Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 28, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'TESORO CORP /NEW/ | ' |
Entity Central Index Key | '0000050104 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 129,324,068 |
Condensed_Statements_of_Consol
Condensed Statements of Consolidated Operations (Unaudited) (USD $) | 3 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | |
Income Statement [Abstract] | ' | ' | |
REVENUES (a) | $9,933 | $7,347 | |
COSTS AND EXPENSES: | ' | ' | |
Cost of sales (a) | 8,948 | 6,563 | |
Operating expenses | 591 | 368 | |
Selling, general and administrative expenses | 31 | 111 | |
Depreciation and amortization expense | 130 | 105 | |
(Gain) loss on asset disposals and impairments | -5 | 7 | |
OPERATING INCOME | 238 | 193 | |
Interest and financing costs, net | -77 | [1] | -30 |
Other expense, net | -1 | 0 | |
EARNINGS BEFORE INCOME TAXES | 160 | 163 | |
Income tax expense | 56 | 58 | |
NET EARNINGS FROM CONTINUING OPERATIONS | 104 | 105 | |
Loss from discontinued operations, net of tax | -1 | -1 | |
NET EARNINGS | 103 | 104 | |
Less: Net earnings from continuing operations attributable to noncontrolling interest | 25 | 11 | |
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | 78 | 93 | |
NET EARNINGS (LOSS) ATTRIBUTABLE TO TESORO CORPORATION | ' | ' | |
Continuing operations | 79 | 94 | |
Discontinued operations | -1 | -1 | |
Total | 78 | 93 | |
NET EARNINGS (LOSS) PER SHARE - BASIC: | ' | ' | |
Continuing operations | $0.60 | $0.69 | |
Discontinued operations | ($0.01) | ($0.01) | |
Total | $0.59 | $0.68 | |
Weighted average common shares outstanding - Basic | 131.3 | 137 | |
NET EARNINGS (LOSS) PER SHARE - DILUTED: | ' | ' | |
Continuing operations | $0.59 | $0.68 | |
Discontinued operations | ($0.01) | ($0.01) | |
Total | $0.58 | $0.67 | |
Weighted average common shares outstanding - Diluted | 133.8 | 139.6 | |
DIVIDENDS PER SHARE | $0.25 | $0.20 | |
SUPPLEMENTAL INFORMATION: | ' | ' | |
(a) Includes excise taxes collected by our retail segment (excluding credits) | $141 | $129 | |
[1] | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 2019 Notes during the three months ended March 31, 2014. |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $798 | $1,238 |
Receivables, less allowance for doubtful accounts | 1,696 | 1,313 |
Inventories | 2,777 | 2,565 |
Prepayments and other current assets | 199 | 210 |
Total Current Assets | 5,470 | 5,326 |
NET PROPERTY, PLANT AND EQUIPMENT | 6,895 | 6,875 |
OTHER NONCURRENT ASSETS, NET | 1,203 | 1,188 |
Total Assets | 13,568 | 13,389 |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 2,915 | 2,596 |
Other current liabilities | 721 | 812 |
Total Current Liabilities | 3,636 | 3,408 |
DEFERRED INCOME TAXES | 1,015 | 1,018 |
OTHER NONCURRENT LIABILITIES | 653 | 655 |
Debt | 2,829 | 2,823 |
COMMITMENTS AND CONTINGENCIES (Note L) | ' | ' |
TESORO CORPORATION STOCKHOLDERS’ EQUITY | ' | ' |
Common stock, par value $0.162/3; authorized 200,000,000 shares; 154,735,345 shares issued (154,712,627 in 2013) | 26 | 26 |
Additional paid-in capital | 1,187 | 1,186 |
Retained earnings | 3,985 | 3,940 |
Treasury stock, 24,848,770 common shares (22,907,890 in 2013), at cost | -898 | -798 |
Accumulated other comprehensive loss | -52 | -52 |
Total Tesoro Corporation Stockholders’ Equity | 4,248 | 4,302 |
NONCONTROLLING INTEREST | 1,187 | 1,183 |
Total Equity | 5,435 | 5,485 |
Total Liabilities and Equity | $13,568 | $13,389 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
TESORO CORPORATION STOCKHOLDERS’ EQUITY | ' | ' |
Common stock, par value (dollar per share) | $0.17 | $0.17 |
Common stock, authorized shares (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 154,735,345 | 154,712,627 |
Treasury stock, common shares (shares) | 24,848,770 | 22,907,890 |
Property, Plant and Equipment, Net | ' | ' |
NET PROPERTY, PLANT AND EQUIPMENT | $6,895 | $6,875 |
Debt | ' | ' |
Debt | 2,829 | 2,823 |
Tesoro Logistics LP | ' | ' |
Property, Plant and Equipment, Net | ' | ' |
NET PROPERTY, PLANT AND EQUIPMENT | 1,379 | 1,368 |
Debt | ' | ' |
Debt | $1,164 | $1,164 |
Condensed_Statements_of_Consol1
Condensed Statements of Consolidated Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ' | ' |
Net earnings | $103 | $104 |
Adjustments to reconcile net earnings to net cash from (used in) operating activities: | ' | ' |
Depreciation and amortization expense | 130 | 106 |
Debt redemption charges | 31 | 0 |
Stock-based compensation expense (benefit) | -18 | 52 |
Deferred charges | -60 | -159 |
Other non-cash operating activities | 7 | 5 |
Changes in current assets and current liabilities | -343 | 139 |
Net cash from (used in) operating activities | -150 | 247 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ' | ' |
Capital expenditures | -119 | -125 |
Advanced payments made for Los Angeles Acquisition | 0 | -27 |
Other | 10 | 2 |
Net cash used in investing activities | -109 | -150 |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ' | ' |
Proceeds from debt offering | 300 | 0 |
Repayments of debt | -301 | 0 |
Dividend payments | -33 | -28 |
Net proceeds from issuance of Tesoro Logistics LP common units | 0 | 392 |
Distributions to noncontrolling interest | -20 | -14 |
Purchases of common stock | -100 | -135 |
Premium paid on notes redemption | -19 | 0 |
Other | -8 | 21 |
Net cash from (used in) financing activities | -181 | 236 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -440 | 333 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,238 | 1,639 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $798 | $1,972 |
Basis_of_Presentation_Notes
Basis of Presentation (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
BASIS OF PRESENTATION | ' |
BASIS OF PRESENTATION | |
As used in this report, the terms “Tesoro,” “we,” “us” or “our” may refer to Tesoro Corporation, one or more of its consolidated subsidiaries or all of them taken as a whole. The words “we,” “us” or “our” generally include Tesoro Logistics LP (“TLLP”) and its subsidiaries as consolidated subsidiaries of Tesoro Corporation with certain exceptions where there are transactions or obligations between TLLP and Tesoro Corporation or its other subsidiaries. When used in descriptions of agreements and transactions, “TLLP” or the “Partnership” refers to TLLP and its consolidated subsidiaries. | |
The interim condensed consolidated financial statements and notes thereto of Tesoro Corporation and its subsidiaries have been prepared by management without audit according to the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results for the periods presented. Such adjustments are of a normal recurring nature, unless otherwise disclosed. | |
The consolidated balance sheet at December 31, 2013 has been condensed from the audited consolidated financial statements at that date. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. However, management believes that the disclosures presented herein are adequate to present the information fairly. The accompanying condensed consolidated financial statements and notes should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013. | |
We prepare our condensed consolidated financial statements in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts and disclosures of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We review our estimates on an ongoing basis. Changes in facts and circumstances may result in revised estimates and actual results could differ from those estimates. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain prior year balances have been aggregated or disaggregated in order to conform to the current year presentation. Due to there being no adjustments to accumulated other comprehensive income for the three months ended March 31, 2014 and 2013, consolidated statements of comprehensive income have been omitted. | |
Our consolidated financial statements include TLLP, a variable interest entity. As the general partner of TLLP, we have the sole ability to direct the activities of TLLP that most significantly impact its economic performance. We are also considered to be the primary beneficiary for accounting purposes and are TLLP’s primary customer. Under our various long-term, fee-based commercial agreements with TLLP, transactions with us accounted for 88% and 93% of TLLP’s total revenues for the three months ended March 31, 2014, and 2013 respectively. TLLP does not derive a significant amount of revenue from third parties. However, in the event TLLP incurs a loss, our operating results will reflect TLLP’s loss, net of intercompany eliminations. See Note C for additional information relating to TLLP. | |
On September 25, 2013, we completed the sale of all of our interest in Tesoro Hawaii, LLC, which operated a 94 thousand barrel per day (“Mbpd”) Hawaii refinery, retail stations and associated logistics assets (the “Hawaii Business”). Unless otherwise noted, the information in the notes to the condensed consolidated financial statements relates to our continuing operations. |
Acquisitions_Notes
Acquisitions (Notes) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Business Combinations [Abstract] | ' | |||
ACQUISITIONS | ' | |||
ACQUISITIONS | ||||
Los Angeles Acquisition | ||||
We acquired BP’s integrated Southern California refining, marketing and logistics business on June 1, 2013 from BP West Coast Products, LLC and other affiliated sellers (the “Los Angeles Acquisition”) consistent with our business strategy and providing us with an opportunity to combine two West Coast refining, marketing and logistics businesses resulting in a more efficient integrated refining, marketing and logistics system. The acquired assets include the 266 Mbpd Carson refinery located adjacent to our Wilmington refinery, related marine terminals, land terminals and pipelines. The assets also include the ARCO® brand and associated registered trademarks, as well as a master franchisee license for the ampm® convenience store brand and the supply rights to approximately 835 branded dealer-operated and branded wholesale stations in central and southern California, Nevada and Arizona. Additionally, we acquired an anode coke calcining operation and a 51% ownership in the Watson cogeneration facility, both located at the Carson refinery. We also assumed certain environmental liabilities, primarily remediation obligations. For additional information regarding the assumed environmental remediation obligations, see Note L. | ||||
Our allocation of the Los Angeles Acquisition's $2.33 billion purchase price remains preliminary at March 31, 2014 as we continue to evaluate information about assumed environmental liabilities existing at the date of acquisition and finalize our appraisal of property, plant and equipment. Although the finalization of the appraisal and full evaluation of the liabilities may result in changes in the valuation of assets acquired and liabilities assumed within our measurement period, we believe these changes will not have a material impact on our liquidity, financial position, or results of operations. | ||||
The table below presents the acquisition date purchase price allocation (in millions) through March 31, 2014: | ||||
Receivables | $ | 197 | ||
Inventories | 1,096 | |||
Prepayments and other current assets | 14 | |||
Property, plant and equipment | 1,085 | |||
Acquired intangibles, net | 63 | |||
Other noncurrent assets, net | 112 | |||
Other current liabilities | (25 | ) | ||
Other noncurrent liabilities | (179 | ) | ||
Debt | (36 | ) | ||
Total purchase price | $ | 2,327 | ||
If the Los Angeles Acquisition had occurred prior to 2013, our pro forma revenues and net earnings would have been $10.7 billion and $176 million, respectively, for the three months ended March 31, 2013. |
Tesoro_Logistics_LP_Notes
Tesoro Logistics LP (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Variable Interest Entity, Measure of Activity [Abstract] | ' |
TESORO LOGISTICS LP | ' |
TESORO LOGISTICS LP | |
TLLP is a publicly traded limited partnership that was formed to own, operate, develop and acquire logistics assets. Its assets are integral to the success of Tesoro’s refining and marketing operations and generate revenue by charging fees for gathering crude oil and for terminalling, transporting and storing crude oil and refined products. Tesoro Logistics GP, LLC (“TLGP”), a fully consolidated subsidiary, serves as the general partner of TLLP. We held an approximate 36% interest in TLLP at March 31, 2014 and December 31, 2013, including the general partner interest. This interest includes 3,855,824 common units, 15,254,890 subordinated units and 1,110,282 general partner units. All intercompany transactions with TLLP are eliminated upon consolidation. | |
TLLP provides us with various pipeline transportation, trucking, terminal distribution, storage and coke-handling services under long-term, fee-based commercial agreements. Each of these agreements, with the exception of the storage and transportation services agreement, contain minimum volume commitments. We do not provide financial or equity support through any liquidity arrangements or financial guarantees to TLLP. |
Discontinued_Operations_Discon
Discontinued Operations Discontinued Operations (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ' |
DISCONTINUED OPERATIONS | ' |
DISCONTINUED OPERATIONS | |
On September 25, 2013, we completed the sale of all of the Hawaii Business and received gross proceeds of $539 million, including $75 million from the sale of assets and $464 million from the sale of inventory and other net working capital. Additional contingent consideration includes an earnout arrangement payable over three years for an aggregate amount of up to $40 million based on consolidated gross margins. Any income related to the earnout arrangement will not be recorded until it is considered realizable. We have also agreed to indemnify the purchaser for up to $15 million of environmental remediation costs related to the Hawaii Business, subject to limitations described in the purchase agreement, and retained responsibility for the resolution of certain Clean Air Act allegations as described in Note L. The asset retirement obligations were assumed by the purchaser upon close of the transaction; therefore, we will not incur any removal or other closure costs for this business. | |
The results of operations for this business have been presented as discontinued operations in the condensed statements of consolidated operations for the three months ended March 31, 2014 and 2013. There were no revenues for the three months ended March 31, 2014. Revenues from the discontinued Hawaii Business for the three months ended March 31, 2013 were $809 million. We recorded losses, before and after tax, of $1 million related to the Hawaii Business for the three months ended March 31, 2014 and 2013. | |
Cash flows related to the discontinued Hawaii Business have been combined with the cash flows from continuing operations in the condensed statements of consolidated cash flows for both periods presented. There were no cash flows for the three months ended March 31, 2014, however cash flows provided by operating activities for the three months ended March 31, 2013 were $102 million with no cash flows associated with investing activities. |
Earnings_Per_Share_Notes
Earnings Per Share (Notes) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Earnings Per Share [Abstract] | ' | |||
EARNINGS PER SHARE | ' | |||
EARNINGS PER SHARE | ||||
We compute basic earnings per share by dividing net earnings attributable to Tesoro Corporation stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share include the effects of potentially dilutive shares outstanding during the period. | ||||
Our share calculations are presented below (in millions): | ||||
Three Months Ended | ||||
March 31, | ||||
2014 | 2013 | |||
Weighted average common shares outstanding | 131.3 | 137 | ||
Common stock equivalents | 2.5 | 2.6 | ||
Total diluted shares | 133.8 | 139.6 | ||
Potentially dilutive common stock equivalents are excluded from the calculation of diluted earnings per share if the effect of including such securities in the calculation would have been anti-dilutive. Anti-dilutive securities were 0.4 million shares and 0.2 million shares for the three months ended March 31, 2014 and 2013, respectively. |
Inventories_Notes
Inventories (Notes) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
INVENTORIES | ' | |||||||
INVENTORIES | ||||||||
Components of inventories were as follows (in millions): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Domestic crude oil and refined products | $ | 1,904 | $ | 1,847 | ||||
Foreign subsidiary crude oil | 671 | 523 | ||||||
Other inventories | 202 | 195 | ||||||
Total Inventories | $ | 2,777 | $ | 2,565 | ||||
The total carrying value of our crude oil and refined product inventories was less than replacement cost by approximately$1.8 billion and $1.7 billion at March 31, 2014 and December 31, 2013, respectively. |
Property_Plant_and_Equipment_N
Property, Plant and Equipment (Notes) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
PROPERTY, PLANT AND EQUIPMENT | ' | |||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||||
Property, plant and equipment, at cost, is as follows (in millions): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Refining | $ | 6,679 | $ | 6,611 | ||||
TLLP | 1,530 | 1,504 | ||||||
Retail | 784 | 778 | ||||||
Corporate | 234 | 230 | ||||||
Property, plant and equipment, at cost | 9,227 | 9,123 | ||||||
Accumulated depreciation | (2,332 | ) | (2,248 | ) | ||||
Net property, plant and equipment | $ | 6,895 | $ | 6,875 | ||||
We capitalize interest as part of the cost of major projects during the construction period. Capitalized interest totaled $5 million and $4 million for the three months ended March 31, 2014 and 2013, respectively, and is recorded as a reduction to net interest and financing costs in our condensed statements of consolidated operations. |
Fair_Value_Measurements_Notes
Fair Value Measurements (Notes) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||||||||
We classify financial assets and financial liabilities into the following fair value hierarchy: | ||||||||||||||||||||
• | level 1 - valued based on quoted prices in active markets for identical assets and liabilities; | |||||||||||||||||||
• | level 2 - valued based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability; and | |||||||||||||||||||
• | level 3 - valued based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||||||||||||||||||
We measure fair value using level 1 inputs, when available, because they provide the most reliable evidence of fair value. Derivative instruments along with obligations for Renewable Identification Numbers (“RINs”) and cap and trade emission credits for the state of California (together with RINs, our “Environmental Credit Obligations”) are our only financial assets and financial liabilities measured at fair value on a recurring basis. We did not have any financial assets or liabilities classified as level 3 at March 31, 2014 or December 31, 2013. See Note I for further information on the Company’s derivative instruments. | ||||||||||||||||||||
