Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TESORO CORP /NEW/ | |
Entity Central Index Key | 50104 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | -19 | |
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 | 125,831,891 |
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, 2015 | Mar. 31, 2014 | ||
Income Statement [Abstract] | ||||
Revenues (a) | $6,463 | $9,933 | ||
Costs and Expenses: | ||||
Cost of sales (a) | 5,340 | 8,948 | ||
Operating expenses | 509 | 591 | ||
Selling, general and administrative expenses | 91 | 31 | ||
Depreciation and amortization expense | 179 | 130 | ||
(Gain) loss on asset disposals and impairments | 4 | -5 | ||
Operating Income | 340 | 238 | ||
Interest and financing costs, net | -55 | [1] | -77 | [1] |
Other expense, net | -1 | -1 | ||
Earnings Before Income Taxes | 284 | 160 | ||
Income tax expense | 96 | 56 | ||
Net Earnings from Continuing Operations | 188 | 104 | ||
Loss from discontinued operations, net of tax | 0 | -1 | ||
Net Earnings | 188 | 103 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 43 | 25 | ||
Net Earnings Attributable to Tesoro Corporation | 145 | 78 | ||
Net Earnings (Loss) Attributable to Tesoro Corporation | ||||
Continuing operations | 145 | 79 | ||
Discontinued operations | 0 | -1 | ||
Total | 145 | 78 | ||
Net Earnings (Loss) per Share - Basic: | ||||
Continuing operations | $1.17 | $0.60 | ||
Discontinued operations | $0 | ($0.01) | ||
Total | $1.17 | $0.59 | ||
Weighted average common shares outstanding - Basic | 125.2 | 131.3 | ||
Net Earnings (Loss) per Share - Diluted: | ||||
Continuing operations | $1.15 | $0.59 | ||
Discontinued operations | $0 | ($0.01) | ||
Total | $1.15 | $0.58 | ||
Weighted average common shares outstanding - Diluted | 126.9 | 133.8 | ||
Dividends per Share | $0.43 | $0.25 | ||
Supplemental Information: | ||||
(a) Includes excise taxes collected by our retail segment | $140 | $141 | ||
[1] | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 5.50% Senior Notes due 2019 during the three months ended March 31, 2014. |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Millions, unless otherwise specified | ||||
Current Assets | ||||
Cash and cash equivalents | $459 | $1,000 | ||
Receivables, net of allowance for doubtful accounts | 1,367 | 1,435 | ||
Inventories | 2,532 | 2,439 | ||
Prepayments and other current assets | 223 | 200 | ||
Total Current Assets | 4,581 | 5,074 | ||
Net Property, Plant and Equipment | 9,180 | 9,045 | ||
OTHER NONCURRENT ASSETS | ||||
Acquired intangibles, net | 1,211 | 1,222 | ||
Other, net | 1,311 | 1,150 | ||
Total Other Noncurrent Assets, Net | 2,522 | 2,372 | ||
Total Assets | 16,283 | 16,491 | ||
Current Liabilities | ||||
Accounts payable | 2,141 | 2,470 | ||
Other current liabilities | 864 | 996 | ||
Total Current Liabilities | 3,005 | 3,466 | ||
Deferred Income Taxes | 1,121 | 1,098 | ||
Other Noncurrent Liabilities | 941 | 790 | ||
Debt, net of unamortized issuance costs | 4,138 | 4,161 | ||
Commitments and Contingencies (Note 10) | ||||
Tesoro Corporation Stockholders’ Equity | ||||
Common stock, par value $0.162/3; authorized 200,000,000 shares; 158,146,319 shares issued (156,627,604 in 2014) | 26 | 26 | ||
Additional paid-in capital | 1,309 | 1,255 | ||
Retained earnings | 4,733 | 4,642 | ||
Treasury stock, 32,394,535 common shares (31,677,195 in 2014), at cost | -1,378 | -1,320 | ||
Accumulated other comprehensive loss | -149 | -149 | ||
Total Tesoro Corporation Stockholders’ Equity | 4,541 | 4,454 | ||
Noncontrolling Interest | 2,537 | 2,522 | ||
Total Equity | 7,078 | [1] | 6,976 | [1] |
Total Liabilities and Equity | $16,283 | $16,491 | ||
[1] | 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, 2015 and December 31, 2014. |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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) | 158,146,319 | 156,627,604 |
Treasury stock, common shares (shares) | 32,394,535 | 31,667,195 |
Current Assets | ||
Cash and cash equivalents | $459 | $1,000 |
OTHER NONCURRENT ASSETS | ||
Acquired intangibles, net | 1,211 | 1,222 |
Other, net | 1,311 | 1,150 |
Property, Plant and Equipment, Net | ||
Net Property, Plant and Equipment | 9,180 | 9,045 |
Debt | ||
Debt, net of unamortized issuance costs | 4,138 | 4,161 |
Tesoro Logistics LP | ||
Current Assets | ||
Cash and cash equivalents | 16 | 19 |
OTHER NONCURRENT ASSETS | ||
Acquired intangibles, net | 966 | 973 |
Other, net | 258 | 251 |
Property, Plant and Equipment, Net | ||
Net Property, Plant and Equipment | 3,335 | 3,306 |
Debt | ||
Debt, net of unamortized issuance costs | $2,520 | $2,544 |
Condensed_Statements_of_Consol1
Condensed Statements of Consolidated Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flows From (Used In) Operating Activities | ||
Net earnings | $188 | $103 |
Adjustments to reconcile net earnings to net cash from (used in) operating activities: | ||
Depreciation and amortization expense | 179 | 130 |
Debt redemption charges | 0 | 31 |
Stock-based compensation expense (benefit) | 28 | -18 |
Deferred charges | -83 | -60 |
Other non-cash operating activities | 10 | 7 |
Changes in current assets and current liabilities | -470 | -343 |
Net cash used in operating activities | -148 | -150 |
Cash Flows From (Used In) Investing Activities | ||
Capital expenditures | -271 | -119 |
Other investing activities | -2 | 10 |
Net cash used in investing activities | -273 | -109 |
Cash Flows From (Used In) Financing Activities | ||
Borrowings under revolving credit agreements | 99 | 0 |
Proceeds from debt offering | 0 | 300 |
Repayments on revolving credit agreements | -124 | 0 |
Repayments of debt | 0 | -301 |
Dividend payments | -54 | -33 |
Net proceeds from issuance of Tesoro Logistics LP common units | 24 | 0 |
Distributions to noncontrolling interest | -44 | -20 |
Purchases of common stock | -19 | -100 |
Taxes paid related to net share settlement of equity awards | -39 | 0 |
Premium paid on notes redemption | 0 | -19 |
Other financing activities | 37 | -8 |
Net cash used in financing activities | -120 | -181 |
Decrease in Cash and Cash Equivalents | -541 | -440 |
Cash and Cash Equivalents, Beginning of Period | 1,000 | 1,238 |
Cash and Cash Equivalents, End of Period | $459 | $798 |
Basis_of_Presentation_Notes
Basis of Presentation (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
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, including its 58% interest in QEP Midstream Partners, LP (“QEPM”), a publicly traded limited partnership, and its 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, 2014 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, 2014. | |
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, 2015 and 2014, consolidated statements of comprehensive income have been omitted. | |
Our condensed 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 56% and 88% of TLLP’s total revenues for the three months ended March 31, 2015 and 2014, respectively. In the event TLLP incurs a loss, our operating results will reflect TLLP’s loss, net of intercompany eliminations. See Note 2 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 Hawaii refinery, retail stations and associated logistics assets (the “Hawaii 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, 2015 and 2014. There were no revenues for either the three months ended March 31, 2015 or 2014. We recorded losses, before and after tax of $1 million for the three months ended March 31, 2014 related to the Hawaii Business. There were no recorded losses, before or after tax, for the three months ended March 31, 2015. There were no cash flows for either the three months ended March 31, 2015 or 2014. Unless otherwise noted, the information in the notes to the condensed consolidated financial statements relates to our continuing operations. | |
New Accounting Standards and Disclosures | |
Revenue Recognition. The Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) in May 2014 providing accounting guidance for all revenue arising from contracts to provide goods or services to customers. The requirements from the new ASU are effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. The FASB has proposed a one-year deferral of the effective date; however, this proposal has not been finalized. The standard allows for either full retrospective adoption or modified retrospective adoption. At this time, we are evaluating the guidance to determine the method of adoption and the impact of this ASU on our financial statements and related disclosures. | |
Debt Issuance Costs. In April 2015, the FASB issued ASU 2015-03 which will simplify the presentation of debt issuance costs. Under the new ASU, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. As a result, our balance sheet will reflect a reclassification of unamortized debt issuance costs from other noncurrent assets to debt. This ASU is effective for interim and annual periods beginning after December 15, 2015, and early adoption is permitted. We have adopted this standard effective as of March 31, 2015 and applied the changes retrospectively to the prior periods presented. Adoption of this standard has resulted in the reclassification of $93 million from other noncurrent assets to debt on the balance sheet at December 31, 2014. Unamortized debt issuance costs of $89 million are recorded as a reduction to debt on the balance sheet at March 31, 2015. |
Tesoro_Logistics_LP_Notes
Tesoro Logistics LP (Notes) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
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 are used to gather crude oil and natural gas, process natural gas, and distribute, transport and store crude oil and refined products. TLLP’s gathering assets consist of crude oil gathering systems in the Williston Basin located in North Dakota and natural gas gathering systems in the Green River and Uinta Basins located in Wyoming and Utah. Its processing assets include four gas processing complexes and a fractionation facility in or around the Green River and Uinta Basins. Its terminalling and transportation assets consist of: | ||||
• | 24 crude oil and refined products terminals and storage facilities in the western and midwestern United States; | |||
• | four marine terminals in California; | |||
• | 140 miles of pipelines, which transport products and crude oil from Tesoro’s refineries to nearby facilities in Salt Lake City, Utah and Los Angeles, California; | |||
• | the Northwest Products Pipeline, which includes a regulated common carrier products pipeline running from Salt Lake City, Utah to Spokane, Washington and a jet fuel pipeline to the Salt Lake City International Airport; | |||
• | a rail-car unloading facility in Washington; | |||
• | a petroleum coke handling and storage facility in Los Angeles, California; and | |||
• | a regulated common carrier refined products pipeline system connecting Tesoro’s Kenai refinery terminals to terminals in Anchorage, Alaska. | |||
Tesoro Logistics GP, LLC (“TLGP”), a wholly-owned subsidiary, serves as the general partner of TLLP. We held an approximate 36% interest in TLLP at both March 31, 2015 and December 31, 2014, including a 2% general partner interest and all of the incentive distribution rights. This interest at March 31, 2015 includes 28,181,748 common units and 1,631,448 general partner units. | ||||
TLLP acquired assets related to, and entities engaged in, natural gas gathering, transportation and processing in Wyoming, Colorado, Utah, and North Dakota (the “Rockies Natural Gas Business”) through its acquisition of QEP Field Services, LLC (“QEPFS”) from QEP Resources, Inc. on December 2, 2014 for $2.5 billion. QEPFS holds an approximate 56% limited partner interest in QEPM, consisting of 3,701,750 common units and 26,705,000 subordinated units, and 100% of QEPM’s general partner, QEP Midstream Partners GP, LLC (“QEPM GP”), which itself holds a 2% general partner interest and all of the incentive distribution rights in QEPM. All intercompany transactions with TLLP and QEPM are eliminated upon consolidation. | ||||
On April 6, 2015, TLLP entered into an Agreement and Plan of Merger (the “Merger Agreement”) with TLGP, QEPFS, TLLP Merger Sub LLC (“Merger Sub”), QEPM, and QEPM GP. Subject to the satisfaction or waiver of certain conditions in the Merger Agreement, upon the later of the filing with the Secretary of State of the State of Delaware of a certificate of merger or the later date and time set forth in such certificate, Merger Sub will merge with and into QEPM, with QEPM surviving the merger as a wholly owned subsidiary of TLLP (the “Merger”). Following the Merger, QEPM GP will remain the general partner of QEPM, and all outstanding common units representing limited partnership interests in QEPM (the “QEPM Common Units”) other than QEPM Common Units held by QEPFS will be converted into the right to receive 0.3088 common units representing limited partnership interests in TLLP (the “TLLP Common Units”). No fractional TLLP Common Units will be issued in the Merger, and holders of QEPM Common Units other than QEPFS will instead receive cash in lieu of fractional TLLP Common Units, if any. | ||||
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. | ||||
TLLP’s allocation of the Rockies Natural Gas Business acquisition’s $2.5 billion purchase price remains preliminary as of March 31, 2015. During the three months ended March 31, 2015, the original purchase price was increased by $7 million for adjustments in net working capital primarily for changes related to accounts receivable as well as a change related to goodwill. Finalization of the purchase price allocation is pending and adjustments can be made through the end of TLLP’s measurement period, which is not to exceed one year from the acquisition date. The table below reflects the preliminary acquisition date purchase price allocation as of March 31, 2015 (in millions): | ||||
Cash | $ | 31 | ||
Accounts receivable | 120 | |||
Prepayments and other | 7 | |||
Property, plant and equipment | 1,735 | |||
Acquired intangibles | 976 | |||
Other noncurrent assets (a) | 239 | |||
Accounts payable | (81 | ) | ||
Other current liabilities | (47 | ) | ||
Other noncurrent liabilities | (31 | ) | ||
Noncontrolling interest | (432 | ) | ||
Total purchase price | $ | 2,517 | ||
____________________ | ||||
(a) | Other noncurrent assets include $159 million of goodwill. | |||
During the three months ended March 31, 2015, TLLP incurred transaction and integration costs of $3 million directly attributable to the Rockies Natural Gas Business acquisition. These costs are included in selling, general and administrative expenses in our condensed statements of consolidated operations. |
Earnings_Per_Share_Notes
Earnings Per Share (Notes) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
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, | |||||
2015 | 2014 | ||||
Weighted average common shares outstanding | 125.2 | 131.3 | |||
Common stock equivalents | 1.7 | 2.5 | |||
Total diluted shares | 126.9 | 133.8 | |||
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 0.3 million and 0.4 million for the three months ended March 31, 2015 and 2014, respectively. |
Inventories_Notes
Inventories (Notes) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
INVENTORIES | INVENTORIES | |||||||
Components of inventories were as follows (in millions): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Domestic crude oil and refined products | $ | 2,219 | $ | 1,930 | ||||
Foreign subsidiary crude oil | 134 | 351 | ||||||
Other inventories | 179 | 158 | ||||||
Total Inventories | $ | 2,532 | $ | 2,439 | ||||
The total carrying value of our crude oil and refined product inventories was less than replacement cost by approximately$318 million at March 31, 2015. Due to the declining crude oil and refined product pricing environment at the end of 2014, we recorded additional expense to cost of sales for a lower of cost or market adjustment of $42 million at December 31, 2014 for our crude oil, refined products, oxygenates and by-product inventories. This adjustment was reversed as the inventories associated with the adjustment at the end of 2014 were sold or used during the three months ended March 31, 2015. |
Property_Plant_and_Equipment_N
Property, Plant and Equipment (Notes) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, | |||||||
2015 | 2014 | |||||||
Refining | $ | 7,171 | $ | 6,994 | ||||
TLLP | 3,617 | 3,551 | ||||||
Retail | 835 | 834 | ||||||
Corporate | 256 | 254 | ||||||
Property, plant and equipment, at cost | 11,879 | 11,633 | ||||||
Accumulated depreciation | (2,699 | ) | (2,588 | ) | ||||
Net property, plant and equipment | $ | 9,180 | $ | 9,045 | ||||
We capitalize interest as part of the cost of major projects during the construction period. Capitalized interest totaled $9 million and $5 million for the three months ended March 31, 2015 and 2014, respectively, and is recorded as a reduction to net interest and financing costs in our condensed statements of consolidated operations. |
Derivative_Instruments_Notes
Derivative Instruments (Notes) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ||||||||||||||||||
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS | |||||||||||||||||
In the ordinary course of business, our profit margins, earnings and cash flows are impacted by the timing, direction and overall change in pricing for commodities used throughout our operations. We use non-trading derivative instruments to manage our exposure to the following: | ||||||||||||||||||
• | price risks associated with the purchase or sale of feedstocks, refined products and energy supplies related to our refineries, terminals, retail fuel inventory and customers; | |||||||||||||||||
• | price risks associated with inventories above or below our target levels; | |||||||||||||||||
• | future emission credit requirements; and | |||||||||||||||||
• | exchange rate fluctuations on our purchases of Canadian crude oil. | |||||||||||||||||
