UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
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
Former name, former address and former fiscal year, if changed since
last report.
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 . . .
Registrant's number of common shares outstanding as of July 28, 2000: 27,687,454
<PAGE>
FRONTIER OIL CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2000
INDEX
Page
Part I - Financial Information
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II - Other Information 13
FORWARD-LOOKING STATEMENTS
Statements in this Form 10-Q concerning us which are (1) projections of
revenues, earnings, earnings per share, capital expenditures or other financial
items, (2) statements of plans and objectives for future operations, including
acquisitions, (3) statements of future economic performance, or (4) statements
of assumptions or estimates underlying or supporting the foregoing are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and Section 21E of the Exchange Act. The ultimate
accuracy of forward-looking statements is subject to a wide range of business
risks and changes in circumstances, and actual results and outcomes often differ
from expectations.
All subsequent written and oral forward-looking statements attributable to
us or any person acting on our behalf are expressly qualified in their entirety
by the cautionary statements contained or referred to in this section. We
undertake no obligation to publicly release the result of any revisions to any
such forward-looking statements that may be made to reflect events or
circumstances after the date of this Form 10-Q, or to reflect the occurrence of
unanticipated events.
Definitions of Terms
bbl(s) = barrel(s)
bpd = barrel(s) per day
-1-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FRONTIER OIL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
2000 1999 2000 1999
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues:
Refined products $ 971,285 $ 144,845 $ 523,684 $ 88,900
Other 1,351 1,638 1,145 1,366
---------- ---------- ----------- ----------
972,636 146,483 524,829 90,266
---------- ---------- ----------- ----------
Costs and Expenses:
Refining operating costs 911,054 134,136 473,310 79,695
Selling and general expenses 5,930 4,080 3,347 2,003
Depreciation 11,358 5,735 5,689 2,894
---------- ---------- ----------- ----------
928,342 143,951 482,346 84,592
---------- ---------- ----------- ----------
Operating Income 44,294 2,532 42,483 5,674
Interest Expense, Net 16,745 3,291 8,493 1,664
---------- ---------- ----------- ----------
Income (Loss) Before Income Taxes 27,549 (759) 33,990 4,010
Provision for Income Taxes 1,728 173 2,087 96
---------- ---------- ----------- ----------
Net Income (Loss) $ 25,821 $ (932) $ 31,903 $ 3,914
========== ========== =========== ==========
Basic Earnings (Loss) Per Share
of Common Stock: $ .94 $ (.03) $ 1.16 $ .14
========== ========== =========== ==========
Diluted Earnings (Loss) Per Share
of Common Stock: $ .92 $ (.03) $ 1.13 $ .14
========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
FRONTIER OIL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands except shares)
<TABLE>
<CAPTION>
June 30, 2000 and December 31, 1999 2000 1999
----------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash, including cash equivalents of
$33,260 in 2000 and $35,771 in 1999 $ 43,681 $ 38,345
Trade receivables, less allowance for doubtful
accounts of $500 in 2000 and 1999 80,494 38,563
Other receivables 7,800 14,512
Inventory of crude oil, products and other 136,609 100,359
Other current assets 1,526 1,211
----------- ----------
Total current assets 270,110 192,990
----------- ----------
Property, Plant and Equipment, at cost:
Refineries and pipeline 380,156 377,613
Furniture, fixtures and other equipment 5,096 4,956
----------- ----------
385,252 382,569
Less - Accumulated depreciation 80,596 69,261
----------- ----------
304,656 313,308
Other Assets 14,963 15,195
----------- ----------
$ 589,729 $ 521,493
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 178,172 $ 121,385
Revolving credit facility - 26,000
Accrued turnaround cost 17,918 8,763
Accrued liabilities and other 15,153 6,554
Accrued interest 5,195 5,456
----------- ----------
Total current liabilities 216,438 168,158
----------- ----------
Long-Term Debt 252,431 257,286
Long-Term Accrued Turnaround Cost 16,478 20,685
Post-Retirement Employee Liabilities 18,067 17,287
Deferred Credits and Other 4,406 4,002
Deferred Income Taxes 3,924 3,394
Commitments and Contingencies
Shareholders' Equity:
Preferred stock, $100 par value, 500,000 shares authorized,
no shares issued - -
Common stock, no par, 50,000,000 shares authorized,
28,991,564 and 28,542,330 shares issued in 2000 and 1999 57,339 57,294
Paid-in capital 88,946 87,028
Retained earnings (deficit) (61,301) (87,122)
