Tesoro
Corporation (NYSE:TSO) today reported a second quarter 2009 net loss
of $45 million, or $0.33 per diluted share compared to net earnings of
$4 million, or $0.03 per diluted share for the second quarter of 2008.
Second quarter segment operating income was $11 million versus $74
million in the second quarter of 2008. The variance was primarily due to
lower gross margins and decreased throughput, partially offset by lower
operating costs.
The Company’s realized gross margin of $8.52 per barrel (/bbl) decreased
by $1.58/bbl from a year ago, although the Tesoro Index was $3/bbl
lower. The Company reduced the amount of distillate it produced as West
Coast distillate margins decreased by more than $22/bbl from a year ago,
while gasoline margins increased more than $2/bbl from the 2008 second
quarter. Narrowing price spreads between heavy and light crudes also
reduced gross margins. During the second quarter, discounts for spot
California heavy crudes were down 45%, as San Joaquin Valley Heavy
traded $8/bbl below Alaska North Slope (ANS) versus a discount of
$15/bbl a year ago. Discounts for South American heavy crudes also
weakened as Oriente crude traded $7/bbl below ANS versus $13/bbl a year
ago. Heavy crudes such as these represent almost 70% of our crude slate
in the California region.
Total system throughput for the second quarter was 565 thousand barrels
per day (mbpd), down 7% from the 2008 second quarter as a result of a
full plant turnaround at Alaska, and planned maintenance at Golden
Eagle. Additionally, in this economic environment, the Company continues
to monitor throughput and inventory levels to meet lower product demand.
Direct manufacturing costs before depreciation and amortization were
$238 million in the second quarter versus $257 million in the first
quarter 2009. The difference is primarily attributable to lower energy
costs. During the quarter, spot natural gas prices averaged $4 per
million British thermal units (mmbtu), a decrease of 15% from a quarter
ago.
For the second quarter 2009, capital expenditures were $173 million,
including turnaround spending. We expect to spend less than our
announced capital budget of $600 million dollars for the full year.
“As we began 2009, we were prepared for a very difficult year, and in
the second quarter it arrived,” said Bruce Smith, Chairman, President
and CEO. “Declining industrial production, weak distillate demand and
excess inventories have crushed distillate margins. Gasoline margins,
which were strong in April, weakened in the quarter and dropped to half
the April levels in July. Like other refiners, the most significant
impact to our second quarter results was the narrowing of the heavy
crude discount which has severely reduced overall coking capacity
economics. The marginal economics of these units at our California
refineries materially impacted the quarter.
“The outlook for the third quarter is that we expect to continue to see
difficult market conditions. In July, record product inventories and
narrow heavy-light crude oil differentials continued to hamper margins.
We are prepared for this environment to persist. Already, we are seeing
temporary closures and units running at less than full rates at a number
of refineries. We remain committed to our 2009 goals of lowering our
cash break-even costs, gaining sustainable improvements in our capture
of available margins and funding our capital program through operating
cash flow. We believe that our markets and assets continue to hold
competitive advantages, and our management team is prepared for both the
political and consumer-related challenges that may lie ahead,” said
Smith.
Board Declares Quarterly Dividend
Tesoro announced today that its Board of Directors has approved a
regular quarterly cash dividend of $0.10 per share. The dividend is
payable September 15, 2009 to shareholders of record as of September 1,
2009.
Public Invited to Listen to Analyst Conference Call
At 7:30 a.m., CDT, Thursday, July 30th, 2009 Tesoro will
broadcast, live, its conference call with analysts regarding second
quarter 2009 results and other business matters. Interested parties may
listen to the live conference call over the Internet by logging on to http://www.tsocorp.com,
or via phone by dialing 888-241-0558 (international dial-in:
647-427-3417), event ID 18009088. A telephone replay of the call will be
available for one week, and may be accessed via phone by dialing
800-839-9871 (international replay: 402-220-4284 and entering passcode
18009088).
