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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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95-0862768
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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19100 Ridgewood Pkwy, San Antonio, Texas 78259-1828
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(Address of principal executive offices) (Zip Code)
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210-626-6000
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(Registrant’s telephone number, including area code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.16
2
/
3
par value
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New York Stock Exchange
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PART I
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Page
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PART II
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PART III
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PART IV
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•
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the constantly changing margin between the price we pay for crude oil and other refinery feedstocks as well as renewable identification numbers (“RINs”) and environmental credits, and the prices at which we are able to sell refined products;
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•
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changes in the expected value of and benefits derived from acquisitions and capital projects;
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•
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changes in global economic conditions and the effects of the global economic downturn on our business, especially in California, and the business of our suppliers, customers, business partners and credit lenders;
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•
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changes in fuel and utility costs for our facilities;
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•
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changes in the cost or availability of third-party vessels, pipelines and other means of transporting crude oil feedstocks and refined products;
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•
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regulatory and other requirements concerning the transportation of crude oil, particularly from the Bakken area;
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•
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changes in the carrying costs of our inventory;
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•
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the timing and extent of changes in commodity prices and underlying demand for our refined products, natural gas and NGLs;
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•
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the availability and costs of crude oil, other refinery feedstocks, refined products and RINs;
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•
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changes in our cash flow from operations;
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•
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earthquakes or other natural disasters affecting operations;
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•
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direct or indirect effects on our business resulting from actual or threatened terrorist incidents, cyber-security breaches or acts of war;
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•
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weather conditions affecting our operations or the areas in which our refined products are marketed;
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•
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actions of customers and competitors;
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•
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state and federal environmental, economic, health and safety, energy and other policies and regulations, including those related to climate change and any changes therein, and any legal or regulatory investigations, delays, compliance costs or other factors beyond our control;
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•
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adverse rulings, judgments, or settlements in litigation or other legal or tax matters, including unexpected environmental remediation costs in excess of any reserves;
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•
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operational hazards inherent in refining operations and in transporting and storing crude oil and refined products;
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•
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changes in our credit profile;
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•
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changes in capital requirements or in execution of planned capital projects;
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•
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disruptions due to equipment interruption or failure at our facilities or third-party facilities;
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•
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seasonal variations in demand for refined products and natural gas;
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•
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risks related to labor relations and workplace safety; and
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•
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political developments.
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Refinery
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Crude Oil Capacity (a)
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Throughput (a)
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California
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Martinez, California
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166
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123
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Los Angeles, California
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380
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369
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Pacific Northwest
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Anacortes, Washington
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120
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107
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Kenai, Alaska
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72
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64
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Mid-Continent
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Mandan, North Dakota
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74
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73
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Salt Lake City, Utah
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63
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51
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Total (b)
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875
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787
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(a)
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Throughput can exceed crude oil capacity due to the processing of other feedstocks in addition to crude oil. In December 2015, we updated our crude oil capacity from 850 Mbpd to
875
Mbpd.
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(b)
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See discussion regarding changes in total refining throughput in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7.
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Characteristics
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Sources
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||||||||
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Sweet
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Sour
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Residual
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Other Feedstocks
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Blendstocks
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United States
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Canada
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South & Central America
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Asia
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Middle East & Africa
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Los Angeles
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●
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●
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●
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●
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●
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●
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●
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●
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●
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●
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Martinez
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●
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●
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●
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●
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●
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●
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●
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●
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●
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●
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Anacortes
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●
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|
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●
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●
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●
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●
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●
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●
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Kenai
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●
|
|
|
|
●
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|
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●
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|
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●
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Mandan
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●
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|
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●
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●
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●
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Salt Lake City
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●
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●
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●
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●
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|
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California
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Pacific Northwest
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Mid-Continent
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Total Refining
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|||||||||||||
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Volume
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%
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Volume
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%
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Volume
|
|
%
|
|
Volume
|
|
%
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|||||
Throughput
|
|
|
|
|
|
|
|
|
|
|
|
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|||||
Heavy crude
|
146
|
|
|
29
|
|
5
|
|
|
3
|
|
—
|
|
|
—
|
|
|
151
|
|
|
19
|
Light crude
|
309
|
|
|
63
|
|
151
|
|
|
89
|
|
120
|
|
|
97
|
|
|
580
|
|
|
74
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Other feedstocks
|
38
|
|
|
8
|
|
14
|
|
|
8
|
|
4
|
|
|
3
|
|
|
56
|
|
|
7
|
Total
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493
|
|
|
100
|
|
170
|
|
|
100
|
|
124
|
|
|
100
|
|
|
787
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|||||
Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|||||
Gasoline and gasoline blendstocks
|
264
|
|
|
50
|
|
75
|
|
|
43
|
|
70
|
|
|
54
|
|
|
409
|
|
|
49
|
Diesel fuel
|
100
|
|
|
19
|
|
31
|
|
|
18
|
|
38
|
|
|
29
|
|
|
169
|
|
|
20
|
Jet fuel
|
74
|
|
|
14
|
|
34
|
|
|
19
|
|
11
|
|
|
9
|
|
|
119
|
|
|
14
|
Heavy fuel oils, residual products,
internally produced fuel and
other (a)
|
93
|
|
|
17
|
|
36
|
|
|
20
|
|
10
|
|
|
8
|
|
|
139
|
|
|
17
|
Total
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531
|
|
|
100
|
|
176
|
|
|
100
|
|
129
|
|
|
100
|
|
|
836
|
|
|
100
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(a)
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The majority of internally produced fuel is consumed during the refining process.
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Crude oil transported (Mbpd):
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Pipelines (a)
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188
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Trucking
|
38
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Natural gas transported (thousands of MMBtu/day):
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Pipelines
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1,077
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(a)
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Also includes barrels that were gathered and then delivered into TLLP’s High Plains pipeline by truck.
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Throughput Capacity (a)
|
|
Throughput (a)
|
||
Processing Complexes
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1,432
|
|
|
910
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Fractionation Complex
|
15,000
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|
|
2,931
|
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(a)
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Capacity and throughput is measured in MMcf/d for processing complexes and barrels per day for the fractionation complex.
|
•
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25 crude oil and refined products terminals and storage facilities in the western and midwestern U.S. that are supplied by Tesoro-owned and third-party pipelines, trucks and barges;
|
•
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four marine terminals in California that load and unload vessels;
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•
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130 miles of pipelines, which transport products and crude oil from Tesoro’s refineries to nearby facilities in Salt Lake City and Los Angeles and a 50% fee interest in a 16-mile pipeline that transports jet fuel from our Los Angeles refinery to the Los Angeles International Airport;
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•
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a regulated common carrier products pipeline running from Salt Lake City, Utah to Spokane, Washington and a jet fuel pipeline to the Salt Lake City International Airport (the “Northwest Products Pipeline”);
|
•
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a rail-car unloading facility in Washington that receives crude oil transported on unit trains leased by Tesoro;
|
•
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a petroleum coke handling and storage facility in Los Angeles that handles and stores petroleum coke from Tesoro’s Los Angeles refinery; and
|
•
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a regulated common carrier refined products pipeline system connecting our Kenai refinery to Anchorage, Alaska.
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Daily Available
Terminalling
Capacity
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Throughput
|
||
Terminals and storage facilities
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1,005
|
|
|
430
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Marine terminals
|
795
|
|
|
456
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Rail facility
|
50
|
|
|
49
|
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Total Crude Oil and Refined Products Terminals
|
1,850
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|
|
935
|
|
State
|
|
ARCO
®
|
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Shell
®
|
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Exxon
®
|
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Mobil
®
|
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Other (a)
|
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Total
|
|
California
|
|
●
|
|
●
|
|
●
|
|
●
|
|
●
|
|
1,365
|
|
Minnesota
|
|
●
|
|
●
|
|
●
|
|
●
|
|
●
|
|
250
|
|
Nevada
|
|
●
|
|
●
|
|
|
|
●
|
|
●
|
|
132
|
|
Utah
|
|
|
|
●
|
|
●
|
|
|
|
●
|
|
118
|
|
Idaho
|
|
|
|
●
|
|
|
|
●
|
|
●
|
|
110
|
|
Arizona
|
|
●
|
|
●
|
|
●
|
|
●
|
|
|
|
104
|
|
North Dakota
|
|
|
|
●
|
|
●
|
|
●
|
|
●
|
|
103
|
|
Alaska
|
|
|
|
|
|
|
|
|
|
●
|
|
73
|
|
Washington
|
|
|
|
|
|
|
|
●
|
|
●
|
|
60
|
|
Other (b)
|
|
|
|
●
|
|
|
|
●
|
|
●
|
|
82
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
2,397
|
|
(a)
|
Other brands include USA Gasoline
TM
, Tesoro
®
, Rebel
TM
and Thrifty
TM
.
|
(b)
|
Other states include Colorado, Iowa, New Mexico, Oregon, South Dakota, Wisconsin and Wyoming.
|
•
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Our Martinez, Los Angeles and Anacortes refineries compete with several refiners in the U.S., Canada and throughout the Pacific Rim.
|
•
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Our Kenai refinery competes with two
other in-state refineries along with refineries on the West Coast and in Asia. Our jet fuel sales in Alaska are concentrated in Anchorage, where we are one of the principal suppliers at the Anchorage International Airport.
|
•
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Our mid-continent refineries in Mandan, North Dakota and Salt Lake City, Utah compete with supplies provided from refineries in surrounding states and pipeline supply from the Midwest and Gulf Coast regions.
|
•
|
The U.S. Environmental Protection Agency (“EPA”) has promulgated multiple regulations to control greenhouse gas emissions under the Federal Clean Air Act. The first of these regulations, finalized on April 1, 2010, set standards for the control of greenhouse gas emissions from light trucks and cars. The U.S. Congress may also consider legislation regarding greenhouse gas emissions in the future.
|
•
|
The Energy Independence and Security Act of 2007 mandates the blending of increasing amounts of renewable fuels in the supply of transportation fuels used domestically. This use of renewable fuels is required of all manufacturers and importers of transportation fuels sold domestically. The EPA implemented the second renewable fuel standard (“RFS2”) through regulation and RFS2 requires transportation fuel manufacturers to provide proof of purchase of these renewable fuels. The costs associated with RFS2 compliance are uncertain and fluctuate with market dynamics.
|
•
|
The EPA adopted a new rule in 2015 requiring further reductions in the National Ambient Air Quality Standard (“NAAQS”) for ozone.
|
•
|
The DOT issued new regulations in 2015 governing the design of rail cars used to transport petroleum and other materials.
|
•
|
In California, Assembly Bill 32 (“AB 32”), created a statewide cap on greenhouse gas emissions and requires that the state return to 1990 emission levels by 2020. AB 32 also created a low carbon fuel standard, which requires a 10% reduction in the carbon intensity of fuels by 2020.
|
•
|
In California, the Board for the South Coast Air Quality Management District passed amendments to the Regional Clean Air Incentives Market (“RECLAIM”) on December 4, 2015. The RECLAIM Amendments become effective in 2016 and require a staged reduction of Nitrogen Oxides through 2022.
|
•
|
In California, pre-rulemaking is underway to implement the recommendations made in 2014 by the Governor’s Interagency Refinery Safety Working Group.
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Name
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Age
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Position
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Position Held Since
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Gregory J. Goff
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|
59
|
|
President and Chief Executive Officer
Chairman of the Board |
|
May 2010
December 2014 |
Keith M. Casey
|
|
49
|
|
Executive Vice President, Operations
|
|
May 2014
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Charles S. Parrish
|
|
58
|
|
Executive Vice President, General Counsel and Secretary
|
|
April 2009
|
Steven M. Sterin
|
|
44
|
|
Executive Vice President, Chief Financial Officer
|
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August 2014
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Cynthia J. Warner
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|
57
|
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Executive Vice President, Strategy and Business Development
|
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October 2014
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Daryl R. Schofield
|
|
56
|
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Senior Vice President, Commercial
|
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March 2014
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Tracy D. Jackson
|
|
46
|
|
Vice President and Controller
|
|
March 2015
|
Brad S. Lakhia
|
|
43
|
|
Vice President and Treasurer
|
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February 2014
|
Rodney F. Chase
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Chairman of the Audit Committee of Tesoro Corporation; Director of Hess Corporation
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Gregory J. Goff
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Chairman of the Board, President and Chief Executive Officer of Tesoro Corporation and Chairman of the Board of Tesoro Logistics GP, LLC; Director of Polyone Corporation
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Robert W. Goldman
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Former Senior Vice President and Chief Financial Officer of Conoco, Inc.;
Director of BWX Technologies, Inc.; Director of Tesoro Logistics GP, LLC; Director of FRG Development Company
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David Lilley
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Chairman of the Compensation Committee of Tesoro Corporation; Former Chairman, President and Chief Executive Officer of Cytec Industries Inc.; Director of Rockwell Collins, Inc. and Public Service Enterprise Group Incorporated
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Mary Pat McCarthy
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Former Vice Chairman, KPMG LLP; Director of Mutual of Omaha
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J.W. Nokes
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Chairman of the Environmental, Health, Safety and Security Committee of Tesoro Corporation; Retired Executive Vice President for ConocoPhillips; Director of Post Oak Bank, N.A. (Houston, Texas); Non-Executive Chairman of Albemarle Corporation
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Susan Tomasky
|
Lead Director and Chairman of the Governance Committee of Tesoro Corporation; Former President of AEP Transmission, a division of American Electric Power Company, Inc.; Director of Public Service Enterprise Group Incorporated and Summit Midstream Partners GP, LLC
|
Michael E. Wiley
|
Retired Chairman, President and Chief Executive Officer of Baker Hughes, Inc.; Director of Bill Barrett Corporation; Director of Tesoro Logistics GP, LLC; Director of Post Oak Bank, N.A. (Houston, Texas)
|
Patrick Y. Yang
|
Former Head of Global Technical Operations for F. Hoffmann-La Roche Ltd.; Director of Codexis, Inc., Pharma Essentia Corporation and Amyris, Inc.
|
•
|
production and availability of foreign and domestic crude oil and refined products;
|
•
|
production controls set and maintained by the members of the Organization of the Petroleum Exporting Countries (“OPEC”);
|
•
|
transportation infrastructure availability, local market conditions, operation levels of other refineries in our markets, and the import or export of crude and refined products;
|
•
|
political instability, threatened or actual terrorist incidents, acts of war, and other global political conditions;
|
•
|
domestic and foreign governmental regulations and taxes;
|
•
|
weather conditions, hurricanes or other natural disasters;
|
•
|
the price, availability and efficiency of competing energy sources; and
|
•
|
local, regional, national and worldwide economic conditions.
|
•
|
In California, Assembly Bill 32 requires the state to reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020. Two regulations implemented to achieve this goal are Cap-and-Trade and the Low Carbon Fuel Standard (LCFS). In 2012, the California Air Resource Board implemented Cap-and-Trade. This program currently places a cap on GHGs and we are required to acquire a sufficient number of credits to cover emissions from our refineries and our in-state sales of gasoline, diesel, and some LPGs. In 2009, CARB adopted the LCFS, which requires a 10% reduction in the carbon intensity of gasoline and diesel by 2020. Compliance is demonstrated by blending lower carbon intensity biofuels into gasoline and diesel or by purchasing credits. Compliance with each of these programs is demonstrated through a market-based credit system. If we are unable to pass the costs of compliance on to our customers, sufficient credits are unavailable for purchase, we have to pay a significantly higher price for credits, or if we are otherwise unable to meet our compliance obligation, our financial condition and results of operations could be adversely affected.
|
•
|
In California, the Board for the South Coast Air Quality Management District (“SCAQMD”) passed amendments to the Regional Clean Air Incentives Market (“RECLAIM”) on December 4, 2015. The RECLAIM Amendments become effective in 2016 and require a staged reduction of NOx through 2022.
|
•
|
The EPA adopted a new rule in 2015 requiring further reductions in the National Ambient Air Quality Standard (“NAAQS”) for ozone.
|
•
|
increasing our vulnerability to changing economic, regulatory and industry conditions;
|
•
|
limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry;
|
•
|
limiting our ability to pay dividends to our stockholders;
|
•
|
limiting our ability to borrow additional funds; and
|
•
|
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for working capital, capital expenditures, acquisitions and other purposes.
|
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
||||||||||||
Tesoro
|
$
|
100
|
|
|
$
|
126.00
|
|
|
$
|
239.18
|
|
|
$
|
323.02
|
|
|
$
|
417.97
|
|
|
$
|
603.96
|
|
S&P 500
|
100
|
|
|
102.11
|
|
|
118.45
|
|
|
156.82
|
|
|
178.28
|
|
|
180.75
|
|
||||||
Peer Group
|
100
|
|
|
93.51
|
|
|
170.59
|
|
|
252.57
|
|
|
241.79
|
|
|
301.37
|
|
(a)
|
Assumes that the value of the investments in common stock and each index was
$100
on
December 31, 2010
, and that all dividends were reinvested. Investment is weighted on the basis of market capitalization.
|
|
Sales Prices per Common Share
|
|
Dividends per Common Share
|
||||||||
Quarter Ended
|
High
|
|
Low
|
|
|||||||
December 31, 2015
|
$
|
119.67
|
|
|
$
|
95.37
|
|
|
$
|
0.50
|
|
September 30, 2015
|
110.74
|
|
|
83.75
|
|
|
0.50
|
|
|||
June 30, 2015
|
93.14
|
|
|
81.77
|
|
|
0.425
|
|
|||
March 31, 2015
|
94.83
|
|
|
64.16
|
|
|
0.425
|
|
|||
December 31, 2014
|
79.49
|
|
|
55.59
|
|
|
0.30
|
|
|||
September 30, 2014
|
67.07
|
|
|
57.11
|
|
|
0.30
|
|
|||
June 30, 2014
|
62.89
|
|
|
47.03
|
|
|
0.25
|
|
|||
March 31, 2014
|
59.07
|
|
|
46.40
|
|
|
0.25
|
|
Period
|
Total Number of Shares Purchased (a)
|
|
Average Price Paid
per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
|
||||||
October 2015
|
482,598
|
|
|
$
|
102.60
|
|
|
482,598
|
|
|
$
|
1,456
|
|
November 2015
|
414,893
|
|
|
$
|
114.06
|
|
|
414,469
|
|
|
$
|
1,409
|
|
December 2015
|
500,628
|
|
|
$
|
106.53
|
|
|
499,697
|
|
|
$
|
1,356
|
|
Total
|
1,398,119
|
|
|
|
|
1,396,764
|
|
|
|
(a)
|
Includes
1,355
shares acquired from employees during the fourth quarter of
2015
to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to them.
|
(b)
|
Our Board of Directors authorized a $1.0 billion share repurchase program in July 2014. Under the program, management is permitted to purchase Tesoro common stock at its discretion in the open market. On October 28, 2015, our Board authorized a new $1.0 billion share repurchase program to become effective upon the full completion of our current $1.0 billion share repurchase authorization. The authorization has no time limit and may be suspended or discontinued at any time.
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(In millions except per share amounts)
|
||||||||||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Revenues
|
$
|
28,711
|
|
|
$
|
40,633
|
|
|
$
|
37,601
|
|
|
$
|
29,809
|
|
|
$
|
27,182
|
|
Net Earnings from Continuing Operations
|
$
|
1,694
|
|
|
$
|
917
|
|
|
$
|
434
|
|
|
$
|
903
|
|
|
$
|
593
|
|
Less Net Earnings Attributable to Noncontrolling Interest
|
150
|
|
|
45
|
|
|
42
|
|
|
27
|
|
|
17
|
|
|||||
Net Earnings from Continuing Operations Attributable
to Tesoro Corporation
|
$
|
1,544
|
|
|
$
|
872
|
|
|
$
|
392
|
|
|
$
|
876
|
|
|
$
|
576
|
|
Net Earnings from Continuing Operations per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
12.53
|
|
|
$
|
6.79
|
|
|
$
|
2.90
|
|
|
$
|
6.28
|
|
|
$
|
4.07
|
|
Diluted
|
$
|
12.39
|
|
|
$
|
6.67
|
|
|
$
|
2.85
|
|
|
$
|
6.20
|
|
|
$
|
4.02
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
123.2
|
|
|
128.5
|
|
|
135.0
|
|
|
139.4
|
|
|
141.4
|
|
|||||
Diluted
|
124.6
|
|
|
130.8
|
|
|
137.3
|
|
|
141.5
|
|
|
143.3
|
|
|||||
Dividends per Share
|
$
|
1.85
|
|
|
$
|
1.10
|
|
|
$
|
0.90
|
|
|
$
|
0.27
|
|
|
$
|
—
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
$
|
4,307
|
|
|
$
|
5,074
|
|
|
$
|
5,262
|
|
|
$
|
4,522
|
|
|
$
|
4,120
|
|
Total Assets
|
16,332
|
|
|
16,491
|
|
|
13,179
|
|
|
10,538
|
|
|
9,835
|
|
|||||
Current Liabilities
|
2,530
|
|
|
3,430
|
|
|
3,408
|
|
|
2,881
|
|
|
3,249
|
|
|||||
Total Debt, Net of Unamortized Issuance Costs
|
4,073
|
|
|
4,167
|
|
|
2,756
|
|
|
1,538
|
|
|
1,662
|
|
|||||
Total Equity
|
7,740
|
|
|
6,976
|
|
|
5,485
|
|
|
4,737
|
|
|
3,978
|
|
|||||
Total Debt to Capitalization
|
34
|
%
|
|
37
|
%
|
|
33
|
%
|
|
25
|
%
|
|
29
|
%
|
|||||
Total Debt to Capitalization Ratio excluding TLLP
|
19
|
%
|
|
27
|
%
|
|
27
|
%
|
|
22
|
%
|
|
31
|
%
|
|||||
Tesoro Stockholders’ Equity
|
$
|
5,213
|
|
|
$
|
4,454
|
|
|
$
|
4,302
|
|
|
$
|
4,251
|
|
|
$
|
3,668
|
|
Common Stock Shares Outstanding
|
119.3
|
|
|
124.9
|
|
|
131.8
|
|
|
138.2
|
|
|
140.0
|
|
|||||
Tesoro Stockholders’ Equity per Outstanding Share
|
$
|
43.70
|
|
|
$
|
35.66
|
|
|
$
|
32.64
|
|
|
$
|
30.76
|
|
|
$
|
26.20
|
|
Capital Expenditures
|
$
|
1,006
|
|
|
$
|
779
|
|
|
$
|
558
|
|
|
$
|
542
|
|
|
$
|
304
|
|
•
|
Operational Efficiency and Effectiveness - continuously improving safety, compliance, reliability, system improvements and cost leadership;
|
•
|
Value Chain Optimization - enhancing margin capture through our supply and trading activities, optimization of our integrated businesses and customer focus;
|
•
|
Financial Discipline - maintaining a strong financial position by exercising capital discipline and focusing on a balanced use of free cash flow;
|
•
|
Value-Driven Growth - extending our capabilities and growing earnings through growth in our logistics and marketing businesses and other strategic opportunities accretive to shareholder value; and
|
•
|
High Performing Culture - fostering a performance-based culture that is committed to building leadership at all levels of the organization and across our value chain with employees from diverse backgrounds and experiences who are accountable for delivering on our commitments.
|
|
Operational
Efficiency &
Effectiveness
|
Value Chain Optimization
|
Financial
Discipline
|
Value
Driven
Growth
|
High Performing Culture
|
Operated our Los Angeles and Anacortes refineries safely during a work stoppage in February and March 2015.
|
•
|
•
|
|
|
•
|
Completed a safe restart of the Martinez refinery in late March 2015.
|
•
|
|
|
|
•
|
Completed the second phase of the Salt Lake City Refinery Expansion Project.
|
|
•
|
|
•
|
•
|
TLLP completed the integration of the Rockies Natural Gas Business assets delivering strong business results and synergies above original expectations.
|
|
|
|
•
|
•
|
Purchased 6.9 million shares of our common stock and paid $0.50 and $0.425 per share dividends in the last half and first half of 2015, respectively.
|
|
|
•
|
|
|
Continued upgrades to our crude oil rail car fleet by adding enhanced tank cars that exceed new safe transport standards issued by the Department of Transportation.
|
•
|
|
|
|
•
|
Modified Anacortes refinery crude tower allowing increased throughput totaling 125 Mbpd.
|
•
|
•
|
|
•
|
•
|
Processed over 2 million barrels of additional crude oil at the Los Angeles refinery during a hydrocracker turnaround, exhibiting the synergy and integration efforts.
|
•
|
•
|
|
•
|
•
|
Added pipeline interconnects at the Los Angeles refinery, enabling further movements between assets and reduced dependence on third-party systems.
|
•
|
•
|
|
|
|
Expanded our marketing operations through acquisition of ARCO
®
retail stations in Southern California and execution of a strategic marketing agreement with high volume retail stations in Las Vegas, Nevada.
|
|
•
|
|
•
|
|
Repaid $398 million Term Loan Facility eliminating secured debt. Received positive outlook ratings for both Tesoro and TLLP.
|
|
|
•
|
|
|
TLLP completed its acquisition of the LA Storage and Handling Assets from Tesoro for total consideration of $500 million.
