EXHIBIT 99.1
GIANT INDUSTRIES, INC.
NEWS RELEASE
Contact: Mark B. Cox
Executive Vice President, Treasurer, & Chief Financial Officer
Giant Industries, Inc.
(480) 585-8888
FOR IMMEDIATE RELEASE
November 14, 2006
GIANT INDUSTRIES, INC. ANNOUNCES
THIRD QUARTER 2006 RESULTS
Scottsdale, Arizona - November 14, 2006 - Giant Industries, Inc. [NYSE: GI]
today reported net earnings of $44.0 million, or $3.00 per diluted share for
the third quarter ended September 30, 2006. Net earnings were $46.6 million,
or $3.38 per diluted share in the third quarter of 2005. The Company reported
net earnings of $80.9 million, or $5.51 per diluted share, for the first nine
months of 2006 compared to net earnings of $77.3 million, or $5.80 per
diluted share in 2005.
Giant's Chairman and Chief Executive Officer, Fred Holliger commented,
"Strong financial performance from our Four Corners refineries and our Retail
and Wholesale strategic business units contributed to the overall results in
the third quarter. Our Four Corners refineries performed well throughout the
quarter as refining margins and the demand for refined products remained
strong throughout most of the quarter. At our Yorktown refinery, operating
results were negatively impacted by weaker refining margins which resulted
primarily from the processing of relatively high cost feedstocks in a
declining crude oil and finished products market particularly late in the
quarter, coupled with the delay in the start-up of the Ultra Low Sulfur
Diesel unit. The operating results were positively impacted by a $28.8
million after-tax gain from a final settlement with our insurers, relative to
the November 2005 fire at the Yorktown refinery."
"In the third quarter, our Retail operations continued to see growth in fuel
volumes and merchandise sales. Same store fuel volumes increased
approximately 4% and same store merchandise sales increased approximately 5%
over the prior year third quarter level. Throughout the quarter, we also
experienced improvement in fuel margins. Also in the quarter, the number of
retail locations that we operate increased from 134 to 153 as a result of an
acquisition that we closed in mid-August. All of these factors contributed to
an 88% improvement in third quarter profitability from our Retail
operations."
"Our Wholesale operations continued to experience strong demand for gasoline
and diesel in both wholesale and cardlock operations. However, profitability
was lower than the same quarter last year as fuel margins declined slightly
from the prior year level."
Commenting on the recent Yorktown refinery and Ciniza refinery fires,
Holliger stated, "The Yorktown refinery is currently operating at full crude
oil capacity of approximately 62,000 barrels per day. We are, however, unable
to operate the Ultra Low Sulfur Diesel unit. We currently anticipate that the
Ultra Low Sulfur Diesel unit will again be operational in mid-February. As to
our Ciniza refinery operations, the alkylation unit is in the process of
being repaired, and we currently anticipate that it should be operational in
mid-December. Most of the units shutdown after the fire at the refinery have
been brought back on-line and we anticipate returning Ciniza to normal
operations, other than the alkylation unit, by next week."
Commenting on the 16-inch pipeline that will supply crude oil to the
Company's Four Corners refineries, Holliger commented, "We have successfully
completed hydrotesting the pipeline, and we are in the process of making the
necessary changes to reverse the flow of the pipeline. We have experienced
some project delays from our original schedule; nevertheless, we currently
anticipate that we should have the pipeline operational in February with new
crude oil at the refineries by the end of the first quarter of 2007. As
previously noted, when fully operational, the pipeline has sufficient
capacity to allow us to again operate both Four Corners refineries at maximum
rates."
Holliger offered the following update on the proposed merger with Western
Refining, "Since we signed the original merger agreement, a number of
unexpected events occurred that resulted in a change in the transaction
terms. Central to these events were two recent fires at Giant's Ciniza and
Yorktown refineries and the resulting effects on Giant's operations,
including the costs and terms of Giant's insurance coverage. After careful
consideration of these events, all of which were unforeseen when we announced
the original transaction in August, the Boards of Directors of both companies
decided that it still makes good sense to go forward with the transaction,
but at an amended purchase price. While recent events have caused us to
revisit some of the terms of the transaction, we still firmly believe this
combination is in the best interests of all of our stakeholders."
