Tesoro Corporation : Tesoro Corporation Reports First Quarter 2013 Results

  Tesoro Corporation : Tesoro Corporation Reports First Quarter 2013 Results

  *Net income  of  $0.67 per  diluted  share,  or $0.73  per  diluted  share, 
    excluding special items

  *Announced unit train unloading and marine loading terminal at the Port  of 
    Vancouver, WA

  *Began process to cease refining operations at the Hawaii refinery

  *Purchased $245 million in Tesoro shares to-date, nearly 50% of  authorized 
    buyback program

SAN ANTONIO - May 1, 2013 - Tesoro Corporation (NYSE:TSO) today reported first
quarter 2013 net income of $93 million, or $0.67 per diluted share compared to
net income of $56 million, or $0.39 per diluted share for the first quarter of
2012. 

The 2013  results  include  one-time after-tax  expenses  totaling  $0.06  per 
diluted share  related  primarily  to transaction  costs  from  the  announced 
acquisition of  BP's  Southern  California refining  and  marketing  business. 
Excluding these items, the Company earned  $102 million, or $0.73 per  diluted 
share.

"We are  pleased  with  our  first quarter  results,  which  reflect  a  solid 
operating performance and  continued execution  of our  strategic plan,"  said 
Greg Goff, President  and CEO. "We  completed a major  portion of our  planned 
turnaround activity for 2013; developed the next phase of our West Coast crude
oil strategy with the formation of the Tesoro-Savage joint venture; began  the 
process to  cease  crude oil  refining  operations in  Hawaii;  and  continued 
returning  cash  to  shareholders  through  share  repurchases  and   dividend 
payments."

For the first quarter, the Company  recorded segment operating income of  $300 
million, compared to  segment operating income  of $187 million  in the  first 
quarter of 2012.  The strong operating  income improvement was  driven by  the 
execution of the  Company's high-return capital  program and favorable  market 
conditions.

The Tesoro  Index was  $12.40 per  barrel  (/bbl) for  the first  quarter,  up 
greater than $2/bbl relative to a year  ago. Diesel crack spreads on the  West 
Coast, which were up  over $3/bbl year-over-year,  enhanced the benchmark.  In 
the Mid-Continent,  the discount  of West  Texas Intermediate  (WTI) to  Brent 
widened by nearly $3/bbl relative to a year ago. The Company's realized  gross 
margin was $13.68/bbl.

Driving the Company's gross margin performance  in excess of the Tesoro  Index 
was discounted crude  oil compared to  benchmark grades of  crude oil. On  the 
West Coast, foreign heavy, Canadian light sweet and Bakken crude oil continued
to  price  at  a  discount  to  domestic  alternatives.  Despite   significant 
turnaround activity, total throughput in the quarter was 579 thousand  barrels 
per day (mbpd) or 86% utilization. 

Direct manufacturing  costs  in  the  first  quarter  averaged  $4.86/bbl,  up 
slightly relative to  the fourth  quarter of  last year,  impacted by  planned 
turnaround activity and resulting lower refinery utilization. 

Retail fuel sales volumes  were up 18% year-over-year  driven by the  addition 
last year of 174 retail stations from Thrifty Oil Co. and 49 Albertson's  Fuel 
Express retail stations. Same store fuel sales during the quarter were  higher 
by about 1% and retail fuel margins  were up relative to the first quarter  of 
last year.

Corporate and unallocated costs, net  of $5 million of corporate  depreciation 
and excluding $47 million in variable stock-based compensation expense and $14
million of transaction  costs, primarily  related to the  acquisition of  BP's 
Southern California refining and marketing  business, were $42 million in  the 
first quarter.

Value-Driven Growth

On April  22,  2013, Tesoro  and  Savage Companies  ("Savage")  announced  the 
formation of an equally owned joint venture to develop and operate a new  unit 
train unloading and marine loading facility at the Port of Vancouver, WA, with
initial capacity of 120 mbpd, subject to regulatory approval.

