Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - FRONTIER OIL CORP /NEW/ | form8k.htm |
Exhibit 99.1
NEWS
RELEASE
2010-02
FOR
IMMEDIATE RELEASE
Contact: Kristine
Boyd
(713)
688-9600 x135
FRONTIER
OIL REPORTS FOURTH QUARTER 2009 RESULTS
HOUSTON,
TEXAS, February 25, 2010 – Frontier Oil Corporation (NYSE: FTO) today announced
a net loss of $75.1 million, or $0.72 per share, for the quarter ended December
31, 2009, compared to net income of $119.0 million, or $1.15 per diluted share,
for the quarter ended December 31, 2008. For the twelve months ended
December 31, 2009, Frontier reported a net loss of $83.8 million, or $0.81 per
share, compared to net income of $226.1 million, or $2.18 per diluted share, for
the twelve months ended December 31, 2008.
During
the fourth quarter of 2009, Frontier switched inventory valuation accounting
methods from the first-in, first-out (FIFO) method to the last-in, first-out
(LIFO) method. As a result of this accounting change, Frontier will
receive a one-time tax refund of $85.6 million. In addition,
Frontier’s Board of Directors has suspended the Company’s quarterly cash
dividend due to contractual limitations under the restricted payments provision
of the Company’s senior notes indentures.
Weak
demand for refined products, particularly distillates, and narrow crude
differentials were the primary contributors to the fourth quarter and full year
2009 results. Average diesel crack spreads declined steeply to $7.03
per barrel for the fourth quarter of 2009, compared to $21.81 per barrel for the
same period of 2008. This was partially offset by the improvement in
average gasoline crack spreads to $4.40 per barrel in the most recent quarter,
from negative $0.95 per barrel for the fourth quarter of
2008. Similarly for the full year, average gasoline crack spreads
improved modestly by $2.85 per barrel between 2009 and the prior year, while
average diesel crack spreads dropped by $16.34 per barrel over the same
period.
Crude
differentials in the fourth quarter of 2009, while slightly improved over the
first half of the year, remained significantly below those of 2008 and prior
years primarily due to the global decline in the supply of heavy and sour
crudes. The light/heavy crude differential averaged $7.71 per barrel
for the fourth quarter of 2009, compared to $15.27 per barrel for the same
period of 2008, and $6.34 per barrel for the full year 2009, compared to $17.38
per barrel in 2008. The WTI/WTS spread averaged $2.27 per barrel in
the most recent quarter, compared to $3.30 per barrel for the fourth quarter of
2008, and $1.65 per barrel for the full year 2009, compared to $3.92 per barrel
in 2008.
Also
impacting the fourth quarter results was the reduced throughput at the El Dorado
refinery due to planned major turnaround maintenance on the FCC unit, gasoil
hydrotreater, and other associated units. As a result, total crude charges in
the fourth quarter for the El Dorado and Cheyenne refineries combined were
121,840 barrels per day (bpd), down from 168,301 bpd for the fourth quarter of
2008.
Frontier’s
President and CEO, Mike Jennings, commented, “While we are displeased to report
our first annual loss in a decade, we recognize the cyclical nature of this
industry and have confidence in the strengths that define Frontier - advantaged
markets, quality assets, and a conservative balance sheet. We remain
focused on reducing our operating expenses and improving our yields at the
Cheyenne refinery. While we do not expect a near-term recovery for
the refining industry, we believe we are well positioned to participate in the
recovery as the U.S. economy strengthens.”
During
the three months ended December 31, 2009, Frontier produced a loss of $6.1
million in operating cash flows, invested $49.2 million in capital expenditures,
and paid $6.3 million in dividends. For the twelve months ended
December 31, 2009, Frontier generated $140.9 million in operating cash flows,
invested $171.0 million in capital expenditures, and paid $25.4 million in
dividends. As of December 31, 2009, Frontier had a cash balance of
$425.3 million (which exceeded debt by $77.8 million) and had $498.2 million of
working capital. In addition, there were no cash borrowings under the
Company’s revolving credit facility, which had $399.4 million of borrowing base
availability at year end.
