Frontier Oil Corporation (FTO) To Change Accounting Method From FIFO to LIFO
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Frontier Oil Corporation (NYSE: FTO) today announced its intention to change its inventory valuation method to the last-in, first-out (LIFO) method from the first-in, first-out (FIFO) method effective with the
filing of the Company's 10-K for the fiscal year ended December 31, 2009. The inventory valuation change will decrease Frontier's reported pre-tax income for the nine months ended September 30, 2009 by approximately $180 million. As a result of lower pre-tax income, the Company believes it will recognize cash tax savings in excess of $60 million for the nine months ended September 30, 2009.
Based on current market conditions and after giving effect to the change in inventory valuation methods, the Company anticipates being contractually unable to pay cash dividends under the restricted payments
provision of the Company's senior notes indentures upon filing of its 10-K for the year ended December 31, 2009.
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