Our derivative instruments consist primarily of physical commodity forward purchase and sale contracts (“Forward Contracts”), exchange-traded futures (“Futures Contracts”), over-the-counter swaps (“OTC Swap Contracts”), options (“Options”), and over-the-counter options (“OTC Option Contracts”). Forward Contracts, OTC Swap Contracts, and OTC Option Contracts are valued using third-party broker quotes, industry pricing services and price curves derived from commodity exchange postings. These quotes are corroborated with market data and are categorized in level 2 of the fair value hierarchy. Futures Contracts are valued based on quoted prices from exchanges and are categorized in level 1 or level 2 of the fair value hierarchy based on the liquidity of the instrument. Options are valued using quoted prices from exchanges and are categorized in level 1 of the fair value hierarchy. | ||||||||||||||||||||
Our Environmental Credit Obligations are based on our deficit for RINs and California cap and trade credits and the price of each as of the balance sheet date. These obligations are measured at fair value using quoted prices from independent pricing services and are categorized in level 2 of the fair value hierarchy. Our RINs obligation represents our deficit for the purchase of RINs to satisfy the requirement to blend biofuels into the products we have produced. RINs are assigned to biofuels produced or imported into the U.S. as required by the U.S. Environmental Protection Agency (“EPA”), which sets annual quotas for the percentage of biofuels that must be blended into transportation fuels consumed in the U.S. As a producer of petroleum transportation fuels, we are required to blend biofuels into the products we produce at a rate that will meet the EPA’s quota. To the degree we are unable to blend at that rate, we must purchase RINs in the open market to satisfy the requirement. The cap and trade emission credits for the state of California represent our deficit for the purchase of additional credits to satisfy emission reduction requirements mandated in California’s Assembly Bill 32 in each period for which our carbon emissions exceed the level set by the regulation. | ||||||||||||||||||||
Financial assets and liabilities recognized at fair value in our condensed consolidated balance sheets by level within the fair value hierarchy were as follows (in millions): | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total as of | ||||||||||||||||
31-Mar-14 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 179 | $ | 2 | $ | — | $ | (117 | ) | $ | 64 | |||||||||
Commodity OTC Swap Contracts | — | 1 | — | — | 1 | |||||||||||||||
Commodity Forward Contracts | — | 2 | — | — | 2 | |||||||||||||||
Total Assets | $ | 179 | $ | 5 | $ | — | $ | (117 | ) | $ | 67 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 192 | $ | 4 | $ | — | $ | (180 | ) | $ | 16 | |||||||||
Commodity OTC Swap Contracts | — | 3 | — | — | 3 | |||||||||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 9 | — | — | 9 | |||||||||||||||
Total Liabilities | $ | 192 | $ | 17 | $ | — | $ | (180 | ) | $ | 29 | |||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total as of | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 136 | $ | 4 | $ | — | $ | (72 | ) | $ | 68 | |||||||||
Total Assets | $ | 136 | $ | 4 | $ | — | $ | (72 | ) | $ | 68 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 156 | $ | 2 | $ | — | $ | (137 | ) | $ | 21 | |||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 5 | — | — | 5 | |||||||||||||||
Total Liabilities | $ | 156 | $ | 8 | $ | — | $ | (137 | ) | $ | 27 | |||||||||
________________ | ||||||||||||||||||||
(a) | Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of March 31, 2014 and December 31, 2013, cash collateral amounts of $63 million and $65 million, respectively, are netted with mark-to-market derivative assets. | |||||||||||||||||||
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. | ||||||||||||||||||||
We believe the carrying value of our other financial instruments, including cash and cash equivalents, receivables, accounts payable and certain accrued liabilities approximate fair value. Our fair value assessment incorporates a variety of considerations, including the short-term duration of the instruments (less than one percent of our trade receivables and payables are outstanding for greater than 90 days), and the expected future insignificance of bad debt expense, which includes an evaluation of counterparty credit risk. The borrowings under the Tesoro Corporation revolving credit facility (the “Revolving Credit Facility”), the TLLP senior secured revolving credit agreement (the “TLLP Revolving Credit Facility”) and our term loan credit facility agreement (the “Term Loan Credit Facility”), which include variable interest rates, approximate fair value. The fair value of our debt is based on prices from recent trade activity and is categorized in level 2 of the fair value hierarchy. The carrying value and fair value of our debt were approximately $2.8 billion and $2.9 billion, respectively, at both March 31, 2014 and December 31, 2013. |
Derivative_Instruments_Notes
Derivative Instruments (Notes) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ' | |||||||||||||||||
DERIVATIVE INSTRUMENTS | ' | |||||||||||||||||
DERIVATIVE INSTRUMENTS | ||||||||||||||||||
The timing, direction and overall change in refined product prices versus crude oil prices has a significant impact on our profit margins, earnings and cash flows. Consequently, we use non-trading derivative instruments to manage exposure to commodity price risks associated with the purchase or sale of feedstocks, refined products and energy supplies to or from our refineries, terminals, retail operations and customers. We also use non-trading derivative instruments to manage price risks associated with inventories above or below our target levels. To achieve our objectives, we use derivative instruments such as Forward Contracts, Futures Contracts, OTC Swap Contracts, Options, and, OTC Option Contracts, which had remaining maturity dates within one year as of March 31, 2014. We are also exposed to exchange rate fluctuations on our purchases of Canadian crude oil. We enter into Forward Contracts of Canadian dollars to manage these exchange rate fluctuations. | ||||||||||||||||||
The accounting for changes in the fair value of a commodity derivative depends on whether we have elected the normal purchases and normal sales exception. Our recognition of derivatives using the normal purchase normal sales exception follows the accrual method of accounting whereas changes in fair value for all other derivatives are recorded each period using mark-to-market accounting. | ||||||||||||||||||
The primary derivative instruments that we use have the following characteristics. Forward Contracts are agreements to buy or sell the commodity at a predetermined price at a specified future date. Futures Contracts are standardized agreements, traded on a futures exchange, to buy or sell the commodity at a predetermined price at a specified future date. Options provide the right, but not the obligation to buy or sell the commodity at a specified price in the future. OTC Swap Contracts and OTC Option Contracts require cash settlement for the commodity based on the difference between a contracted fixed or floating price and the market price on the settlement date. Certain of these contracts require cash collateral if our liability position exceeds specified thresholds. We believe that we have minimal credit risk with respect to our counterparties. | ||||||||||||||||||
The following table presents the fair value (in millions) of our derivative instruments as of March 31, 2014 and December 31, 2013. The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements including cash collateral on deposit with, or received from, brokers. We offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists. As a result, the asset and liability amounts below will not agree with the amounts presented in our condensed consolidated balance sheets. | ||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||
Balance Sheet Location | March 31, | December 31, | March 31, | December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Commodity Futures Contracts (a) | Prepayments and other current assets | $ | 181 | $ | 140 | $ | 196 | $ | 158 | |||||||||
Commodity OTC Swap Contracts | Receivables | 1 | — | — | — | |||||||||||||
Commodity OTC Swap Contracts | Accounts payable | — | — | 3 | — | |||||||||||||
Commodity Forward Contracts | Receivables | 2 | — | — | — | |||||||||||||
Commodity Forward Contracts | Accounts payable | — | — | 1 | 1 | |||||||||||||
Total Gross Mark-to-Market Derivatives | 184 | 140 | 200 | 159 | ||||||||||||||
Less: Counterparty Netting and Cash Collateral (b) | (117 | ) | (72 | ) | (180 | ) | (137 | ) | ||||||||||
Total Net Fair Value of Derivatives | $ | 67 | $ | 68 | $ | 20 | $ | 22 | ||||||||||
________________ | ||||||||||||||||||
(a) | We had derivative assets totaling $1 million and $3 million at March 31, 2014 and December 31, 2013, respectively, related to corn futures used to manage our biofuel exposure. Additionally, we had derivative liabilities totaling $4 million and $1 million at March 31, 2014 and December 31, 2013, respectively, related to corn futures. | |||||||||||||||||
(b) | As of March 31, 2014 and December 31, 2013, cash collateral amounts of $63 million and $65 million, respectively, are netted with mark-to-market derivative assets. | |||||||||||||||||
Gains (losses) for our mark-to market derivatives for the three months ended March 31, 2014 and 2013, were as follows (in millions): | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Commodity Futures Contracts | $ | — | $ | (26 | ) | |||||||||||||
Commodity OTC Swap Contracts | (1 | ) | — | |||||||||||||||
Commodity Forward Contracts | 1 | (2 | ) | |||||||||||||||
Foreign Currency Forward Contracts | (2 | ) | (2 | ) | ||||||||||||||
Total Loss on Mark-to-Market Derivatives | $ | (2 | ) | $ | (30 | ) | ||||||||||||
The income statement location of gains (losses) for our mark-to market derivatives above were as follows (in millions): | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Revenues | $ | 1 | $ | 1 | ||||||||||||||
Cost of sales | (1 | ) | (22 | ) | ||||||||||||||
Other expense, net | (2 | ) | (2 | ) | ||||||||||||||
Net loss from discontinued operations | — | (7 | ) | |||||||||||||||
Total Loss on Mark-to-Market Derivatives | $ | (2 | ) | $ | (30 | ) | ||||||||||||
Open Long (Short) Positions | ||||||||||||||||||
All of our open positions are scheduled to mature within one year. At March 31, 2014, we had open Forward Contracts to purchase CAD $50 million that matured on April 25, 2014. The information below presents the net volume of outstanding commodity contracts by type of instrument and year of maturity as of March 31, 2014 (volumes in thousands of barrels): | ||||||||||||||||||
Mark-to-Market Derivatives | ||||||||||||||||||
Derivative instrument and Year of maturity | Long (Short) Contract Volumes | |||||||||||||||||
Futures | ||||||||||||||||||
2014 | -11,937 | |||||||||||||||||
OTC Swaps | ||||||||||||||||||
2014 | 4,300 | |||||||||||||||||
Forwards | ||||||||||||||||||
2014 | -306 | |||||||||||||||||
Options | ||||||||||||||||||
2014 | 600 | |||||||||||||||||
Additionally, as of March 31, 2014, we held short futures positions totaling 5.8 million bushels of corn maturing in 2014. |
Debt_Notes
Debt (Notes) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
DEBT | ' | |||||||||||||||||
DEBT | ||||||||||||||||||
Our total debt balance at March 31, 2014 and December 31, 2013 was as follows (in millions): | ||||||||||||||||||
March 31, | December 31, | |||||||||||||||||
2014 | 2013 | |||||||||||||||||
Total debt (a) | $ | 2,835 | $ | 2,829 | ||||||||||||||
Less: Current maturities | 6 | 6 | ||||||||||||||||
Debt, less current maturities | $ | 2,829 | $ | 2,823 | ||||||||||||||
________________ | ||||||||||||||||||
(a) | Total debt related to TLLP, which is non-recourse to Tesoro, except for TLGP, was $1.2 billion at both March 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||
5.125% Senior Notes due 2024 | ||||||||||||||||||
Effective March 18, 2014, we issued $300 million aggregate principal amount of 5.125% Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes have a ten-year maturity and are subject to optional redemption by Tesoro beginning April 1, 2019 at premiums of 2.563% through March 31, 2020; 1.708% from April 1, 2020 through March 31, 2021; 0.854% from April 1, 2021 through March 31, 2022; and at par thereafter, or at a make-whole plus accrued and unpaid interest before April 1, 2019. In addition, at any time prior to April 1, 2017, we may redeem up to 35% of the aggregate principal amount at 105.125% of face value with proceeds from certain equity issuances. The terms of the 2024 Notes are generally less restrictive than those contained in our senior notes due in 2017 and 2022, and omit some limitations on restricted payments, asset sales and other transactions that are included in those senior notes. These notes are unsecured obligations and guaranteed by certain of our domestic subsidiaries, excluding TLGP and TLLP and its subsidiaries. The proceeds from the issuance of the 2024 Notes, together with cash on hand, were used to pay for fees and expenses related to the note issuance and to redeem all outstanding 9.750% Senior Notes due 2019 (the “2019 Notes") for an aggregate purchase price of $329 million, including accrued interest and premiums. In connection with the redemption of the 2019 Notes, we incurred charges totaling $31 million comprised of premiums paid on the 2019 Notes of $19 million and non-cash charges associated with the expensing of $8 million and $4 million of unamortized debt discount and issuance costs, respectively. Our debt redemption charges for the 2019 Notes are recorded in net interest and financing costs in our condensed statements of consolidated operations. | ||||||||||||||||||
Credit Facilities Overview | ||||||||||||||||||
We had available capacity under our credit agreements as follows at March 31, 2014 (in millions): | ||||||||||||||||||
Total | Amount Borrowed as of March 31, 2014 | Outstanding | Available Capacity | Expiration | ||||||||||||||
Capacity | Letters of Credit | |||||||||||||||||
Tesoro Corporation Revolving | $ | 3,000 | $ | — | $ | 795 | $ | 2,205 | January 4, 2018 | |||||||||
Credit Facility (a) | ||||||||||||||||||
TLLP Revolving Credit Facility | 575 | — | — | 575 | December 31, 2017 | |||||||||||||
Term Loan Credit Facility | 398 | 398 | — | — | 30-May-16 | |||||||||||||
Letter of Credit Facilities | 1,712 | — | 858 | 854 | ||||||||||||||
Total credit agreements | $ | 5,685 | $ | 398 | $ | 1,653 | $ | 3,634 | ||||||||||
________________ | ||||||||||||||||||
(a) | Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity. | |||||||||||||||||
As of March 31, 2014, our credit facilities were subject to the following expenses and fees: | ||||||||||||||||||
Credit Facility | 30 day Eurodollar (LIBOR) Rate | Eurodollar Margin | Base Rate | Base Rate Margin | Commitment Fee | |||||||||||||
(unused portion) | ||||||||||||||||||
Tesoro Corporation Revolving Credit Facility | 0.15% | 1.50% | 3.25% | 0.50% | 0.38% | |||||||||||||
($3.0 billion) (b) | ||||||||||||||||||
TLLP Revolving Credit Facility ($575 million) (c) | 0.15% | 2.50% | 3.25% | 1.50% | 0.50% | |||||||||||||
Term Loan Credit Facility ($398 million) (b) | 0.15% | 2.25% | 3.25% | 1.25% | —% | |||||||||||||
________________ | ||||||||||||||||||
(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. TLLP incurs commitment fees for the unused portion of the TLLP Revolving Credit Facility. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate. | |||||||||||||||||
Tesoro Corporation Revolving Credit Facility | ||||||||||||||||||
At March 31, 2014, our Revolving Credit Facility provided for borrowings (including letters of credit) up to the lesser of the amount of a periodically adjusted borrowing base of approximately $3.6 billion, consisting of Tesoro’s eligible cash and cash equivalents, receivables and petroleum inventories, net of the standard reserve as defined, or the Revolving Credit Facility’s total capacity of $3.0 billion. The total available capacity can be increased up to an aggregate of $4.0 billion, subject to receiving increased commitments from the lenders; however, we must offer to reduce the commitments by at least $500 million on or prior to November 21, 2014 and by an additional $500 million on or prior to May 21, 2015. | ||||||||||||||||||
TLLP Revolving Credit Facility | ||||||||||||||||||
The TLLP Revolving Credit Facility provided for total loan availability of $575 million as of March 31, 2014, and TLLP may request that the loan availability be increased up to an aggregate of $650 million, subject to receiving increased commitments from the lenders. The TLLP Revolving Credit Facility is non-recourse to Tesoro, except for TLGP, and is guaranteed by all of TLLP’s subsidiaries and secured by substantially all of TLLP’s assets. Borrowings are available under the TLLP Revolving Credit Facility up to the total loan availability of the facility. There were no borrowings outstanding under the TLLP Revolving Credit Facility as of March 31, 2014. | ||||||||||||||||||
Term Loan Credit Facility | ||||||||||||||||||
We entered into the Term Loan Credit Facility in January 2013, which allowed us to borrow up to an aggregate of $500 million. We borrowed $500 million on May 30, 2013, to fund a portion of the Los Angeles Acquisition. The obligations under the Term Loan Credit Facility are secured by all equity interests of Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company, the Tesoro and USA Gasoline trademarks and those trademarks containing the name “ARCO” acquired in the Los Angeles Acquisition and junior liens on certain assets. The Term Loan Credit Facility may be repaid at any time but amounts may not be re-borrowed. The borrowings under our Term Loan Credit Facility incurred interest at a rate of 2.40% as of March 31, 2014. | ||||||||||||||||||
Letter of Credit Agreements | ||||||||||||||||||
The Revolving Credit Facility allows us to obtain letters of credit under separate letter of credit agreements for foreign crude oil purchases. Our uncommitted letter of credit agreements had $858 million outstanding as of March 31, 2014. Capacity under these letter of credit agreements is available on an uncommitted basis and can be terminated by either party at any time. |
Benefit_Plans_Notes
Benefit Plans (Notes) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ' | |||||||||||||||
BENEFIT PLANS | ' | |||||||||||||||
BENEFIT PLANS | ||||||||||||||||
Tesoro sponsors four defined benefit pension plans, including one funded qualified employee retirement plan and three unfunded nonqualified executive plans. Although our funded employee retirement plan fully meets all funding requirements under applicable laws and regulations, we voluntarily contributed $15 million during the three months ended March 31, 2014 to improve the funded status of the plan. Tesoro also provides other postretirement health care benefits to retirees who met certain service requirements and were participating in our group health insurance program at retirement. | ||||||||||||||||
The components of pension and other postretirement benefit expense (income) for the three months ended March 31, 2014 and 2013 were (in millions): | ||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 13 | $ | 8 | $ | 1 | $ | 1 | ||||||||
Interest cost | 9 | 7 | 1 | 1 | ||||||||||||
Expected return on plan assets | (8 | ) | (6 | ) | — | — | ||||||||||
Amortization of prior service credit | — | — | (9 | ) | (9 | ) | ||||||||||
