-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mi+TLUj3z/uKsr/iyCfBkK++hkhZdJbTNQp9RMOmYnN17G4wTXeuLLX7Q3waZ6Zu 4ECu21/DAdhacAPkBr0f3w== 0000856465-06-000006.txt : 20060808 0000856465-06-000006.hdr.sgml : 20060808 20060808125623 ACCESSION NUMBER: 0000856465-06-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060630 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060808 DATE AS OF CHANGE: 20060808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GIANT INDUSTRIES INC CENTRAL INDEX KEY: 0000856465 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 860642718 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10398 FILM NUMBER: 061012085 BUSINESS ADDRESS: STREET 1: 23733 N SCOTTSDALE RD CITY: SCOTTSDALE STATE: AZ ZIP: 85255 BUSINESS PHONE: 4805858888 MAIL ADDRESS: STREET 1: 23733 N SCOTTSDALE RD CITY: SCOTTSDALE STATE: AZ ZIP: 85255 8-K 1 secondqtr2006-8kfiling.txt GIANT INDUSTRIES, INC. 2006 SECOND QUARTER PRESS RELEASE ======================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- Form 8-K ---------------------------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 7, 2006 GIANT INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 1-10398 86-0642718 (State of jurisdiction of (Commission File) (IRS Employer incorporation) Number) Identification No. 23733 North Scottsdale Road Scottsdale, Arizona 85255 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (480) 585-8888 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ======================================================================== ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 7, 2006, the Registrant issued a press release containing earnings information for the quarter ended June 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99.1 Press Release, dated August 7, 2006. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. By: /s/ MARK B. COX ---------------------------------- MARK B. COX Executive Vice President, Chief Financial Officer (Principal Financial Officer) Date: August 8, 2006 INDEX TO EXHIBITS Exhibit Number Description - ------- ----------------------------------------- 99.1 Press Release, dated as of August 7, 2006 EX-99 2 exhibit99-1.txt GIANT INDUSTRIES, INC. EXHIBIT 99.1 EXHIBIT 99.1 GIANT INDUSTRIES, INC. NEWS RELEASE Contact: Mark B. Cox Executive Vice President, Treasurer, & Chief Financial Officer Giant Industries, Inc. (480) 585-8888 FOR IMMEDIATE RELEASE August 07, 2006 GIANT INDUSTRIES, INC. ANNOUNCES RECORD SECOND QUARTER NET EARNINGS Scottsdale, AZ (August 07, 2006) - Giant Industries, Inc. [NYSE: GI] announced today net earnings of $49.2 million or $3.35 per diluted share for the second quarter ended June 30, 2006 versus $20.6 million or $1.51 per diluted share, for the second quarter of the prior year. For the first half of 2006, the Company reported net earnings of $36.9 million or $2.51 per diluted share versus net earnings of $30.6 million or $2.34 per diluted share for the first six months of 2005. Fred Holliger, Giant's Chairman and CEO said, "The first six months of this year have certainly been strong from an earnings perspective. Our net earnings for the second quarter and year-to-date exceeded our financial performance for the same period last year. Our Four Corners refining operations were exceptionally strong with operating income of $46.6 million in the first half of 2006 compared to $26.0 million for the same period last year. This improvement was primarily the result of improved refining margins. Operating income at the Yorktown refinery was lower for the second quarter and year-to-date as we operated at reduced capacity throughout the first quarter and most of the month of April as we completed repairs on the units that were damaged by a fire in late November 2005. Additionally, the delayed start-up of the new diesel hydrotreater at Yorktown also had an impact on our June financial performance as we sold a portion of our distillates in the lower value heating oil market, and purchased diesel sulfur credits for the on-road sales. Throughout the months of May and June, the refinery operated at full capacity and is continuing to operate at that level. In the second quarter, we received a partial advance from our insurers in the amount of $33.1 million, which was booked as income in the quarter. In July, we received further advances from our insurers in the amount of $3.15 million. We believe that additional proceeds will be forthcoming in the future and will have a significant impact on our earnings during the remainder of 