In closing, relative to fourth quarter performance, Holliger remarked, "We
currently believe that our refining fundamentals, overall, are weaker now as
compared to the same time last year, due in part to the narrowing of crack
spreads from the post hurricane period of a year ago. In addition, our
refining operations will be negatively impacted as a result of the recent
fires until our units become fully operational. Same store fuel volumes for
our Retail group are above the prior year's levels, however fuel margins are
lower. In addition, same store merchandise sales for our Retail group are
above the prior year's level, while same store merchandise margins have
remained stable. The Wholesale group currently is experiencing stable margins
and volumes as compared to the same time last year."
Giant's senior management will hold a conference call at 3:00 p.m. ET on
November 14, 2006 to discuss this earnings release and provide an update on
Company operations. The conference call will be broadcast live on the
Company's website at www.giant.com.
Giant Industries, Inc., headquartered in Scottsdale, Arizona, is a refiner
and marketer of petroleum products. Giant owns and operates one Virginia and
two New Mexico crude oil refineries, a crude oil gathering pipeline system
based in Farmington, New Mexico, which services the New Mexico refineries,
finished products distribution terminals in Albuquerque, New Mexico and
Flagstaff, Arizona, a fleet of crude oil and finished product truck
transports, and a chain of retail service station/convenience stores in New
Mexico, Colorado, and Arizona. Giant is also the parent Company of Phoenix
Fuel Co., Inc. and Dial Oil Co., both of which are wholesale petroleum
products distributors. For more information, please visit Giant's website at
www.giant.com.
This press release contains forward-looking statements that involve known and
unknown risks and uncertainties. Forward-looking statements are identified by
words or phrases such as "believes," "expects," "anticipates," "estimates,"
"should," "could," "plans," "intends," "will," variations of such words and
phrases, and other similar expressions. While these forward-looking
statements are made in good faith, and reflect the Company's current judgment
regarding such matters, actual results could vary materially from the
forward-looking statements. Important factors that could cause actual results
to differ from forward-looking statements include, but are not limited to:
the risk that the pipeline acquisition will not result in additional growth
or increased profitability for our Four Corners operations, the risk that it
will not be possible to place the acquired pipeline system in operation
and/or operate the Bloomfield and Ciniza refineries at maximum rates due to
financial, operational or other constraints, the risk that the timetable for
placing the pipeline system into operation will be different than
anticipated, the risk that it will not be possible to obtain additional crude
oil for processing at the Bloomfield and Ciniza refineries at cost effective
prices; the risk that it will cost more or take longer to repair the damaged
units at the Ciniza and Yorktown refineries; the risk that we will not
receive anticipated amounts of insurance proceeds for the damaged units at
the Ciniza and Yorktown refineries; the risk that the Western transaction
will not close on schedule or at all; the risk that our refining fundamentals
will continue to weaken; the risk that same store fuel volumes and
merchandise sales for our retail group will not remain above the prior year's
level and that fuel margins will continue to be lower; the risk that margins
and volumes for our wholesale group will not remain stable as compared to
last year; and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission. All subsequent written
and oral forward-looking statements attributable to the Company, or persons
acting on behalf of the Company, are expressly qualified in their entirety by
the foregoing. Forward-looking statements made by the Company represent its
judgment on the dates such statements are made. The Company assumes no