Tesoro Corporation, a Fortune 100 company, is an independent refiner and
marketer of petroleum products. Tesoro, through its subsidiaries,
operates seven refineries in the western United States with a combined
capacity of approximately 665,000 barrels per day. Tesoro's
retail-marketing system includes over 870 branded retail stations, of
which over 380 are company operated under the Tesoro®, Shell®, Mirastar®
and USA Gasoline™ brands.
This earnings release contains certain statements that are
"forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 concerning our expectations of the market environment, and our
expectations about our cash flow, our capital spending and our margin
capture. For more information concerning factors that could
affect these statements see our annual report on Form 10-K and quarterly
reports on Form 10-Q, filed with the Securities and Exchange Commission.
We undertake no obligation to publicly release the result of any
revisions to any such forward-looking statements that may be made to
reflect events or circumstances that occur, or which we become aware of,
after the date hereof.
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TESORO CORPORATION
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STATEMENTS OF CONSOLIDATED OPERATIONS
|
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(Unaudited)
|
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(In millions except per share amounts)
|
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|
|
|
|
|
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|
|
|
|
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Three Months Ended
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Six Months Ended
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|
|
|
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|
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|
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June 30,
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June 30,
|
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|
|
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|
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2009
|
|
|
2008
|
|
|
|
2009
|
|
|
2008
|
|
Revenues (a)
|
$
|
4,181
|
|
$
|
8,887
|
|
|
$
|
7,461
|
|
$
|
15,493
|
|
Costs and Expenses:
|
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|
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|
|
|
|
|
|
|
|
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|
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|
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|
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Costs of sales and operating expenses (a) (b)
|
|
4,036
|
|
|
8,694
|
|
|
|
7,044
|
|
|
15,302
|
|
|
Selling, general and administrative expenses
|
|
53
|
|
|
58
|
|
|
|
107
|
|
|
110
|
|
|
Depreciation and amortization
|
|
108
|
|
|
99
|
|
|
|
213
|
|
|
189
|
|
|
Loss on asset disposals and impairments
|
|
20
|
|
|
9
|
|
|
|
21
|
|
|
23
|
|
Operating Income (Loss)
|
|
(36)
|
|
|
27
|
|
|
|
76
|
|
|
(131)
|
|
Interest and Financing Costs
|
|
(31)
|
|
|
(29)
|
|
|
|
(59)
|
|
|
(53)
|
|
Interest Income
|
2
|
|
|
1
|
|
|
|
3
|
|
|
3
|
|
Foreign Currency Exchange Loss
|
(10)
|
|
|
(5)
|
|
|
|
(10)
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|
|
(8)
|
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Other Income (c)
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|
-
|
|
|
4
|
|
|
|
-
|
|
|
49
|
|
|
|
Earnings (Loss) Before Income Taxes
|
|
(75)
|
|
|
(2)
|
|
|
|
10
|
|
|
(140)
|
|
Income Tax Provision (Benefit)
|
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(30)
|
|
|
(6)
|
|
|
|
4
|
|
|
(62)
|
|
Net Earnings (Loss)
|
$
|
(45)
|
|
$
|
4
|
|
|
$
|
6
|
|
$
|
(78)
|
|
Net Earnings (Loss) Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic
|
$
|
(0.33)
|
|
$
|
0.03
|
|
|
$
|
0.04
|
|
$
|
(0.57)
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|
|
Diluted (d)
|
$
|
(0.33)
|
|
$
|
0.03
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|
|
$
|
0.04
|
|
$
|
(0.57)
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Weighted Average Common Shares:
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|
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|
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|
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|
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|
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Basic
|
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138.0
|
|
|
136.5
|
|
|
|
137.9
|
|
|
136.3
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|
|
Diluted (d)
|
|
138.0
|
|
|
138.9
|
|
|
|
139.6
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|
|
136.3
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(a)
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We have reclassified our losses associated with our derivative
instruments for the 2008 periods from “Revenues” to “Costs of sales
and operating expenses” to conform to the 2009 presentation. Our
derivative losses totaled $52 million and $133 million during the
three months ended June 30, 2009 and 2008, respectively, and $55
million and $208 million during the six months ended June 30, 2009
and 2008, respectively.
