Barclays CEO EnergyPower Conference September 2012 Greg Goff President and CEO, Tesoro Corporation
Tesoro Today Positioned in the western United States Seven refineries 675,000 barrels per day capacity Kenai, AK Over Over 1,375 retail stations branded 1 375 retail stations branded Tesoro, Shell and USA Gasoline Mandan, ND…
Key Messages Transformational acquisition of BPs Southern California Refining and Marketing Business C lif i R fi i dM k i B i Driving operational efficiency and effectiveness Reinvesting 2012 free cash flow into high return…
Strategic Priorities Operational efficiency and effectiveness Safety and reliability Safety and reliability System improvements Cost leadership Commercial excellence Financial discipline Valuedriven growth 5
Capital and Turnaround Summary Capital Spending Turnaround Spending in millions in millions 670 260 260 545 430 320 135 109 2011 2012E 2013E 2014E 2011 2012E 2013E 2014E Regulatory Maintenance TSO Income TLLP…
HighReturn Capital Investments Income Capital Spend Cumulative EBITDA in millions in millions 375 495505 430440 305 245 215225 103 125 2011 2012E 2013E 2014E 2011 2012E 2013E 2014E Large Capital Projects Small Capital…
Operational Efficiency & Effectiveness Large Capital Program g p g Bakken Crude Oil Supply to Anacortes Capital: 60 million Annual EBITDA: 5055 million(1) Mandan Refinery Expansion Mandan Refinery Expansion Completed in August…
Commercial Excellence Advantaged Position in the Bakken Bakken Crude Oil Production mbpd Bakken Crude Oil Production, mbpd 1,400 Pipeline Export Capacity 1,200 1,000 800 600 400 200 0 ' '08 ' '09 ' '10 ' '11 ' '12 '…
Commercial Excellence West Coast Crude Cost Advantage State of Washington Crude Oil Source 2011 Industry Average Tesoro WA Differential 2009 2010 2011 1H 2012 Crude Source Crude Source 4 Yr Range 4Yr Range to ANS to ANS Alaska…
Financial Discipline Maintain average cash balance of 600 to 750 million Solid Invest in highreturn capital projects Operating Results Repurchase Repurchase remaining 299 million 2012 remaining 299 million 2012 Strategic…
ValueDriven Growth Tesoro Benefits From TLLPs Growth (2) TLLP EBITDA Expectations TLLP Enterprise Value in millions in millions in billions in billions 135 150 2.1 2.3 100 110 100 1.5 1.7 1.5 53 0.7 Tesoro Tesoro…
Key Elements of 2012 Plan Execute highreturn capital projects; provide significant EBITDA growth in 2012 and beyond h i 20 2 d b d Execute Tesoro Logistics LP growth plan Continue to drive fundamental improvements in the…
Acquisition Highlights Creates world scale refinery Strengthens our West Coast business Strengthens our West Coast business Increases distillate yield Tesoro Wilmington Lowers refining and distribution costs Extensive, integrated…
Transaction Overview Acquisition of BPs Southern California refining and marketing business for 1,175 million 266 MBD high complexity refinery in Carson, California Integrated retail marketing network of 800 dealer sites ARCO…
Indicative Purchase Price Comparison TSO Carson 14 HFC Tulsa (6/09) 28 PBF Del City (4/10) 102 HFC Tulsa (10/09) 106 PBF Paulsboro (9/10) 138 VLO Meraux (9/11) 171 PBF Toledo (12/10) 205 NTI St. Paul Park (10/10)…
Synergy Overview Synergy EBITDA Synergy Capital millions millions 250 145 215 235 165 185 100 120 60 35 35 25 35 (10) 2013E 2014E 2015E 2016E 2017E 2013E 2014E 2015E 2016E 2017E Synergies Capital improvements Feedstock…
Strategic Priorities Operational Efficiency and Effectiveness Combined refineries creates world scale facility Increases clean product yields Enhances gasoline to diesel production flexibility Lowers manufacturing costs Reduces…
Strategic Priorities Financial Discipline Financing strategy preserves balance sheet strength Value of logistics assets reduces cost of capital and effective purchase price Total debt to total capitalization expected below 30% by…
The New Tesoro Current Future Refineries 7 7 Capacity (MBD) 675 941 Refining Complexity 9.8 10.5 Retail Stations Retail Stations 1 375 1,375 2 175 2,175 Kenai, AK 72 MBD Employees 5,400 7,100 Anacortes, WA Mandan, ND Retail Sales…
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Mandan Refinery Expansion Expand capacity from 58 to 68 mbpd Total cost of 35 million Annual EBITDA contribution Annual EBITDA contribution 3540 million, Base case* 80 million, average 2011 pricing 80 million, average 2011…
Mandan DDU Expansion Expand diesel desulfurization unit (DDU) capacity from 17 to 22 mbpd (DDU) capacity from 17 to 22 mbpd Increase diesel fuel yield at Mandan Total cost of 35 million Annual EBITDA contribution 1012 million,…
Wilmington Yield Improvement Vacuum Distillation Unit replacement Product yield upgrade from petroleum coke to clean products Total cost of 40 million Annual EBITDA contribution 2025 million, Base case* 27 million, average 2011…
Bakken Crude Oil Supply to Anacortes Facility permitted to unload 50 mbpd of Bakken crude oil at Anacortes, 40% of refining capacity A t 40% f fi i it Total cost of 60 million Annual EBITDA contribution l b - 5055 million, Base…
Salt Lake City Conversion Project Improve yields of gasoline and diesel Increase throughput capacity by 4 mbpd Increase throughput capacity by 4 mbpd 100% increase of advantaged waxy crude oil throughput to 21 mbpd oil throughput…
NonGAAP Financial Measure (In millions) Unaudited Projected TLLP Annual EBITDA(1)(2) IPO 2013 Estimate Post Announced Dropdowns Projected net earnings net earnings 42 79 92 Add: Depreciation and amortization expense 9 14 17 Add:…
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