EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
Exhibit 99.1





NEWS
RELEASE

2009-06

FOR IMMEDIATE RELEASE
Contact: Kristine Boyd
(713) 688-9600 x135

FRONTIER OIL REPORTS FIRST QUARTER 2009 RESULTS

HOUSTON, TEXAS, May 7, 2009 – Frontier Oil Corporation (NYSE: FTO) today announced quarterly net income of $73.5 million, or $0.70 per diluted share, for the quarter ended March 31, 2009, compared to net income of $46.0 million, or $0.44 per diluted share, for the quarter ended March 31, 2008.  The first quarter 2009 results include an after-tax inventory gain of $21.3 million, or $0.20 per diluted share, and an after-tax hedging gain of $13.8 million, or $0.13 per diluted share, compared to an after-tax inventory gain of $62.5 million, or $0.60 per diluted share, and an after-tax hedging loss of $16.8 million, or $0.16 per diluted share, for the comparable period in 2008.

Crude differentials narrowed during the quarter, resulting in an average light/heavy crude oil differential of $6.49 per barrel in the first quarter of 2009, compared to an average of $19.48 per barrel in the first quarter of 2008.  The WTI/WTS differential averaged $1.69 per barrel in the first quarter of 2009, compared to an average of $4.64 per barrel in the first quarter of 2008.

Gasoline demand and the associated crack spread stabilized in the first quarter, offset by a significant decline in distillate fundamentals.  Frontier’s gasoline crack spread averaged $7.04 per barrel in the first quarter of 2009, compared to an average of $4.24 per barrel in the first quarter of 2008.   Frontier’s diesel crack spread fell to an average of $11.69 per barrel, compared to an average of $20.92 per barrel in the first quarter of 2008.

Frontier’s total charges for the first quarter of 2009 averaged 182,475 barrels per day (“bpd”), up from an average of 126,018 bpd in the first quarter of 2008 due to the planned shutdown of the El Dorado crude unit in early 2008 and also due to the additional capacity provided by the El Dorado crude and coker projects completed in 2008.

Frontier’s President and CEO, Mike Jennings, commented, “Our first quarter financial performance provided a strong start in what we expect to be a challenging year for the refining sector.  Gasoline demand appears to have stabilized or marginally improved, while distillate consumption continues to weaken with the economy.  We are hopeful that the U.S. driving season will provide a seasonal boost, but we do not foresee significant improvement in demand or product margins without an accompanying U.S. economic recovery.”

For the three months ended March 31, 2009, Frontier generated $102.8 million in cash flow before changes in working capital, while investing approximately $32.7 million in capital expenditures and reducing working capital by $85.4 million.  Frontier’s cash balance at March 31, 2009 was $631.7 million, up from $483.5 million at December 31, 2008, and exceeded debt by $284.4 million as of March 31, 2009.  There were no cash borrowings under the Company’s revolving credit facility and $257.9 million of borrowing base availability at quarter end.


Conference Call

A conference call is scheduled for today, May 7, 2009, at 11:00 a.m. eastern time to discuss the financial results.  To access the call, please dial (888) 713-4515 several minutes prior to the call.  From outside the United States, please call (913) 312-0646.  A recorded replay of the call may be heard through May 22, 2009 at 1:00 p.m. central time by dialing (888) 203-1112 (international callers (719) 457-0820) and entering the code 4502718.  In addition, the real-time conference call and a recorded replay will be available via webcast by registering from the Investor Relations page of the website www.frontieroil.com.

Frontier operates a 130,000 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
  
             
   
Three Months Ended
  
   
March 31,
  
   
2009
    
2008
  
INCOME STATEMENT DATA ($000s except per share)
            
Revenues
  
$
846,248
    
$
1,185,783
  
Raw material, freight and other costs
    
619,897
      
999,128
  
Refining operating expenses, excluding depreciation
    
75,876
      
87,560
  
Selling and general expenses, excluding depreciation
    
12,421
      
10,355
  
Gain on sale of assets
    
-
      
37
  
Operating income before depreciation
    
138,054
      
88,777
  
Depreciation, amortization and accretion
    
18,144
      
14,940
  
Operating income
    
119,910
      
73,837
  
Interest expense and other financing costs
    
7,420
      
1,639
  
Interest and investment income
    
(516
)
    
(2,313
)
Provision for income taxes
    
39,547
      
28,542
  
Net income
  
$
73,459
    
$
45,969
  
Net income per diluted share
  
$
0.70
    
$
0.44
  
Average shares outstanding (000s)
    
104,252
      
104,018
  
                 
OTHER FINANCIAL DATA ($000s)
                
Adjusted EBITDA (1)
  
$
138,054
    
$
88,777
  
Cash flow before changes in working capital
    
102,815
      
64,761
  
Working capital changes
    
85,417
      
(91,113
)
Net cash provided by (used in) operating activities
    
188,232
      
(26,352
)
Net cash used in investing activities
    
(32,743
)
    
(51,066
)
Net cash used in financing activities
    
(7,299
)
    
(65,720
)
                 
OPERATIONS
                
Consolidated
                
Operations (bpd)
                
Total charges
    
182,475
      
126,018
  
Gasoline yields
    
82,768
      
65,498
  
Diesel yields
    
70,759
      
38,824
  
Total sales
    
179,413
      
137,148
  
                 
Refinery operating margins information ($ per bbl)
                
Refined products revenue
  
$
50.92
    
$
96.76
  
Raw material, freight and other costs
    
38.39
      
80.06
  
Refinery operating expenses, excluding depreciation
    
4.70
      
7.02
  
    Depreciation, amortization and accretion
    
1.12
      
1.19
  
                 
Cheyenne Refinery light/heavy crude oil differential ($ per bbl)
  
$
5.84
    
$
18.36
  
WTI/WTS differential ($ per bbl)
    
1.69
      
4.64
  
El Dorado Refinery light/heavy crude oil differential ($ per bbl)
    
7.54
      
21.45
  
                 
                 
BALANCE SHEET DATA ($000s)
  
March 31, 2009
    
December 31, 2008
  
Cash, including cash equivalents (a)
  
$
631,722
    
$
483,532
  
Working capital
    
715,315
      
651,352
  
Short-term and current debt (b)
    
-
      
-
  
Total long-term debt (c)
    
347,284
      
347,220
  
Shareholders' equity (d)
    
1,121,979
      
1,051,140
  
Net debt to book capitalization (b+c-a)/(b+c-a+d)
    
-34.0
%
    
-14.9
%



(1) 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 three months ended March 31, 2009 and 2008 is reconciled to net income as follows:

   
Three Months Ended
  
   
March 31,
  
   
2009
    
2008
  
   
(in thousands)
  
Net income
  
$
73,459
    
$
45,969
  
Add provision for income taxes
    
39,547
      
28,542
  
Add interest expense and other financing costs
    
7,420
      
1,639
  
Subtract interest and investment income
    
(516
)
    
(2,313
)
Add depreciation, amortization and accretion
    
18,144
      
14,940
  
Adjusted EBITDA
  
$
138,054
    
$
88,777
  



*****