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(b)
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During the 2008 second quarter, a reduction in inventory
quantities resulted in a liquidation of applicable LIFO inventory
quantities carried at lower costs in the prior year. This LIFO
liquidation resulted in a decrease of costs of sales of $78 million
for the three and six months ended June 30, 2008.
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(c)
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Other income for the three and six months ended June 30, 2008
represents refunds received from the Trans Alaska Pipeline System in
connection with rulings by the Regulatory Commission of Alaska
concerning our protest of intrastate pipeline tariffs set between
1997 and 2003.
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(d)
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The assumed conversion of common stock equivalents produced
anti-dilutive results for the three months ended June 30, 2009 and
six months ended June 30, 2008, and was not included in the dilutive
calculation.
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TESORO CORPORATION
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SELECTED OPERATING SEGMENT DATA
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(Unaudited)
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(In millions)
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|
|
|
|
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|
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Three Months Ended
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Six Months Ended
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|
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June 30,
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June 30,
|
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|
|
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2009
|
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2008
|
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|
2009
|
|
|
2008
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Refining
|
|
$
|
7
|
|
$
|
85
|
|
$
|
184
|
|
$
|
(2)
|
|
|
Retail
|
|
|
4
|
|
|
(11)
|
|
|
(11)
|
|
|
(39)
|
|
|
Total Segment Operating Income (Loss)
|
|
|
11
|
|
|
74
|
|
|
173
|
|
|
(41)
|
|
|
Corporate and Unallocated Costs
|
|
|
(47)
|
|
|
(47)
|
|
|
(97)
|
|
|
(90)
|
|
|
|
Operating Income (Loss)
|
|
|
(36)
|
|
|
27
|
|
|
76
|
|
|
(131)
|
|
|
Interest and Financing Costs
|
|
|
(31)
|
|
|
(29)
|
|
|
(59)
|
|
|
(53)
|
|
|
Interest Income
|
2
|
|
|
1
|
|
|
3
|
|
|
3
|
|
|
Foreign Currency Exchange Loss
|
(10)
|
|
|
(5)
|
|
|
(10)
|
|
|
(8)
|
|
|
Other Income (c)
|
|
|
-
|
|
|
4
|
|
|
-
|
|
|
49
|
|
|
|
Earnings (Loss) Before Income Taxes
|
|
$
|
(75)
|
|
$
|
(2)
|
|
$
|
10
|
|
$
|
(140)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining
|
|
$
|
90
|
|
$
|
83
|
|
$
|
177
|
|
$
|
156
|
|
|
Retail
|
|
|
10
|
|
|
10
|
|
|
19
|
|
|
22
|
|
|
Corporate
|
|
|
8
|
|
|
6
|
|
|
17
|
|
|
11
|
|
|
Depreciation and Amortization
|
|
$
|
108
|
|
$
|
99
|
|
$
|
213
|
|
$
|
189
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining
|
|
$
|
88
|
|
$
|
123
|
|
$
|
159
|
|
$
|
288
|
|
|
Retail
|
|
|
4
|
|
|
5
|
|
|
9
|
|
|
6
|
|
|
Corporate
|
|
|
15
|
|
|
8
|
|
|
27
|
|
|
17