2006." "Our retail group has also performed well financially and operationally in the first half of 2006 as same store fuel sales are up approximately 3.7% over the prior year level and our same store merchandise sales are up approximately 6.2% over the prior year level. Year-to-date operating income was also positively impacted by higher fuel margins in comparison to the first six months of 2005 and the addition of twelve new convenience stores as a result of an acquisition completed in July 2005. " "Our Wholesale group continued to experience strong growth in sales volumes and operating income grew approximately 18% from approximately $6.5 million in the first six months of 2005 to $7.7 million in the first six months of 2006, primarily as a result of the July 2005 acquisition." Holliger continued, "We recently completed hydrotesting of the crude oil pipeline system that originates near Jal, New Mexico and is connected to a company-owned pipeline network that directly supplies crude oil to the Bloomfield and Ciniza refineries. We are currently in the process of installing the pumps and other hardware necessary for reactivation. We anticipate that we should have the pipeline operational before the end of 2006. As we have previously noted, when operational the pipeline has sufficient capacity to allow us to again operate both Four Corners refineries at maximum rates. We are also in the process of closing the acquisition of certain assets from a New Mexico based petroleum jobbership. We are acquiring twenty-five convenience stores, two bulk petroleum distribution plants and a transportation fleet. This acquisition is an excellent complement to all of our existing businesses." Relative to third quarter performance, Holliger remarked, "We currently believe that our refining fundamentals, overall, are more positive now as compared to the same time last year. Additionally, we anticipate that further insurance proceeds will be received in connection with the fire at our Yorktown refinery that occurred in the fourth quarter of 2005. Further, all three of our refineries are now producing low sulfur highway diesel fuel, as our Yorktown refinery began production this past weekend. Same store fuel volumes for our retail group currently are above the prior year's levels, however, fuel margins are lower. In addition, same store merchandise sales for our retail group are above the prior year's level, while same store merchandise margins have remained stable. The wholesale group currently is experiencing stable margins and volumes as compared to the same time last year." Giant's senior management will hold a conference call at 2:00 p.m. EDT on August 08, 2006 to discuss this earnings release and provide an update on company operations. The conference call will be broadcast live on the company's website at www.giant.com. Giant Industries, Inc., headquartered in Scottsdale, Arizona, is a refiner and marketer of petroleum products. Giant owns and operates one Virginia and two New Mexico crude oil refineries, a crude oil gathering pipeline system based in Farmington, New Mexico, which services the New Mexico refineries, finished products distribution terminals in Albuquerque, New Mexico and Flagstaff, Arizona, a fleet of crude oil and finished product truck transports, and a chain of retail service station/convenience stores in New Mexico, Colorado, and Arizona. Giant is also the parent company of Phoenix Fuel Co., Inc. and Dial Oil Co., both of which are wholesale petroleum products distributors. For more information, please visit Giant's website at www.giant.com. This press release contains forward-looking statements that involve known and unknown risks and uncertainties. Forward-looking statements are identified by words or phrases such as "believes," "expects," "anticipates," "estimates," "should," "could," "plans," "intends," "will," variations of such words and phrases, and other similar expressions. While these forward-looking statements are made in good faith, and reflect the Company's current judgment regarding such matters, actual results could vary materially from the forward-looking statements. Important factors that could cause actual results to differ from forward-looking statements include, but are not limited to: the risk that we will not receive the anticipated amounts of insurance proceeds in connection with the 2005 fire at the Yorktown refinery, the risk that the insurance proceeds received will not have a significant impact on earnings for the remainder of 2006, the risk that the