exv99w1
Exhibit 99.1
FRONTIER OIL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited, in thousands except per share data)
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Six Months Ended |
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Three Months Ended |
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June 30, |
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June 30, |
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2011 |
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2010 |
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2011 |
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2010 |
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Revenues: |
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Refined products |
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$ |
3,975,515 |
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$ |
2,795,549 |
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$ |
2,059,845 |
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$ |
1,520,510 |
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Other |
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3,666 |
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25,475 |
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10,682 |
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28,370 |
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Total revenues |
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3,979,181 |
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2,821,024 |
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2,070,527 |
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1,548,880 |
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Costs and expenses: |
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Raw material, freight and other costs |
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3,242,306 |
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2,561,055 |
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1,680,903 |
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1,337,291 |
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Refinery operating expenses, excluding depreciation |
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152,566 |
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127,323 |
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76,759 |
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58,440 |
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Selling and general expenses, excluding depreciation |
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24,351 |
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22,196 |
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13,748 |
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11,220 |
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Holly Corporation merger costs |
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7,966 |
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2,818 |
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Depreciation, amortization and accretion |
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54,265 |
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52,547 |
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27,297 |
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25,938 |
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Loss (gain) on sales of assets |
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45 |
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(1 |
) |
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66 |
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Total costs and expenses |
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3,481,499 |
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2,763,120 |
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1,801,591 |
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1,432,889 |
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Operating income |
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497,682 |
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57,904 |
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268,936 |
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115,991 |
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Interest expense and other financing costs |
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17,414 |
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15,281 |
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8,780 |
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8,046 |
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Interest and investment income |
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(448 |
) |
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(1,095 |
) |
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(101 |
) |
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(568 |
) |
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Income before income taxes |
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480,716 |
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43,718 |
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260,257 |
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108,513 |
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Provision for income taxes |
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173,758 |
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17,868 |
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93,165 |
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42,399 |
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Net income |
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$ |
306,958 |
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$ |
25,850 |
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$ |
167,092 |
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$ |
66,114 |
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Comprehensive income |
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$ |
306,961 |
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$ |
25,585 |
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$ |
167,093 |
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$ |
65,982 |
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Basic earnings per share of common stock |
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$ |
2.93 |
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$ |
0.25 |
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$ |
1.59 |
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$ |
0.63 |
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Diluted earnings per share of common stock |
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$ |
2.90 |
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$ |
0.25 |
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$ |
1.57 |
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$ |
0.63 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
1
FRONTIER OIL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands except share data)
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June 30, 2011 and December 31, 2010 |
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2011 |
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2010 |
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ASSETS |
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Current assets: |
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Cash, including cash equivalents of $871,026 and $556,737 at 2011 and 2010,
respectively |
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$ |
872,626 |
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$ |
558,641 |
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Trade receivables, net of allowance of $1,000 at 2011 and 2010 |
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232,956 |
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145,033 |
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Income taxes receivable |
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37,807 |
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49,305 |
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Other receivables, net |
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5,307 |
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1,734 |
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Inventory of crude oil, products and other |
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260,230 |
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280,847 |
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Deferred income tax assets current |
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19,143 |
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30,516 |
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Other current assets |
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13,038 |
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12,981 |
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Total current assets |
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1,441,107 |
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1,079,057 |
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Property, plant and equipment, net |
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1,009,207 |
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1,014,868 |
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Deferred turnaround and catalyst costs, net |
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56,760 |
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51,347 |
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Deferred financing costs, net of accumulated amortization of $3,119 and $2,400 at
2011 and 2010, respectively |
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5,552 |
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6,271 |
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Intangible assets, net of accumulated amortization of $797 and $736 at 2011 and
2010, respectively |
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1,033 |
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1,094 |
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Deferred state income tax assets noncurrent |
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11,768 |
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Other assets |
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|
782 |
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4,359 |
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Total assets |
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$ |
2,514,441 |
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$ |
2,168,764 |
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LIABILITIES AND SHAREHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
560,664 |
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$ |
493,212 |
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Accrued income taxes |
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1,370 |
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|
47 |
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Accrued liabilities and other |
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42,144 |
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42,365 |
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Total current liabilities |
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604,178 |
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535,624 |
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Long-term debt, net of unamortized discount of $2,073 and $2,227 at 2011
and 2010, respectively |
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347,927 |
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347,773 |
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Contingent income tax liabilities |
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3,420 |
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3,830 |
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Post-retirement employee liabilities |
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44,694 |
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43,313 |
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Long-term capital lease obligation |
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2,695 |
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2,938 |
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Other long-term liabilities |
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|
9,964 |
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|
14,066 |
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Deferred income tax liabilities |
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|
239,279 |
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|
234,673 |
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Commitments and contingencies |
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Shareholders equity: |
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Preferred stock, $100 par value, 500,000 shares authorized, no shares issued |
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Common stock, no par value, 180,000,000 shares authorized, 131,850,356 shares issued |
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|
57,736 |
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57,736 |
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Paid-in capital |
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|
281,766 |
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|
263,706 |
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Retained earnings |
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|
1,331,981 |
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|
1,068,004 |
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Accumulated other comprehensive loss |
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(6,490 |
) |
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|
(6,493 |
) |
Treasury stock, at cost, 25,221,001 and 26,097,398 shares at 2011 and 2010, respectively |
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|
(402,709 |
) |
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(396,406 |
) |
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Total shareholders equity |
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1,262,284 |
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|
986,547 |
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Total liabilities and shareholders equity |
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$ |
2,514,441 |
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$ |
2,168,764 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
2
FRONTIER OIL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
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For the six months ended |
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June 30, |
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2011 |
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2010 |
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Cash flows from operating activities: |
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Net income |
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$ |
306,958 |
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$ |
25,850 |
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Adjustments to reconcile net income to net cash from operating activities: |
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Depreciation, amortization and accretion |
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|
54,265 |
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|
52,548 |
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Deferred income tax provision |
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|
27,731 |
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|
13,145 |
|
Stock-based compensation expense |
|
|
7,600 |
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|
8,613 |
|
Excess income tax benefits of stock-based compensation |
|
|
(3,406 |
) |
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|
(101 |
) |
Amortization of debt issuance costs |
|
|
718 |
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|
744 |
|
Senior Notes discount amortization |
|
|
154 |
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|
|
141 |
|
Decrease in allowance for investment loss and bad debts |
|
|
(251 |
) |
|
|
(52 |
) |
Loss (gain) on sales of assets |
|
|
45 |
|
|
|
(1 |
) |
Increase (decrease) in other long-term liabilities |
|
|
777 |
|
|
|
(6,187 |
) |
Turnaround and catalyst costs paid |
|
|
(18,399 |
) |
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|
(5,729 |
) |
Other |
|
|
(545 |
) |
|
|
678 |
|
Changes in working capital from operations |
|
|
17,808 |
|
|
|
(19,767 |
) |
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Net cash provided by operating activities |
|
|
393,455 |
|
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|
69,882 |
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Cash flows from investing activities: |
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Additions to property, plant and equipment |
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|
(42,477 |
) |
|
|
(40,744 |
) |
Proceeds from sales of assets and other |
|
|
214 |
|
|
|
1 |
|
|
|
|
|
|
|
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Net cash used in investing activities |
|
|
(42,263 |
) |
|
|
(40,743 |
) |
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|
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|
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Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Purchase of treasury stock |
|
|
(7,326 |
) |
|
|
(3,582 |
) |
Dividends paid |
|
|
(42,462 |
) |
|
|
(6,493 |
) |
Proceeds from issuance of common stock |
|
|
9,497 |
|
|
|
|
|
Excess income tax benefits of stock-based compensation |
|
|
3,406 |
|
|
|
101 |
|
Debt issuance costs and other |
|
|
(322 |
) |
|
|
(205 |
) |
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(37,207 |
) |
|
|
(10,179 |
) |
|
|
|
|
|
|
|
Increase in cash and cash equivalents |
|
|
313,985 |
|
|
|
18,960 |
|
Cash and cash equivalents, beginning of period |
|
|
558,641 |
|
|
|
425,280 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
872,626 |
|
|
$ |
444,240 |
|
|
|
|
|
|
|
|
|
|
|
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Supplemental Disclosure of Cash Flow Information: |
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Cash paid during the period for interest, excluding capitalized interest |
|
$ |
13,865 |
|
|
$ |
13,298 |
|
Cash paid during the period for income taxes |
|
|
148,099 |
|
|
|
51 |
|
Cash refunds of income taxes |
|
|
16,426 |
|
|
|
43,932 |
|
Noncash investing activities accrued capital expenditures, end of period |
|
|
1,992 |
|
|
|
9,348 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
FRONTIER OIL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statement Presentation
The interim condensed consolidated financial statements include the accounts of Frontier Oil
Corporation (FOC), a Wyoming corporation, and its wholly-owned subsidiaries, collectively
referred to as Frontier or the Company. The Company is an energy company engaged in crude oil
refining and wholesale marketing of refined petroleum products (the refining operations). Except
as otherwise noted herein, these financial statements were prepared as of June 30, 2011 as though
the Company was an independent entity without regard to the July 1, 2011 merger with Holly
Corporation (see Note 2 Holly Corporation Merger).
The Company operates refineries (the Refineries) in Cheyenne, Wyoming and El Dorado, Kansas.
The Company owns Ethanol Management Company (EMC), a products terminal and blending facility
located near Denver, Colorado. The Company also owns a refined products pipeline which runs from
Cheyenne, Wyoming to Sidney, Nebraska and the associated refined products terminal and truck rack
at Sidney, Nebraska. The Company utilizes the equity method of accounting for investments in
entities in which it has the ability to exercise significant influence. Entities in which the
Company has the ability to exercise control are consolidated. All of the operations of the Company
are in the United States, with its marketing efforts focused in the Rocky Mountain and Plains
States regions of the United States. The Rocky Mountain region includes the states of Colorado,
Wyoming, western Nebraska, Montana and Utah, and the Plains States include the states of Kansas,
Oklahoma, eastern Nebraska, Iowa, Missouri, North Dakota and South Dakota. The Company purchases
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. The operations
of refining and marketing of petroleum products are considered part of one reporting segment.
These financial statements have been prepared by the Company 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 (GAAP) have been condensed or omitted pursuant to such rules and regulations. The
Company believes that the disclosures contained herein are adequate to make the information
presented not misleading. The condensed consolidated financial statements included herein should
be read in conjunction with the financial statements and the notes thereto included in the
Companys annual report on Form 10-K for the year ended December 31, 2010. These interim financial
statements are not indicative of annual results.
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Subsequent Events
The Company has evaluated subsequent events through the date the financial statements were
issued.
Earnings per share
The Company computes basic earnings or loss per share (EPS) by dividing net income or loss
by the weighted average number of common shares outstanding during the period. No adjustments to
income are used in the calculation of basic EPS. Diluted EPS includes the effects of potentially
dilutive shares, principally common stock options and unvested restricted stock and performance
stock units outstanding during the period. The basic and diluted average shares outstanding were
as follows:
|
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Six Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Basic |
|
|
104,812,901 |
|
|
|
104,065,946 |
|
|
|
105,043,369 |
|
|
|
104,196,131 |
|
Diluted |
|
|
105,980,579 |
|
|
|
105,315,679 |
|
|
|
106,292,427 |
|
|
|
105,578,151 |
|
For the six and three months ended June 30, 2010, 434,793 outstanding stock options that could
potentially dilute EPS in future years were not included in the computation of diluted EPS as they
were anti-dilutive. As of June 30, 2011, all stock options had either been exercised or expired.
The Companys Board of Directors declared a special cash dividend of $0.28 per share of common
stock in February 2011 that was paid in March 2011 and quarterly cash dividends of $0.06 per share of common
stock in February 2011 and June 2011, which were paid in March 2011 and June 2011, respectively.
As of June 30, 2011, the Company had $397.4 million and $409.2 million available to pay dividends
under the restricted payments basket of its 6.875% Senior Notes and 8.5% Senior Notes, respectively
(collectively, the Senior Notes) covenants.