Treasury stock, 1,304,110 shares and 1,230,900 shares
in 2000 and 1999 (6,999) (6,519)
----------- ----------
Total Shareholders' Equity 77,985 50,681
----------- ----------
$ 589,729 $ 521,493
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
FRONTIER OIL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
For the six months ended June 30, 2000 1999
----------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 25,821 $ (932)
Depreciation 11,358 5,735
Deferred credits and other 793 135
Change in working capital from operations (4,715) (9,664)
----------- ----------
Net cash provided by (used in) operating activities 33,257 (4,726)
INVESTING ACTIVITIES
Additions to property and equipment (3,345) (6,039)
Other - (861)
----------- ----------
Net cash used in investing activities (3,345) (6,900)
FINANCING ACTIVITIES
Refining credit facility (repayments) borrowings (26,000) 4,200
Issuance of common stock 1,963 627
Purchase of treasury stock (489) (3,193)
Other (50) (172)
----------- ----------
Net cash (used in) provided by financing activities (24,576) 1,462
----------- ----------
Increase (decrease) in cash and cash equivalents 5,336 (10,164)
Cash and cash equivalents, beginning of period 38,345 33,589
----------- ----------
Cash and cash equivalents, end of period $ 43,681 $ 23,425
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
FRONTIER OIL CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
1. Financial statement presentation
Financial statement presentation
The condensed consolidated financial statements include the accounts of
Frontier Oil Corporation, a Wyoming Corporation, and its wholly owned
subsidiaries, including Frontier Holdings Inc., collectively referred to as
Frontier or the Company. These financial statements have been prepared by the
registrant without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC) and include all adjustments (comprised
of only normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that the financial statements included herein be
read in conjunction with the financial statements and the notes thereto included
in the Company's annual report on Form 10-K for the year ended December 31,
1999.
The Company is an independent energy company engaged in crude oil
refining and wholesale marketing of refined petroleum products (the "refining
operations"). The Company operates refineries ("the Refineries") in Cheyenne,
Wyoming and El Dorado, Kansas with a total crude oil capacity of over 150,000
barrels per day. The Company focuses its marketing efforts in the Rocky Mountain
and Plains States regions of the United States. The Company purchases the crude
oil to be refined and markets the refined petroleum products produced, including
various grades of gasoline, diesel fuel, jet fuel, asphalt, chemicals and
petroleum coke.
Earnings per share
Basic earnings per share has been computed based on the weighted average
number of common shares outstanding. Diluted earnings per share assumes the
additional dilution for the exercise of in-the-money stock options. No
adjustments to income are used in the calculation of earnings per share. The
basic and diluted average shares outstanding are as follows:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Basic 27,468,549 27,439,327 27,539,080 27,290,765
Diluted 28,081,997 27,439,327 28,152,528 27,701,557
</TABLE>
Derivative instruments and hedging activities
The Company currently is utilizing derivative instruments to protect
against price declines on foreign crude oil purchases and to fix margins on
approximately 1.2 million barrels of gasoline to be sold in July, August and
October of 2000. The Company accounts for its derivative contracts entered into
to protect against price declines on foreign crude purchases under the hedge (or
deferral) method of accounting. As such, gains or losses are recognized in
refining operating costs when the associated transactions are consummated. The
Company accounts for its derivative contracts to fix margins on a portion of the
El Dorado refinery's gasoline production using mark to market accounting as such
derivative contracts do not qualify for hedge accounting treatment because a
high correlation with the hedged exposure currently does not exist. The Company
recognized an $864,000 unrealized mark to market gain related to such contracts
in the second quarter of 2000.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities". The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or a liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless
-5-
<PAGE>
specific hedge accounting criteria are met. Special accounting for qualifying
hedges allows a derivative's gains and losses to offset related results on the
hedged item in the income statement, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that receive
hedge accounting.