The Tesoro-Savage  joint  venture will  own  the crude  unloading  and  marine 
loading  facilities,  while  Savage  will  oversee  and  manage  the   design, 
construction and operation of the facility on the joint venture's behalf.  The 
facility is expected to be operational in 2014 with a total construction  cost 
of between $75 to $100 million, and will be designed with near-term  expansion 
capability up to 280 mbpd.

As part of  Tesoro's West Coast  crude oil strategy,  the Company has  ordered 
additional coiled and insulated rail cars with an expected delivery  beginning 
mid-2014.  The  Company  expects  to  utilize  its  current  U.S.-flag  marine 
capabilities, as well as supplemental capacity, to execute the strategy.

"Building upon  the recent  success  of the  rail  unloading facility  at  our 
Anacortes, WA refinery, this project is the  ideal next step for Tesoro as  we 
drive additional feedstock cost advantage  to the remaining refineries in  our 
West Coast system," said Goff. "The Port  of Vancouver is the most direct  and 
cost-effective coastal outlet  for the delivery  of crude oil  via unit  train 
from North  Dakota, providing  a significant  location advantage  relative  to 
other waterborne markets."

The Company is nearing the completion of the first phase of the Salt Lake City
Conversion Project, with an  expected in-service date  later this month.  This 
project expands  Tesoro's capability  to run  cost-advantaged waxy  crude  oil 
while  driving  product  yield   improvements.  The  expected  annual   EBITDA 
contribution from this project  is approximately $100  million, about half  of 
which is expected to be realized upon conclusion of the first phase.

Ceased Crude Oil Refining in Hawaii

On April 30, 2013,  Tesoro ceased refining crude  oil at its Hawaii  refinery. 
Tesoro Hawaii  will  maintain  the existing  distribution  system  to  support 
marketing operations and  fulfill its supply  commitments while continuing  to 
offer the assets for sale.

Capital Spending and Liquidity

Capital spending for the first  quarter was $119 million. Turnaround  spending 
was $132 million. The Company expects consolidated capital spending in 2013 of
approximately $560  million.  Expectations  for  full  year  2013  turnaround 
spending remain at $310 million. The Company ended the first quarter with $2.0
billion in  cash  and remained  undrawn  with  greater than  $1.0  billion  of 
availability on  the  Tesoro  Corporation revolving  credit  facility.  Tesoro 
Logistics LP (TLLP) ended the quarter undrawn on its separate credit facility.

On January 4, 2013, Tesoro  Corporation amended its revolving credit  facility 
expanding total  available  capacity  from  $1.85  billion  to  $3.0  billion. 
Additionally, on January  28, 2013, Tesoro  closed a three  year $500  million 
term loan  credit  facility  with  attractive  borrowing  rates  and  flexible 
repayment provisions. Both facilities become  effective just prior to  closing 
the announced acquisition of BP's  Southern California refining and  marketing 
business.

Additionally, on January 4, 2013,  TLLP amended its revolving credit  facility 
expanding total  available capacity  from  $300 million  to $500  million  and 
allowing TLLP  to  request that  the  availability  be increased  up  to  $650 
million, subject to receiving increased commitments from the lenders.

Finally, on January  14, 2013,  TLLP closed  an equity  offering of  9,775,000 
common units at an  offering price of  $41.70 per unit.  Net proceeds to  TLLP 
from the sale of the units were approximately $392 million. Subsequent to the
equity issuance, Tesoro  Corporation and its  affiliates owned an  approximate 
38% interest in TLLP, including an approximate 2% general partner interest. 

Returning Cash to Shareholders

Tesoro Corporation today announced that the board of directors has approved  a 
regular quarterly cash dividend of $0.20 per share payable on June 14, 2013 to
holders of record at the close of business on May 31, 2013.

During the  first quarter  of  2013, Tesoro  returned  about $100  million  to 
shareholders through  the purchase  of  nearly two  million of  the  Company's 
shares. So  far  during the  second  quarter,  the Company  has  purchased  an 
additional $45 million  of shares, bringing  total purchases to  approximately 
$245 million  or nearly  50% of  the outstanding  $500 million  share  buyback 
program. In addition, Tesoro returned about $35 million to shareholders during
the first quarter through  the purchase of greater  than six hundred  thousand 
shares under the Company's existing  program designed to off-set the  dilutive 
effect of outstanding and future stock-based compensation awards. 

