2012-02-01 23:02:56 -
SAN ANTONIO - February 1, 2012 - Tesoro Corporation (NYSE:TSO) today reported a
fourth quarter 2011 net loss of $124 million, or $0.89 per diluted share
compared to net income of $3 million, or $0.02 per diluted share for the fourth
quarter of 2010.
For the full year 2011, the Company reported net income of $546 million, or
$3.81 per diluted share, versus a net loss of $29 million, or $0.21 per diluted
share for the full year 2010.
"The fourth quarter was a challenging period as a result of the dramatic change
in crude oil price differentials," said Greg Goff, President and CEO of Tesoro.
"Despite the loss in the fourth quarter, our full year results were better than
any year since 2007 when we posted similar earnings on
a Tesoro Index that was
40% higher. The Company's strong performance for the year clearly demonstrates
our ability to deliver fundamental improvements in the business." With a
strategic focus on operational efficiency and effectiveness, the Company
increased refinery utilization rates, capturing additional gross margin while
reducing manufacturing costs per barrel during 2011. The resulting strong free
cash flow allowed the company to reduce debt by $328 million, further
strengthening its balance sheet. The Company also increased the integration
between refining and marketing and successfully launched Tesoro Logistics LP
(NYSE:TLLP).
For the fourth quarter, the Company recorded a segment operating loss of $96
million, compared to segment operating income of $85 million, excluding business
interruption and property damage insurance proceeds, net of costs related to
repair work at the Anacortes refinery and the write-off of goodwill at the
Hawaii refinery in the fourth quarter of 2010. The decrease in operating income
is due primarily to an extremely weak margin environment in California and the
collapse of the West Texas Intermediate (WTI) to Brent crude oil spread.
The Tesoro Index was $7.50 per barrel (/bbl) for the fourth quarter, up slightly
relative to a year ago. However, the Tesoro Index for the California region was
a negative five cents per barrel, down more than $6/bbl relative to the fourth
quarter of 2010. Unusually high prices for heavy California crude oil relative
to light sweet crude oil negatively impacted the benchmark. During the quarter,
heavy California crude oil traded at a narrow $1/bbl discount relative to Brent
versus a wider discount of $7/bbl a year ago. Additionally, West Coast benchmark
gasoline crack spreads declined nearly 50% relative to the fourth quarter of
2010. The Company captured a gross margin of $6.02/bbl.
The Company's margin underperformance relative to the Index was impacted by the
collapse of the WTI to Brent crude oil spread. The discount of WTI to Brent
during the fourth quarter narrowed by $18/bbl, dropping from $26/bbl at the end
of September to $8/bbl at the end of December. This market price movement
impacted fourth quarter results in two ways. First, by reducing benchmark
margins at our refineries that run WTI-priced barrels. Second, by reducing the
margin on long-haul foreign crude oil barrels indexed to WTI.
Total throughput in the quarter was 567 thousand barrels per day (mbpd) or 85%
of total crude oil capacity. The decline from 609 mbpd or 92% of capacity in the
third quarter of this year is due primarily to turnaround activity in the
California and Pacific Northwest regions.
Direct manufacturing costs in the fourth quarter were $5.03/bbl, up $0.46/bbl
from the third quarter of 2011, a result of higher maintenance spending and
lower refinery throughput.
Retail fuel sales volumes in the fourth quarter were up 14% year-over-year
reflecting growth in the Company's branded jobber and dealer business. Same
store fuel sales during the quarter were essentially flat year-over-year. Retail
operating income was $27 million, up $16 million from a year ago driven by
higher fuel margins.
Corporate and unallocated costs, net of $2 million of corporate depreciation and
excluding $21 million in stock-based compensation expense primarily associated
with stock appreciation rights, were $36 million in the fourth quarter.
Capital Spending and Liquidity
Capital spending for the full year 2011 was $320 million. Turnaround spending
for the full year was $109 million. Expectations for 2012 capital spending
remain at $670 million, as expenditures related to the high-return capital
program increase. Turnaround spending of $300 million in 2012 is projected. The
Company ended the year with $900 million in cash on the balance sheet and
remained undrawn on the parent company revolving credit facility with over $810
million of availability.