Our accounting for derivative instruments depends on whether the underlying commodity will be used or sold in the normal course of business. For contracts where the crude oil or refined products are expected to be used or sold in the normal course of business, we apply the normal purchase normal sale exception and follow the accrual method of accounting. All other derivative instruments are recorded at fair value using mark-to-market accounting. | ||||||||||||||||||
Our derivative instruments include 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 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 to be received or paid if our asset or liability position, respectively, 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, 2015 and December 31, 2014. 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, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Commodity Futures Contracts | Prepayments and other current assets | $ | 786 | $ | 1,201 | $ | 751 | $ | 1,025 | |||||||||
Commodity OTC Swap Contracts | Receivables | 2 | — | — | — | |||||||||||||
Commodity OTC Swap Contracts | Accounts payable | — | — | — | 1 | |||||||||||||
Commodity Forward Contracts | Receivables | 2 | 3 | — | — | |||||||||||||
Commodity Forward Contracts | Accounts payable | — | — | 1 | 1 | |||||||||||||
Total Gross Mark-to-Market | 790 | 1,204 | 752 | 1,027 | ||||||||||||||
Derivatives | ||||||||||||||||||
Less: Counterparty Netting and | (675 | ) | (1,136 | ) | (749 | ) | (1,024 | ) | ||||||||||
Cash Collateral (a) | ||||||||||||||||||
Total Net Fair Value of Derivatives | $ | 115 | $ | 68 | $ | 3 | $ | 3 | ||||||||||
________________ | ||||||||||||||||||
(a) | As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. Cash collateral amounts are netted with mark-to-market derivative assets. | |||||||||||||||||
Gains (losses) for our mark-to market derivatives for the three months ended March 31, 2015 and 2014 were as follows (in millions): | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2015 | 2014 | |||||||||||||||||
Commodity Futures Contracts | $ | 43 | $ | — | ||||||||||||||
Commodity OTC Swap Contracts | — | (1 | ) | |||||||||||||||
Commodity Forward Contracts | 2 | 1 | ||||||||||||||||
Foreign Currency Forward Contracts | (2 | ) | (2 | ) | ||||||||||||||
Total Gain (Loss) on Mark-to-Market Derivatives | $ | 43 | $ | (2 | ) | |||||||||||||
The income statement location of gains (losses) for our mark-to market derivatives above were as follows (in millions): | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2015 | 2014 | |||||||||||||||||
Revenues | $ | 4 | $ | 1 | ||||||||||||||
Cost of sales | 41 | (1 | ) | |||||||||||||||
Other expense, net | (2 | ) | (2 | ) | ||||||||||||||
Total Gain (Loss) on Mark-to-Market Derivatives | $ | 43 | $ | (2 | ) | |||||||||||||
Open Long (Short) Positions | ||||||||||||||||||
The information below presents the net volume of outstanding commodity and other contracts by type of instrument, year of maturity and unit of measure as of March 31, 2015 (units in thousands): | ||||||||||||||||||
Contract Volumes by Year of Maturity | ||||||||||||||||||
Mark-to-Market Derivative Instrument | 2015 | 2016 | 2017 | Unit of Measure | ||||||||||||||
Crude oil, refined products and blending products: | ||||||||||||||||||
Futures - short | -13,710 | — | — | Barrels | ||||||||||||||
Futures - long | — | 485 | — | Barrels | ||||||||||||||
OTC Swaps - long | 2,000 | — | — | Barrels | ||||||||||||||
Forwards - long | 131 | — | — | Barrels | ||||||||||||||
Carbon credits: | ||||||||||||||||||
Futures - long | 3,675 | 1,000 | 1,000 | Tons | ||||||||||||||
Corn: | ||||||||||||||||||
Futures - short | -3,515 | — | — | Bushels |
Fair_Value_Measurements_Notes
Fair Value Measurements (Notes) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | |||||||||||||||||||
We classify financial assets and liabilities according to the fair value hierarchy. Financial assets and liabilities classified as level 1 instruments are valued based on quoted prices in active markets for identical assets and liabilities. Level 2 instruments are valued based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices, such as liquidity, that are observable for the asset or liability. These instruments include derivative instruments that are valued using market quotations from independent price reporting agencies, third-party broker quotes and price curves derived from commodity exchange postings that are corroborated with market data. Level 3 instruments are 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 do not have any financial assets or liabilities classified as level 3 at March 31, 2015 or December 31, 2014. | ||||||||||||||||||||
Our financial assets and liabilities measured at fair value on a recurring basis include derivative instruments. Additionally, our financial liabilities include obligations for Renewable Identification Numbers (“RINs”) and cap and trade emission credits for the state of California (together with RINs, our “Environmental Credit Obligations”). See Note 6 for further information on our derivative instruments. Our Environmental Credit Obligations represent the estimated fair value amount at each balance sheet date for which we do not have sufficient RINs and California cap and trade credits to satisfy our obligations to the U.S. Environmental Protection Agency (“EPA”) and the state of California, respectively. RINs are assigned to biofuels produced or imported into the U.S. as required by the 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. We must purchase RINs in the open market to satisfy the requirement if we are unable to blend at that rate. Our liability for cap and trade emission credits for the state of California represent the deficit of credits to satisfy emission reduction requirements mandated in California’s Assembly Bill 32 for each period which stationary or transportation fuel carbon emissions exceed the level allowed 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): | ||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total | ||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 772 | $ | 14 | $ | — | $ | (675 | ) | $ | 111 | |||||||||
Commodity OTC Swap Contracts | — | 2 | — | — | 2 | |||||||||||||||
Commodity Forward Contracts | — | 2 | — | — | 2 | |||||||||||||||
Total Assets | $ | 772 | $ | 18 | $ | — | $ | (675 | ) | $ | 115 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 738 | $ | 13 | $ | — | $ | (749 | ) | $ | 2 | |||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 37 | — | — | 37 | |||||||||||||||
Total Liabilities | $ | 738 | $ | 51 | $ | — | $ | (749 | ) | $ | 40 | |||||||||
December 31, 2014 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total | ||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 1,165 | $ | 36 | $ | — | $ | (1,136 | ) | $ | 65 | |||||||||
Commodity Forward Contracts | — | 3 | — | — | 3 | |||||||||||||||
Total Assets | $ | 1,165 | $ | 39 | $ | — | $ | (1,136 | ) | $ | 68 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 1,011 | $ | 14 | $ | — | $ | (1,024 | ) | $ | 1 | |||||||||
Commodity OTC Swap Contracts | — | 1 | — | — | 1 | |||||||||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 20 | — | — | 20 | |||||||||||||||
Total Liabilities | $ | 1,011 | $ | 36 | $ | — | $ | (1,024 | ) | $ | 23 | |||||||||
________________ | ||||||||||||||||||||
(a) | 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. As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. | |||||||||||||||||||
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 fixed rate debt is based on prices from recent trade activity and is categorized in level 2 of the fair value hierarchy. The carrying values of our debt were approximately $4.2 billion at both March 31, 2015 and December 31, 2014, and the fair values of our debt were approximately $4.3 billion and $4.2 billion at March 31, 2015 and December 31, 2014, respectively. These carrying and fair values of our debt do not include the unamortized issuance costs associated with our total debt. |
Debt_Notes
Debt (Notes) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||
DEBT | DEBT | |||||||||||||||||
Our debt balance, net of unamortized issuance costs, at March 31, 2015 and December 31, 2014 was as follows (in millions): | ||||||||||||||||||
March 31, | December 31, | |||||||||||||||||
2015 | 2014 | |||||||||||||||||
Total debt (a) | $ | 4,229 | $ | 4,255 | ||||||||||||||
Unamortized issuance costs (b) | (85 | ) | (88 | ) | ||||||||||||||
Current maturities | (6 | ) | (6 | ) | ||||||||||||||
Debt, net of current maturities and unamortized issuance costs | $ | 4,138 | $ | 4,161 | ||||||||||||||
________________ | ||||||||||||||||||
(a) | Total debt related to TLLP, which is non-recourse to Tesoro, except for TLGP, was $2.5 billion at both March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||
(b) | The Company has adopted ASU 2015-03 as of March 31, 2015 and applied the changes retrospectively to the prior period presented. Adoption of this standard has resulted in the reclassification of $93 million of unamortized debt issuance costs from other noncurrent assets to debt on the balance sheet at December 31, 2014. Unamortized debt issuance costs of $89 million are recorded as a reduction to debt on the balance sheet at March 31, 2015. See Note 1 for further discussion. | |||||||||||||||||
Revolving Credit Facilities | ||||||||||||||||||
We had available capacity under our credit facilities as follows at March 31, 2015 (in millions): | ||||||||||||||||||
Total | Amount Borrowed as of March 31, 2015 | Outstanding | Available Capacity | Expiration | ||||||||||||||
Capacity | Letters of Credit | |||||||||||||||||
Tesoro Corporation Revolving | $ | 2,156 | $ | — | $ | 237 | $ | 1,919 | November 18, 2019 | |||||||||
Credit Facility (c) | ||||||||||||||||||
TLLP Revolving Credit Facility | 900 | 235 | — | 665 | December 2, 2019 | |||||||||||||
Letter of Credit Facilities | 2,035 | — | 56 | 1,979 | ||||||||||||||
Total credit facilities | $ | 5,091 | $ | 235 | $ | 293 | $ | 4,563 | ||||||||||
________________ | ||||||||||||||||||
(c) | Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity of $3.0 billion. | |||||||||||||||||
As of March 31, 2015, 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 | 0.18% | 1.50% | 3.25% | 0.50% | 0.38% | |||||||||||||
($2.2 billion) (d) | ||||||||||||||||||
TLLP Revolving Credit Facility ($900 million) (e) | 0.18% | 2.50% | 3.25% | 1.50% | 0.50% | |||||||||||||
________________ | ||||||||||||||||||
(d) | 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. | |||||||||||||||||
(e) | 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 TLLP Revolving Credit Facility incur fees at the Eurodollar margin rate. | |||||||||||||||||
Revolving Credit Facilities | ||||||||||||||||||
Tesoro Corporation Revolving Credit Facility. Our Revolving Credit Facility provides for borrowings (including letters of credit) up to the lesser of the amount of a periodically adjusted borrowing base, which consists 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. We had unused credit availability of approximately 89% of the eligible borrowing base at March 31, 2015. Our Revolving Credit Facility is guaranteed by substantially all of Tesoro’s active domestic subsidiaries, excluding TLGP, TLLP and its subsidiaries, and certain foreign subsidiaries, and is secured by substantially all of Tesoro’s active domestic subsidiaries’ crude oil and refined product inventories, cash and receivables. | ||||||||||||||||||
Our Revolving Credit Facility, as amended, senior notes and Term Loan 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 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 $56 million outstanding as of March 31, 2015. Letters of credit outstanding under these agreements incur fees ranging from 0.40% to 1.00% and are secured by the crude oil inventories for which they are issued. Capacity under these letter of credit agreements is available on an uncommitted basis and can be terminated by either party at any time. | ||||||||||||||||||
TLLP Revolving Credit Facility. The TLLP Revolving Credit Facility provided for total loan availability of $900 million as of March 31, 2015, and TLLP may request that the loan availability be increased up to an aggregate of $1.5 billion, 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, with the exception of certain non-wholly owned subsidiaries acquired in the Rockies Natural Gas Business acquisition, 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 was $235 million in borrowings outstanding under the TLLP Revolving Credit Facility, which incurred interest at a weighted average interest rate of 2.67% at March 31, 2015. TLLP had unused credit availability of approximately 74% of the eligible borrowing base at March 31, 2015. | ||||||||||||||||||
Tesoro Debt | ||||||||||||||||||
Term Loan Facility. We entered into the Term Loan Facility in January 2013, which allowed us to borrow up to an aggregate of $500 million, which we used to fund a portion of the acquisition of BP’s integrated Southern California refining, marketing and logistics business (the “Los Angeles Acquisition”). The Term Loan Facility matures May 30, 2016. The obligations under the Term Loan Facility are secured by all equity interests of Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company LLC, 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 Facility may be repaid at any time but amounts may not be re-borrowed. There were no payments on the borrowings under the Term Loan Facility for the three months ended March 31, 2015. The borrowings under our Term Loan Facility incurred interest at a rate of 2.43% as of March 31, 2015 based on the following expense and fee schedule: | ||||||||||||||||||
Credit Facility | 30 day Eurodollar (LIBOR) Rate | Eurodollar Margin | Base Rate | Base Rate Margin | Commitment Fee | |||||||||||||
(unused portion) | ||||||||||||||||||
Term Loan Facility ($398 million) (a) | 0.18% | 2.25% | 3.25% | 1.25% | —% | |||||||||||||
____________________ | ||||||||||||||||||
(a) | 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 Term Loan Facility contains affirmative covenants, representations and warranties and events of default substantially similar to those set forth in the Revolving Credit Facility and contains negative covenants substantially similar to those set forth in most of our current indentures. |
Benefit_Plans_Notes
Benefit Plans (Notes) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
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, 2015 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, 2015 and 2014 were (in millions): | ||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Service cost | $ | 12 | $ | 13 | $ | 1 | $ | 1 | ||||||||
Interest cost | 8 | 9 | 1 | 1 | ||||||||||||
Expected return on plan assets | (7 | ) | (8 | ) | — | — | ||||||||||
Amortization of prior service cost | — | — | (9 | ) | (9 | ) | ||||||||||
Recognized net actuarial loss | 6 | 4 | 1 | 1 | ||||||||||||
Net Periodic Benefit Expense (Income) | $ | 19 | $ | 18 | $ | (6 | ) | $ | (6 | ) | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES AND ENVIRONMENTAL LIABILITIES |
Environmental Liabilities | |
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 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 $259 million and $274 million at March 31, 2015 and December 31, 2014, respectively, including $28 million and $32 million for TLLP, respectively. These accruals include $208 million and $216 million at March 31, 2015 and December 31, 2014, respectively, related to amounts estimated for site cleanup activities arising from operations at our Martinez refinery and operations of assets acquired in the Los Angeles Acquisition prior to their respective acquisition dates. We cannot reasonably determine the full extent of remedial activities that may be required at the Martinez refinery and for assets acquired in the Los Angeles Acquisition, and it is possible that we will identify additional investigation and remediation costs for site cleanup activities as more information becomes available. The environmental remediation liabilities assumed in the Los Angeles Acquisition include amounts estimated for site cleanup activities and monitoring activities arising from operations at the Carson refinery, certain terminals and pipelines, and retail stations prior to our acquisition on June 1, 2013. These estimates for environmental liabilities are based on third-party assessments and available information. Our estimates for site cleanup activities reflect amounts for 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 and the insurer has challenged coverage and filed a declaratory relief action in federal court. | |
Other Contingencies | |
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”) initiated an investigation 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, November 2013 and February 2015 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. | |
On November 20, 2013, we received a notice of violation (“NOV”) from the EPA alleging 46 violations of the Clean Air Act Risk Management Plan requirements at our Washington refinery. The EPA conducted an investigation of the refinery in 2011, following the April 2010 fire in the naphtha hydrotreater unit. We have provided a response to the NOV and additional information to the EPA. While we 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. | |
In January 2015, we received notice and demand for indemnity from the previous owner of our Washington refinery for damages incurred in the civil litigation brought by the families of those fatally wounded in the April 2010 refinery fire. We settled our involvement in civil litigation in 2012. Arbitration proceedings were initiated in March 2015 after an unsuccessful mediation and we intend to vigorously defend ourselves against this claim. | |
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 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 U.S. Department of Justice. We have established an accrual for this matter although we cannot currently estimate the final amount or timing of its resolution. 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 at our operating refineries. However, we do not believe that the final outcome of this matter will have a material impact on our liquidity or financial position. | |