Recognized net actuarial loss | 4 | 7 | 1 | 2 | ||||||||||||
Net Periodic Benefit Expense (Income) | $ | 18 | $ | 16 | $ | (6 | ) | $ | (5 | ) | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | |
Environmental Matters | |
We are subject to extensive federal, state and local environmental laws and regulations. These laws, which change frequently, regulate the discharge of materials into the environment and may require us to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites, install additional controls or make other modifications to certain emission sources, equipment or facilities. | |
We are incurring and expect to continue to incur expenses for environmental remediation liabilities at a number of currently and previously owned or operated refining, pipeline, terminal and retail station properties. We have accrued liabilities for these expenses and believe these accruals are adequate based on current information and projections that can be reasonably estimated. Additionally, we have recognized environmental remediation liabilities assumed in past acquisitions from the prior owners that include amounts estimated for site cleanup activities and monitoring activities arising from operations at refineries, certain terminals and pipelines, and retail stations prior to the dates of our acquisitions. Our environmental accruals are based on estimates including engineering assessments, and it is possible that our projections will change and that additional costs will be recorded as more information becomes available. | |
Our accruals for environmental expenditures totaled $270 million and $262 million at March 31, 2014 and December 31, 2013, including $28 million and $24 million for TLLP, respectively. These accruals include $220 million and $216 million at March 31, 2014 and December 31, 2013, respectively, related to amounts estimated for site cleanup activities arising from operations at our Martinez refinery prior to August 2000 and operations of assets acquired in the Los Angeles Acquisition prior to June 1, 2013. We cannot reasonably determine the full extent of remedial activities that may be required at the Martinez refinery and continue to evaluate information related to assets acquired in the Los Angeles Acquisition within our measurement period not to exceed one year from acquisition on June 1, 2013. It is possible that we will identify additional investigation and remediation costs for site cleanup activities at our Martinez refinery and sites associated with the Los Angeles Acquisition as more information becomes available. Our estimates for site cleanup activities reflect amounts to which we are responsible under applicable cost-sharing arrangements. We also have insurance policies related to certain matters at our Martinez refinery that provide coverage up to $190 million for expenditures in excess of $50 million in self-insurance. We have not recognized possible insurance recoveries because the insurer has challenged coverage and filed a declaratory relief action in federal court. | |
Washington Refinery Fire | |
The naphtha hydrotreater unit at our Washington refinery was involved in a fire in April 2010, which fatally injured seven employees and rendered the unit inoperable. The Washington State Department of Labor & Industries (“L&I”), the U.S. Chemical Safety and Hazard Investigation Board (“CSB”) and the EPA initiated separate investigations of the incident. L&I completed its investigation in October 2010, issued citations and assessed a $2.4 million fine, which we appealed. L&I reassumed jurisdiction of the citation and affirmed the allegations in December 2010. We disagree with L&I’s characterizations of operations at our Washington refinery and believe, based on available evidence and scientific reviews, that many of the agency’s conclusions are mistaken. We filed an appeal of the citation in January 2011. In separate September 2013 and November 2013 orders, the Board of Industrial Insurance Appeals granted partial summary judgment in our favor and dismissed most of the citations. We have established an accrual for this matter although we cannot currently estimate the final amount or timing of its resolution. The outcome of this matter will not have a material impact on our liquidity, financial position, or results of operations. | |
On May 1, 2014, the CSB finalized its investigation report on the April 2010 Washington refinery naphtha hydrotreater fire. This matter will not have a material impact on our liquidity, financial position, or results of operations. | |
The EPA, in conjunction with the U.S. Department of Justice (“DOJ”), is continuing its criminal investigation of the Washington naphtha hydrotreater fire. We cannot predict what action, if any, the EPA and DOJ will take. As a result, we cannot currently estimate the amount or timing of the resolution of any action that may result from this investigation. | |
We received a NOV from the EPA alleging 46 violations of the Clean Air Act Risk Management Plan requirements at our Washington refinery on November 20, 2013. The EPA conducted an investigation of the refinery in 2011, following the April 2010 fire in the naphtha hydrotreater unit. While we are evaluating the allegations and cannot currently estimate the amount or timing of the resolution of this matter, we believe the outcome will not have a material impact on our liquidity, financial position, or results of operations. | |
Other Matters | |
In the ordinary course of business, we become party to lawsuits, administrative proceedings and governmental investigations, including environmental, regulatory and other matters. Large, and sometimes unspecified, damages or penalties may be sought from us in some matters. We have not established accruals for these matters unless a loss is probable, and the amount of loss is currently estimable. | |
Legal | |
We are a defendant, along with other manufacturing, supply and marketing defendants, in a lawsuit brought by the Orange County Water District, alleging methyl tertiary butyl ether (“MTBE”) contamination in groundwater. The lawsuit is proceeding in the United States District Court of the Southern District of New York and the defendants are being sued for having manufactured MTBE and having manufactured, supplied and distributed gasoline containing MTBE. The plaintiff alleges, in part, that the defendants are liable for manufacturing or distributing a defective product. The suit generally seeks individual, unquantified compensatory and punitive damages and attorney’s fees. We intend to vigorously assert our defenses against this claim. While we cannot currently estimate the final amount or timing of the resolution of this matter, we have established an accrual and believe that the outcome will not have a material impact on our liquidity, financial position, or results of operations. | |
Environmental | |
The EPA has alleged that we have violated certain Clean Air Act regulations at our Alaska, Washington, Martinez, North Dakota and Utah refineries. We also retained the responsibility for resolving similar allegations relating to our former Hawaii refinery, which we sold in September 2013. We previously received a notice of violation (“NOV”) in March 2011 from the EPA alleging violations of Title V of the Clean Air Act at our Alaska refinery, which arose from a 2007 state of Alaska inspection and inspections by the EPA in 2008 and 2010. We also previously received NOVs in 2005 and 2008 alleging violations of the Clean Air Act at our Washington refinery. We are continuing discussions of all EPA claims with the EPA and the DOJ. The ultimate resolution of these matters could have a material impact on our future interim or annual results of operations, as we may be required to incur material capital expenditures and/or civil penalties. However, we do not believe that the outcome will have a material impact on our liquidity or financial position. | |
We have investigated conditions at certain active wastewater treatment units at our Martinez refinery pursuant to an order received in 2004 from the San Francisco Bay Regional Water Quality Control Board that named us as well as two previous owners of the Martinez refinery. We cannot currently estimate the amount of the ultimate resolution of the order, but we believe it will not have a material adverse impact on our liquidity, financial position, or results of operations. | |
Tax | |
We are subject to extensive federal, state and foreign tax laws and regulations. Newly enacted tax laws and regulations, and changes in existing tax laws and regulations, could result in increased expenditures in the future. We are also subject to audits by federal, state and foreign taxing authorities in the normal course of business. It is possible that tax audits could result in claims against us in excess of recorded liabilities. We believe that resolution of any such claim(s) would not have a material impact on our liquidity, financial position, or results of operations. It is reasonably possible that state tax litigation related to certain state income apportionment matters may be resolved in 2014. Because the tax was fully paid in prior years, the unrecognized tax benefit of $11 million would be eliminated without impacting expense. |
Stockholders_Equity_Notes
Stockholders' Equity (Notes) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Stockholders' Equity Attributable to Parent [Abstract] | ' | |||||||||||
STOCKHOLDERS' EQUITY | ' | |||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||
Changes to equity during the three months ended March 31, 2014 are presented below (in millions): | ||||||||||||
Tesoro | Noncontrolling | Total Equity | ||||||||||
Corporation | Interest | |||||||||||
Stockholders’ | ||||||||||||
Equity | ||||||||||||
Balance at December 31, 2013 | $ | 4,302 | $ | 1,183 | $ | 5,485 | ||||||
Net earnings | 78 | 25 | 103 | |||||||||
Purchases of common stock | (100 | ) | — | (100 | ) | |||||||
Dividend payments | (33 | ) | — | (33 | ) | |||||||
Distributions to noncontrolling interest | — | (20 | ) | (20 | ) | |||||||
Other | 1 | (1 | ) | — | ||||||||
Balance at March 31, 2014 | $ | 4,248 | $ | 1,187 | $ | 5,435 | ||||||
We issued less than 0.1 million shares and 0.9 million shares for proceeds of $1 million and $32 million primarily for stock option exercises under our equity-based compensation plans during the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||
Share Repurchase Programs | ||||||||||||
We are authorized by our Board under previously disclosed programs to purchase shares of our common stock in open market transactions at our discretion, to offset the dilutive effect of stock-based compensation awards and to meet our obligations under employee benefit and compensation plans, including the exercise of stock options, vesting of restricted stock and to fulfill other stock compensation requirements. The Board’s authorization has no time limit and may be suspended or discontinued at any time. Under these programs, we purchased approximately 1.9 million shares and 2.6 million shares of our common stock for approximately $100 million and $135 million during the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||
Preferred Stock | ||||||||||||
We have 5.0 million shares of preferred stock authorized with no par value per share. No shares of preferred stock were outstanding as of March 31, 2014 and December 31, 2013. | ||||||||||||
Cash Dividends | ||||||||||||
On February 5, 2014, our Board declared a quarterly cash dividend on common stock of $0.25 per share, payable on March 14, 2014 to shareholders of record at the close of business on February 28, 2014, which resulted in a cash payment of $33 million during the three months ended March 31, 2014. On April 30, 2014, our Board declared a cash dividend of $0.25 per share, payable on June 13, 2014 to shareholders of record on May 30, 2014. | ||||||||||||
Our Revolving Credit Facility, senior notes and Term Loan Credit Facility each limit our ability to make certain restricted payments (as defined in our debt agreements), which include dividends, purchases of our stock or voluntary prepayments of subordinate debt. The aggregate amount of restricted payments cannot exceed an amount defined in each of the debt agreements. The indentures for our senior notes also limit certain of our subsidiaries’ ability to make certain payments and distributions. |
StockBased_Compensation_Notes
Stock-Based Compensation (Notes) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Share-based Compensation [Abstract] | ' | |||||||
STOCK-BASED COMPENSATION | ' | |||||||
STOCK-BASED COMPENSATION | ||||||||
Stock-based compensation expense (benefit), including discontinued operations, was as follows (in millions): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Stock appreciation rights | $ | (18 | ) | $ | 39 | |||
Performance share awards | (3 | ) | 8 | |||||
Market stock units | 3 | 4 | ||||||
Other stock-based awards | — | 1 | ||||||
Total Stock-Based Compensation Expense (Benefit) | $ | (18 | ) | $ | 52 | |||
We have aggregated expenses for certain award types as they are not considered significant. The income tax effect recognized in the income statement for stock-based compensation was an expense of $7 million and a benefit of $20 million for the three months ended March 31, 2014 and 2013, respectively. The reduction in current taxes payable recognized from tax deductions resulting from exercises and vestings under all of our stock-based compensation arrangements totaled $3 million and $17 million for the three months ended March 31, 2014 and 2013, respectively. | ||||||||
Stock Appreciation Rights | ||||||||
A stock appreciation right (“SAR”) entitles an employee to receive cash in an amount equal to the excess of the fair market value of one share of common stock on the date of exercise over the grant price of the SAR. The fair value of each SAR is estimated at the end of each reporting period using the Black-Scholes option-pricing model. We have not granted any SARs since 2010. We paid cash of $4 million and $18 million to settle 0.2 million and 0.9 million SARs that were exercised during the three months ended March 31, 2014 and 2013, respectively. We had $54 million and $76 million recorded in accrued liabilities associated with our SARs awards at March 31, 2014 and December 31, 2013, respectively. | ||||||||
Performance Share Awards | ||||||||
During the three months ended March 31, 2014, we granted 0.2 million performance share awards, including awards with performance and market conditions, at a weighted average grant date fair value of $53.89 per share under the amended and restated 2011 Long-Term Incentive Plan (“2011 Plan”). These equity awards can range from 0% to 200% of the number of original shares granted and are tied to performance conditions or market conditions over the performance period. These performance share awards vest at the end of the performance period. The fair value of performance share awards are estimated using the market price of our common stock on the grant date or using a Monte Carlo simulation model on the grant date. The value ultimately paid for performance share awards tied to performance or market conditions, which are measured against our performance peer group and the S&P 500 Index, is based on return on capital employed or relative total shareholder return, respectively. The estimated fair value of these performance share awards is amortized over a three-year vesting period using the straight-line method. | ||||||||
Market Stock Units | ||||||||
We granted 0.4 million market stock units at a weighted average grant date fair value of $59.06 per unit under the 2011 Plan during the three months ended March 31, 2014. These market stock units vest at the end of a three-year performance period. The number of shares ultimately issued will be based on Tesoro’s stock price changes over the performance period. The market stock units’ potential payout can range from 50-200% of targeted award value, unless the average closing stock price at vesting has decreased more than 50% from the average closing stock price at the grant date in which case no market stock units will be paid out. The fair value of each market stock unit is estimated on the grant date using a Monte Carlo simulation model. The estimated fair value of these market stock units is amortized over a three-year vesting period using the straight-line method. |
Operating_Segments_Notes
Operating Segments (Notes) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
OPERATING SEGMENTS | ' | |||||||
OPERATING SEGMENTS | ||||||||
The Company’s revenues are derived from three operating segments, refining, TLLP and retail. We own and operate six petroleum refineries located in California, Washington, Alaska, North Dakota and Utah that manufacture gasoline and gasoline blendstocks, jet fuel, diesel fuel, residual fuel oil and other refined products. We sell these refined products, together with refined products purchased from third parties, at wholesale through terminal facilities and other locations and opportunistically export refined products to foreign markets. TLLP’s assets and operations include certain crude oil gathering assets and crude oil and refined products terminalling and transportation assets acquired from Tesoro and other third parties. Revenues from the TLLP segment are generated by charging fees for gathering crude oil and for terminalling, transporting and storing crude oil and refined products. Our retail segment sells gasoline, diesel fuel and convenience store items through company-operated retail stations and branded jobber/dealers in 17 states. Since we do not have significant operations in foreign countries, revenue generated in and long-lived assets located in foreign countries are not material to our operations. | ||||||||
We evaluate the performance of our segments based primarily on segment operating income. Segment operating income includes those revenues and expenses that are directly attributable to management of the respective segment. Intersegment sales from refining to retail are made at prices which approximate market. TLLP revenues include intersegment transactions with our refining segment at prices which we believe are no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services. Income taxes, other expense, net, interest and financing costs, net, corporate depreciation and corporate general and administrative expenses are excluded from segment operating income. | ||||||||
Segment information related to continuing operations is as follows: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(In millions) | ||||||||
Revenues | ||||||||
Refining: | ||||||||
Refined products | $ | 9,500 | $ | 6,744 | ||||
Crude oil resales and other | 272 | 469 | ||||||
TLLP: | ||||||||
Crude oil gathering | 25 | 22 | ||||||
Terminalling and transportation | 100 | 30 | ||||||
Retail: | ||||||||
Fuel (a) | 3,024 | 1,507 | ||||||
Merchandise and other | 61 | 48 | ||||||
Intersegment sales | (3,049 | ) | (1,473 | ) | ||||
Total Revenues | $ | 9,933 | $ | 7,347 | ||||
Segment Operating Income | ||||||||
Refining | $ | 183 | $ | 259 | ||||
TLLP (b) | 62 | 24 | ||||||
Retail | 19 | 15 | ||||||
Total Segment Operating Income | 264 | 298 | ||||||
Corporate and unallocated costs (c) | (26 | ) | (105 | ) | ||||
Operating Income | 238 | 193 | ||||||
Interest and financing costs, net (d) | (77 | ) | (30 | ) | ||||
Other expense, net | (1 | ) | — | |||||
Earnings Before Income Taxes | $ | 160 | $ | 163 | ||||