obligation to update any forward-looking statements to reflect new or changed
events or circumstance.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------
(In thousands except shares and per share data)
- -------------------------------------------------------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
- -------------------------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- -------------------------------------------------------------------------------------------------------------------
Net revenues $ 1,165,948 $ 1,085,225 $ 3,174,252 $ 2,660,309
Cost of products sold (excluding
depreciation and amortization) 1,052,131 920,408 2,879,390 2,295,082
- -------------------------------------------------------------------------------------------------------------------
Operating expenses 60,609 53,901 168,619 148,889
Depreciation and amortization 11,972 9,973 32,508 30,435
Selling, general and administrative expenses 12,836 15,431 36,047 35,072
Net loss/(gain) on disposal/write-down of assets (450) 1,055 (1,041) 835
Gain from insurance settlement due to fire incident (46,050) - (82,003) (3,688)
- -------------------------------------------------------------------------------------------------------------------
Operating income 74,900 84,457 140,732 153,684
Interest expense (5,153) (5,783) (14,014) (19,159)
Costs associated with early debt extinguishment - 17 - (2,082)
Amortization of financing costs (399) (398) (1,197) (2,398)
Investment and other income 1,156 479 3,838 967
- -------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations
before income taxes 70,504 78,772 129,359 131,012
Provision for income taxes 26,461 32,132 48,428 53,776
- -------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations 44,043 46,640 80,931 77,236
Earnings from discontinued operations, net
of income tax provision of $13 and $9 - - - 15
- -------------------------------------------------------------------------------------------------------------------
Net Earnings $ 44,043 $ 46,640 $ 80,931 $ 77,251
===================================================================================================================
Net Earnings per common share:
Basic
Continuing operations $ 3.02 $ 3.43 $ 5.55 $ 5.88
Discontinued operations - - - -
- -------------------------------------------------------------------------------------------------------------------
$ 3.02 $ 3.43 $ 5.55 $ 5.88
===================================================================================================================
Assuming dilution
Continuing operations $ 3.00 $ 3.38 $ 5.51 $ 5.80
Discontinued operations - - - -
- -------------------------------------------------------------------------------------------------------------------
$ 3.00 $ 3.38 $ 5.51 $ 5.80
===================================================================================================================
Weighted average number of shares outstanding:
Basic 14,601,212 13,611,847 14,594,953 13,137,526
Assuming dilution 14,686,319 13,786,784 14,677,905 13,324,686
===================================================================================================================
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
- -----------------------------------------------------------------------------------------
September 30, 2006 December 31, 2005
- -----------------------------------------------------------------------------------------
Assets
Current assets $ 410,282 $ 442,355
- -----------------------------------------------------------------------------------------
Property, plant and equipment 951,574 764,788
Less accumulated depreciation and amortization (318,127) (297,962)
- -----------------------------------------------------------------------------------------
633,447 466,826
Other assets 80,130 75,291
- -----------------------------------------------------------------------------------------
Total Assets $ 1,123,859 $ 984,472
=========================================================================================
Liabilities and Stockholders' Equity
Current liabilities $ 226,143 $ 208,508
Long-term debt 275,251 274,864
Deferred income taxes 114,306 76,834
