Exhibit 99.1
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NEWS RELEASE
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FOR IMMEDIATE RELEASE
Contact: Larry E. Bell
FRONTIER REPORTS THIRD QUARTER RESULTS
HOUSTON, TEXAS, October 21, 1999 -- Frontier Oil Corporation ("FTO") today
reported net income for the third quarter ending September 30, 1999 of $8.4
million, or $.30 per diluted share, compared to $9.4 million, or $.33 per
diluted share, for the third quarter of 1998. Operating income before
depreciation was $13.2 million versus $13.7 million for the same period last
year. Frontier's operating income was $10.2 million compared to $11.0 million
for the third quarter of 1998. This year's third quarter results benefitted from
approximately $6.1 million of inventory gains due to the sharp increase in crude
oil prices during the quarter.
The Company's third quarter results were down compared to last year's third
quarter due to a significant decrease in the light/heavy crude oil spread and
lower by product margins due to higher crude oil costs. The refined product
margin was $6.26 per bbl, compared to $7.14 per bbl in the third quarter last
year. The light/heavy crude oil spread for the quarter was $1.89 per bbl, or
$1.77 lower than last year's spread of $3.66 per bbl, and was the lowest quarter
ever experienced by Frontier. Gasoline production increased 7% to 17,437 bbls
per day, distillate production was up 10% to 13,115 bbls per day, and sales
volumes increased 9% to 48,984 bbls per day. Refining operating expenses per bbl
decreased $.48 per bbl to $2.87 per bbl for the third quarter of 1999 due to
higher throughput, lower maintenance costs and lower turnaround accruals.
For the nine months ending September 30, 1999, the Company had net income of
$7.4 million, or $.27 per diluted share, compared to $14.8 million, or $.51 per
diluted share for the same period last year. Operating income before
depreciation was $21.5 million versus $31.0 million for the first nine months of
1998. Operating income was $12.8 million compared to $23.1 million in the first
nine months last year. The 1998 results include a $3.0 million loss on the early
retirement of debt. This year's results benefitted from approximately $12.7
million of inventory gains due to a sharp increase in crude oil prices.
This year's results were down compared to 1998 results due to lower product
margins and a significant reduction in the light/heavy crude oil spread offset
by the benefit of inventory gains. High nationwide inventory levels of gasoline
and diesel in 1999 kept margins through June at their lowest levels since 1995
although the third quarter showed significant improvement. The refined product
margin was $5.28 per bbl compared to $6.40 in the 1998 period. The light/heavy
crude oil spread for the nine months ending September 30 was $2.01 per bbl
compared to $4.40 per bbl for the same period last year and was the lowest ever
experienced by Frontier for a nine month period. Yields of gasoline increased 8%
while yields of distillate decreased 3% in 1999 compared to the same period last
year. Refining operating expense per bbl decreased $.20 per bbl to $3.14 per bbl
in 1999 due to higher throughput and lower maintenance costs.
The Company ended the third quarter of 1999 with $26 million in cash and a debt
to total capitalization ratio of approximately 48%. As announced October 20,
1999, Frontier and Equilon Enterprises LLC ("Equilon") have signed the asset
purchase and sale agreement and other commercial agreements related to the
acquisition by a Frontier subsidiary of Equilon's 110,000 barrel per day
refinery in El Dorado, Kansas. Closing of the transaction, which is conditional
upon Frontier's successful completion of acquisition financing, is expected by
mid-November. In this regard, the Company also announced today the filing of its
preliminary prospectus supplement relating to its offering of $190 million of
Senior Notes due 2009.
Frontier Oil Corporation conducts crude oil refining and wholesale marketing of
refined products through its subsidiaries on the eastern slope of the Rocky
Mountains. Frontier's common shares are listed on the New York Stock Exchange.
FRONTIER OIL CORPORATION
Nine Months Ended Three Months Ended
September 30, September 30,
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1999 1998 1999 1998
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FINANCIAL (Financial information in thousands except per share)
Revenues $ 262,927 $ 234,813 $ 116,444 $ 80,863
Operating income before depreciation 21,485 31,045 13,218 13,743
Operating income 12,779 23,119 10,247 11,015
Income before taxes 7,808 17,814 8,567 9,448
Extraordinary loss on retirement of debt - 3,013 - -
Net income 7,426 14,801 8,358 9,448
Income from continuing operations per share
Basic 0.27 0.63 0.31 0.34
Diluted 0.27 0.62 0.30 0.33
Income per share
Basic 0.27 0.52 0.31 0.34
Diluted 0.27 0.51 0.30 0.33
Net cash provided by operating activities
before changes in working capital 16,105 25,115 11,167 12,206
Net cash provided by operating activities $ 8,003 $ 23,254 $ 12,729 $ 17,241
Basic average shares outstanding 27,394 28,138 27,306 28,155
Diluted average shares outstanding 27,791 28,826 28,084 28,727
Cash and equivalents $ 26,024 $ 26,013
Working capital 36,292 29,548
Total debt 70,000 70,000
Shareholders' equity 75,168 71,057
OPERATIONS
Operations (bpd)
Total charges 42,452 40,365 45,773 41,782
Gasoline yields 16,809 15,619 17,437 16,233
Distillate yields 12,412 12,801 13,115 11,951
Total sales 44,547 43,278 48,984 45,010
Operating Margins (per bbl)
Revenues $ 21.47 $ 19.77 $ 25.80 $ 19.46
Material costs 16.19 13.37 19.54 12.32
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Refined product margin 5.28 6.40 6.26 7.14
Operating costs excluding depreciation 3.14 3.34 2.87 3.35
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Margin before depreciation 2.14 3.06 3.39 3.79
Depreciation 0.71 0.66 0.65 0.64
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Net margin $ 1.43 $ 2.40 $ 2.74 $ 3.15
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Light/Heavy crude spread (per bbl) $ 2.01 $ 4.40 $ 1.89 $ 3.66
KEY TERMS
bpd = barrels per day
bbl = barrel
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