HOUSTON, Nov. 7 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) today announced quarterly net income of $137.2 million, or
$1.28 per diluted share for the quarter ended September 30, 2007, compared
to net income of $123.6 million or $1.10 per diluted share, for the quarter
ended September 30, 2006. For the nine months ended September 30, 2007 net
income totaled $455.7 million, or $4.19 per diluted share, compared to
$326.8 million or $2.89 per diluted share for the nine months ended
September 30, 2006.
Refining margins in Frontier's markets, the Rocky Mountain and
mid-continent regions, were among the highest in the United States for the
most recent quarter. Frontier's gasoline crack averaged $20.51 per barrel
for the third quarter of 2007 compared to $18.41 per barrel for the same
period in 2006. The diesel crack spread averaged $23.43 per barrel for the
quarter ended September 30, 2007, compared to $26.21 per barrel for the
third quarter of 2006. For the third quarter of 2007, the Cheyenne
Refinery's light/heavy differential averaged $18.40 per barrel and the
light/heavy spread at the El Dorado Refinery averaged $20.60 per barrel.
The WTI/WTS spread averaged $4.20 per barrel for the quarter ended
September 30, 2007.
Total charges for the third quarter of 2007 decreased to 171,243
barrels per day compared to 175,907 for the third quarter of 2006 due to a
heavier crude slate at both refineries and unplanned maintenance on the
FCCU at the Cheyenne Refinery. In order to take advantage of widening crude
oil differentials, heavy crude oil charge increased to 51,247 barrels per
day for the most recent quarter compared to 47,789 barrels per day for the
third quarter of 2006.
Frontier's Chairman, President and CEO, James Gibbs, commented, "Our
net income of $455.7 million for the first nine months of 2007 is more than
we have earned in any fiscal year in our history. Our record results have
allowed us to make significant growth capital investments in our refineries
while returning cash to our shareholders through our share repurchase
program. Product crack spreads have weakened considerably during the fourth
quarter, particularly gasoline, however crude oil differentials are near
record levels. As a result, we are maximizing heavy crude oil throughput at
both refineries."
For the three months ended September 30, 2007, Frontier generated cash
flow before changes in working capital of $137.3 million. Frontier's cash
balance at September 30, 2007 was $432.7 million, down from $530.3 million
in the previous quarter due to $75.9 million in share repurchases, $63.0
million in net capital expenditures and a $93.1 million increase in working
capital. There were no borrowings under the Company's revolving credit
facility. For the nine months ended September 30, 2007, Frontier generated
$508.8 million in cash before changes in working capital while investing
approximately $217.6 million in net capital expenditures and $204.1 million
in share repurchases. Subsequent to September 30, 2007, Frontier has spent
an additional $20.6 million to repurchase its shares.
The third quarter 2007 results include an after-tax hedging loss of
$19.8 million, or $0.19 per diluted share. The third quarter 2007 results
also include an after-tax inventory gain of approximately $15.5 million or
$0.15 per diluted share, compared to a loss of $15.7 million or $0.14 per
diluted share, for the same period of 2006. The nine months ended September
30, 2007 include an after-tax inventory gain of approximately $37.6 million
or $0.35 per diluted share, compared to a gain of $7.9 million, or $0.07
per diluted share for the same period in 2006. Costs associated with the
proposed settlement of the Beverly Hills lawsuit totaled $3.9 million
after-tax, or $0.04 per diluted share, in the most recent quarter. Lastly,
Frontier had a non-recurring after-tax gain of $10.7 million or $0.10 per
diluted share from the sale of its interest in a pipeline and related crude
oil tanks in the quarter ended September 30, 2007.
