of the call may be
heard through March 13, 2007 by dialing (888) 203-1112 (international
callers (719) 457-0820) and entering the code 1325274. 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 2005
2006 As Adjusted (1) 2006 As Adjusted (1)
INCOME STATEMENT DATA
($000's except
per share)
Revenues $4,795,953 $4,001,162 $1,087,267 $1,150,315
Raw material,
freight and
other costs 3,850,937 3,247,372 911,628 964,826
Refining operating
expenses, excluding
depreciation 277,129 241,445 73,321 71,514
Selling and general
expenses, excluding
depreciation 52,488 30,763 15,665 5,598
(Gain) on sale
of assets (8) (3,644) --- (3,641)
Operating income
before depreciation 615,407 485,226 86,653 112,018
Depreciation and
amortization 41,213 35,213 11,167 8,552
Operating income 574,194 450,013 75,486 103,466
Interest expense
and other
financing costs 12,139 10,341 3,241 2,006
Interest and
investment income (18,059) (7,583) (5,666) (3,719)
Provision for
income taxes 200,837 169,594 25,477 39,633
Income before
cumulative effect
of accounting changes 379,277 277,661 52,434 65,546
Cumulative effect
of accounting changes,
net of taxes --- (2,503) --- (2,503)
Net income $379,277 $275,158 $52,434 $63,043
Net income per
diluted share $3.37 $2.42 $0.47 $0.55
Average shares
outstanding (000's) 112,512 113,636 110,741 114,326
OTHER FINANCIAL DATA
($000's)
Adjusted EBITDA (2) $615,407 $485,226 $86,653 $112,018
Cash flow before
changes in working
capital 446,667 346,170 75,759 82,091
Working capital
changes (106,150) 14,167 (18,655) 38,505
Net cash provided
(used) by operating
activities 340,517 360,337 57,104 120,596
Net cash provided
(used) by investing
activities (137,195) (109,568) (36,085) (31,036)
OPERATIONS
Consolidated
Operations (bpd)
Total charges 171,819 168,604 173,613 175,589
Gasoline yields 81,484 83,574 83,283 92,850
Diesel yields 57,678 55,151 60,950 57,926
Total sales 172,038 170,381 174,252 181,437
Refinery operating
margins information
($ per bbl)
Refined products
revenue $75.80 $64.32 $67.13 $68.77
Raw material,
freight and
other costs 61.33 52.22 56.87 57.80
Refinery operating
expenses, excluding
depreciation 4.41 3.88 4.57 4.28
Depreciation,
accretion and
amortization 0.65 0.56 0.69 0.51
Cheyenne Refinery
Light/Heavy crude oil
differential
($ per bbl) $16.21 $15.32 $14.35 $18.11
WTI/WTS Differential
($ per bbl) 5.22 4.51 4.84 5.56
El Dorado Refinery
Light/Heavy crude oil
differential
($ per bbl) 18.13 n/a 13.99 n/a
BALANCE SHEET DATA ($000's)
At December 31, 2005 At December 31, 2006
Cash, including
cash equivalents [a] $405,479 $356,065
Working capital 479,518 270,145
Short-term and current debt [b] --- ---
Total long-term debt [c] 150,000 150,000
Shareholders' equity [d] 775,854 478,692
Net debt to book capitalization
(b+c-a)/(b+c-a+d) -49.1% -75.6%
(1) During the fourth quarter of 2006, the Company adopted a change in
its accounting method for the costs of turnarounds from the accrual
method to the deferral method. Turnarounds are the scheduled and
required shutdowns of refinery processing units for significant
overhaul and refurbishment. Under the deferral accounting method,
the costs of turnarounds are deferred when incurred and amortized on
a straight-line basis over the period of time estimated to lapse
until the next turnaround occurs. The new method of accounting for
turnarounds was adopted in order to adhere to FSP No. AUG AIR-1
"Accounting for Planned Major Maintenance Activities" which
prohibits the accrual method of accounting for planned major
maintenance activities. The Company elected to early adopt the FSP
in the fourth quarter of 2006. The comparative financial statements
for 2005 have been adjusted to apply the new method retrospectively.
(2) Adjusted EBITDA represents income before cumulative effect of
accounting change, interest expense and other financing costs,
interest and investment 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 also used for internal analysis and as a basis
for financial covenants. Frontier's Adjusted EBITDA for the twelve
months and three months ended December 31, 2006 and 2005 is
reconciled to net income as follows:
Twelve Months Ended Three Months Ended
December 31 December 31
2006 2005 2006 2005
Net income (loss) $379,277 $275,158 $52,434 $63,043
Add cumulative effect
of accounting changes --- 2,503 --- 2,503
Add provision (benefit)
for income taxes 200,837 169,594 25,477 39,633
Add interest expense
and other financing
costs 12,139 10,341 3,241 2,006
Subtract interest
and investment
income (18,059) (7,583) (5,666) (3,719)
Add depreciation,
accretion and
amortization 41,213 35,213 11,167 8,552
Adjusted EBITDA $615,407 $485,226 $86,653 $112,018
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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