4
Foreign currency transactions
The Company at times has receivables and payables denominated in Canadian dollars from certain
crude oil purchases and related taxes on such purchases. These amounts are accounted for in
accordance with GAAP on the Condensed Consolidated Balance Sheet by translating the balances at the
applicable exchange rates until they are settled. The corresponding gain or loss is recognized in
the Condensed Consolidated Statements of Income and Comprehensive Income. For the six and three
months ended June 30, 2011, the Company recognized a loss of $1.1 million and $432,000,
respectively, due to the translation of its foreign denominated assets and liabilities. For the
six and three months ended June 30, 2010, the Company recognized gains of $137,000 and $176,000,
respectively.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current period financial
statement presentation. The Company has reclassified turnaround and catalyst amortization on the
Condensed Consolidated Statements of Income from Refinery operating expenses, excluding
depreciation to Depreciation, amortization and accretion to be more consistent with industry
peers. The reclassifications have no effect on previously reported operating income loss or net
income. In addition, the Company has reflected the turnaround and catalyst costs paid as a
separate line on the Condensed Consolidated Statements of Cash Flows. The reclassifications have
no effect on previously reported cash provided by operating activities.
Related Party Transactions
During the first quarter of 2010, the Company made a relocation-related loan to an officer of
one of its subsidiaries in the amount of $120,000 with a term of one year. The Company accounted
for this balance in Other Receivables on the Condensed Consolidated Balance Sheets as of December
31, 2010. During the second quarter of 2011, the officer repaid the loan.
New accounting pronouncements
In January 2010, the FASB issued ASU 2010-06, which amended ASC 820, Fair Value Measurements
and Disclosures. New disclosures included in this ASU require the Company to disclose separately
the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and
the related reasoning for the transfer. Also included in the new disclosure requirements is the
separate presentation of purchases, sales, issuances and settlements on a gross basis in the
reconciliation for significant unobservable inputs, or Level 3 inputs. Further, this ASU clarifies
existing fair value disclosures about the level of disaggregation and about inputs and valuation
techniques used to measure fair value for either Level 2 or Level 3 measurements. Finally, this
ASU amends guidance on employers disclosures about postretirement benefit plan assets under ASC
715 to change terminology from major categories of assets to classes of assets and how to determine
appropriate classes to present fair value disclosures. The new disclosures and clarifications of
existing disclosures were effective for interim and annual reporting periods beginning after
December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in
the rollforward of activity in Level 3 fair value measurements. These Level 3 specific disclosures
are effective for fiscal years beginning after December 15, 2010 and for interim periods within
those fiscal years. The adoption of the disclosures required for the Company during the first
quarter of 2010 did not have a material impact on the Companys financial statement disclosures.
The additional disclosures required for 2011 related to Level 3 fair value measurements did not
have a material impact on the Companys financial statement disclosures.
2. Holly Corporation Merger
On February 21, 2011, the Company entered into a definitive merger agreement with a
wholly-owned subsidiary of Holly Corporation (Holly) and Holly under which the Company and the
Holly subsidiary would combine in an all-stock merger of equals transaction. The merger was
completed on July 1, 2011. Under the terms of the merger agreement, the Companys shareholders
received 0.4811 Holly shares for each share of the Companys common stock. Upon closing of the
transaction, former Holly shareholders owned approximately 51 percent and the Companys former
shareholders owned approximately 49 percent of the combined company. As part of the merger, on
July 1, 2011, both Holly and Frontier cancelled their revolving credit facilities and a single
credit facility was entered into by HollyFrontier Corporation. Subsequent to the merger, on July 1,
2011, Frontier merged with and into HollyFrontier Corporation.
3. Inventories
Inventories of crude oil, unfinished products and all finished products are recorded at the
lower of cost on a LIFO basis or market, which is determined using current estimated selling
prices. Crude oil includes both domestic and foreign crude oil volumes at its cost and associated
freight and other costs. Unfinished products (work in process) include any crude oil that has
entered into the refining process, and other feedstocks that are not finished as far as refining
operations are concerned. These include unfinished gasoline and diesel, blendstocks and other
feedstocks. Finished product inventory includes saleable gasoline, diesel, jet fuel, chemicals,
asphalt and other finished products. Unfinished and finished products inventory values have
components of raw material, the associated raw material freight and other costs, and direct
refinery operating expense allocated when refining begins relative to their proportionate market
values. During the six months ended June 30, 2011, the Company reduced certain inventory
quantities resulting in a liquidation of LIFO inventory quantities carried at lower costs
prevailing in prior years compared to the cost of 2011 purchases. The effect of these reductions
resulted in a decrease of Raw material, freight and other costs of $23.3 million and an increase in Net income of
$14.4 million after tax or $0.14
5
per diluted share in 2011. Refined product exchange transactions
are considered asset exchanges with deliveries offset against receipts. The net exchange balance
is included in inventory. Inventories of process chemicals and repairs and maintenance supplies
and other are recorded at the lower of average cost or market. Crude oil inventories, unfinished
product inventories and finished product inventories are used to secure financing for operations
under the Companys revolving credit facility. The components of inventory as of June 30, 2011 and
December 31, 2010 were as follows:
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
|
December 31, |
|
|
|
2011 |
|
|
2010 |
|
|
|
(in thousands) |
|
Crude oil |
|
$ |
221,944 |
|
|
$ |
319,452 |
|
Unfinished products |
|
|
227,879 |
|
|
|
193,389 |
|
Finished products |
|
|
152,150 |
|
|
|
86,160 |
|
LIFO reserve adjustment to inventories |
|
|
(367,802 |
) |
|
|
(344,149 |
) |
|
|
|
|
|
|
|
|
|
|
234,171 |
|
|
|
254,852 |
|
Process chemicals |
|
|
827 |
|
|
|
770 |
|
Repairs and maintenance supplies and other |
|
|
25,232 |
|
|
|
25,225 |
|
|
|
|
|
|
|
|
|
|
$ |
260,230 |
|
|
$ |
280,847 |
|
|
|
|
|
|
|
|
4. Other Current Assets
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
|
December 31, |
|
|
|
2011 |
|
|
2010 |
|
|
|
(in thousands) |
|
Margin deposits |
|
$ |
|
|
|
$ |
3,569 |
|
Derivative assets |
|
|
1,868 |
|
|
|
1,195 |
|
Prepaid insurance |
|
|
3,069 |
|
|
|
6,599 |
|
Deferred compensation |
|
|
4,998 |
|
|
|
|
|
Purchased RINs |
|
|
1,845 |
|
|
|
351 |
|
Other |
|
|
1,258 |
|
|
|
1,267 |
|
|
|
|
|
|
|
|
|
|
$ |
13,038 |
|
|
$ |
12,981 |
|
|
|
|
|
|
|
|
5. Property, Plant and Equipment
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
|
December 31, |
|
|
|
2011 |
|
|
2010 |
|
|
|
(in thousands) |
|
Refineries, pipelines and terminal equipment |
|
$ |
1,488,660 |
|
|
$ |
1,454,861 |
|
Buildings |
|
|
43,448 |
|
|
|
43,271 |
|
Land and land improvements |
|
|
15,798 |
|
|
|
15,592 |
|
Furniture, fixtures and other equipment |
|
|
17,151 |
|
|
|
17,184 |
|
|
|
|
|
|
|
|
Property, plant and equipment, at cost |
|
|
1,565,057 |
|
|
|
1,530,908 |
|
Accumulated depreciation |
|
|
(555,850 |
) |
|
|
(516,040 |
) |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
$ |
1,009,207 |
|
|
$ |
1,014,868 |
|
|
|
|
|
|
|
|
6
6. Accrued Liabilities and Other
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2011 |
|
|
2010 |
|
|
|
(in thousands) |
|
Accrued compensation |
|
$ |
17,806 |
|
|
$ |
21,427 |
|
Accrued property taxes |
|
|
6,478 |
|
|
|
5,805 |
|
Accrued interest |
|
|
6,313 |
|
|
|
6,188 |
|
Accrued environmental costs |
|
|
2,758 |
|
|
|
2,245 |
|
Deferred compensation |
|
|
4,998 |
|
|
|
|
|
Accrued dividends |
|
|
852 |
|
|
|
334 |
|
Derivative liabilities |
|
|
|
|
|
|
2,389 |
|
Other |
|
|
2,939 |
|
|
|
3,977 |
|
|
|
|
|
|
|
|
|
|
$ |
42,144 |
|
|
$ |
42,365 |
|
|
|
|
|
|
|
|
7. Income Taxes
The Company recognizes liabilities, interest and penalties for potential tax issues based on
its estimate of whether, and the extent to which, additional taxes may be due as determined under
ASC 740 Income Taxes. Although amounts the Company has paid for unresolved IRS audit issues for
2006 and 2005 totaling $18.1 million are no longer reflected as a liability on the Condensed
Consolidated Balance Sheets, as of June 30, 2011 or December 31, 2010, the amounts are still
included in the following table of unrecognized tax benefits. A reconciliation of the beginning
and ending amount of unrecognized tax benefits, excluding accrued interest and the federal income
tax benefit of state contingencies is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Three months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Balance beginning of period |
|
$ |
22,577 |
|
|
$ |
23,854 |
|
|
$ |
22,577 |
|
|
$ |
23,788 |
|
Additions based on tax positions related to the current year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions for tax positions of prior years |
|
|
|
|
|
|
81 |
|
|
|
|
|
|
|
81 |
|
Reductions for tax positions of prior years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reductions due to lapse of applicable statutes of limitations |
|
|
|
|
|
|
(66 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance end of period |
|
$ |
22,577 |
|
|
$ |
23,869 |
|
|
$ |
22,577 |
|
|
$ |
23,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The total contingent income tax liabilities and accrued interest of $3.4 million and $3.8
million at June 30, 2011 and December 31, 2010, respectively, are reflected in the Condensed
Consolidated Balance Sheets under Contingent income tax liabilities. As of June 30, 2011 and
December 31, 2010, accrued interest was $972,000 and $922,000, respectively.
The Company recognized net interest expense on contingent income tax liabilities of $50,000 and
$761,000 during the six months ended June 30, 2011 and 2010, respectively.
8. Treasury Stock
The Company accounts for its treasury stock under the cost method on a first-in, first-out
basis. A rollforward of treasury stock for the six months ended June 30, 2011 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
shares |
|
|
Amount |
|
|
|
(in thousands except share amounts) |
|
Balance as of December 31, 2010 |
|
|
26,097,398 |
|
|
$ |
396,406 |
|
Shares received to fund withholding taxes |
|
|
276,990 |
|
|
|
8,305 |
|
Shares issued for restricted stock unit vestings |
|
|
(119,596 |
) |
|
|
(219 |
) |
Shares issued for stock option exercises |
|
|
(356,497 |
) |
|
|
(544 |
) |
Shares issued for restricted stock grants |
|
|
(300,000 |
) |
|
|
(548 |
) |
Shares issued for conversion of stock unit awards |
|
|
(377,294 |
) |
|
|
(691 |
) |
|
|
|
|
|
|
|
Balance as of June 30, 2011 |
|
|
25,221,001 |
|
|
$ |
402,709 |
|
|
|
|
|
|
|
|
7
9. Stock-based Compensation
Stock-based compensation costs and income tax benefits recognized in the Condensed
Consolidated Statements of Income and Comprehensive Income for the six and three months ended June
30, 2011 and 2010 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Three Months |
|
|
|
June 30, |
|
|
Ended June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Restricted shares and units |
|
$ |
5,871 |
|
|
$ |
6,294 |
|
|
$ |
3,203 |
|
|
$ |
3,383 |
|
Contingently issuable stock unit awards |
|
|
1,729 |
|
|
|
2,319 |
|
|
|
1,173 |
|
|
|
1,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation expense |
|
$ |
7,600 |
|
|
$ |
8,613 |
|
|
$ |
4,376 |
|
|
$ |
4,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit recognized in the
income statement |
|
$ |
2,888 |
|
|
$ |
3,273 |
|
|
$ |
1,663 |
|
|
$ |
1,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Omnibus Incentive Compensation Plan. As of June 30, 2011, 6,332,393 shares were available to
be awarded under the Companys Omnibus Incentive Compensation Plan (the Plan) assuming maximum
payout is achieved on the contingently issuable awards made in 2009, 2010 and 2011 (see
Contingently Issuable Awards below). For purposes of determining compensation expense,
forfeitures are estimated at the time Awards are granted based on historical average forfeiture
rates and the group of individuals receiving those Awards. The Plan provides that the source of
shares for Awards may be either newly issued shares or treasury shares. For the six and three
months ended June 30, 2011, treasury shares were re-issued for stock options exercised and
restricted stock awards. As of June 30, 2011, there was $25.8 million of total unrecognized
compensation cost related to the Plan, including costs for restricted stock and performance-based
awards, which is expected to be recognized over a weighted-average period of 2.05 years. However,
the vesting of a majority of the restricted stock and performance-based awards was accelerated to
July 1, 2011 when the HollyFrontier merger closed.