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. This matter, originally filed in 2004, is proceeding in the United States District Court of the Southern District of New York. 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. Certain non-governmental organizations filed a Request for Agency Action (the “Request”) with the Utah Department of Environmental Quality (“UDEQ”) concerning our Utah refinery in October 2012. The Request challenges the UDEQ’s permitting of our refinery conversion project alleging that the permits do not conform to the requirements of the Clean Air Act. As the permittee, we are the real party in interest and are defending the permits with UDEQ. In orders issued on July 10 and September 9, 2014, the UDEQ Administrative Law Judge (“ALJ”) recommended the Executive Director of UDEQ deny Petitioners’ request for a stay of the project and dismiss their challenge to the permit. The Executive Director’s final decision approving the ALJ’s recommended order is currently under appeal. While we cannot estimate the timing or estimated amount, if any, associated with the outcome of this matter, we do not believe it will have a material adverse impact on our liquidity, financial position, or results of operations. | |
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. However, 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 unrecognized tax benefits may decrease by as much as $8 million in the next twelve months, related primarily to state apportionment matters. However, since the tax was fully paid in prior years, the unrecognized tax benefit would be eliminated without impacting expense. |
Stockholders_Equity_Notes
Stockholders' Equity (Notes) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Stockholders' Equity Attributable to Parent [Abstract] | ||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY | |||||||||||
Changes to equity during the three months ended March 31, 2015 are presented below (in millions): | ||||||||||||
Tesoro | Noncontrolling | Total Equity | ||||||||||
Corporation | Interest | |||||||||||
Stockholders’ | ||||||||||||
Equity | ||||||||||||
Balance at December 31, 2014 (a) | $ | 4,454 | $ | 2,522 | $ | 6,976 | ||||||
Net earnings | 145 | 43 | 188 | |||||||||
Purchases of common stock | (19 | ) | — | (19 | ) | |||||||
Dividend payments | (54 | ) | — | (54 | ) | |||||||
Shares issued for equity-based compensation awards (b) | 6 | — | 6 | |||||||||
Amortization of equity settled awards | 10 | — | 10 | |||||||||
Excess tax benefits from stock-based compensation arrangements, net | 31 | — | 31 | |||||||||
Taxes paid related to net share settlement of equity awards | (39 | ) | — | (39 | ) | |||||||
Net proceeds from issuance of Tesoro Logistics LP common units | — | 24 | 24 | |||||||||
Distributions to noncontrolling interest | — | (44 | ) | (44 | ) | |||||||
Transfers to (from) noncontrolling interest from (to) Tesoro related to: | ||||||||||||
TLLP’s sale of common units | — | (8 | ) | (8 | ) | |||||||
Tesoro’s purchase of TLLP common units | 8 | — | 8 | |||||||||
Other | (1 | ) | — | (1 | ) | |||||||
Balance at March 31, 2015 (a) | $ | 4,541 | $ | 2,537 | $ | 7,078 | ||||||
________________ | ||||||||||||
(a) | 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, 2015 and December 31, 2014. | |||||||||||
(b) | We issued approximately 0.2 million shares and less than 0.1 million shares for proceeds of $6 million and $1 million primarily for stock option exercises under our equity-based compensation plans during the three months ended March 31, 2015 and 2014, respectively. | |||||||||||
Share Repurchases | ||||||||||||
We are authorized by our Board to purchase shares of our common stock in open market transactions at our discretion. The Board’s authorization has no time limit and may be suspended or discontinued at any time. Purchases of our common stock can also be made 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 and vesting of restricted stock and to fulfill other stock compensation requirements. We purchased approximately 0.3 million shares and 1.9 million shares of our common stock for approximately $19 million and $100 million during the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||
Cash Dividends | ||||||||||||
We paid cash dividends totaling $54 million for the three months ended March 31, 2015 based on a $0.425 per share quarterly cash dividend on common stock. We paid cash dividends totaling $33 million for the three months ended March 31, 2014 based on a $0.25 per share quarterly cash dividend on common stock. On May 7, 2015, our Board declared a cash dividend of $0.425 per share payable on June 15, 2015 to shareholders of record on May 29, 2015. |
StockBased_Compensation_Notes
Stock-Based Compensation (Notes) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, | ||||||||
2015 | 2014 | |||||||
Stock appreciation rights (a) | $ | 15 | $ | (18 | ) | |||
Performance share awards (b) | 4 | (3 | ) | |||||
Market stock units (c) | 5 | 3 | ||||||
Other stock-based awards (d) | 4 | — | ||||||
Total Stock-Based Compensation Expense (Benefit) | $ | 28 | $ | (18 | ) | |||
________________ | ||||||||
(a) | We paid cash of $20 million and $4 million to settle 0.3 million and 0.2 million SARs that were exercised during the three months ended March 31, 2015 and 2014, respectively. We had $55 million and $60 million recorded in accrued liabilities associated with our SARs awards at March 31, 2015 and December 31, 2014, respectively. | |||||||
(b) | We granted 0.1 million market condition performance share awards at a weighted average grant date fair value of $117.96 per share under the amended and restated 2011 Long-Term Incentive Plan (“2011 Plan”) during the three months ended March 31, 2015. | |||||||
(c) | We granted 0.4 million market stock units at a weighted average grant date fair value of $114.57 per unit under the 2011 Plan during the three months ended March 31, 2015. | |||||||
(d) | 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 a benefit of $11 million and an expense of $7 million for the three months ended March 31, 2015 and 2014, 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 $54 million and $3 million for the three months ended March 31, 2015 and 2014, respectively. |
Operating_Segments_Notes
Operating Segments (Notes) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, natural gas gathering and processing 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 natural gas, for processing natural gas, and for terminalling, transporting and storing crude oil, and refined products. During 2014, we converted our company-operated retail locations to multi-site operators (“MSOs”) and retained the transportation fuel sales. Our retail segment sells gasoline and diesel fuel through MSOs and branded jobber/dealers in 16 states. Since we do not have significant operations in foreign countries, revenue generated 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 income, 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, | ||||||||
2015 | 2014 | |||||||
(In millions) | ||||||||
Revenues | ||||||||
Refining: | ||||||||
Refined products | $ | 5,838 | $ | 9,500 | ||||
Crude oil resales and other | 299 | 272 | ||||||
TLLP: | ||||||||
Gathering | 77 | 25 | ||||||
Processing | 67 | — | ||||||
Terminalling and transportation | 119 | 102 | ||||||
Retail: | ||||||||
Fuel (a) | 2,195 | 3,024 | ||||||
Other non-fuel (b) | 16 | 61 | ||||||
Intersegment sales | (2,148 | ) | (3,051 | ) | ||||
Total Revenues | $ | 6,463 | $ | 9,933 | ||||
Segment Operating Income | ||||||||
Refining (c) | $ | 190 | $ | 185 | ||||
TLLP (d) | 108 | 60 | ||||||
Retail (c) | 126 | 19 | ||||||
Total Segment Operating Income | 424 | 264 | ||||||
Corporate and unallocated costs (e) | (84 | ) | (26 | ) | ||||
Operating Income | 340 | 238 | ||||||
Interest and financing costs, net (f) | (55 | ) | (77 | ) | ||||
Other expense, net | (1 | ) | (1 | ) | ||||
Earnings Before Income Taxes | $ | 284 | $ | 160 | ||||
Depreciation and Amortization Expense | ||||||||
Refining | $ | 119 | $ | 101 | ||||
TLLP | 44 | 16 | ||||||
Retail | 12 | 10 | ||||||
Corporate | 4 | 3 | ||||||
Total Depreciation and Amortization Expense | $ | 179 | $ | 130 | ||||
Capital Expenditures | ||||||||
Refining | $ | 184 | $ | 68 | ||||
TLLP | 66 | 26 | ||||||
Retail | 4 | 5 | ||||||
Corporate | 6 | 4 | ||||||
Total Capital Expenditures | $ | 260 | $ | 103 | ||||
________________ | ||||||||
(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 $140 million and $141 million for the three months ended March 31, 2015 and 2014, respectively. | |||||||
(b) | Includes merchandise revenue for the three months ended March 31, 2014. | |||||||
(c) | Our refining segment uses RINs to satisfy its obligations under the Renewable Fuels Standard, in addition to physically blending required biofuels. Effective April 1, 2013, we changed our intersegment pricing methodology and no longer reduced the amount retail pays for the biofuels by the market value of the RINs due to significant volatility in the value of RINs. At the end of 2014, given the price of RINs has become more transparent in the price of biofuels, we determined our intersegment pricing methodology should include the market value of RINs as a reduction to the price our retail segment pays to our refining segment. We made this change effective January 1, 2015. We have not adjusted financial information presented for our refining and retail segments for the period ended March 31, 2014. Had we made this change effective January 1, 2014, operating income in our refining segment would have been reduced by $28 million with a corresponding increase to operating income in our retail segment. | |||||||
(d) | We present TLLP’s segment operating income net of general and administrative expenses totaling $12 million and $4 million representing TLLP’s corporate costs for the three months ended March 31, 2015 and 2014, respectively, that are not allocated to TLLP’s operating segments. | |||||||
(e) | Includes stock-based compensation expense of $28 million and benefit of $18 million for the three months ended March 31, 2015 and 2014, respectively. The significant impact to stock-based compensation expense during the three months ended March 31, 2015 compared to the prior period is primarily a result of changes in Tesoro’s stock price. | |||||||
(f) | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 5.50% Senior Notes due 2019 during the three months ended March 31, 2014. |
Condensed_Consolidating_Financ
Condensed Consolidating Financial Information (Notes) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
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 is presented below. At March 31, 2015, 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, 2015, 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. This 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. Certain intercompany and intracompany transactions between subsidiaries are presented gross and eliminated in the eliminations column. 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, 2015 and 2014. | ||||||||||||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||
for the Three Months Ended March 31, 2015 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
Revenues | $ | — | $ | 6,999 | $ | 914 | $ | (1,450 | ) | $ | 6,463 | |||||
Costs and Expenses: | ||||||||||||||||
Cost of sales | — | 5,993 | 661 | (1,314 | ) | 5,340 | ||||||||||
Operating, selling, general and administrative expenses | 4 | 609 | 123 | (136 | ) | 600 | ||||||||||
Depreciation and amortization expense | — | 134 | 45 | — | 179 | |||||||||||
Loss on asset disposals and impairments | — | 4 | — | — | 4 | |||||||||||
Operating Income (Loss) | (4 | ) | 259 | 85 | — | 340 | ||||||||||
Equity in earnings of subsidiaries | 157 | 16 | — | (173 | ) | — | ||||||||||
Interest and financing costs, net | (11 | ) | (18 | ) | (26 | ) | — | (55 | ) | |||||||
Other income (expense), net | — | (4 | ) | 3 | — | (1 | ) | |||||||||
Earnings Before Income Taxes | 142 | 253 | 62 | (173 | ) | 284 | ||||||||||
Income tax expense (benefit) (a) | (3 | ) | 95 | 4 | — | 96 | ||||||||||
Net Earnings | 145 | 158 | 58 | (173 | ) | 188 | ||||||||||
Less: Net earnings from continuing operations attributable to | — | — | 43 | — | 43 | |||||||||||
noncontrolling interest | ||||||||||||||||
Net Earnings Attributable to Tesoro Corporation | $ | 145 | $ | 158 | $ | 15 | $ | (173 | ) | $ | 145 | |||||
Comprehensive Income | ||||||||||||||||
Total comprehensive income | $ | 145 | $ | 158 | $ | 58 | $ | (173 | ) | $ | 188 | |||||
Less: Noncontrolling interest in comprehensive income | — | — | 43 | — | 43 | |||||||||||
Comprehensive Income Attributable to Tesoro | $ | 145 | $ | 158 | $ | 15 | $ | (173 | ) | $ | 145 | |||||
Corporation | ||||||||||||||||
_________________ | ||||||||||||||||
(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, 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 (a) | 86 | 14 | — | (100 | ) | — | ||||||||||
Interest and financing costs, net | (8 | ) | (59 | ) | (18 | ) | 8 | (77 | ) | |||||||
Other income (expense), net | — | (1 | ) | 8 | (8 | ) | (1 | ) | ||||||||
Earnings Before Income Taxes | 77 | 130 | 53 | (100 | ) | 160 | ||||||||||
Income tax expense (benefit) (b) | (1 | ) | 51 | 6 | — | 56 | ||||||||||
Net Earnings from Continuing Operations | 78 | 79 | 47 | (100 | ) | 104 | ||||||||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | — | (1 | ) | |||||||||
Net Earnings | 78 | 78 | 47 | (100 | ) | 103 | ||||||||||
Less: Net earnings from continuing operations attributable to | — | — | 25 | — | 25 | |||||||||||
noncontrolling interest | ||||||||||||||||
Net Earnings Attributable to Tesoro Corporation | $ | 78 | $ | 78 | $ | 22 | $ | (100 | ) | $ | 78 | |||||
Comprehensive Income | ||||||||||||||||
Total comprehensive income | $ | 78 | $ | 78 | $ | 47 | $ | (100 | ) | $ | 103 | |||||
Less: Noncontrolling interest in comprehensive income | — | — | 25 | — | 25 | |||||||||||
Comprehensive Income Attributable to Tesoro | $ | 78 | $ | 78 | $ | 22 | $ | (100 | ) | $ | 78 | |||||
Corporation | ||||||||||||||||
_________________ | ||||||||||||||||
(a) | Revised to conform to current period presentation of equity in earnings of subsidiaries that reflects equity in earnings of subsidiaries within the guarantor and non-guarantor columns net of intercompany amounts. | |||||||||||||||
(b) | 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 Balance Sheet as of March 31, 2015 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 400 | $ | 59 | $ | — | $ | 459 | ||||||
Receivables, net of allowance for doubtful accounts | 9 | 884 | 474 | — | 1,367 | |||||||||||
Short-term receivables from affiliates | — | 35 | — | (35 | ) | — | ||||||||||
Inventories | — | 2,398 | 134 | — | 2,532 | |||||||||||
Prepayments and other current assets | 51 | 158 | 15 | (1 | ) | 223 | ||||||||||
Total Current Assets | 60 | 3,875 | 682 | (36 | ) | 4,581 | ||||||||||
Net Property, Plant and Equipment | — | 5,775 | 3,405 | — | 9,180 | |||||||||||
Investment in Subsidiaries | 6,742 | 351 | — | (7,093 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 2,450 | — | — | (2,450 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,376 | (1,376 | ) | — | ||||||||||
Other Noncurrent Assets: | ||||||||||||||||
Acquired intangibles, net | — | 245 | 966 | — | 1,211 | |||||||||||
Other, net | 6 | 1,048 | 257 | — | 1,311 | |||||||||||
Total Other Noncurrent Assets, Net | 6 | 1,293 | 1,223 | — | 2,522 | |||||||||||
Total Assets | $ | 9,258 | $ | 11,294 | $ | 6,686 | $ | (10,955 | ) | $ | 16,283 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | — | $ | 1,639 | $ | 502 | $ | — | $ | 2,141 | ||||||
Short-term payables to affiliates | — | — | 35 | (35 | ) | — | ||||||||||
Other current liabilities | 193 | 535 | 137 | (1 | ) | 864 | ||||||||||
Total Current Liabilities | 193 | 2,174 | 674 | (36 | ) | 3,005 | ||||||||||
Long-Term Payables to Affiliates | — | 2,412 | 38 | (2,450 | ) | — | ||||||||||
Deferred Income Taxes | 1,121 | — | — | — | 1,121 | |||||||||||
Other Noncurrent Liabilities | 446 | 431 | 64 | — | 941 | |||||||||||
Debt, net of unamortized issuance costs | 1,581 | 37 | 2,520 | — | 4,138 | |||||||||||
Long-Term Intercompany Note Payable | 1,376 | — | — | (1,376 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,541 | 6,240 | 853 | (7,093 | ) | 4,541 | ||||||||||
Equity-Noncontrolling Interest | — | — | 2,537 | — | 2,537 | |||||||||||
Total Liabilities and Equity | $ | 9,258 | $ | 11,294 | $ | 6,686 | $ | (10,955 | ) | $ | 16,283 | |||||
Condensed Consolidating Balance Sheet as of December 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 943 | $ | 57 | $ | — | $ | 1,000 | ||||||
Receivables, net of allowance for doubtful accounts | 6 | 912 | 517 | — | 1,435 | |||||||||||
Short-term receivables from affiliates | — | 84 | — | (84 | ) | — | ||||||||||
Inventories | — | 2,088 | 351 | — | 2,439 | |||||||||||
Prepayments and other current assets | 71 | 115 | 16 | (2 | ) | 200 | ||||||||||
Total Current Assets | 77 | 4,142 | 941 | (86 | ) | 5,074 | ||||||||||
Net Property, Plant and Equipment | — | 5,666 | 3,379 | — | 9,045 | |||||||||||
Investment in Subsidiaries | 6,592 | 362 | — | (6,954 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 2,427 | — | — | (2,427 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,376 | (1,376 | ) | — | ||||||||||
Other Noncurrent Assets: | ||||||||||||||||
Acquired intangibles, net | — | 249 | 973 | — | 1,222 | |||||||||||
Other, net | 6 | 893 | 251 | — | 1,150 | |||||||||||
Total Other Noncurrent Assets, Net | 6 | 1,142 | 1,224 | — | 2,372 | |||||||||||
Total Assets | $ | 9,102 | $ | 11,312 | $ | 6,920 | $ | (10,843 | ) | $ | 16,491 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 1 | $ | 1,779 | $ | 690 | $ | — | $ | 2,470 | ||||||
Short-term payables to affiliates | — | — | 84 | (84 | ) | — | ||||||||||