2012 Strategic Focus
"We delivered in 2011 what we set out to deliver," said Goff. "But it was
the
first year of a multi-year plan. As we begin 2012, our strategic priorities
remain the same. Our primary focus is to reinvest free cash flow in high-return
capital projects that drive significant future earnings growth. We'll also
continue to drive earnings improvements that are not dependent on capital
spending and we remain focused on further strengthening our balance sheet with
the planned retirement of the remaining $299 million of 6 1/4% senior notes due
in November." Full details of the 2012 business plan can be viewed in the
December Analyst Day presentation posted on the Investor Relations section of
the www.tsocorp.com website.
Plan to Sell Hawaii Operations
On January 10, 2012, Tesoro Corporation announced its intention to sell its
Hawaii operations, including the 94 mbpd Kapolei refinery, operations at 32
retail stations and all associated logistical assets.
"Following a comprehensive analysis, we've determined that our business in
Hawaii does not align with our strategic focus on the Mid-Continent and West
Coast," said Goff. "While the Hawaii business is no longer in-line with our
vision for Tesoro's future, there is no question that it offers value for the
right investor."
Tesoro Hawaii anticipates completing the sale no sooner than the second half of
2012, subject to regulatory and other approvals.
Refining and Marketing Integration
Tesoro recently closed on the purchase of 49 Albertson's Fuel Express retail
stations from SUPERVALU, Inc. (NYSE: SVU). These stations are located in
Washington, Oregon, California, Nevada, Idaho, Utah and Wyoming with total fuel
sales of about 5 mbpd.
Public Invited to Listen to Analyst Conference Call
At 7:30 a.m. CST tomorrow morning, Tesoro will broadcast, live, its conference
call with analysts regarding fourth quarter and full year 2011 results and other
business matters. Interested parties may listen to the live conference call
over the Internet by logging on to
www.tsocorp.com.
Tesoro Corporation, a Fortune 150 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 nearly 1,200 branded retail stations, of which over 375 are company
operated under the Tesoro®, Shell® and USA Gasoline(TM) 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 expectations about
implementation of strategic priorities, earnings improvements, strengthening our
balance sheet, retiring debt, capital and turnaround spending and the return on
capital projects, and Tesoro Hawaii's intent to sell its Hawaii operations. 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."
Contact:
Investors:
Louie Rubiola, Director, Investor Relations, (210) 626-4355
Media:
Tesoro Media Relations, (210) 626-7702
TESORO CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(Unaudited)
(In millions except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
----------------------- ------------------------
2011 2010 2011 2010
----------- ----------- ------------ -----------
Revenues $ 7,713 $ 5,513 $ 30,303 $ 20,583
Costs and Expenses:
Cost of sales 7,307 4,865 27,007 18,251
Operating expenses 378 378 1,495 1,474
Selling, general and
administrative expenses 71 77 237 242
Depreciation and amortization
expense 105 108 417 422
Loss on asset disposals and
impairments (a) 7 15 67 54
----------- ----------- ------------ -----------
Operating Income (Loss) (b)(c) (155 ) 70 1,080 140
Interest and financing costs (36 ) (43 ) (177 ) (157 )
Interest income - 1 2 3
Foreign currency exchange gain
(loss) (1 ) - (2 ) 2
Other income (expense) (d) 1 (15 ) 2 (13 )
----------- ----------- ------------ -----------
Earnings (Loss) Before Income
Taxes (191 ) 13 905 (25 )
Income tax expense (benefit) (73 ) 10 342 4
----------- ----------- ------------ -----------
Net Earnings (Loss) (118 ) 3 563 (29 )
Less net income attributable
to noncontrolling interest 6 - 17 -
----------- ----------- ------------ -----------
NET EARNINGS (LOSS)
ATTRIBUTABLE TO
TESORO CORPORATION $ (124 ) $ 3 $ 546 $ (29 )
----------- ----------- ------------ -----------
Net Earnings (Loss) Per Share:
Basic $ (0.89 ) $ 0.02 $ 3.86 $ (0.21 )
Diluted (e) $ (0.89 ) $ 0.02 $ 3.81 $ (0.21 )
Weighted Average Common
Shares:
Basic 138.7 141.3 141.4 140.6
Diluted (e) 138.7 142.8 143.3 140.6
____________________________
(a) Includes losses related to a change in scope of a capital project at our
Los Angeles refinery of $51 million and $20 million for the years ended
December 31, 2011 and December 31, 2010, respectively. Loss on asset disposals
and impairments is included in refining segment operating income but excluded
from the regional operating costs per barrel.