Statement 133, as amended, is effective for fiscal years beginning after
June 15, 2000. A company may also implement the Statement as of the beginning of
any fiscal quarter after issuance (that is fiscal quarters beginning June 16,
1998 and thereafter). Statement 133 cannot be applied retroactively. Statement
133 must be applied to (a) derivative instruments and (b) certain derivative
instruments embedded in hybrid contracts.
The Company does not expect the impact of Statement 133 to have a material
effect on its result of operations based on its current derivative activity.
2. Schedule of major components of inventory
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
-------------- --------------
(in thousands)
<S> <C> <C>
Crude oil $ 44,945 $ 24,852
Unfinished products 37,278 24,779
Finished products 38,638 35,582
Process chemicals 2,742 2,088
Repairs and maintenance supplies and other 13,006 13,058
-------------- --------------
$ 136,609 $ 100,359
============== ==============
</TABLE>
Inventories of crude oil, other unfinished oils and all finished
products are recorded at the lower of cost on a first in, first out (FIFO) basis
or market.
3. Unaudited pro forma information
The El Dorado Refinery was acquired on November 16, 1999. The following
is the unaudited pro forma financial information giving effect as if the El
Dorado Refinery acquisition had occurred at the beginning of 1999.
<TABLE>
<CAPTION>
Six Months Three Months
Ended Ended
June 30, June 30,
(in thousands, except per share amounts) 1999 1999
-------------- --------------
<S> <C> <C>
Revenues $ 514,599 $ 311,592
Depreciation 10,851 5,452
Operating income 35,226 29,042
Net income 16,829 19,464
Basic earnings per share .61 .71
Diluted earnings per share .60 .70
</TABLE>
-6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The terms "Frontier" and "we" refer to Frontier Oil Corporation and its
subsidiaries. On November 16,1999, we acquired the 110,000 barrels per day crude
oil refinery located in El Dorado, Kansas from Equilon Enterprises LLC
("Equilon"). Operating results for this refinery have been included in our
financial information for the six months and three months ended June 30, 2000,
but not for the same period in 1999. Accordingly, absolute changes between
periods are not and should not be expected to be comparable.
Six months ended June 30, 2000 compared with the same period in 1999
We had net income for the six months ended June 30, 2000 of $25.8 million,
or $.92 per diluted share, compared to a loss of $932,000, or $.03 per share,
for the same period in 1999.
Operating income increased $41.8 million in 2000 versus 1999 due to an
increase in the refined product spread (revenues less material costs) of $110.5
million, offset by a decrease in other income of $287,000 and increases in
refining operating expenses of $61 million, selling and general costs of $1.9
million and depreciation of $5.6 million.
Refined product revenues and refining operating costs are impacted by
changes in the price of crude oil. The average price of crude oil was higher in
2000 than in 1999, yet during both periods crude oil prices were increasing. The
refined product spread was $4.96 per barrel compared to $4.39 per barrel in
1999. The Cheyenne refinery refined product spread was $5.18 per barrel in 2000
compared to $4.39 per barrel in 1999. The improved product spread was due to
improved light product margins, increased throughput, inventory profits and an
increase in the light/heavy spread, offset by the negative impact of higher
crude oil prices on by-product margins. The El Dorado refinery refined product
spread was $4.86 per barrel in 2000. The El Dorado refinery experienced
extremely poor light product margins during early 2000 with gasoline margins
improving from March on and reaching their highest point of the year during
June.
Refined product revenues increased $826.4 million or 571% due to increased
sales prices and increased sales volumes from the El Dorado Refinery
acquisition. Average gasoline prices increased $15.70 per barrel, average diesel
and jet fuel prices increased $14.28 per barrel and there was a 278% overall
increase in sales volumes. Yields of gasoline increased 367% while yields of
diesel and jet fuel increased 321% in 2000 compared to the same period in 1999.
Other income decreased $287,000 to $1.4 million in 2000 due to receipts in
1999 of $635,000 in legal settlements and claims, sulfur credit sales of
$311,000 in 1999 and reduced processing fees in 2000, offset by a $864,000
futures trading gain in 2000.
