UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: December 31, 2003 |
| OR | |
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from . . . .to . . . . |
Commission File Number: 1-7627
FRONTIER OIL CORPORATION
(Exact name of registrant as specified in its charter)
| Wyoming | 74-1895085 | ||
| (State or other jurisdiction of | (I.R.S. Employer | ||
| incorporation or organization) | Identification No.) | ||
| 10000 Memorial Drive, Suite 600 | 77024-3411 | ||
| Houston, Texas | (Zip Code) | ||
| (Address of principal executive offices) |
Registrant’s telephone number, including area code:(713) 688-9600
Securities registered pursuant to Section 12(b) of the Act:
| Name of Each Exchange | |||
| Title of Each Class | on Which Registered | ||
| Common Stock | New York Stock Exchange | ||
| 11¾% Senior Notes, due 2009 |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No . . .
Indicate by check mark if disclosure of delinquent filers pursuant to rule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[X]
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes [X] No . . .
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of June 30, 2003 was $340.8 million.
The number of shares of common stock outstanding as of March 1, 2004 was 26,527,840.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the year ended December 31, 2003 are incorporated by reference into Item 1 of Part I and Items 6 through 8 of Part II.
Portions of the Annual Proxy Statement for the registrant’s 2004 annual meeting of shareholders are incorporated by reference into Items 10 through 14 of Part III.
PURPOSE OF AMENDMENT
Frontier Oil Corporation is filing this Amendment on Form 10-K/A to amend its Annual Report on Form 10-K for the fiscal year ended December 31, 2003 to replace Exhibit 13.1 to correct immaterial typographical errors in the financial statements incorporated by reference in Items 6, 8 and 15. These typographical errors occurred during the process of preparing the document for electronic filing with the Securities and Exchange Commission. This Form 10-K/A continues to speak as of the date of the original filing of the Form 10-K. Frontier Oil Corporation has not updated the disclosure in this amendment to speak as of a later date. All information contained in this amendment and the original Form 10-K is subject to updating and supplementing as provided in the periodic reports filed subsequent to the original filing date with the Securities and Exchange Commission.
ITEM 6. SELECTED FINANCIAL DATA
The information in the 2003 Annual Report to Shareholders under the heading “Five-Year Financial Data” is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and the data contained in the 2003 Annual Report of Shareholders are incorporated herein by reference. See index to financial statements and supplemental data appearing under Item 15(a)1.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
| (a)1. | Financial Statements and Supplemental Data | Page* |
| Consolidated Statements of Income | 23 | ||
| Consolidated Balance Sheets | 24 | ||
| Consolidated Statements of Cash Flows | 25 | ||
| Consolidated Statements of Changes in Shareholders’ Equity | 26 | ||
| Notes to Consolidated Financial Statements | 28 | ||
| Report of Independent Registered Public Accounting Firm | 44 | ||
| Selected Quarterly Financial Data | 20 | ||
| *Reference to pages in the 2003 Annual Report to Shareholders (as published), which portions thereof are incorporated herein by reference. | |||
| (a)2. | Financial Statements Schedules |
| Report of Independent Registered Public Accounting Firm | |
| Schedule I - Condensed Financial Information of Registrant | |
| Schedule II - Valuation and Qualifying Accounts | |
| Other Schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the financial statements or notes thereto. |
| (a)3. List of Exhibits | ||||||
| * | 2.1 | - - | Agreement and Plan of Merger dated March 30, 2003, by and among Frontier Oil Corporation, Front Range Himalaya Corporation, Front Range Merger Corporation, Himalaya Merger Corporation and Holly Corporation (incorporated by reference and filed as Exhibit 99.2 to Form 8-K dated March 30, 2003, filed April 2, 2002, File Number 1-07627). | |||
