UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934
| [X] | FOR THE YEAR ENDED DECEMBER 31, 2001 OR | |
| [ ] | Transition Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from . . . . to . . . . Commission file number 1-7627 |
FRONTIER RETIREMENT SAVINGS PLAN
(Full title of the plan)
FRONTIER OIL CORPORATION
(Name of issuer of the securities)
10000 Memorial Drive, Suite 600
Houston, Texas 77024-3411
(Address of issuer's principal executive offices)
FRONTIER RETIREMENT SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
FOR THE YEAR ENDED DECEMBER 31, 2001
INDEX
| Page | |
| Independent Auditors' Report | 1 |
| Statement of Net Assets Available for Plan Benefits As of December 31, 2001 and 2000 | 2 |
| Statement of Changes in Net Assets Available for Plan Benefits for the Year Ended December 31, 2001 | 3 |
| Notes to Financial Statements | 4 |
| Supplemental Schedules*: Schedule of Assets Held As of December 31, 2001 | 9 |
| Exhibit Index | 10 |
* Other supplemental schedules required by Section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable.
To the Trustees and Participants of
the Frontier Retirement Savings Plan
Denver, Colorado
We have audited the accompanying statements of net assets available for plan benefits of the Frontier Retirement Savings Plan (the “Plan”) as of December 31, 2001 and 2000, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2001. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 2001 and 2000 and the changes in net assets available for plan benefits for the year ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held as of December 31, 2001 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plan’s management. Such schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
Deloitte & Touche LLP
Denver, Colorado
June 25, 2002.
FRONTIER RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
As of December 31, 2001 and 2000
2001 2000
--------------- --------------
ASSETS
Cash and Cash Equivalents $ 14,819 $ -
--------------- --------------
Investments at Fair Value (Note 2):
Mutual Funds 23,188,998 23,900,947
Frontier Oil Corporation Common Stock 338,191 -
Common/Collective Trust 3,762,311 2,745,608
Participant Loans 680,608 728,601
--------------- --------------
27,970,108 27,375,156
--------------- --------------
Receivables:
Employer Contributions 943,040 897,903
Employee Contributions 226,105 233,632
--------------- --------------
1,169,145 1,131,535
--------------- --------------
Total Assets 29,154,072 28,506,691
--------------- --------------
LIABILITIES
Excess Contributions Payable to Participants (78,086) (75,536)
-------------- -------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 29,075,986 $ 28,431,155
=============== ==============
The accompanying notes are an integral part of these statements.
FRONTIER RETIRMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the Year Ended December 31, 2001
Additions to Net Assets Attributed to:
Dividends and Interest Income $ 674,124
Participant Loan Interest 61,145
--------------
735,269
Contributions:
Employer 4,035,541
Employee 3,378,939
Rollovers 13,587
Transfers from Frontier Refining & Marketing and Subsidiaries
Collectively Bargained Employees Retirement Savings Plan 94,469
--------------
Total Additions 8,257,805
--------------
Deductions from Net Assets Attributed to:
Net Depreciation in Fair Value of Investments (Note 2) (4,775,356)
Net Loss on Sale of Assets (Note 2) (2,016,177)
Benefits Paid to Participants (732,639)
Excess Contributions Payable to Participants (78,086)
Administrative Fees (10,716)
-------------
Total Deductions (7,612,974)
-------------
Net Increase 644,831
Net Assets Available for Plan Benefits:
Beginning of Year 28,431,155
--------------
End of Year $ 29,075,986
==============
The accompanying notes are an integral part of this statement.
| The following summary of the Frontier Retirement Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan document, available upon request from the Company’s Human Resources Department, for a more complete description of the Plan’s provisions. The Plan generally covers employees of Frontier Oil Corporation, Frontier Refining & Marketing Inc. and Subsidiaries and other affiliates as applicable (collectively, the “Company”). |
| On November 17, 1999, the Company acquired a refinery in El Dorado, Kansas from Equilon Enterprises LLC (“Equilon”). The refinery employees became employees of the Company and became eligible to participate in the Plan effective November 17, 1999 and were credited their service with Equilon for purposes of determining eligibility and vesting. |
General
| The Plan is a defined contribution plan covering any person who is employed by the Company or an affiliate, has completed six months of service, is age 21 or older, is not a non-resident alien or “leased” employee and who is not an employee at the Company’s Cheyenne, Wyoming refinery covered by a collective bargaining agreement between employee representatives and the Company or an affiliate. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). Plan benefits are not guaranteed by the Pension Benefit Guaranty Corporation. Any eligible employee will be considered a “Participant” in the Plan. |
| All of the Plan’s assets are held by a trustee-administered trust fund (the “Trust”). The trustee for the Plan is Fidelity Management Trust Company (the “Trustee”). A committee appointed by the Company’s Board of Directors (the “Board”) administers the Plan. |
Basis of Accounting
| The financial statements of the Plan are prepared on the accrual basis of accounting. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan’s management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates. |
Investment Valuation
Investments, except for investments in the Fidelity Managed Income Portfolio and Participant Loans, are stated at fair values. Quoted market prices are used to value investments. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year-end. The Fidelity Managed Income Portfolio is a common/collective trust that invests in guaranteed investment contracts, bank investment contracts and synthetic guaranteed investment contracts. These contracts are carried in the common/collective trust fund’s audited financial statements at estimated fair value as determined by the Trustee based on the underlying investments, which approximates fair value. The Plan’s investment in the Trust is valued daily at the Plan’s proportionate interest in the fund as of the financial statement date. The average yield for the year ended December 31, 2001was 5.40% and the crediting interest rate as of December 31, 2001 and 2000 was 5.82% and 5.92%, respectively. Participant Loans are valued at cost, which approximates fair value. |