Other current liabilities | 148 | 717 | 133 | (2 | ) | 996 | ||||||||||
Total Current Liabilities | 149 | 2,496 | 907 | (86 | ) | 3,466 | ||||||||||
Long-Term Payables to Affiliates | — | 2,399 | 28 | (2,427 | ) | — | ||||||||||
Deferred Income Taxes | 1,098 | — | — | — | 1,098 | |||||||||||
Other Noncurrent Liabilities | 447 | 296 | 47 | — | 790 | |||||||||||
Debt, net of unamortized issuance costs | 1,578 | 39 | 2,544 | — | 4,161 | |||||||||||
Long-Term Intercompany Note Payable | 1,376 | — | — | (1,376 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,454 | 6,082 | 872 | (6,954 | ) | 4,454 | ||||||||||
Equity-Noncontrolling Interest | — | — | 2,522 | — | 2,522 | |||||||||||
Total Liabilities and Equity | $ | 9,102 | $ | 11,312 | $ | 6,920 | $ | (10,843 | ) | $ | 16,491 | |||||
Condensed Consolidating Statement of Cash Flows for the three March 31, 2015 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
Cash Flows From (Used In) Operating Activities | ||||||||||||||||
Net cash from (used in) operating activities | $ | (10 | ) | $ | (350 | ) | $ | 212 | $ | — | $ | (148 | ) | |||
Cash Flows From (Used In) Investing Activities | ||||||||||||||||
Capital expenditures | — | (191 | ) | (80 | ) | — | (271 | ) | ||||||||
Intercompany notes, net | 106 | — | — | (106 | ) | — | ||||||||||
Other investing activities | — | (2 | ) | — | — | (2 | ) | |||||||||
Net cash from (used in) investing activities | 106 | (193 | ) | (80 | ) | (106 | ) | (273 | ) | |||||||
Cash Flows From (Used In) Financing Activities | ||||||||||||||||
Borrowings under revolving credit agreements | — | — | 99 | — | 99 | |||||||||||
Repayments on revolving credit agreements | — | — | (124 | ) | — | (124 | ) | |||||||||
Dividend payments | (54 | ) | — | — | — | (54 | ) | |||||||||
Net proceeds from issuance of Tesoro Logistics LP | — | — | 24 | — | 24 | |||||||||||
common units | ||||||||||||||||
Distributions to noncontrolling interest | — | — | (44 | ) | — | (44 | ) | |||||||||
Purchases of common stock | (19 | ) | — | — | — | (19 | ) | |||||||||
Taxes paid related to net share settlement of equity awards | (39 | ) | — | — | — | (39 | ) | |||||||||
Net intercompany repayments | — | (37 | ) | (69 | ) | 106 | — | |||||||||
Distributions to TLLP unitholders and general partner | 10 | 6 | (16 | ) | — | — | ||||||||||
Other financing activities | 6 | 31 | — | — | 37 | |||||||||||
Net cash used in financing activities | (96 | ) | — | (130 | ) | 106 | (120 | ) | ||||||||
Increase (Decrease) in Cash And Cash Equivalents | — | (543 | ) | 2 | — | (541 | ) | |||||||||
Cash and Cash Equivalents, Beginning of Period | — | 943 | 57 | — | 1,000 | |||||||||||
Cash and Cash Equivalents, End of Period | $ | — | $ | 400 | $ | 59 | $ | — | $ | 459 | ||||||
Condensed Consolidating Statement of Cash Flows for the three 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 | ) | |||||||||
Net intercompany borrowings (repayments) | — | (501 | ) | 333 | 168 | — | ||||||||||
Premium paid on notes redemption | (19 | ) | — | — | — | (19 | ) | |||||||||
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 | ||||||
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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. |
Consolidation of variable interest entity policy | Our condensed 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. |
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 Hawaii refinery, retail stations and associated logistics assets (the “Hawaii Business”). |
New Accounting Pronouncements, Policy | New Accounting Standards and Disclosures |
Revenue Recognition. The Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) in May 2014 providing accounting guidance for all revenue arising from contracts to provide goods or services to customers. The requirements from the new ASU are effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. The FASB has proposed a one-year deferral of the effective date; however, this proposal has not been finalized. The standard allows for either full retrospective adoption or modified retrospective adoption. At this time, we are evaluating the guidance to determine the method of adoption and the impact of this ASU on our financial statements and related disclosures. | |
Debt Issuance Costs. In April 2015, the FASB issued ASU 2015-03 which will simplify the presentation of debt issuance costs. Under the new ASU, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. As a result, our balance sheet will reflect a reclassification of unamortized debt issuance costs from other noncurrent assets to debt. This ASU is effective for interim and annual periods beginning after December 15, 2015, and early adoption is permitted. We have adopted this standard effective as of March 31, 2015 and applied the changes retrospectively to the prior periods presented. Adoption of this standard has resulted in the reclassification of $93 million from other noncurrent assets to debt on the balance sheet at December 31, 2014. Unamortized debt issuance costs of $89 million are recorded as a reduction to debt on the balance sheet at March 31, 2015. |
Property_Plant_and_Equipment_P
Property, Plant and Equipment Property, Plant and Equipment (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Interest capitalization policy | We capitalize interest as part of the cost of major projects during the construction period. |
Derivative_Instruments_Policie
Derivative Instruments (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |
Derivatives, policy | Our accounting for derivative instruments depends on whether the underlying commodity will be used or sold in the normal course of business. For contracts where the crude oil or refined products are expected to be used or sold in the normal course of business, we apply the normal purchase normal sale exception and follow the accrual method of accounting. All other derivative instruments are recorded at fair value using mark-to-market accounting. |
Fair_Value_Measurements_Polici
Fair Value Measurements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments policy | We classify financial assets and liabilities according to the fair value hierarchy. Financial assets and liabilities classified as level 1 instruments are valued based on quoted prices in active markets for identical assets and liabilities. Level 2 instruments are valued based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices, such as liquidity, that are observable for the asset or liability. These instruments include derivative instruments that are valued using market quotations from independent price reporting agencies, third-party broker quotes and price curves derived from commodity exchange postings that are corroborated with market data. Level 3 instruments are 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. |
Tesoro_Logistics_LP_Tables
Tesoro Logistics LP (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Variable Interest Entity, Measure of Activity [Abstract] | ||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | ||||
Cash | $ | 31 | ||
Accounts receivable | 120 | |||
Prepayments and other | 7 | |||
Property, plant and equipment | 1,735 | |||
Acquired intangibles | 976 | |||
Other noncurrent assets (a) | 239 | |||
Accounts payable | (81 | ) | ||
Other current liabilities | (47 | ) | ||
Other noncurrent liabilities | (31 | ) | ||
Noncontrolling interest | (432 | ) | ||
Total purchase price | $ | 2,517 | ||
____________________ | ||||
(a) | Other noncurrent assets include $159 million of goodwill. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Earnings Per Share [Abstract] | |||||
Schedule of Basic and Diluted Shares Outstanding | Our share calculations are presented below (in millions): | ||||
Three Months Ended | |||||
March 31, | |||||
2015 | 2014 | ||||
Weighted average common shares outstanding | 125.2 | 131.3 | |||
Common stock equivalents | 1.7 | 2.5 | |||
Total diluted shares | 126.9 | 133.8 | |||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Schedule of inventory, current | Components of inventories were as follows (in millions): | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Domestic crude oil and refined products | $ | 2,219 | $ | 1,930 | ||||
Foreign subsidiary crude oil | 134 | 351 | ||||||
Other inventories | 179 | 158 | ||||||
Total Inventories | $ | 2,532 | $ | 2,439 | ||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, plant and equipment | Property, plant and equipment, at cost, is as follows (in millions): | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Refining | $ | 7,171 | $ | 6,994 | ||||
TLLP | 3,617 | 3,551 | ||||||
Retail | 835 | 834 | ||||||
Corporate | 256 | 254 | ||||||
Property, plant and equipment, at cost | 11,879 | 11,633 | ||||||
Accumulated depreciation | (2,699 | ) | (2,588 | ) | ||||
Net property, plant and equipment | $ | 9,180 | $ | 9,045 | ||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
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, 2015 and December 31, 2014. 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, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Commodity Futures Contracts | Prepayments and other current assets | $ | 786 | $ | 1,201 | $ | 751 | $ | 1,025 | |||||||||
Commodity OTC Swap Contracts | Receivables | 2 | — | — | — | |||||||||||||
Commodity OTC Swap Contracts | Accounts payable | — | — | — | 1 | |||||||||||||
Commodity Forward Contracts | Receivables | 2 | 3 | — | — | |||||||||||||
Commodity Forward Contracts | Accounts payable | — | — | 1 | 1 | |||||||||||||
Total Gross Mark-to-Market | 790 | 1,204 | 752 | 1,027 | ||||||||||||||
Derivatives | ||||||||||||||||||
Less: Counterparty Netting and | (675 | ) | (1,136 | ) | (749 | ) | (1,024 | ) | ||||||||||
Cash Collateral (a) | ||||||||||||||||||
Total Net Fair Value of Derivatives | $ | 115 | $ | 68 | $ | 3 | $ | 3 | ||||||||||
________________ | ||||||||||||||||||
(a) | As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. Cash collateral amounts 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, 2015 and 2014 were as follows (in millions): | |||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2015 | 2014 | |||||||||||||||||
Commodity Futures Contracts | $ | 43 | $ | — | ||||||||||||||
Commodity OTC Swap Contracts | — | (1 | ) | |||||||||||||||
Commodity Forward Contracts | 2 | 1 | ||||||||||||||||
Foreign Currency Forward Contracts | (2 | ) | (2 | ) | ||||||||||||||
Total Gain (Loss) on Mark-to-Market Derivatives | $ | 43 | $ | (2 | ) | |||||||||||||
The income statement location of gains (losses) for our mark-to market derivatives above were as follows (in millions): | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2015 | 2014 | |||||||||||||||||
Revenues | $ | 4 | $ | 1 | ||||||||||||||
Cost of sales | 41 | (1 | ) | |||||||||||||||
Other expense, net | (2 | ) | (2 | ) | ||||||||||||||
Total Gain (Loss) on Mark-to-Market Derivatives | $ | 43 | $ | (2 | ) | |||||||||||||
Schedule of open long (short) positions | The information below presents the net volume of outstanding commodity and other contracts by type of instrument, year of maturity and unit of measure as of March 31, 2015 (units in thousands): | |||||||||||||||||
Contract Volumes by Year of Maturity | ||||||||||||||||||
Mark-to-Market Derivative Instrument | 2015 | 2016 | 2017 | Unit of Measure | ||||||||||||||
Crude oil, refined products and blending products: | ||||||||||||||||||
Futures - short | -13,710 | — | — | Barrels | ||||||||||||||
Futures - long | — | 485 | — | Barrels | ||||||||||||||
OTC Swaps - long | 2,000 | — | — | Barrels | ||||||||||||||
Forwards - long | 131 | — | — | Barrels | ||||||||||||||
Carbon credits: | ||||||||||||||||||
Futures - long | 3,675 | 1,000 | 1,000 | Tons | ||||||||||||||
Corn: | ||||||||||||||||||
Futures - short | -3,515 | — | — | Bushels |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
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): | |||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total | ||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 772 | $ | 14 | $ | — | $ | (675 | ) | $ | 111 | |||||||||
Commodity OTC Swap Contracts | — | 2 | — | — | 2 | |||||||||||||||
Commodity Forward Contracts | — | 2 | — | — | 2 | |||||||||||||||
Total Assets | $ | 772 | $ | 18 | $ | — | $ | (675 | ) | $ | 115 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 738 | $ | 13 | $ | — | $ | (749 | ) | $ | 2 | |||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 37 | — | — | 37 | |||||||||||||||
Total Liabilities | $ | 738 | $ | 51 | $ | — | $ | (749 | ) | $ | 40 | |||||||||
December 31, 2014 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting and Collateral (a) | Total | ||||||||||||||||
Assets: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 1,165 | $ | 36 | $ | — | $ | (1,136 | ) | $ | 65 | |||||||||
Commodity Forward Contracts | — | 3 | — | — | 3 | |||||||||||||||
Total Assets | $ | 1,165 | $ | 39 | $ | — | $ | (1,136 | ) | $ | 68 | |||||||||
Liabilities: | ||||||||||||||||||||
Commodity Futures Contracts | $ | 1,011 | $ | 14 | $ | — | $ | (1,024 | ) | $ | 1 | |||||||||
Commodity OTC Swap Contracts | — | 1 | — | — | 1 | |||||||||||||||
Commodity Forward Contracts | — | 1 | — | — | 1 | |||||||||||||||
Environmental Credit Obligations | — | 20 | — | — | 20 | |||||||||||||||
Total Liabilities | $ | 1,011 | $ | 36 | $ | — | $ | (1,024 | ) | $ | 23 | |||||||||
________________ | ||||||||||||||||||||
(a) | 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. As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. |
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||
Schedule of Debt | Our debt balance, net of unamortized issuance costs, at March 31, 2015 and December 31, 2014 was as follows (in millions): | |||||||||||||||||
March 31, | December 31, | |||||||||||||||||
2015 | 2014 | |||||||||||||||||
Total debt (a) | $ | 4,229 | $ | 4,255 | ||||||||||||||
Unamortized issuance costs (b) | (85 | ) | (88 | ) | ||||||||||||||
Current maturities | (6 | ) | (6 | ) | ||||||||||||||
Debt, net of current maturities and unamortized issuance costs | $ | 4,138 | $ | 4,161 | ||||||||||||||
________________ | ||||||||||||||||||
(a) | Total debt related to TLLP, which is non-recourse to Tesoro, except for TLGP, was $2.5 billion at both March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||
(b) | The Company has adopted ASU 2015-03 as of March 31, 2015 and applied the changes retrospectively to the prior period presented. Adoption of this standard has resulted in the reclassification of $93 million of unamortized debt issuance costs from other noncurrent assets to debt on the balance sheet at December 31, 2014. Unamortized debt issuance costs of $89 million are recorded as a reduction to debt on the balance sheet at March 31, 2015. See Note 1 for further discussion. | |||||||||||||||||
Schedule of Line of Credit Facilities | The borrowings under our Term Loan Facility incurred interest at a rate of 2.43% as of March 31, 2015 based on the following expense and fee schedule: | |||||||||||||||||
Credit Facility | 30 day Eurodollar (LIBOR) Rate | Eurodollar Margin | Base Rate | Base Rate Margin | Commitment Fee | |||||||||||||
(unused portion) | ||||||||||||||||||
Term Loan Facility ($398 million) (a) | 0.18% | 2.25% | 3.25% | 1.25% | —% | |||||||||||||
____________________ | ||||||||||||||||||
(a) | 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. | |||||||||||||||||
We had available capacity under our credit facilities as follows at March 31, 2015 (in millions): | ||||||||||||||||||
Total | Amount Borrowed as of March 31, 2015 | Outstanding | Available Capacity | Expiration | ||||||||||||||
Capacity | Letters of Credit | |||||||||||||||||
Tesoro Corporation Revolving | $ | 2,156 | $ | — | $ | 237 | $ | 1,919 | November 18, 2019 | |||||||||
Credit Facility (c) | ||||||||||||||||||
TLLP Revolving Credit Facility | 900 | 235 | — | 665 | December 2, 2019 | |||||||||||||
Letter of Credit Facilities | 2,035 | — | 56 | 1,979 | ||||||||||||||
Total credit facilities | $ | 5,091 | $ | 235 | $ | 293 | $ | 4,563 | ||||||||||
________________ | ||||||||||||||||||
(c) | Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity of $3.0 billion. | |||||||||||||||||
As of March 31, 2015, 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 | 0.18% | 1.50% | 3.25% | 0.50% | 0.38% | |||||||||||||
($2.2 billion) (d) | ||||||||||||||||||
TLLP Revolving Credit Facility ($900 million) (e) | 0.18% | 2.50% | 3.25% | 1.50% | 0.50% | |||||||||||||
________________ | ||||||||||||||||||
(d) | 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. | |||||||||||||||||
(e) | 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 TLLP Revolving Credit Facility incur fees at the Eurodollar margin rate. |
Benefit_Plans_Tables
Benefit Plans (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
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, 2015 and 2014 were (in millions): | |||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Service cost | $ | 12 | $ | 13 | $ | 1 | $ | 1 | ||||||||
Interest cost | 8 | 9 | 1 | 1 | ||||||||||||
Expected return on plan assets | (7 | ) | (8 | ) | — | — | ||||||||||
Amortization of prior service cost | — | — | (9 | ) | (9 | ) | ||||||||||
Recognized net actuarial loss | 6 | 4 | 1 | 1 | ||||||||||||
Net Periodic Benefit Expense (Income) | $ | 19 | $ | 18 | $ | (6 | ) | $ | (6 | ) | ||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Stockholders' Equity Attributable to Parent [Abstract] | ||||||||||||
Stockholders' equity and noncontrolling interest | Changes to equity during the three months ended March 31, 2015 are presented below (in millions): | |||||||||||
Tesoro | Noncontrolling | Total Equity | ||||||||||
Corporation | Interest | |||||||||||
Stockholders’ | ||||||||||||
Equity | ||||||||||||
Balance at December 31, 2014 (a) | $ | 4,454 | $ | 2,522 | $ | 6,976 | ||||||
Net earnings | 145 | 43 | 188 | |||||||||
Purchases of common stock | (19 | ) | — | (19 | ) | |||||||
Dividend payments | (54 | ) | — | (54 | ) | |||||||
Shares issued for equity-based compensation awards (b) | 6 | — | 6 | |||||||||
Amortization of equity settled awards | 10 | — | 10 | |||||||||