(b) Includes a $48 million gain for the year ended December 31, 2010, from the
elimination of postretirement life insurance benefits for current and future
retirees.
(c) Includes business interruption recoveries and property damage insurance
recoveries related to the April 2, 2010 incident at the Washington refinery of
$32 million and $5 million, respectively, for the year ended December 31, 2011
and $55 million and $12 million, respectively, for the year ended December
31, 2010.
(d) Includes $16 million, or $10 million after-tax, for the three months and
year ended December 31, 2010, related to a legal accrual from claims asserted
against us in connection with our 2008 refunds received from owners of the Trans
Alaska Pipeline System.
(e) The assumed conversion of common stock equivalents produced anti-dilutive
results for the three months ended December 31, 2011 and the year ended
December 31, 2010, and was not included in the dilutive calculation.
TESORO CORPORATION
SELECTED OPERATING SEGMENT DATA
(Unaudited)
(In millions)
Three Months Ended Years Ended
December 31, December 31,
-------------------- --------------------
2011 2010 2011
2010
---------- --------- ----------- --------
Operating Income (Loss)
Refining (a)(c) $ (123 ) $ 128 $ 1,179 $ 255
Retail 27 11 89 97
---------- --------- ----------- --------
Total Segment Operating Income (Loss) (96 ) 139 1,268 352
Corporate and unallocated costs (59 ) (69 ) (188 ) (212 )
---------- --------- ----------- --------
Operating Income (Loss) (b)(c) (155 ) 70 1,080 140
Interest and financing costs (36 ) (43 ) (177 ) (157 )
Interest income - 1 2 3
Foreign currency exchange gain (loss) (1 ) - (2 ) 2
Other income (expense) (d) 1 (15 ) 2 (13 )
---------- --------- ----------- --------
Earnings (Loss) Before Income Taxes $ (191 ) $ 13 $ 905 $ (25 )
---------- --------- ----------- --------
Depreciation and Amortization Expense
Refining $ 93 $ 95 $ 369 $ 365
Retail 10 9 38 39
Corporate 2 4 10 18
---------- --------- ----------- --------
Depreciation and Amortization Expense $ 105 $ 108 $ 417 $ 422
---------- --------- ----------- --------
Capital Expenditures
Refining $ 100 $ 56 $ 262 $ 263
Retail 21 10 41 22
Corporate 8 2 17 2
---------- --------- ----------- --------
Capital Expenditures $ 129 $ 68 $ 320 $ 287
------------ --------- ----------- --------
BALANCE SHEET DATA
(Unaudited)
(Dollars in millions)
December December
31, 31,
2011
2010
----------- ----------
Cash and cash equivalents $ 900 $ 648
Total Assets $ 9,892 $ 8,732
Total Debt $ 1,701 $ 1,995
Total Equity $ 3,978 $ 3,215
Total Debt to Capitalization Ratio 30 % 38 %
TESORO CORPORATION
OPERATING DATA
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
------------------------ -----------------------
REFINING SEGMENT 2011 2010 2011 2010
------------ ----------- ------------ ----------
Total Refining Segment
Throughput (thousand barrels
("bbls") per day)
Heavy crude (f) 148 173 171 181
Light crude 385 303 373 270
Other feedstocks 34 29 35 29
------------ ----------- ------------ ----------
Total Throughput 567 505 579 480
------------ ----------- ------------ ----------
Yield (thousand bbls per day)
Gasoline and gasoline
blendstocks 281 236 285 232
Jet fuel 80 75 79 68
Diesel fuel 138 112 135 103
Heavy fuel oils, residual
products, internally produced
fuel and other 100 110 112 106
------------ ----------- ------------ ----------
Total Yield 599 533 611 509