The net annual change in the fair value of investments (net realized and unrealized gains or losses) is reflected in the accompanying Statement of Changes in Net Assets Available for Plan Benefits. |
Administrative Expenses
Subject to such limitations as may be imposed by ERISA or other applicable law, all costs and expenses incurred in connection with the general administration of the Plan and the Trust shall be covered by the Company unless paid by the Trust. During calendar year 2001, administrative costs in the amount of $12,165 were paid directly by the Company. |
Additionally, administrative costs in the amount of $10,716 were paid by the Trust, from specific participant accounts. |
Contributions
Each year, the Company’s Board may determine a contribution (“Profit-Sharing Contribution”) to be made on behalf of each Plan Participant who meets the eligibility requirements. Such contribution, if made, shall be equal to such percentage of the Participant’s compensation (as defined in the Plan document) as the Board may determine. For eligible employees at locations other than El Dorado, Kansas, a percentage contribution of 3% of Participants’ compensation up to the Social Security taxable wage base at the beginning of the year and 6% of Participants’ compensation for the year in excess of such Social Security taxable wage base was made by the Company for the year ended December 31, 2001. For eligible employees at the El Dorado, Kansas, refinery the Company made percentage contributions for the year ended December 31, 2001 based on years of vesting service as follows: |
Less than 9 years 3% of Participants' compensation up to the Social Security taxable
wage base plus 3% of Participants' compensation over the Social
Security taxable wage base.
9 years but less than 15 5% of Participants compensation up to the Social Security taxable
wage base plus 1% of Participants' compensation over the Social
Security taxable wage base.
15 years but less than 20 6% of Participants' compensation.
20 years or more 8% of Participants' compensation.
A Participant is eligible to receive a quarterly Profit-Sharing Contribution, currently funded at the end of the said quarter, if he/she is an eligible employee at the end of the said quarter. |
Participants may elect to contribute (“Employee Contributions”) from 1% to 15% of their compensation as a before-tax contribution to the Plan, subject to Internal Revenue Service limits. |
In addition, the Company may, at the discretion of the Board, make a matching contribution (��Matching Contribution”) on behalf of each Participant. This Matching Contribution, if any, shall be equal to the amounts contributed by Participants not to exceed a percentage determined by the Board. During 2001, Matching Contributions up to 6% of Participants’ compensation were made. Matching Contributions are funded quarterly and a Participant is eligible to receive the Matching Contributions for a quarter if he/she is an eligible employee at the end of the said quarter. |
Total annual additions under the Plan and all other plans sponsored by the Company are limited to the lesser of 25% of eligible compensation or $35,000. |
Participant Accounts
A separate account (“Account”) is maintained for each Participant and is credited for the contributions made by and on behalf of each Participant. Each Participant has an undivided proportionate interest in the Trust that is measured by the proportion that the market value of their Account bears to the total market value of all Accounts as of the date that such interest is being determined. As of each Valuation Date, as defined in the Plan, the net earnings and gains or losses of each Investment Fund are allocated to each Participant’s Account in the same proportion that the market value of their Account in such Investment Fund bears to the total market value of all Participants’ Accounts in such Investment Fund. |
Vesting
Participants are immediately fully vested in all amounts contributed to the Plan. |
Payment of Benefits
Upon a Participant’s retirement, death, disability, or termination of employment, the Participant’s Account will be available for distribution as soon as reasonably practical following the termination date. In addition, hardship distributions are permitted if certain criteria are met. The Plan provides that participants may receive in-service distributions of any or all of their account as of the date they attain age 59½. Any amounts subsequently credited to their Account shall be available after each such contribution. Benefits are recorded when paid. |
Participant Loans
Subject to certain limitations, each Participant may borrow amounts from their Account as defined in the Plan. The terms of such loans are determined by the guidelines defined in the Plan, and are in conformance with Internal Revenue Service guidelines. The maximum amount available for borrowing is 50% of the Participant’s vested account balance, not to exceed $50,000. |
The Plan administrator establishes the available investment alternatives administered under the Trust. Each Plan Participant directs the investment of all contributions to his/her Account in increments of 10% in any one or more of the available investment alternatives. Currently, there are nineteen investment alternatives in a common/collective trust, mutual funds and Frontier oil common stock from which the Participant may choose. |
The fair value of individual investments that represent 5% or more of the Plan’s total net assets as of December 31, 2001 and 2000 are as follows: |
2001 2000
-------------------------- --------------------------
Shares Shares
or or
Units Amount Units Amount
----------- ------------- ---------- -------------
Fidelity Managed Income Portfolio 3,762,311 $ 3,762,311 2,745,608 $ 2,745,608
Fidelity Puritan Fund 166,731 2,946,143 120,815 2,274,938
Fidelity Independence Fund 344,407 5,431,298 359,087 7,903,513
Fidelity Growth & Income Fund 61,805 2,310,262 45,659 1,922,245
Fidelity Aggressive Growth Fund 264,175 5,024,613 207,111 7,491,198
Fidelity Contrafund* 41,614 1,779,832 22,627 1,112,545
Fidelity Low-Priced Stock Fund* 53,353 1,462,934 18,644 431,057
Fidelity Spartan U.S. Equity Index Fund* 44,036 1,789,611 25,762 1,205,911
* These funds did not exceed 5% or more of the Plan’s total net assets as of December 31, 2000; they are reflected for comparative purposes to 2001 only.