|
|
|
•
|
•
|
|
TLLP successfully placed the Connolly Gathering System project in service on time and below budget at a total cost of $148 million. The project increased crude oil gathering capacity by 60 Mbpd.
|
|
|
•
|
•
|
|
•
|
Benefited from Los Angeles improvements including:
|
◦
|
Crude optimizations from sourcing new crudes;
|
◦
|
Crude blending capabilities at the Carson crude terminal that resulted in higher throughput volumes;
|
◦
|
New cargo sharing with our Martinez refinery;
|
◦
|
Improved pipeline connectivity between the Los Angeles refinery sites; and
|
◦
|
West Coast integration of naphtha and gasoline blendstocks.
|
•
|
Re-distributed in-bound crude oil to our Kenai refinery during maintenance and turnaround activities at our Anacortes refinery to optimize our west coast system; and
|
•
|
Completed the second phase of the Salt Lake City Refinery Expansion project.
|
•
|
Focusing on stable, fee-based business;
|
•
|
Optimizing our existing asset base;
|
•
|
Pursuing organic expansion opportunities; and
|
•
|
Continued growth through strategic acquisitions.
|
•
|
expanded its assets on its gathering and transportation system, located in the Bakken Region (the “High Plains System”) in support of growing third-party demand for transportation services and Tesoro’s demand for Bakken crude oil in the mid-continent and west coast refining systems, including:
|
◦
|
further expanded capacity and capability of its common carrier pipeline in North Dakota and Montana;
|
◦
|
expanded its gathering footprint in the Bakken region, including crude oil, natural gas and water, to enhance and improve overall basin logistic efficiencies;
|
◦
|
added other origin and destination points on the High Plains System to increase volumes; and
|
◦
|
improved utilization of its proprietary truck fleet, which should generate cost and operating efficiencies.
|
•
|
increased its terminalling volumes by expanding capacity and growing its third-party services at certain of its terminals;
|
•
|
optimized Tesoro volumes and grow third-party volumes using its terminalling and transportation assets;
|
•
|
completed the integration, expanded and optimized its natural gas gathering and processing assets;
|
•
|
completed the Connolly Gathering System major growth project, which has a capacity of approximately 60 Mbpd; and
|
•
|
closed the acquisition of crude oil and refined product storage and pipeline assets in Los Angeles, California (the "LA Storage and Handling Assets") owned by subsidiaries of Tesoro, for a total consideration of $500 million. TLLP acquired a crude oil, feedstock and refined product storage tank facility with combined capacity of 6.6 million barrels and a 50% interest in a 16-mile pipeline that transports jet fuel from Tesoro's Los Angeles refinery to the Los Angeles International Airport.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash distributions received from TLLP (a):
|
|
|
|
|
|
||||||
For common/subordinated units held
|
$
|
80
|
|
|
$
|
52
|
|
|
$
|
35
|
|
For general partner units held
|
68
|
|
|
35
|
|
|
9
|
|
|||
Total Cash Distributions Received from TLLP
|
$
|
148
|
|
|
$
|
87
|
|
|
$
|
44
|
|
(a)
|
Represents distributions received from TLLP during the years ended
December 31, 2015
,
2014
and
2013
on common or subordinated units and general partner units held by Tesoro including incentive distribution rights.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions except per share amounts)
|
||||||||||
Revenues
|
$
|
28,711
|
|
|
$
|
40,633
|
|
|
$
|
37,601
|
|
Cost and Expenses:
|
|
|
|
|
|
||||||
Cost of sales (excluding the lower of cost or market inventory
valuation adjustment)
|
22,149
|
|
|
35,631
|
|
|
34,085
|
|
|||
Lower of cost or market inventory valuation adjustment
|
317
|
|
|
42
|
|
|
—
|
|
|||
Operating expenses
|
2,278
|
|
|
2,420
|
|
|
1,911
|
|
|||
Selling, general and administrative expenses
|
342
|
|
|
342
|
|
|
337
|
|
|||
Depreciation and amortization expense
|
756
|
|
|
562
|
|
|
489
|
|
|||
Loss on asset disposals and impairments
|
42
|
|
|
4
|
|
|
24
|
|
|||
Operating Income
|
2,827
|
|
|
1,632
|
|
|
755
|
|
|||
Interest and financing costs, net
|
(217
|
)
|
|
(235
|
)
|
|
(149
|
)
|
|||
Equity in earnings of equity method investments
|
7
|
|
|
10
|
|
|
11
|
|
|||
Other income, net
|
13
|
|
|
57
|
|
|
63
|
|
|||
Earnings Before Income Taxes
|
2,630
|
|
|
1,464
|
|
|
680
|
|
|||
Income tax expense
|
936
|
|
|
547
|
|
|
246
|
|
|||
Net Earnings from Continuing Operations
|
1,694
|
|
|
917
|
|
|
434
|
|
|||
Earnings (loss) from discontinued operations, net of tax
|
(4
|
)
|
|
(29
|
)
|
|
20
|
|
|||
Net Earnings
|
1,690
|
|
|
888
|
|
|
454
|
|
|||
Less: Net earnings from continuing operations attributable to
noncontrolling interest
|
150
|
|
|
45
|
|
|
42
|
|
|||
Net Earnings Attributable to Tesoro Corporation
|
$
|
1,540
|
|
|
$
|
843
|
|
|
$
|
412
|
|
|
|
|
|
|
|
||||||
Net Earnings (Loss) Attributable to Tesoro Corporation
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1,544
|
|
|
$
|
872
|
|
|
$
|
392
|
|
Discontinued operations
|
(4
|
)
|
|
(29
|
)
|
|
20
|
|
|||
Total
|
$
|
1,540
|
|
|
$
|
843
|
|
|
$
|
412
|
|
|
|
|
|
|
|
||||||
Net Earnings (Loss) Per Share - Basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
12.53
|
|
|
$
|
6.79
|
|
|
$
|
2.90
|
|
Discontinued operations
|
(0.03
|
)
|
|
(0.23
|
)
|
|
0.15
|
|
|||
Total
|
$
|
12.50
|
|
|
$
|
6.56
|
|
|
$
|
3.05
|
|
Weighted average common shares outstanding - Basic
|
123.2
|
|
|
128.5
|
|
|
135.0
|
|
|||
|
|
|
|
|
|
||||||
Net Earnings (Loss) Per Share - Diluted:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
12.39
|
|
|
$
|
6.67
|
|
|
$
|
2.85
|
|
Discontinued operations
|
(0.03
|
)
|
|
(0.23
|
)
|
|
0.15
|
|
|||
Total
|
$
|
12.36
|
|
|
$
|
6.44
|
|
|
$
|
3.00
|
|
Weighted average common shares outstanding - Diluted
|
124.6
|
|
|
130.8
|
|
|
137.3
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
|
(In millions)
|
||||||||||
Net earnings
|
$
|
1,690
|
|
|
$
|
888
|
|
|
$
|
454
|
|
Loss (earnings) from discontinued operations, net of tax
|
4
|
|
|
29
|
|
|
(20
|
)
|
|||
Depreciation and amortization expense
|
756
|
|
|
562
|
|
|
489
|
|
|||
Interest and financing costs, net
|
217
|
|
|
235
|
|
|
149
|
|
|||
Income tax expense
|
936
|
|
|
547
|
|
|
246
|
|
|||
EBITDA (a)
|
$
|
3,603
|
|
|
$
|
2,261
|
|
|
$
|
1,318
|
|
Special items (b)
|
321
|
|
|
29
|
|
|
(3
|
)
|
|||
Adjusted EBITDA (a)
|
$
|
3,924
|
|
|
$
|
2,290
|
|
|
$
|
1,315
|
|
|
|
|
|
|
|
||||||
Reconciliation of Cash Flows from Operating Activities to EBITDA and
Adjusted EBITDA
|
|
|
|
|
|
||||||
Net cash from operating activities
|
$
|
2,131
|
|
|
$
|
1,364
|
|
|
$
|
859
|
|
Net cash used in (from) discontinued operations
|
5
|
|
|
3
|
|
|
(71
|
)
|
|||
Debt redemption charges
|
(1
|
)
|
|
(41
|
)
|
|
—
|
|
|||
Turnaround and branding charges
|
342
|
|
|
256
|
|
|
451
|
|
|||
Changes in current assets and current liabilities
|
164
|
|
|
186
|
|
|
(55
|
)
|
|||
Income tax expense
|
936
|
|
|
547
|
|
|
246
|
|
|||
Stock-based compensation expense
|
(75
|
)
|
|
(55
|
)
|
|
(79
|
)
|
|||
Interest and financing costs, net
|
217
|
|
|
235
|
|
|
149
|
|
|||
Deferred income tax expense
|
(65
|
)
|
|
(246
|
)
|
|
(166
|
)
|
|||
Loss on asset disposals and impairments
|
(42
|
)
|
|
(4
|
)
|
|
(24
|
)
|
|||
Other
|
(9
|
)
|
|
16
|
|
|
8
|
|
|||
EBITDA (a)
|
$
|
3,603
|
|
|
$
|
2,261
|
|
|
$
|
1,318
|
|
Special items (b)
|
321
|
|
|
29
|
|
|
(3
|
)
|
|||
Adjusted EBITDA (a)
|
$
|
3,924
|
|
|
$
|
2,290
|
|
|
$
|
1,315
|
|
(a)
|
For a definition of EBITDA and adjusted EBITDA, see discussion above.
|
(b)
|
Special items included in EBITDA but excluded for presentation of adjusted EBITDA consist of the following (in millions):
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Transaction and integration costs (c)
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
62
|
|
Lower of cost or market inventory adjustment (d)
|
317
|
|
|
42
|
|
|
—
|
|
|||
Throughput deficiency receivable (e)
|
13
|
|
|
10
|
|
|
—
|
|
|||
Legal settlements, net (f)
|
—
|
|
|
(44
|
)
|
|
(70
|
)
|
|||
Insurance settlement gain (g)
|
(11
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of Boise Terminal (h)
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Inspection and maintenance expenses associated with the Northwest Products System (i)
|
—
|
|
|
7
|
|
|
5
|
|
|||
Total Special Items Included in EBITDA
|
$
|
321
|
|
|
$
|
29
|
|
|
$
|
(3
|
)
|
(c)
|
Transaction and integration costs for the years ended
December 31, 2015
and
2014
primarily related to TLLP’s Rockies Natural Gas Business acquisition of
$1 million
and
$19 million
, respectively, and
$62 million
related to the assets we acquired on June 1, 2013 from BP West Coast Products, LLC and other affiliated sellers (the “Los Angeles Acquisition”) and TLLP acquisition of Chevron’s Northwest Products System (the “Northwest Products System”) for the year ended December 31,
2013
.
|
(d)
|
We recorded charges of
$359 million
and
$42 million
for lower of cost or market adjustments related to our inventories at
December 31, 2015
and
2014
, respectively. The year ended
December 31, 2015
also includes a benefit of
$42 million
for the reversal of the lower of cost or market inventory adjustment made in 2014.
|
(e)
|
During the years ended
December 31, 2015
and
2014
, TLLP invoiced QEPFS customers for deficiency payments. TLLP did not recognize
$13 million
and
$10 million
of revenue related to the billing period for the years ended
December 31, 2015
and
2014
, respectively, as it represented opening balance sheet assets for the acquisition of the Rockies Natural Gas Business; however, TLLP is entitled to cash receipt from such billings.
|
(f)
|
Includes a refund and settlement from a crude pipeline network rate case settlement of $59 million for the year ended
December 31, 2014
, partially offset by accruals of $15 million for the resolution of certain legal matters. A
$16 million
benefit related to the release of a legal reserve as a result of a favorable litigation settlement and
$54 million
in refunds from the settlement of a rate proceeding from the California Public Utilities Commission are included for the year ended December 31, 2013.
|
(g)
|
During the year ended
December 31, 2015
, we recorded a gain of
$11 million
as other income for insurance proceeds related to the settlement of claims associated with the Washington Refinery Fire.
|
(h)
|
Includes a gain of
$5 million
for the year ended
December 31, 2014
, resulting from TLLP’s sale of its Boise terminal.
|
(i)
|
Includes costs for detailed inspection and maintenance program on the Northwest Products System pipeline for the years ended
December 31, 2014
and
2013
. The purchase price of the Northwest Products System was reduced to compensate TLLP for assuming responsibilities to perform this work.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Refined Product Sales
(Mbpd) (a)
|
|
|
|
|
|
||||||
Gasoline and gasoline blendstocks
|
510
|
|
|
507
|
|
|
429
|
|
|||
Diesel fuel
|
204
|
|
|
206
|
|
|
176
|
|
|||
Jet fuel
|
152
|
|
|
149
|
|
|
117
|
|
|||
Heavy fuel oils, residual products and other
|
92
|
|
|
87
|
|
|
86
|
|
|||
Total Refined Product Sales
|
958
|
|
|
949
|
|
|
808
|
|
|||
|
|
|
|
|
|
||||||
Refined Product Sales Margin
($/barrel) (b)
|
|
|
|
|
|
||||||
Average sales price
|
$
|
77.70
|
|
|
$
|
112.17
|
|
|
$
|
118.40
|
|
Average costs of sales
|
65.07
|
|
|
102.59
|
|
|
109.64
|
|
|||
Refined Product Sales Margin
|
$
|
12.63
|
|
|
$
|
9.58
|
|
|
$
|
8.76
|
|
(a)
|
Sources of total refined product sales include refined products manufactured at our refineries and refined products purchased from third parties. Total refined product sales margins include margins on sales of manufactured and purchased refined products.
|
(b)
|
Average refined product sales price include all sales through our marketing segment as well as in bulk markets and exports through our refining segment. Average costs of sales and related sales margins include amounts recognized for the sale of refined products manufactured at our refineries along with the sale of refined products purchased from third parties to help fulfill supply commitments.
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Crack Spreads
|
|
|
|
|
|
||||||
West Coast 321 (ANS) ($/barrel)
|
$
|
25.33
|
|
|
$
|
16.25
|
|
|
$
|
16.30
|
|
Mid-Continent 321 (WTI) ($/barrel)
|
18.09
|
|
|
16.41
|
|
|
20.65
|
|
|||
Crude Oil Differentials
|
|
|
|
|
|
||||||
Brent to WTI
|
$
|
4.85
|
|
|
$
|
6.54
|
|
|
$
|
10.79
|
|
Brent to ANS
|
1.21
|
|
|
2.09
|
|
|
1.08
|
|
|||
WTI to Bakken (Clearbrook)
|
2.29
|
|
|
5.95
|
|
|
4.89
|
|
|||
ANS to Bakken (Clearbrook)
|
5.93
|
|
|
10.40
|
|
|
14.61
|
|
|||
ANS to San Joaquin Valley Heavy (CA)
|
8.09
|
|
|
7.54
|
|
|
6.93
|
|
|||
ANS to Canadian Lt. Sweet
|
5.91
|
|
|
11.77
|
|
|
17.97
|
|
•
|
Gross refining margin per barrel is calculated by dividing gross refining margin (revenues less costs of feedstocks, purchased refined products, transportation and distribution) by total refining throughput;
|
•
|
Manufacturing costs before depreciation and amortization expense (“Manufacturing Costs”) per barrel is calculated by dividing Manufacturing Costs by total refining throughput:
|
•
|
We calculate refined product sales margin per barrel by dividing refined product sales margin by total refined product sales (in barrels); and
|
•
|
Refined product sales margin represents refined product sales less refined product cost of sales.
|
|
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Throughput
(Mbpd)
|
|
|
|
|
|
|||
Heavy crude
|
151
|
|
|
155
|
|
|
185
|
|
Light crude
|
580
|
|
|
613
|
|
|
459
|
|
Other feedstocks
|
56
|
|
|
57
|
|
|
53
|
|
Total Throughput
|
787
|
|
|
825
|
|
|
697
|
|
|
|
|
|
|
|
|||
Yield
(Mbpd)
|
|
|
|
|
|
|||
Gasoline and gasoline blendstocks
|
409
|
|
|
429
|
|
|
350
|
|
Diesel fuel
|
169
|
|
|
191
|
|
|
158
|
|
Jet fuel
|
119
|
|
|
127
|
|
|
100
|
|
Heavy fuel oils, residual products, internally produced fuel and other
|
139
|
|
|
132
|
|
|
132
|
|
Total Yield
|
836
|
|
|
879
|
|
|
740
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(Dollars in millions except per
barrel amounts)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Refined products (a)
|
$
|
25,997
|
|
|
$
|
37,970
|
|
|
$
|
34,846
|
|
Crude oil resales and other
|
946
|
|
|
1,456
|
|
|
1,969
|
|
|||
Total Revenues
|
$
|
26,943
|
|
|
$
|
39,426
|
|
|
$
|
36,815
|
|
Segment Operating Income
|
|
|
|
|
|
||||||
Gross refining margin (b) (c)
|
$
|
4,342
|
|
|
$
|
3,653
|
|
|
$
|
2,739
|
|
Expenses
|
|
|
|
|
|
||||||
Manufacturing costs
|
1,595
|
|
|
1,692
|
|
|
1,308
|
|
|||
Other operating expenses
|
346
|
|
|
340
|
|
|
243
|
|
|||
Selling, general and administrative expenses
|
8
|
|
|
13
|
|
|
1
|
|
|||
Depreciation and amortization expense
|
512
|
|
|
427
|
|
|
385
|
|
|||
Loss on asset disposals and impairments
|
32
|
|
|
3
|
|
|
16
|
|
|||
Segment Operating Income (c)
|
$
|
1,849
|
|
|
$
|
1,178
|
|
|
$
|
786
|
|
Gross Refining Margin
($/throughput barrel) (d)
|
$
|
16.22
|
|
|
$
|
12.27
|
|
|
$
|
10.76
|
|
Manufacturing Cost Before Depreciation and Amortization
Expense
($/throughput barrel)
|
$
|
5.55
|
|
|
$
|
5.62
|
|
|
$
|
5.14
|
|
(a)
|
Refined product sales include intersegment sales to our marketing segment of
$16.9 billion
,
$22.8 billion
and
$20.1 billion
in
2015
,
2014
and
2013
, respectively.
|
(b)
|
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 included
$2 million
for the year ended
December 31, 2015
, and
$5 million
for both of the years ended
December 31, 2014
and
2013
. Gross refining margin includes the effect of intersegment sales to the marketing segment and services provided by TLLP. Gross refining margin approximates total refining throughput multiplied by the gross refining margin per barrel.
|
(c)
|
Our refining segment uses Renewable Identification Numbers (“RINs”) to satisfy its obligations under the Renewable Fuels Standard, in addition to physically blending required biofuels. At the end of 2014, given the price of RINs had become more transparent in the price of biofuels, we determined our intersegment pricing methodology should include the market value of RINs as a reduction to the price our marketing segment pays to our refining segment. We made this change effective January 1, 2015. We have not adjusted financial information presented for our refining and marketing segments for the years ended
December 31, 2014
and
2013
. Had we made this change effective January 1, 2013, operating income in our refining segment would have been reduced by
$125 million
and
$116 million
with a corresponding increase to operating income in our marketing segment for the years ended
December 31, 2014
and
2013
, respectively.
|
(d)
|
We recorded charges of
$359 million
and
$42 million
for lower of cost or market adjustments to our inventories at
December 31, 2015
and
2014
, respectively. The year ended
December 31, 2015
also includes a benefit of
$42 million
for the reversal of the lower of cost or market inventory adjustment made in 2014. The gross refining margin per throughput barrel does not include these charges in the computation of the rate at a consolidated and regional level.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(Dollars in millions except per barrel amounts)
|
||||||||||
Refining Data by Region
|
|
|
|
|
|
||||||
California (Martinez and Los Angeles) (a)
|
|
|
|
|
|
||||||
Refining throughput (Mbpd)
|
493
|
|
|
523
|
|
|
422
|
|
|||
Gross refining margin
|
$
|
2,928
|
|
|
$
|
2,007
|
|
|
$
|
1,289
|
|
Gross refining margin ($/throughput barrel) (b)
|
$
|
17.44
|
|
|
$
|
10.67
|
|
|
$
|
8.38
|
|
Manufacturing cost before depreciation and amortization
expense ($/throughput barrel)
|
$
|
6.37
|
|
|
$
|
6.43
|
|
|
$
|
5.86
|
|
Pacific Northwest (Washington and Alaska)
|
|
|
|
|
|
||||||
Refining throughput (Mbpd)
|
170
|
|
|
171
|
|
|
156
|
|
|||
Gross refining margin
|
$
|
681
|
|
|
$
|
584
|
|
|
$
|
541
|
|
Gross refining margin ($/throughput barrel) (b)
|
$
|
12.17
|
|
|
$
|
9.49
|
|
|
$
|
9.49
|
|
Manufacturing cost before depreciation and amortization
expense ($/throughput barrel)
|
$
|
4.14
|
|
|
$
|
4.37
|
|
|
$
|
4.17
|
|
Mid-Continent (North Dakota and Utah)
|
|
|
|
|
|
||||||
Refining throughput (Mbpd)
|
124
|
|
|
131
|
|
|
119
|
|
|||
Gross refining margin
|
$
|
731
|
|
|
$
|
1,057
|
|
|
$
|
904
|
|
Gross refining margin ($/throughput barrel) (b)
|
$
|
16.88
|
|
|
$
|
22.14
|
|
|
$
|
20.72
|
|
Manufacturing cost before depreciation and amortization
expense ($/throughput barrel)
|
$
|
4.26
|
|
|
$
|
4.00
|
|
|
$
|
3.86
|
|
(a)
|
We acquired the Carson refinery and related assets on June 1, 2013. The information presented includes the results of operations of these assets from the date of acquisition on June 1, 2013. We continue to integrate the operations of our Wilmington and Carson facilities and refer to the combined facility as the Los Angeles refinery.
|
(b)
|
We recorded charges of
$359 million
and
$42 million
for lower of cost or market adjustments to our inventories at
December 31, 2015
and
2014
, respectively. The year ended
December 31, 2015
also includes a benefit of
$42 million
for the reversal of the lower of cost or market inventory adjustment made in 2014. On a regional basis, gross refining margin reflects charges of
$207 million
,
$76 million
and
$34 million
for California, Pacific Northwest and Mid-Continent, respectively, for the year ended
December 31, 2015
. For the year ended December 31, 2014, the charges were $30 million, $8 million and $4 million for California, Pacific Northwest and Mid-Continent, respectively. The gross refining margin per throughput barrel on a consolidated and regional basis does not include these charges.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Gathering
|
|
|
|
|
|
||||||
Crude oil gathering pipeline throughput (Mbpd)
|
188
|
|
|
123
|
|
|
86
|
|
|||
Average crude oil gathering pipeline revenue per barrel
|
$
|
1.79
|
|
|
$
|
1.46
|
|
|
$
|
1.27
|
|
Crude oil gathering trucking volume (Mbpd)
|
38
|
|
|
49
|
|
|
44
|
|
|||
Average crude oil gathering trucking revenue per barrel
|
$
|
3.25
|
|
|
$
|
3.23
|
|
|
$
|
3.10
|
|
Gas gathering volume (thousands of MMBtu/day) (a)
|
1,077
|
|
|
1,046
|
|
|
—
|
|
|||
Average gas gathering revenue per MMBtu
|
$
|
0.43
|
|
|
$
|
0.41
|
|
|
$
|
—
|
|
Processing (a)
|
|
|
|
|
|
||||||
NGL processing throughput (Mbpd) (a)
|
8
|
|
|
7
|
|
|
—
|
|
|||
Average keep-whole fee per barrel of NGL
|
$
|
34.46
|
|
|
$
|
35.51
|
|
|
$
|
—
|
|
Natural gas processing volumes (thousands of MMBtu/day) (a)
|
743
|
|
|
693
|
|
|
—
|
|
|||
Average fee-based processing revenue per MMBtu
|
$
|
0.39
|
|
|
$
|
0.30
|
|
|
$
|
—
|
|
Terminalling and Transportation (b)
|
|
|
|
|
|
||||||
Terminalling throughput (Mbpd)
|
935
|
|
|
917
|
|
|
739
|
|
|||
Average terminalling revenue per barrel
|
$
|
1.11
|
|
|
$
|
1.00
|
|
|
$
|
0.69
|
|
Pipeline transportation throughput (Mbpd)
|
825
|
|
|
822
|
|
|
205
|
|
|||
Average pipeline transportation revenue per barrel (c)
|
$
|
0.39
|
|
|
$
|
0.36
|
|
|
$
|
0.52
|
|
(a)
|
TLLP commenced natural gas gathering and processing operations with the acquisition of the Rockies Natural Gas Business on December 2, 2014. Per day calculations only reflect the period of 2014 that TLLP owned the Rockies Natural Gas Business.
|
(b)
|
Includes historical results of TLLP’s Predecessors for the years ended December 31,
2014
and
2013
. See additional information regarding TLLP’s Predecessors under “Items Impacting Comparability”.
|
(c)
|
We did not separately report transportation volumes on the pipeline assets located in southern California that TLLP acquired from one of our subsidiaries; therefore, the
2013
pipeline volumes have not been adjusted to include the activity from the date we acquired the assets on June 1, 2013 through December 31,
2013
.
