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Annual Shareholder Meeting – Tesoro Corporation

Tesoro Corporation · Dec 10, 2008 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Annual Shareholder Meeting – Tesoro Corporation – slide 1
    Bruce A. Smith Chairman, President and CEO Annual Shareholder Meeting
  2. Annual Shareholder Meeting – Tesoro Corporation – slide 2
    2007 Delivered Superior Results Operational Excellence Expanded Our Presence Business Model Migrated to the Pursuit of Internal Projects Generated Superior Shareholder Returns Strong Financial Performance 1
  3. Annual Shareholder Meeting – Tesoro Corporation – slide 3
    2007 Delivered Superior Results Operational Excellence Consistently high throughput levels throughout the system Increased the use of cost advantaged crudes 2
  4. Annual Shareholder Meeting – Tesoro Corporation – slide 4
    2007 Operational Excellence Maintaining Throughput Rates ..while Increasing Heavy Capacity MBPD % of Total Throughput 530 529 527 100% 80% Increased heavy throughput 60% by 18+ million barrels 40% 20% 0% 2005 2006 2007*…
  5. Annual Shareholder Meeting – Tesoro Corporation – slide 5
    2007 Delivered Superior Results Operational Excellence Expanded Our Presence Purchased Shells Los Angeles Refinery Reentered prime California retail market and doubled sites Completed our strategic acquisition plan 4
  6. Annual Shareholder Meeting – Tesoro Corporation – slide 6
    2007 Expanded Our Presence Los Angeles Refinery: Keystone of the West Coast System 5
  7. Annual Shareholder Meeting – Tesoro Corporation – slide 7
    2007 Expanded Our Presence Los Angeles Refinery: System Impact 100,000 BPD nameplate capacity 2007 LA Throughput Fills out our West Coast presence 88% 16.4 Nelson Complexity One of the most complex refineries in the United States…
  8. Annual Shareholder Meeting – Tesoro Corporation – slide 8
    2007 Delivered Superior Results Operational Excellence Expanded Our Presence Business Model Migrated to the Pursuit of Internal Projects 7
  9. Annual Shareholder Meeting – Tesoro Corporation – slide 9
    Capital Expenditures Moving Towards Organic Growth Capital Expenditures 2007 in Millions 1,000 Control Room Modernization and Wharf Expansion (Golden Eagle) Sulfur Handling Project (Anacortes) 750 2008 Delayed Coker (Golden…
  10. Annual Shareholder Meeting – Tesoro Corporation – slide 10
    Golden Eagle Coker Modification Project Installed in Record Time Regulatory Project Improved Profitability No recordable injuries or environmental Improved reliability incidences Reduce greenhouse gas 43 days to tie-in, ahead of…
  11. Annual Shareholder Meeting – Tesoro Corporation – slide 11
    2007 Delivered Superior Results Operational Excellence Expanded Our Presence Business Model Migrated to the Pursuit of Internal Projects Generated Superior Shareholder Returns 10
  12. Annual Shareholder Meeting – Tesoro Corporation – slide 12
    2007 Superior Shareholder Returns Total Shareholder Return* 60% 3-yr CAGR = 45% 50% 5-yr CAGR = 85% 40% 30% 20% 10% 0% Tesoro Valero Sunoco S&P 500** -10% Frontier Delek Coffeyville Alon Holly Western * Total…
  13. Annual Shareholder Meeting – Tesoro Corporation – slide 13
    2007 Delivered Superior Results Operational Excellence Expanded Our Presence Business Model Migrated to the Pursuit of Internal Projects Generated Superior Shareholder Returns Strong Financial Performance Improved cash from…
  14. Annual Shareholder Meeting – Tesoro Corporation – slide 14
    2007 Strong Financial Performance Cash From Operating Activities Debt : Capitalization in Millions 1,322 36% 35% 1,139 29% 758 2005 2006 2007 2005 2006 2007 Record Year for Cash from Operations Maintained Strong Balance…