------------ ----------- ------------ ----------
Gross refining margin
($/throughput bbl) (g) $ 6.02 $ 12.33 $ 13.94 $ 11.26
Manufacturing cost before
depreciation and amortization
expense
($/throughput bbl) (g) $ 5.03 $ 5.50 $ 4.98 $ 5.83
Segment Operating Income
(Loss) ($ millions)
Gross refining margin (h) $ 313 $ 572 $ 2,944 $ 1,974
Expenses
Manufacturing Costs 263 256 1,052 1,022
Other operating expenses 65 72 241 254
Selling, general and
administrative expenses 11 8 43 30
Depreciation and amortization
expense (i) 93 95 369 365
Loss on asset disposal and
impairments (a) 4 13 60 48
------------ ----------- ------------ ----------
Segment Operating Income
(Loss) (c) $ (123 ) $ 128 $ 1,179 $ 255
------------ ----------- ------------ ----------
Refined Product Sales
(thousand bbls per day) (j)
Gasoline and gasoline
blendstocks 341 296 341 288
Jet fuel 93 91 91 92
Diesel fuel 153 122 143 116
Heavy fuel oils, residual
products and other 92 77 85 76
------------ ----------- ------------ ----------
Total Refined Product Sales 679 586 660 572
------------ ----------- ------------ ----------
Refined Product Sales Margin
($/bbl) (j)
Average sales price $ 119.00 $ 96.98 $ 121.09 $ 91.03
Average costs of sales 112.89 86.85 109.96 82.66
------------ ----------- ------------ ----------
Refined Product Sales Margin $ 6.11 $ 10.13 $ 11.13 $ 8.37
-------------- ----------- ------------ ----------
___________________________
(f) We define heavy crude oil as crude oil with an American Petroleum
Institute gravity of 24 degrees or less.
(g) Management uses gross refining margin per barrel to evaluate performance
and compare profitability to other companies in the industry. There are a
variety of ways to calculate gross refining margin per barrel; different
companies may calculate it in different ways. We calculate gross refining margin
per barrel by dividing gross refining margin (revenue less costs of feedstocks,
purchased refined products, transportation and distribution) by total refining
throughput. Management uses manufacturing costs per barrel to evaluate the
efficiency of refining operations. There are a variety of ways to calculate
manufacturing costs per barrel; different companies may calculate it in
different ways. We calculate manufacturing costs per barrel by dividing
manufacturing costs by total refining throughput. 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 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 ("U.S. GAAP").
(h) Consolidated gross refining margin combines gross refining margin for each
of our regions adjusted for other amounts not directly attributable to a
specific region. Other amounts resulted in an increase of $2 million for both
the three months ended December 31, 2011, and 2010, and $6 million and $2
million for the years ended December 31, 2011 and 2010, respectively. 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.
(i) Includes manufacturing depreciation and amortization expense per throughput
barrel of approximately $1.70 and $1.94 for the three months ended
December 31, 2011 and 2010, respectively, and $1.67 and $1.97 for the years
ended December 31, 2011 and 2010, respectively.
(j) Sources of total refined product sales include refined products
manufactured at our refineries and refined products purchased from third
parties. The total refined product sales margins include margins on sales of
manufactured and purchased refined products.