Other liabilities 25,628 24,430
Stockholders' equity 482,531 399,836
- -----------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 1,123,859 $ 984,472
=========================================================================================
OPERATING STATISTICS
3 Qtr. 2006 2 Qtr. 2006 1 Qtr. 2006 4 Qtr. 2005 3 Qtr. 2005
- -----------------------------------------------------------------------------------------------------------
Refining Group:
- --------------
Four Corners Operations:
Crude Oil/NGL Throughput (BPD) 26,572 28,658 29,122 29,033 29,867
Refinery Sourced Sales Barrels (BPD) 27,102 27,084 28,471 27,075 29,096
Avg. Crude Oil Costs ($/Bbl) $ 70.50 $ 67.86 $ 62.30 $ 60.21 $ 60.59
Refining Margins ($/Bbl) $ 18.31 $ 21.97 $ 10.84 $ 16.64 $ 18.08
Retail Fuel Volumes Sold as a % of Four
Corners Refineries? Sourced
Sales Barrels 50% 47% 38% 37% 38%
Yorktown Operations:
Crude Oil/NGL Throughput (BPD) 70,751 60,396 37,589 41,685 68,201
Refinery Sourced Sales Barrels (BPD) 68,360 61,668 33,466 45,566 70,936
Avg. Crude Oil Costs ($/Bbl) $ 68.92 $ 68.36 $ 59.02 $ 57.72 $ 58.05
Refining Margins ($/Bbl) $ 3.81 $ 6.65 $ (3.50) $ 9.61 $ 11.25
Retail Group:(1)(2)
- ------------
Fuel Gallons Sold (000's) 52,426 49,021 46,261 45,421 48,210
Fuel Margins ($/gal) $ 0.25 $ 0.17 $ 0.15 $ 0.29 $ 0.20
Merchandise Sales ($ in 000's) $ 43,175 $ 40,972 $ 35,531 $ 36,828 $ 40,527
Merchandise Margins 27% 27% 27% 28% 27%
Number of Operating Units at End of Period 153 134 134 135 136
Wholesale Group: (3)
- ---------------
Fuel Gallons Sold (000's) 150,278 149,231 140,748 141,328 138,126
Fuel Margins ($/gal) $ 0.07 $ 0.06 $ 0.07 $ 0.09 $ 0.08
Lubricant Sales ($ in 000's) $ 18,388 $ 15,770 $ 17,644 $ 14,789 $ 14,081
Lubricant Margins 14% 14% 13% 15% 22%
===========================================================================================================
Operating Income/(loss)(before corporate
allocations) (in 000's)
Refining - Four Corners Operations $ 24,572 $ 35,375 $ 11,233 $ 22,539 $ 32,968
- Yorktown Operations (802) 14,589 (30,805) 16,533 52,288
Retail(1) 8,212 3,978 1,711 7,751 4,377
Wholesale 5,202 3,527 4,175 5,109 7,577
Corporate (8,784) (8,392) (6,102) (5,800) (11,698)
Net gain/(loss) on disposal/write-down
of assets(1)(4) 46,500 33,051 3,493 (174) (1,055)
- -----------------------------------------------------------------------------------------------------------
Total(1) $ 74,900 $ 82,128 $(16,295) $ 45,958 $ 84,457
===========================================================================================================
Capital expenditures (in 000's)
Refining - Four Corners Operations(5) $ 25,168 $ 26,263 $ 9,783 $ 5,687 $ 3,958
- Yorktown Operations(6) 23,973 40,224 47,791 14,190 14,734
Retail 2,663 997 814 1,488 1,221
Wholesale 744 1,039 1,204 529 528
Corporate 395 398 105 375 252
- -----------------------------------------------------------------------------------------------------------
Total $ 52,943 $ 68,921 $ 59,697 $ 22,269 $ 20,693
===========================================================================================================
(1) Includes 12 convenience stores from Dial Oil Co.
(2) Includes 21 convenience stores purchased from Amigo Petroleum Company.
(3) Includes Wholesale operations of Dial Oil Co.
(4) Includes insurance proceeds related to the Ciniza and Yorktown fire incidences that occurred in
2004 and 2005, respectively.
(5) Includes disbursements related to the Ciniza fire incident.
(6) Includes disbursements related to the Yorktown fire incident.
Selected Financial Data
September 30, 2006 December 31, 2005
- -----------------------------------------------------------------------------------------
Working Capital (In Thousands) $ 184,139 $ 233,847
Current Ratio 1.81:1 2.12:1
Long-Term Debt As A Percent of Total Capital (8) 36.3% 40.7%
Net Debt As A Percent of Total Net Capital (9) 31.6% 21.7%
Book Value Per Share (10) $ 32.96 $ 27.36
Net cash provided by operating activities $ 62,318 $ 188,808
- -----------------------------------------------------------------------------------------
(8) Total Capital represents Long-Term Debt plus Total Stockholders' Equity.