Public Invited to Listen to Analyst Conference Call

At 7:30 a.m. CDT tomorrow morning, Tesoro will broadcast, live, its conference
call with analysts  regarding first  quarter 2013 results  and other  business 
matters.Interested parties may listen  to the live  conference call over  the 
Internet by logging on to http://www.tsocorp.com.

Tesoro Corporation,  a Fortune  150  company, is  an independent  refiner  and 
marketer of petroleum  products. Tesoro, through  its subsidiaries,  operates 
seven refineries in  the western  United States  with a  combined capacity  of 
approximately 675,000  barrels  per  day.  Tesoro's  retail-marketing  system 
includes over 1,400 branded retail stations, of which 595 are company operated
under the Tesoro^®, Shell^® and USA Gasoline(TM) brands.

This earnings release contains  certain statements that are  "forward-looking" 
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 concerning our expectations
about capital spending; statements concerning  the expected completion of  the 
process to cease  refining crude oil  at the Hawaii  refinery; feedstock  cost 
advantage,  expected  timing,  cost  and  volumes  related  to  the  Vancouver 
facility; execution  of the  West Coast  crude oil  strategy; and  timing  and 
expected earnings related to the Salt  Lake City Conversion Project. For  more 
information concerning  factors that  could affect  these statements  see  our 
annual report on Form 10-K and quarterly reports on Form 10-Q, filed with  the 
Securities and Exchange  Commission. We  undertake no  obligation to  publicly 
release the result  of any  revisions to any  such forward-looking  statements 
that may be made to  reflect events or circumstances  that occur, or which  we 
become aware of, after the date hereof.

Contact:
Investors:
Louie Rubiola, Director, Investor Relations, (210) 626-4355

Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702

                              TESORO CORPORATION
                      RESULTS OF CONSOLIDATED OPERATIONS
                                 (Unaudited)
                   (In millions, except per share amounts)

                                                           Three Months Ended
                                                               March 31,
                                                            2013       2012
Revenues                                                  $ 8,156    $ 7,820
Costs and Expenses:
Cost of sales                                               7,335      7,168
Operating expenses                                            400        347
Selling, general and administrative expenses (a)              115         62
Depreciation and amortization expense                         106        103
Loss on asset disposals and impairments                         8          6
Operating Income                                              192        134
Interest and financing costs, net                             (30 )      (36 )
Interest income                                                 1          1
Other expense, net                                             (1 )        -
Earnings Before Income Taxes                                  162         99
Income tax expense                                             58         37
Net Earnings                                                  104         62
Less: Net earnings attributable to noncontrolling
interest                                                       11          6
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION           $    93    $    56
Net Earnings Per Share:
Basic                                                     $  0.68    $  0.40
Diluted                                                   $  0.67    $  0.39
Weighted Average Common Shares:
Basic                                                       137.0      139.5
Diluted                                                     139.6      141.8

___________________________
(a)Includes stock-based compensation expense  related to Tesoro stock  awards 
of $52 million and $20 million for  the three months ended March 31, 2013  and 
2012, respectively. The increase is primarily a result of changes in Tesoro's
stock price during the three  months ended March 31,  2013 as compared to  the 
three months ended March 31, 2012.

                              TESORO CORPORATION
                       SELECTED OPERATING SEGMENT DATA
                                 (Unaudited)
                                (In millions)

                                      Three Months Ended
                                          March 31,
                                        2013      2012
Operating Income (Loss)
Refining                              $   283    $ 191
Retail                                     17       (4 )
Total Segment Operating Income            300      187
Corporate and unallocated costs (a)      (108 )    (53 )
Operating Income                          192      134
Interest and financing costs, net         (30 )    (36 )
Interest income                             1        1
Other expense, net                         (1 )      -
Earnings Before Income Taxes          $   162    $  99
Depreciation and Amortization Expense
Refining                              $    92    $  91
Retail                                      9       10
Corporate                                   5        2
Depreciation and Amortization Expense $   106    $ 103
Capital Expenditures
Refining                              $   109    $  91
Retail                                      7        8
Corporate                                   3        3
Capital Expenditures                  $   119    $ 102

