HOUSTON, Nov. 3 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced record quarterly net income of $109.2 million, or
$1.91 per diluted share for the quarter ended September 30, 2005, compared to
net income of $23.8 million, or $0.43 per diluted share, for the same period
of 2004. For the nine months ended September 30, 2005, net income totaled a
record $209.6 million, or $3.70 per diluted share, compared to $69.5 million,
or $1.27 per diluted share for the nine months ended September 30, 2004.
Frontier's record quarterly earnings are attributable to outstanding
diesel and gasoline crack spreads, wide crude oil differentials and improved
refinery utilization. Although our refineries operated at their maximum
capacity during the third quarter 2005, hurricanes Rita and Katrina caused
substantial damage to refineries located on the Gulf Coast. Gasoline and
diesel crack spreads increased sharply during the third quarter 2005, due in
part to Gulf Coast refinery outages, as well as to the lack of domestic
refining capacity. The diesel crack spread increased to an average of
$18.38 per barrel for the third quarter 2005, well above the $8.10 per barrel
in the third quarter of 2004. The gasoline crack spread also improved
significantly to an average of $18.11 per barrel in the third quarter of 2005
compared to an average of $8.88 per barrel in the third quarter 2004. The
light/heavy crude oil differential increased to $14.93 per barrel for the
quarter ended September 30, 2005 compared to $9.28 for the quarter ended
September 30, 2004. Similarly, the WTI/WTS crude oil differential increased
to $3.13 per barrel for the quarter compared to $2.95 per barrel for the third
quarter of 2004.
Frontier's crude oil charge for the third quarter 2005 averaged
161,416 barrels per day (bpd), approximately 8,700 bpd more than the average
152,724 bpd the Company charged in the third quarter of 2004. As a result,
total product sales averaged 177,196 bpd for the third quarter 2005, compared
to 174,204 bpd in the third quarter of 2004.
For the nine months ending September 30, 2005, Frontier generated
$239.7 million cash from operating activities while incurring $78.5 million of
capital expenditures. Frontier's balance sheet remains in excellent shape at
quarter end with a cash balance of $286.6 million and no borrowings under the
Company's revolving credit facility. Frontier's cash exceeded its debt by
$136.6 million as of September 30, 2005.
Frontier's Chairman, President and CEO, James Gibbs, commented, "Our year
to date earnings have been exceptional and our October results were also
outstanding. We have amassed significant cash from operations and along with
considering capital improvement projects at our refineries, our Board of
Directors will evaluate a number of alternatives to return value to our
shareholders at the board meeting scheduled for the end of this month."
The third quarter 2005 results include an after-tax inventory gain of
approximately $25.4 million, or $0.44 per diluted share, compared to a gain of
$13.1 million, or $0.24 per diluted share, for the same period of 2004. The
nine months ended September 30, 2005 include an after-tax inventory gain of
$43.7 million, or $0.77 per diluted share, compared to a gain of
$27.9 million, or $0.51 per diluted share, for the nine-month period ended
September 30, 2004.
Conference Call
A conference call is scheduled for today, November 3, 2005, at 11:00 a.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 289-0496. For those individuals outside the United States, please
call (913) 981-5519. A recorded replay of the call may be heard through
November 17, 2005 by dialing (888) 203-1112 (international callers
(719) 457-0820) and entering the code 3285148. 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 barrel-per-day refinery located in El Dorado,
Kansas, and a 52,000 barrel-per-day 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 facts, 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
Nine Months Ended Three Months Ended
September 30 September 30
2005 2004 2005 2004
INCOME STATEMENT DATA
($000's except per share)
Revenues $2,850,850 $2,058,312 $1,185,930 $785,076
Raw material, freight
and other costs 2,282,546 1,719,851 931,495 671,400
Refinery operating
expenses, excluding
depreciation 173,877 162,124 58,702 55,721
Selling and general
expenses 25,118 20,921 8,677 7,075
Merger termination and
legal costs 47 3,820 10 157
Operating income before
depreciation 369,262 151,596 187,046 50,723
Depreciation and
amortization 26,661 23,928 9,796 8,166
Operating income 342,601 127,668 177,250 42,557
Interest expense and
other financing costs 8,335 17,618 2,359 5,813
Interest and investment
income (3,864) (890) (2,137) (485)
Gain on involuntary
conversion of assets --- (594) --- ---
Provision for income
taxes 128,548 42,009 67,843 13,437
Net income $209,582 $69,525 $109,185 $23,792
Net income per diluted
share $3.70 $1.27 $1.91 $0.43
Average shares
outstanding (000's) 56,699 54,598 57,303 54,890
OTHER FINANCIAL DATA
($000's)
Adjusted EBITDA (1) $369,262 $152,190 $187,046 $50,723
Cash flow before changes
in working capital 286,192 124,222 139,534 40,799
Working capital changes (46,450) (18,766) 1,044 1,259
Net cash provided by
operating activities 239,742 105,456 140,578 42,058
Net cash used in
investing activities (78,533) (33,120) (20,158) (3,020)
OPERATIONS
Consolidated
Operations (bpd)
Total charges 166,249 164,818 176,566 169,436
Gasoline yields 80,449 81,918 85,827 84,477
Diesel and jet fuel
yields 54,216 52,487 55,409 55,057
Total sales 166,656 164,803 177,196 174,204
Refinery operating margin
information (per sales bbl)
Refined products
revenue $62.69 $45.84 $72.85 $49.39
Raw material, freight
and other costs 50.17 38.09 57.14 41.89
Refinery operating
expenses, excluding
depreciation 3.82 3.59 3.60 3.48
Depreciation and
amortization 0.58 0.51 0.60 0.49
Light/Heavy crude oil
differential (per bbl) $14.39 $8.75 $14.93 $9.28
WTI/WTS crude oil
differential (per bbl) 4.16 3.04 3.13 2.95
BALANCE SHEET DATA
($000's) At September 30, At December 31,
2005 2004
Cash, including cash
equivalents (a) $286,553 $124,389
Working capital 295,045 97,261
Short-term and current
debt (b) --- ---
Total long-term debt (c) 150,000 150,000
Shareholders' equity (d) 471,033 240,113
Net debt to book
capitalization
(b+c-a)/(b+c-a+d) -40.8% 9.6%
(1) Adjusted EBITDA represents income before interest expense, 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 presented here because 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 nine
and three months ended September 30, 2005 and 2004 is reconciled to
net income as follows:
Nine Months Ended Three Months Ended
September 30 September 30
2005 2004 2005 2004
Net income $209,582 $69,525 $109,185 $23,792
Add provision for
income taxes 128,548 42,009 67,843 13,437
Add interest expense
and other financing costs 8,335 17,618 2,359 5,813
Subtract interest and
investment income (3,864) (890) (2,137) (485)
Add depreciation and
amortization 26,661 23,928 9,796 8,166
Adjusted EBITDA 369,262 152,190 187,046 50,723
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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