| * | 3.1 | - - | Articles of Amendment to the Restated Articles of Incorporation of the Company (Exhibit 3.2 to Registration Statement No. 333-47745, filed May 4, 1998). | |||
| * | 3.2 | - - | Fourth Restated By-Laws of the Company as amended through February 20, 1992 (Exhibit 3.2 to Form 10-K dated December 31, 1992, File Number 1-07627, filed March 10, 1993). | |||
| * | 4.1 | - - | Indenture dated as of February 9, 1998 between the Company and Chase Bank of Texas, National Association, as Trustee relating to the Company’s 9-1/8% Senior Notes due 2006 (filed as Exhibit 4.8 to Registration Statement No. 333-47745, filed March 11, 1998). | |||
| * | 4.2 | - - | Indenture dated as of November 12, 1999, among the Company and Chase Bank of Texas, National Association, as Trustee relating to the Company’s 11¾% Senior Notes due 2009 (Exhibit 4.1 to Form 8-K, File Number 1-07627, filed December 1, 1999). | |||
| * | 10.1 | - - | Asset Purchase and Sale Agreement among Frontier El Dorado Refining Company, as buyer, Frontier Oil Corporation, as Guarantor and Equilon Enterprises LLC, as seller, dated as of October 19, 1999 (Exhibit 10.1 to Form 8-K, File Number 1-07627, filed December 1, 1999). | |||
| * | 10.2 | - - | Revolving Credit Agreement dated as of November 16, 1999 among Frontier Oil and Refining Company, as borrower, the lenders named therein, Union Bank of California, N.A., as administrative agent, documentation agent and lead arranger, and Paribas, as syndication agent and lead arranger (Exhibit 10.2 to Form 8-K, File Number 1-07627, filed December 1, 1999). | |||
| * | 10.3 | - - | Purchase and Sale Agreement, dated May 5, 1997, for the sale of Canadian oil and gas properties (Exhibit to From 8-K, File Number 1-07627,filed June 30, 1997). | |||
| *+ | 10.4 | - - | The 1968 Incentive Stock Option Plan as amended and restated (Exhibit 10.1 to Form 10-K dated December 31, 1987, File Number 1-07627, filed March 3, 1998). | |||
| *+ | 10.5 | - - | 1995 Stock Grant Plan for Non-employee Directors (Exhibit 10.14 to Form 10-Q dated June 30, 1995, File Number 1-07627, filed August 3, 1995). | |||
| *+ | 10.6 | - - | Frontier Deferred Compensation Plan (previously named Wainoco Deferred Compensation Plan dated October 29, 1993 and filed as Exhibit 10.19 to Form 10-K dated December 31, 1994, File Number 1-07627, filed March 17, 1995). | |||
| *+ | 10.7 | - - | Frontier Deferred Compensation Plan for Directors (previously named Wainoco Deferred Compensation Plan for Directors dated May 1, 1994 and filed as Exhibit 10.20 to Form 10-K dated December 31, 1994, File Number 1-07627, filed March 17, 1995). | |||
| *+ | 10.8 | - - | Executive Employment Agreement dated December 18, 2000 between the Company and W. Reed Williams (Exhibit 10.10 to Form 10-K dated December 31, 2001, File Number 1-07627, filed March 1, 2002). | |||
| *+ | 10.9 | - - | Executive Employment Agreement dated December 18, 2000 between the Company and James R. Gibbs (Exhibit 10.11 to Form 10-K dated December 31, 2001, File Number 1-07627, filed March 1, 2002). | |||
| *+ | 10.10 | - - | Executive Employment Agreement dated December 18, 2000 between the Company and Julie H. Edwards (Exhibit 10.12 to Form 10-K dated December 31, 2001, File Number 1-07627, filed March 1, 2002). | |||
| *+ | 10.11 | - - | Executive Employment Agreement dated December 18, 2000 between the Company and J. Currie Bechtol (Exhibit 10.13 to Form 10-K dated December 31, 2001, File Number 1-07627, filed March 1, 2002). | |||
| *+ | 10.12 | - - | Executive Employment Agreement dated December 18, 2000 between the Company and Jon D. Galvin (Exhibit 10.14 to Form 10-K dated December 31, 2001, File Number 1-07627, filed March 1, 2002). | |||
| *+ | 10.13 | - - | Executive Employment Agreement dated December 18, 2000 between the Company and Gerald B. Faudel (Exhibit 10.15 to Form 10-K dated December 31, 2001, File Number 1-07627, filed March 1, 2002). | |||
| *+ | 10.14 | - - | Executive Employment Agreement dated February 28, 2001 between the Company and Nancy J. Zupan (Exhibit 10.16 to Form 10-K dated December 31, 2001, File Number 1-07627, filed March 1, 2002). | |||