|
|
|
Capital Expenditures
|
|
$
|
107
|
|
$
|
136
|
|
$
|
195
|
|
$
|
311
|
|
BALANCE SHEET DATA
|
|
(Unaudited)
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
Cash and Cash Equivalents
|
|
$
|
279
|
|
$
|
20
|
|
Total Assets
|
|
$
|
8,322
|
|
$
|
7,433
|
|
Total Debt
|
|
$
|
1,837
|
|
$
|
1,611
|
|
Total Stockholders' Equity
|
|
$
|
3,209
|
|
$
|
3,218
|
|
Total Debt to Capitalization Ratio
|
|
|
36%
|
|
|
33%
|
|
TESORO CORPORATION
|
|
OPERATING DATA
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
REFINING SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Refining Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude (e)
|
|
|
186
|
|
|
184
|
|
|
184
|
|
|
180
|
|
|
|
|
Light crude
|
|
|
343
|
|
|
388
|
|
|
332
|
|
|
389
|
|
|
|
|
Other feedstocks
|
|
|
36
|
|
|
38
|
|
|
35
|
|
|
33
|
|
|
|
Total Throughput
|
|
|
565
|
|
|
610
|
|
|
551
|
|
|
602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline and gasoline blendstocks
|
|
|
286
|
|
|
280
|
|
|
272
|
|
|
282
|
|
|
|
|
Jet fuel
|
|
|
67
|
|
|
82
|
|
|
66
|
|
|
79
|
|
|
|
|
Diesel fuel
|
|
|
111
|
|
|
145
|
|
|
116
|
|
|
136
|
|
|
|
|
Heavy oils, residual products, internally produced fuel and other
|
|
|
133
|
|
|
135
|
|
|
128
|
|
|
134
|
|
|
|
Total Yield
|
|
|
597
|
|
|
642
|
|
|
582
|
|
|
631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross refining margin ($/throughput bbl) (f)
|
|
$
|
8.52
|
|
$
|
10.10
|
|
$
|
10.27
|
|
$
|
8.34
|
|
|
|
|
Manufacturing cost before depreciation and amortization
($/throughput bbl) (f)
|
|
$
|
4.63
|
|
$
|
5.35
|
|
$
|
4.96
|
|
$
|
5.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Income ($ millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross refining margin (g)
|
|
$
|
438
|
|
$
|
561
|
|
$
|
1,023
|
|
$
|
914
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing costs
|
|
|
238
|
|
|
297
|
|
|
495
|
|
|
583
|
|
|
|
|
Other operating expenses
|
|
|
77
|
|
|
76
|
|
|
136
|
|
|
146
|
|
|
|
|
Selling, general and administrative
|
|
|
8
|
|
|
12
|
|
|
12
|
|
|
21
|
|
|
|
|
Depreciation and amortization (h)
|
|
|
90
|
|
|
83
|
|
|
177
|
|
|
156
|
|
|
|
|
Loss on asset disposals and impairments (i)
|
|
|
18
|
|
|
8
|
|
|
19
|
|
|
10
|
|
|
|
|
Segment Operating Income (Loss)
|
|
$
|
7
|
|
$
|
85
|
|
$
|
184
|
|
$
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined Product Sales (thousand barrels per day) (j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline and gasoline blendstocks
|
|
|
317
|
|
|
334
|
|
|
312
|
|
|
332
|
|
|
|
|
Jet fuel
|
|
|
79
|
|
|
92
|
|
|
78
|
|
|
95
|
|
|
|
|
Diesel fuel
|
|
|
123
|
|
|
151
|
|
|
121
|
|
|
137
|
|
|
|
|
Heavy oils, residual products and other
|
|
|
88
|
|
|
104
|
|
|
87
|
|
|
98
|
|
|
|
Total Refined Product Sales
|
|
|
607
|
|
|
681
|
|
|
598
|
|
|
662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined Product Sales Margin ($/barrel) (j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price
|
|
$
|
69.63
|
|
$
|
135.73
|
|
$
|
63.15
|
|
$
|
121.29
|
|
|
|
|
Average costs of sales
|
|
|
61.80
|
|
|
125.19
|
|
|
54.06
|
|
|
112.66
|
|
|
|
|
Refined Product Sales Margin
|
|
$
|
7.83
|
|
$
|
10.54
|
|
$
|
9.09
|
|
$
|
8.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
We define heavy crude oil as crude oil with an American Petroleum
Institute gravity of 24 degrees or less.