timetable for placing the new pipeline in service will be different than anticipated, or that it will not be possible to place the pipeline in service at all, the risk that the closing for the purchase of Amigo Petroleum Company will not be completed, the risk that the operations of Amigo Petroleum Company will not complement our existing wholesale and retail businesses, the risk that we will not be able to make further improvements in our overall financial picture, the risk that the operating conditions currently being experienced by our refining, retail and wholesale groups will worsen, that our refineries will not continue to be able to produce low sulfur highway diesel fuel, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. All subsequent written and oral forward- looking statements attributable to the Company, or persons acting on behalf of the Company, are expressly qualified in their entirety by the foregoing. Forward-looking statements made by the Company represent its judgment on the dates such statements are made. The Company assumes no obligation to update any forward-looking statements to reflect new or changed events or circumstance.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - -------------------------------------------------------------------------------------------------------- (In thousands except shares and per share data) - -------------------------------------------------------------------------------------------------------- Three Months Ended June 30, Six Months Ended June 30, - -------------------------------------------------------------------------------------------------------- 2006 2005 2006 2005 - -------------------------------------------------------------------------------------------------------- Net revenues $ 1,145,279 $ 863,357 $ 2,008,304 $ 1,575,084 Cost of products sold (excluding depreciation and amortization) 1,016,706 748,883 1,827,259 1,374,673 - -------------------------------------------------------------------------------------------------------- Operating expenses 55,322 48,744 108,009 94,988 Depreciation and amortization 10,969 9,492 20,536 20,463 Selling, general and administrative expenses 13,205 11,843 23,211 19,641 Net loss/(gain) on disposal/write-down of assets 49 (207) (591) (219) Gain from insurance settlement due to fire incident (33,100) (196) (35,953) (3,688) - -------------------------------------------------------------------------------------------------------- Operating income 82,128 44,798 65,833 69,226 Interest expense (4,178) (6,382) (8,860) (13,376) Costs associated with early debt extinguishment - (2,099) - (2,099) Amortization of financing costs (399) (1,496) (798) (2,000) Investment and other income 1,079 368 2,681 489 - -------------------------------------------------------------------------------------------------------- Earnings from continuing operations before income taxes 78,630 35,189 58,856 52,240 Provision for income taxes 29,392 14,651 21,967 21,644 - -------------------------------------------------------------------------------------------------------- Earnings from continuing operations 49,238 20,538 36,889 30,596 Earnings from discontinued operations, net of income tax provision of $13 and $9 - 22 - 15 - -------------------------------------------------------------------------------------------------------- Net Earnings $ 49,238 $ 20,560 $ 36,889 $ 30,611 ======================================================================================================== Net Earnings per common share: Basic Continuing operations $ 3.37 $ 1.53 $ 2.53 $ 2.37 Discontinued operations - - - - - -------------------------------------------------------------------------------------------------------- $ 3.37 $ 1.53 $ 2.53 $ 2.37 ======================================================================================================== Assuming dilution Continuing operations $ 3.35 $ 1.51 $ 2.51 $ 2.34 Discontinued operations - - - - - -------------------------------------------------------------------------------------------------------- $ 3.35 $ 1.51 $ 2.51 $ 2.34 ======================================================================================================== Weighted average number of shares outstanding: Basic 14,601,212 13,405,673 14,591,772 12,896,435 Assuming dilution 14,684,001 13,585,293 14,673,827 13,085,121 ========================================================================================================