Depreciation and Amortization Expense | ||||||||
Refining | $ | 101 | $ | 88 | ||||
TLLP | 16 | 4 | ||||||
Retail | 10 | 8 | ||||||
Corporate | 3 | 5 | ||||||
Total Depreciation and Amortization Expense | $ | 130 | $ | 105 | ||||
Capital Expenditures | ||||||||
Refining | $ | 68 | $ | 99 | ||||
TLLP | 26 | 10 | ||||||
Retail | 5 | 7 | ||||||
Corporate | 4 | 3 | ||||||
Total Capital Expenditures | $ | 103 | $ | 119 | ||||
________________ | ||||||||
(a) | Federal and state motor fuel taxes on sales by our retail segment are included in both revenues and cost of sales in our condensed statements of consolidated operations. These taxes totaled $141 million and $129 million for the three months ended March 31, 2014 and 2013, respectively. | |||||||
(b) | We present TLLP’s segment operating income net of general and administrative expenses totaling $3 million and $4 million representing TLLP’s corporate costs for the three months ended March 31, 2014 and 2013, respectively, that are not allocated to TLLP’s operating segments. | |||||||
(c) | Includes stock-based compensation benefit of $18 million and expense of $49 million for the three months ended March 31, 2014 and 2013, respectively. The significant impact to stock-based compensation expense during the three months ended March 31, 2014 compared to the prior periods is primarily a result of changes in Tesoro’s stock price. | |||||||
(d) | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 2019 Notes during the three months ended March 31, 2014. |
Condensed_Consolidating_Financ
Condensed Consolidating Financial Information (Notes) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | |||||||||||||||
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | ' | |||||||||||||||
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | ||||||||||||||||
Separate condensed consolidating financial information of Tesoro Corporation (the “Parent”), subsidiary guarantors and non-guarantors are presented below. At March 31, 2014, Tesoro and certain subsidiary guarantors have fully and unconditionally guaranteed our 4.250% Senior Notes due 2017, 5.375% Senior Notes due 2022, and 5.125% Senior Notes due 2024. TLLP, in which we had a 36% ownership interest as of March 31, 2014, and other subsidiaries have not guaranteed these obligations. As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information, which should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto. The following condensed consolidating financial information is provided as an alternative to providing separate financial statements for guarantor subsidiaries. Separate financial statements of Tesoro’s subsidiary guarantors are not included because the guarantees are full and unconditional and these subsidiary guarantors are 100% owned and are jointly and severally liable for Tesoro’s outstanding senior notes. The information is presented using the equity method of accounting for investments in subsidiaries. Additionally, the results of operations of the Hawaii Business have been reported as discontinued operations in these condensed consolidating statements of operations and comprehensive income for the three months ended March 31, 2014 and 2013. | ||||||||||||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||
for the Three Months Ended March 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
REVENUES | $ | — | $ | 11,564 | $ | 1,610 | $ | (3,241 | ) | $ | 9,933 | |||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of sales | — | 10,664 | 1,476 | (3,192 | ) | 8,948 | ||||||||||
Operating, selling, general and administrative expenses | 1 | 612 | 58 | (49 | ) | 622 | ||||||||||
Depreciation and amortization expense | — | 113 | 17 | — | 130 | |||||||||||
Gain on asset disposals and impairments | — | (1 | ) | (4 | ) | — | (5 | ) | ||||||||
OPERATING INCOME (LOSS) | (1 | ) | 176 | 63 | — | 238 | ||||||||||
Equity in earnings of subsidiaries | 86 | 12 | 100 | (198 | ) | — | ||||||||||
Interest and financing costs, net | (8 | ) | (59 | ) | (18 | ) | 8 | (77 | ) | |||||||
Other income (expense), net | — | (1 | ) | 8 | (8 | ) | (1 | ) | ||||||||
EARNINGS BEFORE INCOME TAXES | 77 | 128 | 153 | (198 | ) | 160 | ||||||||||
Income tax expense (benefit) (a) | (1 | ) | 51 | 6 | — | 56 | ||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 78 | 77 | 147 | (198 | ) | 104 | ||||||||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | — | (1 | ) | |||||||||
NET EARNINGS | 78 | 76 | 147 | (198 | ) | 103 | ||||||||||
Less: Net earnings from continuing operations attributable to noncontrolling interest | — | — | 25 | — | 25 | |||||||||||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | $ | 78 | $ | 76 | $ | 122 | $ | (198 | ) | $ | 78 | |||||
_______________ | ||||||||||||||||
(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. | |||||||||||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||
for the Three Months Ended March 31, 2013 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
REVENUES | $ | — | $ | 9,115 | $ | 822 | $ | (2,590 | ) | $ | 7,347 | |||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of sales | — | 8,397 | 756 | (2,590 | ) | 6,563 | ||||||||||
Operating, selling, general and administrative expenses | 1 | 450 | 28 | — | 479 | |||||||||||
Depreciation and amortization expense | — | 100 | 5 | — | 105 | |||||||||||
Loss on asset disposals and impairments | — | 4 | 3 | — | 7 | |||||||||||
OPERATING INCOME (LOSS) | (1 | ) | 164 | 30 | — | 193 | ||||||||||
Equity in earnings (loss) of subsidiaries | 96 | (6 | ) | 44 | (134 | ) | — | |||||||||
Interest and financing costs, net | (2 | ) | (25 | ) | (5 | ) | 2 | (30 | ) | |||||||
Other income (expense), net | — | — | 2 | (2 | ) | — | ||||||||||
EARNINGS BEFORE INCOME TAXES | 93 | 133 | 71 | (134 | ) | 163 | ||||||||||
Income tax expense (a) | — | 55 | 3 | — | 58 | |||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 93 | 78 | 68 | (134 | ) | 105 | ||||||||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | — | (1 | ) | |||||||||
NET EARNINGS | 93 | 77 | 68 | (134 | ) | 104 | ||||||||||
Less: Net earnings from continuing operations attributable to noncontrolling interest | — | — | 11 | — | 11 | |||||||||||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | $ | 93 | $ | 77 | $ | 57 | $ | (134 | ) | $ | 93 | |||||
_______________ | ||||||||||||||||
(a) | The income tax expense 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. | |||||||||||||||
Condensed Consolidating Balance Sheet as of March 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 726 | $ | 72 | $ | — | $ | 798 | ||||||
Receivables, less allowance for doubtful accounts | — | 1,326 | 370 | — | 1,696 | |||||||||||
Inventories | — | 2,106 | 671 | — | 2,777 | |||||||||||
Prepayments and other current assets | 91 | 95 | 69 | (56 | ) | 199 | ||||||||||
Total Current Assets | 91 | 4,253 | 1,182 | (56 | ) | 5,470 | ||||||||||
Net Property, Plant and Equipment | — | 5,438 | 1,457 | — | 6,895 | |||||||||||
Investment in Subsidiaries | 5,323 | 36 | 1,615 | (6,974 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 2,982 | — | — | (2,982 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,134 | (1,134 | ) | — | ||||||||||
Other Noncurrent Assets, Net | 55 | 1,110 | 38 | — | 1,203 | |||||||||||
Total Assets | $ | 8,451 | $ | 10,837 | $ | 5,426 | $ | (11,146 | ) | $ | 13,568 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 1 | $ | 2,411 | $ | 503 | $ | — | $ | 2,915 | ||||||
Other current liabilities | 116 | 563 | 98 | (56 | ) | 721 | ||||||||||
Total Current Liabilities | 117 | 2,974 | 601 | (56 | ) | 3,636 | ||||||||||
Long-Term Payables to Affiliates | — | 2,469 | 513 | (2,982 | ) | — | ||||||||||
Deferred Income Taxes | 1,015 | — | — | — | 1,015 | |||||||||||
Other Noncurrent Liabilities | 315 | 330 | 8 | — | 653 | |||||||||||
Debt | 1,622 | 43 | 1,164 | — | 2,829 | |||||||||||
Long-Term Intercompany Note Payable | 1,134 | — | — | (1,134 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,248 | 5,021 | 1,953 | (6,974 | ) | 4,248 | ||||||||||
Equity-Noncontrolling Interest | — | — | 1,187 | — | 1,187 | |||||||||||
Total Liabilities and Equity | $ | 8,451 | $ | 10,837 | $ | 5,426 | $ | (11,146 | ) | $ | 13,568 | |||||
Condensed Consolidating Balance Sheet as of December 31, 2013 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 1,161 | $ | 77 | $ | — | $ | 1,238 | ||||||
Receivables, less allowance for doubtful accounts | 12 | 1,182 | 119 | — | 1,313 | |||||||||||
Inventories | — | 2,041 | 524 | — | 2,565 | |||||||||||
Prepayments and other current assets | 109 | 89 | 57 | (45 | ) | 210 | ||||||||||
Total Current Assets | 121 | 4,473 | 777 | (45 | ) | 5,326 | ||||||||||
Net Property, Plant and Equipment | — | 5,428 | 1,447 | — | 6,875 | |||||||||||
Investment in Subsidiaries | 5,242 | 51 | 1,520 | (6,813 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 3,080 | — | — | (3,080 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,134 | (1,134 | ) | — | ||||||||||
Other Noncurrent Assets, Net | 58 | 1,092 | 38 | — | 1,188 | |||||||||||
Total Assets | $ | 8,501 | $ | 11,044 | $ | 4,916 | $ | (11,072 | ) | $ | 13,389 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 1 | $ | 2,110 | $ | 485 | $ | — | $ | 2,596 | ||||||
Other current liabilities | 112 | 679 | 66 | (45 | ) | 812 | ||||||||||
Total Current Liabilities | 113 | 2,789 | 551 | (45 | ) | 3,408 | ||||||||||
Long-Term Payables to Affiliates | — | 2,939 | 141 | (3,080 | ) | — | ||||||||||
Deferred Income Taxes | 1,018 | — | — | — | 1,018 | |||||||||||
Other Noncurrent Liabilities | 320 | 327 | 8 | — | 655 | |||||||||||
Debt | 1,614 | 45 | 1,164 | — | 2,823 | |||||||||||
Long-Term Intercompany Note Payable | 1,134 | — | — | (1,134 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,302 | 4,944 | 1,869 | (6,813 | ) | 4,302 | ||||||||||
Equity-Noncontrolling Interest | — | — | 1,183 | — | 1,183 | |||||||||||
Total Liabilities and Equity | $ | 8,501 | $ | 11,044 | $ | 4,916 | $ | (11,072 | ) | $ | 13,389 | |||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ||||||||||||||||
Net cash from (used in) operating activities | $ | (17 | ) | $ | 154 | $ | (287 | ) | $ | — | $ | (150 | ) | |||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||||||||||||||||
Capital expenditures | — | (92 | ) | (27 | ) | — | (119 | ) | ||||||||
Intercompany notes, net | 168 | — | — | (168 | ) | — | ||||||||||
Other investing activities | — | — | 10 | — | 10 | |||||||||||
Net cash from (used in) investing activities | 168 | (92 | ) | (17 | ) | (168 | ) | (109 | ) | |||||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||||||||||||||||
Proceeds from debt offering | 300 | — | — | — | 300 | |||||||||||
Repayments of debt | (300 | ) | (1 | ) | — | — | (301 | ) | ||||||||
Dividend payments | (33 | ) | — | — | — | (33 | ) | |||||||||
Distributions to noncontrolling interest | — | — | (20 | ) | — | (20 | ) | |||||||||
Purchases of common stock | (100 | ) | — | — | — | (100 | ) | |||||||||
Premium paid on notes redemption | (19 | ) | — | — | — | (19 | ) | |||||||||
Net intercompany borrowings (repayments) | — | (501 | ) | 333 | 168 | — | ||||||||||
Distributions to TLLP unitholders and general partner | 4 | 5 | (9 | ) | — | — | ||||||||||
Other financing activities | (3 | ) | — | (5 | ) | — | (8 | ) | ||||||||
Net cash from (used in) financing activities | (151 | ) | (497 | ) | 299 | 168 | (181 | ) | ||||||||
DECREASE IN CASH AND CASH EQUIVALENTS | — | (435 | ) | (5 | ) | — | (440 | ) | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 1,161 | 77 | — | 1,238 | |||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 726 | $ | 72 | $ | — | $ | 798 | ||||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2013 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
Net cash from operating activities | $ | — | $ | 135 | $ | 112 | $ | — | $ | 247 | ||||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||||||||||||||||
Capital expenditures | — | (115 | ) | (10 | ) | — | (125 | ) | ||||||||
Advanced payments made for Los Angeles Acquisition | — | (27 | ) | — | — | (27 | ) | |||||||||
Intercompany notes, net | (91 | ) | — | — | 91 | — | ||||||||||
Other investing activities | — | — | 2 | — | 2 | |||||||||||
Net cash used in investing activities | (91 | ) | (142 | ) | (8 | ) | 91 | (150 | ) | |||||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||||||||||||||||
Dividend payments | (28 | ) | — | — | — | (28 | ) | |||||||||
Net proceeds from issuance of Tesoro Logistics LP common units | — | — | 392 | — | 392 | |||||||||||
Distributions to noncontrolling interest | — | — | (14 | ) | — | (14 | ) | |||||||||
Purchases of common stock | (135 | ) | — | — | — | (135 | ) | |||||||||
Net intercompany borrowings (repayments) | — | 273 | (182 | ) | (91 | ) | — | |||||||||
Borrowings from general partner | 230 | — | (230 | ) | — | — | ||||||||||
Distributions to TLLP unitholders and general partner | 3 | 4 | (7 | ) | — | — | ||||||||||
Other financing activities | 21 | 3 | (3 | ) | — | 21 | ||||||||||
Net cash from (used in) financing activities | 91 | 280 | (44 | ) | (91 | ) | 236 | |||||||||
INCREASE IN CASH AND CASH EQUIVALENTS | — | 273 | 60 | — | 333 | |||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 1,244 | 395 | — | 1,639 | |||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 1,517 | $ | 455 | $ | — | $ | 1,972 | ||||||
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of presentation and significant accounting policies | ' |
We prepare our condensed consolidated financial statements in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts and disclosures of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. | |
Use of estimates policy | ' |
We review our estimates on an ongoing basis. Changes in facts and circumstances may result in revised estimates and actual results could differ from those estimates. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain prior year balances have been aggregated or disaggregated in order to conform to the current year presentation. | |
Discontinued operations policy | ' |
On September 25, 2013, we completed the sale of all of our interest in Tesoro Hawaii, LLC, which operated a 94 thousand barrel per day (“Mbpd”) Hawaii refinery, retail stations and associated logistics assets (the “Hawaii Business”). Unless otherwise noted, the information in the notes to the condensed consolidated financial statements relates to our continuing operations. | |
Consolidation of variable interest entity policy | ' |
Our consolidated financial statements include TLLP, a variable interest entity. As the general partner of TLLP, we have the sole ability to direct the activities of TLLP that most significantly impact its economic performance. We are also considered to be the primary beneficiary for accounting purposes and are TLLP’s primary customer. |
Property_Plant_and_Equipment_P
Property, Plant and Equipment Property, Plant and Equipment (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ' |
Interest capitalization policy | ' |
We capitalize interest as part of the cost of major projects during the construction period. |
Fair_Value_Measurements_Polici
Fair Value Measurements (Policies) | 3 Months Ended | |
Mar. 31, 2014 | ||
Fair Value Disclosures [Abstract] | ' | |
Fair value of financial instruments policy | ' | |
We classify financial assets and financial liabilities into the following fair value hierarchy: | ||
• | level 1 - valued based on quoted prices in active markets for identical assets and liabilities; | |
• | level 2 - valued based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability; and | |
• | level 3 - valued based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |
We measure fair value using level 1 inputs, when available, because they provide the most reliable evidence of fair value. Derivative instruments along with obligations for Renewable Identification Numbers (“RINs”) and cap and trade emission credits for the state of California (together with RINs, our “Environmental Credit Obligations”) are our only financial assets and financial liabilities measured at fair value on a recurring basis. We did not have any financial assets or liabilities classified as level 3 at March 31, 2014 or December 31, 2013. See Note I for further information on the Company’s derivative instruments. |
Derivative_Instruments_Policie
Derivative Instruments (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ' |
Derivatives, policy | ' |
The accounting for changes in the fair value of a commodity derivative depends on whether we have elected the normal purchases and normal sales exception. Our recognition of derivatives using the normal purchase normal sales exception follows the accrual method of accounting whereas changes in fair value for all other derivatives are recorded each period using mark-to-market accounting. |
Acquisitions_Acquisitions_Tabl
Acquisitions Acquisitions (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Business Combinations [Abstract] | ' | |||
Acquisition date purchase price allocation | ' | |||
The table below presents the acquisition date purchase price allocation (in millions) through March 31, 2014: | ||||
Receivables | $ | 197 | ||
Inventories | 1,096 | |||
Prepayments and other current assets | 14 | |||
Property, plant and equipment | 1,085 | |||
Acquired intangibles, net | 63 | |||
Other noncurrent assets, net | 112 | |||
Other current liabilities | (25 | ) | ||
Other noncurrent liabilities | (179 | ) | ||
Debt | (36 | ) | ||
Total purchase price | $ | 2,327 | ||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Earnings Per Share [Abstract] | ' | |||
Schedule of Basic and Diluted Shares Outstanding | ' | |||
Our share calculations are presented below (in millions): | ||||
Three Months Ended | ||||
March 31, | ||||
2014 | 2013 | |||
Weighted average common shares outstanding | 131.3 | 137 | ||
Common stock equivalents | 2.5 | 2.6 | ||
Total diluted shares | 133.8 | 139.6 |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of inventory, current | ' | |||||||
Components of inventories were as follows (in millions): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Domestic crude oil and refined products | $ | 1,904 | $ | 1,847 | ||||
Foreign subsidiary crude oil | 671 | 523 | ||||||
Other inventories | 202 | 195 | ||||||
Total Inventories | $ | 2,777 | $ | 2,565 | ||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, plant and equipment | ' | |||||||
Property, plant and equipment, at cost, is as follows (in millions): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Refining | $ | 6,679 | $ | 6,611 | ||||
TLLP | 1,530 | 1,504 | ||||||
Retail | 784 | 778 | ||||||
Corporate | 234 | 230 | ||||||
Property, plant and equipment, at cost | 9,227 | 9,123 | ||||||
Accumulated depreciation | (2,332 | ) | (2,248 | ) | ||||
Net property, plant and equipment | $ | 6,895 | $ | 6,875 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
Schedule of fair value, assets and liabilities measured on recurring basis | ' | |||||||||||||||||||
Financial assets and liabilities recognized at fair value in our condensed consolidated balance sheets by level within the fair value hierarchy were as follows (in millions): | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total as of | ||||||||||||||||
31-Mar-14 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 179 | $ | 2 | $ | — | $ | (117 | ) | $ | 64 | |||||||||
Commodity OTC Swap Contracts | — | 1 | — | — | 1 | |||||||||||||||
Commodity Forward Contracts | — | 2 | — | — | 2 | |||||||||||||||