Conference Call
A conference call is scheduled for today, November 7, 2007, at 11:00
a.m. eastern time, to discuss the financial results. To access the call,
please dial (877) 874-1569. For those individuals outside the United
States, please call (719) 325-4749. A recorded replay of the call may be
heard through November 21, 2007 by dialing (888) 203-1112 (international
callers (719) 457- 0820) and entering the code 8121894. 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 website 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
Nine Months Ended Three Months Ended
September 30 September 30
2006 (1) 2006 (1)
2007 As Adjusted 2007 As Adjusted
INCOME STATEMENT DATA
($000's except per share)
Revenues $3,869,103 $3,708,686 $1,386,520 $1,381,127
Raw material, freight and
other costs 2,900,169 2,939,309 1,095,364 1,110,214
Refining operating
expenses, excluding
depreciation 210,359 203,808 69,382 63,927
Selling and general
expenses, excluding
depreciation 41,855 36,823 17,240 15,094
(Gain) on sales of assets (15,232) (8) (17,260) (8)
Operating income before
depreciation 731,952 528,754 221,794 191,900
Depreciation, accretion
and amortization 37,963 30,046 14,770 11,138
Operating income 693,989 498,708 207,024 180,762
Interest expense and other
financing costs 7,029 8,898 2,081 3,616
Interest and investment
income (17,697) (12,393) (6,050) (5,937)
Provision for income taxes 248,949 175,360 73,768 59,457
Net income $455,708 $326,843 $137,225 $123,626
Net income per diluted
share $4.19 $2.89 $1.28 $1.10
Average shares outstanding
(000's) 108,890 113,211 106,913 113,336
OTHER FINANCIAL DATA
($000's)
EBITDA (2) $731,952 $528,754 $221,794 $191,900
Cash flow before changes
in working capital 508,764 370,908 137,264 138,600
Working capital changes (55,848) (87,495) (93,123) (17,244)
Net cash provided by
operating activities 452,916 283,413 44,141 121,356
Net cash used by investing
activities (217,612) (101,110) (63,031) (26,309)
OPERATIONS
Consolidated
Operations (bpd)
Total charges 167,272 171,215 171,243 175,907
Gasoline yields 78,592 80,877 78,302 79,298
Diesel yields 57,376 56,575 55,389 62,137
Total sales 172,928 171,293 174,116 175,456
Refinery operating margins
information ($ per bbl)
Refined products
revenue $82.60 $78.77 $88.54 $84.31
Raw material, freight
and other costs 61.43 62.86 68.38 68.78
Refinery operating
expenses, excluding
depreciation 4.46 4.36 4.33 3.96
Depreciation, accretion
and amortization 0.80 0.64 0.92 0.69
Cheyenne Refinery
Light/Heavy crude oil
differential ($ per bbl) $15.27 $16.82 $18.40 $16.30
WTI/WTS Differential
($ per bbl) 4.38 5.34 4.20 4.69
El Dorado Refinery
Light/Heavy crude oil
differential ($ per bbl) 17.26 19.91 20.60 12.83
BALANCE SHEET DATA
($000's) At September 30, 2007 At December 31, 2006
Cash, including cash
equivalents (a) $432,661 $405,479
Working capital 577,403 479,518
Short-term and current
debt (b) - -
Total long-term debt (c) 150,000 150,000
Shareholders' equity (d) 1,036,665 775,854
Net debt to book
capitalization
(b+c-a)/(b+c-a+d) -37.5% -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 nine months and three months ended September 30, 2007 and
2006 is reconciled to net income as follows:
Nine Months Ended Three Months Ended
September 30 September 30
2006 (1) 2006 (1)
2007 As Adjusted 2007 As Adjusted
Net income $455,708 $326,843 $137,225 $123,626
Add provision for income taxes 248,949 175,360 73,768 59,457
Add interest expense and other
financing costs 7,029 8,898 2,081 3,616
Subtract interest and investment
income (17,697) (12,393) (6,050) (5,937)
Add depreciation, accretion and
amortization 37,963 30,046 14,770 11,138
EBITDA $731,952 $528,754 $221,794 $191,900
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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