Excess tax benefits from stock-based compensation arrangements, net | 31 | — | 31 | |||||||||
Taxes paid related to net share settlement of equity awards | (39 | ) | — | (39 | ) | |||||||
Net proceeds from issuance of Tesoro Logistics LP common units | — | 24 | 24 | |||||||||
Distributions to noncontrolling interest | — | (44 | ) | (44 | ) | |||||||
Transfers to (from) noncontrolling interest from (to) Tesoro related to: | ||||||||||||
TLLP’s sale of common units | — | (8 | ) | (8 | ) | |||||||
Tesoro’s purchase of TLLP common units | 8 | — | 8 | |||||||||
Other | (1 | ) | — | (1 | ) | |||||||
Balance at March 31, 2015 (a) | $ | 4,541 | $ | 2,537 | $ | 7,078 | ||||||
________________ | ||||||||||||
(a) | 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, 2015 and December 31, 2014. | |||||||||||
(b) | We issued approximately 0.2 million shares and less than 0.1 million shares for proceeds of $6 million and $1 million primarily for stock option exercises under our equity-based compensation plans during the three months ended March 31, 2015 and 2014, respectively. |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, | ||||||||
2015 | 2014 | |||||||
Stock appreciation rights (a) | $ | 15 | $ | (18 | ) | |||
Performance share awards (b) | 4 | (3 | ) | |||||
Market stock units (c) | 5 | 3 | ||||||
Other stock-based awards (d) | 4 | — | ||||||
Total Stock-Based Compensation Expense (Benefit) | $ | 28 | $ | (18 | ) | |||
________________ | ||||||||
(a) | We paid cash of $20 million and $4 million to settle 0.3 million and 0.2 million SARs that were exercised during the three months ended March 31, 2015 and 2014, respectively. We had $55 million and $60 million recorded in accrued liabilities associated with our SARs awards at March 31, 2015 and December 31, 2014, respectively. | |||||||
(b) | We granted 0.1 million market condition performance share awards at a weighted average grant date fair value of $117.96 per share under the amended and restated 2011 Long-Term Incentive Plan (“2011 Plan”) during the three months ended March 31, 2015. | |||||||
(c) | We granted 0.4 million market stock units at a weighted average grant date fair value of $114.57 per unit under the 2011 Plan during the three months ended March 31, 2015. | |||||||
(d) | We have aggregated expenses for certain award types as they are not considered significant. |
Operating_Segments_Tables
Operating Segments (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Schedule of segment reporting information, by segment | Segment information related to continuing operations is as follows: | |||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
(In millions) | ||||||||
Revenues | ||||||||
Refining: | ||||||||
Refined products | $ | 5,838 | $ | 9,500 | ||||
Crude oil resales and other | 299 | 272 | ||||||
TLLP: | ||||||||
Gathering | 77 | 25 | ||||||
Processing | 67 | — | ||||||
Terminalling and transportation | 119 | 102 | ||||||
Retail: | ||||||||
Fuel (a) | 2,195 | 3,024 | ||||||
Other non-fuel (b) | 16 | 61 | ||||||
Intersegment sales | (2,148 | ) | (3,051 | ) | ||||
Total Revenues | $ | 6,463 | $ | 9,933 | ||||
Segment Operating Income | ||||||||
Refining (c) | $ | 190 | $ | 185 | ||||
TLLP (d) | 108 | 60 | ||||||
Retail (c) | 126 | 19 | ||||||
Total Segment Operating Income | 424 | 264 | ||||||
Corporate and unallocated costs (e) | (84 | ) | (26 | ) | ||||
Operating Income | 340 | 238 | ||||||
Interest and financing costs, net (f) | (55 | ) | (77 | ) | ||||
Other expense, net | (1 | ) | (1 | ) | ||||
Earnings Before Income Taxes | $ | 284 | $ | 160 | ||||
Depreciation and Amortization Expense | ||||||||
Refining | $ | 119 | $ | 101 | ||||
TLLP | 44 | 16 | ||||||
Retail | 12 | 10 | ||||||
Corporate | 4 | 3 | ||||||
Total Depreciation and Amortization Expense | $ | 179 | $ | 130 | ||||
Capital Expenditures | ||||||||
Refining | $ | 184 | $ | 68 | ||||
TLLP | 66 | 26 | ||||||
Retail | 4 | 5 | ||||||
Corporate | 6 | 4 | ||||||
Total Capital Expenditures | $ | 260 | $ | 103 | ||||
________________ | ||||||||
(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 $140 million and $141 million for the three months ended March 31, 2015 and 2014, respectively. | |||||||
(b) | Includes merchandise revenue for the three months ended March 31, 2014. | |||||||
(c) | Our refining segment uses RINs to satisfy its obligations under the Renewable Fuels Standard, in addition to physically blending required biofuels. Effective April 1, 2013, we changed our intersegment pricing methodology and no longer reduced the amount retail pays for the biofuels by the market value of the RINs due to significant volatility in the value of RINs. At the end of 2014, given the price of RINs has become more transparent in the price of biofuels, we determined our intersegment pricing methodology should include the market value of RINs as a reduction to the price our retail segment pays to our refining segment. We made this change effective January 1, 2015. We have not adjusted financial information presented for our refining and retail segments for the period ended March 31, 2014. Had we made this change effective January 1, 2014, operating income in our refining segment would have been reduced by $28 million with a corresponding increase to operating income in our retail segment. | |||||||
(d) | We present TLLP’s segment operating income net of general and administrative expenses totaling $12 million and $4 million representing TLLP’s corporate costs for the three months ended March 31, 2015 and 2014, respectively, that are not allocated to TLLP’s operating segments. | |||||||
(e) | Includes stock-based compensation expense of $28 million and benefit of $18 million for the three months ended March 31, 2015 and 2014, respectively. The significant impact to stock-based compensation expense during the three months ended March 31, 2015 compared to the prior period is primarily a result of changes in Tesoro’s stock price. | |||||||
(f) | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 5.50% Senior Notes due 2019 during the three months ended March 31, 2014. |
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Information (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
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, 2015 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
Revenues | $ | — | $ | 6,999 | $ | 914 | $ | (1,450 | ) | $ | 6,463 | |||||
Costs and Expenses: | ||||||||||||||||
Cost of sales | — | 5,993 | 661 | (1,314 | ) | 5,340 | ||||||||||
Operating, selling, general and administrative expenses | 4 | 609 | 123 | (136 | ) | 600 | ||||||||||
Depreciation and amortization expense | — | 134 | 45 | — | 179 | |||||||||||
Loss on asset disposals and impairments | — | 4 | — | — | 4 | |||||||||||
Operating Income (Loss) | (4 | ) | 259 | 85 | — | 340 | ||||||||||
Equity in earnings of subsidiaries | 157 | 16 | — | (173 | ) | — | ||||||||||
Interest and financing costs, net | (11 | ) | (18 | ) | (26 | ) | — | (55 | ) | |||||||
Other income (expense), net | — | (4 | ) | 3 | — | (1 | ) | |||||||||
Earnings Before Income Taxes | 142 | 253 | 62 | (173 | ) | 284 | ||||||||||
Income tax expense (benefit) (a) | (3 | ) | 95 | 4 | — | 96 | ||||||||||
Net Earnings | 145 | 158 | 58 | (173 | ) | 188 | ||||||||||
Less: Net earnings from continuing operations attributable to | — | — | 43 | — | 43 | |||||||||||
noncontrolling interest | ||||||||||||||||
Net Earnings Attributable to Tesoro Corporation | $ | 145 | $ | 158 | $ | 15 | $ | (173 | ) | $ | 145 | |||||
Comprehensive Income | ||||||||||||||||
Total comprehensive income | $ | 145 | $ | 158 | $ | 58 | $ | (173 | ) | $ | 188 | |||||
Less: Noncontrolling interest in comprehensive income | — | — | 43 | — | 43 | |||||||||||
Comprehensive Income Attributable to Tesoro | $ | 145 | $ | 158 | $ | 15 | $ | (173 | ) | $ | 145 | |||||
Corporation | ||||||||||||||||
_________________ | ||||||||||||||||
(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, 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 (a) | 86 | 14 | — | (100 | ) | — | ||||||||||
Interest and financing costs, net | (8 | ) | (59 | ) | (18 | ) | 8 | (77 | ) | |||||||
Other income (expense), net | — | (1 | ) | 8 | (8 | ) | (1 | ) | ||||||||
Earnings Before Income Taxes | 77 | 130 | 53 | (100 | ) | 160 | ||||||||||
Income tax expense (benefit) (b) | (1 | ) | 51 | 6 | — | 56 | ||||||||||
Net Earnings from Continuing Operations | 78 | 79 | 47 | (100 | ) | 104 | ||||||||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | — | (1 | ) | |||||||||
Net Earnings | 78 | 78 | 47 | (100 | ) | 103 | ||||||||||
Less: Net earnings from continuing operations attributable to | — | — | 25 | — | 25 | |||||||||||
noncontrolling interest | ||||||||||||||||
Net Earnings Attributable to Tesoro Corporation | $ | 78 | $ | 78 | $ | 22 | $ | (100 | ) | $ | 78 | |||||
Comprehensive Income | ||||||||||||||||
Total comprehensive income | $ | 78 | $ | 78 | $ | 47 | $ | (100 | ) | $ | 103 | |||||
Less: Noncontrolling interest in comprehensive income | — | — | 25 | — | 25 | |||||||||||
Comprehensive Income Attributable to Tesoro | $ | 78 | $ | 78 | $ | 22 | $ | (100 | ) | $ | 78 | |||||
Corporation | ||||||||||||||||
_________________ | ||||||||||||||||
(a) | Revised to conform to current period presentation of equity in earnings of subsidiaries that reflects equity in earnings of subsidiaries within the guarantor and non-guarantor columns net of intercompany amounts. | |||||||||||||||
(b) | 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 Balance Sheet | Condensed Consolidating Balance Sheet as of March 31, 2015 | |||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 400 | $ | 59 | $ | — | $ | 459 | ||||||
Receivables, net of allowance for doubtful accounts | 9 | 884 | 474 | — | 1,367 | |||||||||||
Short-term receivables from affiliates | — | 35 | — | (35 | ) | — | ||||||||||
Inventories | — | 2,398 | 134 | — | 2,532 | |||||||||||
Prepayments and other current assets | 51 | 158 | 15 | (1 | ) | 223 | ||||||||||
Total Current Assets | 60 | 3,875 | 682 | (36 | ) | 4,581 | ||||||||||
Net Property, Plant and Equipment | — | 5,775 | 3,405 | — | 9,180 | |||||||||||
Investment in Subsidiaries | 6,742 | 351 | — | (7,093 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 2,450 | — | — | (2,450 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,376 | (1,376 | ) | — | ||||||||||
Other Noncurrent Assets: | ||||||||||||||||
Acquired intangibles, net | — | 245 | 966 | — | 1,211 | |||||||||||
Other, net | 6 | 1,048 | 257 | — | 1,311 | |||||||||||
Total Other Noncurrent Assets, Net | 6 | 1,293 | 1,223 | — | 2,522 | |||||||||||
Total Assets | $ | 9,258 | $ | 11,294 | $ | 6,686 | $ | (10,955 | ) | $ | 16,283 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | — | $ | 1,639 | $ | 502 | $ | — | $ | 2,141 | ||||||
Short-term payables to affiliates | — | — | 35 | (35 | ) | — | ||||||||||
Other current liabilities | 193 | 535 | 137 | (1 | ) | 864 | ||||||||||
Total Current Liabilities | 193 | 2,174 | 674 | (36 | ) | 3,005 | ||||||||||
Long-Term Payables to Affiliates | — | 2,412 | 38 | (2,450 | ) | — | ||||||||||
Deferred Income Taxes | 1,121 | — | — | — | 1,121 | |||||||||||
Other Noncurrent Liabilities | 446 | 431 | 64 | — | 941 | |||||||||||
Debt, net of unamortized issuance costs | 1,581 | 37 | 2,520 | — | 4,138 | |||||||||||
Long-Term Intercompany Note Payable | 1,376 | — | — | (1,376 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,541 | 6,240 | 853 | (7,093 | ) | 4,541 | ||||||||||
Equity-Noncontrolling Interest | — | — | 2,537 | — | 2,537 | |||||||||||
Total Liabilities and Equity | $ | 9,258 | $ | 11,294 | $ | 6,686 | $ | (10,955 | ) | $ | 16,283 | |||||
Condensed Consolidating Balance Sheet as of December 31, 2014 | ||||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | — | $ | 943 | $ | 57 | $ | — | $ | 1,000 | ||||||
Receivables, net of allowance for doubtful accounts | 6 | 912 | 517 | — | 1,435 | |||||||||||
Short-term receivables from affiliates | — | 84 | — | (84 | ) | — | ||||||||||
Inventories | — | 2,088 | 351 | — | 2,439 | |||||||||||
Prepayments and other current assets | 71 | 115 | 16 | (2 | ) | 200 | ||||||||||
Total Current Assets | 77 | 4,142 | 941 | (86 | ) | 5,074 | ||||||||||
Net Property, Plant and Equipment | — | 5,666 | 3,379 | — | 9,045 | |||||||||||
Investment in Subsidiaries | 6,592 | 362 | — | (6,954 | ) | — | ||||||||||
Long-Term Receivables from Affiliates | 2,427 | — | — | (2,427 | ) | — | ||||||||||
Long-Term Intercompany Note Receivable | — | — | 1,376 | (1,376 | ) | — | ||||||||||
Other Noncurrent Assets: | ||||||||||||||||
Acquired intangibles, net | — | 249 | 973 | — | 1,222 | |||||||||||
Other, net | 6 | 893 | 251 | — | 1,150 | |||||||||||
Total Other Noncurrent Assets, Net | 6 | 1,142 | 1,224 | — | 2,372 | |||||||||||
Total Assets | $ | 9,102 | $ | 11,312 | $ | 6,920 | $ | (10,843 | ) | $ | 16,491 | |||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 1 | $ | 1,779 | $ | 690 | $ | — | $ | 2,470 | ||||||
Short-term payables to affiliates | — | — | 84 | (84 | ) | — | ||||||||||
Other current liabilities | 148 | 717 | 133 | (2 | ) | 996 | ||||||||||
Total Current Liabilities | 149 | 2,496 | 907 | (86 | ) | 3,466 | ||||||||||
Long-Term Payables to Affiliates | — | 2,399 | 28 | (2,427 | ) | — | ||||||||||
Deferred Income Taxes | 1,098 | — | — | — | 1,098 | |||||||||||
Other Noncurrent Liabilities | 447 | 296 | 47 | — | 790 | |||||||||||
Debt, net of unamortized issuance costs | 1,578 | 39 | 2,544 | — | 4,161 | |||||||||||
Long-Term Intercompany Note Payable | 1,376 | — | — | (1,376 | ) | — | ||||||||||
Equity-Tesoro Corporation | 4,454 | 6,082 | 872 | (6,954 | ) | 4,454 | ||||||||||
Equity-Noncontrolling Interest | — | — | 2,522 | — | 2,522 | |||||||||||
Total Liabilities and Equity | $ | 9,102 | $ | 11,312 | $ | 6,920 | $ | (10,843 | ) | $ | 16,491 | |||||
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows for the three March 31, 2015 | |||||||||||||||
(In millions) | ||||||||||||||||
Parent | Guarantor | Non- | Eliminations | Consolidated | ||||||||||||
Subsidiaries | Guarantors | |||||||||||||||
Cash Flows From (Used In) Operating Activities | ||||||||||||||||
Net cash from (used in) operating activities | $ | (10 | ) | $ | (350 | ) | $ | 212 | $ | — | $ | (148 | ) | |||
Cash Flows From (Used In) Investing Activities | ||||||||||||||||
Capital expenditures | — | (191 | ) | (80 | ) | — | (271 | ) | ||||||||
Intercompany notes, net | 106 | — | — | (106 | ) | — | ||||||||||
Other investing activities | — | (2 | ) | — | — | (2 | ) | |||||||||
Net cash from (used in) investing activities | 106 | (193 | ) | (80 | ) | (106 | ) | (273 | ) | |||||||
Cash Flows From (Used In) Financing Activities | ||||||||||||||||
Borrowings under revolving credit agreements | — | — | 99 | — | 99 | |||||||||||
Repayments on revolving credit agreements | — | — | (124 | ) | — | (124 | ) | |||||||||
Dividend payments | (54 | ) | — | — | — | (54 | ) | |||||||||
Net proceeds from issuance of Tesoro Logistics LP | — | — | 24 | — | 24 | |||||||||||
common units | ||||||||||||||||
Distributions to noncontrolling interest | — | — | (44 | ) | — | (44 | ) | |||||||||
Purchases of common stock | (19 | ) | — | — | — | (19 | ) | |||||||||
Taxes paid related to net share settlement of equity awards | (39 | ) | — | — | — | (39 | ) | |||||||||
Net intercompany repayments | — | (37 | ) | (69 | ) | 106 | — | |||||||||
Distributions to TLLP unitholders and general partner | 10 | 6 | (16 | ) | — | — | ||||||||||
Other financing activities | 6 | 31 | — | — | 37 | |||||||||||
Net cash used in financing activities | (96 | ) | — | (130 | ) | 106 | (120 | ) | ||||||||
Increase (Decrease) in Cash And Cash Equivalents | — | (543 | ) | 2 | — | (541 | ) | |||||||||
Cash and Cash Equivalents, Beginning of Period | — | 943 | 57 | — | 1,000 | |||||||||||
Cash and Cash Equivalents, End of Period | $ | — | $ | 400 | $ | 59 | $ | — | $ | 459 | ||||||
Condensed Consolidating Statement of Cash Flows for the three 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 | ) | |||||||||
Net intercompany borrowings (repayments) | — | (501 | ) | 333 | 168 | — | ||||||||||
Premium paid on notes redemption | (19 | ) | — | — | — | (19 | ) | |||||||||
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 | ||||||
Basis_of_Presentation_Basis_of
Basis of Presentation Basis of Presentation (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Variable Interest Entity | |||
Ownership interest | 36.00% | 36.00% | |
Percentage of TLLP's revenues from Tesoro | 56.00% | 88.00% | |
QEP Midstream Partners LP | |||
Variable Interest Entity | |||
Ownership interest | 58.00% |
Basis_of_Presentation_Basis_of1
Basis of Presentation Basis of Presentation, Discontinued Operations (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 25, 2013 | Mar. 31, 2015 | Mar. 31, 2014 |
Discontinued Operations | |||
Loss from discontinued operations, net of tax | $0 | ($1) | |
Hawaii Operations | |||
Discontinued Operations | |||
Disposal date | 25-Sep-13 | ||
Capacity (bpd) | 94,000 | ||
Revenues | 0 | 0 | |
Loss from discontinued operations, before tax | -1 | ||
Loss from discontinued operations, net of tax | -1 | ||
Net Cash Provided by (Used in) Discontinued Operations | $0 | $0 |
Basis_of_Presentation_New_Acco
Basis of Presentation New Accounting Standards and Disclosures (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
New Accounting Pronouncement, Early Adoption | ||
Unamortized debt issuance costs | ($89) | |
New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncement, Early Adoption | ||
Unamortized debt issuance costs | ($93) |
Tesoro_Logistics_LP_Tesoro_Log
Tesoro Logistics LP Tesoro Logistics LP, Ownership Interest (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 02, 2014 | Apr. 06, 2015 |
Variable Interest Entity | ||||
Percentage ownership of Tesoro Logistics LP | 36.00% | 36.00% | ||
Limited partner common units outstanding (units) | 28,181,748 | |||
TLGP | ||||
Variable Interest Entity | ||||
General Partner, Ownership Interest | 2.00% | 2.00% | ||
General partner units outstanding (units) | 1,631,448 | |||