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) - ----------------------------------------------------------------------------------------- June 30, 2006 December 31, 2005 - ----------------------------------------------------------------------------------------- Assets Current assets $ 422,378 $ 442,355 - ----------------------------------------------------------------------------------------- Property, plant and equipment 891,624 764,788 Less accumulated depreciation and amortization (308,983) (297,962) - ----------------------------------------------------------------------------------------- 582,641 466,826 Other assets 79,421 75,291 - ----------------------------------------------------------------------------------------- Total Assets $1,084,440 $ 984,472 ========================================================================================= Liabilities and Stockholders' Equity Current liabilities $ 250,148 $ 208,508 Long-term debt 275,119 274,864 Deferred income taxes 93,292 76,834 Other liabilities 27,489 24,430 Stockholders' equity 438,392 399,836 - ----------------------------------------------------------------------------------------- Total Liabilities and Stockholders' Equity $1,084,440 $ 984,472 =========================================================================================
OPERATING STATISTICS 2 Qtr. 2006 1 Qtr. 2006 4 Qtr. 2005 3 Qtr. 2005 2 Qtr. 2005 - ----------------------------------------------------------------------------------------------------------- Refining Group: - -------------- Four Corners Operations: Crude Oil/NGL Throughput (BPD) 28,658 29,122 29,033 29,867 29,811 Refinery Sourced Sales Barrels (BPD) 27,084 28,471 27,075 29,096 29,344 Avg. Crude Oil Costs ($/Bbl) $ 67.86 $ 62.30 $ 60.21 $ 60.59 $ 51.64 Refining Margins ($/Bbl) $ 21.97 $ 10.84 $ 16.64 $ 18.08 $ 13.48 Retail Fuel Volumes Sold as a % of Four Corners Refinery's Sourced Sales Barrels 47% 38% 37% 38% 37% Yorktown Operations: Crude Oil/NGL Throughput (BPD) 60,396 37,589 41,685 68,201 68,449 Refinery Sourced Sales Barrels (BPD) 61,668 33,466 45,566 70,936 71,539 Avg. Crude Oil Costs ($/Bbl) $ 68.36 $ 59.02 $ 57.72 $ 58.05 $ 48.76 Refining Margins ($/Bbl) $ 6.65 $ (3.50) $ 9.61 $ 11.25 $ 7.30 Retail Group:(1)(2) - ------------ Fuel Gallons Sold (000's) 49,021 46,261 45,421 48,210 41,410 Fuel Margins ($/gal) $ 0.17 $ 0.15 $ 0.29 $ 0.20 $ 0.17 Merchandise Sales ($ in 000's) $ 40,972 $ 35,531 $ 36,828 $ 40,527 $ 36,325 Merchandise Margins 27% 27% 28% 27% 27% Number of Operating Units at End of Period 134 134 135 136 124 Wholesale Group: (3) - --------------- Fuel Gallons Sold (000's) 149,231 140,748 141,328 138,126 120,344 Fuel Margins ($/gal) $ 0.06 $ 0.07 $ 0.09 $ 0.08 $ 0.06 Lubricant Sales ($ in 000's) $ 15,770 $ 17,644 $ 14,789 $ 14,081 $ 9,027 Lubricant Margins 14% 13% 15% 22% 10% =========================================================================================================== Operating Income/(loss)(before corporate allocations) (in 000's) - ----------------------------------- Refining - Four Corners Operations $ 35,375 $ 11,233 $ 22,539 $ 32,968 $ 19,724 - Yorktown Operations 14,589 (30,805) 16,533 52,288 27,312 Retail(1) 3,978 1,711 7,751 4,377 3,114 Wholesale 3,527 4,175 5,109 7,577 2,815 Corporate (8,392) (6,102) (5,800) (11,698) (8,557) Net gain/(loss) on disposal/write-down of assets(1)(4) 33,051 3,493 (174) (1,055) 425 - ----------------------------------------------------------------------------------------------------------- Total(1) $ 82,128 $(16,295) $ 45,958 $ 84,457 $ 44,833 =========================================================================================================== Capital expenditures (in 000's)(5) Refining - Four Corners Operations(6) $ 26,263 $ 9,783 $ 5,687 $ 3,958 $ 1,930 - Yorktown Operations(7) 40,224 47,791 14,190 14,734 10,790 Retail 997 814 1,488 1,221 1,230 Wholesale 1,039 1,204 529 528 576 Corporate 398 105 375 252 345 - ----------------------------------------------------------------------------------------------------------- Total $ 68,921 $ 59,697 $ 22,269 $ 20,693 $ 14,871 =========================================================================================================== (1) Includes discontinued operations. (2) Includes 12 convenience stores from Dial Retail. (3) Includes Wholesale Division of Dial Oil Company. (4) Includes insurance proceeds related to the Ciniza and Yorktown fire incident. (5) Excludes Yorktown refinery acquisition contingent payments. (6) Includes disbursements related to the Ciniza fire incident. (7) Includes disbursements related to the Yorktown fire incident.