|
|
|
|
|
|
|
|
(f)
|
Management uses gross refining margin per barrel to evaluate
performance and compare profitability to other companies in the
industry. Gross refining margin per barrel is calculated by
dividing gross refining margin by total refining throughput and
may not be calculated similarly by other companies. Gross
refining margin is calculated as revenues less costs of
feedstocks, purchased refined products, transportation and
distribution. Management uses manufacturing costs per barrel to
evaluate the efficiency of refinery operations. Manufacturing
costs per barrel is calculated by dividing manufacturing costs by
total refining throughput and 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.
|
|
|
|
|
|
|
|
(g)
|
Consolidated gross refining margin totals gross refining margin
for each of our regions adjusted for other costs not directly
attributable to a specific region. Gross refining margin includes
the effect of intersegment sales to the retail segment at prices
which approximate market. Gross refining margin approximates total
refining throughput times gross refining margin per barrel.
|
|
|
|
|
|
|
|
(h)
|
Includes manufacturing depreciation and amortization per
throughput barrel of approximately $1.62 and $1.41 for the three
months ended June 30, 2009 and 2008, respectively, and $1.66 and
$1.33 for the six months ended June 30, 2009 and 2008, respectively.
|
|
|
|
|
|
|
|
(i)
|
Includes a termination charge of $12 million during the three and
six months ended June 30, 2009, related to cancelling the purchase
of equipment associated with a capital project at our Los Angeles
refinery.
|
|
|
|
|
|
|
|
(j)
|
Sources of total refined product sales included refined products
manufactured at the refineries and refined products purchased from
third parties. Total refined product sales margin includes margins
on sales of manufactured and purchased refined products and the
effects of inventory changes.
|
|
TESORO CORPORATION
|
|
OPERATING DATA
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
2009
|
|
|
2008
|
|
Refining By Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California (Golden Eagle and Los Angeles)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput (thousand barrels per day) (k)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude (e)
|
|
173
|
|
|
144
|
|
169
|
|
|
151
|
|
|
|
|
Light crude
|
|
57
|
|
|
82
|
|
59
|
|
|
82
|
|
|
|
|
Other feedstocks
|
|
21
|
|
|
24
|
|
22
|
|
|
22
|
|
|
|
Total Throughput
|
|
251
|
|
|
250
|
|
250
|
|
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline and gasoline blendstocks
|
|
140
|
|
|
129
|
|
136
|
|
|
136
|
|
|
|
|
Jet fuel
|
|
20
|
|
|
20
|
|
18
|
|
|
19
|
|
|
|
|
Diesel fuel
|
|
50
|
|
|
68
|
|
56
|
|
|
64
|
|
|
|
|
Heavy oils, residual products, internally produced fuel and other
|
|
65
|
|
|
53
|
|
62
|
|
|
53
|
|
|
|
Total Yield
|
|
275
|
|
|
270
|
|
272
|
|
|
272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross refining margin
|
$
|
185
|
|
$
|
318
|
$
|
521
|
|
$
|
558
|
|
|
|
|
Gross refining margin ($/throughput bbl) (f)
|
$
|
8.09
|
|
$
|
13.98
|
$
|
11.54
|
|
$
|
12.04
|
|
|
|
|
Manufacturing cost before depreciation and amortization
($/throughput bbl) (f)
|
$
|
6.12
|
|
$
|
7.87
|
$
|
6.57
|
|
$
|
7.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Northwest (Alaska & Washington)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput (thousand barrels per day) (k)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude (e)