Total Assets | $ | 179 | $ | 5 | $ | — | $ | (117 | ) | $ | 67 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 192 | $ | 4 | $ | — | $ | (180 | ) | $ | 16 | |||||||||
Commodity OTC Swap Contracts | — | 3 | — | — | 3 | |||||||||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 9 | — | — | 9 | |||||||||||||||
Total Liabilities | $ | 192 | $ | 17 | $ | — | $ | (180 | ) | $ | 29 | |||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total as of | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 136 | $ | 4 | $ | — | $ | (72 | ) | $ | 68 | |||||||||
Total Assets | $ | 136 | $ | 4 | $ | — | $ | (72 | ) | $ | 68 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 156 | $ | 2 | $ | — | $ | (137 | ) | $ | 21 | |||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 5 | — | — | 5 | |||||||||||||||
Total Liabilities | $ | 156 | $ | 8 | $ | — | $ | (137 | ) | $ | 27 | |||||||||
________________ | ||||||||||||||||||||
(a) | Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of March 31, 2014 and December 31, 2013, cash collateral amounts of $63 million and $65 million, respectively, are netted with mark-to-market derivative assets. |
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ' | |||||||||||||||||
Schedule of derivative instruments in Balance Sheet, fair value | ' | |||||||||||||||||
The following table presents the fair value (in millions) of our derivative instruments as of March 31, 2014 and December 31, 2013. The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements including cash collateral on deposit with, or received from, brokers. We offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists. As a result, the asset and liability amounts below will not agree with the amounts presented in our condensed consolidated balance sheets. | ||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||
Balance Sheet Location | March 31, | December 31, | March 31, | December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Commodity Futures Contracts (a) | Prepayments and other current assets | $ | 181 | $ | 140 | $ | 196 | $ | 158 | |||||||||
Commodity OTC Swap Contracts | Receivables | 1 | — | — | — | |||||||||||||
Commodity OTC Swap Contracts | Accounts payable | — | — | 3 | — | |||||||||||||
Commodity Forward Contracts | Receivables | 2 | — | — | — | |||||||||||||
Commodity Forward Contracts | Accounts payable | — | — | 1 | 1 | |||||||||||||
Total Gross Mark-to-Market Derivatives | 184 | 140 | 200 | 159 | ||||||||||||||
Less: Counterparty Netting and Cash Collateral (b) | (117 | ) | (72 | ) | (180 | ) | (137 | ) | ||||||||||
Total Net Fair Value of Derivatives | $ | 67 | $ | 68 | $ | 20 | $ | 22 | ||||||||||
________________ | ||||||||||||||||||
(a) | We had derivative assets totaling $1 million and $3 million at March 31, 2014 and December 31, 2013, respectively, related to corn futures used to manage our biofuel exposure. Additionally, we had derivative liabilities totaling $4 million and $1 million at March 31, 2014 and December 31, 2013, respectively, related to corn futures. | |||||||||||||||||
(b) | As of March 31, 2014 and December 31, 2013, cash collateral amounts of $63 million and $65 million, respectively, are netted with mark-to-market derivative assets. | |||||||||||||||||
Schedule of mark-to-market derivatives | ' | |||||||||||||||||
Gains (losses) for our mark-to market derivatives for the three months ended March 31, 2014 and 2013, were as follows (in millions): | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Commodity Futures Contracts | $ | — | $ | (26 | ) | |||||||||||||
Commodity OTC Swap Contracts | (1 | ) | — | |||||||||||||||
Commodity Forward Contracts | 1 | (2 | ) | |||||||||||||||
Foreign Currency Forward Contracts | (2 | ) | (2 | ) | ||||||||||||||
Total Loss on Mark-to-Market Derivatives | $ | (2 | ) | $ | (30 | ) | ||||||||||||
The income statement location of gains (losses) for our mark-to market derivatives above were as follows (in millions): | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Revenues | $ | 1 | $ | 1 | ||||||||||||||
Cost of sales | (1 | ) | (22 | ) | ||||||||||||||
Other expense, net | (2 | ) | (2 | ) | ||||||||||||||
Net loss from discontinued operations | — | (7 | ) | |||||||||||||||
Total Loss on Mark-to-Market Derivatives | $ | (2 | ) | $ | (30 | ) | ||||||||||||
Schedule of open long (short) positions | ' | |||||||||||||||||
The information below presents the net volume of outstanding commodity contracts by type of instrument and year of maturity as of March 31, 2014 (volumes in thousands of barrels): | ||||||||||||||||||
Mark-to-Market Derivatives | ||||||||||||||||||
Derivative instrument and Year of maturity | Long (Short) Contract Volumes | |||||||||||||||||
Futures | ||||||||||||||||||
2014 | -11,937 | |||||||||||||||||
OTC Swaps | ||||||||||||||||||
2014 | 4,300 | |||||||||||||||||
Forwards | ||||||||||||||||||
2014 | -306 | |||||||||||||||||
Options | ||||||||||||||||||
2014 | 600 |
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
Schedule of Debt | ' | |||||||||||||||||
Our total debt balance at March 31, 2014 and December 31, 2013 was as follows (in millions): | ||||||||||||||||||
March 31, | December 31, | |||||||||||||||||
2014 | 2013 | |||||||||||||||||
Total debt (a) | $ | 2,835 | $ | 2,829 | ||||||||||||||
Less: Current maturities | 6 | 6 | ||||||||||||||||
Debt, less current maturities | $ | 2,829 | $ | 2,823 | ||||||||||||||
________________ | ||||||||||||||||||
(a) | Total debt related to TLLP, which is non-recourse to Tesoro, except for TLGP, was $1.2 billion at both March 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||
Schedule of Line of Credit Facilities | ' | |||||||||||||||||
We had available capacity under our credit agreements as follows at March 31, 2014 (in millions): | ||||||||||||||||||
Total | Amount Borrowed as of March 31, 2014 | Outstanding | Available Capacity | Expiration | ||||||||||||||
Capacity | Letters of Credit | |||||||||||||||||
Tesoro Corporation Revolving | $ | 3,000 | $ | — | $ | 795 | $ | 2,205 | January 4, 2018 | |||||||||
Credit Facility (a) | ||||||||||||||||||
TLLP Revolving Credit Facility | 575 | — | — | 575 | December 31, 2017 | |||||||||||||
Term Loan Credit Facility | 398 | 398 | — | — | 30-May-16 | |||||||||||||
Letter of Credit Facilities | 1,712 | — | 858 | 854 | ||||||||||||||
Total credit agreements | $ | 5,685 | $ | 398 | $ | 1,653 | $ | 3,634 | ||||||||||
________________ | ||||||||||||||||||
(a) | Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity. | |||||||||||||||||
As of March 31, 2014, our credit facilities were subject to the following expenses and fees: | ||||||||||||||||||
Credit Facility | 30 day Eurodollar (LIBOR) Rate | Eurodollar Margin | Base Rate | Base Rate Margin | Commitment Fee | |||||||||||||
(unused portion) | ||||||||||||||||||
Tesoro Corporation Revolving Credit Facility | 0.15% | 1.50% | 3.25% | 0.50% | 0.38% | |||||||||||||
($3.0 billion) (b) | ||||||||||||||||||
TLLP Revolving Credit Facility ($575 million) (c) | 0.15% | 2.50% | 3.25% | 1.50% | 0.50% | |||||||||||||
Term Loan Credit Facility ($398 million) (b) | 0.15% | 2.25% | 3.25% | 1.25% | —% | |||||||||||||
________________ | ||||||||||||||||||
(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. TLLP incurs commitment fees for the unused portion of the TLLP Revolving Credit Facility. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate. |
Benefit_Plans_Tables
Benefit Plans (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Defined Benefit Plans Disclosures | ' | |||||||||||||||
The components of pension and other postretirement benefit expense (income) for the three months ended March 31, 2014 and 2013 were (in millions): | ||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 13 | $ | 8 | $ | 1 | $ | 1 | ||||||||
Interest cost | 9 | 7 | 1 | 1 | ||||||||||||
Expected return on plan assets | (8 | ) | (6 | ) | — | — | ||||||||||
Amortization of prior service credit | — | — | (9 | ) | (9 | ) | ||||||||||
Recognized net actuarial loss | 4 | 7 | 1 | 2 | ||||||||||||
Net Periodic Benefit Expense (Income) | $ | 18 | $ | 16 | $ | (6 | ) | $ | (5 | ) | ||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Stockholders' Equity Attributable to Parent [Abstract] | ' | |||||||||||
Stockholders' equity and noncontrolling interest | ' | |||||||||||
Changes to equity during the three months ended March 31, 2014 are presented below (in millions): | ||||||||||||
Tesoro | Noncontrolling | Total Equity | ||||||||||
Corporation | Interest | |||||||||||
Stockholders’ | ||||||||||||
Equity | ||||||||||||
Balance at December 31, 2013 | $ | 4,302 | $ | 1,183 | $ | 5,485 | ||||||
Net earnings | 78 | 25 | 103 | |||||||||
Purchases of common stock | (100 | ) | — | (100 | ) | |||||||
Dividend payments | (33 | ) | — | (33 | ) | |||||||
Distributions to noncontrolling interest | — | (20 | ) | (20 | ) | |||||||
Other | 1 | (1 | ) | — | ||||||||
Balance at March 31, 2014 | $ | 4,248 | $ | 1,187 | $ | 5,435 | ||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Share-based Compensation [Abstract] | ' | |||||||
Summary of stock-based compensation expense (benefit) | ' | |||||||
Stock-based compensation expense (benefit), including discontinued operations, was as follows (in millions): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Stock appreciation rights | $ | (18 | ) | $ | 39 | |||
Performance share awards | (3 | ) | 8 | |||||
Market stock units | 3 | 4 | ||||||
Other stock-based awards | — | 1 | ||||||
Total Stock-Based Compensation Expense (Benefit) | $ | (18 | ) | $ | 52 | |||
Operating_Segments_Tables
Operating Segments (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Schedule of segment reporting information, by segment | ' | |||||||
Segment information related to continuing operations is as follows: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(In millions) | ||||||||
Revenues | ||||||||
Refining: | ||||||||
Refined products | $ | 9,500 | $ | 6,744 | ||||
Crude oil resales and other | 272 | 469 | ||||||
TLLP: | ||||||||
Crude oil gathering | 25 | 22 | ||||||
Terminalling and transportation | 100 | 30 | ||||||
Retail: | ||||||||
Fuel (a) | 3,024 | 1,507 | ||||||
Merchandise and other | 61 | 48 | ||||||
Intersegment sales | (3,049 | ) | (1,473 | ) | ||||
Total Revenues | $ | 9,933 | $ | 7,347 | ||||
Segment Operating Income | ||||||||
Refining | $ | 183 | $ | 259 | ||||
TLLP (b) | 62 | 24 | ||||||
Retail | 19 | 15 | ||||||
Total Segment Operating Income | 264 | 298 | ||||||
Corporate and unallocated costs (c) | (26 | ) | (105 | ) | ||||
Operating Income | 238 | 193 | ||||||
Interest and financing costs, net (d) | (77 | ) | (30 | ) | ||||
Other expense, net | (1 | ) | — | |||||
Earnings Before Income Taxes | $ | 160 | $ | 163 | ||||
Depreciation and Amortization Expense | ||||||||
Refining | $ | 101 | $ | 88 | ||||
TLLP | 16 | 4 | ||||||
Retail | 10 | 8 | ||||||
Corporate | 3 | 5 | ||||||
Total Depreciation and Amortization Expense | $ | 130 | $ | 105 | ||||
Capital Expenditures | ||||||||
Refining | $ | 68 | $ | 99 | ||||
TLLP | 26 | 10 | ||||||
Retail | 5 | 7 | ||||||
Corporate | 4 | 3 | ||||||
Total Capital Expenditures | $ | 103 | $ | 119 | ||||
________________ | ||||||||
(a) | Federal and state motor fuel taxes on sales by our retail segment are included in both revenues and cost of sales in our condensed statements of consolidated operations. These taxes totaled $141 million and $129 million for the three months ended March 31, 2014 and 2013, respectively. | |||||||
(b) | We present TLLP’s segment operating income net of general and administrative expenses totaling $3 million and $4 million representing TLLP’s corporate costs for the three months ended March 31, 2014 and 2013, respectively, that are not allocated to TLLP’s operating segments. | |||||||
(c) | Includes stock-based compensation benefit of $18 million and expense of $49 million for the three months ended March 31, 2014 and 2013, respectively. The significant impact to stock-based compensation expense during the three months ended March 31, 2014 compared to the prior periods is primarily a result of changes in Tesoro’s stock price. | |||||||
(d) | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 2019 Notes during the three months ended March 31, 2014. |
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Information (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | |||||||||||||||
Condensed Consolidating Statement of Operations | ' | |||||||||||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||
for the Three Months Ended March 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
REVENUES | $ | — | $ | 11,564 | $ | 1,610 | $ | (3,241 | ) | $ | 9,933 | |||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of sales | — | 10,664 | 1,476 | (3,192 | ) | 8,948 | ||||||||||
Operating, selling, general and administrative expenses | 1 | 612 | 58 | (49 | ) | 622 | ||||||||||
Depreciation and amortization expense | — | 113 | 17 | — | 130 | |||||||||||
Gain on asset disposals and impairments | — | (1 | ) | (4 | ) | — | (5 | ) | ||||||||
OPERATING INCOME (LOSS) | (1 | ) | 176 | 63 | — | 238 | ||||||||||
Equity in earnings of subsidiaries | 86 | 12 | 100 | (198 | ) | — | ||||||||||
Interest and financing costs, net | (8 | ) | (59 | ) | (18 | ) | 8 | (77 | ) | |||||||
Other income (expense), net | — | (1 | ) | 8 | (8 | ) | (1 | ) | ||||||||
EARNINGS BEFORE INCOME TAXES | 77 | 128 | 153 | (198 | ) | 160 | ||||||||||
Income tax expense (benefit) (a) | (1 | ) | 51 | 6 | — | 56 | ||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 78 | 77 | 147 | (198 | ) | 104 | ||||||||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | — | (1 | ) | |||||||||
NET EARNINGS | 78 | 76 | 147 | (198 | ) | 103 | ||||||||||
Less: Net earnings from continuing operations attributable to noncontrolling interest | — | — | 25 | — | 25 | |||||||||||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | $ | 78 | $ | 76 | $ | 122 | $ | (198 | ) | $ | 78 | |||||
_______________ | ||||||||||||||||
(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. | |||||||||||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||
for the Three Months Ended March 31, 2013 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
REVENUES | $ | — | $ | 9,115 | $ | 822 | $ | (2,590 | ) | $ | 7,347 | |||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of sales | — | 8,397 | 756 | (2,590 | ) | 6,563 | ||||||||||
Operating, selling, general and administrative expenses | 1 | 450 | 28 | — | 479 | |||||||||||
Depreciation and amortization expense | — | 100 | 5 | — | 105 | |||||||||||
Loss on asset disposals and impairments | — | 4 | 3 | — | 7 | |||||||||||
OPERATING INCOME (LOSS) | (1 | ) | 164 | 30 | — | 193 | ||||||||||
Equity in earnings (loss) of subsidiaries | 96 | (6 | ) | 44 | (134 | ) | — | |||||||||
Interest and financing costs, net | (2 | ) | (25 | ) | (5 | ) | 2 | (30 | ) | |||||||
Other income (expense), net | — | — | 2 | (2 | ) | — | ||||||||||
EARNINGS BEFORE INCOME TAXES | 93 | 133 | 71 | (134 | ) | 163 | ||||||||||
Income tax expense (a) | — | 55 | 3 | — | 58 | |||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 93 | 78 | 68 | (134 | ) | 105 | ||||||||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | — | (1 | ) | |||||||||
NET EARNINGS | 93 | 77 | 68 | (134 | ) | 104 | ||||||||||
Less: Net earnings from continuing operations attributable to noncontrolling interest | — | — | 11 | — | 11 | |||||||||||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | $ | 93 | $ | 77 | $ | 57 | $ | (134 | ) | $ | 93 | |||||
_______________ | ||||||||||||||||
(a) | The income tax expense 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. | |||||||||||||||
Condensed Consolidating Balance Sheet | ' | |||||||||||||||
Condensed Consolidating Balance Sheet as of March 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 726 | $ | 72 | $ | — | $ | 798 | ||||||
Receivables, less allowance for doubtful accounts | — | 1,326 | 370 | — | 1,696 | |||||||||||
Inventories | — | 2,106 | 671 | — | 2,777 | |||||||||||
Prepayments and other current assets | 91 | 95 | 69 | (56 | ) | 199 | ||||||||||
Total Current Assets | 91 | 4,253 | 1,182 | (56 | ) | 5,470 | ||||||||||
Net Property, Plant and Equipment | — | 5,438 | 1,457 | — | 6,895 | |||||||||||
Investment in Subsidiaries | 5,323 | 36 | 1,615 | (6,974 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 2,982 | — | — | (2,982 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,134 | (1,134 | ) | — | ||||||||||
Other Noncurrent Assets, Net | 55 | 1,110 | 38 | — | 1,203 | |||||||||||
Total Assets | $ | 8,451 | $ | 10,837 | $ | 5,426 | $ | (11,146 | ) | $ | 13,568 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 1 | $ | 2,411 | $ | 503 | $ | — | $ | 2,915 | ||||||
Other current liabilities | 116 | 563 | 98 | (56 | ) | 721 | ||||||||||
Total Current Liabilities | 117 | 2,974 | 601 | (56 | ) | 3,636 | ||||||||||
Long-Term Payables to Affiliates | — | 2,469 | 513 | (2,982 | ) | — | ||||||||||
Deferred Income Taxes | 1,015 | — | — | — | 1,015 | |||||||||||
Other Noncurrent Liabilities | 315 | 330 | 8 | — | 653 | |||||||||||
Debt | 1,622 | 43 | 1,164 | — | 2,829 | |||||||||||
Long-Term Intercompany Note Payable | 1,134 | — | — | (1,134 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,248 | 5,021 | 1,953 | (6,974 | ) | 4,248 | ||||||||||
Equity-Noncontrolling Interest | — | — | 1,187 | — | 1,187 | |||||||||||
Total Liabilities and Equity | $ | 8,451 | $ | 10,837 | $ | 5,426 | $ | (11,146 | ) | $ | 13,568 | |||||
Condensed Consolidating Balance Sheet as of December 31, 2013 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 1,161 | $ | 77 | $ | — | $ | 1,238 | ||||||
Receivables, less allowance for doubtful accounts | 12 | 1,182 | 119 | — | 1,313 | |||||||||||
Inventories | — | 2,041 | 524 | — | 2,565 | |||||||||||
Prepayments and other current assets | 109 | 89 | 57 | (45 | ) | 210 | ||||||||||
Total Current Assets | 121 | 4,473 | 777 | (45 | ) | 5,326 | ||||||||||
Net Property, Plant and Equipment | — | 5,428 | 1,447 | — | 6,875 | |||||||||||
Investment in Subsidiaries | 5,242 | 51 | 1,520 | (6,813 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 3,080 | — | — | (3,080 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,134 | (1,134 | ) | — | ||||||||||
Other Noncurrent Assets, Net | 58 | 1,092 | 38 | — | 1,188 | |||||||||||
Total Assets | $ | 8,501 | $ | 11,044 | $ | 4,916 | $ | (11,072 | ) | $ | 13,389 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 1 | $ | 2,110 | $ | 485 | $ | — | $ | 2,596 | ||||||
Other current liabilities | 112 | 679 | 66 | (45 | ) | 812 | ||||||||||
Total Current Liabilities | 113 | 2,789 | 551 | (45 | ) | 3,408 | ||||||||||
Long-Term Payables to Affiliates | — | 2,939 | 141 | (3,080 | ) | — | ||||||||||
Deferred Income Taxes | 1,018 | — | — | — | 1,018 | |||||||||||
Other Noncurrent Liabilities | 320 | 327 | 8 | — | 655 | |||||||||||
Debt | 1,614 | 45 | 1,164 | — | 2,823 | |||||||||||
Long-Term Intercompany Note Payable | 1,134 | — | — | (1,134 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,302 | 4,944 | 1,869 | (6,813 | ) | 4,302 | ||||||||||
Equity-Noncontrolling Interest | — | — | 1,183 | — | 1,183 | |||||||||||
Total Liabilities and Equity | $ | 8,501 | $ | 11,044 | $ | 4,916 | $ | (11,072 | ) | $ | 13,389 | |||||
Condensed Consolidating Statement of Cash Flows | ' | |||||||||||||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ||||||||||||||||
Net cash from (used in) operating activities | $ | (17 | ) | $ | 154 | $ | (287 | ) | $ | — | $ | (150 | ) | |||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||||||||||||||||
Capital expenditures | — | (92 | ) | (27 | ) | — | (119 | ) | ||||||||
