HOUSTON, Aug. 8 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced record quarterly net income of $243.8 million,
or $2.23 per diluted share for the quarter ended June 30, 2007, compared to
the prior record quarterly net income of $145.9 million or $1.29 per
diluted share, for the quarter ended June 30, 2006. For the six months
ended June 30, 2007 net income totaled $318.5 million, or $2.90 per diluted
share, compared to $203.2 million or $1.80 per diluted share for the six
months ended June 30, 2006.
Frontier's record quarterly results were achieved despite a planned
30-day plant-wide shutdown at the Cheyenne Refinery. As a result of the
Cheyenne turnaround, total charges for the second quarter of 2007 fell to
163,991 barrels per day compared to 171,426 for the second quarter of 2006.
However, the Company stored intermediate and finished product inventories
during the first quarter of this year, allowing product sales to average
173,888 barrels per day for the most recent quarter compared to 173,642
barrels per day for the second quarter of 2006.
Second quarter 2007 results were impacted by several competitor
refinery outages that reduced gasoline and diesel supplies in our markets.
The gasoline crack averaged a record $36.73 per sales barrel for the second
quarter of 2007 compared to $20.92 per sales barrel for the same period in
2006. The diesel crack spread averaged a record $29.08 per sales barrel for
the quarter ended June 30, 2007, compared to $23.49 per sales barrel for
the second quarter of 2006. For the second quarter of 2007, the Cheyenne
Refinery's light/heavy differential averaged $14.17 per barrel and the
light/heavy spread at the El Dorado Refinery averaged $18.78 per barrel.
The WTI/WTS spread averaged $4.59 per barrel for the quarter ended June 30,
2007.
Frontier's Chairman, President and CEO, James Gibbs, commented, "We are
very pleased with our extraordinary quarterly results. The coker and crude
fractionation projects in Cheyenne are substantially complete, with the
final phase of the coker project to be completed in the fourth quarter of
this year. We continue to make good progress on our expansion projects in
El Dorado. Although we have seen deterioration in product margins from the
record cracks of the second quarter, our product markets continue to be
among the best in the United States. Additionally, both the light/heavy
crude oil spread and the WTI/WTS spread have improved thus far in the third
quarter."
For the three months ending June 30, 2007, Frontier generated $248.9
million in cash before changes in working capital while investing
approximately $94.4 million in capital expenditures. Frontier's cash
balance at June 30, 2007 increased to $530.3 million despite $98.5 million
in share repurchases during the quarter. There were no borrowings under the
Company's revolving credit facility. Frontier's cash exceeded its debt by
$380.3 million as of June 30, 2007. For the six months ending June 30,
2007, Frontier generated $371.5 million in cash before changes in working
capital while investing approximately $154.6 million in capital
expenditures and $128.2 million in share repurchase. The Company has spent
an additional $20.0 million to repurchase its shares since June 30, 2007
and in 2007 has repurchased a total of 4.1 million shares and spent
approximately $150.0 million of the current $200 million share repurchase
authorization.
The second quarter 2007 results include an after-tax inventory gain of
approximately $20.0 million or $0.18 per diluted share, compared to a gain
of $23.6 or $0.21 per diluted share, for the same period of 2006. The six
months ended June 30, 2007 include an after-tax inventory gain of
approximately $22.0 million or $0.20 per diluted share, compared to a gain
of $23.6 million, or $0.21 per diluted share for the same period in 2006.
Conference Call
A conference call is scheduled for today, August 8, 2007, at 11:00 a.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 500-0311. For those individuals outside the United States,
please call (719) 457-2698. A recorded replay of the call may be heard
through August 22, 2007 by dialing (888) 203-1112 (international callers
(719) 457-0820) and entering the code 1478187. 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 (1) 2006 (1)
2007 As Adjusted 2007 As Adjusted
INCOME STATEMENT DATA
($000's except
per share)
Revenues $2,482,583 $2,327,559 $1,434,700 $1,315,366
Raw material, freight
and other costs 1,804,805 1,829,095 964,940 995,608
Refining operating
expenses, excluding
depreciation 140,977 139,881 69,814 70,547
Selling and general
expenses, excluding
depreciation 24,615 21,729 13,583 12,815
Loss on sale of assets 2,028 -- -- --
Operating income before
depreciation 510,158 336,854 386,363 236,396
Depreciation, accretion
and amortization 23,193 18,908 12,070 10,041
Operating income 486,965 317,946 374,293 226,355
Interest expense and
other financing costs 4,948 5,282 1,992 2,847
Interest and investment
income (11,647) (6,456) (6,320) (3,910)
Provision for income
taxes 175,181 115,903 134,858 81,554
Net income $318,483 $203,217 $243,763 $145,864
Net income per diluted
share $2.90 $1.80 $2.23 $1.29
Average shares
outstanding (000's) 109,877 113,211 109,304 113,336
OTHER FINANCIAL DATA
($000's)
EBITDA (2) $510,158 $336,854 $386,363 $236,396
Cash flow before changes
in working capital 371,500 232,308 248,898 163,487
Working capital changes 37,275 (70,251) 20,170 48,381
Net cash provided by
operating activities 408,775 162,057 269,068 211,868
Net cash used by
investing activities (154,581) (74,801) (94,442) (37,712)
OPERATIONS
Consolidated
Operations (bpd)
Total charges 165,253 168,828 163,991 171,426
Gasoline yields 78,740 81,680 79,921 79,817
Diesel yields 58,386 53,748 55,437 54,857
Total sales 172,324 169,176 173,888 173,642
Refinery operating margins
information ($ per bbl)
Refined products revenue $79.55 $75.85 $90.44 $83.23
Raw material, freight
and other costs 57.86 59.73 60.98 63.01
Refinery operating
expenses, excluding
depreciation 4.52 4.57 4.41 4.46
Depreciation, accretion
and amortization 0.74 0.61 0.76 0.63
Cheyenne Refinery
light/heavy crude oil
differential ($ per bbl) $13.71 $17.09 $14.17 $15.19
WTI/WTS crude oil
differential ($ per bbl) 4.47 5.66 4.59 4.89
El Dorado Refinery
light/heavy crude oil
differential ($ per bbl) 15.59 25.22 18.78 25.41
BALANCE SHEET DATA ($000's) At June 30, 2007 At December 31, 2006
Cash, including cash
equivalents (a) $530,321 $405,479
Working capital 539,541 479,518
Short-term and current debt (b) --
Total long-term debt (c) 150,000 150,000
Shareholders' equity (d) 967,202 775,854
Net debt to book
capitalization (b+c-a)/(b+c-a+d) -64.8% -49.1%
(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 2006 have
been adjusted to apply the new method retrospectively.
(2) EBITDA represents income before interest expense and other financing
costs, interest and investment income, income tax, and depreciation,
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 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, 2007 and 2006 is reconciled to net income
as follows:
Six Months Ended Three Months Ended
June 30, June 30,
2006 (1) 2006 (1)
2007 As Adjusted 2007 As Adjusted
Net income (loss) $318,483 $203,217 $243,763 $145,864
Add provision (benefit)
for income taxes 175,181 115,903 134,858 81,554
Add interest expense and
other financing costs 4,948 5,282 1,992 2,847
Subtract interest and
investment income (11,647) (6,456) (6,320) (3,910)
Add depreciation, accretion
and amortization 23,193 18,908 12,070 10,041
EBITDA $510,158 $336,854 $386,363 $236,396
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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