Rockies Natural Gas Business | ||||
Variable Interest Entity | ||||
Limited partner common units outstanding (units) | 3,701,750 | |||
Effective date of acquisition | 2-Dec-14 | |||
Purchase price | 2,517 | |||
Subordinated units outstanding (units) | 26,705,000 | |||
QEP Field Services, LLC | ||||
Variable Interest Entity | ||||
General Partner, Ownership Interest | 100.00% | |||
Limited Partner, Ownership Interest | 56.00% | |||
QEP Midstream Partners GP, LLC | ||||
Variable Interest Entity | ||||
General Partner, Ownership Interest | 2.00% | |||
Subsequent Event | ||||
Variable Interest Entity | ||||
Merger agreement date | 6-Apr-15 | |||
Limited Partnership interests Common Units, Conversion Ratio | 0.3088 | |||
Refined Products Pipeline | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 1 | |||
Crude Oil Gathering System | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 1 | |||
Gas Processing Complexes | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 4 | |||
Crude Oil and Refined Products Terminals and Storage Facilities | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 24 | |||
Rail Car Unloading Facility | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 1 | |||
Fractionation Facility | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 1 | |||
Regulated Common Carrier Products Pipeline | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 1 | |||
Jet Fuel Pipeline | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 1 | |||
Petroleum Coke Handling and Storage Facility | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 1 | |||
Marine Terminals | TLLP | ||||
Variable Interest Entity | ||||
Number of assets (assets) | 4 | |||
Pipeline Transportation of Refined Petroleum Products and Crude Oil | TLLP | ||||
Variable Interest Entity | ||||
Number of miles (miles) | 140 |
Tesoro_Logistics_LP_TLLPs_Prel
Tesoro Logistics LP TLLP’s Preliminary Acquisition Date Purchase Price Allocation (Details) (Rockies Natural Gas Business, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | |
Rockies Natural Gas Business | ||
Preliminary acquisition date purchase price allocation | ||
Cash | $31 | |
Accounts receivable | 120 | |
Prepayments and other | 7 | |
Property, plant and equipment | 1,735 | |
Acquired intangibles | 976 | |
Other noncurrent assets | 239 | [1] |
Accounts payable | -81 | |
Other current liabilities | -47 | |
Other noncurrent liabilities | -31 | |
Noncontrolling interest | -432 | |
Total purchase price | 2,517 | |
Purchase price adjustment | 7 | |
Goodwill | 159 | |
Transaction and integration costs | $3 | |
[1] | Other noncurrent assets include $159 million of goodwill. |
Earnings_Per_Share_Details
Earnings Per Share (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Weighted average common shares outstanding | 125.2 | 131.3 |
Common stock equivalents | 1.7 | 2.5 |
Total diluted shares | 126.9 | 133.8 |
Earnings_Per_Share_Earnings_Pe
Earnings Per Share Earnings Per Share Narrative (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities (shares) | 0.3 | 0.4 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Domestic crude oil and refined products | $2,219 | $1,930 |
Foreign subsidiary crude oil | 134 | 351 |
Other inventories | 179 | 158 |
Total Inventories | $2,532 | $2,439 |
Inventories_Inventories_Narrat
Inventories Inventories Narrative (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Excess of replacement or current costs over stated LIFO value | $318 | |
Lower of cost or market adjustment | $42 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Property Plant and Equipment, at cost | ||
Property, plant and equipment, at cost | $11,879 | $11,633 |
Accumulated depreciation | -2,699 | -2,588 |
Net property, plant and equipment | 9,180 | 9,045 |
Refining | ||
Property Plant and Equipment, at cost | ||
Property, plant and equipment, at cost | 7,171 | 6,994 |
TLLP | ||
Property Plant and Equipment, at cost | ||
Property, plant and equipment, at cost | 3,617 | 3,551 |
Retail | ||
Property Plant and Equipment, at cost | ||
Property, plant and equipment, at cost | 835 | 834 |
Corporate | ||
Property Plant and Equipment, at cost | ||
Property, plant and equipment, at cost | $256 | $254 |
Property_Plant_and_Equipment_P1
Property, Plant and Equipment Property, Plant and Equipment Narrative (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Capitalized interest | $9 | $5 |
Derivative_Instruments_Derivat
Derivative Instruments, Derivative Assets and Liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Millions, unless otherwise specified | ||||
Derivatives, Fair Value | ||||
Gross derivative assets | $790 | $1,204 | ||
Gross derivative liabilities | 752 | 1,027 | ||
Derivative asset amount offset against collateral and netting arrangements | -675 | [1],[2] | -1,136 | [1],[2] |
Derivative liability amount offset against collateral and netting arrangements | -749 | [1],[2] | -1,024 | [1],[2] |
Net derivative assets | 115 | 68 | ||
Net derivative liabilities | 3 | 3 | ||
Derivative, Collateral | ||||
Cash collateral outstanding | 74 | |||
Counterparty cash collateral | -112 | |||
Commodity Futures Contracts | Prepayments and other current assets | ||||
Derivatives, Fair Value | ||||
Gross derivative assets | 786 | 1,201 | ||
Gross derivative liabilities | 751 | 1,025 | ||
Commodity OTC Swap Contracts | Receivables | ||||
Derivatives, Fair Value | ||||
Gross derivative assets | 2 | 0 | ||
Gross derivative liabilities | 0 | 0 | ||
Commodity OTC Swap Contracts | Accounts payable | ||||
Derivatives, Fair Value | ||||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | 0 | 1 | ||
Commodity Forward Contracts | Receivables | ||||
Derivatives, Fair Value | ||||
Gross derivative assets | 2 | 3 | ||
Gross derivative liabilities | 0 | 0 | ||
Commodity Forward Contracts | Accounts payable | ||||
Derivatives, Fair Value | ||||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | $1 | $1 | ||
[1] | 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. As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. | |||
[2] | As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. Cash collateral amounts 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, 2015 | Mar. 31, 2014 |
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | $43 | ($2) |
Revenues | ||
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | 4 | 1 |
Cost of sales | ||
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | 41 | -1 |
Other expense, net | ||
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | -2 | -2 |
Commodity Futures Contracts | ||
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | 43 | 0 |
Commodity OTC Swap Contracts | ||
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | 0 | -1 |
Commodity Forward Contracts | ||
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | 2 | 1 |
Foreign Currency Forward Contracts | ||
Derivative Instruments, Gain (Loss) | ||
Total Gain (Loss) on Mark-to-Market Derivatives | ($2) | ($2) |
Derivative_Instruments_Open_Lo
Derivative Instruments, Open Long (Short) Positions (Details) | 3 Months Ended |
Mar. 31, 2015 | |
bbl | |
Crude Oil Refined Products And Blending Products (in barrels) | Futures | Short | 2015 | |
Derivative | |
Contract volumes | -13,710,000 |
Crude Oil Refined Products And Blending Products (in barrels) | Futures | Short | 2016 | |
Derivative | |
Contract volumes | 0 |
Crude Oil Refined Products And Blending Products (in barrels) | Futures | Short | 2017 | |
Derivative | |
Contract volumes | 0 |
Crude Oil Refined Products And Blending Products (in barrels) | Futures | Long | 2015 | |
Derivative | |
Contract volumes | 0 |
Crude Oil Refined Products And Blending Products (in barrels) | Futures | Long | 2016 | |
Derivative | |
Contract volumes | 485,000 |
Crude Oil Refined Products And Blending Products (in barrels) | Futures | Long | 2017 | |
Derivative | |
Contract volumes | 0 |
Crude Oil Refined Products And Blending Products (in barrels) | OTC Swaps | Long | 2015 | |
Derivative | |
Contract volumes | 2,000,000 |
Crude Oil Refined Products And Blending Products (in barrels) | OTC Swaps | Long | 2016 | |
Derivative | |
Contract volumes | 0 |
Crude Oil Refined Products And Blending Products (in barrels) | OTC Swaps | Long | 2017 | |
Derivative | |
Contract volumes | 0 |
Crude Oil Refined Products And Blending Products (in barrels) | Forwards | Long | 2015 | |
Derivative | |
Contract volumes | 131,000 |
Crude Oil Refined Products And Blending Products (in barrels) | Forwards | Long | 2016 | |
Derivative | |
Contract volumes | 0 |
Crude Oil Refined Products And Blending Products (in barrels) | Forwards | Long | 2017 | |
Derivative | |
Contract volumes | 0 |
Carbon Credit (in tons) | Futures | Long | 2015 | |
Derivative | |
Contract, mass | 3,675,000 |
Carbon Credit (in tons) | Futures | Long | 2016 | |
Derivative | |
Contract, mass | 1,000,000 |
Carbon Credit (in tons) | Futures | Long | 2017 | |
Derivative | |
Contract, mass | 1,000,000 |
Corn (in bushels) | Futures | Short | 2015 | |
Derivative | |
Contract volumes | -3,515,000 |
Corn (in bushels) | Futures | Short | 2016 | |
Derivative | |
Contract volumes | 0 |
Corn (in bushels) | Futures | Short | 2017 | |
Derivative | |
Contract volumes | 0 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | |||
Fair Value Measurements | ||||
Gross derivative assets | 790,000,000 | $1,204,000,000 | ||
Derivative asset amount offset against collateral and netting arrangements | -675,000,000 | [1],[2] | -1,136,000,000 | [1],[2] |
Net derivative assets | 115,000,000 | 68,000,000 | ||
Gross derivative liabilities | 752,000,000 | 1,027,000,000 | ||
Derivative liability amount offset against collateral and netting arrangements | -749,000,000 | [1],[2] | -1,024,000,000 | [1],[2] |
Net derivative liabilities | 40,000,000 | 23,000,000 | ||
Cash collateral posted | 74,000,000 | |||
Counterparty cash collateral | -112,000,000 | |||
Debt carrying value | 4,200,000,000 | 4,200,000,000 | ||
Debt fair value | 4,300,000,000 | 4,200,000,000 | ||
Commodity Futures Contracts | ||||
Fair Value Measurements | ||||
Derivative asset amount offset against collateral and netting arrangements | -675,000,000 | [1] | -1,136,000,000 | [1] |
Net derivative assets | 111,000,000 | 65,000,000 | ||
Derivative liability amount offset against collateral and netting arrangements | -749,000,000 | [1] | -1,024,000,000 | [1] |
Net derivative liabilities | 2,000,000 | 1,000,000 | ||
Commodity OTC Swap Contracts | ||||
Fair Value Measurements | ||||
Derivative asset amount offset against collateral and netting arrangements | 0 | [1] | ||
Net derivative assets | 2,000,000 | |||
Derivative liability amount offset against collateral and netting arrangements | 0 | [1] | ||
Net derivative liabilities | 1,000,000 | |||
Commodity Forward Contracts | ||||
Fair Value Measurements | ||||
Derivative asset amount offset against collateral and netting arrangements | 0 | [1] | 0 | |
Net derivative assets | 2,000,000 | 3,000,000 | ||
Derivative liability amount offset against collateral and netting arrangements | 0 | [1] | 0 | [1] |
Net derivative liabilities | 1,000,000 | 1,000,000 | ||
Environmental Credit Obligations | ||||
Fair Value Measurements | ||||
Derivative liability amount offset against collateral and netting arrangements | 0 | [1] | 0 | [1] |
Net derivative liabilities | 37,000,000 | 20,000,000 | ||
Level 1 | ||||
Fair Value Measurements | ||||
Gross derivative assets | 772,000,000 | 1,165,000,000 | ||
Gross derivative liabilities | 738,000,000 | 1,011,000,000 | ||
Level 1 | Commodity Futures Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 772,000,000 | 1,165,000,000 | ||
Gross derivative liabilities | 738,000,000 | 1,011,000,000 | ||
Level 1 | Commodity OTC Swap Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 0 | |||
Gross derivative liabilities | 0 | |||
Level 1 | Commodity Forward Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | 0 | 0 | ||
Level 1 | Environmental Credit Obligations | ||||
Fair Value Measurements | ||||
Gross derivative liabilities | 0 | 0 | ||
Level 2 | ||||
Fair Value Measurements | ||||
Gross derivative assets | 18,000,000 | 39,000,000 | ||
Gross derivative liabilities | 51,000,000 | 36,000,000 | ||
Level 2 | Commodity Futures Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 14,000,000 | 36,000,000 | ||
Gross derivative liabilities | 13,000,000 | 14,000,000 | ||
Level 2 | Commodity OTC Swap Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 2,000,000 | |||
Gross derivative liabilities | 1,000,000 | |||
Level 2 | Commodity Forward Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 2,000,000 | 3,000,000 | ||
Gross derivative liabilities | 1,000,000 | 1,000,000 | ||
Level 2 | Environmental Credit Obligations | ||||
Fair Value Measurements | ||||
Gross derivative liabilities | 37,000,000 | 20,000,000 | ||
Level 3 | ||||
Fair Value Measurements | ||||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | 0 | 0 | ||
Level 3 | Commodity Futures Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | 0 | 0 | ||
Level 3 | Commodity OTC Swap Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 0 | |||
Gross derivative liabilities | 0 | |||
Level 3 | Commodity Forward Contracts | ||||
Fair Value Measurements | ||||
Gross derivative assets | 0 | 0 | ||
Gross derivative liabilities | 0 | 0 | ||
Level 3 | Environmental Credit Obligations | ||||
Fair Value Measurements | ||||
Gross derivative liabilities | 0 | $0 | ||
Maximum | ||||
Fair Value Measurements | ||||
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% | |||
Minimum | ||||
Fair Value Measurements | ||||
Days outstanding on accounts payable and receivable | 90 days | |||
[1] | 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. As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. | |||
[2] | As of March 31, 2015, we had provided cash collateral amounts of $74 million related to our unrealized derivative positions. At December 31, 2014, our counterparties had provided cash collateral of $112 million related to our unrealized derivative positions. Cash collateral amounts are netted with mark-to-market derivative assets. |
Total_Debt_Details
Total Debt (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Millions, unless otherwise specified | ||||
Debt Instrument | ||||
Total Debt | $4,229 | [1] | $4,255 | [1] |
Unamortized issuance costs | -85 | [2] | -88 | [2] |
Current maturities | -6 | -6 | ||
Debt, net of current maturities and unamortized issuance costs | 4,138 | 4,161 | ||
Unamortized debt issuance costs | -89 | |||
TLLP | ||||
Debt Instrument | ||||
Total Debt | 2,500 | 2,500 | ||
New Accounting Pronouncement, Early Adoption, Effect | ||||
Debt Instrument | ||||
Unamortized debt issuance costs | ($93) | |||
[1] | Total debt related to TLLP, which is non-recourse to Tesoro, except for TLGP, was $2.5 billion at both March 31, 2015 and December 31, 2014, respectively. | |||
[2] | The Company has adopted ASU 2015-03 as of March 31, 2015 and applied the changes retrospectively to the prior period presented. Adoption of this standard has resulted in the reclassification of $93 million of unamortized debt issuance costs from other noncurrent assets to debt on the balance sheet at December 31, 2014. Unamortized debt issuance costs of $89 million are recorded as a reduction to debt on the balance sheet at March 31, 2015. See Note 1 for further discussion. |
Revolving_Credit_Facilities_De
Revolving Credit Facilities (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | ||
Credit facilities | ||
Total capacity | $5,091,000,000 | |
Amount Borrowed as of March 31, 2015 | 235,000,000 | |
Outstanding Letters of Credit | 293,000,000 | |
Available Capacity | 4,563,000,000 | |
Tesoro Corporation Revolving Credit Facility | ||
Credit facilities | ||
Total capacity | 2,156,000,000 | [1] |
Amount Borrowed as of March 31, 2015 | 0 | [1] |
Outstanding Letters of Credit | 237,000,000 | [1] |
Available Capacity | 1,919,000,000 | [1] |
Maturity date | 18-Nov-19 | [1] |
Expenses and Fees | ||
Commitment Fee (unused portion) | 0.38% | [2] |
Line of credit facility, remaining borrowing capacity percentage | 89.00% | |
Maximum available capacity | 3,000,000,000 | |
TLLP Revolving Credit Facility | ||
Credit facilities | ||
Total capacity | 900,000,000 | |
Amount Borrowed as of March 31, 2015 | 235,000,000 | |
Outstanding Letters of Credit | 0 | |
Available Capacity | 665,000,000 | |
Maturity date | 2-Dec-19 | |
Expenses and Fees | ||
Commitment Fee (unused portion) | 0.50% | [3] |
Line of credit facility, remaining borrowing capacity percentage | 74.00% | |
Maximum available capacity | 1,500,000,000 | |
Weighted average interest rate | 2.67% | |
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, with the exception of certain non-wholly owned subsidiaries acquired in the Rockies Natural Gas Business acquisition, 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. | |
Letter of Credit Facilities | ||
Credit facilities | ||
Total capacity | 2,035,000,000 | |
Amount Borrowed as of March 31, 2015 | 0 | |
Outstanding Letters of Credit | 56,000,000 | |
Available Capacity | $1,979,000,000 | |
30 day Eurodollar (LIBOR) Rate | Tesoro Corporation Revolving Credit Facility | ||
Expenses and Fees | ||
Eurodollar or Base Rate | 0.18% | [2] |
Eurodollar or Base Rate Margin | 1.50% | [2] |
30 day Eurodollar (LIBOR) Rate | TLLP Revolving Credit Facility | ||
Expenses and Fees | ||
Eurodollar or Base Rate | 0.18% | [3] |
Eurodollar or Base Rate Margin | 2.50% | [3] |
Base Rate | Tesoro Corporation Revolving Credit Facility | ||
Expenses and Fees | ||
Eurodollar or Base Rate | 3.25% | [2] |
Eurodollar or Base Rate Margin | 0.50% | [2] |
Base Rate | TLLP Revolving Credit Facility | ||
Expenses and Fees | ||
Eurodollar or Base Rate | 3.25% | [3] |
Eurodollar or Base Rate Margin | 1.50% | [3] |
Minimum | Letter of Credit Facilities | ||
Expenses and Fees | ||
Tesoro Corporation, letter of credit outstanding fees | 0.40% | |
Maximum | Letter of Credit Facilities | ||
Expenses and Fees | ||
Tesoro Corporation, letter of credit outstanding fees | 1.00% | |