Intercompany notes, net | 168 | — | — | (168 | ) | — | ||||||||||
Other investing activities | — | — | 10 | — | 10 | |||||||||||
Net cash from (used in) investing activities | 168 | (92 | ) | (17 | ) | (168 | ) | (109 | ) | |||||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||||||||||||||||
Proceeds from debt offering | 300 | — | — | — | 300 | |||||||||||
Repayments of debt | (300 | ) | (1 | ) | — | — | (301 | ) | ||||||||
Dividend payments | (33 | ) | — | — | — | (33 | ) | |||||||||
Distributions to noncontrolling interest | — | — | (20 | ) | — | (20 | ) | |||||||||
Purchases of common stock | (100 | ) | — | — | — | (100 | ) | |||||||||
Premium paid on notes redemption | (19 | ) | — | — | — | (19 | ) | |||||||||
Net intercompany borrowings (repayments) | — | (501 | ) | 333 | 168 | — | ||||||||||
Distributions to TLLP unitholders and general partner | 4 | 5 | (9 | ) | — | — | ||||||||||
Other financing activities | (3 | ) | — | (5 | ) | — | (8 | ) | ||||||||
Net cash from (used in) financing activities | (151 | ) | (497 | ) | 299 | 168 | (181 | ) | ||||||||
DECREASE IN CASH AND CASH EQUIVALENTS | — | (435 | ) | (5 | ) | — | (440 | ) | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 1,161 | 77 | — | 1,238 | |||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 726 | $ | 72 | $ | — | $ | 798 | ||||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2013 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
Net cash from operating activities | $ | — | $ | 135 | $ | 112 | $ | — | $ | 247 | ||||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||||||||||||||||
Capital expenditures | — | (115 | ) | (10 | ) | — | (125 | ) | ||||||||
Advanced payments made for Los Angeles Acquisition | — | (27 | ) | — | — | (27 | ) | |||||||||
Intercompany notes, net | (91 | ) | — | — | 91 | — | ||||||||||
Other investing activities | — | — | 2 | — | 2 | |||||||||||
Net cash used in investing activities | (91 | ) | (142 | ) | (8 | ) | 91 | (150 | ) | |||||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||||||||||||||||
Dividend payments | (28 | ) | — | — | — | (28 | ) | |||||||||
Net proceeds from issuance of Tesoro Logistics LP common units | — | — | 392 | — | 392 | |||||||||||
Distributions to noncontrolling interest | — | — | (14 | ) | — | (14 | ) | |||||||||
Purchases of common stock | (135 | ) | — | — | — | (135 | ) | |||||||||
Net intercompany borrowings (repayments) | — | 273 | (182 | ) | (91 | ) | — | |||||||||
Borrowings from general partner | 230 | — | (230 | ) | — | — | ||||||||||
Distributions to TLLP unitholders and general partner | 3 | 4 | (7 | ) | — | — | ||||||||||
Other financing activities | 21 | 3 | (3 | ) | — | 21 | ||||||||||
Net cash from (used in) financing activities | 91 | 280 | (44 | ) | (91 | ) | 236 | |||||||||
INCREASE IN CASH AND CASH EQUIVALENTS | — | 273 | 60 | — | 333 | |||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 1,244 | 395 | — | 1,639 | |||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 1,517 | $ | 455 | $ | — | $ | 1,972 | ||||||
Basis_of_Presentation_Basis_of
Basis of Presentation Basis of Presentation (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' |
Percentage of TLLP's revenues from Tesoro | 88.00% | 93.00% |
Basis_of_Presentation_Basis_of1
Basis of Presentation Basis of Presentation, Discontinued Operations (Details) (Hawaii Operations) | Sep. 25, 2013 |
Hawaii Operations | ' |
Discontinued Operations | ' |
Capacity (bpd) | 94,000 |
Acquisitions_Los_Angeles_Narra
Acquisitions, Los Angeles Narrative (Details) (USD $) | 3 Months Ended |
In Billions, unless otherwise specified | Mar. 31, 2014 |
stores | |
Los Angeles Acquisition | ' |
Business Acquisition | ' |
Date of acquisition | 1-Jun-13 |
Number of stations (stations) | 835 |
Watson cogeneration facility ownership percentage | 51.00% |
Purchase price | $2.33 |
California Region | ' |
Business Acquisition | ' |
Number of refineries (refineries) | 2 |
Carson refinery | Los Angeles Acquisition | ' |
Business Acquisition | ' |
Capacity (Mbpd) | 266 |
Acquisitions_Acquisitions_Los_
Acquisitions Acquisitions, Los Angeles (Details) (Los Angeles Acquisition, USD $) | 3 Months Ended | |
Mar. 31, 2013 | Mar. 31, 2014 | |
Los Angeles Acquisition | ' | ' |
Los Angeles Purchase Price Allocation | ' | ' |
Receivables | ' | $197,000,000 |
Inventories | ' | 1,096,000,000 |
Prepayments and other current assets | ' | 14,000,000 |
Property, plant and equipment | ' | 1,085,000,000 |
Acquired intangibles, net | ' | 63,000,000 |
Other noncurrent assets, net | ' | 112,000,000 |
Other current liabilities | ' | -25,000,000 |
Other noncurrent liabilities | ' | -179,000,000 |
Debt | ' | -36,000,000 |
Total purchase price | ' | 2,327,000,000 |
Los Angeles Pro Forma Information | ' | ' |
Pro forma revenue | 10,700,000,000 | ' |
Pro forma net earnings | $176,000,000 | ' |
Tesoro_Logistics_LP_Tesoro_Log
Tesoro Logistics LP Tesoro Logistics LP, Ownership Interest (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Variable Interest Entity | ' | ' |
Percentage ownership of Tesoro Logistics LP | 36.00% | 36.00% |
Limited partner common units outstanding (units) | 3,855,824 | ' |
Subordinated units outstanding (units) | 15,254,890 | ' |
General partner | ' | ' |
Variable Interest Entity | ' | ' |
General partner units outstanding (units) | 1,110,282 | ' |
Discontinued_Operations_Discon1
Discontinued Operations Discontinued Operations (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 25, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues and earnings from discontinued operations | ' | ' | ' |
Loss from discontinued operations, net of tax | ' | ($1) | ($1) |
Hawaii Operations | ' | ' | ' |
Discontinued Operations | ' | ' | ' |
Sales price | 539 | ' | ' |
Sales price, assets | 75 | ' | ' |
Sales price, inventory and other net working capital | 464 | ' | ' |
Earnout arrangement period (years) | '3 years | ' | ' |
Earnout arrangement maximum | 40 | ' | ' |
Indemnification for environmental remediation | 15 | ' | ' |
Revenues and earnings from discontinued operations | ' | ' | ' |
Revenues | ' | 0 | 809 |
Loss from discontinued operations, before tax | ' | ' | -1 |
Loss from discontinued operations, net of tax | ' | ' | -1 |
Cash flows related to discontinued operations | ' | ' | ' |
Net Cash Provided by (Used in) Discontinued Operations | ' | 0 | ' |
Operating activities | ' | ' | 102 |
Investing activities | ' | ' | $0 |
Earnings_Per_Share_Details
Earnings Per Share (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share [Abstract] | ' | ' |
Weighted average common shares outstanding | 131.3 | 137 |
Common stock equivalents | 2.5 | 2.6 |
Total diluted shares | 133.8 | 139.6 |
Anti-dilutive securities (shares) | 0.4 | 0.2 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Domestic crude oil and refined products | $1,904 | $1,847 |
Foreign subsidiary crude oil | 671 | 523 |
Other inventories | 202 | 195 |
Total Inventories | 2,777 | 2,565 |
Excess of replacement or current costs over stated LIFO value | $1,800 | $1,700 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Property Plant and Equipment, at cost | ' | ' | ' |
Property, plant and equipment, at cost | $9,227 | ' | $9,123 |
Accumulated depreciation | -2,332 | ' | -2,248 |
Net property, plant and equipment | 6,895 | ' | 6,875 |
Capitalized interest | 5 | 4 | ' |
Refining | ' | ' | ' |
Property Plant and Equipment, at cost | ' | ' | ' |
Property, plant and equipment, at cost | 6,679 | ' | 6,611 |
TLLP | ' | ' | ' |
Property Plant and Equipment, at cost | ' | ' | ' |
Property, plant and equipment, at cost | 1,530 | ' | 1,504 |
Retail | ' | ' | ' |
Property Plant and Equipment, at cost | ' | ' | ' |
Property, plant and equipment, at cost | 784 | ' | 778 |
Corporate | ' | ' | ' |
Property Plant and Equipment, at cost | ' | ' | ' |
Property, plant and equipment, at cost | $234 | ' | $230 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | |||||||||
In Millions, unless otherwise specified | Commodity Futures Contracts | Commodity Futures Contracts | Commodity OTC Swap Contracts | Commodity Forward Contracts | Commodity Forward Contracts | Environmental Credit Obligations | Environmental Credit Obligations | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Netting and Collateral | Netting and Collateral | Netting and Collateral | Netting and Collateral | Netting and Collateral | Netting and Collateral | Netting and Collateral | Netting and Collateral | Netting and Collateral | Maximum | Minimum | |||||||||||
Commodity Futures Contracts | Commodity Futures Contracts | Commodity OTC Swap Contracts | Commodity Forward Contracts | Commodity Forward Contracts | Environmental Credit Obligations | Environmental Credit Obligations | Commodity Futures Contracts | Commodity Futures Contracts | Commodity OTC Swap Contracts | Commodity Forward Contracts | Commodity Forward Contracts | Environmental Credit Obligations | Environmental Credit Obligations | Commodity Futures Contracts | Commodity Futures Contracts | Commodity OTC Swap Contracts | Commodity Forward Contracts | Commodity Forward Contracts | Environmental Credit Obligations | Environmental Credit Obligations | Commodity Futures Contracts | Commodity Futures Contracts | Commodity OTC Swap Contracts | Commodity Forward Contracts | Commodity Forward Contracts | Environmental Credit Obligations | Environmental Credit Obligations | |||||||||||||||||||||||||||||
Fair Value Measurements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Gross derivative assets | $184 | $140 | ' | ' | ' | ' | ' | ' | ' | $179 | $136 | $179 | $136 | $0 | $0 | ' | ' | ' | $5 | $4 | $2 | $4 | $1 | $2 | ' | ' | ' | $0 | $0 | $0 | $0 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Derivative asset amount offset against collateral and netting arrangements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -117 | [1] | -72 | [1] | -117 | [1] | -72 | [1] | 0 | [1] | 0 | [1] | ' | ' | ' | ' | ' | |||
Net derivative assets | 67 | 68 | 64 | 68 | 1 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Gross derivative liabilities | 200 | 159 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 192 | 156 | 0 | 0 | 0 | ' | ' | ' | ' | 4 | 2 | 3 | 1 | 1 | ' | ' | ' | ' | 0 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Derivative liability amount offset against collateral and netting arrangements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -180 | [1] | -137 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ' | ' | ' | ' | ||||
Net derivative liabilities | 20 | 22 | 16 | 21 | 3 | 1 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Environmental Credit Obligations | ' | ' | ' | ' | ' | ' | ' | 9 | 5 | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | 9 | 5 | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | 0 | [1] | 0 | [1] | ' | ' | |||||||
Net Derivative liabilities and environmental credit obligations | 29 | 27 | ' | ' | ' | ' | ' | ' | ' | 192 | 156 | ' | ' | ' | ' | ' | ' | ' | 17 | 8 | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | -180 | [1] | -137 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Cash collateral posted | 63 | 65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Percent of trade receivables with balances outstanding greater than 90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | |||||||||
Percent of trade payables with balances outstanding greater than 90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | |||||||||
Days Outstanding On Acccounts Payable and Receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | |||||||||
Debt carrying value | 2,829 | 2,823 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Debt fair value | $2,900 | $2,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
[1] | Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of March 31, 2014 and December 31, 2013, cash collateral amounts of $63 million and $65 million, respectively, are netted with mark-to-market derivative assets. |
Derivative_Instruments_Derivat
Derivative Instruments, Derivative Assets and Liabilities (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | ||
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification | ' | ' | ||
Derivative maturity period (years) | '1 year | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross derivative assets | $184 | $140 | ||
Gross derivative liabilities | 200 | 159 | ||
Net derivative assets | 67 | 68 | ||
Net derivative liabilities | 20 | 22 | ||
Derivative, Collateral | ' | ' | ||
Cash collateral outstanding | 63 | 65 | ||
Commodity Futures Contracts | Prepayments and other current assets | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross derivative assets | 181 | [1] | 140 | [1] |
Gross derivative liabilities | 196 | [1] | 158 | [1] |
Commodity OTC Swap Contracts | Receivables | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross derivative assets | 1 | 0 | ||
Gross derivative liabilities | 0 | 0 | ||
Commodity OTC Swap Contracts | Accounts payable | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | 3 | 0 | ||
Commodity Forward Contracts | Receivables | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross derivative assets | 2 | 0 | ||
Gross derivative liabilities | 0 | 0 | ||
Commodity Forward Contracts | Accounts payable | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | 1 | 1 | ||
Counterparty Netting and Cash Collateral | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Derivative asset amount offset against collateral and netting arrangements | -117 | [2] | -72 | [2] |
Derivative liability amount offset against collateral and netting arrangements | -180 | [2] | -137 | [2] |
Commodity Contract, Corn Futures | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross derivative assets | 1 | 3 | ||
Gross derivative liabilities | $4 | $1 | ||
[1] | We had derivative assets totaling $1 million and $3 million at March 31, 2014 and December 31, 2013, respectively, related to corn futures used to manage our biofuel exposure. Additionally, we had derivative liabilities totaling $4 million and $1 million at March 31, 2014 and December 31, 2013, respectively, related to corn futures. | |||
[2] | As of March 31, 2014 and December 31, 2013, cash collateral amounts of $63 million and $65 million, respectively, are netted with mark-to-market derivative assets. |
Derivative_Instruments_Derivat1
Derivative Instruments, Derivative Gains and Losses (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | ($2) | ($30) |
Commodity Futures Contracts | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | 0 | -26 |
Commodity OTC Swap Contracts | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | -1 | 0 |
Commodity Forward Contracts | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | 1 | -2 |
Foreign Currency Forward Contracts | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | -2 | -2 |
Revenues | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | 1 | 1 |
Cost of sales | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | -1 | -22 |
Other expense, net | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | -2 | -2 |
Net loss from discontinued operations | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' |
Total Loss on Mark-to-Market Derivatives | $0 | ($7) |
Derivative_Instruments_Open_Lo
Derivative Instruments, Open Long (Short) Positions (Details) (CAD) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Derivative | ' |
Open positions maturity period (years) | '1 year |
Futures | 2014 | ' |
Derivative | ' |
Long (short) contract volumes (thousands of barrels/ millions bushels) | -11,937 |
OTC Swaps | 2014 | ' |
Derivative | ' |
Long (short) contract volumes (thousands of barrels/ millions bushels) | 4,300 |
Forwards | 2014 | ' |
Derivative | ' |
Long (short) contract volumes (thousands of barrels/ millions bushels) | -306 |
Derivative, Notional Amount | 50 |
Maturity of Foreign Currency Derivatives | 25-Apr-14 |
Options | 2014 | ' |
Derivative | ' |
Long (short) contract volumes (thousands of barrels/ millions bushels) | 600 |
Commodity Contract, Corn Futures | 2014 | ' |
Derivative | ' |
Long (short) contract volumes (thousands of barrels/ millions bushels) | 5,800,000 |
Debt_Overview_Details
Debt, Overview (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | ||
Debt Instrument | ' | ' | ' | |
Total Debt | $2,835,000,000 | ' | $2,829,000,000 | |
Less: Current maturities | 6,000,000 | ' | 6,000,000 | |
Debt, less current maturities | 2,829,000,000 | ' | 2,823,000,000 | |
Debt redemption charges | -31,000,000 | 0 | ' | |
Credit agreements | ' | ' | ' | |
Total Capacity | 5,685,000,000 | ' | ' | |
Amount Borrowed as of March 31, 2014 | 398,000,000 | ' | ' | |
Outstanding Letters of Credit | 1,653,000,000 | ' | ' | |
Available Capacity | 3,634,000,000 | ' | ' | |
Tesoro Corporation Revolving Credit Facility | ' | ' | ' | |
Credit agreements | ' | ' | ' | |
Total Capacity | 3,000,000,000 | [1] | ' | ' |
Amount Borrowed as of March 31, 2014 | 0 | [1] | ' | ' |
Outstanding Letters of Credit | 795,000,000 | [1] | ' | ' |
Available Capacity | 2,205,000,000 | [1] | ' | ' |
Expiration | 4-Jan-18 | [1] | ' | ' |
Expenses and Fees | ' | ' | ' | |
Commitment Fee (unused portion) | 0.38% | [2] | ' | ' |
Tesoro Corporation Revolving Credit Facility | 30 day Eurodollar (LIBOR) Rate | ' | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Eurodollar or Base Rate | 0.15% | [2] | ' | ' |
Eurodollar or Base Rate Margin | 1.50% | [2] | ' | ' |
Tesoro Corporation Revolving Credit Facility | Base Rate | ' | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Eurodollar or Base Rate | 3.25% | [2] | ' | ' |
Eurodollar or Base Rate Margin | 0.50% | [2] | ' | ' |
TLLP Revolving Credit Facility | ' | ' | ' | |
Credit agreements | ' | ' | ' | |
Total Capacity | 575,000,000 | ' | ' | |
Amount Borrowed as of March 31, 2014 | 0 | ' | ' | |
Outstanding Letters of Credit | 0 | ' | ' | |
Available Capacity | 575,000,000 | ' | ' | |
Expiration | 31-Dec-17 | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Commitment Fee (unused portion) | 0.50% | [3] | ' | ' |
TLLP Revolving Credit Facility | 30 day Eurodollar (LIBOR) Rate | ' | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Eurodollar or Base Rate | 0.15% | [3] | ' | ' |
Eurodollar or Base Rate Margin | 2.50% | [3] | ' | ' |
TLLP Revolving Credit Facility | Base Rate | ' | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Eurodollar or Base Rate | 3.25% | [3] | ' | ' |
Eurodollar or Base Rate Margin | 1.50% | [3] | ' | ' |
Term Loan Credit Facility | ' | ' | ' | |
Credit agreements | ' | ' | ' | |
Total Capacity | 398,000,000 | ' | ' | |
Amount Borrowed as of March 31, 2014 | 398,000,000 | ' | ' | |
Outstanding Letters of Credit | 0 | ' | ' | |
Available Capacity | 0 | ' | ' | |
Expiration | 30-May-16 | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Commitment Fee (unused portion) | 0.00% | [2] | ' | ' |
Term Loan Credit Facility | 30 day Eurodollar (LIBOR) Rate | ' | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Eurodollar or Base Rate | 0.15% | [2] | ' | ' |
Eurodollar or Base Rate Margin | 2.25% | [2] | ' | ' |
Term Loan Credit Facility | Base Rate | ' | ' | ' | |
Expenses and Fees | ' | ' | ' | |
Eurodollar or Base Rate | 3.25% | [2] | ' | ' |
Eurodollar or Base Rate Margin | 1.25% | [2] | ' | ' |
Letter of Credit Facilities | ' | ' | ' | |
Credit agreements | ' | ' | ' | |
Total Capacity | 1,712,000,000 | ' | ' | |
Amount Borrowed as of March 31, 2014 | 0 | ' | ' | |
Outstanding Letters of Credit | 858,000,000 | ' | ' | |
Available Capacity | 854,000,000 | ' | ' | |