TESORO CORPORATION
OPERATING DATA
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
---------------------- ----------------------
Refining By Region 2011 2010 2011 2010
---------- ----------- ----------- ----------
California (Golden Eagle and Los
Angeles)
Throughput (thousand bbls per
day) (k)
Heavy crude (f) 138 152 156 161
Light crude 75 48 60 42
Other feedstocks 28 21 25 20
---------- ----------- ----------- ----------
Total Throughput 241 221 241 223
---------- ----------- ----------- ----------
Yield (thousand bbls per day)
Gasoline and gasoline blendstocks 135 115 134 124
Jet fuel 19 22 20 19
Diesel fuel 69 56 63 54
Heavy fuel oils, residual
products, internally produced
fuel and other 39 48 45 47
---------- ----------- ----------- ----------
Total Yield 262 241 262 244
---------- ----------- ----------- ----------
Gross refining margin $ 38 $ 249 $ 1,071 $ 979
Gross refining margin
($/throughput bbl) (g) $ 1.72 $ 12.24 $ 12.19 $ 12.03
Manufacturing cost before
depreciation and amortization
expense
($/throughput bbl) (g) $ 6.76 $ 7.56 $ 6.90 $ 7.54
Capital expenditures $ 46 $ 26 $ 121 $ 119
Pacific Northwest (Alaska &
Washington)
Throughput (thousand bbls per
day) (k)
Heavy crude (f) 1 - 3 1
Light crude 137 99 144 87
Other feedstocks 1 3 6 5
---------- ----------- ----------- ----------
Total Throughput 139 102 153 93
---------- ----------- ----------- ----------
Yield (thousand bbls per day)
Gasoline and gasoline blendstocks 59 39 66 34
Jet fuel 28 24 30 24
Diesel fuel 25 12 27 11
Heavy fuel oils, residual
products, internally produced
fuel and other 31 30 35 27
---------- ----------- ----------- ----------
Total Yield 143 105 158 96
---------- ----------- ----------- ----------
Gross refining margin $ 76 $ 137 $ 693 $ 367
Gross refining margin
($/throughput bbl) (g) $ 5.96 $ 14.58 $ 12.40 $ 10.84
Manufacturing cost before
depreciation and amortization
expense
($/throughput bbl) (g) $ 4.31 $ 4.89 $ 3.64 $ 5.88
Capital expenditures $ 21 $ 18 $ 59 $ 81
TESORO CORPORATION
OPERATING DATA
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
----------------------- ----------------------
2011 2010 2011 2010
----------- ----------- ----------- ----------
Mid-Pacific (Hawaii)
Throughput (thousand bbls per
day) (k)
Heavy crude (f) 9 21 12 19
Light crude 63 48 59 45
----------- ----------- ----------- ----------
Total Throughput 72 69 71 64
----------- ----------- ----------- ----------
Yield (thousand bbls per day)
Gasoline and gasoline
blendstocks 19 17 19 15
Jet fuel 20 18 18 15
Diesel fuel 13 14 13 12
Heavy fuel oils, residual
products, internally produced
fuel and other 22 21 22 23
----------- ----------- ----------- ----------
Total Yield 74 70 72 65
----------- ----------- ----------- ----------
Gross refining margin $ (29 ) $ 30 $ 105 $ 88
Gross refining margin
($/throughput bbl) (g) $ (4.33 ) $ 4.79 $ 4.08 $ 3.77
Manufacturing cost before
depreciation and amortization
expense
($/throughput bbl) (g) $ 3.11 $ 3.21 $ 3.65 $ 3.18
Capital expenditures $ 5 $ 2 $ 13 $ 10
Mid-Continent (North Dakota and
Utah)
Throughput (thousand bbls per
day) (k)
Light crude 110 108 110 96
Other feedstocks 5 5 4 4
----------- ----------- ----------- ----------
Total Throughput 115 113 114 100
----------- ----------- ----------- ----------
Yield (thousand bbls per day)
Gasoline and gasoline
blendstocks 68 65 66 59
Jet fuel 13 11 11 10
Diesel fuel 31 30 32 26
Heavy fuel oils, residual
products, internally produced
fuel and other 8 11 10 9
----------- ----------- ----------- ----------
Total Yield 120 117 119 104
----------- ----------- ----------- ----------
Gross refining margin $ 226 $ 154 $ 1,069 $ 538
Gross refining margin
($/throughput bbl) (g) $ 21.38 $ 14.88 $ 25.59 $ 14.62
Manufacturing cost before
depreciation and amortization
expense
($/throughput bbl) (g) $ 3.51 $ 3.44 $ 3.55 $ 3.68
Capital expenditures $ 28 $ 10 $ 69 $ 53
_______________________
(k) We experienced reduced throughput due to scheduled turnarounds at our
Golden Eagle refinery during the 2011 second quarter, at our Golden Eagle and
Utah refineries during the 2010 first quarter, at our North Dakota refinery
during the 2010 second quarter, and our Hawaii refinery during the 2010 third
quarter. We temporarily shut-down processing at the Washington refinery
subsequent to the incident in April 2010, and resumed operations at planned
rates in November 2010.