|
|
Years Ended December 31,
|
||||||||||
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
||||||
|
(Dollars in millions)
|
||||||||||
Segment Operating Income
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gathering (b)
|
$
|
339
|
|
|
$
|
135
|
|
|
$
|
90
|
|
Processing (b)
|
278
|
|
|
23
|
|
|
—
|
|
|||
Terminalling and transportation
|
495
|
|
|
442
|
|
|
223
|
|
|||
Total Revenues (c)
|
1,112
|
|
|
600
|
|
|
313
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Operating expenses (d)
|
411
|
|
|
265
|
|
|
172
|
|
|||
General and administrative expenses (e)
|
102
|
|
|
74
|
|
|
32
|
|
|||
Depreciation and amortization expense
|
179
|
|
|
78
|
|
|
46
|
|
|||
(Gain) loss on asset disposals and impairments
|
1
|
|
|
(4
|
)
|
|
—
|
|
|||
Segment Operating Income
|
$
|
419
|
|
|
$
|
187
|
|
|
$
|
63
|
|
(a)
|
Includes historical results of TLLP’s Predecessors for the years ended
December 31, 2015
,
2014
and
2013
. See additional information regarding TLLP’s Predecessors under “Items Impacting Comparability”.
|
(b)
|
TLLP commenced natural gas gathering and processing operations with the acquisition of the Rockies Natural Gas Business on December 2, 2014.
|
(c)
|
TLLP segment revenues from services provided to our refining segment were
$615 million
,
$497 million
and
$273 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively. These amounts are eliminated upon consolidation.
|
(d)
|
TLLP segment operating expenses include amounts billed by Tesoro for services provided to TLLP under various operational contracts. Amounts billed by Tesoro totaled
$76 million
,
$52 million
and
$69 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively. Operating expenses also include imbalance gains and reimbursements of
$42 million
,
$43 million
and
$12 million
in the years ended
December 31, 2015
,
2014
and
2013
, respectively. These amounts are eliminated upon consolidation. TLLP segment third-party operating expenses related to the transportation of crude oil and refined products are reclassified to cost of sales in our statements of consolidated operations upon consolidation.
|
(e)
|
TLLP segment general and administrative expenses include amounts charged by Tesoro for general and administrative services provided to TLLP under various operational and administrative contracts. These amounts totaled
$71 million
,
$39 million
and
$20 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively. These amounts are eliminated upon consolidation. TLLP segment third-party general and administrative expenses are reclassified to cost of sales in our statements of consolidated operations upon consolidation.
|
(a)
|
In December 2014, we converted our company-operated retail stations to MSO retail stations. The impact of this change was not material to our marketing segment results.
|
(b)
|
Primarily includes rental income for the year ended
December 31, 2015
and primarily merchandise revenue for the years ended
December 31, 2014
and
2013
.
|
(c)
|
Our refining segment uses RINs to satisfy its obligations under the Renewable Fuels Standard, in addition to physically blending required biofuels. At the end of 2014, given the price of RINs had become more transparent in the price of biofuels, we determined our intersegment pricing methodology should include the market value of RINs as a reduction to the price our marketing segment pays to our refining segment. We made this change effective January 1, 2015. We have not adjusted financial information presented for our refining and marketing segments for the years ended
December 31, 2014
and
2013
. Had we made this change effective January 1, 2013, operating income in our refining segment would have been reduced by
$125 million
and
$116 million
with a corresponding increase to operating income in our marketing segment for the years ended
December 31, 2014
and
2013
, respectively.
|
Debt, including current maturities:
|
December 31, 2015
|
||
Tesoro Corporation Revolving Credit Facility
|
$
|
—
|
|
4.250% Senior Notes due 2017
|
450
|
|
|
5.375% Senior Notes due 2022
|
475
|
|
|
5.125% Senior Notes due 2024
|
300
|
|
|
Capital lease obligations and other
|
39
|
|
|
Tesoro Debt
|
1,264
|
|
|
TLLP Revolving Credit Facility
|
305
|
|
|
TLLP Unsecured Term Loan Facility
|
250
|
|
|
TLLP 5.500% Senior Notes due 2019
|
500
|
|
|
TLLP 5.875% Senior Notes due 2020
|
470
|
|
|
TLLP 6.125% Senior Notes due 2021
|
550
|
|
|
TLLP 6.250% Senior Notes due 2022
|
800
|
|
|
Capital lease obligations and other
|
8
|
|
|
TLLP Debt
|
2,883
|
|
|
Total Debt
|
4,147
|
|
|
Unamortized Issuance Costs (a)
|
(74
|
)
|
|
Debt, Net of Unamortized Issuance Costs
|
4,073
|
|
|
Total Equity
|
7,740
|
|
|
Total Capitalization
|
$
|
11,813
|
|
(a)
|
The unamortized issuance costs for TLLP were
$39 million
, including an unamortized premium of
$4 million
.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
TLLP Unsecured Term Loan Facility ($250 million) (b)
|
|
0.35%
|
|
2.75%
|
|
3.50%
|
|
1.75%
|
(b)
|
TLLP can elect the interest rate to apply to the TLLP Unsecured Term Loan Facility between a base rate plus the base rate margin, or a Eurodollar rate, for the applicable term, plus the Eurodollar margin at the time of borrowing.
|
|
Total
Capacity
|
|
Amount
Borrowed as of December 31, 2015
|
|
Outstanding
Letters of
Credit
|
|
Available
Capacity
|
|
Expiration
|
||||||||
Tesoro Corporation Revolving
Credit Facility (a)
|
$
|
2,626
|
|
|
$
|
—
|
|
|
$
|
90
|
|
|
$
|
2,536
|
|
|
November 18, 2019
|
TLLP Revolving Credit Facility
|
900
|
|
|
305
|
|
|
—
|
|
|
595
|
|
|
December 2, 2019
|
||||
Letter of Credit Facilities
|
1,745
|
|
|
—
|
|
|
196
|
|
|
1,549
|
|
|
|
||||
Total Credit Facilities
|
$
|
5,271
|
|
|
$
|
305
|
|
|
$
|
286
|
|
|
$
|
4,680
|
|
|
|
(a)
|
Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity of
$3.0 billion
.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion) |
Tesoro Corporation Revolving Credit Facility
($2.6 billion) (b) |
|
0.43%
|
|
1.50%
|
|
3.5%
|
|
0.50%
|
|
0.375%
|
TLLP Revolving Credit Facility ($900 million) (c)
|
|
0.43%
|
|
2.50%
|
|
3.5%
|
|
1.50%
|
|
0.50%
|
(b)
|
We can elect the interest rate to apply to the facility between a base rate plus the base rate margin, or a Eurodollar rate, for the applicable term, plus the Eurodollar margin at the time of the borrowing. The applicable margin on the Revolving Credit Facility varies primarily based upon our credit ratings. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate.
|
(c)
|
TLLP has the option to elect if the borrowings will bear interest at either, a base rate plus the base rate margin or a Eurodollar rate, for the applicable period, plus the Eurodollar margin at the time of the borrowing. The applicable margin varies based upon a certain leverage ratio, as defined by the TLLP Revolving Credit Facility. Letters of credit outstanding under the TLLP Revolving Credit Facility incur fees at the Eurodollar margin rate.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash Flows From (Used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
2,131
|
|
|
$
|
1,364
|
|
|
$
|
859
|
|
Investing activities
|
(1,129
|
)
|
|
(3,172
|
)
|
|
(2,577
|
)
|
|||
Financing activities
|
(1,060
|
)
|
|
1,570
|
|
|
1,317
|
|
|||
Decrease in Cash and Cash Equivalents
|
$
|
(58
|
)
|
|
$
|
(238
|
)
|
|
$
|
(401
|
)
|
|
Tesoro (a)
|
|
TLLP
|
||||
Growth
|
$
|
309
|
|
|
$
|
243
|
|
Maintenance
|
179
|
|
|
53
|
|
||
Regulatory
|
222
|
|
|
—
|
|
||
Total 2015 Capital Expenditures
|
$
|
710
|
|
|
$
|
296
|
|
(a)
|
Tesoro capital expenditures exclude TLLP.
|
Major Projects
|
|
Total Project
Capital Expenditures
|
|
Actual 2015
Capital Expenditures
|
||||
Salt Lake City Refinery Expansion (a)
|
|
$
|
405
|
|
|
$
|
82
|
|
TLLP’s Connolly Gathering System (b)
|
|
148
|
|
|
100
|
|
(a)
|
The expansion project at the Salt Lake City refinery improved yields of gasoline and diesel, improved the flexibility of processing crude feedstocks and increased throughput capacity by 4 Mbpd. The expansion project increased potential waxy crude oil processing capabilities up to 26 Mbpd. We completed the work in the second quarter of
2015
.
|
(b)
|
TLLP substantially completed the construction of a pipeline gathering system (the “Connolly Gathering System”) to gather crude oil from various points in Dunn County, North Dakota for delivery at its existing Connolly Station with an expected capacity of approximately 60 Mbpd.
|
Major Projects
|
|
Total Project Expected
Capital Expenditures
|
|
Actual 2015
Capital Expenditures
|
||||
In Process:
|
|
|
|
|
||||
Clean Product Upgrade Project (d)
|
|
$
|
380
|
|
|
$
|
20
|
|
Avon Wharf Project (e)
|
|
180
|
|
|
93
|
|
||
Under Development:
|
|
|
|
|
||||
Los Angeles Refinery Integration Project (f)
|
|
$
|
510
|
|
|
$
|
43
|
|
(d)
|
The Clean Product Upgrade Project at our Anacortes, Washington refinery enables compliance with Tier 3 gasoline sulfur reduction; reduction of gasoline production costs; extraction of existing mixed xylene from gasoline and logistics capability for its export to manufacturers of polyester fibers and films used in clothing, food packaging and beverage containers. The project was approved by our Board in February 2015 with approximately $25 million approved for the first phase of the project. The project remains subject to regulatory approval, which we expect to obtain in 2016.
|
(e)
|
The regulatory and compliance project for the Avon Wharf in Martinez, California is required under the California building code for Marine Oil Terminal Engineering and Maintenance Standards (“MOTEMS”). The project will replace the existing berth with a MOTEMS compliant structure that will improve clean product movements and has received all regulatory approval and permits.
|
(f)
|
The integration project at the Los Angeles refinery is designed to improve the flexibility of gasoline and diesel yields and reduce carbon dioxide emissions. The proposed project, subject to final Board approval, project scoping, engineering and regulatory approval, includes decommissioning the fluid catalytic cracking unit at our Wilmington refinery. Of the total expected capital expenditure related to this project, a portion will be incurred and paid by TLLP.
|
|
2015
|
|
2016 Expected
|
||||
Turnarounds and catalysts
|
$
|
290
|
|
|
$
|
355
|
|
Branding charges
|
59
|
|
|
75
|
|
||
Total expenditures
|
$
|
349
|
|
|
$
|
430
|
|
Significant Turnarounds
|
Los Angeles
|
Martinez
|
Anacortes
|
Kenai
|
Mandan
|
Salt Lake City
|
2015
|
●
|
●
|
●
|
|
|
|
Planned 2016
|
●
|
●
|
|
●
|
●
|
●
|
Contractual Obligation
|
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
Long-term debt obligations (a)
|
|
$
|
5,278
|
|
|
$
|
215
|
|
|
$
|
661
|
|
|
$
|
196
|
|
|
$
|
996
|
|
|
$
|
874
|
|
|
$
|
2,336
|
|
Capital lease obligations (b)
|
|
56
|
|
|
9
|
|
|
8
|
|
|
9
|
|
|
8
|
|
|
5
|
|
|
17
|
|
|||||||
Operating lease obligations (b)
|
|
1,769
|
|
|
374
|
|
|
335
|
|
|
272
|
|
|
220
|
|
|
188
|
|
|
380
|
|
|||||||
Crude oil supply obligations (c)
|
|
3,840
|
|
|
1,285
|
|
|
758
|
|
|
578
|
|
|
639
|
|
|
441
|
|
|
139
|
|
|||||||
Other purchase obligations (d)
|
|
1,282
|
|
|
323
|
|
|
222
|
|
|
186
|
|
|
159
|
|
|
142
|
|
|
250
|
|
|||||||
Capital expenditure obligations (e)
|
|
278
|
|
|
278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Contractual Obligations
|
|
$
|
12,503
|
|
|
$
|
2,484
|
|
|
$
|
1,984
|
|
|
$
|
1,241
|
|
|
$
|
2,022
|
|
|
$
|
1,650
|
|
|
$
|
3,122
|
|
(a)
|
Includes maturities of principal and interest payments, excluding capital lease obligations. Amounts and timing may be different from our estimated commitments due to potential voluntary debt prepayments and borrowings. Interest payments assume the interest rate in effect as of
December 31, 2015
.
|
(b)
|
Capital lease obligations include amounts classified as interest. Operating lease obligations primarily represent our future minimum noncancellable lease commitments. Operating lease obligations primarily include lease arrangements with initial or remaining noncancellable terms in excess of one year and are not reduced by minimum rentals to be received by us under subleases.
|
(c)
|
Represents an estimate of our long-term contractual purchase commitments for crude oil, having initial or remaining terms in excess of one year. At
December 31, 2015
, these agreements have remaining terms ranging from one month to six years. Prices under these term agreements fluctuate due to market-responsive pricing provisions. To estimate our annual commitments under these contracts, we estimated crude oil prices using exchange-traded crude future prices by crude oil type as of
December 31, 2015
, with prices ranging from
$30
per barrel to
$50
per barrel, and volumes based on the contract’s minimum purchase requirements over the term of the contract. We also purchase additional crude oil under short-term renewable contracts and in the spot market, which are not included in the table above.
|
(d)
|
Represents long-term commitments primarily for the transportation of crude oil, refined products and NGLs as well as to purchase industrial gases, chemical processing services and utilities at our refineries. These purchase obligations are based on the contract’s minimum volume requirements.
|
(e)
|
Minimum contractual spending requirements for certain capital projects.
|
|
1-Percentage-
Point Increase
|
|
1-Percentage-
Point Decrease
|
||||
Expected Rate of Return:
|
|
|
|
||||
Effect on net periodic pension expense
|
$
|
(4
|
)
|
|
$
|
4
|
|
Discount Rate:
|
|
|
|
||||
Effect on net periodic pension expense
|
$
|
(7
|
)
|
|
$
|
11
|
|
Effect on projected benefit obligation
|
(77
|
)
|
|
104
|
|
•
|
create and maintain a comprehensive risk management policy;
|
•
|
provide for authorization by the appropriate levels of management;
|
•
|
provide for segregation of duties;
|
•
|
maintain an appropriate level of knowledge regarding the execution of and the accounting for derivative instruments; and
|
•
|
implement key indicators to measure the performance of its hedging activities.
|
|
Net Gain (Loss)
|
||||||
|
2015
|
|
2014
|
||||
Reversal of unrealized prior period gain (loss) carried on open derivative positions
|
$
|
(177
|
)
|
|
$
|
19
|
|
Realized gain on settled derivative positions
|
412
|
|
|
286
|
|
||
Unrealized gain on open net derivative positions
|
44
|
|
|
177
|
|
||
Net Gain
|
$
|
279
|
|
|
$
|
482
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions except per share amounts)
|
||||||||||
Revenues (a)
|
$
|
28,711
|
|
|
$
|
40,633
|
|
|
$
|
37,601
|
|
Cost and Expenses:
|
|
|
|
|
|
||||||
Cost of sales (excluding the lower of cost or market inventory valuation adjustment) (a)
|
22,149
|
|
|
35,631
|
|
|
34,085
|
|
|||
Lower of cost or market inventory valuation adjustment
|
317
|
|
|
42
|
|
|
—
|
|
|||
Operating expenses
|
2,278
|
|
|
2,420
|
|
|
1,911
|
|
|||
Selling, general and administrative expenses
|
342
|
|
|
342
|
|
|
337
|
|
|||
Depreciation and amortization expense
|
756
|
|
|
562
|
|
|
489
|
|
|||
Loss on asset disposals and impairments
|
42
|
|
|
4
|
|
|
24
|
|
|||
Operating Income
|
2,827
|
|
|
1,632
|
|
|
755
|
|
|||
Interest and financing costs, net
|
(217
|
)
|
|
(235
|
)
|
|
(149
|
)
|
|||
Equity in earnings of equity method investments
|
7
|
|
|
10
|
|
|
11
|
|
|||
Other income, net
|
13
|
|
|
57
|
|
|
63
|
|
|||
Earnings Before Income Taxes
|
2,630
|
|
|
1,464
|
|
|
680
|
|
|||
Income tax expense
|
936
|
|
|
547
|
|
|
246
|
|
|||
Net Earnings from Continuing Operations
|
1,694
|
|
|
917
|
|
|
434
|
|
|||
Earnings (loss) from discontinued operations, net of tax
|
(4
|
)
|
|
(29
|
)
|
|
20
|
|
|||
Net Earnings
|
1,690
|
|
|
888
|
|
|
454
|
|
|||
Less: Net earnings from continuing operations attributable to noncontrolling interest
|
150
|
|
|
45
|
|
|
42
|
|
|||
Net Earnings Attributable to Tesoro Corporation
|
$
|
1,540
|
|
|
$
|
843
|
|
|
$
|
412
|
|
|
|
|
|
|
|
||||||
Net Earnings (Loss) Attributable to Tesoro Corporation:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1,544
|
|
|
$
|
872
|
|
|
$
|
392
|
|
Discontinued operations
|
(4
|
)
|
|
(29
|
)
|
|
20
|
|
|||
Total
|
$
|
1,540
|
|
|
$
|
843
|
|
|
$
|
412
|
|
|
|
|
|
|
|
||||||
Net Earnings (Loss) Per Share - Basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
12.53
|
|
|
$
|
6.79
|
|
|
$
|
2.90
|
|
Discontinued operations
|
(0.03
|
)
|
|
(0.23
|
)
|
|
0.15
|
|
|||
Total
|
$
|
12.50
|
|
|
$
|
6.56
|
|
|
$
|
3.05
|
|
Weighted average common shares outstanding - Basic
|
123.2
|
|
|
128.5
|
|
|
135.0
|
|
|||
|
|
|
|
|
|
||||||
Net Earnings (Loss) Per Share - Diluted:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
12.39
|
|
|
$
|
6.67
|
|
|
$
|
2.85
|
|
Discontinued operations
|
(0.03
|
)
|
|
(0.23
|
)
|
|
0.15
|
|
|||
Total
|
$
|
12.36
|
|
|
$
|
6.44
|
|
|
$
|
3.00
|
|
Weighted average common shares outstanding - Diluted
|
124.6
|
|
|
130.8
|
|
|
137.3
|
|
|||
|
|
|
|
|
|
||||||
Dividends per Share
|
$
|
1.85
|
|
|
$
|
1.10
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
||||||
Supplemental Information:
|
|
|
|
|
|
||||||
(a) Includes excise taxes collected by our marketing segment
|
$
|
561
|
|
|
$
|
581
|
|
|
$
|
567
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Comprehensive Income:
|
|
|
|
|
|
||||||
Net Earnings
|
$
|
1,690
|
|
|
$
|
888
|
|
|
$
|
454
|
|
Pension and other postretirement benefit liability adjustments, net of tax benefit (expense) of $0, $62, and $(56) million
|
—
|
|
|
(97
|
)
|
|
85
|
|
|||
Total Comprehensive Income
|
1,690
|
|
|
791
|
|
|
539
|
|
|||
Less: Noncontrolling interest in comprehensive income
|
150
|
|
|
45
|
|
|
42
|
|
|||
Comprehensive Income Attributable to Tesoro Corporation
|
$
|
1,540
|
|
|
$
|
746
|
|
|
$
|
497
|
|
|
Tesoro Corporation Stockholders’ Equity (In millions)
|
|
|
|
|
||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Non-
controlling
Interest
|
|
Total Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||
At December 31, 2012
|
152.6
|
|
|
$
|
25
|
|
|
$
|
1,070
|
|
|
$
|
3,649
|
|
|
(14.4
|
)
|
|
$
|
(356
|
)
|
|
$
|
(137
|
)
|
|
$
|
486
|
|
|
$
|
4,737
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
454
|
|
|||||||
Purchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.4
|
)
|
|
(436
|
)
|
|
—
|
|
|
—
|
|
|
(436
|
)
|
|||||||
Changes in equity on Tesoro Logistics LP common unit issuance
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
712
|
|
|
702
|
|
|||||||
Shares issued for equity-based compensation awards
|
2.1
|
|
|
1
|
|
|
72
|
|
|
—
|
|
|
(0.1
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
67
|
|
|||||||
Excess tax benefits from stock-based compensation arrangements
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||||
Amortization of equity settled awards
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
43
|
|
|||||||
Dividend payments
|
—
|
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|||||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|
(59
|
)
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
85
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
At December 31, 2013
|
154.7
|
|
|
$
|
26
|
|
|
$
|
1,186
|
|
|
$
|
3,940
|
|
|
(22.9
|
)
|
|
$
|
(798
|
)
|
|
$
|
(52
|
)
|
|
$
|
1,183
|
|
|
$
|
5,485
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
888
|
|
|||||||
Purchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.4
|
)
|
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||||
Additional noncontrolling interest from Rockies Natural Gas Business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
432
|
|
|
432
|
|
|||||||
Changes in equity on Tesoro Logistics LP common unit issuance
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
960
|
|
|
949
|
|
|||||||
Shares issued for equity-based compensation awards
|
1.9
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
(0.4
|
)
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||||
Excess tax benefits from stock-based compensation arrangements
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||||
Amortization of equity settled awards
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
38
|
|
|||||||
Dividend payments
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|||||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96
|
)
|
|
(96
|
)
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
(97
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
|||||||
At December 31, 2014
|
156.6
|
|
|
$
|
26
|
|
|
$
|
1,255
|
|
|
$
|
4,642
|
|
|
(31.7
|
)
|
|
$
|
(1,320
|
)
|
|
$
|
(149
|
)
|
|
$
|
2,522
|
|
|
$
|
6,976
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
1,540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
1,690
|
|
|||||||
Purchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|
(644
|
)
|
|
—
|
|
|
—
|
|
|
(644
|
)
|
|||||||
Changes in equity on Tesoro Logistics LP common unit issuance
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
|
99
|
|
|||||||
Transfers to (from) noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
(23
|
)
|
|||||||
Shares issued for equity-based compensation awards
|
1.8
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
(0.5
|
)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||||||
Excess tax benefits from stock-based compensation arrangements
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||||
Amortization of equity settled awards
|
—
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
46
|
|
|||||||
Dividend payments
|
—
|
|
|
—
|
|
|
—
|
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(228
|
)
|
|||||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(182
|
)
|
|
(182
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
At December 31, 2015
|
158.4
|
|
|
$
|
26
|
|
|
$
|
1,391
|
|
|
$
|
5,954
|
|
|
(39.1
|
)
|
|
$
|
(2,009
|
)
|
|
$
|
(149
|
)
|
|
$
|
2,527
|
|
|
$
|
7,740
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Cash Flows From (Used In) Operating Activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
1,690
|
|
|
$
|
888
|
|
|
$
|
454
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
756
|
|
|
562
|
|
|
490
|
|
|||
Lower of cost or market inventory valuation adjustment
|
317
|
|
|
42
|
|
|
—
|
|
|||
Amortization of debt issuance costs and discounts
|
16
|
|
|
15
|
|
|
14
|
|
|||
Debt redemption charges
|
1
|
|
|
41
|
|
|
—
|
|
|||
(Gain) loss related to Hawaii Business
|
6
|
|
|
42
|
|
|
(81
|
)
|
|||
Loss on asset disposals and impairments
|
42
|
|
|
4
|
|
|
24
|
|
|||
Stock-based compensation expense
|
75
|
|
|
55
|
|
|
80
|
|
|||
Deferred income taxes
|
65
|
|
|
246
|
|
|
166
|
|
|||
Excess tax benefits from stock-based compensation arrangements
|
(38
|
)
|
|
(20
|
)
|
|
(12
|
)
|
|||
Turnaround and branding charges
|
(342
|
)
|
|
(256
|
)
|
|
(451
|
)
|
|||
Other non-cash operating activity
|
24
|
|
|
(27
|
)
|
|
(25
|
)
|
|||
Changes in current assets and current liabilities:
|
|
|
|
|
|
||||||
Receivables
|
638
|
|
|
10
|
|
|
36
|
|
|||
Inventories
|
(179
|
)
|
|
107
|
|
|
(311
|
)
|
|||
Prepayments and other
|
(77
|
)
|
|
(47
|
)
|
|
(43
|
)
|
|||
Accounts payable and other current liabilities
|
(863
|
)
|
|
(298
|
)
|
|
518
|
|
|||
Net cash from operating activities
|
2,131
|
|
|
1,364
|
|
|
859
|
|
|||
Cash Flows From (Used In) Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(1,030
|
)
|
|
(685
|
)
|
|
(570
|
)
|
|||
Acquisitions
|
(97
|
)
|
|
(2,496
|
)
|
|
(2,552
|
)
|
|||
Proceeds from sale of Hawaii Business
|
—
|
|
|
—
|
|
|
539
|
|
|||
Other investing activities
|
(2
|
)
|
|
9
|
|
|
6
|
|
|||
Net cash used in investing activities
|
(1,129
|
)
|
|
(3,172
|
)
|
|
(2,577
|
)
|
|||
Cash Flows From (Used In) Financing Activities
|
|
|
|
|
|
||||||
Borrowings under revolving credit agreements
|
476
|
|
|
646
|
|
|
2,068
|
|
|||
Repayments on revolving credit agreements
|
(431
|
)
|
|
(386
|
)
|
|
(2,068
|
)
|
|||
Borrowings under term loan credit agreement
|
250
|
|
|
—
|
|
|
500
|
|
|||
Proceeds from debt offerings
|
—
|
|
|
1,600
|
|
|
806
|
|
|||
Repayments of debt
|
(404
|
)
|
|
(434
|
)
|
|
(106
|
)
|
|||
Dividend payments
|
(228
|
)
|
|
(141
|
)
|
|
(121
|
)
|
|||
Proceeds from stock options exercised
|
13
|
|
|
19
|
|
|
72
|
|
|||
Net proceeds from issuance of Tesoro Logistics LP common units
|
99
|
|
|
949
|
|
|
702
|
|
|||
Distributions to noncontrolling interest
|
(182
|
)
|
|
(96
|
)
|
|
(59
|
)
|
|||
Purchases of common stock
|
(644
|
)
|
|
(500
|
)
|
|
(440
|
)
|
|||
Taxes paid related to net share settlement of equity awards
|
(45
|
)
|
|
(22
|
)
|
|
(6
|
)
|
|||
Payments of debt issuance costs
|
(2
|
)
|
|
(24
|
)
|
|
(13
|
)
|
|||
Excess tax benefits from stock-based compensation arrangements
|
38
|
|
|
20
|
|
|
12
|
|
|||
Other financing activities
|
—
|
|
|
(61
|
)
|
|
(30
|
)
|
|||
Net cash from (used in) financing activities
|
(1,060
|
)
|
|
1,570
|
|
|
1,317
|
|
|||
Decrease in Cash and Cash Equivalents
|
(58
|
)
|
|
(238
|
)
|
|
(401
|
)
|
|||
Cash and Cash Equivalents, Beginning of Year
|
1,000
|
|
|
1,238
|
|
|
1,639
|
|
|||
Cash and Cash Equivalents, End of Year
|
$
|
942
|
|
|
$
|
1,000
|
|
|
$
|
1,238
|
|
•
|
hazardous materials disposal such as petroleum manufacturing by-products, chemical catalysts, and sealed insulation material containing asbestos, and removal or dismantlement requirements associated with the closure of our refining facilities, terminal facilities or pipelines, including the demolition or removal of certain major processing units, buildings, tanks, pipelines or other equipment; and
|
•
|
removal of underground storage tanks at our owned retail stations at or near the time of closure.