5.125% Senior Notes Due 2024 | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Debt instrument interest rate | 5.13% | ' | ' | |
Debt instrument, aggregate principal | 300,000,000 | ' | ' | |
Debt Instrument, Maturity Date | 1-Apr-24 | ' | ' | |
Debt Instrument, Maturity Date, Description | 'ten-year | ' | ' | |
Redemption price, percentage | 105.13% | ' | ' | |
Collateral | 'These notes are unsecured obligations and guaranteed by certain of our domestic subsidiaries, excluding TLGP and TLLP and its subsidiaries. The proceeds from the issuance of the 2024 Notes, together with cash on hand, were used to pay for fees and expenses related to the note issuance and to redeem all outstanding 9.750% Senior Notes due 2019 (the “2019 Notesâ€) for an aggregate purchase price of $329 million, including accrued interest and premiums. expenses related to the offering of the notes. | ' | ' | |
5.125% Senior Notes Due 2024 | April 1, 2019 through March 31, 2020 | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Debt Instrument Redemption Premium Percentage | 2.56% | ' | ' | |
Debt Instrument Redemption With Equity Proceeds | 35.00% | ' | ' | |
5.125% Senior Notes Due 2024 | April 1, 2020 through March 31, 2021 | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Debt Instrument Redemption Premium Percentage | 1.71% | ' | ' | |
5.125% Senior Notes Due 2024 | April 1, 2021 through March 31, 2022 | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Debt Instrument Redemption Premium Percentage | 0.85% | ' | ' | |
9.750% Senior Notes Due 2019 | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Debt instrument interest rate | 9.75% | ' | ' | |
Debt Instrument, Maturity Date | 1-Jun-19 | ' | ' | |
Debt Instrument, aggregate purchase price | 329,000,000 | ' | ' | |
Debt redemption charges | 31,000,000 | ' | ' | |
Debt Instrument, premium paid | 19,000,000 | ' | ' | |
Unamortized debt discount | 8,000,000 | ' | ' | |
Unamortized debt Issuance costs | 4,000,000 | ' | ' | |
4.250% Senior Notes Due 2017 | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Debt instrument interest rate | 4.25% | ' | ' | |
Debt Instrument, Maturity Date | 1-Oct-17 | ' | ' | |
5.375% Senior Notes Due 2022 | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Debt instrument interest rate | 5.38% | ' | ' | |
Debt Instrument, Maturity Date | 1-Oct-22 | ' | ' | |
TLLP | ' | ' | ' | |
Debt Instrument | ' | ' | ' | |
Total Debt | $1,164,000,000 | ' | $1,164,000,000 | |
[1] | Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity. | |||
[2] | 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. | |||
[3] | 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. TLLP incurs commitment fees for the unused portion of the TLLP Revolving Credit Facility. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate. |
Debt_Credit_Facilities_Details
Debt, Credit Facilities (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
30-May-13 | Mar. 31, 2014 | ||
Line of Credit Facility | ' | ' | |
Total capacity | ' | $5,685,000,000 | |
Line of Credit Facility, Amount Outstanding | ' | 398,000,000 | |
Letters of credit, amount outstanding | ' | 1,653,000,000 | |
Tesoro Corporation Revolving Credit Facility | ' | ' | |
Line of Credit Facility | ' | ' | |
Adjusted Borrowing Base | ' | 3,600,000,000 | |
Total capacity | ' | 3,000,000,000 | [1] |
Maximum available capacity | ' | 4,000,000,000 | |
Line of Credit Facility, Amount Outstanding | ' | 0 | [1] |
Maturity date | ' | 4-Jan-18 | [1] |
Letters of credit, amount outstanding | ' | 795,000,000 | [1] |
1st repayment provision | ' | ' | |
Line of Credit Facility | ' | ' | |
Required decrease in commitments | ' | 500,000,000 | |
Commitment reduction date (on or prior to) | ' | 21-Nov-14 | |
2nd repayment provision | ' | ' | |
Line of Credit Facility | ' | ' | |
Required decrease in commitments | ' | 500,000,000 | |
Commitment reduction date (on or prior to) | ' | 21-May-15 | |
TLLP Revolving Credit Facility | ' | ' | |
Line of Credit Facility | ' | ' | |
Total capacity | ' | 575,000,000 | |
Maximum available capacity | ' | 650,000,000 | |
Line of Credit Facility, Amount Outstanding | ' | 0 | |
Maturity date | ' | 31-Dec-17 | |
Line of credit facility, collateral | ' | 'The TLLP Revolving Credit Facility is non-recourse to Tesoro, except for TLGP, and is guaranteed by all of TLLP’s subsidiaries and secured by substantially all of TLLP’s assets. Borrowings are available under the TLLP Revolving Credit Facility up to the total loan availability of the facility. | |
Letters of credit, amount outstanding | ' | 0 | |
Term Loan Credit Facility | ' | ' | |
Line of Credit Facility | ' | ' | |
Total capacity | ' | 398,000,000 | |
Maximum available capacity | ' | 500,000,000 | |
Line of Credit Facility, Amount Outstanding | ' | 398,000,000 | |
Borrowings on Term Loan Facility | 500,000,000 | ' | |
Interest rate | ' | 2.40% | |
Maturity date | ' | 30-May-16 | |
Line of credit facility, collateral | ' | 'The obligations under the Term Loan Credit Facility are secured by all equity interests of Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company, the Tesoro and USA Gasoline trademarks and those trademarks containing the name “ARCO†acquired in the Los Angeles Acquisition and junior liens on certain assets. | |
Letters of credit, amount outstanding | ' | 0 | |
Letter of Credit Facilities | ' | ' | |
Line of Credit Facility | ' | ' | |
Total capacity | ' | 1,712,000,000 | |
Line of Credit Facility, Amount Outstanding | ' | 0 | |
Letters of credit, amount outstanding | ' | $858,000,000 | |
[1] | Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity. |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
plans | ||
Pension Benefits | ' | ' |
General Discussion of Pension Plan | ' | ' |
Number of defined benefit plans sponsored (plans) | 4 | ' |
Pension Contributions | ' | ' |
Employer contributions to employee retirement plan | $15 | ' |
Components of Net Periodic Benefit Expense and Other Postretirement Expense (Income): | ' | ' |
Service cost | 13 | 8 |
Interest cost | 9 | 7 |
Expected return on plan assets | -8 | -6 |
Amortization of prior service cost credit | 0 | 0 |
Recognized net actuarial loss | 4 | 7 |
Net Periodic Benefit Expense (Income) | 18 | 16 |
Other Postretirement Benefits | ' | ' |
Components of Net Periodic Benefit Expense and Other Postretirement Expense (Income): | ' | ' |
Service cost | 1 | 1 |
Interest cost | 1 | 1 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service cost credit | -9 | -9 |
Recognized net actuarial loss | 1 | 2 |
Net Periodic Benefit Expense (Income) | ($6) | ($5) |
Funded Qualified Employee Retirement Plan | ' | ' |
General Discussion of Pension Plan | ' | ' |
Number of defined benefit plans sponsored (plans) | 1 | ' |
Unfunded Nonqualified Executive Plan | ' | ' |
General Discussion of Pension Plan | ' | ' |
Number of defined benefit plans sponsored (plans) | 3 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies, Environmental Liabilities (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Environmental Liabilities | ' | ' |
Environmental liability accrual | $270 | $262 |
Martinez Refinery and Los Angeles Acquisition | ' | ' |
Environmental Liabilities | ' | ' |
Environmental liability accrual | 220 | 216 |
Remediation activities measurement period | 'We cannot reasonably determine the full extent of remedial activities that may be required at the Martinez refinery and continue to evaluate information related to assets acquired in the Los Angeles Acquisition within our measurement period not to exceed one year from acquisition on June 1, 2013. | ' |
Martinez refinery | ' | ' |
Environmental Liabilities | ' | ' |
Environmental insurance coverage ceiling | 190 | ' |
Self-insurance deductible | 50 | ' |
Number of previous owners (owners) | 2 | ' |
Tesoro Logistics LP | ' | ' |
Environmental Liabilities | ' | ' |
Environmental liability accrual | $28 | $24 |
Commitments_and_Contingencies_2
Commitments and Contingencies, Washington Refinery Fire (Details) (Washington Refinery Fire, USD $) | 1 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Oct. 31, 2010 | Apr. 30, 2010 | Mar. 31, 2014 |
employees | |||
Washington Refinery Fire | ' | ' | ' |
Loss Contingencies | ' | ' | ' |
Loss contingency, period of occurrence | ' | '4/1/2010 | ' |
Number of fatally injured employees in the refinery incident (employees) | ' | 7 | ' |
Fines and penalties assessed | $2.40 | ' | ' |
Notice of Violation (NOV) disclosure | ' | ' | 'We received a NOV from the EPA alleging 46 violations of the Clean Air Act Risk Management Plan requirements at our Washington refinery on November 20, 2013. The EPA conducted an investigation of the refinery in 2011, following the April 2010 fire in the naphtha hydrotreater unit. |
Commitments_and_Contingencies_3
Commitments and Contingencies, Legal (Details) (MTBE Contaimination Litigation) | Mar. 31, 2014 |
lawsuits | |
MTBE Contaimination Litigation | ' |
Other Matters | ' |
Remaining lawsuits (lawsuits) | 1 |
Commitments_and_Contingencies_4
Commitments and Contingencies, Tax Matters (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Significant change in unrecognized tax benefits | 'We believe that resolution of any such claim(s) would not have a material impact on our liquidity, financial position, or results of operations. It is reasonably possible that state tax litigation related to certain state income apportionment matters may be resolved in 2014. Because the tax was fully paid for in prior years, the unrecognized tax benefit of $11 million would be eliminated without additional liability. |
Stockholders_Equity_Changes_to
Stockholders' Equity, Changes to Equity (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Total Equity | ' | ' |
Balance at December 31, 2013 | $5,485 | ' |
Net earnings | 103 | 104 |
Purchases of common stock | -100 | ' |
Dividend payments | -33 | ' |
Distributions to noncontrolling interest | -20 | ' |
Other | 0 | ' |
Balance at March 31, 2014 | 5,435 | ' |
Shares issued for equity-based compensation plans (shares) | 0.1 | 0.9 |
Shares issued for equity-based compensation awards | 1 | 32 |
Tesoro Corporation Stockholders’ Equity | ' | ' |
Total Equity | ' | ' |
Balance at December 31, 2013 | 4,302 | ' |
Net earnings | 78 | ' |
Purchases of common stock | -100 | ' |
Dividend payments | -33 | ' |
Distributions to noncontrolling interest | 0 | ' |
Other | 1 | ' |
Balance at March 31, 2014 | 4,248 | ' |
Noncontrolling Interest | ' | ' |
Total Equity | ' | ' |
Balance at December 31, 2013 | 1,183 | ' |
Net earnings | 25 | ' |
Purchases of common stock | 0 | ' |
Dividend payments | 0 | ' |
Distributions to noncontrolling interest | -20 | ' |
Other | -1 | ' |
Balance at March 31, 2014 | $1,187 | ' |
Stockholders_Equity_Stockholde
Stockholders' Equity Stockholders' Equity, Share Repurchases and Dividends (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Apr. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2013 |
Subsequent Event | Share repurchase program | Share repurchase program | ||||
Number of shares purchased (shares) | ' | ' | ' | ' | 1,900,000 | 2,600,000 |
Share repurchases, value | $100 | ' | ' | ' | $100 | $135 |
Preferred Stock, Shares Authorized | 5,000,000 | ' | 5,000,000 | ' | ' | ' |
Preferred Stock, Par or Stated Value Per Share | $0 | ' | $0 | ' | ' | ' |
Preferred Stock, Shares Issued | 0 | ' | 0 | ' | ' | ' |
Dividends payable, date declared | 5-Feb-14 | ' | ' | 30-Apr-14 | ' | ' |
Dividends declared (dollars per share) | $0.25 | $0.20 | ' | $0.25 | ' | ' |
Dividends, date to be paid | 14-Mar-14 | ' | ' | 13-Jun-14 | ' | ' |
Dividend payments | $33 | $28 | ' | ' | ' | ' |
Dividends, date of record | 28-Feb-14 | ' | ' | 30-May-14 | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' | ' |
Stock-based compensation expense (benefit) | ($18) | $52 |
Income tax benefit (expense) for stock-based compensation arrangements | -7 | 20 |
Tax benefit realized from exercise of stock-based compensation arrangements | 3 | 17 |
Stock appreciation rights | ' | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' | ' |
Stock-based compensation expense (benefit) | -18 | 39 |
Performance share awards | ' | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' | ' |
Stock-based compensation expense (benefit) | -3 | 8 |
Market stock units | ' | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' | ' |
Stock-based compensation expense (benefit) | 3 | 4 |
Other stock-based awards | ' | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' | ' |
Stock-based compensation expense (benefit) | $0 | $1 |
StockBased_Compensation_StockB
Stock-Based Compensation Stock-Based Compensation, Stock Appreciation Rights (Details) (Stock appreciation rights, USD $) | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Stock appreciation rights | ' | ' | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' | ' | ' |
Awards granted (shares) | 0 | ' | ' |
Cash paid to settle awards | $4 | $18 | ' |
Exercised stock appreciation rights (shares) | 200,000 | 900,000 | ' |
Accrued stock appreciation rights | $54 | ' | $76 |
StockBased_Compensation_StockB1
Stock-Based Compensation Stock-Based Compensation, Performance Share Awards and Market Stock Units (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Performance share awards | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Awards granted (shares) | 200,000 |
Weighted average grant date fair value (dollars per share) | $53.89 |
Market stock units | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Awards granted (shares) | 400,000 |
Weighted average grant date fair value (dollars per share) | $59.06 |
Award requisite service period (years) | '3 years |
Award vesting period (years) | '3 years |
Market condition percentage (percent) | 50.00% |
Market stock units | Minimum | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Vesting percentages of stock based compensation arrangements (percent) | 50.00% |
Market stock units | Maximum | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Vesting percentages of stock based compensation arrangements (percent) | 200.00% |
Performance Conditions | Performance share awards | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Award vesting period (years) | '3 years |
Performance Conditions | Performance share awards | Minimum | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Vesting percentages of stock based compensation arrangements (percent) | 0.00% |
Performance Conditions | Performance share awards | Maximum | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Vesting percentages of stock based compensation arrangements (percent) | 200.00% |
Market Conditions | Performance share awards | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Award vesting period (years) | '3 years |
Market Conditions | Performance share awards | Minimum | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Vesting percentages of stock based compensation arrangements (percent) | 0.00% |
Market Conditions | Performance share awards | Maximum | ' |
Stock-Based Compensation Arrangement by Stock-based Payment Award | ' |
Vesting percentages of stock based compensation arrangements (percent) | 200.00% |
Operating_Segments_Details
Operating Segments (Details) | 3 Months Ended |
Mar. 31, 2014 | |
segments | |
Segment Reporting Information | ' |
Number of operating segments (segments) | 3 |
Foreign operations | 'Since we do not have significant operations in foreign countries, revenue generated in and long-lived assets located in foreign countries are not material to our operations. |
Refining | ' |
Segment Reporting Information | ' |
Number of refineries (refineries) | 6 |
Segment reporting description | 'We own and operate six petroleum refineries located in California, Washington, Alaska, North Dakota and Utah. These refineries manufacture gasoline and gasoline blendstocks, jet fuel, diesel fuel, residual fuel oil and other refined products. We sell these refined products, together with refined products purchased from third parties, at wholesale through terminal facilities and other locations. Our refining segment also sells refined products to unbranded marketers and opportunistically exports refined products to foreign markets. |
TLLP | ' |
Segment Reporting Information | ' |
Segment reporting description | 'TLLP’s assets and operations include certain crude oil gathering assets and crude oil and refined products terminalling and transportation assets acquired from Tesoro and other third parties. The historical results of operations of these assets have been retrospectively adjusted to conform to current presentation. Revenues from the TLLP segment are generated by charging fees for gathering crude oil and for terminalling, transporting and storing crude oil and refined products. |
Retail | ' |
Segment Reporting Information | ' |
Number of states with retail sites (states) | 17 |
Segment reporting description | 'Our retail segment sells gasoline, diesel fuel and convenience store items through company-operated retail stations and branded jobber/dealers in 17 states. |
Operating_Segments_Results_Det
Operating Segments, Results (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | $9,933 | $7,347 | ||
OPERATING INCOME | 238 | 193 | ||
Reconciliation of Operating Income from Segments to Consolidated | ' | ' | ||
Total Segment Operating Income | 264 | 298 | ||
Corporate and unallocated costs | -26 | [1] | -105 | [1] |
Segment Reporting Information, Income before Income Taxes | ' | ' | ||
Interest and financing costs, net | -77 | [2] | -30 | |
Other expense, net | -1 | 0 | ||
EARNINGS BEFORE INCOME TAXES | 160 | 163 | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | ' | ' | ||
Total Depreciation and Amortization Expense | 130 | 105 | ||
Total Capital Expenditures | 103 | 119 | ||
Segment Reporting Table Footnotes | ' | ' | ||
Federal and state motor fuel taxes on sales by our retail segment | 141 | 129 | ||
Stock-based compensation expense (benefit) | -18 | 52 | ||
Debt redemption charges | -31 | 0 | ||
Refining | ' | ' | ||
Segment Reporting Information | ' | ' | ||
OPERATING INCOME | 183 | 259 | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | ' | ' | ||
Total Depreciation and Amortization Expense | 101 | 88 | ||
Total Capital Expenditures | 68 | 99 | ||
Refining | Refined products | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | 9,500 | 6,744 | ||
Refining | Crude oil resales and other | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | 272 | 469 | ||
TLLP | ' | ' | ||
Segment Reporting Information | ' | ' | ||
OPERATING INCOME | 62 | [3] | 24 | [3] |
Reconciliation of Operating Income from Segments to Consolidated | ' | ' | ||
Corporate and unallocated costs | 3 | 4 | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | ' | ' | ||
Total Depreciation and Amortization Expense | 16 | 4 | ||
Total Capital Expenditures | 26 | 10 | ||
TLLP | Crude Oil Gathering | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | 25 | 22 | ||
TLLP | Terminalling and transportation | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | 100 | 30 | ||
Retail | ' | ' | ||
Segment Reporting Information | ' | ' | ||
OPERATING INCOME | 19 | 15 | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | ' | ' | ||
Total Depreciation and Amortization Expense | 10 | 8 | ||
Total Capital Expenditures | 5 | 7 | ||
Retail | Fuel | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | 3,024 | [4] | 1,507 | [4] |
Retail | Merchandise and other | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | 61 | 48 | ||
Intersegment sales | ' | ' | ||