The gain or loss on the sale of assets represents the difference between the sales proceeds and the fair value of the investment at the beginning of the year, or the acquisition cost if the asset was acquired during the year. Net appreciation or depreciation in the fair value of investments is computed as the difference between the fair value at the end of the year and the beginning of the year, or the acquisition cost if the asset was acquired during the year. The Plan’s mutual funds (except the Fidelity Managed Income Portfolio) and Frontier Oil Common Stock depreciated in total value during 2001 by a net $6,791,533 (including gains and losses on funds bought and sold, as well as held during the year). |
The Internal Revenue Service has determined and informed the Company by a letter dated April 14, 1997, that the Plan is qualified and the Trust established under the Plan is tax-exempt, under the appropriate sections of the Internal Revenue Code. The Plan has been amended since April 14, 1997, and it is the Plan administrator’s opinion that the Plan is still designed and being operated in compliance with the applicable sections of the Internal Revenue Code. |
Although the Company has not expressed any intent to do so, the Plan specifies that the Company has the right to at any time amend, modify or terminate the Plan by action of the Board. |
Certain Plan investments are shares of mutual funds and common/collective trusts managed by Fidelity Management Trust Company, the trustee of the Plan and, therefore, these transactions qualify as a party-in-interest. Other Plan investments are shares of Frontier Oil Common Stock, which also qualify as party-in-interest transactions. |
The Plan provides for various investment options in mutual fund and common/collective trusts. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the Statements of Net Assets Available for Plan Benefits and the Statement of Changes in Net Assets Available for Plan Benefits. |
Effective April 1, 2002 the Plan was amended including several changes available as a result of the 2001 Economic Growth and Tax Relief Reconciliation Act (“EGTRRA”). Employees may now elect to contribute up to 60% (previously 15%) of their compensation as a before-tax contribution to the Plan, but are still subject to Internal Revenue Service dollar limits. Participants who are age 50 or older may now contribute additional amounts into the Plan each year ($1,000 for 2002) as allowed per EGTRRA. Total annual additions for the total of employee and employer contributions under the Plan and all other plans sponsored by the Company will be the lesser of 100% of eligible compensation or $40,000. |
FRONTIER RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD
As of December 31, 2001
Shares
Identity of Issuer Description of Investments Or Units Market Value
- ------------------------------------ -------------------------------------------- ------------- ----------------
Fidelity Management Trust
Company Common/Collective Trust:
*Fidelity Managed Income Portfolio 3,762,311 $ 3,762,311
Managed Funds:
*Fidelity Intermediate Bond Fund 78,265 807,697
*Fidelity Puritan Fund 166,731 2,946,143
*Fidelity Independence Fund 344,407 5,431,298
*Fidelity Growth & Income Fund 61,705 2,310,262
*Fidelity Aggressive Growth Fund 264,175 5,024,613
*Fidelity Contrafund 41,614 1,779,832
*Fidelity Low-Priced Stock Fund 53,353 1,462,934
*Fidelity Diversified International Fund 45,161 861,674
*Fidelity Spartan US Equity Index Fund 44,036 1,789,611
*Fidelity Value Fund 6,197 319,225
*Fidelity Mid-Cap Stock Fund 3,493 78,830
*Fidelity Freedom 2000 Fund 24 277
*Fidelity Freedom 2010 Fund 27,151 342,375
*Fidelity Freedom 2020 Fund 2,484 31,254
*Fidelity Freedom 2030 Fund 237 2,973
Frontier Oil Corporation *Frontier Oil Corporation Common Stock 20,324 338,191
Plan Participants Participant Loans, maturities up to ten
years, 6.0% to 10.5% interest 680,608
----------------
Total Investments $ 27,970,108
================
*Represents a party-in-interest (Note 5)
EXHIBIT INDEX
| Exhibit Number | Description | |
| 23 | Consent of Independent Accountants |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Frontier Oil Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FRONTIER RETIREMENT SAVINGS PLAN By: /s/ Nancy J. Zupan –––––––––––––––––––– Nancy J. Zupan Vice President - Controller (principal accounting officer) |
Date: June 28, 2002