|
•
|
there are no plans to retire or dispose of these assets;
|
•
|
we plan on extending the assets’ estimated economic lives through scheduled maintenance projects and other normal repair and maintenance and by continuing to make improvements based on technological advances;
|
•
|
we have rarely retired similar assets in the past; and
|
•
|
industry practice for similar assets has historically been to extend the economic lives through regular repair and maintenance and implementation of technological advances.
|
|
Year Ended December 31, 2013
|
||
|
(In millions, except per share amounts)
|
||
Revenues
|
$
|
43,510
|
|
Net Earnings attributable to Tesoro Corporation
|
515
|
|
|
Basic Earnings Per Share from Continuing Operations
|
3.67
|
|
|
Diluted Earnings Per Share from Continuing Operations
|
3.61
|
|
•
|
25
crude oil and refined products and storage facilities in the western and midwestern U.S. that are supplied by Tesoro-owned and third-party pipelines, trucks and barges;
|
•
|
130
miles of pipelines, which transport products and crude oil from Tesoro’s refineries to nearby facilities in Salt Lake City and Los Angeles and a
50%
fee interest in a
16-mile
pipeline that transports jet fuel from Tesoro’s Los Angeles refinery to the Los Angeles International Airport;
|
•
|
a regulated common carrier products pipeline running from Salt Lake City, Utah to Spokane, Washington and a jet fuel pipeline to the Salt Lake City International Airport (the “Northwest Products Pipeline”);
|
•
|
a rail car unloading facility in Washington that receives crude oil transported on unit trains leased by Tesoro;
|
•
|
a petroleum coke handling and storage facility in Los Angeles that handles and stores petroleum coke from Tesoro’s Los Angeles refinery; and
|
•
|
a regulated common carrier refined products pipeline system connecting our Kenai refinery terminals to terminals in Anchorage, Alaska.
|
Cash
|
$
|
32
|
|
Accounts receivable
|
120
|
|
|
Prepayments and other
|
3
|
|
|
Property, plant and equipment
|
1,695
|
|
|
Acquired intangibles
|
1,008
|
|
|
Other noncurrent assets (a)
|
205
|
|
|
Accounts payable
|
(56
|
)
|
|
Other current liabilities
|
(53
|
)
|
|
Other noncurrent liabilities
|
(5
|
)
|
|
Noncontrolling interest
|
(433
|
)
|
|
Total Purchase Price
|
$
|
2,516
|
|
(a)
|
Other noncurrent assets include
$121 million
of goodwill.
|
•
|
Non-compete clause between us and TLLP effective under certain circumstances;
|
•
|
Right of first offer to TLLP for certain of our retained logistics assets, including certain terminals, pipelines, docks, storage facilities and other related assets located in California, Alaska and Washington;
|
•
|
Payment of an annual fee to us for the provision of various general and administrative services;
|
•
|
Reimbursement to TLLP for certain maintenance and expansion capital expenditures; and
|
•
|
Indemnification to TLLP for certain matters, including pre-Initial Offering environmental, title and tax matters.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,159
|
|
|
|
|
|
|
|
||||||
Loss from discontinued operations, before tax (a)
|
$
|
(6
|
)
|
|
$
|
(46
|
)
|
|
$
|
(47
|
)
|
Gain on sale of Hawaii Business, before tax (b)
|
—
|
|
|
—
|
|
|
81
|
|
|||
Total earnings (loss) from discontinued operations, before tax
|
(6
|
)
|
|
(46
|
)
|
|
34
|
|
|||
Income tax expense (benefit)
|
(2
|
)
|
|
(17
|
)
|
|
14
|
|
|||
Earnings (loss) from discontinued operations, net of tax
|
$
|
(4
|
)
|
|
$
|
(29
|
)
|
|
$
|
20
|
|
(a)
|
Includes charges totaling
$6 million
and
$42 million
for
December 31, 2015
and
2014
, respectively, related to regulatory improvements we are obligated to make at the at the Hawaii refinery to resolve the Clean Air Act matters discussed in Note 17.
|
(b)
|
Gain on sale of the Hawaii Business includes a
$17 million
curtailment gain related to the remeasurement of our pension and other postretirement benefit obligations recognized during 2013.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash Flows From (Used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
(5
|
)
|
|
$
|
(3
|
)
|
|
$
|
71
|
|
Investing activities
|
—
|
|
|
—
|
|
|
537
|
|
|
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Weighted average common shares outstanding
|
123.2
|
|
|
128.5
|
|
|
135.0
|
|
Common stock equivalents
|
1.4
|
|
|
2.3
|
|
|
2.3
|
|
Total Diluted Shares
|
124.6
|
|
|
130.8
|
|
|
137.3
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Trade receivables
|
$
|
778
|
|
|
$
|
1,415
|
|
Tax receivables
|
22
|
|
|
15
|
|
||
Other receivables
|
5
|
|
|
19
|
|
||
Allowance for doubtful accounts (a)
|
(13
|
)
|
|
(14
|
)
|
||
Total Receivables, Net
|
$
|
792
|
|
|
$
|
1,435
|
|
(a)
|
Allowances for doubtful accounts of
$13 million
and
$14 million
at
December 31, 2015
and
2014
, respectively, relate to estimated uncollectible amounts on our trade receivables.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Domestic crude oil and refined products
|
$
|
2,142
|
|
|
$
|
1,952
|
|
Foreign subsidiary crude oil
|
325
|
|
|
351
|
|
||
Materials and supplies
|
140
|
|
|
120
|
|
||
Oxygenates and by-products
|
54
|
|
|
56
|
|
||
Merchandise
|
—
|
|
|
2
|
|
||
Less: Lower of cost or market reserve
|
(359
|
)
|
|
(42
|
)
|
||
Total Inventories, Net
|
$
|
2,302
|
|
|
$
|
2,439
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Refining
|
$
|
7,504
|
|
|
$
|
6,955
|
|
TLLP
|
3,847
|
|
|
3,590
|
|
||
Marketing
|
915
|
|
|
834
|
|
||
Corporate
|
296
|
|
|
254
|
|
||
Property, Plant and Equipment, at Cost
|
12,562
|
|
|
11,633
|
|
||
Accumulated depreciation
|
(3,021
|
)
|
|
(2,588
|
)
|
||
Net Property, Plant and Equipment
|
$
|
9,541
|
|
|
$
|
9,045
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
Rockies Natural Gas Business customer relationships (a)
|
$
|
1,008
|
|
|
$
|
32
|
|
|
$
|
976
|
|
|
$
|
976
|
|
|
$
|
3
|
|
|
$
|
973
|
|
Refining operating permits, emissions credits
and other
|
283
|
|
|
128
|
|
|
155
|
|
|
283
|
|
|
118
|
|
|
165
|
|
||||||
Trade names
|
49
|
|
|
15
|
|
|
34
|
|
|
49
|
|
|
13
|
|
|
36
|
|
||||||
ampm
®
License
|
31
|
|
|
3
|
|
|
28
|
|
|
31
|
|
|
2
|
|
|
29
|
|
||||||
Marketing supply network
|
46
|
|
|
28
|
|
|
18
|
|
|
49
|
|
|
30
|
|
|
19
|
|
||||||
Total
|
$
|
1,417
|
|
|
$
|
206
|
|
|
$
|
1,211
|
|
|
$
|
1,388
|
|
|
$
|
166
|
|
|
$
|
1,222
|
|
(a)
|
In connection with the Rockies Natural Gas Business acquisition, TLLP recognized
$1.0 billion
of customer relationships associated with the acquired natural gas processing and gathering operations. The value for the identified customer relationships consists of cash flows expected from existing contracts and future arrangements from the existing customer base. The amounts and useful lives associated with these customer relationships were finalized within TLLP’s measurement period of the purchase price allocation.
|
•
|
Watson Cogeneration Company (“Watson”) - As part of the Los Angeles Acquisition in 2013, we acquired a
51%
interest in Watson, which produces steam and electricity at a facility located at our Los Angeles refinery. Our transactions with Watson, which do not have intra-entity profits requiring elimination, consist of sales of fuel gas and water, purchases of steam and electricity and charges for general and administrative support.
|
•
|
Vancouver Energy - We entered into a
50%
owned joint venture in 2013 with Savage Companies to construct, own and operate a unit train unloading and marine loading terminal at Port of Vancouver, USA (the “Vancouver Energy” terminal) with a total capacity of
360
Mbpd allowing for the delivery of cost-advantaged North American crude oil to the U.S. West Coast.
|
•
|
Three Rivers Gathering, L.L.C. (“TRG”) - TLLP acquired a
50%
interest in TRG as part of its Rockies Natural Gas Business acquisition. TRG operates natural gas gathering assets within the southeastern Uinta Basin and is primarily supported by long-term, fee-based gas gathering agreements with minimum volume commitments.
|
•
|
Uintah Basin Field Services, L.L.C. (“UBFS”) - TLLP acquired a
38%
interest in UBFS as part of its Rockies Natural Gas Business acquisition. UBFS was originally formed to allow the partners to jointly develop the natural gas gathering infrastructure within a defined area of mutual interest located in the southeastern Uinta Basin and is supported by long-term, fee-based gas gathering agreements that contain firm throughput commitments, which generate fees whether or not the capacity is used, and is operated by TLLP.
|
|
Watson
|
|
Vancouver Energy
|
|
TLLP
|
|
|
||||||||||||
|
|
|
TRG
|
|
UBFS
|
|
Total
|
||||||||||||
Balance at December 31, 2013 (a)
|
$
|
109
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114
|
|
Investments
|
13
|
|
(b)
|
5
|
|
|
39
|
|
|
18
|
|
|
75
|
|
|||||
Equity in earnings (loss)
|
10
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
10
|
|
|||||
Distributions received
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|||||
Balance at December 31, 2014 (a)
|
103
|
|
|
9
|
|
|
40
|
|
|
18
|
|
|
170
|
|
|||||
Investments
|
—
|
|
|
2
|
|
|
2
|
|
(b)
|
—
|
|
(b)
|
4
|
|
|||||
Equity in earnings (loss)
|
1
|
|
|
(1
|
)
|
|
5
|
|
|
2
|
|
|
7
|
|
|||||
Distributions received
|
(12
|
)
|
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
|
(22
|
)
|
|||||
Balance at December 31, 2015 (a)
|
$
|
92
|
|
|
$
|
10
|
|
|
$
|
41
|
|
|
$
|
16
|
|
|
$
|
159
|
|
(a)
|
The carrying amount of our investments in Watson, TRG and UBFS exceeded the underlying equity in net assets by
$68 million
,
$17 million
, and
$8 million
, respectively, at
December 31, 2015
and by
$70 million
,
$15 million
, and
$7 million
, respectively, at
December 31, 2014
.
|
(b)
|
Includes the final fair value adjustment resulting from measurement period changes related to TLLP’s Rockies Natural Gas Business in 2015 and the Los Angeles Acquisition in 2014.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Other Noncurrent Assets:
|
|
|
|
||||
Deferred Charges, net of amortization
|
$
|
650
|
|
|
$
|
582
|
|
Goodwill
|
188
|
|
|
196
|
|
||
Investments - equity method and joint ventures
|
159
|
|
|
170
|
|
||
Environmental credits
|
97
|
|
|
51
|
|
||
Deferred branding costs, net of amortization
|
95
|
|
|
43
|
|
||
Deposits
|
4
|
|
|
53
|
|
||
Other assets, net of amortization
|
80
|
|
|
55
|
|
||
Total Other Noncurrent Assets
|
$
|
1,273
|
|
|
$
|
1,150
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Other Current Liabilities:
|
|
|
|
||||
Taxes other than income taxes
|
$
|
320
|
|
|
$
|
318
|
|
Employee costs
|
298
|
|
|
307
|
|
||
Environmental liabilities
|
64
|
|
|
69
|
|
||
Interest
|
46
|
|
|
45
|
|
||
Pension and other postretirement benefits
|
10
|
|
|
10
|
|
||
Current maturities of debt
|
6
|
|
|
6
|
|
||
Legal costs
|
5
|
|
|
8
|
|
||
Asset retirement obligations
|
5
|
|
|
3
|
|
||
Income taxes payable
|
—
|
|
|
18
|
|
||
Current liabilities related to discontinued operations
|
22
|
|
|
12
|
|
||
Other
|
186
|
|
|
151
|
|
||
Total Other Current Liabilities
|
$
|
962
|
|
|
$
|
947
|
|
|
|
|
|
||||
Other Noncurrent Liabilities:
|
|
|
|
||||
Pension and other postretirement benefits
|
$
|
401
|
|
|
$
|
421
|
|
Environmental liabilities
|
191
|
|
|
205
|
|
||
Deferred income
|
37
|
|
|
1
|
|
||
Employee costs, excluding pension and other postretirement benefits
|
35
|
|
|
5
|
|
||
Asset retirement obligations
|
25
|
|
|
58
|
|
||
Liability for unrecognized tax benefits, including interest and penalties
|
7
|
|
|
5
|
|
||
Noncurrent liabilities related to discontinued operations
|
19
|
|
|
30
|
|
||
Other
|
58
|
|
|
65
|
|
||
Total Other Noncurrent Liabilities
|
$
|
773
|
|
|
$
|
790
|
|
•
|
price risks associated with the purchase or sale of feedstocks, refined products and energy supplies to or from our refineries, terminals, marketing operations and customers;
|
•
|
price risks associated with inventories above or below our target levels;
|
•
|
future emission credit requirements; and
|
•
|
exchange rate fluctuations on our purchases of Canadian crude oil.
|
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||
|
Balance Sheet Location
|
|
December 31,
2015 |
|
December 31,
2014 |
|
December 31,
2015 |
|
December 31,
2014 |
||||||||
Commodity Futures Contracts
|
Prepayments and other current assets
|
|
$
|
711
|
|
|
$
|
1,174
|
|
|
$
|
673
|
|
|
$
|
1,012
|
|
Commodity Swap Contracts
|
Prepayments and other current assets
|
|
15
|
|
|
27
|
|
|
14
|
|
|
13
|
|
||||
Commodity Swap Contracts
|
Receivables
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodity Swap Contracts
|
Accounts payable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Commodity Forward Contracts
|
Receivables
|
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Commodity Forward Contracts
|
Accounts payable
|
|
—
|
|
|
—
|
|
|
4
|
|
|
1
|
|
||||
Total Gross Mark-to-Market
Derivatives
|
|
|
735
|
|
|
1,204
|
|
|
691
|
|
|
1,027
|
|
||||
Less: Counterparty Netting and
Cash Collateral (a)
|
|
|
(675
|
)
|
|
(1,136
|
)
|
|
(687
|
)
|
|
(1,024
|
)
|
||||
Total Net Fair Value of Derivatives
|
|
|
$
|
60
|
|
|
$
|
68
|
|
|
$
|
4
|
|
|
$
|
3
|
|
(a)
|
Certain of our derivative contracts, under master netting arrangements, include both asset and liability positions. We offset both the fair value amounts and any related cash collateral amounts recognized for multiple derivative instruments executed with the same counterparty when there is a legally enforceable right and an intention to settle net or simultaneously. As of
December 31, 2015
, we had provided cash collateral amounts of
$12 million
related to our unrealized derivative positions. As of
December 31, 2014
, our counterparties had provided cash collateral of
$112 million
related to our unrealized derivative positions. Cash collateral amounts are netted with mark-to-market derivative assets.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Commodity Contracts
|
$
|
279
|
|
|
$
|
482
|
|
|
$
|
(147
|
)
|
Foreign Currency Forward Contracts (b)
|
(6
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||
Total Gain (Loss) Mark-to-Market Derivatives
|
$
|
273
|
|
|
$
|
477
|
|
|
$
|
(152
|
)
|
(b)
|
Losses for our foreign currency forward contracts are located in other income, net in our statements of consolidated operations.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
$
|
67
|
|
|
$
|
26
|
|
|
$
|
(11
|
)
|
Cost of sales
|
212
|
|
|
456
|
|
|
(112
|
)
|
|||
Net loss from discontinued operations
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||
Total Gain (Loss) on Mark-to-Market Derivatives
|
$
|
279
|
|
|
$
|
482
|
|
|
$
|
(147
|
)
|
|
|
Contract Volumes by Year of Maturity
|
|
|
||
Mark-to-Market Derivative Instrument
|
|
2016
|
|
2017
|
|
Unit of Measure
|
Crude oil, refined products and blending products:
|
|
|
|
|
|
|
Futures - short
|
|
(12,848)
|
|
—
|
|
Barrels
|
Swap Contracts - long
|
|
1,192
|
|
—
|
|
Barrels
|
Forwards - short
|
|
(1,346)
|
|
—
|
|
Barrels
|
Environmental credits:
|
|
|
|
|
|
|
Futures - long
|
|
1,325
|
|
1,000
|
|
Tons
|
Corn:
|
|
|
|
|
|
|
Futures - short
|
|
(3,235)
|
|
—
|
|
Bushels
|
|
December 31, 2015
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting and Collateral (a)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity Futures Contracts
|
$
|
711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(660
|
)
|
|
$
|
51
|
|
Commodity Swap Contracts
|
—
|
|
|
22
|
|
|
—
|
|
|
(15
|
)
|
|
7
|
|
|||||
Commodity Forward Contracts
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Total Assets
|
$
|
711
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
(675
|
)
|
|
$
|
60
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity Futures Contracts
|
$
|
673
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(673
|
)
|
|
$
|
—
|
|
Commodity Swap Contracts
|
—
|
|
|
14
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|||||
Commodity Forward Contracts
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Environmental Credit Obligations
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||
Total Liabilities
|
$
|
673
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
(687
|
)
|
|
$
|
44
|
|
|
December 31, 2014
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting and Collateral (a)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity Futures Contracts
|
$
|
1,165
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(1,123
|
)
|
|
$
|
51
|
|
Commodity Swap Contracts
|
—
|
|
|
27
|
|
|
—
|
|
|
(13
|
)
|
|
14
|
|
|||||
Commodity Forward Contracts
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Total Assets
|
$
|
1,165
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
(1,136
|
)
|
|
$
|
68
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity Futures Contracts
|
$
|
1,011
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(1,011
|
)
|
|
$
|
1
|
|
Commodity Swap Contracts
|
—
|
|
|
14
|
|
|
—
|
|
|
(13
|
)
|
|
1
|
|
|||||
Commodity Forward Contracts
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Environmental Credit Obligations
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||
Total Liabilities
|
$
|
1,011
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
(1,024
|
)
|
|
$
|
23
|
|
(a)
|
Certain of our derivative contracts, under master netting arrangements, include both asset and liability positions. We offset both the fair value amounts and any related cash collateral amounts recognized for multiple derivative instruments executed with the same counterparty when there is a legally enforceable right and an intention to settle net or simultaneously. At
December 31, 2015
, we had provided cash collateral amounts of
$12 million
related to our unrealized derivative positions. As of
December 31, 2014
, our counter parties had provided cash collateral of
$112 million
related to our unrealized derivative positions. Cash collateral amounts are netted with mark-to-market derivative assets.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Debt, including current maturities:
|
|
|
|
||||
Revolving credit facilities:
|
|
|
|
||||
Tesoro Corporation Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
TLLP Revolving Credit Facility
|
305
|
|
|
260
|
|
||
Tesoro debt:
|
|
|
|
||||
Term Loan Facility
|
—
|
|
|
398
|
|
||
4.250% Senior Notes due 2017
|
450
|
|
|
450
|
|
||
5.375% Senior Notes due 2022
|
475
|
|
|
475
|
|
||
5.125% Senior Notes due 2024
|
300
|
|
|
300
|
|
||
TLLP debt:
|
|
|
|
||||
TLLP Unsecured Term Loan Facility
|
250
|
|
|
—
|
|
||
TLLP 5.500% Senior Notes due 2019
|
500
|
|
|
500
|
|
||
TLLP 5.875% Senior Notes due 2020 (a)
|
470
|
|
|
470
|
|
||
TLLP 6.125% Senior Notes due 2021
|
550
|
|
|
550
|
|
||
TLLP 6.250% Senior Notes due 2022
|
800
|
|
|
800
|
|
||
Capital lease obligations and other
|
47
|
|
|
52
|
|
||
Total Debt
|
4,147
|
|
|
4,255
|
|
||
Unamortized issuance costs (b)
|
(74
|
)
|
|
(88
|
)
|
||
Current maturities, net of unamortized issuance costs
|
(6
|
)
|
|
(6
|
)
|
||
Debt, Net of Current Maturities and Unamortized Issuance Costs
|
$
|
4,067
|
|
|
$
|
4,161
|
|
(a)
|
Unamortized premiums of
$4 million
and
$5 million
associated with these senior notes are included in unamortized issuance costs at
December 31, 2015
and
2014
, respectively.
|
(b)
|
Unamortized debt issuance costs of
$78 million
and
$93 million
are recorded as a reduction to debt on the balance sheet at
December 31, 2015
and
2014
, respectively. The Company adopted ASU 2015-03 in 2015 and applied changes retrospectively to the prior period presented. See Note 1 for further discussion.
|
|
Total
Capacity
|
|
Amount
Borrowed as of December 31, 2015 |
|
Outstanding
Letters of
Credit
|
|
Available
Capacity
|
|
Expiration
|
||||||||
Tesoro Corporation Revolving
Credit Facility (a)
|
$
|
2,626
|
|
|
$
|
—
|
|
|
$
|
90
|
|
|
$
|
2,536
|
|
|
November 18, 2019
|
TLLP Revolving Credit Facility
|
900
|
|
|
305
|
|
|
—
|
|
|
595
|
|
|
December 2, 2019
|
||||
Letter of Credit Facilities
|
1,745
|
|
|
—
|
|
|
196
|
|
|
1,549
|
|
|
|
||||
Total Credit Facilities
|
$
|
5,271
|
|
|
$
|
305
|
|
|
$
|
286
|
|
|
$
|
4,680
|
|
|
|
(a)
|
Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity of
$3.0 billion
.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion) |
Tesoro Corporation Revolving Credit Facility
($2.6 billion) (b)
|
|
0.43%
|
|
1.50%
|
|
3.50%
|
|
0.50%
|
|
0.375%
|
TLLP Revolving Credit Facility ($900 million) (c)
|
|
0.43%
|
|
2.50%
|
|
3.50%
|
|
1.50%
|
|
0.50%
|
(b)
|
We can elect the interest rate to apply to the facility between a base rate plus the base rate margin, or a Eurodollar rate, for the applicable term, plus the Eurodollar margin at the time of borrowing. The applicable margin on the Revolving Credit Facility varies primarily based upon our credit ratings. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate.