  15. Annual Shareholder Meeting – Tesoro Corporation – slide 15
    But This Business Is Cyclical 18 years of margins, highs and lows /bbl 40 Katrina Significant 35 unplanned downtime 30 25 20 Summers 15 10 9/11/01 5 Always comes off highs 0 (5) Jan-90 Jan-92 Jan-94 Jan-96…
  16. Annual Shareholder Meeting – Tesoro Corporation – slide 16
    2007 Overview Crude Oil and Dollar 1.00 Correlation 20072008 120 Very high recent correlation between oil prices and the Dollar 110 Highest correlation versus the 0.90 European currencies 100 0.80 Fed lowering interest rates to…
  17. Annual Shareholder Meeting – Tesoro Corporation – slide 17
    2007 Two Different Halves 2007 Gross Refining Margin 2007 Operating Income /bbl in Millions 917 20.98 13.50 9.02 8.28 50 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Half 2nd Half Margins Narrowed in 2nd…
  18. Annual Shareholder Meeting – Tesoro Corporation – slide 18
    2007 Two Different Halves Retail Prices Lag Crude Prices as West Coast Gasoline Demand Growth Demand Declines Index to 1/1/07 180 3% 160 2% 1.2% 140 1% 0.5% 0.3% 120 0% -1% 100 -2% -1.8% 80 Jan-07 Mar-07 May-07 Jul-07…
  19. Annual Shareholder Meeting – Tesoro Corporation – slide 19
    2007 Two Different Halves US Unemployment Level California Unemployment Level 5.5% 6.0% 5.0% 5.5% 4.5% 5.0% 4.0% 4.5% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec…
  20. Annual Shareholder Meeting – Tesoro Corporation – slide 20
    2008 and Beyond Challenging Market Conditions 19
  21. Annual Shareholder Meeting – Tesoro Corporation – slide 21
    Challenging Market Conditions WTI Crude Price Run-Up Continues California Unemployment Level Continues to Rise WTI, /bbl 110 6.5% 100 6.0% 90 80 5.5% 70 5.0% 60 50 4.5% 1-Jan-07 1-Apr-07 1-Jul-07 1-Oct-07 1-Jan-08 1-Apr-08 Jan…
  22. Annual Shareholder Meeting – Tesoro Corporation – slide 22
    2008 and Beyond Challenging Market Conditions 1Q 2008 Results 21
  23. Annual Shareholder Meeting – Tesoro Corporation – slide 23
    1Q 2008 Results Gross Refining Margin EPS (Diluted) /bbl /share 3.17 20.98 13.50 0.84 9.02 8.28 0.34 6.54 (0.29) (0.60) 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 Gross Margins…
  24. Annual Shareholder Meeting – Tesoro Corporation – slide 24
    2008 and Beyond Challenging Market Conditions 1Q 2008 Results 2008 Goals 23
  25. Annual Shareholder Meeting – Tesoro Corporation – slide 25
    2008 Goals Be profitable in the 2nd, 3rd and 4th quarters Combination of cost reductions and optimization Reduce short term debt in order to return debt : capitalization ratio to year end 2007 level Profitability Lower working…
  26. Annual Shareholder Meeting – Tesoro Corporation – slide 26
    2008 and Beyond Challenging Market Conditions 1Q 2008 Results 2008 Goals 2008-2012 Strategic Plan 25
  27. Annual Shareholder Meeting – Tesoro Corporation – slide 27
    2008-2012 Strategic Plan Heavy Crude Discount /bbl 0 (5) (10) (15) Tesoro plans to increase heavy throughput from 30% to 40% (20) (25) Jan-05 Jan-06 Jan-07 Jan-08 Source: Platts (Maya WTI) Tesoro Cash Operating Cost /bbl…
  28. Annual Shareholder Meeting – Tesoro Corporation – slide 28
    2008 and Beyond Challenging Market Conditions 1Q 2008 Results 2008 Goals 2008-2012 Strategic Plan Long Term Expectations 27
  29. Annual Shareholder Meeting – Tesoro Corporation – slide 29
    Long Term Expectations Grow value through organic programs Ability to add as much value as the underlying base business We dont have to grow through acquisitions to build shareholder value Focus on all costs to make the business…
  30. Annual Shareholder Meeting – Tesoro Corporation – slide 30
    Bruce A. Smith Chairman, President and CEO Annual Shareholder Meeting

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