(9) Net Debt represents Long-Term Debt less Cash and cash equivalents. Total Net Capital
represents Long-Term Debt less Cash and cash equivalents plus Total Stockholders' Equity.
(10) Book Value Per Share represents Total Stockholders' Equity divided by number of common
shares outstanding.
Share Price Data (NYSE: GI)
High Low Close
- -------------------------------------------
2006 3rd Quarter $82.30 $64.49 $81.20
2006 2nd Quarter $76.97 $56.09 $66.55
2006 1st Quarter $71.00 $52.44 $69.54
2005 4th Quarter $60.50 $47.80 $51.96
2005 3rd Quarter $59.74 $35.90 $58.54
RECONCILIATIONS TO AMOUNTS REPORTED UNDER GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES
REFINING GROUP
- --------------
Refining Margin
- ---------------
Refining margin is the difference between average net sales prices and
average cost of products produced per refinery sourced sales barrel of
refined product. Refining margins for each of our refineries and all of our
refineries on a consolidated basis are calculated as shown below.
Three Months Nine Months
Ended September 30, Ended September 30,
- ---------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------
AVERAGE PER BARREL
Four Corners Operations
Net sales $ 92.44 $ 83.48 $ 87.89 $ 70.60
Less cost of products 74.13 65.40 70.92 57.39
- ---------------------------------------------------------------------------------------------------
Refining margin $ 18.31 $ 18.08 $ 16.97 $ 13.21
===================================================================================================
Yorktown Operations
Net sales $ 75.24 $ 72.52 $ 73.87 $ 61.42
Less cost of products 71.43 61.27 70.47 52.90
- ---------------------------------------------------------------------------------------------------
Refining margin $ 3.81 $ 11.25 $ 3.40 $ 8.52
===================================================================================================
Consolidated
Net sales $ 80.12 $ 75.71 $ 78.57 $ 64.15
Less cost of products 72.20 62.47 70.62 54.24
- ---------------------------------------------------------------------------------------------------
Refining margin $ 7.92 $ 13.24 $ 7.95 $ 9.91
===================================================================================================
Reconciliations of refined product sales from
produced products sold per barrel to net revenues
Four Corners Operations
Average sales price per produced barrel sold $ 92.44 $ 83.48 $ 87.89 $ 70.60
Times refinery sourced sales barrels per day 27,102 29,096 27,547 29,002
Times number of days in period 92 92 273 273
- ---------------------------------------------------------------------------------------------------
Refined product sales from produced
products sold* (000's) $ 230,488 $ 223,462 $ 660,962 $ 558,979
===================================================================================================
Yorktown Operations
Average sales price per produced barrel sold $ 75.24 $ 72.52 $ 73.87 $ 61.42
Times refinery sourced sales barrels per day 68,360 70,936 54,626 68,430
Times number of days in period 92 92 273 273
- ---------------------------------------------------------------------------------------------------
Refined product sales from produced
products sold* (000's) $ 473,193 $ 473,274 $1,101,616 $1,147,411
===================================================================================================
Consolidated (000's)
Sum of refined product sales from
produced products sold* $ 703,681 $ 696,736 $1,762,578 $1,706,390
Purchased product, transportation and
other revenues 110,921 49,706 390,232 146,199
- ---------------------------------------------------------------------------------------------------
Net revenue $ 814,602 $ 746,442 $2,152,810 $1,852,589
===================================================================================================
*Includes inter-segment net revenues.