| *+ | 10.15 | - - | Frontier Oil Corporation Restricted Stock Plan (Exhibit 99.1 to Registration Statement No 333-56946, filed March 13, 2001). | |||
| *+ | 10.16 | - - | Amended and Restated Frontier Oil Corporation 1999 Stock Plan (Exhibit 99.1 to Registration Statement No 333-89876 filed June 6, 2002). | |||
| * | 10.17 | - - | Crude Oil Supply Agreement dated October 15, 2002 between Baytex Energy Ltd, and Frontier Oil and Refining Company (Exhibit 10.2 to Form 10-Q dated September 30, 2002, File Number 1-07627, filed October 30, 2002). On November 28, 2002 this agreement was assigned by Baytex Energy Ltd. to its wholly-owned subsidiary, Baytex Marketing Ltd. | |||
| * | 10.18 | - - | Amended and Restated Revolving Credit Agreement dated May 27, 2003 among Frontier Oil Corporation, one of its wholly owned subsidiaries, Frontier Oil and Refining Company, as borrower, the lenders named therein, Union Bank of California, N.A., as administrative agent, documentation agent and lead arranger, and PNB Paribas, as syndication agent (incorporated by reference and filed as Exhibit 99.2 to Form 8-K dated and filed May 29, 2003, File Number 1-07627). | |||
| 13.1 | - - | Portions of the Company’s 2003 Annual Report covering pages 9 through 44. | ||||
| # | 21.1 | - - | Subsidiaries of the Registrant. | |||
| 23 | - - | Consent of Deloitte & Touche LLP. | ||||
| 31.1 | - - | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 31.2 | - - | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 32.1 | - - | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
| 32.2 | - - | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
* Asterisk indicates exhibits incorporated by reference as shown.
+ Plus indicates management contract or compensatory plan or arrangement.
# Pound sign indicates exhibits filed with original filing.
| (b) | Reports on Form 8-K |
| A report on Form 8-K was filed October 31, 2003 and dated October 30, 2003, File Number 1-07627 regarding a press release announcing the Company’s third quarter results. | |
| (c) | Exhibits The Company’s 2003 Annual Report is available upon request. Shareholders of the Company may obtain a copy of any other exhibits to this Form 10-K at a charge of $.05 per page. Requests should be directed to: Investor Relations Frontier Oil Corporation 10000 Memorial Drive, Suite 600 Houston, Texas 77024-3411 |
| (d) | Schedules Report of Independent Registered Public Accounting Firm on Financial Statement Schedules: |
To the Board of Directors and Shareholders of
Frontier Oil Corporation
Houston, Texas
We have audited the consolidated financial statements of Frontier Oil Corporation as of December 31, 2003 and 2002 and for the years then ended, and have issued our report thereon dated February 19, 2004; such consolidated financial statements and report are included in your 2003 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the 2003 and 2002 financial statement schedules of Frontier Oil Corporation listed in Item 15. These financial statement schedules are the responsibility of the Corporation’s management. Our responsibility is to express an opinion based on our audits. In our opinion, the 2003 and 2002 financial statement schedules, when considered in relation to the 2003 and 2002 basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. The financial statement schedules for the year ended December 31, 2001 were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion, in their report dated February 8, 2002, that such 2001 financial statement schedules, when considered in relation to the 2001 basic consolidated financial statements taken as a whole, presented fairly, in all material respects, the information set forth therein.
DELOITTE & TOUCHE LLP
Houston, Texas
February 19, 2004
Frontier Oil Corporation dismissed Arthur Andersen LLP on March 28, 2002 and subsequently engaged Deloitte & Touche LLP as its independent auditors. The predecessor auditors’ report appearing below is a copy of Arthur Andersen LLP’s previously issued opinion dated February 8, 2002. Since Frontier Oil Corporation is unable to obtain a manually signed audit report, a copy of Arthur Andersen LLP’s most recent signed and dated report has been included to satisfy filing requirements, as permitted under Rule 2-02(e) of Regulation S-X.