Conference
Call
A conference call is scheduled for
today, February 25, 2010 at 10:00 a.m. central time, to discuss the financial
results. To access the call, which is open to the public,
please dial (800) 447-0521 several minutes prior to the
call. (international callers (847) 413-3238), passcode
26237001. A recorded replay of the call may be heard through March
11, 2010 by dialing (888) 843-8996 (international callers (630) 652-3044)
passcode 26237001. In addition, the real-time conference call and a
recorded replay will be available via webcast by registering from the Investor
Relations page of our website www.frontieroil.com.
Frontier
operates a 135,000 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 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
|
||||||||||||||||
|
Twelve
Months Ended
|
Three
Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
As
Adjusted (1)
|
As
Adjusted (1)
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
INCOME STATEMENT DATA
($000's except
per share)
|
||||||||||||||||
|
Revenues
|
$ | 4,237,213 | $ | 6,498,780 | $ | 1,088,539 | $ | 1,348,139 | ||||||||
|
Raw
material, freight and other costs
|
3,888,308 | 5,716,091 | 1,073,967 | 1,035,566 | ||||||||||||
|
Refining
operating expenses, excluding depreciation
|
321,299 | 321,364 | 89,124 | 76,503 | ||||||||||||
|
Selling
and general expenses, excluding depreciation
|
58,668 | 44,169 | 19,731 | 11,790 | ||||||||||||
|
Gain
on sale of assets
|
- | 44 | - | - | ||||||||||||
|
Operating
income (loss) before depreciation
|
(31,062 | ) | 417,200 | (94,283 | ) | 224,280 | ||||||||||
|
Depreciation,
amortization and accretion
|
74,308 | 65,756 | 20,082 | 17,684 | ||||||||||||
|
Operating
income (loss)
|
(105,370 | ) | 351,444 | (114,365 | ) | 206,596 | ||||||||||
|
Interest
expense and other financing costs
|
28,187 | 15,130 | 7,141 | 8,087 | ||||||||||||
|
Interest
and investment income
|
(2,279 | ) | (5,425 | ) | (331 | ) | (734 | ) | ||||||||
|
Provision
(benefit) for income taxes
|
(47,518 | ) | 115,686 | (46,121 | ) | 80,267 | ||||||||||
|
Net
income (loss)
|
$ | (83,760 | ) | $ | 226,053 | $ | (75,054 | ) | $ | 118,976 | ||||||
|
Diluted
earnings (loss) per share of common stock
|
$ | (0.81 | ) | $ | 2.18 | $ | (0.72 | ) | $ | 1.15 | ||||||
|
Average
shares outstanding (000's)
|
103,597 | 103,607 | 103,774 | 103,211 | ||||||||||||
|
OTHER FINANCIAL DATA
($000's)
|
||||||||||||||||
|
Adjusted
EBITDA (2)
|
$ | (31,062 | ) | $ | 417,200 | $ | (94,283 | ) | $ | 224,280 | ||||||
|
Cash
flow before changes in working capital
|
42,833 | 466,684 | (51,370 | ) | 347,569 | |||||||||||
|
Working
capital changes
|
98,109 | (169,409 | ) | 45,246 | (270,684 | ) | ||||||||||
|
Net
cash provided (used) by operating activities
|
140,942 | 297,275 | (6,124 | ) | 76,885 | |||||||||||
|
Net
cash used by investing activities
|
(170,770 | ) | (216,835 | ) | (49,196 | ) | (49,161 | ) | ||||||||
|
Net
cash provided (used) by financing activities
|
(28,424 | ) | 105,693 | (6,714 | ) | (8,220 | ) | |||||||||
|
OPERATIONS
|
||||||||||||||||
|
Consolidated
|
||||||||||||||||
|
Operations
(bpd)