[1] | Borrowing base is the lesser of the amount of the periodically adjusted borrowing base or the agreement’s total capacity of $3.0 billion. | |
[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 TLLP Revolving Credit Facility incur fees at the Eurodollar margin rate. |
Debt_Tesoro_Debt_Details
Debt Tesoro Debt (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | ||
Line of Credit Facility | |||
Repayments of borrowings | $124,000,000 | $0 | |
amount borrowed | 235,000,000 | ||
Total capacity | 5,091,000,000 | ||
Term Loan Credit Facility | |||
Line of Credit Facility | |||
Maximum available capacity | 500,000,000 | ||
Maturity date | 30-May-16 | ||
Repayments of borrowings | 0 | ||
Interest rate | 2.43% | ||
Total capacity | $398,000,000 | ||
Expenses and Fees | |||
Commitment Fee (unused portion) | 0.00% | [1] | |
Line of credit facility, collateral | The obligations under the Term Loan Facility are secured by all equity interests of Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company LLC, 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. | ||
30 day Eurodollar (LIBOR) Rate | Term Loan Credit Facility | |||
Expenses and Fees | |||
Eurodollar or Base Rate | 0.18% | [1] | |
Eurodollar or Base Rate Margin | 2.25% | [1] | |
Base Rate | Term Loan Credit Facility | |||
Expenses and Fees | |||
Eurodollar or Base Rate | 3.25% | [1] | |
Eurodollar or Base Rate Margin | 1.25% | [1] | |
[1] | 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. |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
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 | 12 | 13 |
Interest cost | 8 | 9 |
Expected return on plan assets | -7 | -8 |
Amortization of prior service cost (credit) | 0 | 0 |
Recognized net actuarial loss | 6 | 4 |
Net Periodic Benefit Expense (Income) | 19 | 18 |
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 | 1 |
Net Periodic Benefit Expense (Income) | ($6) | ($6) |
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, 2015 | Dec. 31, 2014 |
entities | ||
Environmental Liabilities | ||
Environmental liability accrual | $259 | $274 |
Martinez refinery | ||
Environmental Liabilities | ||
Number of previous owners (owners) | 2 | |
Environmental liability accrual | 208 | 216 |
Remediation activities measurement period | We cannot reasonably determine the full extent of remedial activities that may be required at the Martinez refinery and for assets acquired in the Los Angeles Acquisition, and it is possible that we will identify additional investigation and remediation costs for site cleanup activities as more information becomes available. | |
Environmental insurance coverage ceiling | 190 | |
Self-insurance deductible | 50 | |
TLLP | ||
Environmental Liabilities | ||
Environmental liability accrual | $28 | $32 |
Commitments_and_Contingencies_2
Commitments and Contingencies, Washington Refinery Fire (Details) (Washington Refinery Fire, USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||
In Millions, unless otherwise specified | Nov. 20, 2013 | Mar. 31, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Nov. 30, 2013 | Sep. 30, 2013 | Jan. 31, 2011 | Dec. 31, 2010 | Oct. 31, 2010 | Apr. 30, 2010 | Mar. 31, 2015 |
employees | |||||||||||
Washington Refinery Fire | |||||||||||
Loss Contingencies | |||||||||||
Incident date | Apr-10 | ||||||||||
previous owner, notification of indemnity demand date | Jan-15 | ||||||||||
Number of fatally injured employees in the refinery incident (employees) | 7 | ||||||||||
Citation issuance date | Oct-10 | ||||||||||
Fines and penalties assessed | $2.40 | ||||||||||
L&I Citation allegation reassumption date | Dec-10 | ||||||||||
Citation order appeal date | Feb-15 | Nov-13 | Sep-13 | Jan-11 | |||||||
Notice of Violation (NOV) disclosure | 46 | We received a notice of violation (“NOVâ€) 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. | |||||||||
Notice of Violation (NOV) date | 20-Nov-13 | ||||||||||
Arbitration proceedings against previous owner claim, initiation date | Mar-15 |
Commitments_and_Contingencies_3
Commitments and Contingencies, Tax Matters (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Commitments and Contingencies Disclosure [Abstract] | |
Possible decrease in unrecognized tax benefits in the next twelve months | $8 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible | It is reasonably possible that unrecognized tax benefits may decrease by as much as $8 million in the next twelve months, related primarily to state apportionment matters. However, since the tax was fully paid in prior years, the unrecognized tax benefit would be eliminated without impacting expense. |
Stockholders_Equity_Changes_to
Stockholders' Equity, Changes to Equity (Details) (USD $) | 3 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Total Equity | ||||
Balance at December 31, 2014 | $6,976 | [1] | ||
Net earnings | 188 | 103 | ||
Purchases of common stock | -19 | |||
Dividend payments | -54 | |||
Shares issued for equity-based compensation awards | 6 | [2] | 1 | |
Amortization of equity settled awards | 10 | |||
Excess tax benefits from stock-based compensation arrangements, net | 31 | |||
Taxes paid related to net share settlement of equity awards | -39 | |||
Net proceeds from issuance of Tesoro Logistics LP common units | 24 | |||
Distributions to noncontrolling interest | -44 | |||
TLLP’s sale of common units | -8 | |||
Tesoro’s purchase of TLLP common units | 8 | |||
Other | -1 | |||
Balance at March 31, 2015 | 7,078 | [1] | ||
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 | ||
Shares issued for equity-based compensation plans (shares) | 200,000 | 100,000 | ||
Tesoro Corporation Stockholders’ Equity | ||||
Total Equity | ||||
Balance at December 31, 2014 | 4,454 | [1] | ||
Net earnings | 145 | |||
Purchases of common stock | -19 | |||
Dividend payments | -54 | |||
Shares issued for equity-based compensation awards | 6 | [2] | ||
Amortization of equity settled awards | 10 | |||
Excess tax benefits from stock-based compensation arrangements, net | 31 | |||
Taxes paid related to net share settlement of equity awards | -39 | |||
Net proceeds from issuance of Tesoro Logistics LP common units | 0 | |||
Distributions to noncontrolling interest | 0 | |||
TLLP’s sale of common units | 0 | |||
Tesoro’s purchase of TLLP common units | 8 | |||
Other | -1 | |||
Balance at March 31, 2015 | 4,541 | [1] | ||
Noncontrolling Interest | ||||
Total Equity | ||||
Balance at December 31, 2014 | 2,522 | [1] | ||
Net earnings | 43 | |||
Purchases of common stock | 0 | |||
Dividend payments | 0 | |||
Shares issued for equity-based compensation awards | 0 | [2] | ||
Amortization of equity settled awards | 0 | |||
Excess tax benefits from stock-based compensation arrangements, net | 0 | |||
Taxes paid related to net share settlement of equity awards | 0 | |||
Net proceeds from issuance of Tesoro Logistics LP common units | 24 | |||
Distributions to noncontrolling interest | -44 | |||
TLLP’s sale of common units | -8 | |||
Tesoro’s purchase of TLLP common units | 0 | |||
Other | 0 | |||
Balance at March 31, 2015 | 2,537 | [1] | ||
2014 Share repurchase program | ||||
Total Equity | ||||
Purchases of common stock | ($100) | |||
[1] | 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, 2015 and December 31, 2014. | |||
[2] | We issued approximately 0.2 million shares and less than 0.1 million shares for proceeds of $6 million and $1 million primarily for stock option exercises under our equity-based compensation plans during the three months ended March 31, 2015 and 2014, respectively. |
Stockholders_Equity_Stockholde
Stockholders' Equity Stockholders' Equity, Share Repurchases and Dividends (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | 7-May-15 |
Number of shares purchased (shares) | 0.3 | ||
Share repurchases, value | $19 | ||
Dividend payments | 54 | 33 | |
Dividends declared (dollars per share) | $0.43 | $0.25 | |
Subsequent Event | |||
Dividends declared (dollars per share) | $0.43 | ||
Dividends payable, date declared | 7-May-15 | ||
Dividends, date to be paid | 15-Jun-15 | ||
Dividends, date of record | 29-May-15 | ||
2014 Share repurchase program | |||
Number of shares purchased (shares) | 1.9 | ||
Share repurchases, value | $100 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Stock-Based Compensation Arrangement by Stock-based Payment Award | ||||
Stock-based compensation expense (benefit) | $28 | ($18) | ||
Income tax benefit (expense) for stock-based compensation arrangements | 11 | -7 | ||
Tax benefit realized from exercise of stock-based compensation arrangements | 54 | 3 | ||
Stock appreciation rights | ||||
Stock-Based Compensation Arrangement by Stock-based Payment Award | ||||
Stock-based compensation expense (benefit) | 15 | [1] | -18 | [1] |
Performance share awards | ||||
Stock-Based Compensation Arrangement by Stock-based Payment Award | ||||
Stock-based compensation expense (benefit) | 4 | [2] | -3 | [2] |
Market stock units | ||||
Stock-Based Compensation Arrangement by Stock-based Payment Award | ||||
Stock-based compensation expense (benefit) | 5 | [3] | 3 | [3] |
Other stock-based awards | ||||
Stock-Based Compensation Arrangement by Stock-based Payment Award | ||||
Stock-based compensation expense (benefit) | $4 | [4] | $0 | [4] |
[1] | We paid cash of $20 million and $4 million to settle 0.3 million and 0.2 million SARs that were exercised during the three months ended March 31, 2015 and 2014, respectively. We had $55 million and $60 million recorded in accrued liabilities associated with our SARs awards at March 31, 2015 and December 31, 2014, respectively. | |||
[2] | We granted 0.1 million market condition performance share awards at a weighted average grant date fair value of $117.96 per share under the amended and restated 2011 Long-Term Incentive Plan (“2011 Planâ€) during the three months ended March 31, 2015. | |||
[3] | We granted 0.4 million market stock units at a weighted average grant date fair value of $114.57 per unit under the 2011 Plan during the three months ended March 31, 2015. | |||
[4] | We have aggregated expenses for certain award types as they are not considered significant. |
StockBased_Compensation_StockB
Stock-Based Compensation Stock-Based Compensation, Stock Appreciation Rights, Performance Share Awards and Market Stock Units(Details) (USD $) | 3 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Stock appreciation rights | |||
Stock-Based Compensation Arrangement by Stock-based Payment Award | |||
Cash paid to settle awards | $20 | $4 | |
Exercised stock appreciation rights (shares) | 0.3 | 0.2 | |
Accrued stock appreciation rights | $55 | $60 | |
Performance share awards | |||
Stock-Based Compensation Arrangement by Stock-based Payment Award | |||
Awards granted (shares) | 0.1 | ||
Weighted average grant date fair value (dollars per share) | $117.96 | ||
Market stock units | |||
Stock-Based Compensation Arrangement by Stock-based Payment Award | |||
Awards granted (shares) | 0.4 | ||
Weighted average grant date fair value (dollars per share) | $114.57 |
Operating_Segments_Details
Operating Segments (Details) | 3 Months Ended |
Mar. 31, 2015 | |
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 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. |
Retail | |
Segment Reporting Information | |
Number of states with retail sites (states) | 16 |
Segment reporting description | Our retail segment sells gasoline and diesel fuel through MSOs and branded jobber/dealers in 16 states. |
TLLP | |
Segment Reporting Information | |
Segment reporting description | TLLP’s assets and operations include certain crude oil gathering assets, natural gas gathering and processing 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 natural gas, for processing natural gas, and for terminalling, transporting and storing crude oil, and refined products. |
Operating_Segments_Results_Det
Operating Segments, Results (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||
In Millions, unless otherwise specified | Jan. 01, 2015 | Apr. 01, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 01, 2014 | ||
Segment Reporting Information | |||||||
Total Revenues | $6,463 | $9,933 | |||||
OPERATING INCOME | 340 | 238 | |||||
Reconciliation of Operating Income from Segments to Consolidated | |||||||
Total Segment Operating Income | 424 | 264 | |||||
Corporate and unallocated costs | -84 | [1] | -26 | [1] | |||
Segment Reporting Information, Income before Income Taxes | |||||||
Interest and financing costs, net | -55 | [2] | -77 | [2] | |||
Other expense, net | -1 | -1 | |||||
Earnings Before Income Taxes | 284 | 160 | |||||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | |||||||
Total Depreciation and Amortization Expense | 179 | 130 | |||||
Total Capital Expenditures | 260 | 103 | |||||
Segment Reporting Table Footnotes | |||||||
Federal and state motor fuel taxes on sales by the retail segment | 140 | 141 | |||||
Stock-based compensation expense (benefit) | 28 | -18 | |||||
Debt redemption charges | 0 | -31 | |||||
Intersegment pricing methodology effective date | 1-Apr-13 | ||||||
Intersegment pricing methodology, new inclusion effective date | 1-Jan-15 | ||||||
Refining | |||||||
Segment Reporting Information | |||||||
OPERATING INCOME | 190 | [3] | 185 | [3] | |||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | |||||||
Total Depreciation and Amortization Expense | 119 | 101 | |||||
Total Capital Expenditures | 184 | 68 | |||||
Refining | Refined products | |||||||
Segment Reporting Information | |||||||
Total Revenues | 5,838 | 9,500 | |||||
Refining | Crude oil resales and other | |||||||
Segment Reporting Information | |||||||
Total Revenues | 299 | 272 | |||||
TLLP | |||||||
Segment Reporting Information | |||||||
OPERATING INCOME | 108 | [4] | 60 | [4] | |||
Reconciliation of Operating Income from Segments to Consolidated | |||||||
Corporate and unallocated costs | -12 | -4 | |||||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | |||||||
Total Depreciation and Amortization Expense | 44 | 16 | |||||
Total Capital Expenditures | 66 | 26 | |||||
TLLP | Gathering | |||||||
Segment Reporting Information | |||||||
Total Revenues | 77 | 25 | |||||
TLLP | Processing | |||||||
Segment Reporting Information | |||||||
Total Revenues | 67 | 0 | |||||
TLLP | Terminalling and transportation | |||||||
Segment Reporting Information | |||||||
Total Revenues | 119 | 102 | |||||
Retail | |||||||
Segment Reporting Information | |||||||
OPERATING INCOME | 126 | [3] | 19 | [3] | |||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | |||||||
Total Depreciation and Amortization Expense | 12 | 10 | |||||
Total Capital Expenditures | 4 | 5 | |||||
Retail | Fuel | |||||||
Segment Reporting Information | |||||||
Total Revenues | 2,195 | [5] | 3,024 | [5] | |||
Retail | Other Non-fuel | |||||||
Segment Reporting Information | |||||||
Total Revenues | 16 | [6] | 61 | [6] | |||
Intersegment sales | |||||||
Segment Reporting Information | |||||||
Total Revenues | -2,148 | -3,051 | |||||
Corporate | |||||||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments | |||||||
Total Depreciation and Amortization Expense | 4 | 3 | |||||
Total Capital Expenditures | 6 | 4 | |||||
Segment Reporting Table Footnotes | |||||||
Stock-based compensation expense (benefit) | 28 | -18 | |||||
5.5% Senior Notes due 2019 | |||||||
Segment Reporting Table Footnotes | |||||||
Debt redemption charges | 31 | ||||||
Debt instrument interest rate | 5.50% | ||||||
Debt instrument, maturity date | 15-Oct-19 | ||||||
Pro Forma | |||||||
Segment Reporting Table Footnotes | |||||||
Intersegment pricing methodology, new inclusion effective date | 1-Jan-14 | ||||||
Pro Forma | Refining | |||||||
Segment Reporting Information | |||||||
OPERATING INCOME | -28 | [3] | |||||
Pro Forma | Retail | |||||||
Segment Reporting Information | |||||||
OPERATING INCOME | $28 | [3] | |||||
[1] | Includes stock-based compensation expense of $28 million and benefit of $18 million for the three months ended March 31, 2015 and 2014, respectively. The significant impact to stock-based compensation expense during the three months ended March 31, 2015 compared to the prior period 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 5.50% Senior Notes due 2019 during the three months ended March 31, 2014. | ||||||
[3] | Our refining segment uses RINs to satisfy its obligations under the Renewable Fuels Standard, in addition to physically blending required biofuels. Effective April 1, 2013, we changed our intersegment pricing methodology and no longer reduced the amount retail pays for the biofuels by the market value of the RINs due to significant volatility in the value of RINs. At the end of 2014, given the price of RINs has become more transparent in the price of biofuels, we determined our intersegment pricing methodology should include the market value of RINs as a reduction to the price our retail segment pays to our refining segment. We made this change effective January 1, 2015. We have not adjusted financial information presented for our refining and retail segments for the period ended March 31, 2014. Had we made this change effective January 1, 2014, operating income in our refining segment would have been reduced by $28 million with a corresponding increase to operating income in our retail segment. | ||||||
[4] | We present TLLP’s segment operating income net of general and administrative expenses totaling $12 million and $4 million representing TLLP’s corporate costs for the three months ended March 31, 2015 and 2014, respectively, that are not allocated to TLLP’s operating segments. | ||||||
[5] | 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 $140 million and $141 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||
[6] | Includes merchandise revenue for the three months ended March 31, 2014. |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Information, Narrative (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
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, 2015 | Mar. 31, 2014 | ||
Condensed Financial Statements, captions | ||||