TESORO CORPORATION
OPERATING DATA
(Unaudited)
Three Months Ended Years
Ended
December 31, December
31,
--------------------- --------------------
Retail Segment 2011 2010 2011 2010
---------- ---------- ---------- ---------
Number of Stations (end of period)
Company-operated 376 381 376 381
Branded jobber/dealer (l) 799 499 799 499
---------- ---------- ---------- ---------
Total Stations 1,175 880 1,175 880
---------- ---------- ---------- ---------
Average Stations (during period)
Company-operated 376 381 377 383
Branded jobber/dealer (l) 804 499 780 499
---------- ---------- ---------- ---------
Total Average Retail Stations 1,180 880 1,157 882
---------- ---------- ---------- ---------
Fuel Sales (millions of gallons)
Company-operated 185 184 733 739
Branded jobber/dealer (l) 199 152 793 597
---------- ---------- ---------- ---------
Total Fuel Sales 384 336 1,526 1,336
---------- ---------- ---------- ---------
Fuel margin ($/gallon) (m) $ 0.19 $ 0.17 $ 0.18 $ 0.21
Merchandise Sales ($ millions) $ 47 $ 49 $ 200 $ 201
Merchandise Margin ($ millions) $ 13 $ 13 $ 53 $ 53
Merchandise Margin % 28 % 27 % 27 % 26 %
Segment Operating Income ($
millions)
Gross Margins
Fuel (m) $ 73 $ 56 $ 274 $ 279
Merchandise and other non-fuel
margin 20 20 78 79
---------- ---------- ---------- ---------
Total Gross Margins 93 76 352 358
Expenses
Operating expenses 50 50 202 198
Selling, general and administrative
expenses 4 4 17 18
Depreciation and amortization
expense 10 9 38 39
Loss on asset disposals and
impairments 2 2 6 6
---------- ---------- ---------- ---------
Segment Operating Income $ 27 $ 11 $ 89 $ 97
---------- ---------- ---------- ---------
___________________________
(l) Reflects the expansion of our branded marketing presence through the
addition of approximately 300 wholesale supply contracts predominantly in the
mid-continent region during 2011.
(m) Management uses fuel margin per gallon to compare profitability to other
companies in the industry. There are a variety of ways to calculate fuel margin
per gallon; different companies may calculate it in different ways. We calculate
fuel margin per gallon by dividing fuel gross margin by fuel sales volumes.
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 an alternative to segment operating income and
revenues or any other measure of financial performance presented in accordance
with U.S. GAAP. Fuel margin per gallon includes the effect of intersegment
purchases from the refining segment at prices which approximate market.