Refining operating costs increased $776.9 million or 579% from 1999 levels
due to the El Dorado refinery acquisition and increases in material, freight and
other costs and refinery operating expenses. Material, freight and other costs
per bbl increased 96% or $13.88 per bbl in 2000 primarily due to higher crude
oil prices. The Cheyenne refinery material, freight and other costs of $26.07
per barrel benefitted from an increased heavy crude oil utilization rate and an
increased light/heavy spread. The heavy crude oil utilization rate expressed as
a percentage of total crude oil increased to 92% in 2000 from 87% in 1999. The
light/heavy spread averaged $3.66 per barrel compared to $2.08 per barrel in the
first six months of 1999. Refining operating expense per barrel was $2.88 per
barrel in 2000. The Cheyenne refinery operating expense per barrel decreased
$.29 per barrel to $2.71 per barrel in 2000 due to increased yields and lower
maintenance costs. The El Dorado refinery operating expense was $2.95 per barrel
in 2000. This is a decrease from the 1999 pro forma operating expense per barrel
due to increased yields, decreases in refinery personnel and our lower overhead
costs.
Selling and general expenses increased $1.9 million or 45% for the six
months ended June 30, 2000 because of increased staffing needs and other costs
relating to the El Dorado refinery acquisition.
Depreciation increased $5.6 million or 98% in the 2000 six-month period as
compared to the same period in 1999 because of the El Dorado acquisition and
increases in capital investments.
The interest expense increase of $13.5 million or 409% in 2000 was
attributable to higher debt levels used to purchase the El Dorado refinery.
Average debt for the six months increased from $78 million in 1999 to $302
million in 2000.
-7-
<PAGE>
Three months ended June 30, 2000 compared with the same period in 1999
We had net income for the three months ended June 30, 2000 of $31.9
million, or $1.13 per diluted share, compared to income of $3.9 million, or $.14
per diluted share, for the same period in 1999.
Operating income increased $36.8 million in 2000 versus 1999 due to an
increase in the refined product spread (revenues less material costs) of $75.1
million, offset by a decrease in other income of $221,000 and increases in
refining operating expenses of $33.9 million, selling and general costs of $1.3
million and depreciation of $2.8 million.
Refined product revenues and refining operating costs are impacted by
changes in the price of crude oil. The average price of crude oil was higher in
2000 than in 1999. The refined product spread was $6.38 per barrel compared to
$4.86 per barrel in 1999. The Cheyenne refinery refined product spread was $6.19
per barrel in 2000 compared to $4.86 per barrel in 1999. The improved product
spread was caused by improved light product margins, increased throughput and an
increase in the light/heavy spread, offset by the negative impact of higher
crude oil prices on by-product margins. The El Dorado refinery refined product
spread was $6.47 per barrel in 2000. The El Dorado refinery experienced gasoline
margins improving from March on and reaching their highest point of the year
during June.
Refined product revenues increased $434.8 million or 489% due to increased
sales prices and increased sales volumes from the El Dorado Refinery
acquisition. Average gasoline prices increased $15.48 per barrel, average diesel
and jet fuel prices increased $12.71 per barrel and there was a 257% overall
increase in sales volumes. Yields of gasoline increased 321% while yields of
diesel and jet fuel increased 286% in 2000 compared to the same period in 1999.
Other income decreased $221,000 to $1.2 million in 2000 due to receipts in
1999 of $635,000 in legal settlements and claims, sulfur credit sales of
$311,000 in 1999, and reduced processing fees in 2000, offset by a $864,000
futures trading gain in 2000.
Refining operating costs increased $393.6 million or 494% from 1999 levels
due to the El Dorado refinery acquisition and increases in material, freight and
other costs and refinery operating expenses. Material, freight and other costs
per bbl increased 75% or $12.28 per bbl in 2000 primarily due to higher crude
oil prices. The Cheyenne refinery material, freight and other costs of $26.43
per barrel benefitted from an increased light/heavy spread. The light/heavy
spread averaged $3.44 per barrel compared to $2.21 per barrel in the three
months of 1999. Refining operating expense per barrel was $3.01 per barrel in
2000. The Cheyenne refinery operating expense per barrel decreased $.16 per
barrel to $2.50 per barrel in 2000 due to increased yields and lower maintenance
and energy costs. The El Dorado refinery operating expense was $3.24 per barrel
in 2000. This is a decrease from the 1999 pro forma operating expense per barrel
due to decreases in refinery personnel and our lower overhead costs.