REVENUES | $6,463 | $9,933 | ||
Costs and Expenses: | ||||
Cost of sales | 5,340 | 8,948 | ||
Operating, selling, general and administrative expenses | 600 | 622 | ||
Depreciation and amortization expense | 179 | 130 | ||
(Gain) loss on asset disposals and impairments | 4 | -5 | ||
Operating Income | 340 | 238 | ||
Equity in earnings of subsidiaries | 0 | 0 | ||
Interest and financing costs, net | -55 | [1] | -77 | [1] |
Other income (expense), net | -1 | -1 | ||
Earnings Before Income Taxes | 284 | 160 | ||
Income tax expense (benefit) | 96 | 56 | ||
Net earnings from continuing operations | 188 | 104 | ||
Loss from discontinued operations, net of tax | 0 | -1 | ||
Net Earnings | 188 | 103 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 43 | 25 | ||
Net Earnings Attributable to Tesoro Corporation | 145 | 78 | ||
Comprehensive Income | ||||
Total comprehensive income | 188 | 103 | ||
Less: Noncontrolling interest in comprehensive income | 43 | 25 | ||
COMPREHENSIVE INCOME ATTRIBUTABLE TO TESORO CORPORATION | 145 | 78 | ||
Parent | ||||
Condensed Financial Statements, captions | ||||
REVENUES | 0 | 0 | ||
Costs and Expenses: | ||||
Cost of sales | 0 | 0 | ||
Operating, selling, general and administrative expenses | 4 | 1 | ||
Depreciation and amortization expense | 0 | 0 | ||
(Gain) loss on asset disposals and impairments | 0 | 0 | ||
Operating Income | -4 | -1 | ||
Equity in earnings of subsidiaries | 157 | 86 | [2] | |
Interest and financing costs, net | -11 | -8 | ||
Other income (expense), net | 0 | 0 | ||
Earnings Before Income Taxes | 142 | 77 | ||
Income tax expense (benefit) | -3 | [3] | -1 | [3] |
Net earnings from continuing operations | 78 | |||
Loss from discontinued operations, net of tax | 0 | |||
Net Earnings | 145 | 78 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 0 | 0 | ||
Net Earnings Attributable to Tesoro Corporation | 145 | 78 | ||
Comprehensive Income | ||||
Total comprehensive income | 145 | 78 | ||
Less: Noncontrolling interest in comprehensive income | 0 | 0 | ||
COMPREHENSIVE INCOME ATTRIBUTABLE TO TESORO CORPORATION | 145 | 78 | ||
Guarantor Subsidiaries | ||||
Condensed Financial Statements, captions | ||||
REVENUES | 6,999 | 11,564 | ||
Costs and Expenses: | ||||
Cost of sales | 5,993 | 10,664 | ||
Operating, selling, general and administrative expenses | 609 | 612 | ||
Depreciation and amortization expense | 134 | 113 | ||
(Gain) loss on asset disposals and impairments | 4 | -1 | ||
Operating Income | 259 | 176 | ||
Equity in earnings of subsidiaries | 16 | 14 | [2] | |
Interest and financing costs, net | -18 | -59 | ||
Other income (expense), net | -4 | -1 | ||
Earnings Before Income Taxes | 253 | 130 | ||
Income tax expense (benefit) | 95 | [3] | 51 | [3] |
Net earnings from continuing operations | 79 | |||
Loss from discontinued operations, net of tax | -1 | |||
Net Earnings | 158 | 78 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 0 | 0 | ||
Net Earnings Attributable to Tesoro Corporation | 158 | 78 | ||
Comprehensive Income | ||||
Total comprehensive income | 158 | 78 | ||
Less: Noncontrolling interest in comprehensive income | 0 | 0 | ||
COMPREHENSIVE INCOME ATTRIBUTABLE TO TESORO CORPORATION | 158 | 78 | ||
Non- Guarantors | ||||
Condensed Financial Statements, captions | ||||
REVENUES | 914 | 1,610 | ||
Costs and Expenses: | ||||
Cost of sales | 661 | 1,476 | ||
Operating, selling, general and administrative expenses | 123 | 58 | ||
Depreciation and amortization expense | 45 | 17 | ||
(Gain) loss on asset disposals and impairments | 0 | -4 | ||
Operating Income | 85 | 63 | ||
Equity in earnings of subsidiaries | 0 | 0 | [2] | |
Interest and financing costs, net | -26 | -18 | ||
Other income (expense), net | 3 | 8 | ||
Earnings Before Income Taxes | 62 | 53 | ||
Income tax expense (benefit) | 4 | [3] | 6 | [3] |
Net earnings from continuing operations | 47 | |||
Loss from discontinued operations, net of tax | 0 | |||
Net Earnings | 58 | 47 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 43 | 25 | ||
Net Earnings Attributable to Tesoro Corporation | 15 | 22 | ||
Comprehensive Income | ||||
Total comprehensive income | 58 | 47 | ||
Less: Noncontrolling interest in comprehensive income | 43 | 25 | ||
COMPREHENSIVE INCOME ATTRIBUTABLE TO TESORO CORPORATION | 15 | 22 | ||
Eliminations | ||||
Condensed Financial Statements, captions | ||||
REVENUES | -1,450 | -3,241 | ||
Costs and Expenses: | ||||
Cost of sales | -1,314 | -3,192 | ||
Operating, selling, general and administrative expenses | -136 | -49 | ||
Depreciation and amortization expense | 0 | 0 | ||
(Gain) loss on asset disposals and impairments | 0 | 0 | ||
Operating Income | 0 | 0 | ||
Equity in earnings of subsidiaries | -173 | -100 | [2] | |
Interest and financing costs, net | 0 | 8 | ||
Other income (expense), net | 0 | -8 | ||
Earnings Before Income Taxes | -173 | -100 | ||
Income tax expense (benefit) | 0 | [3] | 0 | [3] |
Net earnings from continuing operations | -100 | |||
Loss from discontinued operations, net of tax | 0 | |||
Net Earnings | -173 | -100 | ||
Less: Net earnings from continuing operations attributable to noncontrolling interest | 0 | 0 | ||
Net Earnings Attributable to Tesoro Corporation | -173 | -100 | ||
Comprehensive Income | ||||
Total comprehensive income | -173 | -100 | ||
Less: Noncontrolling interest in comprehensive income | 0 | 0 | ||
COMPREHENSIVE INCOME ATTRIBUTABLE TO TESORO CORPORATION | ($173) | ($100) | ||
[1] | Includes charges totaling $31 million for premiums and unamortized debt issuance costs associated with the redemption of the 5.50% Senior Notes due 2019 during the three months ended March 31, 2014. | |||
[2] | Revised to conform to current period presentation of equity in earnings of subsidiaries that reflects equity in earnings of subsidiaries within the guarantor and non-guarantor columns net of intercompany amounts. | |||
[3] | 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_Financ4
Condensed Consolidating Financial Information, Balance Sheet (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||||
Current Assets | ||||
Cash and cash equivalents | $459 | $1,000 | $798 | $1,238 |
Receivables, net of allowance for doubtful accounts | 1,367 | 1,435 | ||
Short-term receivables from affiliates | 0 | 0 | ||
Inventories | 2,532 | 2,439 | ||
Prepayments and other current assets | 223 | 200 | ||
Total Current Assets | 4,581 | 5,074 | ||
Net Property, Plant and Equipment | 9,180 | 9,045 | ||
Investment in Subsidiaries | 0 | 0 | ||
Long-Term Receivables from Affiliates | 0 | 0 | ||
Long-Term Intercompany Note Receivable | 0 | 0 | ||
OTHER NONCURRENT ASSETS | ||||
Acquired intangibles, net | 1,211 | 1,222 | ||
Other, net | 1,311 | 1,150 | ||
Total Other Noncurrent Assets, Net | 2,522 | 2,372 | ||
Total Assets | 16,283 | 16,491 | ||
Current Liabilities: | ||||
Accounts payable | 2,141 | 2,470 | ||
Short-term payables to affiliates | 0 | 0 | ||
Other current liabilities | 864 | 996 | ||
Total Current Liabilities | 3,005 | 3,466 | ||
Long-Term Payables to Affiliates | 0 | 0 | ||
Deferred Income Taxes | 1,121 | 1,098 | ||
Other Noncurrent Liabilities | 941 | 790 | ||
Debt, net of unamortized issuance costs | 4,138 | 4,161 | ||
Long-Term Intercompany Note Payable | 0 | 0 | ||
Equity-Tesoro Corporation | 4,541 | 4,454 | ||
Equity-Noncontrolling Interest | 2,537 | 2,522 | ||
Total Liabilities and Equity | 16,283 | 16,491 | ||
Parent | ||||
Current Assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Receivables, net of allowance for doubtful accounts | 9 | 6 | ||
Short-term receivables from affiliates | 0 | 0 | ||
Inventories | 0 | 0 | ||
Prepayments and other current assets | 51 | 71 | ||
Total Current Assets | 60 | 77 | ||
Net Property, Plant and Equipment | 0 | 0 | ||
Investment in Subsidiaries | 6,742 | 6,592 | ||
Long-Term Receivables from Affiliates | 2,450 | 2,427 | ||
Long-Term Intercompany Note Receivable | 0 | 0 | ||
OTHER NONCURRENT ASSETS | ||||
Acquired intangibles, net | 0 | 0 | ||
Other, net | 6 | 6 | ||
Total Other Noncurrent Assets, Net | 6 | 6 | ||
Total Assets | 9,258 | 9,102 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 1 | ||
Short-term payables to affiliates | 0 | 0 | ||
Other current liabilities | 193 | 148 | ||
Total Current Liabilities | 193 | 149 | ||
Long-Term Payables to Affiliates | 0 | 0 | ||
Deferred Income Taxes | 1,121 | 1,098 | ||
Other Noncurrent Liabilities | 446 | 447 | ||
Debt, net of unamortized issuance costs | 1,581 | 1,578 | ||
Long-Term Intercompany Note Payable | 1,376 | 1,376 | ||
Equity-Tesoro Corporation | 4,541 | 4,454 | ||
Equity-Noncontrolling Interest | 0 | 0 | ||
Total Liabilities and Equity | 9,258 | 9,102 | ||
Guarantor Subsidiaries | ||||
Current Assets | ||||
Cash and cash equivalents | 400 | 943 | 726 | 1,161 |
Receivables, net of allowance for doubtful accounts | 884 | 912 | ||
Short-term receivables from affiliates | 35 | 84 | ||
Inventories | 2,398 | 2,088 | ||
Prepayments and other current assets | 158 | 115 | ||
Total Current Assets | 3,875 | 4,142 | ||
Net Property, Plant and Equipment | 5,775 | 5,666 | ||
Investment in Subsidiaries | 351 | 362 | ||
Long-Term Receivables from Affiliates | 0 | 0 | ||
Long-Term Intercompany Note Receivable | 0 | 0 | ||
OTHER NONCURRENT ASSETS | ||||
Acquired intangibles, net | 245 | 249 | ||
Other, net | 1,048 | 893 | ||
Total Other Noncurrent Assets, Net | 1,293 | 1,142 | ||
Total Assets | 11,294 | 11,312 | ||
Current Liabilities: | ||||
Accounts payable | 1,639 | 1,779 | ||
Short-term payables to affiliates | 0 | 0 | ||
Other current liabilities | 535 | 717 | ||
Total Current Liabilities | 2,174 | 2,496 | ||
Long-Term Payables to Affiliates | 2,412 | 2,399 | ||
Deferred Income Taxes | 0 | 0 | ||
Other Noncurrent Liabilities | 431 | 296 | ||
Debt, net of unamortized issuance costs | 37 | 39 | ||
Long-Term Intercompany Note Payable | 0 | 0 | ||
Equity-Tesoro Corporation | 6,240 | 6,082 | ||
Equity-Noncontrolling Interest | 0 | 0 | ||
Total Liabilities and Equity | 11,294 | 11,312 | ||
Non- Guarantors | ||||
Current Assets | ||||
Cash and cash equivalents | 59 | 57 | 72 | 77 |
Receivables, net of allowance for doubtful accounts | 474 | 517 | ||
Short-term receivables from affiliates | 0 | 0 | ||
Inventories | 134 | 351 | ||
Prepayments and other current assets | 15 | 16 | ||
Total Current Assets | 682 | 941 | ||
Net Property, Plant and Equipment | 3,405 | 3,379 | ||
Investment in Subsidiaries | 0 | 0 | ||
Long-Term Receivables from Affiliates | 0 | 0 | ||
Long-Term Intercompany Note Receivable | 1,376 | 1,376 | ||
OTHER NONCURRENT ASSETS | ||||
Acquired intangibles, net | 966 | 973 | ||
Other, net | 257 | 251 | ||
Total Other Noncurrent Assets, Net | 1,223 | 1,224 | ||
Total Assets | 6,686 | 6,920 | ||
Current Liabilities: | ||||
Accounts payable | 502 | 690 | ||
Short-term payables to affiliates | 35 | 84 | ||
Other current liabilities | 137 | 133 | ||
Total Current Liabilities | 674 | 907 | ||
Long-Term Payables to Affiliates | 38 | 28 | ||
Deferred Income Taxes | 0 | 0 | ||
Other Noncurrent Liabilities | 64 | 47 | ||
Debt, net of unamortized issuance costs | 2,520 | 2,544 | ||
Long-Term Intercompany Note Payable | 0 | 0 | ||
Equity-Tesoro Corporation | 853 | 872 | ||
Equity-Noncontrolling Interest | 2,537 | 2,522 | ||
Total Liabilities and Equity | 6,686 | 6,920 | ||
Eliminations | ||||
Current Assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Receivables, net of allowance for doubtful accounts | 0 | 0 | ||
Short-term receivables from affiliates | -35 | -84 | ||
Inventories | 0 | 0 | ||
Prepayments and other current assets | -1 | -2 | ||
Total Current Assets | -36 | -86 | ||
Net Property, Plant and Equipment | 0 | 0 | ||
Investment in Subsidiaries | -7,093 | -6,954 | ||
Long-Term Receivables from Affiliates | -2,450 | -2,427 | ||
Long-Term Intercompany Note Receivable | -1,376 | -1,376 | ||
OTHER NONCURRENT ASSETS | ||||
Acquired intangibles, net | 0 | 0 | ||
Other, net | 0 | 0 | ||
Total Other Noncurrent Assets, Net | 0 | 0 | ||
Total Assets | -10,955 | -10,843 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Short-term payables to affiliates | -35 | -84 | ||
Other current liabilities | -1 | -2 | ||
Total Current Liabilities | -36 | -86 | ||
Long-Term Payables to Affiliates | -2,450 | -2,427 | ||
Deferred Income Taxes | 0 | 0 | ||
Other Noncurrent Liabilities | 0 | 0 | ||
Debt, net of unamortized issuance costs | 0 | 0 | ||
Long-Term Intercompany Note Payable | -1,376 | -1,376 | ||
Equity-Tesoro Corporation | -7,093 | -6,954 | ||
Equity-Noncontrolling Interest | 0 | 0 | ||
Total Liabilities and Equity | ($10,955) | ($10,843) |
Condensed_Consolidating_Financ5
Condensed Consolidating Financial Information, Cash Flows (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ||
Net cash from (used in) operating activities | ($148) | ($150) |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||
Capital expenditures | -271 | -119 |
Intercompany notes, net | 0 | 0 |
Other investing activities | -2 | 10 |
Net cash used in investing activities | -273 | -109 |
Cash Flows From (Used In) Financing Activities | ||
Borrowings under revolving credit agreements | 99 | 0 |
Proceeds from debt offering | 0 | 300 |
Repayments on revolving credit agreements | -124 | 0 |
Repayments of debt | 0 | -301 |
Dividend payments | -54 | -33 |
Net proceeds from issuance of Tesoro Logistics LP common units | 24 | 0 |
Distributions to noncontrolling interest | -44 | -20 |
Purchases of common stock | -19 | -100 |
Taxes paid related to net share settlement of equity awards | -39 | 0 |
Net intercompany borrowings (repayments) | 0 | 0 |
Premium paid on notes redemption | 0 | -19 |
Distributions to TLLP unitholders and general partner | 0 | 0 |
Other financing activities | 37 | -8 |
Net cash used in financing activities | -120 | -181 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -541 | -440 |
Cash and Cash Equivalents, Beginning of Period | 1,000 | 1,238 |
Cash and Cash Equivalents, End of Period | 459 | 798 |
Parent | ||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ||
Net cash from (used in) operating activities | -10 | -17 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||
Capital expenditures | 0 | 0 |
Intercompany notes, net | 106 | 168 |
Other investing activities | 0 | 0 |
Net cash used in investing activities | 106 | 168 |
Cash Flows From (Used In) Financing Activities | ||
Borrowings under revolving credit agreements | 0 | |
Proceeds from debt offering | 300 | |
Repayments on revolving credit agreements | 0 | |
Repayments of debt | -300 | |
Dividend payments | -54 | -33 |
Net proceeds from issuance of Tesoro Logistics LP common units | 0 | |
Distributions to noncontrolling interest | 0 | 0 |
Purchases of common stock | -19 | -100 |
Taxes paid related to net share settlement of equity awards | -39 | |
Net intercompany borrowings (repayments) | 0 | 0 |
Premium paid on notes redemption | -19 | |
Distributions to TLLP unitholders and general partner | 10 | 4 |
Other financing activities | 6 | -3 |
Net cash used in financing activities | -96 | -151 |
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 | -350 | 154 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||
Capital expenditures | -191 | -92 |
Intercompany notes, net | 0 | 0 |
Other investing activities | -2 | 0 |
Net cash used in investing activities | -193 | -92 |
Cash Flows From (Used In) Financing Activities | ||
Borrowings under revolving credit agreements | 0 | |
Proceeds from debt offering | 0 | |
Repayments on revolving credit agreements | 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 |
Taxes paid related to net share settlement of equity awards | 0 | |
Net intercompany borrowings (repayments) | -37 | -501 |
Premium paid on notes redemption | 0 | |
Distributions to TLLP unitholders and general partner | 6 | 5 |
Other financing activities | 31 | 0 |
Net cash used in financing activities | 0 | -497 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -543 | -435 |
Cash and Cash Equivalents, Beginning of Period | 943 | 1,161 |
Cash and Cash Equivalents, End of Period | 400 | 726 |
Non- Guarantors | ||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | ||
Net cash from (used in) operating activities | 212 | -287 |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||
Capital expenditures | -80 | -27 |
Intercompany notes, net | 0 | 0 |
Other investing activities | 0 | 10 |
Net cash used in investing activities | -80 | -17 |
Cash Flows From (Used In) Financing Activities | ||
Borrowings under revolving credit agreements | 99 | |
Proceeds from debt offering | 0 | |
Repayments on revolving credit agreements | -124 | |
Repayments of debt | 0 | |
Dividend payments | 0 | 0 |
Net proceeds from issuance of Tesoro Logistics LP common units | 24 | |
Distributions to noncontrolling interest | -44 | -20 |
Purchases of common stock | 0 | 0 |
Taxes paid related to net share settlement of equity awards | 0 | |
Net intercompany borrowings (repayments) | -69 | 333 |
Premium paid on notes redemption | 0 | |
Distributions to TLLP unitholders and general partner | -16 | -9 |
Other financing activities | 0 | -5 |
Net cash used in financing activities | -130 | 299 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 | -5 |
Cash and Cash Equivalents, Beginning of Period | 57 | 77 |
Cash and Cash Equivalents, End of Period | 59 | 72 |
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 |
Intercompany notes, net | -106 | -168 |
Other investing activities | 0 | 0 |
Net cash used in investing activities | -106 | -168 |
Cash Flows From (Used In) Financing Activities | ||
Borrowings under revolving credit agreements | 0 | |
Proceeds from debt offering | 0 | |
Repayments on revolving credit agreements | 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 |
Taxes paid related to net share settlement of equity awards | 0 | |
Net intercompany borrowings (repayments) | 106 | 168 |
Premium paid on notes redemption | 0 | |
Distributions to TLLP unitholders and general partner | 0 | 0 |
Other financing activities | 0 | 0 |
Net cash used in financing activities | 106 | 168 |
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 |