                              BALANCE SHEET DATA
                                 (Unaudited)
                            (Dollars in millions)

                                                      March31,  December31,
                                                        2013         2012
Cash and cash equivalents                             $ 1,972    $   1,639
Inventories (b)                                         1,560        1,578
Total Assets                                           11,390       10,702
Current maturities of debt                                  3            3
Long-Term Debt                                          1,590        1,587
Total Equity                                            5,104        4,737
Total Debt to Capitalization Ratio                         24 %         25 %
Total Debt to Capitalization Ratio excluding TLLP (c)      23 %         23 %

___________________________
(b) The total carrying value of our crude oil and refined product  inventories 
was less than replacement cost by approximately $2.0 billion and $1.6  billion 
at March31, 2013 and December31, 2012, respectively.
(c) Excludes Tesoro Logistic LP's ("TLLP") total debt of $358 million and $354
million and noncontrolling interest of $881 million and $486 million at  March 
31, 2013 and  December 31, 2012,  respectively. $350 million  of TLLP's  total 
debt related to the TLLP Senior Notes at March 31, 2013 and December 31, 2012,
which are non-recourse to Tesoro, except for Tesoro Logistics GP, LLC.

                              TESORO CORPORATION
                                OPERATING DATA
                                 (Unaudited)

                                                           Three Months Ended
                                                               March 31,
REFINING SEGMENT                                            2013       2012
Total Refining Segment
Throughput (thousand barrels per day ("Mbpd"))
Heavy crude (d)                                                204        142
Light crude                                                    340        358
Other feedstocks                                                35         29
Total Throughput (e)                                           579        529
Yield (Mbpd)
Gasoline and gasoline blendstocks                              274        253
Jet fuel                                                        86         83
Diesel fuel                                                    131        105
Heavy fuel oils, residual products, internally produced
fuel and other                                                 122        114
Total Yield                                                    613        555
Gross refining margin ($/throughput bbl) (f)              $  13.68   $  12.15
Manufacturing cost before depreciation and amortization
expense
($/throughput bbl) (f)                                    $   4.86   $   4.97
Segment Operating Income ($ millions)
Gross refining margin (g)                                 $    713   $    585
Expenses
Manufacturing costs                                            253        239
Other operating expenses                                        71         52
Selling, general and administrative expenses                    10          9
Depreciation and amortization expense                           92         91
Loss on asset disposal and impairments                           4          3
Segment Operating Income                                  $    283   $    191
Refined Product Sales (Mbpd) (h)
Gasoline and gasoline blendstocks                              337        342
Jet fuel                                                       100         94
Diesel fuel                                                    146        131
Heavy fuel oils, residual products and other                    96         90
Total Refined Product Sales                                    679        657
Refined Product Sales Margin ($/bbl) (f) (h)
Average sales price                                       $ 121.92   $ 127.11
Average costs of sales                                      111.29     117.75
Refined Product Sales Margin                              $  10.63   $   9.36

___________________________
(d)We define  heavy  crude  oil  as crude  oil  with  an  American  Petroleum 
Institute gravity of 24 degrees or less.
(e)We had reduced throughput due  to scheduled turnarounds at our  Washington 
refinery during the 2013 first quarter and at our Martinez refinery during the
2012 first quarter.  We had  higher throughput  at our  North Dakota  refinery 
during the 2013 first quarter as a result of the refinery expansion  completed 
in 2012.
(f)Management uses various measures  to evaluate performance and  efficiency 
and to compare  profitability to  other companies in  the industry,  including 
gross refining margin per barrel, manufacturing costs before depreciation  and 
amortization expense ("Manufacturing  Costs") per barrel  and refined  product 
sales margin per barrel. 

  *Management uses gross refining margin  per barrel to evaluate  performance 
    and compare profitability to other companies in the industry. There are a
    variety of ways to calculate  gross refining margin per barrel;  different 
    companies may calculate it in different ways. We calculate gross  refining 
    margin per barrel by dividing  gross refining margin (revenues less  costs 
    of   feedstocks,   purchased   refined   products,   transportation    and 
    distribution) by total refining throughput. 