To Frontier Oil Corporation:
We have audited in accordance with auditing standards generally accepted in the United States, the financial statements included in Frontier Oil Corporation’s annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 8, 2002. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the index above are the responsibility of the Company’s management and are presented for purposes of complying with the Securities and Exchange Commission’s rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Houston, Texas
February 8, 2002
Frontier Oil Corporation
Condensed Financial Information of Registrant
Balance Sheets
As of December 31, Schedule I
- ---------------------------------------------------------------------------------------------------
(in thousands)
2003 2002
--------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 59,846 $ 106,118
Receivables 710 86
Deferred tax current asset 5,967 5,346
Other current assets 68 231
----------- ----------
Total current assets 66,591 111,781
----------- ----------
Property, Plant and Equipment, at cost -
Furniture, fixtures and other 1,111 1,064
Less - Accumulated depreciation (866) (753)
----------- ----------
245 311
Assets Held for Sale - 472
Investment in Subsidiaries 264,016 279,055
Commutation Account 19,550 -
Prepaid Insurance 6,593 -
Other Assets 8,183 8,972
----------- ----------
TOTAL ASSETS $ 365,178 $ 400,591
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,736 $ 41
Other accrued liabilities 4,091 5,503
----------- ----------
Total current liabilities 5,827 5,544
----------- ----------
Deferred Income Taxes 16,930 15,176
Deferred Revenues and Other 3,723 3,032
Payable to Affiliated Companies 732 615
Long-Term Debt 168,689 207,966
Shareholders' Equity 169,277 168,258
----------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 365,178 $ 400,591
=========== ==========
The “Notes to Condensed Financial Information of Registrant” and the “Notes to Consolidated Financial Statements” in the 2003 Annual Report to Shareholders incorporated herein by reference, are an integral part of these financial statements.
Frontier Oil Corporation
Condensed Financial Information of Registrant
Statements of Income
For the three years ended December 31, Schedule I
- -----------------------------------------------------------------------------------------------------
(in thousands)
2003 2002 2001
---------- ---------- ----------
Revenues:
Equity in earnings of subsidiaries $ 48,949 $ 31,704 $ 166,828
Other income (17) (1) 24
---------- ---------- ----------
48,932 31,703 166,852
---------- ---------- ----------
Costs and Expenses:
Selling and general expenses 7,936 6,208 5,900
Merger termination and legal costs (Note 4) 8,739 - -
Depreciation 113 247 227
---------- ---------- ----------
16,788 6,455 6,127
---------- ---------- ----------
Operating Income 32,144 25,248 160,725
Interest Expense and Other Financing Costs 26,981 24,858 27,543
Interest Income (1,004) (1,698) (2,517)
---------- ---------- ----------
Income before Income Taxes 6,167 2,088 135,699
Provision for Income Taxes 2,935 1,060 28,046
---------- ---------- ----------
Net Income $ 3,232 $ 1,028 $ 107,653
========== ========== ==========
The “Notes to Condensed Financial Information of Registrant” and the “Notes to Consolidated Financial Statements” in the 2003 Annual Report to Shareholders incorporated herein by reference, are an integral part of these financial statements.