Three Months Nine Months
Ended September 30, Ended September 30,
- ---------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------
Reconciliation of average cost of products per
produced per barrel sold to total cost of products
sold (excluding depreciation and amortization)
Four Corners Operations
Average cost of products per produced
barrel sold $ 74.13 $ 65.40 $ 70.92 $ 57.39
Times refinery sourced sales barrels per day 27,102 29,096 27,547 29,002
Times number of days in period 92 92 273 273
- ---------------------------------------------------------------------------------------------------
Cost of products for produced products
sold (000's) $ 184,835 $ 175,065 $ 533,342 $ 454,388
===================================================================================================
Yorktown Operations
Average cost of products per produced
barrel sold $ 71.43 $ 61.27 $ 70.47 $ 52.90
Times refinery sourced sales barrels per day 68,360 70,936 54,626 68,430
Times number of days in period 92 92 273 273
- ---------------------------------------------------------------------------------------------------
Cost of products for produced products
sold (000's) $ 449,232 $ 399,855 $1,050,912 $ 988,246
===================================================================================================
Consolidated
Sum of refined cost of produced products sold $ 634,067 $ 574,920 $1,584,254 $1,442,634
Purchased product, transportation and other
cost of products sold 103,507 41,174 366,710 121,835
- ---------------------------------------------------------------------------------------------------
Total cost of products sold (excluding
depreciation and amortization) $ 737,574 $ 616,094 $1,950,964 $1,564,469
===================================================================================================
RETAIL GROUP(1)(2)
- ------------
Fuel Margin
- -----------
Fuel margin is the difference between fuel sales less cost of fuel sales
divided by number of gallons sold.
Three Months Nine Months
Ended September 30, Ended September 30,
- ---------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------
(in 000's except fuel margin per gallon)
Fuel sales $ 151,969 $ 123,916 $ 403,045 $ 294,410
Less cost of fuel sold 138,815 114,179 374,960 273,134
- ---------------------------------------------------------------------------------------------------
Fuel margin $ 13,154 $ 9,737 $ 28,085 $ 21,276
Number of gallons sold 52,426 48,210 147,709 129,090
Fuel margin per gallon $ 0.25 $ 0.20 $ 0.19 $ 0.16
Reconciliation of fuel sales to
net revenues (000's)
Fuel sales $ 151,969 $ 123,916 $ 403,045 $ 294,410
Excise taxes included in sales (20,246) (15,640) (53,025) (46,006)
- ---------------------------------------------------------------------------------------------------
Fuel sales, net of excise taxes 131,723 108,276 350,020 248,404
Merchandise sales 43,175 40,527 119,677 108,139
Other sales 5,387 4,050 15,073 12,109
- ---------------------------------------------------------------------------------------------------
Net revenues $ 180,285 $ 152,853 $ 484,770 $ 368,652
===================================================================================================
Reconciliation of fuel cost of products sold
to total cost of products sold (excluding
depreciation and amortization) (000's)
Fuel cost of products sold $ 138,815 $ 114,179 $ 374,960 $ 273,134
Excise taxes included in cost of products sold (20,246) (15,640) (53,025) (46,006)
- ---------------------------------------------------------------------------------------------------
Fuel cost of products sold, net of excise taxes 118,569 98,539 321,935 227,128
Merchandise cost of products sold 31,320 29,535 86,849 78,817
Other cost of products sold 4,163 3,065 11,588 9,494
- ---------------------------------------------------------------------------------------------------
Total cost of products sold (excluding
depreciation and amortization) $ 154,052 $ 131,139 $ 420,372 $ 315,439
===================================================================================================
(1) Includes 12 retail stores acquired in the Dial Oil transaction on July 12, 2005.
(2) Includes 21 operating stores acquired from Amigo in August 2006 for the three and nine months
ended September 30, 2006.
WHOLESALE GROUP(1)(2)
- ---------------
Fuel Margin
- -----------
Fuel margin is the difference between fuel sales less cost of fuel sales
divided by number of gallons sold.