Selected Financial Data June 30, 2006 December 31, 2005 - ----------------------------------------------------------------------------------------- Working Capital (In Thousands) $ 422,378 $ 233,847 Current Ratio 1.69:1 2.12:1 Long-Term Debt As A Percent of Total Capital (8) 38.6% 40.7% Net Debt As A Percent of Total Net Capital (9) 29.6% 21.7% Book Value Per Share (10) $ 29.95 $ 27.36 Net cash provided by operating activities $ 36,494 $ 188,808 - ----------------------------------------------------------------------------------------- (8) Total capital represents long-term debt plus total stockholders' equity. (9) Net debt represents long-term debt less cash and cash equivalents. Total net capital represents long-term debt less cash and cash equivalents plus total stockholders' equity. (10) Book value per share represents total stockholders' equity divided by number of common shares outstanding.
Share Price Data (NYSE: GI) High Low Close - ------------------------------------------- 2006 2nd Quarter $76.97 $56.09 $66.55 2006 1st Quarter $71.00 $52.44 $69.54 2005 4th Quarter $60.50 $47.80 $51.96 2005 3rd Quarter $59.74 $35.90 $58.54 2005 2nd Quarter $36.49 $25.52 $36.00
RECONCILIATIONS TO AMOUNTS REPORTED UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES REFINING GROUP - -------------- Refining Margin - --------------- Refining margin is the difference between average net sales prices and average cost of products produced per refinery sourced sales barrel of refined product. Refining margins for each of our refineries and all of our refineries on a consolidated basis are calculated as shown below.
Three Months Six Months Ended June 30, Ended June 30, - --------------------------------------------------------------------------------------------------- 2006 2005 2006 2005 - --------------------------------------------------------------------------------------------------- AVERAGE PER BARREL Four Corners Operations Net sales $ 95.24 $ 68.70 $ 85.63 $ 64.02 Less cost of products 73.27 55.22 69.33 53.30 - --------------------------------------------------------------------------------------------------- Refining margin $ 21.97 $ 13.48 $ 16.30 $ 10.72 =================================================================================================== Yorktown Operations Net sales $ 78.65 $ 57.92 $ 72.87 $ 55.46 Less cost of products 72.00 50.62 69.77 48.40 - --------------------------------------------------------------------------------------------------- Refining margin $ 6.65 $ 7.30 $ 3.10 $ 7.06 =================================================================================================== Consolidated Net sales $ 83.72 $ 61.05 $ 77.57 $ 58.04 Less cost of products 72.39 51.96 69.61 49.88 - --------------------------------------------------------------------------------------------------- Refining margin $ 11.33 $ 9.09 $ 7.96 $ 8.16 =================================================================================================== Reconciliations of refined product sales from produced products sold per barrel to net revenues Four Corners Operations Average sales price per produced barrel sold $ 95.24 $ 68.70 $ 85.63 $ 64.02 Times refinery sourced sales barrels per day 27,084 29,344 27,774 28,954 Times number of days in period 91 91 181 181 - --------------------------------------------------------------------------------------------------- Refined product sales from produced products sold* (000's) $ 234,733 $ 183,450 $ 430,470 $ 335,508 =================================================================================================== Yorktown Operations Average sales price per produced barrel sold $ 78.65 $ 57.92 $ 72.87 $ 55.46 Times refinery sourced sales barrels per day 61,668 71,539 47,645 67,157 Times number of days in period 91 91 181 181 - --------------------------------------------------------------------------------------------------- Refined product sales from produced products sold* (000's) $ 441,367 $ 377,062 $ 628,412 $ 674,139 =================================================================================================== Consolidated (000's) Sum of refined product sales from produced products sold* $ 676,100 $ 560,512 $1,058,882 $1,009,647 Purchased product, Transportation and other revenues 95,723 52,609 279,326 96,500 - --------------------------------------------------------------------------------------------------- Net revenue $ 771,823 $ 613,121 $1,338,208 $1,106,147 =================================================================================================== *Includes inter-segment net revenues.