Stock Options. Stock option changes during the six months ended June 30, 2011 are presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted- |
|
|
Aggregate |
|
|
|
Number of |
|
|
Average Exercise |
|
|
Intrinsic Value |
|
|
|
awards |
|
|
Price |
|
|
of Options |
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Outstanding at beginning of period |
|
|
434,793 |
|
|
$ |
29.3850 |
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
Exercised |
|
|
(356,497 |
) |
|
|
29.3850 |
|
|
|
|
|
Expired or forfeited |
|
|
(78,296 |
) |
|
|
29.3850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at end of period |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at end of period |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
The Company received $9.5 million of cash and $978,000 of mature stock for stock options
exercised during the six months ended June 30, 2011. The total intrinsic value of stock options
exercised during the six months ended June 30, 2011 was $455,000. The Company realized $173,000 of
income tax benefit, and reduced the Companys additional paid-in capital (APIC) pool by $3.0
million, for the six months ended June 30, 2011 related to exercises of stock options. There were
no stock option exercises during the six months ended June 30, 2010. All outstanding stock options
expired on April 26, 2011.
8
Restricted Shares and Restricted Stock Units. The following table summarizes the changes in
the Companys restricted shares and restricted stock units during the six months ended June 30,
2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
Average Grant- |
|
|
|
|
|
|
|
Date Market |
|
|
|
Shares/Units |
|
|
Value |
|
Nonvested at beginning of period |
|
|
1,247,995 |
|
|
$ |
14.5218 |
|
Conversion of stock unit
awards |
|
|
377,294 |
|
|
|
12.7000 |
|
Granted |
|
|
342,360 |
|
|
|
25.9380 |
|
Vested |
|
|
(635,117 |
) |
|
|
15.9816 |
|
Forfeited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at end of period |
|
|
1,332,532 |
|
|
|
16.2433 |
|
|
|
|
|
|
|
|
|
The total grant date fair value of restricted shares and restricted stock units which vested
during the six months ended June 30, 2011 and 2010 was $10.2 million and $12.0 million,
respectively. The total fair value at vesting of restricted shares and restricted stock during the
six months ended June 30, 2011 and 2010 was $19.1 million and $8.4 million, respectively. The
Company realized $7.3 million of income tax benefit for the vestings during the six months ended
June 30, 2011, and increased the Companys APIC pool by $8.9 million. The Company realized $3.2
million of income tax benefits related to the vestings during the six months ended June 30, 2010,
of which $3.6 million decreased its APIC pool.
In March 2011, following certification by the Compensation Committee of the Companys Board of
Directors that the specified performance criteria of the Companys return of capital employed
versus that of a defined peer group had been achieved for the year ended December 31, 2010, the
Company issued 377,294 shares of restricted stock in connection with the February 2010 grant of
contingently issuable stock unit awards. The following tables summarize the vesting schedules of
the 377,294 stock unit awards converted to restricted stock and the 342,360 shares of restricted
stock shares and units granted during the six months ended June 30, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting Dates and Share Amounts |
|
|
|
Converted stock |
|
|
|
|
|
|
|
|
|
|
Conversion Date |
|
unit awards |
|
|
June 30, 2011 |
|
|
June 30, 2012 |
|
|
June 30, 2013 |
|
March 11, 2011 |
|
|
377,294 |
|
|
|
125,769 |
|
|
|
125,756 |
|
|
|
125,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting Dates and Share Amounts |
|
|
|
Shares/Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted (Net |
|
|
December 30, |
|
|
March 13, |
|
|
March 13, |
|
|
March 13, |
|
Grant Date |
|
of Forfeits) |
|
|
2011 |
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
January 25, 2011 |
|
|
42,360 |
|
|
|
42,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 24, 2011 |
|
|
295,000 |
|
|
|
|
|
|
|
73,751 |
|
|
|
73,749 |
|
|
|
147,500 |
|
June 30, 2011 |
|
|
5,000 |
|
|
|
|
|
|
|
1,250 |
|
|
|
1,250 |
|
|
|
2,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
342,360 |
|
|
|
42,360 |
|
|
|
75,001 |
|
|
|
74,999 |
|
|
|
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 1, 2011 all outstanding restricted stock awards and restricted stock units totaling
829,210 shares , excluding the March 24, 2011 and June 30, 2011 restricted stock award grants and
the Chief Executive Officer and Chief Financial Officer restricted shares, vested and were
converted to HollyFrontier common stock at 0.4811 per share. In addition, approximately 86,750
shares of the Companys 2011 restricted stock awards, granted on March 24, 2011 (which converted to
41,728 HollyFrontier restricted shares) will have accelerated vestings for certain individuals by
December 31, 2011 upon their termination of employment.
Contingently Issuable Awards. During the six months ended June 30, 2011, the Company
granted 295,000 stock unit awards contingent upon certain share price performance versus the
Companys peers being met over a three-year period ending on December 31, 2013. Depending on
achievement of the market-based performance goal, awards earned could be between 0% and 125% of the
base number of market-based stock units. If any of the market-based performance goals are achieved
and certified by the Compensation Committee, these stock unit awards (or a portion thereof) will be
converted into stock. The stock unit awards were valued at approximately eighty-eight percent of
market value on the date of grant and are being amortized to compensation expense on a
straight-line basis over the nominal vesting period, adjusted for retirement-eligible employees, as
required under GAAP. Currently 101,125 of these stock unit awards are estimated to be cancelled
and converted into the right to receive 0.4811 fully vested shares of HollyFrontier common stock by
December 31, 2011 related to the expected termination of certain employees.
9
In February 2011, following certification by the Compensation Committee of the Companys
Board of Directors that the specified share price performance criteria in connection with the 2008
grant of contingently issuable stock unit awards to be met over a three-year period ended December
31, 2010 had been achieved, the Company issued 119,596 shares of stock to certain employees of the
Company. The total grant date fair value of these performance awards was $3.8 million and the
total fair value of these shares at issuance was $3.2 million. The Company recognized $1.2 million
of income tax benefit related to these vestings, and a reduction of the Companys APIC pool by
$578,000.
As of June 30, 2011, the Company also had outstanding (net of forfeitures) 230,287 and 301,830
contingently issuable stock unit awards issued in 2009 and 2010, respectively, to be earned should
certain share price criteria be met over a three-year period ending December 31, 2011 and 2012,
respectively. Depending on achievement of the performance goal, awards earned could be between 0%
and 125% of the base number of performance stock units. If the market performance goal is achieved
and certified by the Compensation Committee, the stock unit awards (or a portion thereof) would
have been converted into stock. These contingently issuable stock unit awards were cancelled in
full on July 1, 2011 and a number of shares equal to 125% of the number of contingently issuable
stock units (665,173) were converted into 0.4811 fully vested shares of HollyFrontier common stock.
When common stock dividends are declared by the Companys Board of Directors, dividend
equivalents (on the stock unit awards) and dividends (once the stock unit awards are converted to
restricted stock) are accrued on the contingently issuable stock units and restricted stock but are
not paid until the restricted stock vests (except for restricted stock awards granted in 2011 which
will receive dividends as they are payable).
10. Employee Benefit Plans
Defined Benefit Plans
The Company provides post-retirement healthcare and other benefits to certain employees of the
El Dorado Refinery. Eligible employees are employees hired by the El Dorado Refinery before
certain defined dates and who satisfy certain age and service requirements. Employees hired on or
before November 16, 1999 qualify for retirement healthcare insurance until eligible for Medicare.
Employees hired on or before January 1, 1995 are also eligible for Medicare supplemental insurance.
These plans were unfunded as of June 30, 2011 and December 31, 2010. The post-retirement
healthcare plan requires retirees to pay between 20% and 40% of total healthcare costs based on age
and length of service. The plans prescription drug benefits are at least equivalent to Medicare
Part D benefits.
The following tables set forth the net periodic benefit costs recognized for these benefit
plans in the Companys Condensed Consolidated Statements of Income and Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended June 30, |
|
|
June 30, |
|
Post-retirement Healthcare and Other Benefits |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Components of net periodic benefit cost and other amounts
recognized in other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
366 |
|
|
$ |
380 |
|
|
$ |
183 |
|
|
$ |
190 |
|
Interest cost |
|
|
1,209 |
|
|
|
1,035 |
|
|
|
605 |
|
|
|
518 |
|
Amortization of prior service cost |
|
|
(938 |
) |
|
|
(938 |
) |
|
|
(469 |
) |
|
|
(469 |
) |
Amortized net actuarial loss |
|
|
956 |
|
|
|
523 |
|
|
|
478 |
|
|
|
261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
|
1,593 |
|
|
|
1,000 |
|
|
|
797 |
|
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and benefit obligations recognized in
other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
14 |
|
|
|
|
|
|
|
7 |
|
Amortization of prior service cost |
|
|
938 |
|
|
|
938 |
|
|
|
469 |
|
|
|
469 |
|
Amortization of loss |
|
|
(956 |
) |
|
|
(523 |
) |
|
|
(478 |
) |
|
|
(261 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recognized in other comprehensive income |
|
|
(18 |
) |
|
|
429 |
|
|
|
(9 |
) |
|
|
215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recognized in net periodic benefit cost and other
comprehensive income loss |
|
$ |
1,575 |
|
|
$ |
1,429 |
|
|
$ |
788 |
|
|
$ |
715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
11. Fair Value Measurement
The three-level valuation hierarchy is based upon the transparency of inputs to the valuation
of an asset or liability as of the measurement date. The three levels are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical
assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the asset or liability, either
directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
A financial instruments categorization within the valuation hierarchy is based upon the
lowest level of input that is significant to the fair value measurement. The Companys assessment
of the significance of a particular input to the fair value measurement in its entirety requires
judgment and considers factors specific to the asset or liability.
The following tables present information about the Companys assets and liabilities measured
at fair value on a recurring basis as of June 30, 2011 and December 31, 2010, and indicates the
fair value hierarchy of the valuation techniques utilized by the Company to determine such fair
value (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative asset (liability) as of June 30, 2011 |
|
Description |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Commodity contracts |
|
$ |
1,868 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
1,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative asset (liability) as of December 31, 2010 |
|
Description |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Commodity contracts |
|
$ |
(1,263 |
) |
|
$ |
(1,126 |
) |
|
$ |
|
|
|
$ |
(2,389 |
) |
Foreign exchange contracts |
|
|
|
|
|
|
266 |
|
|
|
|
|
|
|
266 |
|
Interest rate contracts |
|
|
|
|
|
|
929 |
|
|
|
|
|
|
|
929 |
|
As of June 30, 2011 and December 31, 2010, the commodity contracts measured under Level 1 are
NYMEX crude oil contracts and thus are valued using quoted market prices at the end of each period.
The foreign exchange contracts at December 31, 2010 were valued using month-end exchange rates and
the variation from each contracts strike price. Due to the variety of sources available to price
month-end exchange rates, these contracts were deemed to have Level 2 inputs. The commodity
contracts measured under Level 2 at December 31, 2010 were valued using pricing models based on
NYMEX crude oil contracts. The interest rate swap contracts measured under Level 2 at December 31,
2010 were valued using a mark-to-market valuation that took into consideration anticipated cash
flows from the transactions using market prices and other economic data, and assumptions were used
to value the swaps. Given the degree of varying assumptions used to value the swaps, their
valuation was deemed as having Level 2 inputs.