Three Months Nine Months
Ended September 30, Ended September 30,
- ---------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------
(in 000's except fuel margin per gallon)
Fuel sales $ 375,004 $ 325,784 $1,075,755 $ 799,579
Less cost of fuel sold 364,420 314,182 1,047,400 773,571
- ---------------------------------------------------------------------------------------------------
Fuel margin $ 10,584 $ 11,602 $ 28,355 $ 26,008
Number of gallons sold 150,278 138,126 440,256 379,336
Fuel margin per gallon $ 0.07 $ 0.08 $ 0.06 $ 0.07
Reconciliation of fuel sales to
net revenues (000's)
Fuel sales $ 375,004 $ 325,784 $1,075,755 $ 799,579
Excise taxes included in sales (48,156) (33,357) (141,714) (119,503)
- ---------------------------------------------------------------------------------------------------
Fuel sales, net of excise taxes 326,848 292,427 934,041 680,076
Lubricant sales 18,389 14,081 51,802 31,520
Other sales 3,318 2,204 10,080 4,505
- ---------------------------------------------------------------------------------------------------
Net revenues $ 348,555 $ 308,712 $ 995,923 $ 716,101
===================================================================================================
Reconciliation of fuel cost of products sold
to total cost of products sold (excluding
depreciation and amortization) (000's)
Fuel cost of products sold $ 364,420 $ 314,182 $1,047,400 $ 773,571
Excise taxes included in cost of products sold (48,156) (33,357) (141,714) (119,503)
- ---------------------------------------------------------------------------------------------------
Fuel cost of products sold, net of excise taxes 316,264 280,825 905,686 654,068
Lubricant cost of products sold 15,796 11,461 44,748 26,787
Other cost of products sold 1,089 259 3,637 724
- ---------------------------------------------------------------------------------------------------
Total cost of products sold (excluding
depreciation and amortization) $ 333,149 $ 292,545 $ 954,071 $ 681,579
===================================================================================================
(1) Includes Phoenix Fuel and Wholesale component of Dial Oil Company.
(2) Dial Oil presents sales and cost of sales, net of excise taxes.
Consolidated
Three Months Nine Months
Ended September 30, Ended September 30,
- ---------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------
Reconciliation to net revenues reported
in Condensed Consolidated Statement of
Operations (000's)
Net revenues ? Refinery Group $ 814,602 $ 746,442 $2,152,810 $1,852,589
Net revenues ? Retail Group 180,285 152,853 484,770 368,652
Net revenues ? Wholesale Group 348,555 308,712 995,923 716,101
Net revenues ? Other 90 67 224 378
Eliminations (177,584) (122,849) (459,475) (277,411)
- ---------------------------------------------------------------------------------------------------
Total net revenues reported in Condensed
Consolidated Statement of Earnings $1,165,948 $1,085,225 $3,174,252 $2,660,309
===================================================================================================
Reconciliation to cost of products sold
(excluding depreciation and amortization)
in Condensed Consolidated Statement of
Operations (000's)
Cost of products sold ? Refinery Group
(excluding depreciation and amortization) $ 737,574 $ 616,094 $1,950,964 $1,564,469
Cost of products sold ? Retail Group
(excluding depreciation and amortization) 154,052 131,139 420,372 315,439
Cost of products sold ? Wholesale Group
(excluding depreciation and amortization) 333,149 292,545 954,071 681,579
Eliminations (177,584) (122,849) (459,475) (277,411)
Other 4,940 3,479 13,458 11,006
- ---------------------------------------------------------------------------------------------------
Total cost of products sold (excluding
depreciation and amortization) reported in
Condensed Consolidated Statement of Operations $1,052,131 $ 920,408 $2,879,390 $2,295,082
===================================================================================================
Our refining margin per barrel is calculated by subtracting cost of products from net sales and
dividing the result by the number of barrels sold for the period. Our fuel margin per gallon is
calculated by subtracting cost of fuel sold from fuel sales and dividing the result by the number
of gallons sold for the period. We use refining margin per barrel and fuel margin per gallon to
evaluate performance, and allocate resources. These measures may not be comparable to similarly
titled measures used by other companies. Investors and analysts use these financial measures to
help analyze and compare companies in the industry on the basis of operating performance. These
financial measures should not be considered as alternatives to segment operating income, revenues,
costs of sales and operating expenses or any other measure of financial performance presented in
accordance with accounting principles generally accepted in the United States of America.