Selling and general expenses increased $1.3 million or 67% for the three
months ended June 30, 2000 because of increased staffing needs and other costs
relating to the El Dorado refinery acquisition.
Depreciation increased $2.8 million or 97% in the 2000 three-month period
as compared to the same period in 1999 because of the El Dorado acquisition and
increases in capital investments.
The interest expense increase of $6.8 million or 410% in 2000 was
attributable to higher debt levels used to purchase the El Dorado refinery.
Average debt for the three months increased from $79 million in 1999 to $300
million in 2000.
-8-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the six months ended June
30, 2000 was $33.3 million compared to $4.7 million cash used by operating
activities for the six months ended June 30, 1999. Working capital changes
required $4.7 million and $9.7 million of cash flows for the first six months of
2000 and 1999, respectively. During both 1999 and 2000, increases in
receivables, inventory and payables occurred due to rising crude oil prices.
Consistent with the seasonality of our business, we invest in working capital
during the first half of the year and recover working capital investment in the
second half of the year.
At June 30, 2000, we had $43.7 million of cash, $100 million available
under our line of credit and working capital of $53.7 million. Our requirement
under our revolving credit facility to maintain $25 million in cash through
March 31, 2001 has been reduced to $12.5 million as we exceeded $40 million
EBITDA (earnings before interest, taxes, depreciation and amortization) for the
six months ended June 30, 2000. In addition, we had committed to purchase $5
million of 11 3/4% Senior Notes which were purchased in early July 2000.
Additions to property and equipment in the first six months of 2000 of
$3.3 million decreased $2.7 million from the first six months in 1999. Capital
expenditures of approximately $13.2 million are planned in 2000.
Market Risk - Derivative Instruments. In June, we entered into forward
crack spread swap agreements with a reputable counterparty. The purpose of the
crack spread swaps is to fix a gasoline margin on a portion of the El Dorado
refinery's gasoline production. Swaps were completed on 15,000 bpd of gasoline
for each of the months of July and August and 10,000 bpd of gasoline in October,
2000. The swap agreements do not qualify for hedge accounting treatment because
a high correlation with the hedged exposure currently does not exist and,
accordingly, we account for the swaps using mark to market accounting. As of
June 30, 2000, we recorded an $864,000 unrealized gain on the swaps.
-9-
<PAGE>
REFINING OPERATING STATISTICAL INFORMATION
<TABLE>
<CAPTION>
Consolidated: Three Months Ended
June 30,
-----------------------------------
Pro forma
2000 1999 1999(1)
-------- --------- ---------
<S> <C> <C> <C>
Raw material input (bpd)
Light crude 35,336 2,668 30,191
Heavy and intermediate crude 106,370 37,337 111,308
Other feed and blend stocks 13,515 5,095 18,077
-------- --------- ---------
Total 155,221 45,100 159,576
Manufactured product yields (bpd)
Gasoline 74,074 17,600 81,241
Diesel and jet fuel 51,049 13,212 51,404
Asphalt 7,444 7,484 7,484
Chemicals 1,810 - 1,599
Other 17,550 5,640 14,629
-------- --------- ---------
Total 151,927 43,936 156,357
Total product sales (bpd)
Gasoline 82,275 22,558 89,704
Diesel and jet fuel 52,470 13,342 51,214
Asphalt 8,393 6,085 6,085
Chemicals 2,582 - 1,450
Other 18,509 3,991 15,217
-------- --------- ---------
Total 164,229 45,976 163,670
Operating margin information (per sales bbl) (2)
Average sales price $ 35.04 $ 21.24
Raw material, freight and other costs (FIFO inventory accounting) 28.66 16.38
-------- ---------
Product spread 6.38 4.86
Refinery operating expenses, excluding depreciation 3.01 2.66
Depreciation .38 .68
-------- ---------
Operating margin $ 2.99 $ 1.52
Average West Texas Intermediate crude oil price at Cushing, OK $ 29.75 $ 17.66
Average sales price (per sales bbl)
Gasoline $ 40.19 $ 24.71
Diesel and jet fuel 34.92 22.21
Asphalt 25.29 19.46
Chemicals 68.89 -
Other 12.19 1.11
</TABLE>
(1) Includes El Dorado Refinery data.
