HOUSTON, May 8 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced record first quarter net income of $57.6
million, or $1.02 per diluted share for the quarter ended March 31, 2006,
compared to the prior record first quarter net income of $34.4 million or
$0.62 per diluted share, for the quarter ended March 31, 2005.
Frontier's record results are attributable to outstanding crude oil
differentials as well as wide product crack spreads. The light/heavy spread
increased to an average $18.99 per barrel for the first quarter of 2006
compared to $14.10 per barrel for the first quarter of 2005. Similarly, the
WTI/WTS spread increased to $6.44 per barrel for the recent quarter
compared to $4.68 per barrel for the first quarter of 2005. As a result of
continued strong demand, the diesel crack spread remained unseasonably high
averaging $15.51 per barrel for the first quarter of 2006 compared to $9.92
barrel for the same period of 2005. The gasoline crack spread also
increased to $9.22 per barrel for the recent quarter compared to $7.28 for
the first quarter of 2005.
Frontier's crude oil charge for the first quarter of 2006 averaged
149,502 barrels per day (bpd), approximately 13,500 bpd more than the
average 136,017 bpd the Company charged in the first quarter of 2005. The
first quarter 2006 crude charge rate was negatively impacted by a total
steam outage at our Cheyenne Refinery in February of this year, while the
first quarter 2005 crude charge rate was reduced as a result of a fluid
catalytic cracking unit turnaround at the El Dorado Refinery. Total product
sales averaged 164,661 bpd for the first quarter 2006, compared to 145,911
bpd in the first quarter of 2005.
Frontier's Chairman, President and CEO, James Gibbs, commented, "This
is our third consecutive record quarter and our fourth in the last five
quarters. We now have the ability to run heavy Canadian crude oil at both
of our plants, which has added additional flexibility to an already
advantaged crude slate. The gasoline and diesel crack spreads are
significantly higher than the five- year average and although crude oil
differentials are showing some seasonal tightening, they remain at
historically high levels for the second quarter."
For the three months ending March 31, 2006, Frontier generated $76.9
million in cash before changes in working capital while investing
approximately $37.1 million in capital expenditures. Frontier's cash
balance at March 31, 2006 decreased to $208.0 million due primarily to a
$65.9 million inventory build associated with linefill for Spearhead
pipeline and $58.5 million in dividends paid in the first quarter. There
were no borrowings under the Company's revolving credit facility.
Frontier's cash exceeded its debt by $58.0 million as of March 31, 2006.
The first quarter 2006 results include an after-tax inventory loss of
approximately $13,000, or $0.00 per diluted share, compared to a gain of
$19.4 million, or $0.35 per diluted share, for the same period of 2005.
Conference Call
A conference call is scheduled for today, May 8, 2006, at 2:00 p.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 946-0786. For those individuals outside the United States,
please call (719) 457-2662. A recorded replay of the call may be heard
through May 22, 2006 by dialing (888) 203-1112 (international callers (719)
457-0820) and entering the code 7541354. 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
Three Months Ended
March 31
2006 2005
INCOME STATEMENT DATA ($000's except per share)
Revenues $1,012,193 $692,640
Raw material, freight and other costs 833,487 558,323
Refinery operating expenses, excluding depreciation 68,904 61,351
Selling and general expenses, excluding depreciation 8,914 7,043
Operating income before depreciation 100,888 65,923
Depreciation, accretion and amortization 8,867 8,260
Operating income 92,021 57,663
Interest expense and other financing costs 2,435 3,037
Interest and investment income (2,546) (737)
Provision for income taxes 34,512 20,927
Net income $57,620 $34,436
Net income per diluted share $1.02 $0.62
Average shares outstanding (000's) 56,752 55,955
OTHER FINANCIAL DATA ($000's)
EBITDA (1) $100,888 $65,923
Cash flow before changes in working capital 76,890 57,968
Working capital changes (126,701) (79,715)
Net cash used by operating activities (49,811) (21,747)
Net cash used by investing activities (37,089) (28,471)
OPERATIONS
Consolidated
Operations (bpd)
Total charges 166,202 150,580
Gasoline yields 83,564 67,006
Diesel yields 52,627 49,111
Total sales 164,661 145,911
Refinery operating margins information ($ per bbl)
Refined products revenue $67.98 $52.79
Raw material, freight and other costs 56.24 42.52
Refinery operating expenses excluding depreciation 4.65 4.67
Refinery depreciation 0.59 0.63
Light/Heavy crude oil differential ($ per bbl) $18.99 $14.10
WTI/WTS crude oil differential ($ per bbl) 6.44 4.68
March 31, December 31,
BALANCE SHEET DATA ($000's) 2006 2005
Cash, including cash equivalents (a) $208,045 $356,065
Working capital 298,866 262,264
Short-term and current debt (b) --- ---
Total long-term debt (c) 150,000 150,000
Shareholders' equity (d) 501,728 445,059
Net debt to book capitalization (b+c-a)/(b+c-a+d) -13.1% -86.2%
(1) EBITDA represents income before interest expense and other financing
costs, interest and investment income, income tax, and depreciation,
accretion and amortization. EBITDA is not a calculation based upon
generally accepted accounting principles; however, the amounts
included in the EBITDA calculation are derived from amounts included
in the consolidated financial statements of the Company. 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.
EBITDA is not necessarily comparable to similarly titled measures of
other companies. EBITDA is presented here because the Company
believes 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. EBITDA is also used for internal analysis and
as a basis for financial covenants. Frontier's EBITDA for the three
months ended March 31, 2006 and 2005 is reconciled to net income as
follows:
Three Months Ended
March 31
2006 2005
(in thousands)
Net income $57,620 $34,436
Add provision for income taxes 34,512 20,927
Add interest expense and other financing costs 2,435 3,037
Subtract interest and investment income (2,546) (737)
Add depreciation, accretion and amortization 8,867 8,260
EBITDA 100,888 65,923
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, x145
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