|
(c)
|
TLLP has the option to elect if the borrowings will bear interest at either, a base rate plus the base rate margin or a Eurodollar rate, for the applicable period, plus the Eurodollar margin at the time of the borrowing. The applicable margin varies based upon a certain leverage ratio, as defined by the TLLP Revolving Credit Facility. Letters of credit outstanding under the TLLP Revolving Credit Facility incur fees at the Eurodollar margin rate.
|
•
|
an extension of the revolving facility maturity date to
November 18, 2019
;
|
•
|
total available revolving capacity of
$3.0 billion
, or lower based on the periodically adjusted borrowing base, and the removal of previously included required revolving loan commitment decreases;
|
•
|
a reduction in the minimum consolidated tangible net worth requirement beginning with the fiscal year ending December 31, 2014;
|
•
|
revisions to the covenants to provide additional flexibility for making restricted payments, dispositions and entering into certain investments; and
|
•
|
a backstop guarantee by Tesoro of certain swap obligations.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
TLLP Unsecured Term Loan Facility ($250 million) (a)
|
|
0.35%
|
|
2.75%
|
|
3.50%
|
|
1.75%
|
(a)
|
TLLP can elect the interest rate to apply to the TLLP Unsecured Term Loan Facility between a base rate plus the base rate margin, or a Eurodollar rate, for the applicable term, plus the Eurodollar margin at the time of borrowing.
|
|
December 31, 2015
|
||
2016
|
$
|
9
|
|
2017
|
8
|
|
|
2018
|
9
|
|
|
2019
|
8
|
|
|
2020
|
5
|
|
|
Thereafter
|
17
|
|
|
Total minimum lease payments
|
56
|
|
|
Less amount representing interest
|
(11
|
)
|
|
Capital Lease Obligations
|
$
|
45
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
697
|
|
|
$
|
244
|
|
|
$
|
59
|
|
State
|
172
|
|
|
42
|
|
|
21
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
76
|
|
|
212
|
|
|
152
|
|
|||
State
|
(9
|
)
|
|
49
|
|
|
14
|
|
|||
Income Tax Expense
|
$
|
936
|
|
|
$
|
547
|
|
|
$
|
246
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued pension and other postretirement benefits
|
$
|
141
|
|
|
$
|
155
|
|
Accrued employee compensation liabilities
|
101
|
|
|
83
|
|
||
Other accrued liabilities
|
50
|
|
|
54
|
|
||
Accrued environmental remediation liabilities
|
87
|
|
|
94
|
|
||
Investment in partnerships
|
20
|
|
|
81
|
|
||
Stock-based compensation
|
47
|
|
|
60
|
|
||
Asset retirement obligations
|
12
|
|
|
12
|
|
||
Other
|
10
|
|
|
3
|
|
||
Tax credit carryforwards
|
8
|
|
|
8
|
|
||
Total deferred tax assets
|
476
|
|
|
550
|
|
||
Less: valuation allowance
|
(7
|
)
|
|
(8
|
)
|
||
Total deferred tax assets, net
|
$
|
469
|
|
|
$
|
542
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Accelerated depreciation and property related items
|
$
|
1,341
|
|
|
$
|
1,198
|
|
Deferred maintenance costs, including refinery turnarounds
|
224
|
|
|
204
|
|
||
Inventory
|
22
|
|
|
131
|
|
||
Other
|
40
|
|
|
79
|
|
||
Amortization of intangible assets
|
64
|
|
|
64
|
|
||
Total deferred tax liabilities
|
1,691
|
|
|
1,676
|
|
||
Deferred Tax Liabilities, Net
|
$
|
1,222
|
|
|
$
|
1,134
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Income tax expense at U.S. federal statutory rate
|
$
|
921
|
|
|
$
|
512
|
|
|
$
|
238
|
|
Effect of:
|
|
|
|
|
|
||||||
State income taxes, net of federal income tax effect
|
105
|
|
|
59
|
|
|
23
|
|
|||
Manufacturing activities deduction
|
(43
|
)
|
|
(21
|
)
|
|
(7
|
)
|
|||
Earnings attributable to noncontrolling interest
|
(53
|
)
|
|
(16
|
)
|
|
(15
|
)
|
|||
Other
|
6
|
|
|
13
|
|
|
7
|
|
|||
Income Tax Expense
|
$
|
936
|
|
|
$
|
547
|
|
|
$
|
246
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance as of beginning of year
|
$
|
21
|
|
|
$
|
28
|
|
|
$
|
30
|
|
Increases related to prior year tax positions
|
159
|
|
|
5
|
|
|
—
|
|
|||
Decreases related to prior year tax positions
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Increases related to current year tax positions
|
1
|
|
|
1
|
|
|
—
|
|
|||
Decreases related to settlements with taxing authorities
|
—
|
|
|
(11
|
)
|
|
(1
|
)
|
|||
Balance as of end of year
|
$
|
181
|
|
|
$
|
21
|
|
|
$
|
28
|
|
•
|
The funded qualified employee retirement plan (the “Retirement Plan”) provides benefits to all eligible employees. Benefits are determined based on final average compensation and years of service through December 31, 2010, and a cash balance account based formula for service beginning January 1, 2011. Although our funded employee retirement plan fully meets all of the funding requirements under applicable laws and regulations, we contributed
$60 million
during both
2015
and
2014
, and
$48 million
in
2013
to improve the plan’s funded status.
|
•
|
The unfunded nonqualified restoration retirement plan provides for the restoration of retirement benefits to certain senior level employees that are not provided under the qualified retirement plan due to limits imposed by the Internal Revenue Code.
|
•
|
The unfunded nonqualified executive security plan provides certain executive officers and other key personnel with supplemental pension benefits. These benefits are provided by a nonqualified, noncontributory plan and are based on years of service and compensation. We made payments of
$1 million
during
2015
, and
$5 million
in both
2014
and
2013
for current retiree obligations under the plan.
|
•
|
The unfunded nonqualified supplemental executive retirement plan provides eligible senior level executives a supplemental pension benefit in excess of those earned under the qualified retirement plan. Effective January 1, 2015, this plan was frozen to new participants.
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligations at beginning of year
|
$
|
767
|
|
|
$
|
611
|
|
|
$
|
77
|
|
|
$
|
77
|
|
Service cost
|
45
|
|
|
44
|
|
|
3
|
|
|
3
|
|
||||
Interest cost
|
30
|
|
|
29
|
|
|
2
|
|
|
3
|
|
||||
Actuarial loss (gain)
|
(44
|
)
|
|
161
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Benefits paid
|
(71
|
)
|
|
(75
|
)
|
|
(6
|
)
|
|
(4
|
)
|
||||
Plan amendments
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Curtailment
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Projected Benefit Obligation at End of Year
|
$
|
727
|
|
|
$
|
767
|
|
|
$
|
74
|
|
|
$
|
77
|
|
|
|
|
|
|
|
|
|
||||||||
Changes in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
413
|
|
|
$
|
386
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
(15
|
)
|
|
37
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
63
|
|
|
65
|
|
|
6
|
|
|
4
|
|
||||
Benefits paid
|
(71
|
)
|
|
(75
|
)
|
|
(6
|
)
|
|
(4
|
)
|
||||
Fair Value of Plan Assets at End of Year
|
390
|
|
|
413
|
|
|
—
|
|
|
—
|
|
||||
Funded Status at End of Year
|
$
|
(337
|
)
|
|
$
|
(354
|
)
|
|
$
|
(74
|
)
|
|
$
|
(77
|
)
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Other current liabilities
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
8
|
|
Other noncurrent liabilities
|
335
|
|
|
352
|
|
|
66
|
|
|
69
|
|
||||
Total Amount Recognized
|
$
|
337
|
|
|
$
|
354
|
|
|
$
|
74
|
|
|
$
|
77
|
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Components of net periodic benefit expense (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
45
|
|
|
$
|
44
|
|
|
$
|
42
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
5
|
|
Interest cost
|
30
|
|
|
29
|
|
|
29
|
|
|
2
|
|
|
3
|
|
|
2
|
|
||||||
Expected return on plan assets
|
(27
|
)
|
|
(25
|
)
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
1
|
|
|
1
|
|
|
1
|
|
|
(34
|
)
|
|
(34
|
)
|
|
(36
|
)
|
||||||
Recognized net actuarial loss
|
24
|
|
|
12
|
|
|
22
|
|
|
5
|
|
|
6
|
|
|
9
|
|
||||||
Recognized curtailment loss (gain)
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||||
Net Periodic Benefit Expense (Income)
|
$
|
73
|
|
|
$
|
62
|
|
|
$
|
70
|
|
|
$
|
(24
|
)
|
|
$
|
(22
|
)
|
|
$
|
(37
|
)
|
(a)
|
We determine the discount rate primarily by reference to the effective yields on high quality corporate bonds that have a comparable cash flow pattern to the expected pension and other postretirement benefit payments to be made.
|
(b)
|
We remeasured our pension and other postretirement benefit obligations during the second quarter of 2013 due to the Los Angeles Acquisition and the sale of the Hawaii Business. The discount rates used to determine the pension and postretirement obligations, and the related net periodic benefit costs, for the remaining period of 2013 were
4.65%
and
3.01%
, respectively.
|
(c)
|
The expected return on plan assets reflects the weighted-average of the expected long-term rates of return for the broad categories of investments held for the Retirement Plan. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns on the Retirement Plan’s investments.
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||
Health care cost trend rate assumed for next year
|
7.20
|
%
|
|
7.50
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
4.80
|
%
|
|
4.80
|
%
|
Year that the rate reaches the ultimate trend rate
|
2024
|
|
|
2024
|
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
|
Total
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Net actuarial loss
|
$
|
(286
|
)
|
|
$
|
(312
|
)
|
|
$
|
(51
|
)
|
|
$
|
(58
|
)
|
|
$
|
(337
|
)
|
|
$
|
(370
|
)
|
Prior service credit (cost)
|
(3
|
)
|
|
(4
|
)
|
|
96
|
|
|
130
|
|
|
93
|
|
|
126
|
|
||||||
Total Income (Loss)
|
$
|
(289
|
)
|
|
$
|
(316
|
)
|
|
$
|
45
|
|
|
$
|
72
|
|
|
$
|
(244
|
)
|
|
$
|
(244
|
)
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Net gain (loss) arising during the year:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial gain (loss)
|
$
|
2
|
|
|
$
|
(144
|
)
|
|
$
|
128
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
25
|
|
Prior service cost
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment loss
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Curtailment - prior service cost
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Net (gain) loss reclassified into income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss
|
24
|
|
|
12
|
|
|
22
|
|
|
5
|
|
|
6
|
|
|
9
|
|
||||||
Prior service cost (credit)
|
1
|
|
|
1
|
|
|
1
|
|
|
(34
|
)
|
|
(35
|
)
|
|
(36
|
)
|
||||||
Total (Gain) Loss Recognized In Other Comprehensive Income
|
$
|
27
|
|
|
$
|
(132
|
)
|
|
$
|
163
|
|
|
$
|
(27
|
)
|
|
$
|
(27
|
)
|
|
$
|
(22
|
)
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
|
Total
|
||||||
Net actuarial (gain) loss
|
$
|
18
|
|
|
$
|
(34
|
)
|
|
$
|
(16
|
)
|
Prior service cost
|
1
|
|
|
4
|
|
|
5
|
|
|||
Total Included In Accumulated Other Comprehensive Income (Loss)
|
$
|
19
|
|
|
$
|
(30
|
)
|
|
$
|
(11
|
)
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Fixed income (a)
|
$
|
—
|
|
|
$
|
155
|
|
|
$
|
—
|
|
|
$
|
155
|
|
|
$
|
—
|
|
|
$
|
161
|
|
|
$
|
—
|
|
|
$
|
161
|
|
Mutual funds (b)
|
103
|
|
|
49
|
|
|
—
|
|
|
152
|
|
|
113
|
|
|
48
|
|
|
—
|
|
|
161
|
|
||||||||
Common/collective trust funds (c)
|
—
|
|
|
76
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
||||||||
Short-term investment funds (d)
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||||
Total
|
$
|
103
|
|
|
$
|
287
|
|
|
$
|
—
|
|
|
$
|
390
|
|
|
$
|
113
|
|
|
$
|
300
|
|
|
$
|
—
|
|
|
$
|
413
|
|
(a)
|
Fixed income assets represent securities primarily invested in corporate, government-related, mortgage and asset-backed debt obligations with a primary focus on long duration securities. Individual fixed income securities are typically priced on the basis of evaluated prices from independent pricing services. All fixed income securities are classified as level 2 investments.
|
(b)
|
Mutual funds that invest primarily in domestic and international equity and fixed income securities. Fair values are based on market quotations from national securities exchanges. Absolute return and real return mutual funds consist of investments in mutual funds that invest in a broad set of asset classes designed to provide a target return regardless of market conditions or the potential for real returns in excess of U.S. inflation, respectively. The fixed income mutual fund consists of a fund that is part of a trust managed by a registered investment company. Fair value for the fixed income mutual fund reflects the net asset value per share as determined by the investment manager and derived from the quoted prices in active markets of the underlying securities. Absolute and real return mutual funds and a U.S. equity mutual fund are categorized as level 1 investments and the fixed income mutual fund is categorized as a level 2 investment.
|
(c)
|
Common/collective trust funds that invest in primarily equity and fixed income securities. Fair values reflect the net asset value per share, as determined by the investment manager and derived from the quoted prices in active markets of the underlying securities. Common/collective trust funds are classified as level 2 investments.
|
(d)
|
The short-term investment funds provide for safety of principal and daily liquidity and is valued using the net asset value per share. These assets are classified as level 2 investments.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Balance at beginning of year (a)
|
$
|
274
|
|
|
$
|
262
|
|
Additions, net
|
46
|
|
|
59
|
|
||
Liabilities assumed in acquisitions
|
2
|
|
|
12
|
|
||
Expenditures
|
(67
|
)
|
|
(59
|
)
|
||
Balance at end of year (a)
|
$
|
255
|
|
|
$
|
274
|
|
(a)
|
Includes
$33 million
and
$32 million
of TLLP environmental liabilities at
December 31, 2015
and
2014
, respectively.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Balance at beginning of year (current and noncurrent)
|
$
|
61
|
|
|
$
|
29
|
|
Additions to accrual
|
—
|
|
|
11
|
|
||
Accretion expense
|
2
|
|
|
1
|
|
||
Settlements
|
(3
|
)
|
|
(2
|
)
|
||
Changes in timing and amount of estimated cash flows
|
(1
|
)
|
|
(8
|
)
|
||
Obligations assumed in (adjustments to) Rockies Natural Gas Business (a)
|
(29
|
)
|
|
30
|
|
||
Balance at end of year
|
$
|
30
|
|
|
$
|
61
|
|
(a)
|
As a result of our finalization of the purchase price allocation of TLLP’s Rockies Natural Gas Business Acquisition, we determined that majority of the AROs initially recognized were not estimable. See Note 3 for further discussion of the purchase price allocation.
|
|
Minimum Annual Lease Payments (a)
|
|
Minimum Crude Oil Supply Commitments (b)
|
|
Minimum Annual Take-or-Pay Payments
|
||||||
2016
|
$
|
374
|
|
|
$
|
1,285
|
|
|
$
|
323
|
|
2017
|
335
|
|
|
758
|
|
|
222
|
|
|||
2018
|
272
|
|
|
578
|
|
|
186
|
|
|||
2019
|
220
|
|
|
639
|
|
|
159
|
|
|||
2020
|
188
|
|
|
441
|
|
|
142
|
|
|||
Thereafter
|
380
|
|
|
139
|
|
|
250
|
|
|||
Total minimum lease payments
|
$
|
1,769
|
|
|
$
|
3,840
|
|
|
$
|
1,282
|
|
(a)
|
Includes operating leases having initial or remaining noncancellable lease terms in excess of one year.
|
(b)
|
Prices under the term agreements fluctuate due to market-responsive pricing provisions. To estimate our annual commitments under these contracts, we estimated crude oil prices using exchange-traded crude future prices by crude oil type as of
December 31, 2015
, with prices ranging from
$30
per barrel to
$50
per barrel, and volumes based on the contract’s minimum purchase requirements over the term of the contract.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Balance at Beginning of Year
|
$
|
2,522
|
|
|
$
|
1,183
|
|
Net earnings
|
150
|
|
|
45
|
|
||
Allocated equity on TLLP common unit issuance
|
101
|
|
|
960
|
|
||
Distributions to noncontrolling interest
|
(182
|
)
|
|
(96
|
)
|
||
Amortization of TLLP equity settled awards
|
4
|
|
|
2
|
|
||
Additional noncontrolling interest from Rockies Natural Gas Business (a)
|
—
|
|
|
432
|
|
||
Transfers to (from) noncontrolling interest from (to) Tesoro related to:
|
|
|
|
||||
TLLP’s sale of common units
|
(114
|
)
|
|
(56
|
)
|
||
Tesoro’s acquisition of TLLP common units (b)
|
44
|
|
|
53
|
|
||
Other
|
2
|
|
|
(1
|
)
|
||
Balance at End of Year
|
$
|
2,527
|
|
|
$
|
2,522
|
|
(a)
|
Represents the fair value of noncontrolling interest related to TLLP subsidiaries that were recognized as part TLLP’s purchase price allocation for the Rockies Natural Gas Business acquisition.
|
(b)
|
Includes the net impact of
$44 million
and
$43 million
for the years ended
December 31, 2015
and
2014
, respectively, to noncontrolling interest for ownership changes occurring a result of TLLP’s issuance of equity under its ATM program in 2015, its 2014 October Equity Offering, and the issuance of TLLP common units to Tesoro for TLLP’s November 2015 acquisition of crude oil and refined product storage and pipeline assets in Los Angeles, California.
|
•
|
The 2011 Plan permits the grant of options, SARs, restricted common stock, restricted stock units, and incentive bonuses (which may be paid in cash, stock, or a combination thereof), any of which may be performance-based. The 2011 Plan became effective in May 2011 and no awards may be granted under the 2011 Plan on or after February 2021. Stock options may be granted at exercise prices not less than the fair market value on the date the options are granted.
|
•
|
The 2006 Plan permits the grant of options, restricted common stock, deferred stock units, performance stock awards, other stock-based awards and cash-based awards. The 2006 Plan became effective in May 2006. Stock options may be granted at exercise prices not less than the fair market value on the date the options are granted. Options granted become exercisable after one year in
33%
annual increments and expire
10 years
from the date of grant. No further awards may be granted under this plan.
|
•
|
The Amended and Restated Executive Long-Term Incentive Plan, which expired in May 2006, allowed grants in a variety of forms, including restricted stock, nonqualified stock options, SARs, performance share and performance unit awards. As of December 31, 2015, we no longer have outstanding awards in this plan, although there were awards outstanding during 2015.
|
•
|
The 1995 Non-Employee Director Stock Option Plan provided for the grant of nonqualified stock options over the life of the plan to eligible non-employee directors of Tesoro. These automatic, non-discretionary stock options were granted at an exercise price equal to the fair market value per share of Tesoro’s common stock at the date of grant. The term of each option is
10 years
, and an option becomes exercisable six months after it is granted. The plan expired in February 2010 and no further options may be granted under this plan.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Stock appreciation rights
|
$
|
25
|
|
|
$
|
15
|
|
|
$
|
35
|
|
Performance share awards
|
11
|
|
|
17
|
|
|
20
|
|
|||
Market stock units
|
27
|
|
|
17
|
|
|
17
|
|
|||
Restricted common stock
|
4
|
|
|
3
|
|
|
2
|
|
|||
Other
|
8
|
|
|
3
|
|
|
6
|
|
|||
Total Stock-Based Compensation Expense
|
$
|
75
|
|
|
$
|
55
|
|
|
$
|
80
|
|
|
Number of SARs
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term
|
|
Outstanding at January 1, 2015
|
1,089
|
|
|
$18.16
|
|
1.2 years
|
Exercised
|
(616
|
)
|
|
$19.74
|
|
|
Forfeited
|
(10
|
)
|
|
$34.80
|
|
|
Outstanding at December 31, 2015
|
463
|
|
|
$15.72
|
|
0.43 years
|
Vested or expected to vest at December 31, 2015
|
463
|
|
|
$15.72
|
|
0.43 years
|
Exercisable at December 31, 2015
|
463
|
|
|
$15.72
|
|
0.43 years
|
|
Years Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Expected life from date of grant (years)
|
7
|
|
7
|
|
7
|
Expected volatility
|
51%
|
|
57%
|
|
59%
|
Expected dividend yield
|
2%
|
|
2%
|
|
2%
|
Risk-free interest rate
|
0.4%
|
|
0.2%
|
|
0.3%
|
|
Years Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Expected volatility
|
35%
|
|
43%
|
|
45%
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Risk-free interest rate
|
1.0%
|
|
0.6%
|
|
0.4%
|
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|
Intrinsic Value (In millions)
|
|
Nonvested at January 1, 2015
|
615
|
|
|
$42.82
|
|
$46
|
Granted
|
234
|
|
|
$117.96
|
|
|
Vested
|
(409
|
)
|
|
$76.03
|
|
|
Forfeited
|
(9
|
)
|
|
$74.52
|
|
|
Nonvested at December 31, 2015
|
431
|
|
|
$71.76
|
|
$45
|
|
Number of Units
|
|
Weighted-Average Grant-Date Fair Value
|
|
Intrinsic Value (In millions)
|
|
Nonvested at January 1, 2015
|
1,331
|
|
|
$51.84
|
|
$99
|
Granted
|
875
|
|
|
$114.57
|
|
|
Vested
|
(1,021
|
)
|
|
$33.96
|
|
|
Forfeited
|
(50
|
)
|
|
$75.83
|
|
|
Nonvested at December 31, 2015
|
1,135
|
|
|
$78.99
|
|
$119
|
|
Years Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Expected volatility
|
35%
|
|
44%
|
|
45%
|
Expected dividend yield
|
2%
|
|
2%
|
|
1%
|
Risk-free interest rate
|
1.1%
|
|
0.7%
|
|
0.4%
|
|
Number of Restricted Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|
Nonvested at January 1, 2015
|
128
|
|
|
$51.04
|
Granted
|
20
|
|
|
$90.40
|
Vested
|
(43
|
)
|
|
$52.63
|
Forfeited
|
—
|
|
|
$—
|
Nonvested at December 31, 2015
|
105
|
|
|
$57.58
|
|
Number of Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value (In millions)
|
|
Outstanding at January 1, 2015
|
704
|
|
|
$31.05
|
|
3.1 years
|
|
$30
|
Exercised
|
(360
|
)
|
|
$35.37
|
|
|
|
|
Forfeited or expired
|
—
|
|
|
$—
|
|
|
|
|
Outstanding at December 31, 2015
|
344
|
|
|
$26.55
|
|
3.0 years
|
|
$27
|
Vested or expected to vest at December 31, 2015
|
344
|
|
|
$26.55
|
|
3.0 years
|
|
$27
|
Exercisable at December 31, 2015
|
344
|
|
|
$26.55
|
|
3.0 years
|
|
$27
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Supplemental Cash Flow Disclosures:
|
|
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
181
|
|
|
$
|
129
|
|
|
$
|
91
|
|
Income taxes paid, net
|
882
|
|
|
309
|
|
|
100
|
|
|||
Supplemental Disclosure of Non-cash Investing Activities:
|
|
|
|
|
|
||||||
Assets received for deposits paid in prior period (a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130
|
|
Capital expenditures included in accounts payable at end of period
|
137
|
|
|
161
|
|
|
67
|
|
|||
Capital leases and other
|
—
|
|
|
4
|
|
|
6
|
|
(a)
|
Includes a
$90 million
deposit paid in connection with the Los Angeles Acquisition and a
$40 million
deposit paid related to TLLP’s acquisition of the Northwest Products System, both of which were paid during 2012.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
(In millions)
|
||||||||||
Refining:
|
|
|
|
|
|
||||||
Refined products
|
$
|
25,997
|
|
|
$
|
37,970
|
|
|
$
|
34,846
|
|
Crude oil resales and other
|
946
|
|
|
1,456
|
|
|
1,969
|
|
|||
TLLP:
|
|
|
|
|
|
||||||
Gathering
|
339
|
|
|
135
|
|
|
90
|
|
|||
Processing
|
278
|
|
|
23
|
|
|
—
|
|
|||
Terminalling and transportation
|
495
|
|
|
442
|
|
|
223
|
|
|||
Marketing:
|
|
|
|
|
|
||||||
Fuel (a)
|
18,081
|
|
|
23,701
|
|
|
20,557
|
|
|||
Other non-fuel
|
63
|
|
|
240
|
|
|
239
|
|
|||
Intersegment sales
|
(17,488
|
)
|
|
(23,334
|
)
|
|
(20,323
|
)
|
|||
Total Revenues
|
$
|
28,711
|
|
|
$
|
40,633
|
|
|
$
|
37,601
|
|
Segment Operating Income
|
|
|
|
|
|
||||||
Refining (b)
|
$
|
1,849
|
|
|
$
|
1,178
|
|
|
$
|
786
|
|
TLLP (c)
|
419
|
|
|
187
|
|
|
63
|
|
|||
Marketing (b)
|
899
|
|
|
553
|
|
|
218
|
|
|||
Total Segment Operating Income
|
3,167
|
|
|
1,918
|
|
|
1,067
|
|
|||
Corporate and unallocated costs
|
(340
|
)
|
|
(286
|
)
|
|
(312
|
)
|
|||
Operating Income
|
2,827
|
|
|
1,632
|
|
|
755
|
|
|||
Interest and financing costs, net
|
(217
|
)
|
|
(235
|
)
|
|
(149
|
)
|
|||
Equity in earnings of equity method investments
|
7
|
|
|
10
|
|
|
11
|
|
|||
Other income, net
|
13
|
|
|
57
|
|
|
63
|
|
|||
Earnings Before Income Taxes
|
$
|
2,630
|
|
|
$
|
1,464
|
|
|
$
|
680
|
|
Depreciation and Amortization Expense
|
|
|
|
|
|
||||||
Refining
|
$
|
512
|
|
|
$
|
427
|
|
|
$
|
385
|
|
TLLP
|
179
|
|
|
78
|
|
|
46
|
|
|||
Marketing
|
46
|
|
|
42
|
|
|
37
|
|
|||
Corporate
|
19
|
|
|
15
|
|
|
21
|
|
|||
Total Depreciation and Amortization Expense
|
$
|
756
|
|
|
$
|
562
|
|
|
$
|
489
|
|
Capital Expenditures
|
|
|
|
|
|
||||||
Refining
|
$
|
620
|
|
|
$
|
445
|
|
|
$
|
410
|
|
TLLP
|
296
|
|
|
250
|
|
|
86
|
|
|||
Marketing
|
34
|
|
|
54
|
|
|
40
|
|
|||
Corporate
|
56
|
|
|
30
|
|
|
22
|
|
|||
Total Capital Expenditures
|
$
|
1,006
|
|
|
$
|
779
|
|
|
$
|
558
|
|
(a)
|
Federal and state motor fuel taxes on sales by our marketing segment are included in both revenues and cost of sales in our statements of consolidated operations. These taxes totaled
$561 million
,
$581 million
and
$567 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
(b)
|
Our refining segment uses RINs to satisfy its obligations under the Renewable Fuels Standard, in addition to physically blending required biofuels. Effective April 1, 2013, we changed our intersegment pricing methodology and no longer reduced the amount marketing pays for the biofuels by the market value of the RINs due to significant volatility in the value of RINs. At the end of 2014, given the price of RINs had become more transparent in the price of biofuels, we determined our intersegment pricing methodology should include the market value of RINs as a reduction to the price our marketing segment pays to our refining segment. We made this change effective January 1, 2015. We have not adjusted financial information presented for our refining and marketing segments for the years ended
December 31, 2014
and
2013
. Had we made this change effective January 1, 2013, operating income in our refining segment would have been reduced by
$125 million
and
$116 million
with a corresponding increase to operating income in our marketing segment for the years ended
December 31, 2014
and
2013
, respectively.