The fair value of the Companys Senior Notes was estimated based on quotations obtained from
broker-dealers who make markets in these and similar securities. At June 30, 2011 and December 31,
2010, the carrying amounts of the Companys 6.875% Senior Notes were $150.0 million, and the
estimated fair values were $157.1 million and $152.6 million, respectively. At June 30, 2011 and
December 31, 2010, the carrying amounts of the Companys 8.5% Senior Notes were $197.9 million and
$197.8 million ($200.0 million less the unamortized discount of $2.1 million and $2.2 million,
respectively), and the estimated fair values were $213.5 million and $212.8 million, respectively.
For cash and cash equivalents, the carrying amounts at June 30, 2011 and December 31, 2010 of
$872.6 million and $558.6 million, respectively, are reasonable estimates of fair value.
12. Price and Interest Risk Management Activities
The Company, at times, enters into derivative contracts to manage its price exposure to its
inventory positions, purchases of foreign crude oil and consumption of natural gas in the refining
process or to fix margins on certain future production or to hedge interest rate risk. The
commodity derivative contracts used by the Company may take the form of futures contracts, forward
contracts, collars or price or interest rate swaps. The Company, also at times, enters into
foreign exchange contracts to manage its exposure to foreign currency fluctuations on its purchases
of foreign crude oil. The Company believes that there is minimal credit risk with respect to its
counterparties. The Companys commodity derivative contracts and foreign exchange contracts, while
economic hedges, are not designated as cash flow or fair value hedges and thus are accounted for
under mark-to-market accounting and gains and losses recorded directly to earnings. The Company
has derivative contracts which it holds directly and also derivative contracts, in connection with
its crude oil purchase and sale contract, previously held on Frontiers behalf by BNP Paribas
Energy Trading GP and BNP Paribas Energy Trading Canada Corp. (collectively, BNP). For
additional fair value disclosures relating to the Companys derivative contracts, see Note 11,
Fair Value Measurement. As of June 30, 2011, the Company had the following outstanding commodity
derivative contracts:
11
|
|
|
|
|
Commodity |
|
Number of barrels |
|
|
|
(in thousands) |
|
Crude oil contracts to hedge excess intermediate, finished product and crude oil inventory |
|
|
930 |
|
As of June 30, 2011, the Company had terminated the two $75.0 million interest rate swaps
totaling $150.0 million of notional amount, that effectively converted a portion of interest
expense from fixed to variable rate debt. The Company received total proceeds from the termination
of $676,000. Under these swap contracts, interest on each of the $75.0 million notional amount was
computed using 30-day LIBOR plus a spread of 5.34% and 5.335%, which equaled an effective interest
rate of 5.59% and 5.58%, respectively, as of the transaction date. Interest was paid semiannually
on the swap contracts, April 1 and October 1, until maturity. The interest income received by the
Company on these swap contracts reduced Interest expense and other financing costs on the
Condensed Consolidated Statements of Income and Comprehensive Income by $725,000 and $365,000 for
the six and three months ended June 30, 2011, respectively, and $717,000 and $345,000 for the six
and three months ended June 30, 2010, respectively. The Company had no receivable as of June 30,
2011 and a receivable of $363,000 as of December 31, 2010, which is included in Other Receivables
on the Condensed Consolidated Balance sheets.
The following table presents the location of the Companys outstanding derivative contracts on
the Condensed Consolidated Balance Sheet and the related fair values at the balance sheet dates.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Derivatives in |
|
|
Liability Derivatives in |
|
|
|
Other Current Assets |
|
|
Accrued Liabilities and Other |
|
|
|
June 30, |
|
|
December 31, |
|
|
June 30, |
|
|
December 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
Fair Value |
|
|
Fair Value |
|
|
Fair Value |
|
|
Fair Value |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Derivatives not designated
as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts |
|
$ |
1,868 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
2,389 |
|
Foreign exchange contracts |
|
|
|
|
|
|
266 |
|
|
|
|
|
|
|
|
|
Interest rate swap contracts |
|
|
|
|
|
|
929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivatives |
|
$ |
1,868 |
|
|
$ |
1,195 |
|
|
$ |
|
|
|
$ |
2,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the location of the gains and losses reported in the Condensed
Consolidated Statements of Income and Comprehensive Income for the current and previous periods
presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Derivatives Gain or (Loss) Recognized |
|
|
|
Location in |
|
|
|
Six Months Ended |
|
|
Three Months Ended |
|
Derivatives not designated |
|
Statements |
|
|
|
June 30, |
|
|
June 30, |
|
as hedging instruments |
|
of Income |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
(in thousands) |
|
|
Commodity contracts |
|
Other Revenues |
|
$ |
1,258 |
|
|
$ |
25,305 |
|
|
$ |
8,152 |
|
|
$ |
28,145 |
|
Foreign exchange
contracts |
|
Other Revenues |
|
|
931 |
|
|
|
(92 |
) |
|
|
443 |
|
|
|
(92 |
) |
Other contracts |
|
Other Revenues |
|
|
|
|
|
|
(34 |
) |
|
|
|
|
|
|
|
|
Interest rate swap contracts |
|
Interest expense and
other financing costs |
|
|
(618 |
) |
|
|
1,033 |
|
|
|
(321 |
) |
|
|
182 |
|
13. Environmental
The Companys operations and many of its manufactured products are specifically subject to
certain requirements of the Clean Air Act (CAA) and related state and local regulations. The
1990 amendments to the CAA contain provisions that will require capital expenditures for the
production of cleaner transportation fuels and the installation of certain air pollution
control devices at the Refineries during the next several years as discussed below.
The Environmental Protection Agency (EPA) has promulgated regulations requiring the phase-in
of gasoline sulfur standards, which began January 1, 2004 and continued through 2008, with special
provisions for small business refiners such as Frontier. As allowed by subsequent regulation,
Frontier elected to extend its small refinery interim gasoline sulfur standard at each of the
Refineries until January 1, 2011 by complying with the highway ultra low sulfur diesel standard by
June 2006. The Company has reevaluated its initial strategy of capital investment at its Cheyenne
Refinery to meet the new gasoline sulfur standard and is now planning to comply with these
requirements starting January 1, 2011 for approximately five years through the redemption of
gasoline sulfur credits. For long-term compliance, the Company expects to utilize internally
generated credits and purchased credits and spend approximately $40.0 million ($18.6 million
incurred as of June 30, 2011) for the FCCU gasoline hydrotreater project comprised of new process
unit capacity and intermediate inventory handling equipment. In addition, new federal benzene
regulations and anticipated state requirements for reduction in gasoline Reid
12
Vapor Pressure (RVP) suggest that additional capital expenditures may be required for
environmental compliance projects. The merger with a subsidiary of Holly on July 1, 2011 resulted
in Frontiers loss of small refiner status and requires expedited compliance with the federal
benzene regulations by January 1, 2014. The Company is presently evaluating projects and the total
potential cost in connection with an overall compliance strategy for the Cheyenne Refinery. Total
capital expenditures for the El Dorado Refinery to comply with the final gasoline sulfur standard
were $95.0 million, including capitalized interest, and were completed in the fourth quarter of
2010. The $95.0 million of expenditures primarily related to the El Dorado Refinerys gasoil
hydrotreater revamp project. The gasoil hydrotreater revamp project addressed most of the El
Dorado Refinerys modifications needed to achieve gasoline sulfur compliance.
The Company is a holder of gasoline sulfur credits retained from prior generation years at
both the Cheyenne and the El Dorado Refineries. There were $2.5 million of sulfur credit sales
during the six and three months ended June 30, 2011 recorded in Other revenue on the Condensed
Consolidated Statements of Income and Comprehensive Income and none in 2010.
In March 2009, settlement agreements associated with the EPAs National Petroleum Refining
Enforcement Initiative were finalized and are now in effect. The Company currently estimates that,
in addition to the flare gas recovery systems previously installed at each facility, capital
expenditures totaling approximately $37.0 million ($717,000 incurred as of June 30, 2011) at the
Cheyenne Refinery and $6.0 million ($1.5 million incurred as of June 30, 2011) at the El Dorado
Refinery will need to be incurred prior to 2017. The Company may also choose to incur additional
costs at the Cheyenne Refinery and at the El Dorado Refinery to comply with certain requirements of
the agreement if such projects are determined to be the most cost effective compliance strategy.
Notwithstanding these settlements, many of these same expenditures are required for the Company to
comply with preexisting regulatory requirements or to implement its planned facility expansions.
Consequently, the costs associated with these other projects are not included in the totals above.
In addition, the settlement agreement provides for stipulated penalties for violations, which are
periodically reported by the Company. Stipulated penalties under the decree are not automatic but
must be requested by one of the agency signatories. As stipulated penalties are requested, the
Company will separately report that matter and the amount of the proposed penalty, if material.
The EPA has promulgated regulations to enact the provisions of the Energy Policy Act of 2005
regarding mandated blending of renewable fuels in gasoline. The Energy Independence and Security
Act of 2007 significantly increased the amount of renewable fuels that had been required by the
2005 legislation. The Company, as a small refiner, was exempt until January 1, 2011 from these
requirements at which time it began incurring additional costs in order to meet the new
requirements. The Company has renewable fuels blending facilities and purchases ethanol with
Renewable Identification Numbers (RINs) credits attached. Ethanol RINs were created to assist in
tracking compliance with these EPA regulations for the blending of renewable fuels. At June 30,
2011, the Company had an asset balance of $1.8 million comprised of RINs purchased that exceeded
the Companys liability at June 30, 2011. There were no RIN sales during the six and three months
ended June 30, 2011 and $128,000 during the six and three months ended June 30, 2010 recorded in
Other revenue on the Condensed Consolidated Statements of Income and Comprehensive Income. While
not yet proposed or promulgated, other pending regulation regarding the mandated use of alternative
or renewable fuels and/or the reduction of greenhouse gas emissions from either transportation
fuels or manufacturing processes is under consideration by the EPA. In addition, the EPA has
recently determined that greenhouse gases, including carbon dioxide, present a danger to human
health and the environment, which may result in future regulation of such gases. If greenhouse gas
control regulations are promulgated, these requirements could materially impact the operations and
financial position of the Company (see Other Future Environmental Considerations below).
On February 26, 2007, the EPA promulgated regulations limiting the amount of benzene in
gasoline. These regulations take effect for large refiners on January 1, 2011 and for small
refiners, such as Frontier, on January 1, 2015. However, the merger with a subsidiary of Holly
resulted in Frontiers loss of small refiner status and requires expedited compliance with the
federal benzene regulations by January 1, 2014. While not yet estimable, the Company anticipates
that potentially material capital expenditures may be necessary to achieve compliance with the new
regulation at its Cheyenne Refinery. Gasoline manufactured at the El Dorado Refinery typically
contains benzene concentrations near the new standard. The Company therefore believes that
necessary benzene compliance expenditures at the El Dorado Refinery will be substantially less than
those at the Cheyenne Refinery.
The Company owns terminals and pipelines in which various groundwater remediation and
monitoring activities are underway and, as of June 30, 2011 and December 31, 2010, the Company had
total accruals of $1.2 million and $558,000, respectively. As is the case with companies engaged
in similar industries, the Company faces potential exposure from future claims and lawsuits
involving environmental matters, including soil and water contamination, air pollution, personal
injury and property damage allegedly caused by substances that the Company may have manufactured,
handled, used, released or disposed.