(2) Prior year data restated to conform to current year presentation.
-10-
<PAGE>
REFINING OPERATING STATISTICAL INFORMATION
<TABLE>
<CAPTION>
Consolidated: Six Months Ended
June 30,
-----------------------------------
Pro forma
2000 1999 1999(1)
-------- --------- ---------
<S> <C> <C> <C>
Raw material input (bpd)
Light crude 39,520 4,524 32,713
Heavy and intermediate crude 101,642 30,721 101,793
Other feed and blend stocks 14,571 5,518 15,875
-------- --------- ---------
Total 155,733 40,763 150,381
Manufactured product yields (bpd)
Gasoline 76,988 16,489 75,832
Diesel and jet fuel 50,796 12,055 49,177
Asphalt 6,066 5,070 5,070
Chemicals 1,842 - 2,006
Other 17,124 5,831 15,310
-------- --------- ---------
Total 152,816 39,445 147,395
Total product sales (bpd)
Gasoline 83,664 21,977 82,550
Diesel and jet fuel 51,666 12,418 49,598
Asphalt 5,627 4,299 4,299
Chemicals 2,247 - 2,016
Other 16,742 3,596 13,254
-------- --------- ---------
Total 159,946 42,290 151,717
Operating margin information (per sales bbl) (2)
Average sales price $ 33.37 $ 18.92
Raw material, freight and other costs (FIFO inventory accounting) 28.41 14.53
-------- ---------
Product spread 4.96 4.39
Refinery operating expenses, excluding depreciation 2.88 3.00
Depreciation .38 .74
-------- ---------
Operating margin $ 1.70 $ .65
Average West Texas Intermediate crude oil price at Cushing, OK $ 29.74 $ 15.23
Average sales price (per sales bbl)
Gasoline $ 37.22 $ 21.52
Diesel and jet fuel 34.09 19.81
Asphalt 23.89 17.93
Chemicals 62.96 -
Other 11.06 1.18
</TABLE>
(1) Includes El Dorado Refinery data.
(2) Prior year data restated to conform to current year presentation.
-11-
<PAGE>
REFINING OPERATING STATISTICAL INFORMATION
<TABLE>
<CAPTION>
Cheyenne Refinery:
Six Months Ended Three Months Ended
June 30, June 30,
----------------------- -----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Raw material input (bpd)
Light crude 3,084 4,524 3,190 2,668
Heavy crude 35,138 30,721 37,414 37,337
Other feed and blend stocks 5,085 5,518 4,887 5,095
--------- --------- --------- ---------
Total 43,307 40,763 45,491 45,100
Manufactured product yields (bpd)
Gasoline 17,776 16,489 17,939 17,600
Diesel 12,469 12,055 12,887 13,212
Asphalt 6,066 5,070 7,444 7,484
Other 5,671 5,831 5,933 5,640
--------- --------- --------- ---------
Total 41,982 39,445 44,203 43,936
Total product sales (bpd)
Gasoline 22,284 21,977 23,462 22,558
Diesel 12,334 12,418 12,508 13,342
Asphalt 5,627 4,299 8,393 6,085
Other 6,166 3,596 6,421 3,991
--------- --------- --------- ---------
Total 46,411 42,290 50,784 45,976
Operating margin information (per sales bbl) (1)
Average sales price $ 31.25 $ 18.92 $ 32.62 $ 21.24
Raw material, freight and other costs (2) 26.07 14.53 26.43 16.38
--------- --------- --------- ---------
Product spread 5.18 4.39 6.19 4.86
Refinery operating expenses, excl depreciation 2.71 3.00 2.50 2.66
Depreciation .72 .74 .66 .68
--------- --------- --------- ---------
Operating margin $ 1.75 $ .65 $ 3.03 $ 1.52
Light/heavy crude spread (per bbl) $ 3.66 $ 2.08 $ 3.44 $ 2.21
Average sales price (per sales bbl)
Gasoline $ 37.97 $ 21.52 $ 40.54 $ 24.71
Diesel 35.78 19.81 36.62 22.21
Asphalt 23.89 17.93 25.29 19.46
Other 4.65 1.18 5.48 1.11
</TABLE>
(1) Prior year data restated to conform to current year presentation.