|
(c)
|
We present TLLP’s segment operating income net of general and administrative expenses totaling
$54 million
,
$39 million
and
$17 million
representing TLLP’s corporate costs for the years ended
December 31, 2015
,
2014
and
2013
, respectively, that are not allocated to TLLP’s operating segments.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Identifiable Assets Related to Continuing Operations:
|
(In millions)
|
||||||
Refining
|
$
|
9,059
|
|
|
$
|
9,430
|
|
TLLP
|
4,892
|
|
|
4,802
|
|
||
Marketing
|
1,167
|
|
|
1,048
|
|
||
Corporate
|
1,214
|
|
|
1,211
|
|
||
Total Assets
|
$
|
16,332
|
|
|
$
|
16,491
|
|
|
Quarters
|
|
Total Year
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|||||||||||
|
(In millions except per share amounts)
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
6,463
|
|
|
$
|
8,232
|
|
|
$
|
7,743
|
|
|
$
|
6,273
|
|
|
$
|
28,711
|
|
Cost of sales (excluding the lower of cost or market inventory valuation adjustment)
|
5,382
|
|
|
6,398
|
|
|
5,488
|
|
|
4,881
|
|
|
22,149
|
|
|||||
Lower of cost or market inventory valuation adjustment
|
(42
|
)
|
|
—
|
|
|
83
|
|
|
276
|
|
|
317
|
|
|||||
Operating expenses
|
509
|
|
|
578
|
|
|
589
|
|
|
602
|
|
|
2,278
|
|
|||||
Operating income
|
340
|
|
|
1,009
|
|
|
1,292
|
|
|
186
|
|
|
2,827
|
|
|||||
Net earnings from continuing operations
|
188
|
|
|
624
|
|
|
799
|
|
|
83
|
|
|
1,694
|
|
|||||
Loss from discontinued operations, net of tax
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Net earnings
|
188
|
|
|
620
|
|
|
799
|
|
|
83
|
|
|
1,690
|
|
|||||
Net earnings attributable to Tesoro Corporation
|
145
|
|
|
582
|
|
|
759
|
|
|
54
|
|
|
1,540
|
|
|||||
Net earnings per share (a):
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
1.17
|
|
|
$
|
4.64
|
|
|
$
|
6.19
|
|
|
$
|
0.46
|
|
|
$
|
12.50
|
|
Diluted
|
$
|
1.15
|
|
|
$
|
4.59
|
|
|
$
|
6.13
|
|
|
$
|
0.45
|
|
|
$
|
12.36
|
|
2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
9,933
|
|
|
$
|
11,104
|
|
|
$
|
11,151
|
|
|
$
|
8,445
|
|
|
$
|
40,633
|
|
Cost of sales (excluding the lower of cost or market inventory valuation adjustment)
|
8,948
|
|
|
9,867
|
|
|
9,594
|
|
|
7,222
|
|
|
35,631
|
|
|||||
Lower of cost or market inventory valuation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
42
|
|
|||||
Operating expenses
|
591
|
|
|
598
|
|
|
624
|
|
|
607
|
|
|
2,420
|
|
|||||
Operating income
|
238
|
|
|
410
|
|
|
702
|
|
|
282
|
|
|
1,632
|
|
|||||
Net earnings from continuing operations
|
104
|
|
|
240
|
|
|
414
|
|
|
159
|
|
|
917
|
|
|||||
Loss from discontinued operations, net of tax
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(27
|
)
|
|
(29
|
)
|
|||||
Net earnings
|
103
|
|
|
240
|
|
|
413
|
|
|
132
|
|
|
888
|
|
|||||
Net earnings attributable to Tesoro Corporation
|
78
|
|
|
224
|
|
|
396
|
|
|
145
|
|
|
843
|
|
|||||
Net earnings per share (a):
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.59
|
|
|
$
|
1.73
|
|
|
$
|
3.10
|
|
|
$
|
1.15
|
|
|
$
|
6.56
|
|
Diluted
|
$
|
0.58
|
|
|
$
|
1.70
|
|
|
$
|
3.05
|
|
|
$
|
1.13
|
|
|
$
|
6.44
|
|
(a)
|
Includes earnings attributable to Tesoro from continuing and discontinued operations. The sum of four quarters may not equal annual results due to rounding or the quarterly number of shares outstanding.
|
|
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
$
|
31,645
|
|
$
|
3,597
|
|
$
|
(6,531
|
)
|
$
|
28,711
|
|
Costs and Expenses
|
|
|
|
|
|
||||||||||
Cost of sales (excluding the lower of cost or market inventory valuation adjustment)
|
—
|
|
25,753
|
|
2,415
|
|
(6,019
|
)
|
22,149
|
|
|||||
Lower of cost or market inventory valuation adjustment
|
—
|
|
317
|
|
—
|
|
—
|
|
317
|
|
|||||
Operating, selling, general and administrative expenses
|
11
|
|
2,576
|
|
545
|
|
(512
|
)
|
2,620
|
|
|||||
Depreciation and amortization expense
|
—
|
|
574
|
|
182
|
|
—
|
|
756
|
|
|||||
Loss on asset disposals and impairments
|
—
|
|
37
|
|
5
|
|
—
|
|
42
|
|
|||||
Operating Income (Loss)
|
(11
|
)
|
2,388
|
|
450
|
|
—
|
|
2,827
|
|
|||||
Equity in earnings of subsidiaries
|
1,593
|
|
139
|
|
—
|
|
(1,732
|
)
|
—
|
|
|||||
Interest and financing costs, net
|
(45
|
)
|
(66
|
)
|
(106
|
)
|
—
|
|
(217
|
)
|
|||||
Equity in earnings of equity method investments
|
—
|
|
—
|
|
7
|
|
—
|
|
7
|
|
|||||
Other income (expense), net
|
3
|
|
11
|
|
(1
|
)
|
—
|
|
13
|
|
|||||
Earnings Before Income Taxes
|
1,540
|
|
2,472
|
|
350
|
|
(1,732
|
)
|
2,630
|
|
|||||
Income tax expense (benefit) (a)
|
(4
|
)
|
887
|
|
53
|
|
—
|
|
936
|
|
|||||
Net Earnings from Continuing Operations
|
1,544
|
|
1,585
|
|
297
|
|
(1,732
|
)
|
1,694
|
|
|||||
Loss from discontinued operations, net of tax
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
|||||
Net Earnings
|
1,540
|
|
1,585
|
|
297
|
|
(1,732
|
)
|
1,690
|
|
|||||
Less: Net earnings from continuing operations attributable to noncontrolling interest
|
—
|
|
—
|
|
150
|
|
—
|
|
150
|
|
|||||
Net Earnings Attributable to Tesoro Corporation
|
$
|
1,540
|
|
$
|
1,585
|
|
$
|
147
|
|
$
|
(1,732
|
)
|
$
|
1,540
|
|
|
|
|
|
|
|
||||||||||
Comprehensive Income
|
|
|
|
|
|
||||||||||
Total comprehensive income
|
$
|
1,540
|
|
$
|
1,585
|
|
$
|
297
|
|
$
|
(1,732
|
)
|
$
|
1,690
|
|
Less: Noncontrolling interest in comprehensive income
|
—
|
|
—
|
|
150
|
|
—
|
|
150
|
|
|||||
Comprehensive Income Attributable to Tesoro Corporation
|
$
|
1,540
|
|
$
|
1,585
|
|
$
|
147
|
|
$
|
(1,732
|
)
|
$
|
1,540
|
|
(a)
|
The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from corporate subsidiaries, but does include the tax effect of the corporate partners’ share of partnership income.
|
|
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
$
|
45,904
|
|
$
|
6,147
|
|
$
|
(11,418
|
)
|
$
|
40,633
|
|
Costs and Expenses
|
|
|
|
|
|
||||||||||
Cost of sales (excluding the lower of cost or market inventory valuation adjustment)
|
—
|
|
41,288
|
|
5,479
|
|
(11,136
|
)
|
35,631
|
|
|||||
Lower of cost or market inventory valuation adjustment
|
—
|
|
42
|
|
—
|
|
—
|
|
42
|
|
|||||
Operating, selling, general and administrative expenses
|
10
|
|
2,675
|
|
359
|
|
(282
|
)
|
2,762
|
|
|||||
Depreciation and amortization expense
|
—
|
|
481
|
|
81
|
|
—
|
|
562
|
|
|||||
(Gain) loss on asset disposals and impairments
|
—
|
|
8
|
|
(4
|
)
|
—
|
|
4
|
|
|||||
Operating Income (Loss)
|
(10
|
)
|
1,410
|
|
232
|
|
—
|
|
1,632
|
|
|||||
Equity in earnings of subsidiaries
|
905
|
|
48
|
|
—
|
|
(953
|
)
|
—
|
|
|||||
Interest and financing costs, net
|
(39
|
)
|
(126
|
)
|
(70
|
)
|
—
|
|
(235
|
)
|
|||||
Equity in earnings of equity method investments
|
—
|
|
9
|
|
1
|
|
—
|
|
10
|
|
|||||
Other income, net
|
2
|
|
55
|
|
—
|
|
—
|
|
57
|
|
|||||
Earnings Before Income Taxes
|
858
|
|
1,396
|
|
163
|
|
(953
|
)
|
1,464
|
|
|||||
Income tax expense (benefit) (a)
|
(14
|
)
|
521
|
|
40
|
|
—
|
|
547
|
|
|||||
Net Earnings from Continuing Operations
|
872
|
|
875
|
|
123
|
|
(953
|
)
|
917
|
|
|||||
Loss from discontinued operations, net of tax
|
(29
|
)
|
—
|
|
—
|
|
—
|
|
(29
|
)
|
|||||
Net Earnings
|
843
|
|
875
|
|
123
|
|
(953
|
)
|
888
|
|
|||||
Less: Net earnings from continuing operations attributable to noncontrolling interest
|
—
|
|
—
|
|
45
|
|
—
|
|
45
|
|
|||||
Net Earnings Attributable to Tesoro Corporation
|
$
|
843
|
|
$
|
875
|
|
$
|
78
|
|
$
|
(953
|
)
|
$
|
843
|
|
|
|
|
|
|
|
||||||||||
Comprehensive Income
|
|
|
|
|
|
||||||||||
Total comprehensive income
|
$
|
746
|
|
$
|
875
|
|
$
|
123
|
|
$
|
(953
|
)
|
$
|
791
|
|
Less: Noncontrolling interest in comprehensive income
|
—
|
|
—
|
|
45
|
|
—
|
|
45
|
|
|||||
Comprehensive Income Attributable to Tesoro Corporation
|
$
|
746
|
|
$
|
875
|
|
$
|
78
|
|
$
|
(953
|
)
|
$
|
746
|
|
(a)
|
The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from corporate subsidiaries, but does include the tax effect of the corporate partners’ share of partnership income.
|
|
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
$
|
44,087
|
|
$
|
4,697
|
|
$
|
(11,183
|
)
|
$
|
37,601
|
|
Costs and Expenses
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
40,775
|
|
4,365
|
|
(11,055
|
)
|
34,085
|
|
|||||
Operating, selling, general and administrative expenses
|
12
|
|
2,192
|
|
172
|
|
(128
|
)
|
2,248
|
|
|||||
Depreciation and amortization expense
|
—
|
|
447
|
|
42
|
|
—
|
|
489
|
|
|||||
Loss on asset disposals and impairments
|
—
|
|
21
|
|
3
|
|
—
|
|
24
|
|
|||||
Operating Income (Loss)
|
(12
|
)
|
652
|
|
115
|
|
—
|
|
755
|
|
|||||
Equity in earnings of subsidiaries (a)
|
386
|
|
30
|
|
—
|
|
(416
|
)
|
—
|
|
|||||
Interest and financing costs, net
|
(19
|
)
|
(110
|
)
|
(20
|
)
|
—
|
|
(149
|
)
|
|||||
Equity in earnings of equity method investments
|
—
|
|
11
|
|
—
|
|
—
|
|
11
|
|
|||||
Other income, net
|
—
|
|
63
|
|
—
|
|
—
|
|
63
|
|
|||||
Earnings Before Income Taxes
|
355
|
|
646
|
|
95
|
|
(416
|
)
|
680
|
|
|||||
Income tax expense (benefit) (b)
|
(8
|
)
|
243
|
|
11
|
|
—
|
|
246
|
|
|||||
Net Earnings from Continuing Operations
|
363
|
|
403
|
|
84
|
|
(416
|
)
|
434
|
|
|||||
Earnings (loss) from discontinued operations, net of tax
|
49
|
|
(29
|
)
|
—
|
|
—
|
|
20
|
|
|||||
Net Earnings
|
412
|
|
374
|
|
84
|
|
(416
|
)
|
454
|
|
|||||
Less: Net earnings from continuing operations attributable to noncontrolling interest
|
—
|
|
—
|
|
42
|
|
—
|
|
42
|
|
|||||
Net Earnings Attributable to Tesoro Corporation
|
$
|
412
|
|
$
|
374
|
|
$
|
42
|
|
$
|
(416
|
)
|
$
|
412
|
|
|
|
|
|
|
|
||||||||||
Comprehensive Income
|
|
|
|
|
|
||||||||||
Total comprehensive income
|
$
|
497
|
|
$
|
374
|
|
$
|
84
|
|
$
|
(416
|
)
|
$
|
539
|
|
Less: Noncontrolling interest in comprehensive income
|
—
|
|
—
|
|
42
|
|
—
|
|
42
|
|
|||||
Comprehensive Income Attributable to Tesoro Corporation
|
$
|
497
|
|
$
|
374
|
|
$
|
42
|
|
$
|
(416
|
)
|
$
|
497
|
|
(a)
|
Revised to conform to current period presentation of equity in earnings of subsidiaries that reflects equity in earnings of subsidiaries within the guarantor and non-guarantor columns net of intercompany amounts.
|
(b)
|
The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings from corporate subsidiaries, but does include the tax effect of the corporate partners’ share of partnership income.
|
|
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||
Current Assets
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
895
|
|
$
|
47
|
|
$
|
—
|
|
$
|
942
|
|
Receivables, net of allowance for doubtful accounts
|
—
|
|
626
|
|
166
|
|
—
|
|
792
|
|
|||||
Short-term receivables from affiliates
|
—
|
|
197
|
|
—
|
|
(197
|
)
|
—
|
|
|||||
Inventories
|
—
|
|
1,971
|
|
331
|
|
—
|
|
2,302
|
|
|||||
Prepayments and other current assets
|
116
|
|
140
|
|
16
|
|
(1
|
)
|
271
|
|
|||||
Total Current Assets
|
116
|
|
3,829
|
|
560
|
|
(198
|
)
|
4,307
|
|
|||||
Net Property, Plant and Equipment
|
—
|
|
6,027
|
|
3,514
|
|
—
|
|
9,541
|
|
|||||
Investment in Subsidiaries
|
8,133
|
|
493
|
|
—
|
|
(8,626
|
)
|
—
|
|
|||||
Long-Term Receivables from Affiliates
|
1,517
|
|
—
|
|
—
|
|
(1,517
|
)
|
—
|
|
|||||
Long-Term Intercompany Note Receivable
|
—
|
|
—
|
|
1,626
|
|
(1,626
|
)
|
—
|
|
|||||
Other Noncurrent Assets:
|
|
|
|
|
|
||||||||||
Acquired intangibles, net
|
—
|
|
234
|
|
977
|
|
—
|
|
1,211
|
|
|||||
Other, net
|
33
|
|
1,026
|
|
219
|
|
(5
|
)
|
1,273
|
|
|||||
Total Other Noncurrent Assets
|
33
|
|
1,260
|
|
1,196
|
|
(5
|
)
|
2,484
|
|
|||||
Total Assets
|
$
|
9,799
|
|
$
|
11,609
|
|
$
|
6,896
|
|
$
|
(11,972
|
)
|
$
|
16,332
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||
Current Liabilities
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
$
|
1,413
|
|
$
|
155
|
|
$
|
—
|
|
$
|
1,568
|
|
Other current liabilities
|
91
|
|
764
|
|
108
|
|
(1
|
)
|
962
|
|
|||||
Short-term payables to affiliates
|
—
|
|
—
|
|
197
|
|
(197
|
)
|
—
|
|
|||||
Total Current Liabilities
|
91
|
|
2,177
|
|
460
|
|
(198
|
)
|
2,530
|
|
|||||
Long-Term Payables to Affiliates
|
—
|
|
1,375
|
|
142
|
|
(1,517
|
)
|
—
|
|
|||||
Deferred Income Taxes
|
1,227
|
|
—
|
|
—
|
|
(5
|
)
|
1,222
|
|
|||||
Other Noncurrent Liabilities
|
452
|
|
271
|
|
50
|
|
—
|
|
773
|
|
|||||
Debt
|
1,190
|
|
33
|
|
2,844
|
|
—
|
|
4,067
|
|
|||||
Long-Term Intercompany Note Payable
|
1,626
|
|
—
|
|
—
|
|
(1,626
|
)
|
—
|
|
|||||
Equity-Tesoro Corporation
|
5,213
|
|
7,753
|
|
873
|
|
(8,626
|
)
|
5,213
|
|
|||||
Equity-Noncontrolling Interest
|
—
|
|
—
|
|
2,527
|
|
—
|
|
2,527
|
|
|||||
Total Liabilities and Equity
|
$
|
9,799
|
|
$
|
11,609
|
|
$
|
6,896
|
|
$
|
(11,972
|
)
|
$
|
16,332
|
|
|
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||
Current Assets
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
943
|
|
$
|
57
|
|
$
|
—
|
|
$
|
1,000
|
|
Receivables, net of allowance for doubtful accounts
|
6
|
|
912
|
|
517
|
|
—
|
|
1,435
|
|
|||||
Short-term receivables from affiliates
|
—
|
|
84
|
|
—
|
|
(84
|
)
|
—
|
|
|||||
Inventories
|
—
|
|
2,088
|
|
351
|
|
—
|
|
2,439
|
|
|||||
Prepayments and other current assets
|
71
|
|
115
|
|
16
|
|
(2
|
)
|
200
|
|
|||||
Total Current Assets
|
77
|
|
4,142
|
|
941
|
|
(86
|
)
|
5,074
|
|
|||||
Net Property, Plant and Equipment
|
—
|
|
5,666
|
|
3,379
|
|
—
|
|
9,045
|
|
|||||
Investment in Subsidiaries (a)
|
6,621
|
|
362
|
|
—
|
|
(6,983
|
)
|
—
|
|
|||||
Long-Term Receivables from Affiliates
|
2,398
|
|
—
|
|
—
|
|
(2,398
|
)
|
—
|
|
|||||
Long-Term Intercompany Note Receivable
|
—
|
|
—
|
|
1,376
|
|
(1,376
|
)
|
—
|
|
|||||
Other Noncurrent Assets:
|
|
|
|
|
|
||||||||||
Acquired intangibles, net
|
—
|
|
249
|
|
973
|
|
—
|
|
1,222
|
|
|||||
Other, net
|
6
|
|
893
|
|
251
|
|
—
|
|
1,150
|
|
|||||
Total Other Noncurrent Assets
|
6
|
|
1,142
|
|
1,224
|
|
—
|
|
2,372
|
|
|||||
Total Assets
|
$
|
9,102
|
|
$
|
11,312
|
|
$
|
6,920
|
|
$
|
(10,843
|
)
|
$
|
16,491
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||
Current Liabilities
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
1
|
|
$
|
1,779
|
|
$
|
703
|
|
$
|
—
|
|
$
|
2,483
|
|
Other current liabilities
|
114
|
|
717
|
|
118
|
|
(2
|
)
|
947
|
|
|||||
Short-term payables to affiliates
|
—
|
|
—
|
|
84
|
|
(84
|
)
|
—
|
|
|||||
Total Current Liabilities
|
115
|
|
2,496
|
|
905
|
|
(86
|
)
|
3,430
|
|
|||||
Long-Term Payables to Affiliates
|
—
|
|
2,370
|
|
28
|
|
(2,398
|
)
|
—
|
|
|||||
Deferred Income Taxes
|
1,132
|
|
—
|
|
2
|
|
—
|
|
1,134
|
|
|||||
Other Noncurrent Liabilities
|
447
|
|
296
|
|
47
|
|
—
|
|
790
|
|
|||||
Debt
|
1,578
|
|
39
|
|
2,544
|
|
—
|
|
4,161
|
|
|||||
Long-Term Intercompany Note Payable
|
1,376
|
|
—
|
|
—
|
|
(1,376
|
)
|
—
|
|
|||||
Equity-Tesoro Corporation (a)
|
4,454
|
|
6,111
|
|
872
|
|
(6,983
|
)
|
4,454
|
|
|||||
Equity-Noncontrolling Interest
|
—
|
|
—
|
|
2,522
|
|
—
|
|
2,522
|
|
|||||
Total Liabilities and Equity
|
$
|
9,102
|
|
$
|
11,312
|
|
$
|
6,920
|
|
$
|
(10,843
|
)
|
$
|
16,491
|
|
(a)
|
Revised to conform to current period presentation that reflects investment in subsidiary and equity amounts within the guarantor and non-guarantor columns net of intercompany amounts.