Frontier Oil Corporation
Condensed Financial Information of Registrant
Statements of Cash Flows
For the three years ended December 31, Schedule I
- ----------------------------------------------------------------------------------------------------------
(in thousands)
2003 2002 2001
----------- ----------- ----------
Operating Activities
Net income $ 3,232 $ 1,028 $ 107,653
Equity in earnings of subsidiaries (48,949) (31,704) (166,828)
Depreciation 113 247 227
Deferred income taxes 2,655 1,149 9,463
Other (22,766) 5,430 (1,598)
----------- ----------- ----------
Net cash used by operating activities (65,715) (23,850) (51,083)
----------- ----------- ----------
Investing Activities
Additions to property, plant and equipment and other (79) (350) (46)
Proceeds from sale of asset 240 - -
Investment in subsidiaries (18,039) (181,867) (12,000)
----------- ----------- ----------
Net cash used by investing activities (17,878) (182,217) (12,046)
----------- ----------- ----------
Financing Activities
Repurchases of debt:
9-1/8% Senior Notes (39,475) (1,090) (24,410)
11-3/4% Senior Notes - - (6,541)
Proceeds from issuance of common stock 1,441 1,702 3,271
Purchase of treasury stock (1,075) (787) (22,600)
Change in intercompany balances, net 117 (30,453) 953
Dividends paid to shareholders (5,187) (5,161) (2,629)
Dividends received from subsidiaries 81,500 244,514 174,800
Other - - 13
----------- ----------- ----------
Net cash provided by financing activities 37,321 208,725 122,857
----------- ----------- ----------
(Decrease) increase in cash and cash equivalents (46,272) 2,658 59,728
Cash and cash equivalents, beginning of period 106,118 103,460 43,732
----------- ----------- ----------
Cash and cash equivalents, end of period $ 59,846 $ 106,118 $ 103,460
=========== =========== ==========
The “Notes to Condensed Financial Information of Registrant” and the “Notes to Consolidated Financial Statements” in the 2003 Annual Report to Shareholders incorporated herein by reference, are an integral part of these financial statements.
Schedule I
(1) General
The accompanying condensed financial statements of Frontier Oil Corporation (Registrant) should be read in conjunction with the consolidated financial statements of the Registrant and its subsidiaries included in the Registrant’s 2003 Annual Report to Shareholders.
(2) Long-term debt
The components (in thousands) of long-term debt are as follows:
2003 2002
----------- ----------
11-3/4% Senior Notes, net of unamortized discount $ 168,689 $ 168,491
9-1/8% Senior Notes - 39,475
----------- ----------
$ 168,689 $ 207,966
=========== ==========
(3) Five-year maturities of long-term debt
The 11¾% Senior Notes are due 2009; until then there are no maturities of long-term debt.
(4) On March 31, 2003 the Company announced that it had entered into an agreement with Holly Corporation (“Holly”) pursuant to which the two companies would merge. On August 20, 2003, Frontier announced that Holly had advised the Company that Holly was not willing to proceed with the merger agreement on the agreed terms. As a result, the Company filed suit for damages in the Delaware Court of Chancery. On September 2, 2003, Holly filed an answer and counterclaims, denying our claims, asserting that Frontier repudiated the merger agreement by filing the Delaware lawsuit, and claiming among other things that the Beverly Hills, California litigation caused the Company to be in breach of its representations and warranties in the merger agreement. Frontier has denied all of Holly’s counterclaims. Trial on the suit and Holly’s counterclaims is scheduled to begin the week of February 23, 2004. The $8.7 million of “Merger termination and legal costs” for the year ended December 31, 2003 included $3.0 million in transaction related costs and $5.7 million in ongoing legal expenses incurred (on an accrual basis) on the Holly lawsuit. Additional net costs of approximately $18.0 million related to the issuance and termination of debt for the anticipated merger have reduced the “Equity in earnings in subsidiaries” on our 2003 statement of income.
Frontier Oil Corporation and Subsidiaries
Valuation and Qualifying Accounts
For the three years ended December 31, Schedule II
- ----------------------------------------------------------------------------------------------------------
(in thousands)
Balance at
beginning of Balance at end
Description period Additions Deductions of period
- -----------------------------------------------------------------------------------------------------------
2003
Allowance for doubtful accounts $ 1,300 $ 103 $ 903 $ 500
Turnaround accruals (1) 26,862 12,163 12,383 26,642
Valuation allowance on deferred tax assets 1,555 - - 1,555
2002
Allowance for doubtful accounts 500 800 - 1,300
Turnaround accruals (1) 25,837 10,969 9,944 26,862
Valuation allowance on deferred tax assets - 1,555 - 1,555
2001
Allowance for doubtful accounts 500 - - 500
Turnaround accruals (1) 31,056 10,637 15,856 25,837
Valuation allowance on deferred tax assets 24,603 - 24,603 -
(1) The turnaround accrual deductions are actual costs incurred.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the date indicated.
| FRONTIER OIL CORPORATION | |
| | |
| By: | /s/ Julie H. Edwards —————————————————— Julie H. Edwards Executive Vice President - Finance and Administration Chief Financial Officer (principal financial officer) |
Date: October 13, 2004