Driven to Create Value TPH 2015 Hotter 'N Hell Conference June 18, 2015
Objectives to Drive Competitive Advantage Create the leading refining, marketing and logistics business in our strategic footprint Drive towards an incident free workplace Deliver significant EBITDA growth Achieve growth through…
Tesoros Business Today Kenai, AK Anacortes, WA 72 MBD 120 MBD Mandan, ND 71 MBD Key Metrics 2015 Salt Lake City, UT Refining Capacity (MBD) 850 Martinez, CA 58 MBD Refining Complexity 11.5 166 MBD Tesoro Logistics LP (%) 36…
Strategic Priorities Operational efficiency and effectiveness Safety and reliability Cost leadership System improvements Value Chain Optimization Financial discipline Value-driven growth High performing culture Enduring…
Achieving Continual Growth in Earnings in millions 325 2,261 450 200 1 Billion of Improvements 1 560 225 175 175 551 2010 2011 2012 2013 2014 Portfolio 2 Energy 3 Market4 2014 EBITDA Price Impact Delivered 1.5…
2014 Distinctive Performance Objectives in millions 2014 2014 Target Actual Deliver California Synergies1 160 180 235 Enhance Gross Margin 140 160 205 Business Improvements 70 90 120 Annual Improvement1,2 370 430 560 Grow…
Accelerating Growth in 2015 in millions 2015 Deliver West Coast Improvements 95 125 Capture Margin Improvements 130 170 Grow Logistics1 325 375 Annual Improvement2 550 670 Annual Improvement 550 670 560 225 175 175 2011…
PADD V Market Dynamics Los Angeles 321 Crack Spread4 24 /bbl PADD V Supply Demand Balance 20 Average MBD1 Production2 Demand Exports 16 Gasoline 1,603 1,539 46 Diesel 583 519 118 12 Jet 426 435 28 8 Total 2,612 2,493 192…
Improving California Economy Unemployment Rate California Vehicle Miles Traveled 16 Percent 186 Billions of Miles 12 California 180 8 174 4 United States 0 168 2005 2007 2009 2011 2013 2015 2004 2006 2008 2010 2012 2014…
Delivering California Synergies Cumulative Synergy Improvements in millions 500 + Realizing synergies earlier 380 - 420 with lower capital 335 - 365 Delivering sustainable 275 synergies across the value Updated Synergies chain…
Creating Competitive Advantage Los Angeles Integration and Compliance Project Provides 30 to 40 MBD of gasoline and distillate yield flexibility Improves processing efficiency Decommissions older fluid catalytic cracking unit…
Optimizing our Value Chain Feedstock Inbound Logistics Refining Outbound Logistics Product Sales Acquisition Advantaged Feedstock Flexibility & Optimization Product Channels Expect to deliver additional 130 to 170 million of…
Increasing Access to Advantaged Crude Oil Provide reliable and cost advantaged access to feedstocks 25 MBD heavy crude oil to California refineries 10 to 15 MBD Waxy Crude oil to Salt Lake City Advantaged Crude Throughput 5 MBD…
Vancouver Energy Delivering Advantaged Crude Oil to West Coast Up to 360 MBD Rail-to-Marine Terminal 50/50 joint venture Port of Vancouver Marine Terminal Commercial advantages Creates more competitive crude oil environment on…
Clean Product Upgrade Project Changes to market structure have created opportunity Low natural gas prices 5,500 miles Advantaged crude oil yields Ethanol blending 11,000 miles Transportation advantage to growing Asian market…
Growing a Stronger Retail Marketing Business Improvements since 2010 Marketing integration increased from 31% to 90% Introduced premium and value brand in our markets Acquired ARCO brand Increased retail network by 250% Average…
Strategic Importance of Logistics Feedstock Inbound Logistics Refining Outbound Logistics Product Sales Acquisition Access to Advantaged Feedstocks Access to Product Channels Growing logistics to provide a greater portion of…
Driving Distinctive Logistics Growth Leading full-service provider of upstream and downstream logistics in Western United States Distinctive logistics growth strategy for crude oil, natural gas and refined products Balanced approach…
Overview of Current TLLP Assets Anacortes Key Metrics Crude Oil, refined product and Kenai Bakken 3,500+ miles Natural gas pipelines Powder River Mandan Natural gas throughput capacity 2,900+ MMcf/d Green Natural gas inlet…
TLLP Strategic Initiatives Focus on Focused fee-based business with long-term minimum commitments Stable, Fee- Maintain minimal commodity risk Based Business Provide full-service logistics offering Optimize Improve operational…
Drop Down Opportunities Potential drop downs of at least 500 million of EBITDA 24
Distinctive Logistics Growth Strategy in millions 2014 2015E 2016E 2017E Gathering (Incl. natural gas) 70 265-285 310-340 335-395 Processing 8 120-140 140-160 150-180 Terminalling and Transportation 257 285-315 300-330 310-340…
TLLP Capital Plan Overview in millions Capital Spend Cumulative EBITDA Organic Investment & Optimization Total Maintenance Base Growth Natural Gas Growth 90 110 100 225 300 200 260 250 150 200 70 60 70 70 44 2014…
Tesoro Financial Priorities Invest in growth opportunities to drive further value creation Maintain a minimum cash balance of 600 to 800 million Target TSO debt to capitalization1 below 30% Solid Operating Results Target TLLP…
Tesoro Capital Spending Outlook Tesoro Capital Spending1 in millions 625 600 575 535 Income Regulatory Maintenance 2014 2015E 2016E 2017E Financially disciplined cash deployment 1) Excludes TLLP capital…
Growth of Tesoro Logistics Annual Distributions to Percent of Logistics EBITDA1 Tesoro from TLLP 300 45% % of Total First Call Estimate in millions 245 Tesoro 30% GP 160 Tesoro excluding third-party 105 15% 50 30 LP…
TLLP Value Proposition to Tesoro in millions TLLP EBITDA1 Tesoros Implied Value of TLLP 815 Ownership2 5,000 675 4,000 3,236 GP 283 Holdings 1,460 156 77 760 LP Units 2012 2013 2014 2015E 2017E 2012 2013 2014 2015E…
Driven to Create Value Operational Efficiency and Effectiveness Commercial Value-Driven Growth Excellence High Performing Financial Discipline Culture Driven to deliver 550 to 670 million in 2015 32
Non-GAAP Financial Measures (In millions) Unaudited EBITDA Reconciliation 2010 2011 2012 2013 2014 Net earnings (29) 563 770 454 888 Add (earnings) loss from discontinued operations - 30 133 (20) 29 Add income tax expense 4 359 527…
Non-GAAP Financial Measures (In millions) Unaudited Annual EBITDA Estimate LA Refinery Integration and Retail Compliance Project Vancouver Energy Segment Projected net earnings 53 122 162 Add income tax expense 32 74 98 Add…
Non-GAAP Financial Measures Expected Annual EBITDA (In millions) Unaudited Contributions Acquisition of West Coast Logistics Assets Projected net earnings 20 Add interest and financing costs 6 Add depreciation and amortization…
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