TESORO CORPORATION
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
(Unaudited) (In millions)
Three Months Ended Years
Ended
December 31, December 31,
-------------------- --------------------
2011 2010 2011 2010
---------- --------- ----------- --------
Reconciliation of Net Earnings (Loss)
to EBITDA
Net earnings (loss) $ (124 ) $ 3 $ 546 $ (29 )
Add: (Less) income tax expense
(benefit) (73 ) 10 342 4
Add: Interest and financing costs 36 43 177 157
Less: Interest income - (1 ) (2 ) (3 )
Add: Depreciation and amortization
expense 105 108 417 422
---------- --------- ----------- --------
Earnings (Loss) before Interest,
Income Taxes, Depreciation
and Amortization Expense (EBITDA) (n) $ (56 ) $ 163 $ 1,480 $ 551
---------- --------- ----------- --------
Reconciliation of Cash Flows from
(used in) Operating
Activities to EBITDA
Net cash from (used in) operating
activities $ (173 ) $ 230 $ 689 $ 385
Add: (Less) income tax expense
(benefit) (73 ) 10 342 4
Add: Interest and financing costs 36 43 177 157
Add: (Less) other credits (charges) 4 (1 ) (4 ) (1 )
Less: Amortization of debt issuance
costs and discounts (3 ) (6 ) (17 ) (18 )
Less: Loss on asset disposals and
impairments (7 ) (15 ) (67 ) (54 )
Less: Stock-based compensation
expense (28 ) (30 ) (53 ) (58 )
Less: Deferred income taxes (26 ) (9 ) (200 ) (9 )
Add: (Less) Changes in assets and
liabilities 220 (59 ) 630 145
Less: Net income attributable to
noncontrolling interest (6 ) - (17 ) -
---------- --------- ----------- --------
Earnings (Loss) before Interest,
Income Taxes, Depreciation
and Amortization Expense (EBITDA) (n) $ (56 ) $ 163 $ 1,480 $ 551
---------- --------- ----------- --------
SEGMENT OPERATING INCOME ADJUSTED FOR SPECIAL ITEMS
(Unaudited) (In millions)
Three Months Three Months
Ended
Ended
December
December
31, 2011 31, 2010
---------------- ---------------
Total Segment Operating Income $ (96 ) $ 139
Special Items, before-tax:
Washington refinery incident (o) - (64 )
Goodwill impairment (p) - 10
---------------- ---------------
Segment Operating Income Adjusted for Special
Items $ (96 ) $ 85
---------------- ---------------
NET EARNINGS ADJUSTED FOR SPECIAL ITEMS
(Unaudited) (In millions)
Three Months Three Months
Ended
Ended
December
December
31, 2011 31, 2010
---------------- ---------------
Net Earnings - U.S. GAAP $ (124 ) $ 3
Special Items, After-tax:
Washington refinery incident (o) - (39 )
Goodwill Impairment (p) - 7
Legal accrual (d) - 10
---------------- ---------------
Net Earnings (Loss) Adjusted for Special Items $ (124 ) $ (19 )
---------------- ---------------
Net Diluted Earnings Per Share - U.S. GAAP $ (0.89 ) $ 0.02
Special Items Per Share, After-tax:
Washington refinery incident (o) - (0.27 )
Goodwill Impairment (p) 0.05
Legal accrual - 0.07
---------------- ---------------
Net Diluted Earnings (Loss) Per Share Adjusted
for Special Items $ (0.89 ) $ (0.13 )
---------------- ---------------
Note: The special items present information that the Company believes is useful
to investors. The Company believes that special items are not indicative of its
core operations.
____________
(n) EBITDA represents earnings before interest and financing costs, interest
income, income taxes, and depreciation and amortization expense. We present
EBITDA because we believe some investors and analysts use EBITDA to help analyze
our cash flows including our ability to satisfy principal and interest
obligations with respect to our indebtedness and use cash for other purposes,
including capital expenditures. EBITDA is also used by some investors and
analysts to analyze and compare companies on the basis of operating performance
and by management for internal analysis and as a component of the fixed charge
coverage financial covenant in our credit agreement. EBITDA should not be
considered as an alternative to net earnings, earnings before income taxes, cash
flows from operating activities or any other measure of financial performance
presented in accordance with accounting principles generally accepted in the
United States of America. EBITDA may not be comparable to similarly titled
measures used by other entities.
(o) Represents $64 million, or $39 million after-tax, impact of the April
2, 2010 incident at the Washington refinery, which includes business
interruption recoveries of $55 million, property damage insurance recoveries of
$12 million and costs of $3 million.
(p) Represents the write-off of goodwill at our Hawaii refinery in the fourth
quarter of 2010. The after-tax impact of the $10 million impairment charge was
$7 million, a portion of which was non-deductible for tax purposes.
Tesoro Corporation Reports 2011 Fourth Quarter and Full Year Results:
hugin.info/144238/R/1581961/494229.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Tesoro Corporation via Thomson Reuters ONE
[HUG#1581961]