  *Management uses Manufacturing Costs per barrel to evaluate the  efficiency 
    of  refining  operations.  There  are  a  variety  of  ways  to  calculate 
    Manufacturing Costs per  barrel; different companies  may calculate it  in 
    different ways. We  calculate Manufacturing Costs  per barrel by  dividing 
    Manufacturing Costs by total refining throughput.

  *Management uses refined product  sales margin per  barrel to evaluate  the 
    profitability of manufactured and  purchased refined product sales.  There 
    are a  variety of  ways  to calculate  refined  product sales  margin  per 
    barrel; different  companies  may  calculate it  in  different  ways.  We 
    calculate refined  product  sales  margin per  barrel  by  calculating  an 
    average refined  product sales  price per  barrel and  an average  refined 
    product cost of sales per barrel, which are calculated by dividing refined
    product  sales  or  refined  product  cost  of  sales  by  total  refining 
    throughput. The  average  refined product  cost  of sales  per  barrel  is 
    subtracted from refined product sales price per barrel.  

Investors and  analysts  use these  financial  measures to  help  analyze  and 
compare companies in the industry on the basis of operating performance. These
financial measures should not be considered alternatives to segment  operating 
income, revenues, costs of sales and  operating expenses or any other  measure 
of financial performance  presented in accordance  with accounting  principles 
generally accepted in the United States of America ("U.S. GAAP").
(g)Consolidated gross refining margin combines gross refining margin for each
of our  regions adjusted  for other  amounts not  directly attributable  to  a 
specific region. Other  amounts resulted in  an increase of  $2 million and  a 
decrease of$1 million  for the  three months  ended March31,  2013 and  2012, 
respectively. Gross refining margin includes the effect of intersegment  sales 
to the  retail segment  at  prices which  approximate market.  Gross  refining 
margin approximates total refining throughput multiplied by the gross refining
margin per barrel.
(h)  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.

                              TESORO CORPORATION
                                OPERATING DATA
                                 (Unaudited)

                                                            Three Months Ended
                                                                March 31,
Refining By Region                                            2013      2012
California (Martinez and Wilmington)
Throughput (Mbpd) (e)
Heavy crude (d)                                                 183       136
Light crude                                                      54        36
Other feedstocks                                                 20        17
Total Throughput                                                257       189
Yield (Mbpd)
Gasoline and gasoline blendstocks                               131        98
Jet fuel                                                         23        20
Diesel fuel                                                      68        36
Heavy fuel oils, residual products, internally produced
fuel and other                                                   58        50
Total Yield                                                     280       204
Gross refining margin ($ millions)                          $   271   $   138
Gross refining margin ($/throughput bbl) (f)                $ 11.73   $  7.98
Manufacturing cost before depreciation and amortization
expense
($/throughput bbl) (f)                                      $  6.04   $  7.34
Capital expenditures ($ millions)                           $    36   $    50
Pacific Northwest (Alaska & Washington)
Throughput (Mbpd) (e)
Heavy crude (d)                                                   3         2
Light crude                                                     116       146
Other feedstocks                                                 11         7
Total Throughput                                                130       155
Yield (Mbpd)
Gasoline and gasoline blendstocks                                52        69
Jet fuel                                                         29        33
Diesel fuel                                                      21        22
Heavy fuel oils, residual products, internally produced
fuel and other                                                   32        36
Total Yield                                                     134       160
Gross refining margin ($ millions)                          $   155   $   183
Gross refining margin ($/throughput bbl) (f)                $ 13.33   $ 12.96
Manufacturing cost before depreciation and amortization
expense
($/throughput bbl) (f)                                      $  4.73   $  3.83
Capital expenditures ($ millions)                           $    22   $    16

                              TESORO CORPORATION
                                OPERATING DATA
                                 (Unaudited)