Segment Reporting Information | ' | ' | ||
Total Revenues | -3,049 | -1,473 | ||
Corporate | ' | ' | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | ' | ' | ||
Total Depreciation and Amortization Expense | 3 | 5 | ||
Total Capital Expenditures | 4 | 3 | ||
Segment Reporting Table Footnotes | ' | ' | ||
Stock-based compensation expense (benefit) | -18 | 49 | ||
9.750% Senior Notes Due 2019 | ' | ' | ||
Segment Reporting Table Footnotes | ' | ' | ||
Debt redemption charges | $31 | ' | ||
[1] | Includes stock-based compensation benefit of $18 million and expense of $49 million for the three months ended March 31, 2014 and 2013, respectively. The significant impact to stock-based compensation expense during the three months ended March 31, 2014 compared to the prior periods is primarily a result of changes in Tesoro’s stock price. | |||
[2] | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 2019 Notes during the three months ended March 31, 2014. | |||
[3] | We present TLLP’s segment operating income net of general and administrative expenses totaling $3 million and $4 million representing TLLP’s corporate costs for the three months ended March 31, 2014 and 2013, respectively, that are not allocated to TLLP’s operating segments. | |||
[4] | Federal and state motor fuel taxes on sales by our retail segment are included in both revenues and cost of sales in our condensed statements of consolidated operations. These taxes totaled $141 million and $129 million for the three months ended March 31, 2014 and 2013, respectively. |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Information, Narrative (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Guarantor Information | ' | ' |
Percentage ownership of Tesoro Logistics LP | 36.00% | 36.00% |
Percentage ownership of subsidiary guarantors | 100.00% | ' |
4.250% Senior Notes Due 2017 | ' | ' |
Guarantor Information | ' | ' |
Debt instrument interest rate | 4.25% | ' |
Debt Instrument, Maturity Date | 1-Oct-17 | ' |
5.375% Senior Notes Due 2022 | ' | ' |
Guarantor Information | ' | ' |
Debt instrument interest rate | 5.38% | ' |
Debt Instrument, Maturity Date | 1-Oct-22 | ' |
5.125% Senior Notes Due 2024 | ' | ' |
Guarantor Information | ' | ' |
Debt instrument interest rate | 5.13% | ' |
Debt Instrument, Maturity Date | 1-Apr-24 | ' |
Condensed_Consolidating_Financ3
Condensed Consolidating Financial Information, Statement of Operations (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Condensed Financial Statements, captions | ' | ' | ||
REVENUES | $9,933 | $7,347 | ||
COSTS AND EXPENSES: | ' | ' | ||
Cost of sales | 8,948 | 6,563 | ||
Operating, selling, general and administrative expenses | 622 | 479 | ||
Depreciation and amortization expense | 130 | 105 | ||
(Gain) loss on asset disposals and impairments | -5 | 7 | ||
OPERATING INCOME | 238 | 193 | ||
Equity in earnings (loss) of subsidiaries | 0 | 0 | ||
Interest and financing costs, net | -77 | [1] | -30 | |
Other income (expense), net | -1 | 0 | ||
EARNINGS BEFORE INCOME TAXES | 160 | 163 | ||
Income tax expense (benefit) | 56 | 58 | ||
NET EARNINGS FROM CONTINUING OPERATIONS | 104 | 105 | ||
Loss from discontinued operations, net of tax | -1 | -1 | ||
NET EARNINGS | 103 | 104 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 25 | 11 | ||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | 78 | 93 | ||
Parent | ' | ' | ||
Condensed Financial Statements, captions | ' | ' | ||
REVENUES | 0 | 0 | ||
COSTS AND EXPENSES: | ' | ' | ||
Cost of sales | 0 | 0 | ||
Operating, selling, general and administrative expenses | 1 | 1 | ||
Depreciation and amortization expense | 0 | 0 | ||
(Gain) loss on asset disposals and impairments | 0 | 0 | ||
OPERATING INCOME | -1 | -1 | ||
Equity in earnings (loss) of subsidiaries | 86 | 96 | ||
Interest and financing costs, net | -8 | -2 | ||
Other income (expense), net | 0 | 0 | ||
EARNINGS BEFORE INCOME TAXES | 77 | 93 | ||
Income tax expense (benefit) | -1 | [2] | 0 | [3] |
NET EARNINGS FROM CONTINUING OPERATIONS | 78 | 93 | ||
Loss from discontinued operations, net of tax | 0 | 0 | ||
NET EARNINGS | 78 | 93 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 0 | 0 | ||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | 78 | 93 | ||
Guarantor Subsidiaries | ' | ' | ||
Condensed Financial Statements, captions | ' | ' | ||
REVENUES | 11,564 | 9,115 | ||
COSTS AND EXPENSES: | ' | ' | ||
Cost of sales | 10,664 | 8,397 | ||
Operating, selling, general and administrative expenses | 612 | 450 | ||
Depreciation and amortization expense | 113 | 100 | ||
(Gain) loss on asset disposals and impairments | -1 | 4 | ||
OPERATING INCOME | 176 | 164 | ||
Equity in earnings (loss) of subsidiaries | 12 | -6 | ||
Interest and financing costs, net | -59 | -25 | ||
Other income (expense), net | -1 | 0 | ||
EARNINGS BEFORE INCOME TAXES | 128 | 133 | ||
Income tax expense (benefit) | 51 | [2] | 55 | [3] |
NET EARNINGS FROM CONTINUING OPERATIONS | 77 | 78 | ||
Loss from discontinued operations, net of tax | -1 | -1 | ||
NET EARNINGS | 76 | 77 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 0 | 0 | ||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | 76 | 77 | ||
Non- Guarantors | ' | ' | ||
Condensed Financial Statements, captions | ' | ' | ||
REVENUES | 1,610 | 822 | ||
COSTS AND EXPENSES: | ' | ' | ||
Cost of sales | 1,476 | 756 | ||
Operating, selling, general and administrative expenses | 58 | 28 | ||
Depreciation and amortization expense | 17 | 5 | ||
(Gain) loss on asset disposals and impairments | -4 | 3 | ||
OPERATING INCOME | 63 | 30 | ||
Equity in earnings (loss) of subsidiaries | 100 | 44 | ||
Interest and financing costs, net | -18 | -5 | ||
Other income (expense), net | 8 | 2 | ||
EARNINGS BEFORE INCOME TAXES | 153 | 71 | ||
Income tax expense (benefit) | 6 | [2] | 3 | [3] |
NET EARNINGS FROM CONTINUING OPERATIONS | 147 | 68 | ||
Loss from discontinued operations, net of tax | 0 | 0 | ||
NET EARNINGS | 147 | 68 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 25 | 11 | ||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | 122 | 57 | ||
Eliminations | ' | ' | ||
Condensed Financial Statements, captions | ' | ' | ||
REVENUES | -3,241 | -2,590 | ||
COSTS AND EXPENSES: | ' | ' | ||
Cost of sales | -3,192 | -2,590 | ||
Operating, selling, general and administrative expenses | -49 | 0 | ||
Depreciation and amortization expense | 0 | 0 | ||
(Gain) loss on asset disposals and impairments | 0 | 0 | ||
OPERATING INCOME | 0 | 0 | ||
Equity in earnings (loss) of subsidiaries | -198 | -134 | ||
Interest and financing costs, net | 8 | 2 | ||
Other income (expense), net | -8 | -2 | ||
EARNINGS BEFORE INCOME TAXES | -198 | -134 | ||
Income tax expense (benefit) | 0 | [2] | 0 | [3] |
NET EARNINGS FROM CONTINUING OPERATIONS | -198 | -134 | ||
Loss from discontinued operations, net of tax | 0 | 0 | ||
NET EARNINGS | -198 | -134 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 0 | 0 | ||
NET EARNINGS ATTRIBUTABLE TO TESORO CORPORATION | ($198) | ($134) | ||
[1] | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 2019 Notes during the three months ended March 31, 2014. | |||
[2] | 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. | |||
[3] | The income tax expense 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. |
Condensed_Consolidating_Financ4
Condensed Consolidating Financial Information, Balance Sheet (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||||
Current Assets: | ' | ' | ' | ' |
Cash and cash equivalents | $798 | $1,238 | $1,972 | $1,639 |
Receivables, less allowance for doubtful accounts | 1,696 | 1,313 | ' | ' |
Inventories | 2,777 | 2,565 | ' | ' |
Prepayments and other current assets | 199 | 210 | ' | ' |
Total Current Assets | 5,470 | 5,326 | ' | ' |
Net Property, Plant and Equipment | 6,895 | 6,875 | ' | ' |
Investment in Subsidiaries | 0 | 0 | ' | ' |
Long-Term Receivables from Affiliates | 0 | 0 | ' | ' |
Long-Term Intercompany Note Receivable | 0 | 0 | ' | ' |
Other Noncurrent Assets, Net | 1,203 | 1,188 | ' | ' |
Total Assets | 13,568 | 13,389 | ' | ' |
Current Liabilities: | ' | ' | ' | ' |
Accounts payable | 2,915 | 2,596 | ' | ' |
Other current liabilities | 721 | 812 | ' | ' |
Total Current Liabilities | 3,636 | 3,408 | ' | ' |
Long-Term Payables to Affiliates | 0 | 0 | ' | ' |
Deferred Income Taxes | 1,015 | 1,018 | ' | ' |
Other Noncurrent Liabilities | 653 | 655 | ' | ' |
Debt | 2,829 | 2,823 | ' | ' |
Long-Term Intercompany Note Payable | 0 | 0 | ' | ' |
Equity-Tesoro Corporation | 4,248 | 4,302 | ' | ' |
Equity-Noncontrolling Interest | 1,187 | 1,183 | ' | ' |
Total Liabilities and Equity | 13,568 | 13,389 | ' | ' |
Parent | ' | ' | ' | ' |
Current Assets: | ' | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Receivables, less allowance for doubtful accounts | 0 | 12 | ' | ' |
Inventories | 0 | 0 | ' | ' |
Prepayments and other current assets | 91 | 109 | ' | ' |
Total Current Assets | 91 | 121 | ' | ' |
Net Property, Plant and Equipment | 0 | 0 | ' | ' |
Investment in Subsidiaries | 5,323 | 5,242 | ' | ' |
Long-Term Receivables from Affiliates | 2,982 | 3,080 | ' | ' |
Long-Term Intercompany Note Receivable | 0 | 0 | ' | ' |
Other Noncurrent Assets, Net | 55 | 58 | ' | ' |
Total Assets | 8,451 | 8,501 | ' | ' |
Current Liabilities: | ' | ' | ' | ' |
Accounts payable | 1 | 1 | ' | ' |
Other current liabilities | 116 | 112 | ' | ' |
Total Current Liabilities | 117 | 113 | ' | ' |
Long-Term Payables to Affiliates | 0 | 0 | ' | ' |
Deferred Income Taxes | 1,015 | 1,018 | ' | ' |
Other Noncurrent Liabilities | 315 | 320 | ' | ' |
Debt | 1,622 | 1,614 | ' | ' |
Long-Term Intercompany Note Payable | 1,134 | 1,134 | ' | ' |
Equity-Tesoro Corporation | 4,248 | 4,302 | ' | ' |
Equity-Noncontrolling Interest | 0 | 0 | ' | ' |
Total Liabilities and Equity | 8,451 | 8,501 | ' | ' |
Guarantor Subsidiaries | ' | ' | ' | ' |
Current Assets: | ' | ' | ' | ' |
Cash and cash equivalents | 726 | 1,161 | 1,517 | 1,244 |
Receivables, less allowance for doubtful accounts | 1,326 | 1,182 | ' | ' |
Inventories | 2,106 | 2,041 | ' | ' |
Prepayments and other current assets | 95 | 89 | ' | ' |
Total Current Assets | 4,253 | 4,473 | ' | ' |
Net Property, Plant and Equipment | 5,438 | 5,428 | ' | ' |
Investment in Subsidiaries | 36 | 51 | ' | ' |
Long-Term Receivables from Affiliates | 0 | 0 | ' | ' |
Long-Term Intercompany Note Receivable | 0 | 0 | ' | ' |
Other Noncurrent Assets, Net | 1,110 | 1,092 | ' | ' |
Total Assets | 10,837 | 11,044 | ' | ' |
Current Liabilities: | ' | ' | ' | ' |
Accounts payable | 2,411 | 2,110 | ' | ' |
Other current liabilities | 563 | 679 | ' | ' |
Total Current Liabilities | 2,974 | 2,789 | ' | ' |
Long-Term Payables to Affiliates | 2,469 | 2,939 | ' | ' |
Deferred Income Taxes | 0 | 0 | ' | ' |
Other Noncurrent Liabilities | 330 | 327 | ' | ' |
Debt | 43 | 45 | ' | ' |
Long-Term Intercompany Note Payable | 0 | 0 | ' | ' |
Equity-Tesoro Corporation | 5,021 | 4,944 | ' | ' |
Equity-Noncontrolling Interest | 0 | 0 | ' | ' |
Total Liabilities and Equity | 10,837 | 11,044 | ' | ' |
Non- Guarantors | ' | ' | ' | ' |
Current Assets: | ' | ' | ' | ' |
Cash and cash equivalents | 72 | 77 | 455 | 395 |
Receivables, less allowance for doubtful accounts | 370 | 119 | ' | ' |
Inventories | 671 | 524 | ' | ' |
Prepayments and other current assets | 69 | 57 | ' | ' |
Total Current Assets | 1,182 | 777 | ' | ' |
Net Property, Plant and Equipment | 1,457 | 1,447 | ' | ' |
Investment in Subsidiaries | 1,615 | 1,520 | ' | ' |
Long-Term Receivables from Affiliates | 0 | 0 | ' | ' |
Long-Term Intercompany Note Receivable | 1,134 | 1,134 | ' | ' |
Other Noncurrent Assets, Net | 38 | 38 | ' | ' |
Total Assets | 5,426 | 4,916 | ' | ' |
Current Liabilities: | ' | ' | ' | ' |
Accounts payable | 503 | 485 | ' | ' |
Other current liabilities | 98 | 66 | ' | ' |
Total Current Liabilities | 601 | 551 | ' | ' |
Long-Term Payables to Affiliates | 513 | 141 | ' | ' |
Deferred Income Taxes | 0 | 0 | ' | ' |
Other Noncurrent Liabilities | 8 | 8 | ' | ' |
Debt | 1,164 | 1,164 | ' | ' |
Long-Term Intercompany Note Payable | 0 | 0 | ' | ' |
Equity-Tesoro Corporation | 1,953 | 1,869 | ' | ' |
Equity-Noncontrolling Interest | 1,187 | 1,183 | ' | ' |
Total Liabilities and Equity | 5,426 | 4,916 | ' | ' |
Eliminations | ' | ' | ' | ' |
Current Assets: | ' | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Receivables, less allowance for doubtful accounts | 0 | 0 | ' | ' |
Inventories | 0 | 0 | ' | ' |
Prepayments and other current assets | -56 | -45 | ' | ' |
Total Current Assets | -56 | -45 | ' | ' |
Net Property, Plant and Equipment | 0 | 0 | ' | ' |
Investment in Subsidiaries | -6,974 | -6,813 | ' | ' |
Long-Term Receivables from Affiliates | -2,982 | -3,080 | ' | ' |
Long-Term Intercompany Note Receivable | -1,134 | -1,134 | ' | ' |
Other Noncurrent Assets, Net | 0 | 0 | ' | ' |
Total Assets | -11,146 | -11,072 | ' | ' |
Current Liabilities: | ' | ' | ' | ' |
Accounts payable | 0 | 0 | ' | ' |
Other current liabilities | -56 | -45 | ' | ' |
Total Current Liabilities | -56 | -45 | ' | ' |
Long-Term Payables to Affiliates | -2,982 | -3,080 | ' | ' |
Deferred Income Taxes | 0 | 0 | ' | ' |
Other Noncurrent Liabilities | 0 | 0 | ' | ' |
Debt | 0 | 0 | ' | ' |
Long-Term Intercompany Note Payable | -1,134 | -1,134 | ' | ' |
Equity-Tesoro Corporation | -6,974 | -6,813 | ' | ' |
Equity-Noncontrolling Interest | 0 | 0 | ' | ' |
Total Liabilities and Equity | ($11,146) | ($11,072) | ' | ' |
Condensed_Consolidating_Financ5
Condensed Consolidating Financial Information, Cash Flows (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ' | ' |
Net cash from (used in) operating activities | ($150) | $247 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ' | ' |
Capital expenditures | -119 | -125 |
Advanced payments made for Los Angeles Acquisition | ' | -27 |
Intercompany notes, net | 0 | 0 |
Other investing activities | 10 | 2 |
Net cash used in investing activities | -109 | -150 |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ' | ' |
Proceeds from debt offering | 300 | 0 |
Repayments of debt | -301 | 0 |
Dividend payments | -33 | -28 |
Net proceeds from issuance of Tesoro Logistics LP common units | 0 | 392 |
Distributions to noncontrolling interest | -20 | -14 |
Purchases of common stock | -100 | -135 |
Premium paid on notes redemption | -19 | 0 |
Net intercompany borrowings (repayments) | 0 | 0 |
Borrowings from general partner | ' | 0 |
Distributions to TLLP unitholders and general partner | 0 | 0 |
Other financing activities | -8 | 21 |
Net cash from (used in) financing activities | -181 | 236 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -440 | 333 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,238 | 1,639 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 798 | 1,972 |
Parent | ' | ' |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ' | ' |
Net cash from (used in) operating activities | -17 | 0 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ' | ' |
Capital expenditures | 0 | 0 |
Advanced payments made for Los Angeles Acquisition | ' | 0 |
Intercompany notes, net | 168 | -91 |
Other investing activities | 0 | 0 |
Net cash used in investing activities | 168 | -91 |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ' | ' |
Proceeds from debt offering | 300 | ' |
Repayments of debt | -300 | ' |
Dividend payments | -33 | -28 |
Net proceeds from issuance of Tesoro Logistics LP common units | ' | 0 |
Distributions to noncontrolling interest | 0 | 0 |
Purchases of common stock | -100 | -135 |
Premium paid on notes redemption | -19 | ' |
Net intercompany borrowings (repayments) | 0 | 0 |
Borrowings from general partner | ' | 230 |
Distributions to TLLP unitholders and general partner | 4 | 3 |
Other financing activities | -3 | 21 |
Net cash from (used in) financing activities | -151 | 91 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 0 | 0 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 0 | 0 |
Guarantor Subsidiaries | ' | ' |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ' | ' |
Net cash from (used in) operating activities | 154 | 135 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ' | ' |
Capital expenditures | -92 | -115 |
Advanced payments made for Los Angeles Acquisition | ' | -27 |
Intercompany notes, net | 0 | 0 |
Other investing activities | 0 | 0 |
Net cash used in investing activities | -92 | -142 |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ' | ' |
Proceeds from debt offering | 0 | ' |
Repayments of debt | -1 | ' |
Dividend payments | 0 | 0 |
Net proceeds from issuance of Tesoro Logistics LP common units | ' | 0 |
Distributions to noncontrolling interest | 0 | 0 |
Purchases of common stock | 0 | 0 |
Premium paid on notes redemption | 0 | ' |
Net intercompany borrowings (repayments) | -501 | 273 |
Borrowings from general partner | ' | 0 |
Distributions to TLLP unitholders and general partner | 5 | 4 |
Other financing activities | 0 | 3 |
Net cash from (used in) financing activities | -497 | 280 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -435 | 273 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,161 | 1,244 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 726 | 1,517 |
Non- Guarantors | ' | ' |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ' | ' |
Net cash from (used in) operating activities | -287 | 112 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ' | ' |
Capital expenditures | -27 | -10 |
Advanced payments made for Los Angeles Acquisition | ' | 0 |
Intercompany notes, net | 0 | 0 |
Other investing activities | 10 | 2 |
Net cash used in investing activities | -17 | -8 |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ' | ' |
Proceeds from debt offering | 0 | ' |
Repayments of debt | 0 | ' |
Dividend payments | 0 | 0 |
Net proceeds from issuance of Tesoro Logistics LP common units | ' | 392 |
Distributions to noncontrolling interest | -20 | -14 |
Purchases of common stock | 0 | 0 |
Premium paid on notes redemption | 0 | ' |
Net intercompany borrowings (repayments) | 333 | -182 |
Borrowings from general partner | ' | -230 |
Distributions to TLLP unitholders and general partner | -9 | -7 |
Other financing activities | -5 | -3 |
Net cash from (used in) financing activities | 299 | -44 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -5 | 60 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 77 | 395 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 72 | 455 |
Eliminations | ' | ' |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ' | ' |
Net cash from (used in) operating activities | 0 | 0 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ' | ' |
Capital expenditures | 0 | 0 |
Advanced payments made for Los Angeles Acquisition | ' | 0 |
Intercompany notes, net | -168 | 91 |
Other investing activities | 0 | 0 |
Net cash used in investing activities | -168 | 91 |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ' | ' |
Proceeds from debt offering | 0 | ' |
Repayments of debt | 0 | ' |
Dividend payments | 0 | 0 |
Net proceeds from issuance of Tesoro Logistics LP common units | ' | 0 |
Distributions to noncontrolling interest | 0 | 0 |
Purchases of common stock | 0 | 0 |
Premium paid on notes redemption | 0 | ' |
Net intercompany borrowings (repayments) | 168 | -91 |
Borrowings from general partner | ' | 0 |
Distributions to TLLP unitholders and general partner | 0 | 0 |
Other financing activities | 0 | 0 |
Net cash from (used in) financing activities | 168 | -91 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 0 | 0 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $0 | $0 |