HOUSTON, Aug. 7 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced record quarterly net income of $143.3 million,
or $1.26 per diluted share for the quarter ended June 30, 2006, compared to
net income of $66.0 million or $0.58 per diluted share, for the quarter
ended June 30, 2005. For the six months ended June 30, 2006, Frontier
reported net income of $201.0 million, or $1.78 per diluted share, compared
to net income of $100.4 million, or $0.89 per diluted share, for the six
months ended June 30, 2005. All current and prior period share related
numbers have been revised to reflect the 2-for-1 stock split effective June
26, 2006.
Frontier continues to benefit from outstanding product crack spreads as
well as wide crude oil differentials. The diesel crack spread remained
unseasonably strong increasing to $23.49 per barrel for the most recent
quarter compared to $15.51 per barrel for the second quarter of 2005. The
gasoline crack spread increased to $20.92 per barrel for the quarter ended
June 30, 2006, compared to $12.50 per barrel for the same period in 2005.
The Cheyenne Refinery light/heavy spread increased slightly to an average
$15.19 per barrel for the second quarter of 2006 compared to $14.15 per
barrel for the second quarter of 2005. Similarly, the WTI/WTS spread
increased slightly to $5.04 per barrel for the recent quarter compared to
$4.67 per barrel for the second quarter of 2005.
Frontier's crude oil charge for the second quarter of 2006 averaged
153,972 barrels per day (bpd), slightly below the average 156,352 bpd the
Company charged in the second quarter of 2005. The most recent quarter's
crude charge was reduced by approximately 4,200 bpd as a result of a diesel
hydrotreater shutdown at the Cheyenne Refinery for the conversion to
ultra-low sulfur diesel. Despite the reduced throughput, Frontier reported
record operating income before depreciation of $232.3 million for the three
months ended June 30, 2006.
Frontier's Chairman, President and CEO, James Gibbs, commented, "Our
results continue to be outstanding. The second quarter of 2006 was our most
profitable quarter ever, which allowed us to continue our share repurchase
program and execute a 2-for-1 stock split during the quarter. Our crack
spreads and crude oil differentials remain incredibly strong and we believe
our third quarter 2006 results will be excellent."
For the three months ending June 30, 2006, Frontier generated $155.3
million in cash before changes in working capital and $211.9 million after
changes in working capital, while investing approximately $37.7 million in
capital expenditures and repurchasing approximately 1.1 million shares of
its common stock. Frontier's cash balance of $350.0 million exceeded debt
by $200.0 million as of June 30, 2006. There were no borrowings under the
Company's revolving credit facility. For the six months ended June 30,
2006, Frontier generated $232.2 million in cash before changes in working
capital and $162.1 million after changes in working capital, while
investing $74.8 million in capital expenditures and repurchasing
approximately 1.5 million shares of its common stock.
The second quarter 2006 results include an after-tax inventory gain of
approximately $23.6 million or $0.21 per diluted share, compared to a loss
of $1.0 million, or $0.01 per diluted share, for the second quarter of
2005. The six months ended June 30, 2006 include an after-tax inventory
gain of approximately $23.6 million or $0.21 per diluted share compared to
a gain of $18.4 million, or $0.16 per diluted share for the same period in
2005. The most recent quarter results also include a $5.0 million, or $0.03
per diluted share (after-tax) accrual for the cleanup of a waste water
treatment pond located on land historically leased from an adjacent
landowner.
Conference Call
A conference call is scheduled for today, August 7, 2006, at 11:00 a.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 811-8824. For those individuals outside the United States,
please call (913) 981-4903. A recorded replay of the call may be heard
through August 21, 2006 by dialing (888) 203-1112 (international callers
(719) 457-0820) and entering the code 5241975. 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
Six Months Ended Three Months Ended
June 30 June 30
2006 2005 2006 2005
INCOME STATEMENT DATA
($000's except per share)
Revenues $2,327,559 $1,664,920 $1,315,366 $972,280
Raw material, freight and
other costs 1,829,095 1,351,051 995,608 792,728
Refining operating expenses,
excluding depreciation 143,515 115,175 74,611 53,824
Selling and general
expenses, excluding
depreciation 21,729 16,478 12,815 9,435
Operating income before
depreciation 333,220 182,216 232,332 116,293
Depreciation, accretion and
amortization 18,908 16,865 10,041 8,605
Operating income 314,312 165,351 222,291 107,688
Interest expense and other
financing costs 5,282 5,976 2,847 2,939
Interest and investment
income (6,456) (1,727) (3,910) (990)
Provision for income taxes 114,524 60,705 80,012 39,778
Net income $200,962 $100,397 $143,342 $65,961
Net income per diluted share $1.78 $0.89 $1.26 $0.58
Average shares outstanding
(000's) 113,211 112,760 113,336 113,602
OTHER FINANCIAL DATA
($000's)
EBITDA (1) $333,220 $182,216 $232,332 $116,293
Cash flow before changes in
working capital 232,157 146,658 155,267 88,690
Working capital changes (70,100) (47,494) 56,601 32,221
Net cash provided by
operating activities 162,057 99,164 211,868 120,911
Net cash provided (used) by
investing activities (74,801) (58,375) (37,712) (29,904)
OPERATIONS
Consolidated
Operations (bpd)
Total charges 168,828 161,005 171,426 171,316
Gasoline yields 81,680 77,715 79,817 88,306
Diesel yields 53,748 53,610 54,857 58,060
Total sales 169,176 161,297 173,642 176,514
Refinery operating margins
information ($ per bbl)
Refined products revenue $75.85 $57.01 $83.23 $60.46
Raw material, freight
and other costs 59.73 46.28 63.01 49.35
Refinery operating
expenses, excluding
depreciation 4.69 3.95 4.72 3.35
Depreciation, accretion
and amortization 0.61 0.57 0.63 0.53
Cheyenne Refinery
Light/Heavy crude oil
differential ($ per bbl) $17.09 $14.13 $15.19 $14.15
WTI/WTS Differential
($ per bbl) 5.74 4.68 5.04 4.67
El Dorado Refinery
Light/Heavy crude oil
differential ($ per bbl) 25.22 n/a 25.41 n/a
BALANCE SHEET DATA ($000's) At June 30, At December 31,
2006 2005
Cash, including cash equivalents (a) $350,014 $356,065
Working capital 387,445 262,264
Short-term and current debt (b) --- ---
Total long-term debt (c) 150,000 150,000
Shareholders' equity (d) 616,741 445,059
Net debt to book capitalization
(b+c-a)/(b+c-a+d) -48.0% -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 six months and three months ended June 30, 2006
and 2005 is reconciled to net income as follows:
Six Months Ended Three Months Ended
June 30 June 30
2006 2005 2006 2005
Net income $200,962 $100,397 $143,342 $65,961
Add provision for income taxes 114,524 60,705 80,012 39,778
Add interest expense and other
financing costs 5,282 5,976 2,847 2,939
Subtract interest and investment
income (6,456) (1,727) (3,910) (990)
Add depreciation, accretion and
amortization 18,908 16,865 10,041 8,605
EBITDA $333,220 $182,216 $232,332 $116,293
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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