                                                            Three Months Ended
                                                                March 31,
                                                              2013      2012
Mid-Pacific (Hawaii)
Throughput (Mbpd)
Heavy crude (d)                                                  18         4
Light crude                                                      49        63
Total Throughput                                                 67        67
Yield (Mbpd)
Gasoline and gasoline blendstocks                                18        19
Jet fuel                                                         19        18
Diesel fuel                                                      10        13
Heavy fuel oils, residual products, internally produced
fuel and other                                                   22        19
Total Yield                                                      69        69
Gross refining margin ($ millions)                          $    28   $    13
Gross refining margin ($/throughput bbl) (f)                $  4.60   $  2.07
Manufacturing cost before depreciation and amortization
expense
($/throughput bbl) (f)                                      $  3.02   $  3.51
Capital expenditures ($ millions)                           $     -   $     3
Mid-Continent (North Dakota and Utah)
Throughput (Mbpd) (e)
Light crude                                                     121       113
Other feedstocks                                                  4         5
Total Throughput                                                125       118
Yield (Mbpd)
Gasoline and gasoline blendstocks                                73        67
Jet fuel                                                         15        12
Diesel fuel                                                      32        34
Heavy fuel oils, residual products, internally produced
fuel and other                                                   10         9
Total Yield                                                     130       122
Gross refining margin ($ millions)                          $   257   $   252
Gross refining margin ($/throughput bbl) (f)                $ 22.73   $ 23.51
Manufacturing cost before depreciation and amortization
expense
($/throughput bbl) (f)                                      $  3.54   $  3.47
Capital expenditures ($ millions)                           $    51   $    22

                              TESORO CORPORATION
                                OPERATING DATA
                                 (Unaudited)

                                             Three Months Ended
                                                 March 31,
Retail Segment                                 2013      2012
Number of Stations (end of period)
Company-operated (i)                            595       425
Branded jobber/dealer                           810       790
Total Stations                                1,405     1,215
Average Stations (during period)
Company-operated (i)                            595       413
Branded jobber/dealer                           811       794
Total Average Retail Stations                 1,406     1,207
Fuel Sales (millions of gallons)
Company-operated (i)                            266       195
Branded jobber/dealer                           183       184
Total Fuel Sales                                449       379
Fuel margin ($/gallon) (j)                   $ 0.20    $ 0.12
Merchandise Sales ($ millions)               $   50    $   48
Merchandise Margin ($ millions)              $   13    $   12
Merchandise Margin %                             26 %      25 %
Segment Operating Income (Loss) ($ millions)
Gross Margins
Fuel (i) (j)                                 $   89    $   47
Merchandise and other non-fuel margin            19        19
Total Gross Margins                             108        66
Expenses
Operating expenses                               76        54
Selling, general and administrative expenses      5         4
Depreciation and amortization expense             9        10
Loss on asset disposals and impairments           1         2
Segment Operating Income (Loss)              $   17    $   (4 )

___________________________
(i) Reflects  the transition  of 174  retail stations  from Thrifty  Oil  Co. 
during the second  and third  quarters of 2012  and acquisition  of 49  retail 
stations from SUPERVALU, Inc. during the first quarter of 2012.
(j) Management uses fuel margin per gallon to compare profitability to  other 
companies in  the industry.  There are  a variety  of ways  to calculate  fuel 
margin per gallon; different companies may calculate it in different ways.  We 
calculate fuel margin per gallon by  dividing fuel gross margin by fuel  sales 
volumes. Investors and analysts use fuel margin per gallon to help analyze and
compare companies in the industry on the basis of operating performance.  This 
financial measure should not be considered an alternative to segment operating
income and revenues or any other measure of financial performance presented in
accordance with U.S. GAAP. Fuel margin and fuel margin per gallon include the
effect of intersegment  purchases from  the refining segment  at prices  which 
approximate market.