Cheyenne Refinery. The Company is party to an agreement with the State of Wyoming requiring
investigation and interim remediation actions at the Cheyenne Refinerys property that may have
been impacted by past operational activities. As a result of past and ongoing investigative
efforts, capital expenditures and remediation of conditions found to exist have already taken
place, including the completion of surface impoundment closures, waste stabilization activities and
other site remediation projects. As of June 30, 2011 and December 31, 2010, the Company had a $4.8
million accrual, included on the Condensed Consolidated Balance Sheets, related to the remediation
program. The accrual at June 30, 2011 reflects the estimated present value of a $705,000 cost in
2011 and $690,000 in annual costs for 2012 through 2020, assuming a 3% inflation rate, ten more
years of the ongoing groundwater remediation program, and discounted at a rate of 7.9%. The
Company estimates a total cost of $7.8 million ($7.2 million incurred as of June 30, 2011) for the
cleanup and on-going
monitoring activities of a waste water treatment pond located on land adjacent to the Cheyenne
Refinery which the Company
13
had historically leased from the landowner. Cleanup of the waste water
pond pursuant to the aforementioned agreement with the State of Wyoming was completed in 2010 with
various on-going monitoring for approximately two years. Depending upon information collected
during the on-going monitoring, or by a subsequent administrative order or permit, additional
remedial action and costs could be required.
In October 2009, Frontier Refining Inc. (which owns the Cheyenne Refinery) was served with a
Complaint from Region 8 of the EPA alleging unlawful storage of untreated or partially treated
refinery wastewater in an on-site surface impoundment. To resolve this issue, the Company has
entered into a negotiated settlement agreement with the EPA. Based on this agreement, the total
settlement expense was $2.8 million. This comprised of a $900,000 penalty (paid in June 2010) and
$1.0 million for the first phase of the pond cleaning expenses related to injunctive relief with
the remaining costs being for legal expenses. Initially, the Company expected that capital costs
for injunctive relief related to the removal and repair of the liner would have been incurred after
June 1, 2011. However, after further analysis and review, the Company has decided to close the
on-site surface impoundment by fourth quarter 2011 for an estimated cost of $1.0 million, which was
accrued at June 30, 2011 and December 31, 2010. An alternative capital project related to storm
water overflow, estimated at $2.8 million, is currently planned.
The Company completed in 2007 the negotiation of a settlement of a Notice of Violation (NOV)
from the Wyoming Department of Environmental Quality (WDEQ) alleging non-compliance with certain
refinery waste management requirements. The Company has estimated that the minimum capital cost
for required corrective measures will be approximately $4.4 million and is estimated to be
completed in late 2011. In addition, the Company incurred a total of $2.3 million for additional
work related to the corrective measures, which was substantially completed in 2010.
The Company has received a draft wastewater discharge permit from the WDEQ designed to renew
the existing permit. This draft includes new discharge limits for selenium and chloride in
addition to a requirement for more rigorous toxicity testing of the wastewater discharge. The
Company is currently evaluating options to achieve compliance with the proposed limits. Costs for
compliance with the new limits, which are currently proposed to become effective on January 1,
2013, are currently not estimable.
El Dorado Refinery. The El Dorado Refinery is subject to a 1988 consent order with the Kansas
Department of Health and Environment (KDHE). Subject to the terms of the purchase and sale
agreement for the El Dorado Refinery entered into between the Company and Shell Oil Products US
(Shell), Shell is responsible for the costs of continued compliance with this order. This order,
including various subsequent modifications, requires the El Dorado Refinery to continue the
implementation of a groundwater management program with oversight provided by the KDHE Bureau of
Environmental Remediation. More specifically, the El Dorado Refinery must continue to operate the
hydrocarbon recovery well systems and containment barriers at the site and conduct sampling from
monitoring wells and surface water stations. Quarterly and annual reports must also be submitted
to the KDHE. The order requires that remediation activities continue until KDHE-established
groundwater criteria or other criteria agreed to by the KDHE and the Refinery are met.
In addition to the State order described above, on March 9, 2011, EPA Region 7 issued a draft
Administrative Order on Consent jointly to the Company and to Shell that will eventually require
investigation and potential corrective measures at the facility related to possible past releases
of hazardous materials or historical waste management activities. The Company and Shell have
initiated preliminary discussions with the EPA to clarify requirements, responsibilities and
coordination with the pre-existing State order.
Other Future Environmental Considerations. Recent scientific studies have suggested that
emissions of certain gases commonly referred to as greenhouse gases or GHG and including carbon
dioxide and methane, may be contributing to warming of the earths atmosphere. On April 2, 2007,
in Massachusetts, et al. v. EPA, the U.S. Supreme Court held that carbon dioxide may be regulated
as an air pollutant under the federal Clean Air Act and that the EPA must consider whether it is
required to regulate greenhouse gas emissions from mobile sources such as cars and trucks. On
April 17, 2009, the EPA proposed that certain greenhouse gases, including carbon dioxide, present a
danger to public health or welfare. The proposed endangerment finding was promulgated on
December 7, 2009, opening the door to direct regulation of such greenhouse gases under the
provisions and programs of the existing Clean Air Act. Thus, the EPA can impose restrictions on
the emission of greenhouse gases even if the U.S. Congress does not adopt new legislation
specifically addressing emissions of greenhouse gases. In October 2009, the EPA published a final
rule requiring large emitters of greenhouse gases and certain industrial sectors to monitor and
report their greenhouse gas emissions to the EPA beginning in 2011 for emissions in 2010. On
November 30, 2010, the EPA published a final rule expanding its existing GHG emission reporting
rule to include onshore oil and natural gas production facilities beginning for 2012 for emissions
occurring after January 1, 2011. In May 2010, the EPA issued a final rule that determines which
stationary sources of greenhouse gas emissions need to obtain a construction or operating permit
and install the best available control technology for greenhouse gas emissions. The regulation did
not identify such technologies. In response to the endangerment finding, the EPA adopted
regulations that require a reduction in emissions of GHGs from motor vehicles and also could
trigger permit review for GHG emission from certain stationary sources. The EPA has determined
that the motor vehicle GHG emission standards triggered Clean Air Act construction and operating
permit requirements for stationary sources beginning on January 2, 2011 when the motor vehicle
standards took effect. In addition, the EPA has stated its intent to propose regulations in 2011
that would require utilities and refineries to limit incremental greenhouse gas emissions resulting
from future facility expansions. The Agency further stated their intent to promulgate such
regulations in 2012. Although it is not possible at this time to predict how legislation or new
regulations that may be adopted to address greenhouse gas emissions would impact the Companys
business, any such future laws and regulations will most likely result in increased compliance
costs or additional operating restrictions, and could
have a material adverse effect on the Companys business, financial condition and results of
operations, including demand for the refined petroleum products that it produces.
14
14. Litigation
The Company is involved in various lawsuits and regulatory actions which are incidental to its
business. Before the closing of the merger between Holly and Frontier on July 1, 2011, twelve
substantially similar shareholder lawsuits styled as class actions were filed in Texas and Wyoming
by alleged Frontier shareholders challenging the proposed merger with Holly and naming as
defendants Frontier, its board of directors and, in certain instances, Holly and a subsidiary of
Holly, as aiders and abettors. On June 20, 2011, a memorandum of understanding was entered into
regarding the settlement of the actions filed in Harris County, Texas. Upon entering a settlement
order by the court, the lawsuits filed in that court will be dismissed with prejudice, releasing
all defendants from any and all claims relating to, among other things, the merger and any
disclosures made in connection therewith. In exchange for that release, Frontier provided
additional disclosures requested by the plaintiffs in the action and has agreed to pay the
plaintiffs attorneys fees awarded by the court in an amount not to exceed $612,500. The
defendants have denied and continue to deny any wrongdoing or liability with respect to all claims,
events and transactions complained of in any of the lawsuits. Frontier believes that neither the
claims that have been made nor the pending lawsuits will result in any material liability or have
any material adverse effect upon Frontier.
15. Consolidating Financial Statements
Frontier Holdings Inc. and its subsidiaries (FHI) are full and unconditional guarantors of
the Companys 6.875% Senior Notes and 8.5% Senior Notes. Presented on the following pages are the
Companys condensed consolidating balance sheets, statements of operations, and statements of cash
flows as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as
amended. As specified in Rule 3-10, the condensed consolidating balance sheets, statements of
operations, and statements of cash flows presented on the following pages meet the requirements for
financial statements of the issuer and each guarantor of the notes because the guarantors are all
direct or indirect 100%-owned subsidiaries of Frontier Oil Corporation, and all of the guarantees
are full and unconditional on a joint and several basis. The Company files a consolidated U.S.
federal income tax return and consolidated state income tax returns in the majority of states in
which it does business. Accordingly, the equity in earnings of subsidiaries recorded for Frontier
Oil Corporation is equal to the subsidiaries net income adjusted for consolidating pre-tax
adjustments and for the portion of the subsidiaries income tax provision which is eliminated in
consolidation.