|
|
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
Cash Flows From (Used in) Operating Activities
|
|
|
|
|
|
||||||||||
Net cash from (used in) operating activities
|
$
|
(39
|
)
|
$
|
1,838
|
|
$
|
332
|
|
$
|
—
|
|
$
|
2,131
|
|
Cash Flows From (Used in) Investing Activities
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
(723
|
)
|
(307
|
)
|
—
|
|
(1,030
|
)
|
|||||
Acquisitions
|
—
|
|
(91
|
)
|
(6
|
)
|
—
|
|
(97
|
)
|
|||||
Intercompany notes, net
|
1,047
|
|
—
|
|
—
|
|
(1,047
|
)
|
—
|
|
|||||
Other investing activities
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
(2
|
)
|
|||||
Net cash from (used in) investing activities
|
1,047
|
|
(816
|
)
|
(313
|
)
|
(1,047
|
)
|
(1,129
|
)
|
|||||
Cash Flows From (Used in) Financing Activities
|
|
|
|
|
|
||||||||||
Borrowings under revolving credit agreements
|
—
|
|
—
|
|
476
|
|
—
|
|
476
|
|
|||||
Repayments on revolving credit agreements
|
—
|
|
—
|
|
(431
|
)
|
—
|
|
(431
|
)
|
|||||
Borrowings under term loan credit agreements
|
—
|
|
—
|
|
250
|
|
—
|
|
250
|
|
|||||
Repayments of debt
|
(398
|
)
|
(6
|
)
|
—
|
|
—
|
|
(404
|
)
|
|||||
Dividend payments
|
(228
|
)
|
—
|
|
—
|
|
—
|
|
(228
|
)
|
|||||
Proceeds from stock options exercised
|
13
|
|
—
|
|
—
|
|
—
|
|
13
|
|
|||||
Net proceeds from issuance of Tesoro Logistics LP common units
|
—
|
|
—
|
|
99
|
|
—
|
|
99
|
|
|||||
Distributions to noncontrolling interest
|
—
|
|
—
|
|
(182
|
)
|
—
|
|
(182
|
)
|
|||||
Purchases of common stock
|
(644
|
)
|
—
|
|
—
|
|
—
|
|
(644
|
)
|
|||||
Taxes paid related to net share settlement of equity awards
|
(45
|
)
|
—
|
|
—
|
|
—
|
|
(45
|
)
|
|||||
Net intercompany borrowings (repayments)
|
—
|
|
(1,126
|
)
|
79
|
|
1,047
|
|
—
|
|
|||||
Distributions to TLLP unitholders and general partner
|
294
|
|
24
|
|
(318
|
)
|
—
|
|
—
|
|
|||||
Payments of debt issuance costs
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(2
|
)
|
|||||
Excess tax benefits from stock-based compensation arrangements
|
—
|
|
38
|
|
—
|
|
—
|
|
38
|
|
|||||
Net cash used in financing activities
|
(1,008
|
)
|
(1,070
|
)
|
(29
|
)
|
1,047
|
|
(1,060
|
)
|
|||||
Decrease in Cash and Cash Equivalents
|
—
|
|
(48
|
)
|
(10
|
)
|
—
|
|
(58
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Year
|
—
|
|
943
|
|
57
|
|
—
|
|
1,000
|
|
|||||
Cash and Cash Equivalents, End of Year
|
$
|
—
|
|
$
|
895
|
|
$
|
47
|
|
$
|
—
|
|
$
|
942
|
|
|
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
Cash Flows From (Used in) Operating Activities
|
|
|
|
|
|
||||||||||
Net cash from (used in) operating activities
|
$
|
(36
|
)
|
$
|
1,161
|
|
$
|
239
|
|
$
|
—
|
|
$
|
1,364
|
|
Cash Flows From (Used in) Investing Activities
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
(465
|
)
|
(220
|
)
|
—
|
|
(685
|
)
|
|||||
Acquisitions
|
—
|
|
(17
|
)
|
(2,479
|
)
|
—
|
|
(2,496
|
)
|
|||||
Intercompany notes, net
|
444
|
|
—
|
|
—
|
|
(444
|
)
|
—
|
|
|||||
Other investing activities
|
—
|
|
(1
|
)
|
10
|
|
—
|
|
9
|
|
|||||
Net cash from (used in) investing activities
|
444
|
|
(483
|
)
|
(2,689
|
)
|
(444
|
)
|
(3,172
|
)
|
|||||
Cash Flows From (Used in) Financing Activities
|
|
|
|
|
|
||||||||||
Borrowings under revolving credit agreements
|
—
|
|
—
|
|
646
|
|
—
|
|
646
|
|
|||||
Repayments on revolving credit agreements
|
—
|
|
—
|
|
(386
|
)
|
—
|
|
(386
|
)
|
|||||
Proceeds from debt offerings
|
300
|
|
—
|
|
1,300
|
|
—
|
|
1,600
|
|
|||||
Repayments of debt
|
(300
|
)
|
(3
|
)
|
(131
|
)
|
—
|
|
(434
|
)
|
|||||
Dividend payments
|
(141
|
)
|
—
|
|
—
|
|
—
|
|
(141
|
)
|
|||||
Proceeds from stock options exercised
|
19
|
|
—
|
|
—
|
|
—
|
|
19
|
|
|||||
Net proceeds from issuance of Tesoro Logistics LP common units
|
—
|
|
—
|
|
949
|
|
—
|
|
949
|
|
|||||
Distributions to noncontrolling interest
|
—
|
|
—
|
|
(96
|
)
|
—
|
|
(96
|
)
|
|||||
Purchases of common stock
|
(500
|
)
|
—
|
|
—
|
|
—
|
|
(500
|
)
|
|||||
Taxes paid related to net share settlement of equity awards
|
(22
|
)
|
—
|
|
—
|
|
—
|
|
(22
|
)
|
|||||
Net intercompany borrowings (repayments)
|
—
|
|
(934
|
)
|
490
|
|
444
|
|
—
|
|
|||||
Borrowings from general partner
|
243
|
|
—
|
|
(243
|
)
|
—
|
|
—
|
|
|||||
Distributions to TLLP unitholders and general partner
|
22
|
|
21
|
|
(43
|
)
|
—
|
|
—
|
|
|||||
Payments of debt issuance costs
|
(5
|
)
|
—
|
|
(19
|
)
|
—
|
|
(24
|
)
|
|||||
Excess tax benefits from stock-based compensation arrangements
|
—
|
|
20
|
|
—
|
|
—
|
|
20
|
|
|||||
Other financing activities
|
(24
|
)
|
—
|
|
(37
|
)
|
—
|
|
(61
|
)
|
|||||
Net cash from (used in) financing activities
|
(408
|
)
|
(896
|
)
|
2,430
|
|
444
|
|
1,570
|
|
|||||
Decrease in Cash and Cash Equivalents
|
—
|
|
(218
|
)
|
(20
|
)
|
—
|
|
(238
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Year
|
—
|
|
1,161
|
|
77
|
|
—
|
|
1,238
|
|
|||||
Cash and Cash Equivalents, End of Year
|
$
|
—
|
|
$
|
943
|
|
$
|
57
|
|
$
|
—
|
|
$
|
1,000
|
|
|
Parent
|
Guarantor Subsidiaries
|
Non-
Guarantors
|
Consolidating Adjustments
|
Consolidated
|
||||||||||
Cash Flows From (Used in) Operating Activities
|
|
|
|
|
|
||||||||||
Net cash from (used in) operating activities
|
$
|
(53
|
)
|
$
|
734
|
|
$
|
178
|
|
$
|
—
|
|
$
|
859
|
|
Cash Flows From (Used in) Investing Activities
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
(496
|
)
|
(74
|
)
|
—
|
|
(570
|
)
|
|||||
Acquisitions
|
—
|
|
(1,838
|
)
|
(714
|
)
|
—
|
|
(2,552
|
)
|
|||||
Proceeds from sale of Hawaii Business
|
539
|
|
—
|
|
—
|
|
—
|
|
539
|
|
|||||
Intercompany notes, net
|
(1,405
|
)
|
—
|
|
—
|
|
1,405
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
1
|
|
5
|
|
—
|
|
6
|
|
|||||
Net cash used in investing activities
|
(866
|
)
|
(2,333
|
)
|
(783
|
)
|
1,405
|
|
(2,577
|
)
|
|||||
Cash Flows From (Used in) Financing Activities
|
|
|
|
|
|
||||||||||
Borrowings under revolving credit agreements
|
1,524
|
|
—
|
|
544
|
|
—
|
|
2,068
|
|
|||||
Repayments on revolving credit agreements
|
(1,524
|
)
|
—
|
|
(544
|
)
|
—
|
|
(2,068
|
)
|
|||||
Borrowings under term loan credit agreements
|
500
|
|
—
|
|
—
|
|
—
|
|
500
|
|
|||||
Proceeds from debt offerings
|
—
|
|
—
|
|
806
|
|
—
|
|
806
|
|
|||||
Repayments of debt
|
(102
|
)
|
(4
|
)
|
—
|
|
—
|
|
(106
|
)
|
|||||
Dividend payments
|
(121
|
)
|
—
|
|
—
|
|
—
|
|
(121
|
)
|
|||||
Proceeds from stock options exercised
|
72
|
|
—
|
|
—
|
|
—
|
|
72
|
|
|||||
Net proceeds from issuance of Tesoro Logistics LP common units
|
—
|
|
—
|
|
702
|
|
—
|
|
702
|
|
|||||
Distributions to noncontrolling interest
|
—
|
|
—
|
|
(59
|
)
|
—
|
|
(59
|
)
|
|||||
Purchases of common stock
|
(440
|
)
|
—
|
|
—
|
|
—
|
|
(440
|
)
|
|||||
Taxes paid related to net share settlement of equity awards
|
(6
|
)
|
—
|
|
—
|
|
—
|
|
(6
|
)
|
|||||
Net intercompany borrowings (repayments)
|
—
|
|
1,491
|
|
(86
|
)
|
(1,405
|
)
|
—
|
|
|||||
Borrowings from general partner
|
1,024
|
|
—
|
|
(1,024
|
)
|
—
|
|
—
|
|
|||||
Distributions to TLLP unitholders and general partner
|
14
|
|
17
|
|
(31
|
)
|
—
|
|
—
|
|
|||||
Payments of debt issuance costs
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
(13
|
)
|
|||||
Excess tax benefits from stock-based compensation arrangements
|
—
|
|
12
|
|
—
|
|
—
|
|
12
|
|
|||||
Other financing activities
|
(22
|
)
|
—
|
|
(8
|
)
|
—
|
|
(30
|
)
|
|||||
Net cash from financing activities
|
919
|
|
1,516
|
|
287
|
|
(1,405
|
)
|
1,317
|
|
|||||
Decrease in Cash and Cash Equivalents
|
—
|
|
(83
|
)
|
(318
|
)
|
—
|
|
(401
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Year
|
—
|
|
1,244
|
|
395
|
|
—
|
|
1,639
|
|
|||||
Cash and Cash Equivalents, End of Year
|
$
|
—
|
|
$
|
1,161
|
|
$
|
77
|
|
$
|
—
|
|
$
|
1,238
|
|
Plan Category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (a)
|
|
Number of Securities Remaining Available for Future Issuance under Equity Compensation
Plans (b)
|
||||
Equity compensation plans approved
by security holders (c)
|
|
3,357,422
|
|
|
$
|
37.12
|
|
|
4,078,670
|
|
Equity compensation plans not
approved by security holders (d)
|
|
151,513
|
|
|
$
|
13.09
|
|
|
—
|
|
Total
|
|
3,508,935
|
|
|
$
|
26.55
|
|
|
4,078,670
|
|
(a)
|
Includes only the exercise price for options to purchase common stock. No value is included in column (a) of the table for restricted stock units, performance share awards or market stock units since they do not have an exercise, or strike, price.
|
(b)
|
For illustrative purposes, a maximum payout (i.e., a
200%
ratio) has been assumed for vesting and payout of outstanding performance share award and market stock unit grants.
|
(c)
|
The number of securities to be issued upon exercise under these approved plans includes
192,855
options to purchase common stock,
31,869
restricted stock units,
862,540
performance share awards, and
2,270,158
market stock units. Each performance share award and market stock unit shown in the table represents a right to receive (upon vesting and payout) a specified number of our common shares. Vesting and payout may be conditioned upon achievement of pre-determined performance objectives or only upon continued service with us and our affiliates. For illustrative purposes, the maximum payout (i.e., a
200%
ratio) provided by the provisions of the award agreements has been assumed for vesting and payout of performance share awards and market share awards. Payout at target levels (i.e., a
100%
ratio) would result in
1,791,073
securities to be issued and
5,051,278
securities remaining available for future issuance under equity compensation plans.
|
(d)
|
Stock options granted in connection with the inducement awards of the CEO Agreement were not granted under an equity compensation plan.
|
|
Page
|
Report of Independent Registered Public Accounting Firm (Ernst & Young LLP)
|
|
Statements of Consolidated Operations — Years Ended December 31, 2015, 2014 and 2013
|
|
Statements of Consolidated Comprehensive Income — Years Ended December 31, 2015, 2014 and 2013
|
|
Consolidated Balance Sheets — December 31, 2015 and 2014
|
|
Statements of Consolidated Equity — Years Ended December 31, 2015, 2014 and 2013
|
|
Statements of Consolidated Cash Flows — Years Ended December 31, 2015, 2014 and 2013
|
|
Notes to Consolidated Financial Statements
|
Exhibit Number
|
|
Description of Exhibit
|
2.1
|
|
Stock Sale Agreement, dated March 18, 1998, among the Company, BHP Hawaii Inc. and BHP Petroleum Pacific Islands Inc. (incorporated by reference herein to Exhibit 2.1 to Registration Statement No. 333-51789).
|
|
|
|
2.2
|
|
Stock Sale Agreement, dated May 1, 1998, among Shell Refining Holding Company, Shell Anacortes Refining Company and the Company (incorporated by reference herein to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 1998, File No. 1-3473).
|
|
|
|
2.3
|
|
Asset Purchase Agreement, dated July 16, 2001, by and among the Company, BP Corporation North America Inc. and Amoco Oil Company (incorporated by reference herein to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 21, 2001, File No. 1-3473).
|
|
|
|
2.4
|
|
Asset Purchase Agreement, dated July 16, 2001, by and among the Company, BP Corporation North America Inc. and Amoco Oil Company (incorporated by reference herein to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on September 21, 2001, File No. 1-3473).
|
|
|
|
2.5
|
|
Asset Purchase Agreement, dated July 16, 2001, by and among the Company, BP Corporation North America Inc. and BP Pipelines (North America) Inc. (incorporated by reference herein to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001, File No. 1-3473).
|
|
|
|
2.6
|
|
Asset Purchase Agreement by and between the Company and Shell Oil Products U.S. dated as of January 29, 2007 (incorporated by reference herein to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 1, 2007, File No. 1-3473).
|
|
|
|
2.7
|
|
Sale and Purchase Agreement for Golden Eagle Refining and Marketing Assets, dated February 4, 2002, by and among Ultramar Inc. and Tesoro Refining and Marketing Company, including First Amendment dated February 20, 2002 and related Purchaser Parent Guaranty dated February 4, 2002, and Second Amendment dated May 3, 2002 (incorporated by reference herein to Exhibit 2.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, File No. 1-3473, and Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on May 9, 2002, File No. 1-3473).
|
|
|
|
2.8
|
|
Asset Purchase and Sale Agreement by and between the Company and Shell Oil Products U.S. dated as of January 29, 2007 (incorporated by reference herein to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on February 1, 2007, File No. 1-3473).
|
|
|
|
2.9
|
|
Purchase and Sale Agreement and Joint Escrow Instructions by and among the Company and USA Petroleum Corporation, USA Gasoline Corporation, Palisades Gas and Wash, Inc. and USA San Diego LLC dated as of January 26, 2007 (incorporated by reference herein to Exhibit 2.3 to the Company’s Current Report on Form 8-K filed on February 1, 2007, File No. 1-3473).
|
|
|
|
#2.10
|
|
Letter Agreement to the Purchase and Sale Agreement and Joint Escrow Instructions dated April 30, 2007 between the Company and USA Petroleum Corporation, Palisades Gas and Wash, Inc. and USA San Diego, LLC (incorporated by reference herein to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, File No. 1-3473).
|
Exhibit Number
|
|
Description of Exhibit
|
|
|
|
2.11
|
|
Purchase and Sale Agreement by and between Tesoro Refining and Marketing Company and the Sellers dated as of August 8, 2012 (incorporated by reference herein to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on August 13, 2012, File No. 1-3473).
|
|
|
|
2.12
|
|
Amendment No. 1 to Purchase and Sale Agreement, dated September 13, 2012, among BP West Coast Products LLC, Atlantic Richfield Company, Arco Midcon LLC, Arco Terminal Services Corporation, Arco Material Supply Company, CH-Twenty, Inc., Products Cogeneration Company, Energy Global Investments (USA) Inc., and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, File No. 1-3473).
|
|
|
|
2.13
|
|
Amendment No. 2 to Purchase and Sale Agreement, dated May 31, 2013, among BP West Coast Products LLC, Atlantic Richfield Company, Arco Midcon LLC, Arco Terminal Services Corporation, Arco Material Supply Company, CH-Twenty, Inc., Products Cogeneration Company, Energy Global Investments (USA) Inc., and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, File No. 1-3473).
|
|
|
|
2.14
|
|
Amendment No. 3 to Purchase and Sale Agreement, dated May 31, 2013, among BP West Coast Products LLC, Atlantic Richfield Company, Arco Midcon LLC, Arco Terminal Services Corporation, Arco Material Supply Company, Products Cogeneration Company, Energy Global Investments (USA) Inc., and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 2.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, File No. 1-3473).
|
|
|
|
2.15
|
|
Membership Interest Purchase Agreement, dated June 17, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC, and Hawaii Pacific Energy, LLC. Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules, exhibits and similar attachments to the Purchase Agreement have not been filed with this exhibit. The schedules contain various items relating to the assets to be acquired and the representations and warranties made by the parties to the agreement. The exhibits contain the forms of various agreements, certificates and other documents to be executed and delivered by the parties upon the closing of the transaction. The Company agrees to furnish supplementally any omitted schedule, exhibit or similar attachment to the SEC upon request (incorporated by reference herein to Exhibit 2.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, File No. 1-3473).
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of the Company, dated as of August 10, 2012 (incorporated by reference herein to Exhibit 3.1 to the Company’s Registration Statement on Form S-3ASR filed on September 13, 2012, File No. 333-183872).
|
|
|
|
3.2
|
|
First Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP, dated April 26, 2011 (incorporated by reference herein to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-3473).
|
|
|
|
3.3
|
|
Amended and Restated Bylaws of Tesoro Corporation effective November 6, 2013 (incorporated by reference herein to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013, File No. 1-3473).
|
|
|
|
3.4
|
|
Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP, dated as of December 2, 2014, entered into and effectuated by Tesoro Logistics GP, LLC (incorporated by reference herein to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-3473).
|
|
|
|
4.1
|
|
Indenture, dated as of October 29, 2014, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference herein to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, File No. 1-3473).
|
|
|
|
4.2
|
|
Supplemental Indenture, dated as of December 2, 2014, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., QEP Field Services, LLC, the other entities party thereto, and U.S. Bank National Association, as trustee (incorporated by reference herein from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-3473).
|
|
|
|
4.3
|
|
Second Supplemental Indenture, dated as of May 21, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference herein to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-3473).
|
|
|
|
4.4
|
|
Indenture (including form of note), dated as of September 27, 2012, among Tesoro Corporation, the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 4.250% Senior Notes due 2017 and the 5.375% Senior Notes due 2022 (incorporated by reference herein to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 2, 2012, File No. 1-3473).
|
|
|
|
4.5
|
|
Supplemental Indenture, dated as of February 27, 2013, among Tesoro Corporation, certain subsidiary guarantors and U.S. Bank National Association, as trustee, relating to the 4.250% Senior Notes due 2017 and 5.375% Senior Notes due 2022 (incorporated by reference herein to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013, File No. 1-3473).
|
|
|
|
4.6
|
|
Supplemental Indenture, dated as of September 5, 2013, among Tesoro Corporation, certain subsidiary guarantors and U.S. Bank National Association, as trustee, relating to the 4.250% Senior Notes due 2017 and 5.375% Senior Notes due 2022 (incorporated by reference herein to Exhibit 4.6 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, File No. 1-3473).
|
|
|
|
4.7
|
|
Supplemental Indenture, dated as of March 3, 2014, among Tesoro Corporation, certain subsidiary guarantors and U.S. Bank National Association, as trustee, relating to the 4.250% Senior Notes due 2017 and 5.375% Senior Notes due 2022 (incorporated by reference herein to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014, File No. 1-3473).
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
*4.8
|
|
Supplemental Indenture, dated as of November 11, 2015, among Tesoro Corporation, certain subsidiary guarantors and U.S. Bank National Association, as trustee, relating to the Company’s 4.20% Senior Notes due 2017 and the 5.375% Senior Notes due 2022.
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|
|
|
4.9
|
|
Release, dated September 10, 2013, of Tesoro Hawaii, LLC and Smiley’s Super Service, Inc. from Indentures relating to the 9.750% Senior Notes due 2019, 4.250% Senior Notes due 2017 and 5.375% Senior Notes due 2022 (incorporated by reference herein to Exhibit 4.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, File No. 1-3473).
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|
|
|
4.10
|
|
Indenture (including form of note), dated as of March 18, 2014, among Tesoro Corporation, the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.125% Senior Notes due 2024 (incorporated by reference herein to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 18, 2014, File No. 1-3473).
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|
|
|
*4.11
|
|
Supplemental Indenture, dated as of November 11, 2015, among Tesoro Corporation, certain subsidiary guarantors and U.S. Bank National Association, as trustee, relating to the Company’s 5.125% Senior Notes due 2024.
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|
|
|
4.12
|
|
Release, dated December 6, 2013, of Tesoro SoCal Pipeline Company LLC from Indentures relating to the 9.750% Senior Notes due 2019, 4.250% Senior Notes due 2017 and 5.375% Senior Notes due 2022 (incorporated by reference herein to Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, File No. 1-3473).
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|
|
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4.13
|
|
Indenture, dated as of September 14, 2012, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-3473).
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|
|
|
4.14
|
|
First Supplemental Indenture, dated as of January 24, 2013, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, File No. 1-3473).
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|
|
|
4.15
|
|
Second Supplemental Indenture, dated as of December 9, 2013, among Tesoro SoCal Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, File No. 1-3473).
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|
|
|
4.16
|
|
Third Supplemental Indenture, dated as of December 17, 2013, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on December 17, 2013, File No. 1-3473).
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|
|
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4.17
|
|
Fourth Supplemental Indenture, dated as of October 8, 2014, among Tesoro Alaska Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, File No. 1-3473).
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|
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4.18
|
|
Fifth Supplemental Indenture, dated as of January 8, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-3473).
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|
|
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4.19
|
|
Sixth Supplemental Indenture, dated as of May 21, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference herein to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-3473).
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|
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4.20
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|
Registration Rights Agreement, dated as of October 29, 2014, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers (incorporated by reference herein to Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, File No. 1-3473).
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|
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4.21
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|
Joinder Agreement to the Registration Rights Agreement, dated as of December 2, 2014, among QEP Field Services, LLC, and the other entities party thereto (incorporated by reference herein from Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-3473).
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|
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4.22
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|
Indenture, dated as of August 1, 2013, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 6.125% Senior Notes due 2021 (incorporated by reference herein to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 2, 2013, File No. 1-3473).
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|
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4.23
|
|
First Supplemental Indenture, dated as of December 9, 2013, among Tesoro SoCal Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., and U.S. Bank National Association, as trustee, relating to the 6.125% Senior Notes due 2021 (incorporated by reference herein to Exhibit 4.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, File No. 1-3473).
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|
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|
4.24
|
|
Second Supplemental Indenture, dated as of October 8, 2014, among Tesoro Alaska Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 6.125% Senior Notes due 2021 (incorporated by reference herein to Exhibit 4.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, File No. 1-3473).
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Exhibit Number
|
|
Description of Exhibit
|
4.25
|
|
Third Supplemental Indenture, dated as of January 8, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 6.125% Senior Notes due 2021 (incorporated by reference herein to Exhibit 4.24 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-3473).
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4.26
|
|
Fourth Supplemental Indenture, dated as of May 21, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference herein to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-3473).
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10.1
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|
Sixth Amended and Restated Credit Agreement, dated as of January 4, 2013, among Tesoro Corporation, JPMorgan Chase Bank, National Association, as administrative agent, and the financial institutions from time to time parties thereto (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 7, 2013, File No. 1-3473).
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10.2
|
|
Omnibus Amendment No. 1 to Sixth Amended and Restated Credit Agreement and Guaranties, dated as of November 18, 2014, among Tesoro Corporation, the guarantors named therein, the lenders named therein and JPMorgan Chase Bank, National Association, as administrative agent (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 19, 2014, File No. 1-3473).
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10.3
|
|
Omnibus Amendment No. 2 and Consent to Sixth Amended and Restated Credit Agreement and Amendment No. 3 to Amended and Restated Security Agreement, dated as of August 21, 2015, among Tesoro Corporation, the guarantors named therein, the lenders named therein and JPMorgan Chase Bank, National Association, as administrative agent (incorporated by reference herein to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, File No. 1-3473).
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10.4
|
|
Term Loan Credit Agreement, dated as of January 28, 2013, among Tesoro Corporation, JPMorgan Chase Bank, National Association, as administrative agent and collateral agent, and the lending institutions from time to time parties thereto (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 30, 2013, File No. 1-3473).
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10.5
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|
ABL Intercreditor Agreement, dated as of January 28, 2013, between JPMorgan Chase Bank, National Association, in its capacity as administrative agent under the Sixth Amended and Restated Credit Agreement, dated as of January 4, 2013 and JPMorgan Chase Bank, National Association, in its capacity as collateral agent under the Term Loan Credit Agreement, dated as of January 28, 2013 (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 30, 2013, File No. 1-3473).
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10.6
|
|
Second Amended and Restated Credit Agreement, dated as of December 2, 2014, among Tesoro Logistics LP, Bank of America, N.A., as administrative agent, L/C issuer and lender, and other lenders party thereto (incorporated by reference herein from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-3473).