Three Months Six Months Ended June 30, Ended June 30, - --------------------------------------------------------------------------------------------------- 2006 2005 2006 2005 - --------------------------------------------------------------------------------------------------- Reconciliation of average cost of products per produced per barrel sold to total cost of products sold (excluding depreciation and amortization) Four Corners Operations Average cost of products per produced barrel sold $ 73.27 $ 55.22 $ 69.33 $ 53.30 Times refinery sourced sales barrels per day 27,084 29,344 27,774 28,954 Times number of days in period 91 91 181 181 - --------------------------------------------------------------------------------------------------- Cost of products for produced products sold (000's) $ 180,584 $ 147,454 $ 348,528 $ 279,328 =================================================================================================== Yorktown Operations Average cost of products per produced barrel sold $ 72.00 $ 50.62 $ 69.77 $ 48.40 Times refinery sourced sales barrels per day 61,668 71,539 47,645 67,157 Times number of days in period 91 91 181 181 - --------------------------------------------------------------------------------------------------- Cost of products for produced products sold (000's) $ 404,049 $ 329,539 $ 601,679 $ 588,322 =================================================================================================== Consolidated Sum of refined cost of produced products sold $ 584,633 $ 476,993 $ 950,207 $ 867,650 Purchased product, transportation and other cost of products sold 87,968 44,314 263,183 80,725 - --------------------------------------------------------------------------------------------------- Total cost of products sold (excluding depreciation and amortization) $ 672,601 $ 521,307 $1,213,390 $ 948,375 ===================================================================================================
RETAIL GROUP - ------------ Fuel Margin - ----------- Fuel margin is the difference between fuel sales less cost of fuel sales divided by number of gallons sold. Three Months Six Months Ended June 30, Ended June 30, - --------------------------------------------------------------------------------------------------- 2006 2005 2006 2005 - --------------------------------------------------------------------------------------------------- (in 000's except fuel margin per gallon) Fuel sales $ 141,445 $ 93,797 $ 251,076 $ 170,495 Less cost of fuel sold 133,232 86,746 236,145 158,955 - --------------------------------------------------------------------------------------------------- Fuel margin $ 8,213 $ 7,051 $ 14,931 $ 11,540 Number of gallons sold 49,021 41,410 95,282 80,879 Fuel margin per gallon $ 0.17 $ 0.17 $ 0.16 $ 0.14 Reconciliation of fuel sales to net revenues (000's) Fuel sales $ 141,445 $ 93,797 $ 251,076 $ 170,495 Excise taxes included in sales (17,296) (15,479) (32,779) (30,366) - --------------------------------------------------------------------------------------------------- Fuel sales, net of excise taxes 124,149 78,318 218,297 140,129 Merchandise sales 40,972 36,325 76,503 67,612 Other sales 4,586 4,230 9,686 8,058 - --------------------------------------------------------------------------------------------------- Net revenues $ 169,707 $ 118,873 $ 304,486 $ 215,799 =================================================================================================== Reconciliation of fuel cost of products sold to total cost of products sold (excluding depreciation and amortization) (000's) Fuel cost of products sold $ 133,232 $ 86,746 $ 236,145 $ 158,955 Excise taxes included in cost of products sold (17,296) (15,479) (32,779) (30,366) - --------------------------------------------------------------------------------------------------- Fuel cost of products sold, net of excise taxes 115,936 71,267 203,366 128,589 Merchandise cost of products sold 29,729 26,496 55,528 49,281 Other cost of products sold 3,411 3,362 7,425 6,430 - --------------------------------------------------------------------------------------------------- Total cost of products sold (excluding depreciation and amortization) $ 149,076 $ 101,125 $ 266,319 $ 184,300 ===================================================================================================