15
FRONTIER OIL CORPORATION
Condensed Consolidating Statement of Income
For the Six Months Ended June 30, 2011
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHI (Guarantor |
|
|
Other Non- Guarantor |
|
|
|
|
|
|
|
|
|
FOC (Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined products |
|
$ |
|
|
|
$ |
3,975,515 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
3,975,515 |
|
Other |
|
|
(51 |
) |
|
|
3,654 |
|
|
|
63 |
|
|
|
|
|
|
|
3,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
(51 |
) |
|
|
3,979,169 |
|
|
|
63 |
|
|
|
|
|
|
|
3,979,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw material,
freight and other
costs |
|
|
|
|
|
|
3,242,306 |
|
|
|
|
|
|
|
|
|
|
|
3,242,306 |
|
Refinery operating
expenses, excluding
depreciation |
|
|
|
|
|
|
152,566 |
|
|
|
|
|
|
|
|
|
|
|
152,566 |
|
Selling and general
expenses, excluding
depreciation |
|
|
8,276 |
|
|
|
16,075 |
|
|
|
|
|
|
|
|
|
|
|
24,351 |
|
Holly Corporation
merger costs |
|
|
7,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,966 |
|
Depreciation,
amortization and
accretion |
|
|
27 |
|
|
|
53,688 |
|
|
|
|
|
|
|
550 |
|
|
|
54,265 |
|
Loss on sales of
assets |
|
|
28 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
16,297 |
|
|
|
3,464,652 |
|
|
|
|
|
|
|
550 |
|
|
|
3,481,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(16,348 |
) |
|
|
514,517 |
|
|
|
63 |
|
|
|
(550 |
) |
|
|
497,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other
financing
costs |
|
|
14,088 |
|
|
|
3,875 |
|
|
|
|
|
|
|
(549 |
) |
|
|
17,414 |
|
Interest and investment
income |
|
|
(304 |
) |
|
|
(144 |
) |
|
|
|
|
|
|
|
|
|
|
(448 |
) |
Equity in earnings of
subsidiaries |
|
|
(510,243 |
) |
|
|
|
|
|
|
|
|
|
|
510,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
480,111 |
|
|
|
510,786 |
|
|
|
63 |
|
|
|
(510,244 |
) |
|
|
480,716 |
|
Provision for income taxes |
|
|
173,153 |
|
|
|
184,361 |
|
|
|
26 |
|
|
|
(183,782 |
) |
|
|
173,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
306,958 |
|
|
$ |
326,425 |
|
|
$ |
37 |
|
|
$ |
(326,462 |
) |
|
$ |
306,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
FRONTIER OIL CORPORATION
Condensed Consolidating Statement of Income
For the Six Months Ended June 30, 2010
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHI (Guarantor |
|
|
Other Non- Guarantor |
|
|
|
|
|
|
|
|
|
FOC (Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined products |
|
$ |
|
|
|
$ |
2,795,549 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
2,795,549 |
|
Other |
|
|
(11 |
) |
|
|
25,443 |
|
|
|
43 |
|
|
|
|
|
|
|
25,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
(11 |
) |
|
|
2,820,992 |
|
|
|
43 |
|
|
|
|
|
|
|
2,821,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw material,
freight and other
costs |
|
|
|
|
|
|
2,561,055 |
|
|
|
|
|
|
|
|
|
|
|
2,561,055 |
|
Refinery operating
expenses, excluding
depreciation |
|
|
|
|
|
|
127,323 |
|
|
|
|
|
|
|
|
|
|
|
127,323 |
|
Selling and general
expenses, excluding
depreciation |
|
|
8,787 |
|
|
|
13,409 |
|
|
|
|
|
|
|
|
|
|
|
22,196 |
|
Depreciation,
amortization and
accretion |
|
|
35 |
|
|
|
52,050 |
|
|
|
|
|
|
|
462 |
|
|
|
52,547 |
|
Gain on sales of
assets |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
8,821 |
|
|
|
2,753,837 |
|
|
|
|
|
|
|
462 |
|
|
|
2,763,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(8,832 |
) |
|
|
67,155 |
|
|
|
43 |
|
|
|
(462 |
) |
|
|
57,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other
financing
costs |
|
|
12,976 |
|
|
|
3,235 |
|
|
|
|
|
|
|
(930 |
) |
|
|
15,281 |
|
Interest and investment
income |
|
|
(937 |
) |
|
|
(158 |
) |
|
|
|
|
|
|
|
|
|
|
(1,095 |
) |
Equity in earnings of
subsidiaries |
|
|
(64,678 |
) |
|
|
|
|
|
|
|
|
|
|
64,678 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
43,807 |
|
|
|
64,078 |
|
|
|
43 |
|
|
|
(64,210 |
) |
|
|
43,718 |
|
Provision for income taxes |
|
|
17,957 |
|
|
|
25,207 |
|
|
|
41 |
|
|
|
(25,337 |
) |
|
|
17,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
25,850 |
|
|
$ |
38,871 |
|
|
$ |
2 |
|
|
$ |
(38,873 |
) |
|
$ |
25,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
FRONTIER OIL CORPORATION
Condensed Consolidating Statement of Income
For the Three Months Ended June 30, 2011
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Non- |
|
|
|
|
|
|
|
|
|
FOC |
|
|
FHI (Guarantor |
|
|
Guarantor |
|
|
|
|
|
|
|
|
|
(Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined products |
|
$ |
|
|
|
$ |
2,059,845 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
2,059,845 |
|
Other |
|
|
(45 |
) |
|
|
10,695 |
|
|
|
32 |
|
|
|
|
|
|
|
10,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
(45 |
) |
|
|
2,070,540 |
|
|
|
32 |
|
|
|
|
|
|
|
2,070,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw material, freight and
other costs |
|
|
|
|
|
|
1,680,903 |
|
|
|
|
|
|
|
|
|
|
|
1,680,903 |
|
Refinery operating expenses,
excluding
depreciation |
|
|
|
|
|
|
76,759 |
|
|
|
|
|
|
|
|
|
|
|
76,759 |
|
Selling and general expenses,
excluding
depreciation |
|
|
4,367 |
|
|
|
9,381 |
|
|
|
|
|
|
|
|
|
|
|
13,748 |
|
Holly Corporation merger costs |
|
|
2,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,818 |
|
Depreciation, amortization and
accretion |
|
|
13 |
|
|
|
27,011 |
|
|
|
|
|
|
|
273 |
|
|
|
27,297 |
|
Gain on sales of assets |
|
|
30 |
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
7,228 |
|
|
|
1,794,090 |
|
|
|
|
|
|
|
273 |
|
|
|
1,801,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(7,273 |
) |
|
|
276,450 |
|
|
|
32 |
|
|
|
(273 |
) |
|
|
268,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other
financing
costs |
|
|
7,004 |
|
|
|
2,114 |
|
|
|
|
|
|
|
(338 |
) |
|
|
8,780 |
|
Interest and investment income |
|
|
(47 |
) |
|
|
(54 |
) |
|
|
|
|
|
|
|
|
|
|
(101 |
) |
Equity in earnings of subsidiaries |
|
|
(273,922 |
) |
|
|
|
|
|
|
|
|
|
|
273,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
259,692 |
|
|
|
274,390 |
|
|
|
32 |
|
|
|
(273,857 |
) |
|
|
260,257 |
|
Provision for income taxes |
|
|
92,600 |
|
|
|
98,209 |
|
|
|
14 |
|
|
|
(97,658 |
) |
|
|
93,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
167,092 |
|
|
$ |
176,181 |
|
|
$ |
18 |
|
|
$ |
(176,199 |
) |
|
$ |
167,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
FRONTIER OIL CORPORATION
Condensed Consolidating Statement of Income
For the Three Months Ended June 30, 2010
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHI |
|
|
Other Non- |
|
|
|
|
|
|
|
|
|
FOC |
|
|
(Guarantor |
|
|
Guarantor |
|
|
|
|
|
|
|
|
|
(Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined products |
|
$ |
|
|
|
$ |
1,520,510 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
1,520,510 |
|
Other |
|
|
|
|
|
|
28,356 |
|
|
|
14 |
|
|
|
|
|
|
|
28,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
1,548,866 |
|
|
|
14 |
|
|
|
|
|
|
|
1,548,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw material, freight and
other costs |
|
|
|
|
|
|
1,337,291 |
|
|
|
|
|
|
|
|
|
|
|
1,337,291 |
|
Refinery operating expenses,
excluding
depreciation |
|
|
|
|
|
|
58,440 |
|
|
|
|
|
|
|
|
|
|
|
58,440 |
|
Selling and general expenses,
excluding
depreciation |
|
|
4,265 |
|
|
|
6,955 |
|
|
|
|
|
|
|
|
|
|
|
11,220 |
|
Depreciation, amortization and
accretion |
|
|
15 |
|
|
|
25,693 |
|
|
|
|
|
|
|
230 |
|
|
|
25,938 |
|
Gain on sales of assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
4,280 |
|
|
|
1,428,379 |
|
|
|
|
|
|
|
230 |
|
|
|
1,432,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(4,280 |
) |
|
|
120,487 |
|
|
|
14 |
|
|
|
(230 |
) |
|
|
115,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other
financing
costs |
|
|
6,803 |
|
|
|
1,648 |
|
|
|
|
|
|
|
(405 |
) |
|
|
8,046 |
|
Interest and investment income |
|
|
(550 |
) |
|
|
(18 |
) |
|
|
|
|
|
|
|
|
|
|
(568 |
) |
Equity in earnings of subsidiaries |
|
|
(119,042 |
) |
|
|
|
|
|
|
|
|
|
|
119,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
108,509 |
|
|
|
118,857 |
|
|
|
14 |
|
|
|
(118,867 |
) |
|
|
108,513 |
|
Provision for income taxes |
|
|
42,395 |
|
|
|
46,225 |
|
|
|
30 |
|
|
|
(46,251 |
) |
|
|
42,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
66,114 |
|
|
$ |
72,632 |
|
|
$ |
(16 |
) |
|
$ |
(72,616 |
) |
|
$ |
66,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
FRONTIER OIL CORPORATION
Condensed Consolidating Balance Sheet
As of June 30, 2011
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHI |
|
|
Other Non- |
|
|
|
|
|
|
|
|
|
FOC |
|
|
(Guarantor |
|
|
Guarantor |
|
|
|
|
|
|
|
|
|
(Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
182 |
|
|
$ |
872,444 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
872,626 |
|
Trade and other receivables, net |
|
|
38,021 |
|
|
|
238,045 |
|
|
|
4 |
|
|
|
|
|
|
|
276,070 |
|
Inventory of crude oil, products and
other |
|
|
|
|
|
|
260,230 |
|
|
|
|
|
|
|
|
|
|
|
260,230 |
|
Deferred income tax assets current |
|
|
19,143 |
|
|
|
16,381 |
|
|
|
|
|
|
|
(16,381 |
) |
|
|
19,143 |
|
Other current assets |
|
|
5,407 |
|
|
|
7,631 |
|
|
|
|
|
|
|
|
|
|
|
13,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
62,753 |
|
|
|
1,394,731 |
|
|
|
4 |
|
|
|
(16,381 |
) |
|
|
1,441,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
169 |
|
|
|
985,604 |
|
|
|
|
|
|
|
23,434 |
|
|
|
1,009,207 |
|
Deferred turnaround and catalyst costs,
net |
|
|
|
|
|
|
56,760 |
|
|
|
|
|
|
|
|
|
|
|
56,760 |
|
Deferred financing costs, net |
|
|
4,758 |
|
|
|
794 |
|
|
|
|
|
|
|
|
|
|
|
5,552 |
|
Intangible assets, net |
|
|
|
|
|
|
1,033 |
|
|
|
|
|
|
|
|
|
|
|
1,033 |
|
Deferred income tax assets noncurrent |
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
(11 |
) |
|
|
|
|
Other assets |
|
|
3 |
|
|
|
779 |
|
|
|
|
|
|
|
|
|
|
|
782 |
|
Receivable from affiliated companies |
|
|
167,820 |
|
|
|
|
|
|
|
654 |
|
|
|
(168,474 |
) |
|
|
|
|
Investment in subsidiaries |
|
|
1,631,506 |
|
|
|
|
|
|
|
|
|
|
|
(1,631,506 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,867,009 |
|
|
$ |
2,439,701 |
|
|
$ |
669 |
|
|
$ |
(1,792,938 |
) |
|
$ |
2,514,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
732 |
|
|
$ |
559,917 |
|
|
$ |
15 |
|
|
$ |
|
|
|
$ |
560,664 |
|
Income taxes payable |
|
|
1,266 |
|
|
|
104 |
|
|
|
|
|
|
|
|
|
|
|
1,370 |
|
Accrued liabilities and other |
|
|
13,195 |
|
|
|
28,949 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
42,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
15,193 |
|
|
|
588,970 |
|
|
|
16 |
|
|
|
(1 |
) |
|
|
604,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
347,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
347,927 |
|
Contingent income tax liabilities |
|
|
2,326 |
|
|
|
1,094 |
|
|
|
|
|
|
|
|
|
|
|
3,420 |
|
Long-term capital lease obligations |
|
|
|
|
|
|
2,695 |
|
|
|
|
|
|
|
|
|
|
|
2,695 |
|
Other long-term liabilities |
|
|
|
|
|
|
54,658 |
|
|
|
|
|
|
|
|
|
|
|
54,658 |
|
Deferred income tax liabilities |
|
|
239,279 |
|
|
|
228,415 |
|
|
|
|
|
|
|
(228,415 |
) |
|
|
239,279 |
|
Payable to affiliated companies |
|
|
|
|
|
|
317,731 |
|
|
|
344 |
|
|
|