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|
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|
10.7
|
|
Third Amended and Restated Credit Agreement, dated as of January 29, 2016, among Tesoro Logistics LP, Bank of America, N.A., as administrative agent, L/C issuer and lender, and other lenders party thereto (incorporated by reference herein from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 3, 2016, File No. 1-3473).
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|
|
|
10.8
|
|
Credit Agreement, dated as of January 29, 2016, among Tesoro Logistics LP, Bank of America, N.A., as administrative agent, Barclays Bank PLC, Citibank, N.A., JPMorgan Chase Bank,N.A., and Wells Fargo Bank, National Association, as Co-Syndication Agents, BBVA Compass Bank, BNP Paribas, Credit Suisse AG, Cayman Islands Branch, Deutsche Bank AG, New York Branch, Goldman Sachs Bank USA, Mizuho Bank, LTD., Royal Bank of Canada, Suntrust Bank, The Bank of Tokyo-Mitsubishi UFJ, LTD., Toronto Dominion (Texas) LLC, US Bank, as Co-Documentation Agents, and other lenders party hereto (incorporated by reference herein from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 3, 2016, File No. 1-3473).
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|
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|
10.9
|
|
Contribution, Conveyance and Assumption Agreement dated as of April 26, 2011, among Tesoro Corporation, Tesoro Alaska Company, Tesoro Refining and Marketing Company and Tesoro High Plains Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-3473).
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|
|
|
10.10
|
|
Contribution, Conveyance and Assumption Agreement, effective April 1, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 3, 2012, File No. 1-3473).
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|
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|
10.11
|
|
Contribution, Conveyance and Assumption Agreement, dated as of September 14, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-3473).
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|
|
|
10.12
|
|
Contribution, Conveyance and Assumption Agreement, dated as of November 15, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 15, 2012, File No. 1-3473).
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|
|
|
10.13
|
|
Contribution, Conveyance and Assumption Agreement, dated as of May 17, 2013, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on May 17, 2013, File No. 1-3473).
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|
|
Exhibit Number
|
|
Description of Exhibit
|
10.14
|
|
Amendment No. 1 to the Tranche 1 Contribution Agreement, dated as of December 6, 2013, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Logistics LP, Tesoro Logistics GP, LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.15
|
|
Contribution, Conveyance and Assumption Agreement, dated as of November 18, 2013, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation, Tesoro Refining & Marketing Company LLC and Carson Cogeneration Company (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 18, 2013, File No. 1-3473).
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|
|
|
10.16
|
|
Amendment No. 1 to Tranche 2 Contribution Agreement, dated as of November 12, 2015, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation, Tesoro Refining & Marketing Company LLC and Carson Cogeneration Company (incorporated by reference herein to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-3473).
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|
|
|
10.17
|
|
Contribution, Conveyance and Assumption Agreement, dated as of June 23, 2014, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, Tesoro Logistics Operations LLC and Tesoro Logistics Pipelines LLC (incorporated by reference herein from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 23, 2014, File No. 1-3473).
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|
|
|
10.18
|
|
Contribution, Conveyance and Assumption Agreement, dated as of November 12, 2015, among Tesoro Corporation, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro SoCal Pipeline Company LLC, Tesoro Refining & Marketing Company LLC and Carson Cogeneration Company (incorporated by reference herein to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-3473).
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|
|
|
10.19
|
|
Third Amended and Restated Omnibus Agreement, dated as of July 1, 2014, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC (incorporated by reference herein to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on July 1, 2014, File No. 1-3473).
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|
|
|
10.20
|
|
Amendment No. 1 to the Third Amended and Restated Omnibus Agreement, dated as of February 20, 2015, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC (incorporated by reference herein to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-3473).
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|
|
|
10.21
|
|
Amendment No. 2 to the Third Amended and Restated Omnibus Agreement, dated as of August 3, 2015, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP, Tesoro Logistics GP, LLC and the other Tesoro entities named therein (incorporated by reference herein to Exhibit 10.2 to the Company’s Quarterly Report for the quarterly period ended June 30, 2015, File No. 1-3473).
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|
|
|
10.22
|
|
First Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement, dated as of November 12, 2015, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP, Tesoro Logistics GP, LLC and the other Tesoro entities named therein (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-3473).
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|
|
|
10.23
|
|
Transportation Services Agreement (Salt Lake City Short-Haul Pipelines), dated as of April 26, 2011, between Tesoro Refining and Marketing Company and Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-3473).
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|
|
|
10.24
|
|
Salt Lake City Storage and Transportation Services Agreement, dated as of April 26, 2011, between Tesoro Refining and Marketing Company and Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-3473).
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|
|
|
10.25
|
|
Second Amended and Restated Master Terminalling Services Agreement, dated as of May 3, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, File No. 1-3473).
|
|
|
|
10.26
|
|
Terminal Expansion Agreement, dated as of February 27, 2012, between Tesoro Logistics Operations LLC and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012, File No. 1-3473).
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|
|
|
10.27
|
|
Amorco Marine Terminal Use and Throughput Agreement, effective April 1, 2012, between Tesoro Refining and Marketing Company and Tesoro Logistics Operations, LLC (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 3, 2012, File No. 1-3473).
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|
|
|
10.28
|
|
Amended and Restated Long Beach Berth Access Use and Throughput Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.29
|
|
Long Beach Operating Agreement, dated as of September 14, 2012, among Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-3473).
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|
|
|
Exhibit Number
|
|
Description of Exhibit
|
10.30
|
|
Transportation Services Agreement (Los Angeles Refinery Short-Haul Pipelines), executed as of September 14, 2012, among Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-3473).
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|
|
|
10.31
|
|
Anacortes Track Use and Throughput Agreement, dated as of November 15, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Refining and Marketing Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 15, 2012, File No. 1-3473).
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|
|
|
10.32
|
|
Amended and Restated Master Terminalling Services Agreement - Southern California, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.33
|
|
Carson Storage Services Agreement, dated as of June 1, 2013, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on June 3, 2013, File No. 1-3473).
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|
|
|
10.34
|
|
Carson II Storage Services Agreement, dated as of November 12, 2015, by and between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-3473).
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|
|
|
10.35
|
|
Long Beach Berth Throughput Agreement, dated as of December 6, 2013, among Carson Cogeneration Company, Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.36
|
|
Long Beach Storage Services Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.12 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.37
|
|
Transportation Services Agreement (SoCal Pipelines), dated as of December 6, 2013, between Tesoro Refining & Marketing Company LLC and Tesoro SoCal Pipeline Company LLC (incorporated by reference herein to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.38
|
|
Amendment No. 1 to Transportation Services Agreement (SoCal Pipelines), dated as of November 12, 2015, among Tesoro SoCal Pipeline Company LLC and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-3473).
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|
|
|
10.39
|
|
Long Beach Pipeline Throughput Agreement (84/86 Pipelines), dated as of December 6, 2013, between the Operating Company and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 10.14 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.40
|
|
Berth 121 Operating Agreement, dated as of December 6, 2013, between Carson Cogeneration Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.41
|
|
Terminals 2 and 3 Operating Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.42
|
|
Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation, dated as of December 6, 2013, by and among Tesoro Companies, Inc., Tesoro Maritime Company, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company, Kenai Pipeline Company, Tesoro Alaska Pipeline Company, Carson Cogeneration Company, Tesoro Logistics Operations, LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Pipelines LLC and Tesoro Logistics Northwest Pipeline LLC (incorporated by reference herein to Exhibit 10.17 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.43
|
|
Berth 121 Sublease Rights Agreement, dated as of December 6, 2013, among Carson Cogeneration Company, Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.44
|
|
Terminal 2 Sublease Rights Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.45
|
|
Terminals 2 and 3 Ground Lease Rights Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
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|
|
|
10.46
|
|
Terminalling Services Agreement – Nikiski, dated as of July 1, 2014, among Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 1, 2014, File No. 1-3473).
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|
|
|
10.47
|
|
Terminalling Services Agreement – Anacortes, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 1, 2014, File No. 1-3473).
|
Exhibit Number
|
|
Description of Exhibit
|
|
|
|
10.48
|
|
Amendment No. 1 to Anacortes Track Use and Throughput Agreement, dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on July 1, 2014, File No. 1-3473).
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|
|
|
10.49
|
|
Terminalling Services Agreement – Martinez, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on July 1, 2014, File No. 1-3473).
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|
|
|
10.50
|
|
Storage Services Agreement—Anacortes, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC. (incorporated by reference herein to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on July 1, 2014, File No. 1-3473).
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|
|
|
10.51
|
|
Secondment and Logistics Services Agreement, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics Operations, LLC, Tesoro Logistics Pipelines LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Northwest Pipeline LLC and Tesoro Alaska Pipeline Company LLC. (incorporated by reference herein to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on July 1, 2014, File No. 1-3473).
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|
|
|
10.52
|
|
Amendment No. 1 to Secondment and Logistics Services Agreement, dated as of December 2, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics Operations, LLC, Tesoro Logistics Pipelines LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Northwest Pipeline LLC, Tesoro Alaska Pipeline Company LLC, QEP Field Services, LLC, QEP Midstream Partners GP, LLC, QEP Midstream Partners Operating, LLC, QEPM Gathering I, LLC, Rendezvous Pipeline Company, LLC and Green River Processing, LLC (incorporated by reference herein to Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-3473).
|
|
|
|
10.53
|
|
Carson Assets Indemnity Agreement, dated as of December 6, 2013, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 9, 2013, File No. 1-3473).
|
|
|
|
10.54
|
|
Keep-Whole Commodity Fee Agreement, dated as of December 7, 2014, among Tesoro Refining & Marketing Company LLC, QEP Field Services, LLC, QEPM Gathering I, LLC and Green River Processing, LLC. (incorporated by reference herein from Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-3473).
|
|
|
|
10.55
|
|
First Amendment to Keep-Whole Commodity Fee Agreement, dated as of February 1, 2016, among QEP Field Services, LLC, QEPM Gathering I, LLC, Green River Processing, LLC, and Tesoro Refining & Marketing Company LLC. (incorporated by reference herein from Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 3, 2016, File No. 1-3473).
|
|
|
|
#10.56
|
|
Agreement to Lease between Tesoro Refining and Marketing Company and Thrifty Oil Co. dated effective August 29, 2011 (incorporated by reference herein to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q/A for the period ended September 30, 2011, File No. 1-3473).
|
|
|
|
10.57
|
|
License Agreement, dated as of November 12, 2015, among Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-3473).
|
|
|
|
†10.58
|
|
Amended and Restated Executive Security Plan effective January 1, 2009 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 18, 2008, File No. 1-3473).
|
|
|
|
†10.59
|
|
Amendment No. 1 to the Amended and Restated Executive Security Plan effective as of January 1, 2010 (incorporated by reference herein to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, File No. 1-3473).
|
|
|
|
†10.60
|
|
2006 Long-Term Incentive Plan dated effective January 1, 2009 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed December 18, 2008, File No. 1-3473).
|
|
|
|
†10.61
|
|
Tesoro Corporation Amended and Restated 2011 Long-Term Incentive Plan (incorporated by reference herein to Appendix A to the Company’s Definitive Proxy Statement, filed on March 21, 2013).
|
|
|
|
†10.62
|
|
Description of 2015 Incentive Compensation Program (incorporated by reference herein to Exhibit 10.59 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-3473).
|
|
|
|
*†10.63
|
|
Description of 2016 Incentive Compensation Program.
|
|
|
|
†10.64
|
|
Tesoro Corporation 2006 Executive Deferred Compensation Plan effective January 1, 2009 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed December 18, 2008, File No. 1-3473).
|
|
|
|
†10.65
|
|
Amendment No. 1 to the Tesoro Corporation Executive Deferred Compensation Plan effective January 1, 2011 (incorporated by reference herein to Exhibit 10.37 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, File No. 1-3473).
|
|
|
|
†10.66
|
|
Amendment No. 2 to the Tesoro Corporation Executive Deferred Compensation Plan effective January 1, 2011 (incorporated by reference herein to Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, File No. 1-3473).
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
†10.67
|
|
Amended and Restated Tesoro Corporation Executive Deferred Compensation Plan effective January 1, 2016 (incorporated by reference herein to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, File No. 1-3473).
|
|
|
|
†10.68
|
|
Tesoro Corporation Restoration Retirement Plan effective January 1, 2009 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed December 18, 2008, File No. 1-3473).
|
|
|
|
†10.69
|
|
Amendment No. 1 to the Tesoro Corporation Restoration Retirement Plan effective January 1, 2010 (incorporated by reference herein to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, File No. 1-3473).
|
|
|
|
†10.70
|
|
2006 Long-Term Stock Appreciation Rights Plan of Tesoro Corporation (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 8, 2006, File No. 1-3473).
|
|
|
|
†10.71
|
|
Tesoro Corporation 2012 Performance Share Award Grant Letter (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 7, 2012, File No. 1-3473).
|
|
|
|
†10.72
|
|
Tesoro Corporation 2013 Performance Share Award Grant Letter (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 8, 2013, File No. 1-3473).
|
|
|
|
†10.73
|
|
Tesoro Corporation 2014 Performance Share Award Grant Letter (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 7, 2014, File No. 1-3473).
|
|
|
|
†10.74
|
|
Tesoro Corporation 2015 Performance Share Award Grant Letter (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 17, 2015, File No. 1-3473).
|
|
|
|
†10.75
|
|
Tesoro Corporation 2016 Performance Share Award Grant Letter (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed February 3, 2016, File No. 1-3473).
|
|
|
|
†10.76
|
|
Tesoro Corporation 2012 Market Stock Unit Award Grant Letter (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 7, 2012, File No. 1-3473).
|
|
|
|
†10.77
|
|
Tesoro Corporation 2013 Market Stock Unit Award Grant Letter (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 8, 2013, File No. 1-3473).
|
|
|
|
†10.78
|
|
Tesoro Corporation 2014 Market Stock Unit Award Grant Letter (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 7, 2014, File No. 1-3473).
|
|
|
|
†10.79
|
|
Tesoro Corporation 2015 Market Stock Unit Award Grant Letter (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 17, 2015, File No. 1-3473).
|
|
|
|
†10.80
|
|
Tesoro Corporation 2016 Market Stock Unit Award Grant Letter (incorporated by reference herein to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed February 3, 2016, File No. 1-3473).
|
|
|
|
†10.81
|
|
Tesoro Corporation Performance Share Awards Granted in 2012 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 7, 2012, File No. 1-3473).
|
|
|
|
†10.82
|
|
Tesoro Corporation Performance Share Awards Granted in 2013 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 8, 2013, File No. 1-3473).
|
|
|
|
†10.83
|
|
Tesoro Corporation Performance Share Awards Granted in 2014 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 7, 2014, File No. 1-3473).
|
|
|
|
†10.84
|
|
Tesoro Corporation Performance Share Awards Granted in 2015 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 17, 2015, File No. 1-3473).
|
|
|
|
†10.85
|
|
Tesoro Corporation Performance Share Awards Granted in 2016 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed February 3, 2016, File No. 1-3473).
|
|
|
|
†10.86
|
|
Tesoro Corporation Market Stock Unit Awards Granted in 2012 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 7, 2012, File No. 1-3473).
|
|
|
|
†10.87
|
|
Tesoro Corporation Market Stock Unit Awards Granted in 2013 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 8, 2013, File No. 1-3473).
|
|
|
|
†10.88
|
|
Tesoro Corporation Market Stock Unit Awards Granted in 2014 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 7, 2014, File No. 1-3473).
|
|
|
|
†10.89
|
|
Tesoro Corporation Market Stock Unit Awards Granted in 2015 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 17, 2015, File No. 1-3473).
|
|
|
|
†10.90
|
|
Tesoro Corporation Market Stock Unit Awards Granted in 2016 Summary of Key Provisions (incorporated by reference herein to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed February 3, 2016, File No. 1-3473).
|
|
|
|
†10.91
|
|
Amended and Restated 1995 Non-Employee Director Stock Option Plan, as amended through March 15, 2000 (incorporated by reference herein to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002, File No. 1-3473).
|
|
|
|
†10.92
|
|
Amendment to the Company’s Amended and Restated 1995 Non-Employee Director Stock Option Plan (incorporated by reference herein to Exhibit 10.41 to the Company’s Registration Statement No. 333-92468).
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
†10.93
|
|
Amendment to the Company’s 1995 Non-Employee Director Stock Option Plan effective as of May 11, 2004 (incorporated by reference herein to Exhibit 4.19 to the Company’s Registration Statement No. 333-120716).
|
|
|
|
†10.94
|
|
Amended and Restated Board of Directors Deferred Compensation Plan effective May 1, 2009 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 1-3473).
|
|
|
|
†10.95
|
|
Board of Directors Deferred Compensation Trust dated February 23, 1995 (incorporated by reference herein to Exhibit 10(v) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1994, File No. 1-3473).
|
|
|
|
†10.96
|
|
Board of Directors Deferred Phantom Stock Plan effective January 1, 2009 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 18, 2008, File No. 1-3473).
|
|
|
|
†10.97
|
|
2005 Director Compensation Plan (incorporated by reference herein to Exhibit A to the Company’s Proxy Statement for the Annual Meeting of Stockholders held on May 4, 2005, File No. 1-3473).
|
|
|
|
†10.98
|
|
Tesoro Corporation Non-Employee Director Compensation Program (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, File No. 1-3473.
|
|
|
|
*†10.99
|
|
Tesoro Corporation Non-Employee Director Compensation Program.
|
|
|
|
†10.100
|
|
Amended and Restated Tesoro Corporation Executive Severance and Change in Control Plan effective May 1, 2013 (incorporated by reference herein to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013, File No. 1-3473).
|
|
|
|
†10.101
|
|
Tesoro Corporation Supplemental Executive Retirement Plan effective January 12, 2011(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 18, 2011, File No. 1-3473).
|
|
|
|
†10.102
|
|
Form of Indemnification Agreement between the Company and its officers (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 4, 2008, File No. 1-3473).
|
|
|
|
†10.103
|
|
Form of Indemnification Agreement between the Company and its directors (incorporated by reference herein to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 4, 2008, File No. 1-3473).
|
|
|
|
*10.104
|
|
Agreement, dated effective as of February 19, 2016, between Tesoro Refining and Marketing Company LLC and Green River Processing, LLC, related to the back-to-back purchase and sale of waxy crude oil.
|
|
|
|
14.1
|
|
Code of Business Conduct (incorporated by reference herein to Exhibit 14.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2011, File No. 1-3473).
|
|
|
|
14.2
|
|
Code of Business Conduct and Ethics for Senior Financial Executives (incorporated by reference herein to Exhibit 14.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, File No. 1-3473).
|
|
|
|
*21.1
|
|
Subsidiaries of the Company.
|
|
|
|
*23.1
|
|
Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP).
|
|
|
|
*31.1
|
|
Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*31.2
|
|
Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32.1
|
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32.2
|
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*99.1
|
|
Press Release dated February 23, 2016
|
|
|
|
**101.INS
|
|
XBRL Instance Document
|
|
|
|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
**101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
**101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
**101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
**101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Submitted electronically herewith.
|
†
|
Compensatory plan or arrangement.
|
#
|
Confidential treatment has been granted for certain portions of this Exhibit pursuant to a confidential treatment order granted by the Securities Exchange Commission. Such portions have been omitted and filed separately with the Securities Exchange Commission.
|
|
|
TESORO CORPORATION
|
|
|
|
|
|
/s/ GREGORY J. GOFF
|
|
|
Gregory J. Goff
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Signature
|
Title
|
Date
|
|
|
|
/s/ GREGORY J. GOFF
|
President, Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
|
February 25, 2016
|
Gregory J. Goff
|
|
|
|
|
|
/s/ STEVEN M. STERIN
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
February 25, 2016
|
Steven M. Sterin
|
|
|
|
|
|
/s/ TRACY D. JACKSON
|
Vice President and Controller
(Principal Accounting Officer)
|
February 25, 2016
|
Tracy D. Jackson
|
|
|
|
|
|
/s/ SUSAN TOMASKY
|
Independent Lead Director
|
February 25, 2016
|
Susan Tomasky
|
|
|
|
|
|
/s/ RODNEY F. CHASE
|
Director
|
February 25, 2016
|
Rodney F. Chase
|
|
|
|
|
|
/s/ ROBERT W. GOLDMAN
|
Director
|
February 25, 2016
|
Robert W. Goldman
|
|
|
|
|
|
/s/ DAVID LILLEY
|
Director
|
February 25, 2016
|
David Lilley
|
|
|
|
|
|
/s/ MARY PAT MCCARTHY
|
Director
|
February 25, 2016
|
Mary Pat McCarthy
|
|
|
|
|
|
/s/ J.W. NOKES
|
Director
|
February 25, 2016
|
J.W. Nokes
|
|
|
|
|
|
/s/ MICHAEL E. WILEY
|
Director
|
February 25, 2016
|
Michael E. Wiley
|
|
|
|
|
|
/s/ PATRICK Y. YANG
|
Director
|
February 25, 2016
|
Patrick Y. Yang
|
|
•
|
Achievement of earnings before interest, taxes, depreciation and amortization (“EBITDA”) measured on a margin neutral basis (this is the most heavily weighted metric, constituting 50% of the bonus opportunity for the corporate performance component)
|
•
|
Safety - Targeted improvement in recordable incidents (this metric constitutes 5% of the bonus opportunity for the corporate performance component)
|
•
|
Process Safety Management - Targeted improvement in the number of process safety incidents (this metric constitutes 5% of the bonus opportunity for the corporate performance component)
|
•
|
Environmental - Targeted improvement in the number of environmental incidents (this metric constitutes 5% of the bonus opportunity for the corporate performance component)
|
•
|
Cost Management - Measurement of non-capital cash expenditure versus budget (this metric constitutes 17.5% of the bonus opportunity for the corporate performance component)
|
•
|
Business Improvement - Targeted improvements from capital improvement initiatives, synergies related to asset acquisitions and other projects and initiatives (this metric constitutes 17.5% of the bonus opportunity for the corporate performance component)
|
•
|
Safety and Environmental
|
•
|
Cost Management
|
•
|
Improvements in EBITDA
|
•
|
Business improvements and value creation initiatives
|
GREEN RIVER PROCESSING, LLC
|
GREEN RIVER PROCESSING, LLC
|
Contract No: [________________]
|
19100 RIDGEWOOD PKWY
|
|
SAN ANTONIO, TX 78259
|
TESORO REFINING & MARKETING COMPANY LLC
|
210.828.8484
|
Contract No: ________
|
210.579.4578 Fax
|
Confidential
|
1
|
February 19, 2016
|
Confidential
|
2
|
February 19, 2016
|
GREEN RIVER PROCESSING, LLC
19100 RIDGEWOOD PKWY
San Antonio, Texas 78259-1828
Attn: Commercial Contract Administration
Phone # 1-210-626-4459
Fax # 1-210-579-4578
|
Tesoro Refining & Marketing Company LLC
19100 RIDGEWOOD PKWY
San Antonio, Texas 78259-1828
Attn: Commercial Contract Administration
Phone # 1-210-626-6529
Fax # 1-210-579-4578
|
OPERATIONS
|
Crude Scheduling
|
Phone: (303) 454-6600
Fax: (210) 745-4565
Email: Denverops@tsocorp.com
and
sat-crudescheduling@tsocorp.com
|
CREDIT
|
Customer Service
|
Phone: (877) 876-7297 Fax: (210) 626-4048
Email: CREDSAT@tsocorp.com
|
ACCOUNTING
|
Mid-Office Accounting
|
Phone: (210) 881-6435
Email: sat-tsocrudeinvoices@tsocorp.com
|
Confidential
|
3
|
February 19, 2016
|
GREEN RIVER PROCESSING, LLC
|
TESORO REFINING & MARKETING COMPANY LLC
|
Confidential
|
4
|
February 19, 2016
|
Name of Subsidiary
|
|
Incorporated or Organized under Laws of
|
Tesoro Refining & Marketing Company LLC
|
|
Delaware
|
Tesoro Logistics LP
|
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 333-174132)
|
(2)
|
Registration Statement (Form S-8 No. 333-176132)
|
(3)
|
Registration Statement (Form S-8 No. 333-176132)
|
(4)
|
Registration Statement (Form S-8 No. 333-25379)
|
(5)
|
Registration Statement (Form S-8 No. 333-39070)
|
(6)
|
Registration Statement (Form S-8 No. 333-112427)
|
(7)
|
Registration Statement (Form S-8 No. 333-120716)
|
(8)
|
Registration Statement (Form S-8 No. 333-156268)
|
(9)
|
Registration Statement (Form S-8 No.333-188405)
|
1.
|
I have reviewed this annual report on Form 10-K of Tesoro Corporation;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
|
(d)
|
Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 25, 2016
|
/s/ GREGORY J. GOFF
|
|
|
Gregory J. Goff
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Tesoro Corporation;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
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(d)
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Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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February 25, 2016
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/s/ STEVEN M. STERIN
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Steven M. Sterin
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|
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ GREGORY J. GOFF
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|
Gregory J. Goff
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Chief Executive Officer
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February 25, 2016
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ STEVEN M. STERIN
|
|
Steven M. Sterin
|
|
Chief Financial Officer
|
|
February 25, 2016
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|