                              TESORO CORPORATION
              RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
                          (Unaudited) (In millions)

                                                       Three Months Ended
                                                            March 31,
                                                          2013          2012
Reconciliation of Net Earnings to Adjusted EBITDA
Net earnings attributable to Tesoro Corporation    $          93       $  56
Net earnings attributable to noncontrolling
interest                                                      11           6
Depreciation and amortization expense                        106         103
Income tax expense                                            58          37
Interest and financing costs, net                             30          36
Interest income                                               (1 )        (1 )
Adjusted EBITDA (k)                                $         297       $ 237
Reconciliation of Cash Flows from (used in) Operating Activities to
Adjusted EBITDA
Net cash from (used in) operating activities       $         247       $ (15 )
Deferred charges                                             159         126
Changes in assets and liabilities                           (125 )       102
Income tax expense                                            58          37
Stock-based compensation expense                             (52 )       (21 )
Interest and financing costs, net                             30          36
Deferred income taxes                                        (14 )       (24 )
Loss on asset disposals and impairments                       (8 )        (6 )
Other                                                          2           2
Adjusted EBITDA (k)                                $         297       $ 237

                              TESORO CORPORATION
        RECONCILIATION OF FORECASTED EBITDA TO AMOUNTS UNDER U.S. GAAP
                          (Unaudited) (In millions)

                                                  Expected Annual
Salt Lake City Conversion Project Expected EBITDA     EBITDA
Projected net earnings                            $        59
Income tax expense                                         35
Depreciation and amortization expense                       6
EBITDA (k)                                        $       100

___________________________
(k) Adjusted  EBITDA  represents  consolidated  earnings,  including  earnings 
attributable to noncontrolling interest, before income taxes, depreciation and
amortization expense, net  interest and financing  costs and interest  income. 
EBITDA represents net earnings before  interest and financing costs,  interest 
income, income taxes  and depreciation  and amortization  expense. We  present 
Adjusted EBITDA and EBITDA because we believe some investors and analysts  use 
Adjusted EBITDA  and EBITDA  to  help analyze  our  cash flows  including  our 
ability to  satisfy principal  and interest  obligations with  respect to  our 
indebtedness and use cash for other purposes, including capital  expenditures. 
Adjusted EBITDA and  EBITDA are also  used by some  investors and analysts  to 
analyze and compare  companies on the  basis of operating  performance and  by 
management.  Adjusted  EBITDA   and  EBITDA  should   not  be  considered   as 
alternatives to net earnings,  earnings before income  taxes, cash flows  from 
operating activities or any other  measure of financial performance  presented 
in accordance with U.S. GAAP. Adjusted EBITDA and EBITDA may not be comparable
to similarly titled measures used by other entities.

                   NET EARNINGS ADJUSTED FOR SPECIAL ITEMS
             (Unaudited) (In millions, except per share amounts)
                                                            Three Months Ended
                                                                March 31,
                                                              2013      2012
Net Earnings- U.S. GAAP                                     $     93   $   56
Special Items, after-tax:
Transaction costs (l)                                              9        -
Net Earnings Adjusted for Special Items (m)                 $    102   $   56
Diluted Net Earnings Per Share- U.S. GAAP                   $   0.67   $ 0.39
Special Items, after-tax:
Transaction costs (l)                                           0.06        -
Diluted Net Earnings Per Share Adjusted for Special Items
(m)                                                         $   0.73   $ 0.39

___________________________
(l) Represents the impact of $14 million ($9 million after-tax) of transaction
and integration costs related to the BP acquisition and TLLP's purchase of the
Northwest Products System for the three months ended March 31, 2013.
(m) We  present  net earnings  adjusted  for  special items  and  diluted  net 
earnings per share adjusted for special items as management believes that  the 
impact of these items on  net earnings and diluted  net earnings per share  is 
important information for an investor's understanding of the operations of our
business and the  financial information presented.  Net earnings adjusted  for 
special items and diluted  net earnings per share  adjusted for special  items 
should not be considered as alternatives to net earnings, diluted net earnings
per  share  or  any  other  measure  of  financial  performance  presented  in 
accordance with  U.S.  GAAP. Net  earnings  adjusted for  special  items  and 
diluted net  earnings  per  share  adjusted  for  special  items  may  not  be 
comparable to similarly titled measures used by other entities.

Tesoro Corporation Reports First Quarter 2013 Results

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(ii) they are solely responsible for the content, accuracy and originality of
the
information contained therein.

Source: Tesoro Corporation via Thomson Reuters ONE
HUG#1698501
 
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