(318,075 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity |
|
|
1,262,284 |
|
|
|
1,246,138 |
|
|
|
309 |
|
|
|
(1,246,447 |
) |
|
|
1,262,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders
equity |
|
$ |
1,867,009 |
|
|
$ |
2,439,701 |
|
|
$ |
669 |
|
|
$ |
(1,792,938 |
) |
|
$ |
2,514,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
FRONTIER OIL CORPORATION
Condensed Consolidating Balance Sheet
As of December 31, 2010
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOC |
|
|
FHI
(Guarantor |
|
|
Other Non-
Guarantor |
|
|
|
|
|
|
|
|
|
(Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
278,163 |
|
|
$ |
280,478 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
558,641 |
|
Trade and other receivables, net |
|
|
49,398 |
|
|
|
146,674 |
|
|
|
|
|
|
|
|
|
|
|
196,072 |
|
Inventory of crude oil, products and
other |
|
|
|
|
|
|
280,847 |
|
|
|
|
|
|
|
|
|
|
|
280,847 |
|
Deferred income tax assets current |
|
|
30,516 |
|
|
|
26,647 |
|
|
|
|
|
|
|
(26,647 |
) |
|
|
30,516 |
|
Other current assets |
|
|
1,403 |
|
|
|
11,571 |
|
|
|
7 |
|
|
|
|
|
|
|
12,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
359,480 |
|
|
|
746,217 |
|
|
|
7 |
|
|
|
(26,647 |
) |
|
|
1,079,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
328 |
|
|
|
991,104 |
|
|
|
|
|
|
|
23,436 |
|
|
|
1,014,868 |
|
Deferred turnaround and catalyst costs,
net |
|
|
|
|
|
|
51,347 |
|
|
|
|
|
|
|
|
|
|
|
51,347 |
|
Deferred financing costs, net |
|
|
5,124 |
|
|
|
1,147 |
|
|
|
|
|
|
|
|
|
|
|
6,271 |
|
Intangible assets, net |
|
|
|
|
|
|
1,094 |
|
|
|
|
|
|
|
|
|
|
|
1,094 |
|
Deferred income tax assets noncurrent |
|
|
11,768 |
|
|
|
6,642 |
|
|
|
10 |
|
|
|
(6,652 |
) |
|
|
11,768 |
|
Other assets |
|
|
4,180 |
|
|
|
179 |
|
|
|
|
|
|
|
|
|
|
|
4,359 |
|
Receivable from affiliated companies(1) |
|
|
|
|
|
|
15,892 |
|
|
|
591 |
|
|
|
(16,483 |
) |
|
|
|
|
Investment in subsidiaries |
|
|
1,208,245 |
|
|
|
|
|
|
|
|
|
|
|
(1,208,245 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,589,125 |
|
|
$ |
1,813,622 |
|
|
$ |
608 |
|
|
$ |
(1,234,591 |
) |
|
$ |
2,168,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
147 |
|
|
$ |
493,050 |
|
|
$ |
15 |
|
|
$ |
|
|
|
$ |
493,212 |
|
Accrued liabilities and other |
|
|
9,823 |
|
|
|
32,588 |
|
|
|
3 |
|
|
|
(2 |
) |
|
|
42,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
9,970 |
|
|
|
525,638 |
|
|
|
18 |
|
|
|
(2 |
) |
|
|
535,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
347,773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
347,773 |
|
Contingent income tax liabilities |
|
|
2,758 |
|
|
|
1,072 |
|
|
|
|
|
|
|
|
|
|
|
3,830 |
|
Long-term capital lease obligations |
|
|
|
|
|
|
2,938 |
|
|
|
|
|
|
|
|
|
|
|
2,938 |
|
Other long-term liabilities |
|
|
4,093 |
|
|
|
53,286 |
|
|
|
|
|
|
|
|
|
|
|
57,379 |
|
Deferred income tax liabilities |
|
|
234,673 |
|
|
|
223,978 |
|
|
|
22 |
|
|
|
(224,000 |
) |
|
|
234,673 |
|
Payable to affiliated companies |
|
|
3,311 |
|
|
|
|
|
|
|
296 |
|
|
|
(3,607 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity |
|
|
986,547 |
|
|
|
1,006,710 |
|
|
|
272 |
|
|
|
(1,006,982 |
) |
|
|
986,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders
equity |
|
$ |
1,589,125 |
|
|
$ |
1,813,622 |
|
|
$ |
608 |
|
|
$ |
(1,234,591 |
) |
|
$ |
2,168,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
FHI receivable from affiliated companies balance includes $13,173 for income taxes receivable from parent under a tax sharing agreement. |
21
FRONTIER OIL CORPORATION
Condensed Consolidating Statement of Cash Flows
For the Six Months Ended June 30, 2011
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHI |
|
|
Other Non- |
|
|
|
|
|
|
|
|
|
FOC |
|
|
(Guarantor |
|
|
Guarantor |
|
|
|
|
|
|
|
|
|
(Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
306,958 |
|
|
$ |
326,425 |
|
|
$ |
37 |
|
|
$ |
(326,462 |
) |
|
$ |
306,958 |
|
Adjustments to reconcile net income
to net cash from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of subsidiaries |
|
|
(510,243 |
) |
|
|
|
|
|
|
|
|
|
|
510,243 |
|
|
|
|
|
Depreciation, amortization and
accretion |
|
|
27 |
|
|
|
53,688 |
|
|
|
|
|
|
|
550 |
|
|
|
54,265 |
|
Deferred income tax provision |
|
|
27,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,731 |
|
Stock-based compensation expense |
|
|
7,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,600 |
|
Excess income tax benefits of
stock-based compensation |
|
|
(3,406 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,406 |
) |
Intercompany income taxes |
|
|
|
|
|
|
183,760 |
|
|
|
23 |
|
|
|
(183,783 |
) |
|
|
|
|
Intercompany dividends |
|
|
87,000 |
|
|
|
|
|
|
|
|
|
|
|
(87,000 |
) |
|
|
|
|
Other intercompany transactions |
|
|
(171,131 |
) |
|
|
171,194 |
|
|
|
(63 |
) |
|
|
|
|
|
|
|
|
Amortization of debt issuance costs |
|
|
365 |
|
|
|
353 |
|
|
|
|
|
|
|
|
|
|
|
718 |
|
Senior notes discount amortization |
|
|
154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
154 |
|
Decrease in allowance for investment
loss and bad debts |
|
|
(21 |
) |
|
|
(230 |
) |
|
|
|
|
|
|
|
|
|
|
(251 |
) |
Loss on sales of assets |
|
|
28 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
45 |
|
(Decrease) increase in other
long-term liabilities |
|
|
(432 |
) |
|
|
1,209 |
|
|
|
|
|
|
|
|
|
|
|
777 |
|
Turnaround and catalyst costs paid |
|
|
|
|
|
|
(18,399 |
) |
|
|
|
|
|
|
|
|
|
|
(18,399 |
) |
Other |
|
|
55 |
|
|
|
(600 |
) |
|
|
|
|
|
|
|
|
|
|
(545 |
) |
Changes in working capital from
operations |
|
|
14,184 |
|
|
|
3,797 |
|
|
|
3 |
|
|
|
(176 |
) |
|
|
17,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
operating activities |
|
|
(241,131 |
) |
|
|
721,214 |
|
|
|
|
|
|
|
(86,628 |
) |
|
|
393,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment |
|
|
(5 |
) |
|
|
(42,100 |
) |
|
|
|
|
|
|
(372 |
) |
|
|
(42,477 |
) |
Proceeds from sales of assets and other |
|
|
139 |
|
|
|
75 |
|
|
|
|
|
|
|
|
|
|
|
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in (provided by)
investing activities |
|
|
134 |
|
|
|
(42,025 |
) |
|
|
|
|
|
|
(372 |
) |
|
|
(42,263 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock |
|
|
(7,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,326 |
) |
Dividends paid |
|
|
(42,462 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(42,462 |
) |
Proceeds from issuance of common
stock |
|
|
9,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,497 |
|
Excess income tax benefits of
stock-based compensation |
|
|
3,406 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,406 |
|
Intercompany dividends |
|
|
|
|
|
|
(87,000 |
) |
|
|
|
|
|
|
87,000 |
|
|
|
|
|
Debt issuance costs and other |
|
|
(99 |
) |
|
|
(223 |
) |
|
|
|
|
|
|
|
|
|
|
(322 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(36,984 |
) |
|
|
(87,223 |
) |
|
|
|
|
|
|
87,000 |
|
|
|
(37,207 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents |
|
|
(277,981 |
) |
|
|
591,966 |
|
|
|
|
|
|
|
|
|
|
|
313,985 |
|
Cash and cash equivalents, beginning of
period |
|
|
278,163 |
|
|
|
280,478 |
|
|
|
|
|
|
|
|
|
|
|
558,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of
period |
|
$ |
182 |
|
|
$ |
872,444 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
872,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
FRONTIER OIL CORPORATION
Condensed Consolidating Statement of Cash Flows
For the Six Months Ended June 30, 2010
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHI |
|
|
Other Non- |
|
|
|
|
|
|
|
|
|
FOC |
|
|
(Guarantor |
|
|
Guarantor |
|
|
|
|
|
|
|
|
|
(Parent) |
|
|
Subsidiaries) |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
25,850 |
|
|
$ |
38,871 |
|
|
$ |
2 |
|
|
$ |
(38,873 |
) |
|
$ |
25,850 |
|
Adjustments to reconcile net income
to
net cash from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of subsidiaries |
|
|
(64,678 |
) |
|
|
|
|
|
|
|
|
|
|
64,678 |
|
|
|
|
|
Depreciation, amortization and
accretion |
|
|
35 |
|
|
|
52,051 |
|
|
|
|
|
|
|
462 |
|
|
|
52,548 |
|
Deferred income tax provision |
|
|
13,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,145 |
|
Stock-based compensation expense |
|
|
8,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,613 |
|
Excess income tax benefits of
stock-based compensation |
|
|
(101 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(101 |
) |
Intercompany income taxes |
|
|
|
|
|
|
25,301 |
|
|
|
36 |
|
|
|
(25,337 |
) |
|
|
|
|
Intercompany dividends |
|
|
6,200 |
|
|
|
|
|
|
|
|
|
|
|
(6,200 |
) |
|
|
|
|
Other intercompany transactions |
|
|
4,350 |
|
|
|
(4,312 |
) |
|
|
(38 |
) |
|
|
|
|
|
|
|
|
Amortization of debt issuance
costs |
|
|
391 |
|
|
|
353 |
|
|
|
|
|
|
|
|
|
|
|
744 |
|
Senior notes discount amortization |
|
|
141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141 |
|
Decrease in allowance for
investment
loss and bad debts |
|
|
(4 |
) |
|
|
(48 |
) |
|
|
|
|
|
|
|
|
|
|
(52 |
) |
Net gains on sales of assets |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
Increase (decrease) in other
long-term
liabilities |
|
|
105 |
|
|
|
(6,292 |
) |
|
|
|
|
|
|
|
|
|
|
(6,187 |
) |
Turnaround and catalyst costs paid |
|
|
|
|
|
|
(5,729 |
) |
|
|
|
|
|
|
|
|
|
|
(5,729 |
) |
Other |
|
|
625 |
|
|
|
53 |
|
|
|
|
|
|
|
|
|
|
|
678 |
|
Changes in working capital from
operations |
|
|
42,165 |
|
|
|
(62,125 |
) |
|
|
|
|
|
|
193 |
|
|
|
(19,767 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities |
|
|
36,836 |
|
|
|
38,123 |
|
|
|
|
|
|
|
(5,077 |
) |
|
|
69,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment |
|
|
9 |
|
|
|
(39,630 |
) |
|
|
|
|
|
|
(1,123 |
) |
|
|
(40,744 |
) |
Proceeds from sales of assets |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
investing activities |
|
|
10 |
|
|
|
(39,630 |
) |
|
|
|
|
|
|
(1,123 |
) |
|
|
(40,743 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock |
|
|
(3,582 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,582 |
) |
Dividends paid |
|
|
(6,493 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,493 |
) |
Excess income tax benefits of
stock-based compensation |
|
|
101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101 |
|
Debt issuance costs and other |
|
|
|
|
|
|
(205 |
) |
|
|
|
|
|
|
|
|
|
|
(205 |
) |
Intercompany dividends |
|
|
|
|
|
|
(6,200 |
) |
|
|
|
|
|
|
6,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(9,974 |
) |
|
|
(6,405 |
) |
|
|
|
|
|
|
6,200 |
|
|
|
(10,179 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents |
|
|
26,872 |
|
|
|
(7,912 |
) |
|
|
|
|
|
|
|
|
|
|
18,960 |
|
Cash and cash equivalents, beginning
of
period |
|
|
211,775 |
|
|
|
213,505 |
|
|
|
|
|
|
|
|
|
|
|
425,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of
period |
|
$ |
238,647 |
|
|
$ |
205,593 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
444,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
For Informational Purposes:
Operating Data
The following tables set forth the refining operating statistical information on a
consolidated basis and for each Refinery for the six and three months ended June 30, 2011 and 2010.