|
|
-
|
|
|
13
|
|
-
|
|
|
12
|
|
|
|
|
Light crude
|
|
129
|
|
|
153
|
|
117
|
|
|
149
|
|
|
|
|
Other feedstocks
|
|
10
|
|
|
9
|
|
9
|
|
|
7
|
|
|
|
Total Throughput
|
|
139
|
|
|
175
|
|
126
|
|
|
168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline and gasoline blendstocks
|
|
64
|
|
|
69
|
|
57
|
|
|
65
|
|
|
|
|
Jet fuel
|
|
22
|
|
|
31
|
|
22
|
|
|
31
|
|
|
|
|
Diesel fuel
|
|
23
|
|
|
36
|
|
22
|
|
|
32
|
|
|
|
|
Heavy oils, residual products, internally produced fuel and other
|
|
34
|
|
|
45
|
|
29
|
|
|
45
|
|
|
|
Total Yield
|
|
143
|
|
|
181
|
|
130
|
|
|
173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross refining margin
|
$
|
123
|
|
$
|
138
|
$
|
206
|
|
$
|
167
|
|
|
|
|
Gross refining margin ($/throughput bbl) (f)
|
$
|
9.70
|
|
$
|
8.63
|
$
|
9.01
|
|
$
|
5.47
|
|
|
|
|
Manufacturing cost before depreciation and amortization
($/throughput bbl) (f)
|
$
|
3.72
|
|
$
|
3.79
|
$
|
4.18
|
|
$
|
4.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-Pacific (Hawaii)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude (e)
|
|
13
|
|
|
27
|
|
15
|
|
|
17
|
|
|
|
|
Light crude
|
|
53
|
|
|
44
|
|
55
|
|
|
52
|
|
|
|
Total Throughput
|
|
66
|
|
|
71
|
|
70
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline and gasoline blendstocks
|
|
16
|
|
|
16
|
|
17
|
|
|
17
|
|
|
|
|
Jet fuel
|
|
17
|
|
|
19
|
|
17
|
|
|
19
|
|
|
|
|
Diesel fuel
|
|
10
|
|
|
11
|
|
10
|
|
|
10
|
|
|
|
|
Heavy oils, residual products, internally produced fuel and other
|
|
24
|
|
|
27
|
|
27
|
|
|
25
|
|
|
|
Total Yield
|
|
67
|
|
|
73
|
|
71
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross refining margin
|
$
|
15
|
|
$
|
(41)
|
$
|
71
|
|
$
|
(50)
|
|
|
|
|
Gross refining margin ($/throughput bbl) (f)
|
$
|
2.52
|
|
$
|
(6.33)
|
$
|
5.67
|
|
$
|
(3.97)
|
|
|
|
|
Manufacturing cost before depreciation and amortization
($/throughput bbl) (f)
|
$
|
3.21
|
|
$
|
3.15
|
$
|
2.98
|
|
$
|
3.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(k)
|
We experienced reduced throughput due to turnarounds at the
Alaska and Golden Eagle refineries during the 2009 second quarter,
scheduled maintenance at the Washington refinery during the 2009
first quarter, and scheduled turnarounds at the Golden Eagle
refinery during the 2008 first and second quarters and at the
Washington refinery during the 2008 first quarter.
|
|
TESORO CORPORATION
|
|
OPERATING DATA
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
2009
|
|
|
2008
|
|
|
Mid-Continent (North Dakota & Utah)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Light crude
|
|
104
|
|
|
109
|
|
|
|
101
|
|
|
106
|
|
|
|
|
Other feedstocks
|
|
5
|
|
|
5
|
|
|
|
4
|
|
|
4
|
|
|
|
Total Throughput
|
|
109
|
|
|
114
|
|
|
|
105
|
|
|
110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield (thousand barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline and gasoline blendstocks
|
|
66
|
|
|
66
|
|
|
|
62
|
|
|
64
|
|
|
|
|
Jet fuel
|
|
8
|
|
|
12
|
|
|
|
9
|
|
|
10
|
|
|
|
|
Diesel fuel
|
|
28
|
|
|
30
|
|
|
|
28
|
|
|
30
|
|
|
|
|
Heavy oils, residual products, internally produced fuel and other
|
|
10
|
|
|
10
|
|
|
|
10
|
|
|
11
|
|
|
|
Total Yield
|
|
112
|
|
|
118
|
|
|
|
109
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross refining margin
|
$
|
111
|
|
$
|
143
|
|
$
|
|
222
|
|
$
|
235
|
|
|
|
|