(2) FIFO inventory accounting.
-12-
<PAGE>
REFINING OPERATING STATISTICAL INFORMATION
<TABLE>
<CAPTION>
El Dorado Refinery (including preacquisition data for 1999):
Six Months Ended Three Months Ended
June 30, June 30,
----------------------- -----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Raw material input (bpd)
Light crude 36,436 28,189 32,147 27,523
Heavy and intermediate crude 66,505 71,072 68,956 73,971
Other feed and blend stocks 9,485 10,357 8,627 12,982
--------- --------- --------- ---------
Total 112,426 109,618 109,730 114,476
Manufactured product yields (bpd)
Gasoline 59,212 59,342 56,135 63,641
Diesel and jet fuel 38,327 37,121 38,162 38,192
Chemicals 1,842 2,006 1,810 1,599
Other 11,453 9,479 11,617 8,988
--------- --------- --------- ---------
Total 110,834 107,948 107,724 112,420
Total product sales (bpd)
Gasoline 61,380 60,572 58,812 67,145
Diesel and jet fuel 39,332 37,179 39,962 37,871
Chemicals 2,247 2,016 2,582 1,450
Other 10,576 9,658 12,088 11,226
--------- --------- --------- ---------
Total 113,535 109,425 113,444 117,692
Operating margin information (per sales bbl)
Average sales price $ 34.23 $ 36.12
Raw material, freight and other costs (1) 29.37 29.65
--------- ---------
Product spread 4.86 6.47
Refinery operating expenses, excl depreciation 2.95 3.24
Depreciation .25 .25
--------- ---------
Operating margin $ 1.66 $ 2.98
Average sales price (per sales bbl)
Gasoline $ 36.95 $ 40.05
Diesel and jet fuel 33.57 34.39
Chemicals 62.96 68.89
Other 14.80 15.75
</TABLE>
(1) FIFO inventory accounting.
-13-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings -
------
The Federal Trade Commission ("FTC") is investigating the
causes of the sharp rises in gasoline prices in certain
Midwest markets, particularly Chicago and Milwaukee, in the
spring and early summer of this year. In late July, the
Company received a subpoena and a civil investigative demand
from the FTC requesting certain documents and information
relating primarily to the sale of products in Petroleum
Administration for Defense District II ("PADD II"). Based on
the FTC's Interim Report dated July 28, 2000, the Company has
learned that it received the requests as part of the second
round of subpoenas to refiners and that the entities who own
or control the pipelines serving the Midwest market received
subpoenas as well. We are in the process of responding to the
FTC's requests. Based on our limited involvement in selling
products in PADD II, management believes that this
investigation will not result in any material impact on the
Company's financial position or results of operations.
ITEM 2. Changes in Securities -
------
There have been no changes in the constituent instruments
defining the rights of the holders of any class of registered
securities during the current quarter.
ITEM 3. Defaults Upon Senior Securities -
------
None.
ITEM 4. Submission of Matters to a Vote of Security Holders -
------
The annual meeting of the registrant was held April 27, 2000
with the shareholders approving the proposals for the
election of six directors, a new stock option plan and the
appointment of the Company's auditors.
ITEM 5. Other Information -
------
None.
ITEM 6. Exhibits and Reports on Form 8-K -
------
(a) Exhibits
27 - Financial Data Schedule
(b) Reports on Form 8-K
None.
-14-
<PAGE>
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.
FRONTIER OIL CORPORATION
By: /s/Jon D. Galvin
----------------------------
Jon D. Galvin
Vice President - Controller
Date: August 1, 2000
<PAGE>