The statistical information includes the following terms:
|
|
|
Charges the quantity of crude oil and other feedstock processed through
refinery process units on a bpd basis. |
|
|
|
Manufactured product yields the volumes of specific materials that are obtained
through the distilling of crude oil and the operations of other refinery process units on
a bpd basis. |
|
|
|
NYMEX WTI the benchmark West Texas Intermediate crude oil priced on the New York
Mercantile Exchange. |
|
|
|
Average laid-in crude oil differential the weighted average differential between the
NYMEX WTI crude oil price and the composite cost of all crude oil purchased and delivered
to our Refineries. |
|
|
|
WTI/WTS crude oil differential the average differential between the NYMEX WTI crude
oil price and the West Texas sour crude oil priced at Midland, Texas. |
|
|
|
Cheyenne Refinery light/heavy crude oil differential the average differential
between the NYMEX WTI crude oil price and the cost of heavy crude oil delivered to the
Cheyenne Refinery. |
|
|
|
El Dorado Refinery light/heavy crude oil differential the average differential
between the NYMEX WTI crude oil price and the cost of heavy crude oil delivered to the El
Dorado Refinery. |
|
|
|
Gasoline and diesel crack spreads the average non-oxygenated gasoline and diesel net
sales prices that we receive for each product less the average NYMEX WTI crude oil price. |
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Charges (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Light crude |
|
|
83,412 |
|
|
|
63,826 |
|
|
|
87,548 |
|
|
|
63,519 |
|
Heavy and intermediate crude |
|
|
88,922 |
|
|
|
105,285 |
|
|
|
81,362 |
|
|
|
115,084 |
|
Other feed and blendstocks |
|
|
16,995 |
|
|
|
12,603 |
|
|
|
17,509 |
|
|
|
12,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
189,329 |
|
|
|
181,714 |
|
|
|
186,419 |
|
|
|
191,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufactured product yields (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
|
90,367 |
|
|
|
87,590 |
|
|
|
84,259 |
|
|
|
92,167 |
|
Diesel and jet fuel |
|
|
69,579 |
|
|
|
70,177 |
|
|
|
67,372 |
|
|
|
74,215 |
|
Asphalt |
|
|
3,172 |
|
|
|
3,483 |
|
|
|
2,462 |
|
|
|
3,187 |
|
Other |
|
|
22,754 |
|
|
|
16,747 |
|
|
|
28,441 |
|
|
|
17,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
185,872 |
|
|
|
177,997 |
|
|
|
182,534 |
|
|
|
186,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total product sales (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
|
104,011 |
|
|
|
95,460 |
|
|
|
102,224 |
|
|
|
101,310 |
|
Diesel and jet fuel |
|
|
67,000 |
|
|
|
69,861 |
|
|
|
63,526 |
|
|
|
73,761 |
|
Asphalt |
|
|
3,251 |
|
|
|
3,152 |
|
|
|
2,606 |
|
|
|
3,463 |
|
Other |
|
|
18,048 |
|
|
|
15,366 |
|
|
|
17,899 |
|
|
|
16,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
192,310 |
|
|
|
183,839 |
|
|
|
186,255 |
|
|
|
195,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery operating margin information (per sales barrel) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined products revenue |
|
$ |
114.21 |
|
|
$ |
84.01 |
|
|
$ |
121.53 |
|
|
$ |
85.63 |
|
Raw material, freight and other costs |
|
|
93.15 |
|
|
|
76.97 |
|
|
|
99.17 |
|
|
|
75.32 |
|
Refinery operating expenses, excluding depreciation (1) |
|
|
4.38 |
|
|
|
3.83 |
|
|
|
4.53 |
|
|
|
3.29 |
|
Depreciation, amortization and accretion (1) |
|
|
1.55 |
|
|
|
1.57 |
|
|
|
1.60 |
|
|
|
1.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average NYMEX WTI (per barrel) |
|
$ |
98.35 |
|
|
$ |
78.35 |
|
|
$ |
102.60 |
|
|
$ |
78.16 |
|
Average laid-in crude oil differential (per barrel) |
|
|
6.04 |
|
|
|
2.81 |
|
|
|
4.78 |
|
|
|
3.66 |
|
Average light/heavy differential (per barrel) |
|
|
16.23 |
|
|
|
7.11 |
|
|
|
13.84 |
|
|
|
9.33 |
|
Average gasoline crack spread (per barrel) |
|
|
20.64 |
|
|
|
8.20 |
|
|
|
25.81 |
|
|
|
10.02 |
|
Average diesel crack spread (per barrel) |
|
|
27.38 |
|
|
|
10.61 |
|
|
|
29.23 |
|
|
|
13.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price (per sales barrel) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
$ |
119.44 |
|
|
$ |
87.72 |
|
|
$ |
128.62 |
|
|
$ |
89.17 |
|
Diesel and jet fuel |
|
|
126.71 |
|
|
|
89.99 |
|
|
|
132.90 |
|
|
|
92.40 |
|
Asphalt |
|
|
71.02 |
|
|
|
72.32 |
|
|
|
80.85 |
|
|
|
72.96 |
|
Other |
|
|
45.44 |
|
|
|
36.25 |
|
|
|
46.62 |
|
|
|
36.63 |
|
|
|
|
(1) |
|
Prior period amounts are adjusted to reflect current year presentation of turnaround and catalyst
amortization as depreciation, amortization and accretion instead of refinery operating expenses. |
24
Cheyenne Refinery:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Charges (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Light crude |
|
|
17,373 |
|
|
|
29,550 |
|
|
|
18,716 |
|
|
|
32,334 |
|
Heavy and intermediate crude |
|
|
25,135 |
|
|
|
13,198 |
|
|
|
23,635 |
|
|
|
13,907 |
|
Other feed and blendstocks |
|
|
1,261 |
|
|
|
2,201 |
|
|
|
595 |
|
|
|
2,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
43,769 |
|
|
|
44,949 |
|
|
|
42,946 |
|
|
|
48,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufactured product yields (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
|
17,703 |
|
|
|
21,526 |
|
|
|
16,405 |
|
|
|
22,879 |
|
Diesel |
|
|
14,754 |
|
|
|
15,671 |
|
|
|
15,528 |
|
|
|
16,553 |
|
Asphalt |
|
|
3,172 |
|
|
|
3,483 |
|
|
|
2,462 |
|
|
|
3,187 |
|
Other |
|
|
6,696 |
|
|
|
2,782 |
|
|
|
6,672 |
|
|
|
4,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
42,325 |
|
|
|
43,462 |
|
|
|
41,067 |
|
|
|
46,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total product sales (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
|
23,693 |
|
|
|
27,870 |
|
|
|
21,498 |
|
|
|
29,339 |
|
Diesel |
|
|
14,804 |
|
|
|
15,669 |
|
|
|
15,366 |
|
|
|
16,457 |
|
Asphalt |
|
|
3,251 |
|
|
|
3,152 |
|
|
|
2,606 |
|
|
|
3,463 |
|
Other |
|
|
3,998 |
|
|
|
2,257 |
|
|
|
4,047 |
|
|
|
2,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
45,746 |
|
|
|
48,948 |
|
|
|
43,517 |
|
|
|
51,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery operating margin information
(per sales barrel) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined products revenue |
|
$ |
110.06 |
|
|
$ |
85.45 |
|
|
$ |
118.08 |
|
|
$ |
87.24 |
|
Raw material, freight and other costs |
|
|
93.30 |
|
|
|
78.19 |
|
|
|
102.66 |
|
|
|
75.86 |
|
Refinery operating expenses, excluding depreciation (1) |
|
|
6.21 |
|
|
|
4.68 |
|
|
|
6.42 |
|
|
|
3.77 |
|
Depreciation, amortization and accretion (1) |
|
|
2.30 |
|
|
|
2.13 |
|
|
|
2.49 |
|
|
|
1.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average laid-in crude oil differential (per barrel) |
|
$ |
12.21 |
|
|
$ |
4.17 |
|
|
$ |
10.19 |
|
|
$ |
5.45 |
|
Average light/heavy crude oil differential (per barrel) |
|
|
18.23 |
|
|
|
8.76 |
|
|
|
15.02 |
|
|
|
11.06 |
|
Average gasoline crack spread (per barrel) |
|
|
20.34 |
|
|
|
8.47 |
|
|
|
26.25 |
|
|
|
10.88 |
|
Average diesel crack spread (per barrel) |
|
|
29.21 |
|
|
|
12.96 |
|
|
|
31.06 |
|
|
|
16.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price (per sales barrel) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
$ |
117.26 |
|
|
$ |
87.60 |
|
|
$ |
127.49 |
|
|
$ |
89.15 |
|
Diesel |
|
|
128.91 |
|
|
|
92.08 |
|
|
|
133.80 |
|
|
|
94.72 |
|
Asphalt |
|
|
71.02 |
|
|
|
72.32 |
|
|
|
80.85 |
|
|
|
72.96 |
|
Other |
|
|
29.34 |
|
|
|
31.23 |
|
|
|
32.46 |
|
|
|
32.11 |
|
|
|
|
(1) |
|
Prior period amounts are adjusted to reflect current year presentation of turnaround and catalyst
amortization as depreciation, amortization and accretion instead of refinery operating expenses. |
25
El Dorado Refinery:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Charges (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Light crude |
|
|
66,040 |
|
|
|
34,275 |
|
|
|
68,833 |
|
|
|
31,185 |
|
Heavy and intermediate crude |
|
|
63,787 |
|
|
|
92,087 |
|
|
|
57,728 |
|
|
|
101,177 |
|
Other feed and blendstocks |
|
|
15,734 |
|
|
|
10,402 |
|
|
|
16,914 |
|
|
|
10,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
145,561 |
|
|
|
136,764 |
|
|
|
143,475 |
|
|
|
142,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufactured product yields (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
|
72,665 |
|
|
|
66,064 |
|
|
|
67,853 |
|
|
|
69,288 |
|
Diesel and jet fuel |
|
|
54,825 |
|
|
|
54,506 |
|
|
|
51,844 |
|
|
|
57,662 |
|
Other |
|
|
16,058 |
|
|
|
13,965 |
|
|
|
21,769 |
|
|
|
13,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
143,548 |
|
|
|
134,535 |
|
|
|
141,466 |
|
|
|
140,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total product sales (bpd) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
|
80,318 |
|
|
|
67,589 |
|
|
|
80,726 |
|
|
|
71,971 |
|
Diesel and jet fuel |
|
|
52,195 |
|
|
|
54,192 |
|
|
|
48,160 |
|
|
|
57,304 |
|
Other |
|
|
14,050 |
|
|
|
13,109 |
|
|
|
13,852 |
|
|
|
14,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
146,563 |
|
|
|
134,890 |
|
|
|
142,738 |
|
|
|
143,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery operating margin information (per sales barrel) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined products revenue |
|
$ |
115.51 |
|
|
$ |
83.49 |
|
|
$ |
122.58 |
|
|
$ |
85.06 |
|
Raw material, freight and other costs |
|
|
93.10 |
|
|
|
76.52 |
|
|
|
98.11 |
|
|
|
75.12 |
|
Refinery operating expenses, excluding depreciation (1) |
|
|
3.81 |
|
|
|
3.52 |
|
|
|
3.95 |
|
|
|
3.12 |
|
Depreciation, amortization and accretion (1) |
|
|
1.32 |
|
|
|
1.37 |
|
|
|
1.34 |
|
|
|
1.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average laid-in crude oil differential (per barrel) |
|
$ |
3.94 |
|
|
$ |
2.34 |
|
|
$ |
2.74 |
|
|
$ |
3.04 |
|
Average WTI/WTS crude oil differential (per barrel) |
|
|
3.49 |
|
|
|
1.94 |
|
|
|
3.40 |
|
|
|
2.11 |
|
Average light/heavy crude oil differential (per barrel) |
|
|
14.75 |
|
|
|
6.16 |
|
|
|
12.92 |
|
|
|
8.37 |
|
Average gasoline crack spread (per barrel) |
|
|
20.73 |
|
|
|
8.09 |
|
|
|
25.69 |
|
|
|
9.67 |
|
Average diesel crack spread (per barrel) |
|
|
26.86 |
|
|
|
9.93 |
|
|
|
28.65 |
|
|
|
13.13 |
|
|
Average sales price (per sales barrel) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
$ |
120.09 |
|
|
$ |
87.77 |
|
|
$ |
128.92 |
|
|
$ |
89.17 |
|
Diesel and jet fuel |
|
|
126.09 |
|
|
|
89.39 |
|
|
|
132.61 |
|
|
|
91.73 |
|
Other |
|
|
50.02 |
|
|
|
37.11 |
|
|
|
50.76 |
|
|
|
37.38 |
|
|
|
|
(1) |
|
Prior period amounts are adjusted to reflect current year presentation of turnaround and catalyst
amortization as depreciation, amortization and accretion instead of refinery operating expenses. |
26