Gross refining margin ($/throughput bbl) (f)
|
$
|
11.29
|
|
$
|
13.86
|
|
$
|
|
11.71
|
|
$
|
11.72
|
|
|
|
|
Manufacturing cost before depreciation and amortization
($/throughput bbl) (f)
|
$
|
3.20
|
|
$
|
3.59
|
|
$
|
|
3.40
|
|
$
|
3.58
|
|
TESORO CORPORATION
|
|
OPERATING DATA
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
|
2009
|
|
2008
|
|
RETAIL SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Stations (end of period)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated
|
|
|
388
|
|
437
|
|
|
388
|
|
437
|
|
|
|
Branded jobber/dealer
|
|
|
490
|
|
496
|
|
|
490
|
|
496
|
|
|
|
|
Total Stations
|
|
|
878
|
|
933
|
|
|
878
|
|
933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Stations (during period)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated
|
|
|
388
|
|
440
|
|
|
389
|
|
443
|
|
|
|
Branded jobber/dealer
|
|
|
490
|
|
497
|
|
|
489
|
|
485
|
|
|
|
|
Total Average Retail Stations
|
|
|
878
|
|
937
|
|
|
878
|
|
928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Sales (millions of gallons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated
|
|
|
263
|
|
270
|
|
|
513
|
|
557
|
|
|
|
Branded jobber/dealer
|
|
|
80
|
|
73
|
|
|
146
|
|
135
|
|
|
Total Fuel Sales
|
|
|
343
|
|
343
|
|
|
659
|
|
692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Margin ($/gallon) (l) (m)
|
|
$
|
0.16
|
$
|
0.12
|
|
$
|
0.14
|
$
|
0.12
|
|
|
Merchandise Sales ($ millions)
|
|
$
|
56
|
$
|
58
|
|
$
|
102
|
$
|
111
|
|
|
Merchandise Margin ($ millions)
|
|
$
|
14
|
$
|
15
|
|
$
|
25
|
$
|
28
|
|
|
Merchandise Margin %
|
|
|
25%
|
|
26%
|
|
|
25%
|
|
25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Income (Loss) ($ millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel (m)
|
|
$
|
55
|
$
|
41
|
|
$
|
91
|
$
|
82
|
|
|
|
|
Merchandise and other non-fuel margin
|
|
|
20
|
|
20
|
|
|
37
|
|
38
|
|
|
|
|
|
Total Gross Margins
|
|
|
75
|
|
61
|
|
|
128
|
|
120
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
52
|
|
56
|
|
|
102
|
|
114
|
|
|
|
|
Selling, general and administrative
|
|
|
7
|
|
6
|
|
|
16
|
|
12
|
|
|
|
|
Depreciation and amortization
|
|
|
10
|
|
10
|
|
|
19
|
|
22
|
|
|
|
|
Loss on asset disposals and impairments (n)
|
|
|
2
|
|
-
|
|
|
2
|
|
11
|
|
|
|
|
|
Segment Operating Income (Loss)
|
|
$
|
4
|
$
|
(11)
|
|
$
|
(11)
|
$
|
(39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(l)
|
Management uses fuel margin per gallon to compare profitability
to other companies in the industry. Fuel margin per gallon is
calculated by dividing fuel gross margin by fuel sales volumes and
may not be calculated similarly by other companies. Investors and
analysts use fuel margin per gallon to help analyze and compare
companies in the industry on the basis of operating performance.
This financial measure should not be considered as an alternative to
segment operating income and revenues or any other measure of
financial performance presented in accordance with U.S. GAAP.
|
|
|
|
|
(m)
|
Includes the effect of intersegment purchases from the refining
segment at prices which approximate market.
|
|
|
|
|
(n)
|
Represents impairment charges during the three months ended March
31, 2008 primarily related to a potential sale of 20 retail stations.
|
Tesoro Corporation
Investors:
Scott Phipps, 210-626-4882
Managing
Director, Finance & Investor Relations
or
Media:
Lynn
Westfall, 210-626-4697
SVP of External Affairs and Chief Economist