|
||||||||||||||||
|
Total
charges
|
169,911 | 161,837 | 138,673 | 185,599 | ||||||||||||
|
Gasoline
yields
|
80,201 | 76,573 | 69,493 | 88,680 | ||||||||||||
|
Diesel
yields
|
66,039 | 58,748 | 52,360 | 75,256 | ||||||||||||
|
Total
sales
|
175,272 | 166,372 | 152,672 | 191,952 | ||||||||||||
|
Refinery
operating margins information ($ per sales
bbl)
|
||||||||||||||||
|
Refined
products revenue
|
$ | 66.32 | $ | 104.15 | $ | 78.01 | $ | 65.57 | ||||||||
|
Raw
material, freight and other costs (1)
|
60.78 | 93.87 | 76.46 | 58.64 | ||||||||||||
|
Refinery
operating expenses, excluding depreciation
|
5.02 | 5.28 | 6.35 | 4.33 | ||||||||||||
|
Depreciation,
amortization and accretion
|
1.16 | 1.08 | 1.42 | 1.00 | ||||||||||||
|
Cheyenne
Refinery light/heavy crude oil differential ($ per
bbl)
|
$ | 6.61 | $ | 17.15 | $ | 8.56 | $ | 15.68 | ||||||||
|
WTI/WTS
crude oil differential
($ per bbl)
|
1.65 | 3.92 | 2.27 | 3.30 | ||||||||||||
|
El
Dorado Refinery light/heavy crude oil differential ($ per
bbl)
|
6.01 | 17.85 | 6.93 | 14.40 | ||||||||||||
|
BALANCE SHEET DATA ($000's)
|
At December 31, 2009
|
At December 31, 2008
|
||||||||||||||
|
Cash,
including cash equivalents (a)
|
$ | 425,280 | $ | 483,532 | ||||||||||||
|
Working
capital
|
498,190 | 639,188 | ||||||||||||||
|
Short-term
and current debt (b)
|
- | - | ||||||||||||||
|
Total
long-term debt (c)
|
347,485 | 347,220 | ||||||||||||||
|
Shareholders'
equity (d)
|
943,976 | 1,038,976 | ||||||||||||||
|
Net
debt to book capitalization (b+c-a)/(b+c-a+d)
|
-9.0 | % | -15.1 | % | ||||||||||||
|
(1)
|
During
the fourth quarter of 2009, the Company changed its crude oil, unfinished
and finished product inventory valuation method to the LIFO method from
the FIFO method. The comparative financial statements for 2008
have been adjusted to apply the new method
retrospectively.
|
|
(2)
|
Adjusted
EBITDA represents income before interest expense and other financing
costs, interest and investment income, income tax, and depreciation,
accretion 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 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. Adjusted EBITDA is also used for internal
analysis and as a basis for financial covenants. Frontier’s Adjusted
EBITDA for the twelve months and three months ended December 31, 2009 and
2008 is reconciled to net income as
follows:
|
|
Twelve
Months Ended
|
Three
Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
As
Adusted (1)
|
As
Adjusted (1)
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Net
income (loss)
|
$ | (83,760 | ) | $ | 226,053 | $ | (75,054 | ) | $ | 118,976 | ||||||
|
Add
provision (benefit) for income taxes
|
(47,518 | ) | 115,686 | (46,121 | ) | 80,267 | ||||||||||
|
Add
interest expense and other financing costs
|
28,187 | 15,130 | 7,141 | 8,087 | ||||||||||||
|
Subtract
interest and investment income
|
(2,279 | ) | (5,425 | ) | (331 | ) | (734 | ) | ||||||||
|
Add
depreciation, amortization and accretion
|
74,308 | 65,756 | 20,082 | 17,684 | ||||||||||||
|
Adjusted
EBITDA
|
$ | (31,062 | ) | $ | 417,200 | $ | (94,283 | ) | $ | 224,280 | ||||||
*****