WHOLESALE GROUP(1),(2) - --------------- Fuel Margin - ----------- Fuel margin is the difference between fuel sales less cost of fuel sales divided by number of gallons sold. Three Months Six Months Ended June 30, Ended June 30, - --------------------------------------------------------------------------------------------------- 2006 2005 2006 2005 - --------------------------------------------------------------------------------------------------- (in 000's except fuel margin per gallon) Fuel sales $ 393,195 $ 250,908 $ 700,751 $ 473,795 Less cost of fuel sold 384,307 243,954 682,980 459,388 - --------------------------------------------------------------------------------------------------- Fuel margin $ 8,888 $ 6,954 $ 17,771 $ 14,407 Number of gallons sold 149,231 120,344 289,979 241,209 Fuel margin per gallon $ 0.06 $ 0.06 $ 0.06 $ 0.06 Reconciliation of fuel sales to net revenues (000's) Fuel sales $ 393,195 $ 250,908 $ 700,751 $ 473,795 Excise taxes included in sales (48,127) (45,314) (93,558) (86,146) - --------------------------------------------------------------------------------------------------- Fuel sales, net of excise taxes 345,068 205,594 607,193 387,649 Lubricant sales 15,770 9,027 33,414 17,439 Other sales 3,457 1,102 6,762 2,299 - --------------------------------------------------------------------------------------------------- Net revenues $ 364,295 $ 215,723 $ 647,369 $ 407,387 =================================================================================================== Reconciliation of fuel cost of products sold to total cost of products sold (excluding depreciation and amortization) (000's) Fuel cost of products sold $ 384,307 $ 243,954 $ 682,980 $ 459,388 Excise taxes included in cost of products sold (48,127) (45,314) (93,558) (86,146) - --------------------------------------------------------------------------------------------------- Fuel cost of products sold, net of excise taxes 336,180 198,640 589,422 373,242 Lubricant cost of products sold 13,602 8,084 28,952 15,326 Other cost of products sold 1,305 133 2,548 465 - --------------------------------------------------------------------------------------------------- Total cost of products sold (excluding depreciation and amortization) $ 351,087 $ 206,857 $ 620,922 389,033 =================================================================================================== (1) Includes Phoenix fuel and Wholesale component of Dial Oil Company. (2) Dial Oil presents sales and cost of sales, net of excise taxes.
Consolidated - ------------ Three Months Six Months Ended June 30, Ended June 30, - ----------------------------------------------------------------------------------------------------- 2006 2005 2006 2005 - ----------------------------------------------------------------------------------------------------- Reconciliation to net revenues reported In Condensed Consolidated Statement of Operations (000's) Net revenues - Refinery Group $ 771,823 $ 613,121 $1,338,208 $1,106,147 Net revenues - Retail Group 169,707 118,873 304,486 215,799 Net revenues - Wholesale Group 364,295 215,723 647,369 407,387 Net revenues - Other 63 213 133 313 Eliminations (160,609) (84,573) (281,892) (154,562) - ----------------------------------------------------------------------------------------------------- Total net revenues reported in Condensed Consolidated Statement of Earnings $1,145,279 $ 863,357 $2,008,304 $1,575,084 ===================================================================================================== Reconciliation to cost of products sold (excluding depreciation and amortization) in Condensed Consolidated Statement of Operations (000's) Cost of products sold - Refinery Group (excluding depreciation and amortization) $ 672,601 $ 521,307 $1,213,390 $ 948,375 Cost of products sold - Retail Group (excluding depreciation and amortization) 149,076 101,125 266,319 184,300 Cost of products sold - Wholesale Group (excluding depreciation and amortization) 351,087 206,857 620,922 389,033 Eliminations (160,609) (84,573) (281,892) (154,562) Other 4,551 4,167 8,520 7,527 - ----------------------------------------------------------------------------------------------------- Total cost of products sold (excluding depreciation and amortization) reported in Condensed Consolidated Statement of Operations $1,016,706 $ 748,883 $1,827,259 $1,374,673 ===================================================================================================== Our refining margin per barrel is calculated by subtracting cost of products from net sales and dividing the result by the number of barrels sold for the period. Our fuel margin per gallon is calculated by subtracting cost of fuel sold from fuel sales and dividing the result by the number of gallons sold for the period. We use refining margin per barrel and fuel margin per gallon to evaluate performance, and allocate resources. These measures may not be comparable to similarly titled measures used by other companies. Investors and analysts use these financial measures to help analyze and compare companies in the industry on the basis of operating performance. These financial measures should not be considered as alternatives to segment operating income, revenues, costs of sales and operating expenses or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America.
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